City Council Work Session — October 14, 2025

Good evening Fort Collins. The time is now 6 p.m. and I call the work session to order. Tonight the Spanish interpretation is available because we will be discussing the budget. And right now I'm going to turn it over to our interpreters to explain how to listen online. And right now I'm going to turn it over to our interpreters to explain how to listen online.

! Good evening. If you are in a computer in Windows or Macros in your meeting webinar controls, click ! Interpretation. The globe. Click the language that you would like to hear by selecting the channel. ! And in Android and iOS on iPads or telephones. In your meeting controls. Tap the ellipses. The three dots. Tap language interpretation. Tap the language you want to hear. Selecting the channel. And click done. Good evening. And how to listen to the language. If you are in Windows or Mac, in the controls of the reunion or the seminar web, make a click on interpretation in the globe. Make a click on the language that you want to listen to and select the channel. In Android or iOS, one, in the controls of the reunion, toque the three points. Toque interpretation of languages. Toque the language that you want to listen to. Haga click and done. Y está finalizado. Thank you. Gracias.

Thank you. Will the city manager please provide a review of tonight's work session agenda?

Yes, thank you, Mayor. Good evening, everyone. So we have three items scheduled tonight, and I want to make note that we updated two of the items to include some agenda materials yesterday. So the first item is a highlight of the 2025 election voter information guide, which our city clerk will review. And again, that guide was shared yesterday. We have an update on the Southeast Community Center project. And then our final discussion of the evening is related to the 2026 budget revision process. So great. That's good. All right. D'Lynn, staff report. Take it away.

All right.

All right. Everybody can see that. Excellent. so I just kind of wanted to walk you through the guide so we'll we'll just do a quick presentation

here from the city's main home page you can just put in the search box voter information

and it will take you to our elections page so if you click on elections and then right here

in this blue box is the voter information guide so that's how you get to it

and I am going to see if I can work Taryn's magic here.

All right, does that help?

So this is what our first voter information guide looks like for everybody. It is online. We are not mailing it to everybody, so I want everybody to know that,

but we do have printed copies, and so we have already delivered copies to all three libraries and the Senior Center, and then we will have them out in city hall as well before any council meeting so if people want printed copies they can get them so just going through here this is a welcome to your guide it talks about what's on the ballot it talks about election day gives people information on how to

register to vote or to check their registration and these links are all active so if you click on this go vote colorado.com it will take you to the secretary of state site so that you can get on and do that talks about voter service and polling centers in case you need to get a replacement ballot or you want to vote in person or you need some accessibility help voting you can go to the voter service and polling centers so we've given you locations for those some specific election dates and deadlines and then we have a table of contents that's actually linked right here so it will take you to each of the individual items just by clicking right here.

So we talk about a little bit how to vote, and of course, everybody's receiving their ballots by mail. They were mailed on Friday, so many of you may already have them in your box, or maybe you've already voted, so that would be exciting. I'm going to channel Tina here a little bit, our Larimer County Clerk and Recorder. She's asking people, please vote early. the earlier that you vote they're able to start counting those ballots starting I think the 15th or 16th so that kind of gets them ahead of the game and she says they receive about a third of their ballots on election day after 7 p.m. so if they yeah after 7 so if they the earlier they can get them the more they can process and then the more they can process on election night so it's really helpful related to that I just want to clarify and here it says

October 20th is the first day county can begin counting votes so I just want to

she that was the initial date that I got but I was with her in a meeting today and she found out that they could start a little bit earlier okay thanks for that's why yeah I will tell you that Dropbox is their preferred method of getting ballots back and that is because the chain of custody doesn't get broken. So if you put your ballot in a ballot box, that chain of custody stays there. If you mail your ballot box back, then there's a period of time where it's out of the control of the county. So they are really encouraging everybody to send it back by either dropping it off at a voter center or by placing it in one of the voter boxes. All right. So this is giving you different locations. I just listed the Fort Collins locations in here. There are locations in Loveland and Estes as well. So you can use those as well if you happen to be there.

All right. So this talks about how you fill out your ballot, especially related to ranked voting. So we've given some questions related to ranked voting, and then we've given our examples on how to fill out your ballot right and not so right, and what happens if you do that. We've given people a sample, so this will take you out to the actual sample ballot that the county has. So it's a link to that so that you can see it. Then we talk about all of our council candidates and these actually will go out to the individual websites. So we've added links for every candidate here so you can start at this page and then go out. So for the mayor, District 1, District 3, and District 5. Then we've added some frequently asked questions both for the general election as well as ranked voting so people can go here. As well as a link to our full FAQs that are on our website. People always care to know about how long it will take to count the votes. And they are assuring me that they are going to be counted and you will see results at the same time that you see results for all the other things. All right. so here's where we have our 2025 ballot measures we have them in here this first listing is just a title so people know what they're looking for and then when you get to each issue we have the actual ballot question that is on there we have a summary of that question we have what a yes vote means for each measure and what a no vote means for every measure and then we have arguments for

and against each of the measures. All right? And so we have done that for every one of the measures that are on the ballot, so all 10. And I'm trying not to make you see sick, so I apologize.

If I can get through all 10.

And I'm just really trying to get to the end here to show that we just have a little bit

more information at the end that, hold on just a second.

sorry i know hide

again voter registration just getting people there and then election contacts at the end and then websites off to fcgov elections and vote larimer.gov so we're really excited about

the guide it has also been translated into spanish that will be posted on our website tomorrow and along with we also had a ballot translated into Spanish so that both of those things will be on our city website starting tomorrow so we're really

excited so yay great thank you very much I did the search thing yesterday and it popped right up yes do council members have questions or comments I don't have

any questions just thank you for putting this together it's the first time we've had that. And I know the clerk's office has been super engaged and out there with educating people about rank choice voting and then putting this together is just a great next step for our community. So thank you for all your work. Yeah, you're welcome.

I'm just going to echo that. It's really, I think it's great. It's very helpful. And I hope you're counting the number of times it's downloaded or viewed or whatever, because that's an interesting data point too, to see how many people are using it. And thank you for printing a few hard copies, because we always try to be as inclusive as possible. So I appreciate that. Thank you. Anybody else?

Okay. We're on item two.

All right. Wonderful. We'll go ahead and invite our team from community services up. So Dean Klinger, who is our community services director, and Leanne Williams, our recreation

director, to provide an update on Southeast Community Center and get some feedback from Council as we prepare for what's really a critical next step of having the general scope of the project locked in so that we can do an appropriation. And that appropriation is something that will be occurring, hopefully, yet this year. And so I'm going to turn it over to Dean Klinger, I believe,

to get us started. Thank you, Kelly. Yeah, just a couple of quick comments from me and then I'll turn this over to leanne but um and we really appreciate the time uh especially the kind of quick pivot to get some materials together so uh some of you know we were just talking to the council finance committee just maybe a week and a half ago um and uh heard at that committee that it would be really valuable to bring the whole council along for this conversation so that's why we're here tonight uh we have a lot of the same material that was in that council finance um presentation but also some really critical updates and um changes from what we heard about that meeting. So yeah, just I mean, the only other thing I would just say is just maybe every time we talk about this project, it's just great to take a quick little moment, recognize our partners. This is a really important collaboration with the Poudre Libraries, Poudre School District. We've got a really big team of consultants and experts helping us that are hard at work on this. So just always nice to make sure everyone realizes what you're going to see tonight is a lot of work behind me and Leanne going into it. So yeah, with that, Leanne, you can take it from here.

All right, good evening Liam Williams director recreation. Thanks for being here tonight We're gonna start with our two questions That we'll bring back up at the end. What input do? You have on the options that we're presenting tonight and what option would council like to see come forward for appropriation? In November in just a few weeks and are there any additional adjustments that needed so we're giving you some options But there's certainly discussion within those options that we might need to flush out in this discussion.

I wanted to kind of ground us back to, why are we doing this? Who is our project purpose? And so this comes directly from our project charter that we created with a lot of the folks Dean just mentioned. That's who created this project charter. And so actually the wear out the carpets came from Eric who's sitting behind us. That was his, he was in op services. He's like, you know, it'd be really cool if it was so busy that the carpets wore out before they're supposed to wear out their useful life. And it's like, yeah, let's put that in there. So that's kind of one of the comments we actually talk about quite a bit, is like, that would be really cool. And of course, it's generational. And we've always talked about with our two partners that we're just better together when these agencies go and partner on a facility like this. And then why do we fund the Southeast Community Center and who benefits? I mean, yes, the South part of our community benefits. And this is, it's going to bring health and wellness to the southern half. Right now, Foothills Activity Center is the lone facility below Drake. And it is a gymnasium and a small weight room, a little community room, and not really a community center. It's a great activity center that gets a lot of programmatic use, right? Like, it's a great facility that we have, and we're really thankful to have that. But all community members do benefit from our community recreation centers. It gives, it expands our access program. You know a family pass in our access program is $50 a year that gets you to into any facility that we have across the community City Park pool Northside Aslan the senior center all of those And then that also gives those families or individuals and there's no age restriction, right? It's for all community members get 70 to 90 percent off of our programs Including that full day summer day camp, which is highly utilized by our reduced fee So it expands those type of access programs and it also expands access to our adaptive and inclusive recreation opportunities which we're really proud of and I know you all are proud of too the work that we do in that space and this gives more opportunities and so those folks that are are in our lower income that live in the south part of the community they'll have better access to this it's really hard to participate when you having to drive clear across town right and so it also finally fulfills the this is the last standalone project to be started on the 2015 CC IP yay right and again we at went back to the community with the 2050 tax and and the southeast was one of those projects that we highlighted that this would be completing that project instead of phasing it and so we've asked the community twice hey we want to build this facility do you say yes to this and they have and of course it had other things along that they were saying yes to as well right to be fully transparent but that's really why I would say to Fund the southeast so we're gonna go really fast through these next few slides because you all have seen them You've probably read the packet ahead of time, but this kind of goes back to our project timeline This has actually been talked about in a feasibility back in 2013 So fast forward all these different conversations that we have been having in particularly over the last three years and then moved forward to where we are going from here. And so we're here tonight with our schematic design and funding stack options that we want to bring to City Council next month to appropriate the funding that we kind of get alignment on tonight. and then a resolution on approving kind of that funding stack so that we can continue to move this project forward to that facility groundbreaking in June it's really important we continue to stay on time and budget the further we push out the potential for more cost escalation is to ground it there and then you'll see the schematic looks very different than a conceptual design that I'll show you in a second back to we presented these three options we all landed kind of an alignment on 2B. And so that's really the work we've been doing over the last eight months with our design team is to kind of bring that facility to life. And there was a number of reasons we did that. Cost recovery, concerted cost, kind of that the lowest life of the facility type cost is what was estimated. That's what these bubble diagrams look like. It did not have the library in there, right? It's there, but they share those spaces. But we took that and it was about 64 to 74 thousand square feet 68 to 80 million. We had a big range in there. That's what we started to work on. That's what we floated to the community. This was the funding stack we presented. We'll be going over this again here. So this again is just a regrounding in that. I guess I had a different slide I thought was coming. But Dean do you have any more to add to that before I go to community outreach?

No I think we're going to spend more time on the choices around funding the funding stack. So again, we're just because We've been at council over so much time. We just put these other slides in there just to connect back to February So there's nothing new in those last slides from what council's on and really quick

It's important we get back to our community and say hey, what are we working on this project? What's coming and so really quick overview if this is a lot of the different places both the library and the city has been together Talking to different advisory boards. We do have this advisory and advocacy meeting we call it kind of a technical advisory that has a lot of different folks in it we have a lot familiar sitting at the table we have a representative from the mobile the harmony mobile home community sitting on that and they really give us a perspective on this community of what is important to them with that and and some of the themes we heard from our universal access design meeting the advisory and advocacy is is they're really excited about a facility that they can access I mean the mobile home community is really excited that their kids have a place that they can potentially ride their bike to we still have to solve how we get them across harmony right harmony is a challenge but that is something that we're working with internally on how to make that safer but that's some of the themes that we've heard and then this is just a word word slide of all the different yeah word bubble for but we've asked the question what would make the southeast community a place you'd want to return to regularly of course hot tub you know into a recreational pool we heard really loud we're building an outdoor recreational pool so it will fulfill a lot of that lazy river weight room outdoor reading a lot of different stuff so that was really fun to hear from kids and adults on what they would do at the facility and kind of the combination between library uses and recreation center uses

All right, and we're going to go kind of into the meat of the presentation tonight. And so this is just a high level of what a schematic design, those bubble diagrams do as we start to get into more design.

And, of course, we start to really start to hone in on what it truly costs to build this sort of facility.

But when it came through to us in September, we were at $93 million.

And, of course, we were like, we are not building a $93 million facility.

We need to get to work and bring a facility that's back in budget to you all to to have discussions with and so That is what we're doing tonight and

The clicker There we go And so this is just a high level of what are those bubble diagrams?

Go to is about 13 million over the max budget of 80 million, right? the further we go you know you get down to that lower budget it's you know in the 20 some million dollars to actually ve out of this facility and so I want to

walk you through some of the work that that we've been doing and we met with council finance as Dean stated just over a week ago we've done more work with that

team since then we hadn't really gotten into the Commons the mechanical systems because a lot of those discussions needed to be shared with the library and it

It's just so much time to kind of go, how do we get all this information and then get it back to you? So you're going to see more reductions that we have done.

And then we kind of prioritize the reductions based upon a number of factors.

Some are partner commitments.

What was in the original ballot language?

Neither, Julie, or I know it. VE. Oh, sorry. Value engineering. It's not a word I love, but for lack of better words, we're value engineering the facility. So BE for short. Thank you for that question. I didn't know what that word was at one point either. So I've just been sending these meetings. And so to walk through this slide first, you'll see that originally we had two gymnasiums. That was in that original scope. What we did is took that from two high school gymnasiums to two middle school gymnasiums. it's still programmatic, it still fits the needs of the facility. One of the big ones on the right that you'll see, is we did remove the licensed childcare wing. The reason we did that was community feedback, and also some community partner feedback. So some of the community members were saying they'd rather see drop-in child watch, so that they could go to the facility, put their kids in a safe place while they use the facility versus a licensed childcare. And then we also talked with both United Way and the Larimer County Early Childhood Council on if there was a gap to fill anymore. And in this age group that we provide for, UPK has done its job. It has provided enough slots in the community that we do not need to build that space to fill a gap. That does not mean in the future that couldn't be added at a later time in terms of how we master plan the site. But right now, there's no really need for us to build that. So that was why we pulled that out. So it was a few different things and then in in this one you also see And we'll we'll still do this we'll get into this later at this point We what we brought to council finance We were talking about reducing two lap lanes and that was because we had not gone through the count The Commons or the mechanical systems yet And so you'll see later in these slides that there's up We are wanting to add those back in to keep the partnership with the school district and offer something in the mechanical side. So we'll go through that later, but that's kind of high level what we did here. And then what is not shown is the outdoor pool. We reduced the outdoor pool by 15% in that initial value engineering as well. And then of course with the gym box getting smaller, that also makes the track smaller and we reduced it from three lanes to two lanes as well.

And we shrunk the weight facility. So we kind of took every recreation amenity and made it smaller.

So we kept the scope of the intent and then we just reduced the sizes of those and then on this next slide This is just a high-level rendering of how we've Reconfigured these shared spaces in the library. We really needed to help the library Together we needed to get back in budget and the library did as well So we had to go into those common and mechanical spaces. So we took we talked to council finance We still had six rooms in there. We're down to four and so we kept the innovation space because that is a ballot mandate. We have a couple community rooms. Those are both story time for the library and the meeting spaces. Then we took the north entrance off at this point. That really saved a lot of square feet. We actually took about 3,500 square feet approximately off of this space and really condensed it in and allowed those rooms to spill out into what I call a great hall. but don't think it's like this grand thing, but just more of a large space that people can spill into. So we really shrunk those spaces. And then the other thing that we are going to be proposing in these options is we, LEED Gold has been our standard that we're building this facility to, which is really aggressive at a community recreation center with indoor, especially indoor aquatics. We are going to get there. We actually are there with even doing all of this. The one thing that we were considering is going above and beyond LEED Gold. right go and be off a bond and that is cost I would say cost prohibitive doesn't make a good sense in terms of a return on investment and that is a geothermal on this size of facility the technology for the cost is just not there Dean would you like to add anything on that

I think we're happy to ask any questions about that but I think yeah fundamentally what the experts are telling us is just this type of building that is not making a lot of sense so still very proud of the environmental benefits the standards that this building will meet

right yeah okay so um back to me here so we are gonna uh try to walk through i would just say spoiler here what we're gonna try to walk through council is how to manage three different variables so this is the total scope of the facility and two of the funding sources and so we spent a lot time with council finance talking about uh the 2050 funding and then here this is sort of the setup for how we're talking about the 2015 ccip so just to make sure anyone who's listening is following along this is the quarter cent sales tax that initially voters approved the project on and so uh great news here over 10 years this sales tax has uh out collected projections so There's about $14.5 million in additional collections in this bucket. And as a part of this project, we actually have been tracking those reserves and thinking about the options for this project for quite some time. And the reasoning behind that is not so much fundamentally that we prioritize this project over any other need in the city, but it's a connection to that initial voter commitment for this package of projects. So just on this slide, you see here some of these numbers that we have shown on our funding stacks in February. And again, we've got options tonight around $12 million of that $14.5 million helping sort of spread the burden for this project. We're just acknowledging right here what we've been hearing from council and from the community. There's a consideration to allocate as much as $10 million of that $14.5 million to housing. What would that do? um and just doing the math here that would reduce what we have on this project and we've got to offset it from a different one of the other two variables scope or the 2050 tax um the the final piece here i think is that it is just really good to acknowledge that there are restrictions on how uh council can spend additional collections in the ballot and um in a really basic way when i read that language what it says is that the package of projects have to be completed before any additional reserves can be spent on anything else. And then generally speaking, the restrictions are pretty loose beyond once you finish the project. So again, that sort of conveys the staff intent of why we have proposed it this way and certainly happy to walk through the options. So I'll just say maybe in an ideal world, we would put this slide ahead of that other one because this really tees up the variables, but here we are. So, you know, looking at the scope of the facility, really appreciate Leanne going through this, this is not an easy exercise to take. What we do not think was the maximum facility in the first place from 93 million down to 78. Those are tough trade-offs, impacts to the community. And with the other options that Leanne is talking about, we do think that there's a possibility to get down to as low as 72. So this is sort of the full range. We will say that 72 million would require a renegotiation with the Poudre School District to be back down to eight lanes so that's something we would have to continue yeah maybe keep me there for a second more lean okay go backwards yeah and then um just to talk through the 2050 piece of this because this can be very confusing and so i know this council has seen many times our proposal and has approved a fiscal policy around how to think about the life of the 2050 tax 80 of it for asset management in parks and recreation 20 of it towards probably just a couple of really critical capital projects and so the question that council finance was asking us was how much would be left for a second significant aquatics and recreation facility so this is the range depending on how you stack up these variables at the low end we could bring as much as 12 million dollars in today's dollars towards a replacement of the mulberry facility or as much as 24. so those obviously start to push on the bubble on the other two variables. And then the last one is what we walked through on the other slide. So thinking about the additional collections that were in the tax itself, how much of them would go to this project versus how much could go to another purpose. Thanks for allowing the time. So here, Leanne referred to this, and I think this is just another way, you know, we walked through the details of a lot of the scope reductions, but I think in a In a project like this that is so heavily built on collaboration and partnerships, it's just really good to break these out and talk about where we've got commitments with partnerships. So as we think about the possibility of exceeding a LEED gold standard of additional things we could do for the building, those affect costs for the library also. So those need to be a joint decision based on the initial commitments we've made. We walked a lot. We made great, I think the commons, I'll just add to what Leanne said, is this is the benefit of the partnership that you see. Even though we shrink those common areas, both parties have access to four individual, combinable community spaces. And so that's been, the partnership has really come through in that way. And we've got to do that as a team. And then of course the pools, for the indoor pool, that is a really critical partnership and a great, the city costs are significantly defrayed. Through that partnership, just have to make sure we mention that again. The outdoor pool, of course, is a standalone city decision, but linked to the ballot. And then finally, what Leanne said is every single piece of the recreation facility that we controlled, we shrunk as a part of these scalings. So just one way to think about what are the kind of pieces that help us walk through the shrinking. Okay, so here's the, you know, talked about this a little bit on the other one. I think this was, again, just since it's a confusing thing, we worked on some ways to describe this. and so again this is in that 80 20 framework and what we're saying is if you think about that 20 being for capital for recreation and aquatic capital how much of it is being spent on this project so this would be on the high end it would be 17 of that being spent here that leaves the lowest amount for another project 12 million or when you see our options built out here the lowest amount of this money that we could spend would be 14 of the total leaving six percent or 24 million for a future mulberry so again we're kind of walking through this just step by step because there are quite a few numbers here so again appreciate the time can i jump in real quick

um and i would just say you're probably going i asked myself the question why would we spend a

higher percent on the southeast versus kind of that replacement facility when we're talking about mulberry pool and so when we think about the southeast it's the one facility that we are building in the south that's in our plans it's the only one right all of our future investments will go back into those north facilities and a future, potentially, northeast facility. But what we really have been talking about with the extra is what is the facility that replaces Mulberry Pool? And when we think about Mulberry Pool, it's one of three facilities in the north that would make up the southeast. So when you think about it, that it's a third, potentially, of the southeast, that's kind of where those percentages get us to more would go to the southeast.

And just when you're building a community recreation center and it has the amenities that it has It's just a more expensive facility than what mulberry pool will be to replace

And so either one of those percents at 12 million add it to you know We're fingers crossed for the this next CC IP 10 million for that future facility is 22 million and

24 million plus that 10 were at 34 million in terms of that range that would be towards a mulberry pool replacement

In the future

Yeah. How much is a Mulberry pool replacement estimated to cost?

Like high level scopes were in the 30s right now.

And again, we don't, we've done some work to say if we just rebuilt Mulberry and put a little more leisure in there. But really what that facility will be, I would say there is still more work to do in terms

of what is needed to replace that in terms of what's there and what comes out of there or what gets added in. I would say it's going to be a big community rec center. or I would say what piece of those aquatics. We hear a lot about indoor leisure, so should it shift more that way and retain some lap lanes and maybe not all.

We have work and time on that facility in the next decade is what I would say, but high level right now we're in that $30 million.

So more towards that facility today than we had towards the southeast. We had $14 million plus the reserves, $18 million.

So I feel like we're setting ourselves up better for the next facility

in terms of finding additional money to do the work.

All right, the fun part. So we really took this down to two options. And again, these are up for discussion. There's some, you know, variables in between. But at a high level, we did more of that VE work and brought it down another $2 million, $2.1 million, so to $76.5 million. And on the left, you'll see that takes nine and a half of the CCIP reserves. And what it does is increases from that two and a half million to five million to affordable housing and an optionality. Adheres to our IGA commitments with both Poudre School District and Poudre Library. And it retains 12 million with the new CCIP, about 22 million towards the future recreation and aquatic needs. And then option B on this is taking that $12 million that we've had in the funding stack previously, does the same things.

It adheres to the IGA commitments.

It puts more towards that future recreation and aquatic needs. And it retains $2.5 million for future commitments to affordable housing or whatever a future council would decide.

And then option two on the other side is further reducing scope that we would need to do a little bit more is $72.5 million.

And so to kind of reduce scope and scale features is what we would need to do. On the left, on that option A, again, we're putting $12 million to CCIP reserves. We're taking that. But it maximizes how much money we would save for a future recreation and aquatic needs. And so that's $24 million out of this tax, and you add that $10 with the new CCIP, and we're at $34 million towards that future replacement. It retains $2.5 million that could go to affordable housing. The difficult thing with these ones on option two is we have to go back to PSD and renegotiate the IGA in all aspects of that capital, operation, and replacement. And so we've had high-level conversations.

I know, Kelly, if she wanted to comment on those, but they're not excited about that reduction is what I would say.

Yeah, I think that's fair, Leanne. And again, council and just for the community to recall that as the land donation was coming forward and the IGA was put together, one of the things that was specifically called out in that IGA was that we would have 10 lanes. And the reason for that from the school district perspective is that as they have up to six teams That this allows two teams to participate to practice at one time, which they couldn't do with only eight lanes so it's it is I'll just say a very critical issue from the What we're hearing from the school district of maintaining those ten lanes and then option B on this option to

takes maximizes that money that could go potentially to affordable housing at that $10 million request in

the CCIP. It retains $12 million to future recreation and aquatic needs. So combining

that with the future CCIP and you're at 22. But it does, again, the same thing. We have to renegotiate the IGA with Poudre School District. And then just high level, all of these options, We didn't put them in here, but the one other funding source we have right now is the two million dollar grant from Dola

And then high level on the O&M and how I'll set this up is

This is today in terms of looking at okay if we have our current scope

um these are would be our what we're projecting and we will refine these numbers based upon how we're currently staffing so this is a third party that does it to us for us and then we bring this into our operations and go would we really put at 15 fte there based upon how we do things right like we we centralize a lot of different things so i anticipate that number is going to come down, but I'm giving you these numbers. We are still going over these numbers. I anticipate that would be the most that we would put in an annual cost of full-time and part-time staff costs, and that is going to reduce as we refine this, as we build out this facility, and really look at how we're going to program it. And then the projected general fund subsidy is definitely where we want to target. And it is doable. Why that year one through five looks smaller is we have 220,000 coming per year from the CCIP operations. So it's going to offset operational costs at this facility for the first five years. And so those numbers are just pulling that out and rounding and saying what an estimate could be. So these are really high level numbers, but we certainly know we will maximize revenue and limit the amount of general fund subsidy that comes to this facility. We will refine these to make sure it is a really highly efficiently run facility. Yeah, Leanne, the piece

I would just throw in there is I do think, yeah, so much emphasis on the design of the facility that is a value proposition for our community that they're willing to bypass or go to, but also you heard Leanne talk about the importance of having the center be accessible and affordable TO EVERYONE THAT IS WHERE THE CITY GENERAL FUND SUBSIDY COMES IN THAT'S WHAT ALLOWS US TO RUN THAT FACILITY IN THAT WAY SO OBVIOUSLY IF YOU RAN TO ZERO SUBSIDY YOU'RE TALKING ABOUT PRIVATIZING THE FACILITY IT GOES TO FULLY FUNDED BY FEES AND SO JUST WANT TO POINT THAT OUT OF LIKE YES THE LOWER THE NUMBER THAT THIS IS THE BETTER FOR THE CITY BUDGET AND IT'S HELPING US MEET REALLY IMPORTANT COMMUNITY OUTCOMES IN THE FACILITY AS WELL

okay yeah just uh we've got teed up our next steps here just so council knows where we're going next which would be obviously we'd like to have a conversation around how the comfort level is for council members around uh these funding and scope options and uh hope to have this council have a resolution back to this council before the end of the year to to approve those things and then the next council would be approving certificates of participation bonds in 2026 so yeah with that back to you mayor the we covered a lot of territory so we're happy to go back to any detail or let us know where we skipped over something that didn't

make sense great i'll just say i'm glad i'm on council finance yes because it did get in the middle I was like oh if you hadn't been on council finance you might be getting a little lost right here and it's not your fault is a little bit complicated but we just I think we had a lengthy discussion so anyway thank you anybody would like to start Kelly

didn't really want to lead off but this won't be my only things on this but if

If we could go to that slide, slides aren't numbered.

It's the one with option one and option two, please.

I thought I saw it.

You're no longer driving. This is a new self-driving presentation.

There. There. There. That one. That one. Didn't want to have to go through that all over again.

You already made me sick earlier.

Sorry.

So on these two, I need a clarification. Okay, I thought we were at 78, but I guess we're at 76.5 on the left one.

I thought we were at 78, but 76.5.

Kelly, Councilman Rolson, can I just clarify to be really clear about that?

What that is reflecting, and it's different than what you saw at Council Finance,

is that takes out the geothermal and it adds back in the lap lanes.

So that's why there's a differential there.

Okay, thank you.

So does 72.5 million, the two extra lanes add 4 million?

That doesn't make sense to me.

Yeah, I think we may struggle to make the math check out for exact adds and subtractions, but I think we think those two lanes right now at this point are somewhere between 2.5 and 3 million.

Okay, because it says reduce scope slash scale features, so are there other features you're thinking of reducing if that's where we end up?

We would go back and VE more into the facility. So that puts every reduction that we have put forward is at $72.5 million, including the Laplanes. I'm sorry, that would take further reductions. We were really trying to show how we would get to the $10 million on affordable housing, kind of big ranges for you all to kind of look at. We had a lot of things in between.

I now know more about pools than I ever truly wanted to know, but can you repeat how much the extra two lap lanes cost approximately?

Yeah, this would be completely baked in cost, so all of the sort of square footage, everything that goes in the building, between $2.5 million and $3 million.

It's the natatorium space that you expand with extra lanes.

And so that leads to the next question, just on the fairness thing, because we talked from the beginning, because I have a real problem as we get to the latter part.

And it's not a new problem. You can probably guess it. But are we making sure that our partners, and again, not a penny more than they should be paying, but for what used to be called HVAC, but it's now probably called Power Plant or something. But for their fair share of the square footage of all things involved in it, including the school district.

And then we talked very clearly all through finance and the council that it was the O&M for their share. And then the medium replacement things that we know having, I'm on my third or fourth sheet of ice at Epic, but the, or things related to the ice. And then the long-term replacement, that's the model we're still doing with our partners. And a fairness model, knowing it won't be perfect.

Yeah. Short answer is yes. I would say in the context of the library, you know, every cost in our estimate is allocated to the city or to the library or as a shared cost, which is based on usage or some other parameters split them. So all of that stuff is done in a fair way. The IGA with the school district has not changed. So all of those things you listed are still in there. I think what we're flagging for the options on the right is that... We would have to open that document back up, talk about what eight lanes means to them, and all of those numbers could potentially be renegotiated. That would just have to be part of that conversation.

Okay, that's my, that's, I'll just, got the ball rolling there.

Okay. Go ahead, Emma. Then, then, now.

Sure. Just while we're here on the slide, I just want to clarify two things. One is, option one is the reduced size, but with 10 lanes. okay then option two is the reduced size and reduced lap lanes but nothing else reduced

option two is basically every reduction that we've showed or talked about including geothermal all the square footage reductions and the two lap lanes so essentially this would be what we're saying is the floor for the cost of the facility it's a different way of asking it

is option one option two but with eight with ten lanes yes thank you okay and then my second question is between A and B, why is there $4 million difference? So in option 1A, it's $26.5 million. In option 1B, it's $26.5 million and $30.5 million. So why is there a $4 million difference

between the two scenarios? I'm not sure I know exactly which numbers you're referring to. Maybe

you can help us. So 9.5 plus 5 plus 12 is 26. And then the 12 and 12, 2.5 and 16 is 30.5.

Yeah. So, so this slide is not, we went away from the funding stack scenario that we've been using, which would be like listing out each of the funding sources to total. So this is actually sort of talking about the different financial aspects of each of these options, if that makes sense. So you can walk through this and say, okay, on option 1A, the total price is at the top. There's the percentage of the 2050 that we're using at 17%. It frees up $5 million to go to affordable housing, and it frees up $12 million out of 2050 to go to Mulberry. So the 5 and the 12 are not actually included in the funding for Southeast. This is actually trying to help Council understand the tradeoffs for what else they could do if they do this one. Does that help?

No.

So I understand the confusion. I think what we're trying to do, again, because we have three variables at play, was start to – the three variables are the size and scope of the project. So we started by isolating that variable through your options. Option one, right, is the width of the 10 lanes, no geothermal, smaller size. Yes, I get that. ! Option two is without the 10 lanes, only eight lanes. ! Also no geothermal, smaller size. ! ! Then within that there are so many different ways that you could slice and dice the funding. ! The two, what we're really trying to focus on honoring what we've heard from council is trying to understand how much of that 2050 tax are you willing to commit. um based on how much of that you commit is how much reserves you're going to have to use so if you use only nine and a half million of ccip reserve that's going to give you more money potentially to go to affordable housing or whatever use you would want to put it towards if you want to preserve more money though in your future 2050 tax then it's going to take a bigger amount of that CCIP reserve to be able to fund the project so there are a lot of different ways that you can slice and dice it and we could have given you you know ABCDEFG we're trying to have a starting point well I understand the

slicing and dicing but why why wouldn't they add up to the same number if so if option a if option one why doesn't a and b add up to the same because what's sort of counterintuitive

here is you're saying the reserves are what you'd have to pull sure you have to pull fewer reserves if you use a high percent higher percentage of the 2050 tax on capital improvements if you only use because remember at council finance we were like 17 out of 20 committed to capital over the life of the tax, right? So they're trying to do a show us, okay, if you did 16% of the, yeah, but so you'd have to use more reserves. Because Emily, what I would say is that

they're not starting from the same point. So look at, sort of look across the lines of $5 million to affordable housing in option A, you're getting more to affordable housing and you're having less left for Mulberry, but they don't get together. You don't add them to

A SIMILAR TOTAL. HERE'S I WOULD I'LL TAKE ONE MORE CRACK AT THAT WE DON'T IT'S OKAY IT'S FINE GUYS I STILL I DON'T THINK IT'S FINE WE DON'T NEED TO KEEP GOING ON THIS BUT IT'S GOOD CLARIFICATION

THANK YOU UM CAN YOU REFRESH MY MEMORY I FEEL LIKE ADVOCACY AROUND POOL CAPACITY MAYBE PREDATED MY TIME ON COUNCIL BUT I DO REMEMBER WATCHING it seems like that was kind of the driving force for the school district with wanting to be a partner was it the pool capacity okay i'm just i i do think when i was watching council i was seeing the the pool conversation so i guess that's it i i just wanted to clarify because it seems like that was their their big selling point of wanting to be a partner in this project were there other selling points for the school district with regard that motivated them to

donate the land and be a partner well leanne you could add more i just say maybe um you know we've got an independent aquatic study that is a little a little bit older now but probably still holds up showing the city needed six to eight lanes for general use and so the school district really came in and said what would it take to move it up to 10 so that was the sort of partnership that made sense there leanne could touch on this too but we're actually working with the school district in multiple different ways including potentially sharing a parking lot how students will use it after school, what kind of options are there for them. We've got some design students working with our contractor. So we've got a water share agreement for raw water on the external part of the site. So lots of other PSD partnerships that are smaller parts than just the funding and

lap lanes. And Melanie, I do think it's fair to say that what brought the school district to the table for consideration of the land was the fact that it was going to have aquatics.

Yeah, I mean, I love how much work you guys put into defining multiple things you could offer to us with some affordable housing money built in, because that's something that we are looking for funds everywhere we can. And it just doesn't sit right with me to have this project that had three organizations going in together with this master plan with these stated goals and renegotiating the igas to me I guess is not my preferred option at this point I'll be interested to hear what other people have to say but it feels like we're pretty far down the road with our library district and our school district as partners to pull rank in that way but that's that's kind of how I don't know that's how it's sitting with me now but I would love to hear my

colleagues perspectives Julie okay thank you I need um so I'm not on finance so I have a lot of questions um and I want to make sure I understood the three variables we're talking about are size and scope the CCIP reserves right which is 14.5 million and then the 2050 tax that was dedicated to in a future aquatics facility, correct?

Recreation. And that was kind of Mulberry, right? Or was it this? And this. And this. What was that initial amount?

Can I comment? There was no, like to the voters, there was no initial, the voters just saw a ballot that talked about park and recreation, infrastructure replacement, and then recreation and aquatic capital. It was in the ballot. We did the internally as a city, we brought the 80-20, and it's now a financial policy where we maintain the integrity of 2050 that says 80% of that tax will still stay in that infrastructure replacement. We're talking about the 20% that's for recreation and aquatic capital that we have set aside, and that is an internal policy that has come before you all. And so that is how internally we did, but there was no ballot mandate to do that.

So what was the estimates of those percentages? What did we think those numbers would be?

Like the total capital cost?

80% of whatever that is and 20%.

So that is this slide we had in here that says a quarter percent is a million dollars. So $80 million. Just to explain a little bit of why that's not a super straightforward number is we've got to predict the growth in sales tax over time, potentially bonding costs. So we've tried to simplify that to say every percentage of 2050 is $4 million. So 20% would be $80 million.

But Julie, is what you're asking, did we have an anticipated portion that would go to Southeast Community Center and an anticipated portion for Mulberry replacement? And the answer is we did not. There was no sort of initial conversation or commitment about what that

split would be. Okay. Sorry. She speaks my language because we need a lot. So thank you. And so dang it. Now I lost my train of thought on all that. I think the issue I'm having with some of this, a lot of it. Well, and this is nothing that has happened here, nothing we could have done the last four years, but I have always asked why we saved this one until the end from the 2015 CCIP. With that $14.5 million that was left over, or that is extra, which is great,

is there any legal language that says that needs to go to something in particular?

No legal language, and I'll look, Carrie can stop me here, but no legal language that says it needs to go to anything in particular. The language does require, again, that before we spend those dollars that we have fulfilled the commitments of the ballot language. And we've, over the years, refined a little bit. We used to say until the projects were completely, like, built open and

operating, those monies could not be considered excess and therefore put toward anything else. I think we have refined that interpretation in the last package to say once a project is

under contract fully moving forward and being built that at that point those dollars could

become available as excess to go to another purpose as designated by council okay um

so i think what i'm struggling the most with i think is trying to figure out

the longer we wait the more expensive this stuff gets to get is to get built but we also know that if we put 10 million in affordable housing today, they could use it today, right? And so

that is where I'm struggling with this. Like, it just seems so intangible to me about what a

replacement of Mulberry Pool might look like and what it might cost and how we might actually get

there and what the funding sources are. So I'm hesitant to maximize what we give for replacement

of that facility just because there are so many unknowns.

And then when it comes to the Southeast Community Center, things have just changed so much over 15 years. And even if we approve this all next week, when are we talking about? When will this facility actually be open and ready to use in like three years? 2028. 2028 you think three years hopefully if everything goes great you don't get stuck in permitting or something right it should be fine um so uh i just i mean i'm just telling you where i'm struggling i don't have an answer to where which option i want at this point but that's i want to inject

those concerns into the conversation i'm just gonna since you asked you know melanie i i agree

with you i think that because the school district's donating the land they might be unlikely to negotiate down the size of the pools that we're providing so um i think it's a little risky to approve something that's contingent upon the changing of a agreement that we made i agree so i'm look my brain is looking at option one between those two choices Trish. And I'm also there too looking at option one. You know, I think we really want to partner and this is such a unique project and it really helped us bring more to the community by partnering with the library district and the school district. And I would hate to give them any reason to not partner with us in the future. They're such important partners for us in our community and to any other future partners that could see this that we renege and also what we've promised the community as well and i also you know i represent this house and there is nothing for us there for there are a lot of affordable housing developments we have hickory village and there are no facilities for them i also like what Julie is saying that there's so many unknowns. Can I ask Leanne, where were we at in 2015 with funding for the Southeast Community Center? In 2015, there was zero dollars. That's

why it was put on the ballot. And so in 2022, when I got to the city, there was basically 18 million And then we work to find a new funding source for that.

Okay. So how many years do you think are still left in the lifespan of Mulberry? So we would have to do it. We would be looking at 20, 35.

Right. Ten years from now, if it's on the capital tax. I would say this about our operations services maintains our pools. And to give you a story of we had our aquatic consultants that build these facilities all over the country, and they saw how we maintain our pools, and they were blown away at the expertise and knowledge of how well run the behind the scenes of our pools is. And so knowing that on how well we maintain things and the fact that we did just invest in an HVAC system at Mulberry Pool, I have high confidence in that team's ability to keep this facility going until we decide that we have the funding available over the next decade to look at that future replacement. That team is, and I don't just say that, like, we heard this from a third party, and I would echo it in terms of just their professionalism and their ability to maintain it. I look at how they've kept the chillers alive at Epic way past useful life. like that team is really we should be really proud of the work that they do behind the scenes that doesn't get noticed and i just would say that with a lot of confidence i have every confidence that

that mulberry pool will continue to be a great aspect for us for the next decade it looks it's not like looks but i know the mayor loves to swim there it's a cool little facility but yes it's

it's it's not the gonna ask another 50 years right so that's what i would say about that

And then I have one more question. I think what we had landed on in February was option 2B, and that chart really maximized where we were at for revenue and annual cost recovery. If we went with option 2, does that then shift that recovery that we're seeing, the revenues?

it could we haven't run we haven't run that scenario from an o&m right we'd have to rerun all the the operational numbers it's it's going to adjust but when you have less amenities in a facility overall the things that drive what we know that drives revenue in these sort of facilities is leisure aquatics outdoor drives a lot of revenue just because it has less cost overall in indoor leisure and then your weight and fitness and kind of those gymnasium type amenities are what drive memberships and memberships are up to 75 percent of revenue in these type of facilities so when you start to really take those even further out it could affect it could affect revenue but again there will be some reduction in operational costs as well so so if i had to

land on one of the four options here, I would say 1A so that we optimize how much can go to affordable housing because as Julie just stated, we know there's a real need for that now in the community. But I want to fulfill our promise to our partners. I want to keep it at the 76.5 going forward and with the hopes that I guess with the trust in our staff that we'll find that funding needed for the mulberry pool as we move forward with that, the need to replace it.

Okay. Anybody else? Emily? Sure. Are there, outside of the geothermal, are there other things we're doing that's making us go above and beyond the gold standard?

From an efficiency point of view? Of meeting the gold lead standard. Yeah, no, I don't think there's any. I mean, I think LEED gold is our standard, which is, you know, we have a brand new energy code, 2024 energy code, which is raising the bar. So we're meeting brand new energy code, too. So that'd be the other part that's contributing. But we don't have any major items that are identified in there that would be above LEED gold or above energy code. I do think those are still, as we develop the entire details of the mechanical system, those are still aligned with goals if we can find ways to do that. but that's not what we have structured here as something we could take out now.

Okay. And then when those certificates of participation come,

say we go with 1A, the bond dollar amount we need, do we have that in the 2050 tax so far, or are we pausing other things to get there or taking from other sources?

Yeah, so the 2050 tax has some, we talked about this in Council Finance, cash at hand. So this is sort of like we are ramping up the team, designing projects, working on multiple projects in parks, but we have not been able to instantly year one spend the full $10 million. So we've stacked up a little cash in hand. The rest of that, the certificate of purchase is the proceeds from bonding against future revenues there. So that would not delay any park projects by virtue of doing it that way.

Okay, great.

And then I just want to make sure that we're all under the same understanding that regardless, the $2.5 million out of CCIP reserves are going to the Affordable Housing Fund. Okay. I just wanted to make sure that at least at the very least we're all on the same page about that. Okay. Thank you. Great. Melanie?

Yes. This is, I think, going to show how naive I am about the cost of a large-scale facility.

But are any of these costs adjusted for us changing any of the finishes? I hear that we don't want to change things like the energy efficiency, but, you know, any of the finishes that we had planned on in the building? Are there places that you can scale back or is that such a marginal amount of savings?

Yeah, that's a great question. So I think that there are lots of design decisions in the project that are meeting other goals is the way I would. So I don't think we're putting anything in there that is just a higher level finish just to be a higher level finish. But certainly when we're talking about how many windows are in the building, we're talking about health and wellness goals, what the building feels like. When we're talking about a lot of design decisions in the building would be, you know, is it a slightly higher upfront cost to reduce maintenance costs over time? So a higher quality finish might reduce overall costs, so a better cost of total ownership. but no, I don't think we have anything in there that would just sort of be like your premium finish. That could just come down to another level.

And I assume so, but I just wanted to check that out. Thank you. Good question. Anybody else? Kelly? Go ahead. You're the only one who can.

I'm sorry. I just needed clarification on Emily's last question. I wasn't quite clear on that.

On the $2.5 million? Yeah. Yes, that is the – What was the question? Oh, I'm sorry. The question was, of the anticipated reserve from CCIP, the anticipated excess, do we already have $2.5 million clearly committed for affordable housing? And again, what I would say is that is the understanding that will obviously take counsel at some point in the future. But that is how, as staff, we have anticipated those dollars will be spent.

Since I was pointed out to me well I mentioned it to people and then they said I should say it all out so after my thousands of days in city council I'm down to the final hundred and so I'm going to go along with kind of with what council wants on this but I've got to just lay the groundwork for the future I'd like to I'd probably

go to the if we're doing option one I do the more money to affordable housing, so I'd also be the 1A if that's where people want to head. But I want to give the little history lesson on that 80-20 because I really don't trust the organization on this, and it pains me to say this. But when we started on this in finance, and it's been many, many meetings and actually several years, and it was a staff recommendation for the 80%, 20% split.

But when this all started back many, like several years ago, it was for parks, refresh, renew, replacement kind of a thing. And then I remember, because we were at the other meeting for work session, I remember it like yesterday.

And then all of a sudden the pool thing exploded onto the scene. And I remember the looks on council members' face like, wow, that's a lot of money. Where'd that come from?

And that's why I really wanted, people said, get a hobby now.

And I said, yeah, it's going to be watching the 80-20 split until it's all spent or I'm gone, because that was your recommendation.

But we also signed off on it.

So could you please change the way you worded it? It's potential split of 2050 parks and rec funds.

No, it's a financial policy split of 2050 parks and rec funds.

The potential thing, you know, it got me in a bad place today that once again now it says potential split.

that when it's a financial policy, it's a real thing.

In answer to the original question that Julie asked, which was a good one,

it's about $57 million to pools, indoor and outdoor recreation and pool facilities, and $227 to replacement and refresh.

And the reason this is important to me is I lent my name, image, and likeness, but with no pay to get the parks, renew, refresh, replacement passed.

Really, pools are important to people, but that's not why I did it.

And the 80-20 split, I think, is rational. I really wish we'd work on rephrasing that because future councils will come in and pretend you folks aren't here. Pretend your integrity and that you're no longer here.

And they read potential split.

Well, we'll just shift it to 60-40 for the parks refresh and 40% for pools.

So I'm just going to go along with the council to maximize whatever they want for the affordable housing.

But it just really is an annoyance to me because this originally started as a parks refresh thing,

and that 20 shouldn't go above that. We can probably deal with it in the future and figure out how to do Mulberry. You're optimistic on the 10 years, having watched it fail two or three times now, but maybe we got it right this time. But maybe we worry about that then.

But I did hear people say we need the money now, and I actually disagree with the city manager because I've been down this route on two of these capital projects.

I don't think it's once you start construction because you've got to have enough money set aside for like what we were placed with COVID

and supply chains and increase in costs

and different things. I don't think it's just when you break ground that then frees up that extra $5 million. But I'll let you and the lawyers figure that out. I don't think it's as simple as when you break ground. And I also heard something about that money be available now. it won't be available now it'll probably be available in 2028 or 2029 but i need a correction

because it has the facility has to be almost finished or open before that money is freed up

for affordable housing that's the way the language states that has been my understanding as well and

And I think in conversation today, again, I learned that we have had some sort of earlier interpretation of, again, once a project is fully contracted, is that the word I'm looking for? So fully under contract for complete construction, that that was at that point considered. We could then free up some of those other dollars. But I think that's something we could certainly.

No, I wouldn't actually disagree with that. I just want people to know it won't be available right away.

Correct. And that's true for the two and a half as well.

The two and a half and the other, and this particular case is now in front of me, but I think it's five million. So they just won't be available right away. I didn't want people's expectations higher than what we can deliver. So I just had to take the 80-20 thing.

I want to see the new wording before we vote on this, the new wording that's going to appear everywhere. So when you're no longer here, you know, and I hope you're all three around here for a long time.

And I mean that. But when you're no longer here, I want people to see that that's a financial policy or bring something forward to council to solidify it more.

But when I see potential split, that's not doing it.

It doesn't warn me for what you're asking for.

Yeah, if I may, just a quick little piece of context, because I do hear that very much, Councilmember Olson. And I think for context, I know you're referring to a slide in the back up here, and I just want everyone to realize we just took verbatim the slide that when we first proposed it to council, so it really was asking council this is the proposed split. That's where that language came from. So it may be confusing to use it that way. I think our intent was just to put the verbatim slide and not make a small change to an old slide. So that's just the context, but have heard you.

I'm actually happy to hear that, but I would have changed. Rid of the old slide. It would have saved all of that.

We'll bury those slides in an archive somewhere.

Yeah, that slide needs to go away. And so I'll just go along with what the majority of council seems to want on this. I'm leaning toward the 1A.

Thank you. And those are good points. Julie, go ahead.

Yeah, thanks. One clarification, because I know you said, oh, we've all probably spent a lot of time with this. This was only given to us yesterday afternoon. And so I actually have not, I barely had time to glance at it, but thank you. Okay. We're going to get rid of slide 30. I know, but it says right there, it actually answers the question I was asking, which it said that 20% was 57 million.

So, so what's just another good reason to get rid of that old slide. I think this was just the simplest way of saying if, if, if all the money were available in 20, $24, $10 million a year, 27 years. So we've got a more sophisticated way of predict of

Forecasting it now is what it's okay. This slide will never be mentioned again. Thank you

I just want to interject that we have a great council we read a lot I'm appreciative of that any other further comments on this this presentation

To I'll just add my voice to the 1a Um, in case that wasn't clear in my little comments, but do we want to have a wrap up or a summary?

Yeah, I don't think we need to say much except for that our next step will be to plan to bring to council a resolution approving that scope of 1A and go from there.

Is that acceptable? Okay, great. Thanks very much.

And also just very much appreciate the work you did between council finance, which just for the record was very, long and detailed and

We asked many many many questions so really the work that you did and the way you communicate tonight is very much appreciated

Do you guys want a five-minute break I hear five minute let's do ten since we'll come back at 7 26

Thanks

okay we're back up ready for all right wonderful we are going to talk about budget before we do that I know Dylan asked as she had done the wonderful presentation on our voter guide what we didn't have a chance to do was to thank our city attorney's office and our communication and Public Involvement Office, who were huge contributors to that as well. So just for counsel and the public, again, another great example of collaboration that happens.

And now as we talk about collaboration, budget happens all over, collaboration all over the place. Tonight's session is really to do some follow-up from our first revision, and then to focus

more heavily on utilities, because that's something we haven't spent a lot of time on. So I'm going to turn it over to our Chief Financial Officer, Caleb Weitz, to get us started, and he will introduce the team he's got with us.

Well, good evening, Mayor and Council. It's a pleasure to be here tonight. So with me is Budget Director Lawrence Pollack, and then Joe Wimmer and Randy Rusher from our utilities finance team are here as well. in terms of the structure of tonight's presentation we just wanted to do a quick overview of the follow-up materials that we have provided from the last work session and that should say september 23rd work session follow-up i apologize for the typo and then we did hear a request from council the last work session for some alternative mechanisms to be able to Fully fund at the level that it was funded In this current year the immigration legal defense fund and eviction legal defense fund So we have some options around that and then the bulk of our presentation tonight will be an update on utilities And what is being planned for there in the 2026 budget revision

So in terms of follow-up from the work session The council's packet materials that were distributed on October 9th. There is a memorandum in that that answers nine pieces of follow-up that were documented from the September 23rd work session. Two things that I'll note in there, in addition to the questions themselves, there's two attachments. The first attachment shows every position that is currently frozen in the hiring freeze that we're in this year, 2025. And then additionally if the position that vacant position is being proposed for elimination in the 2026 budget revisions that is indicated in a column as well so that is all in one chart and then secondly attachment two is just a little bit more information by line item of each of the reduction proposals that the city manager is including in this overall recommendation and we are happy to go into detail on any of the items of follow-up, but just generally noting here that that has been made available for counsel in response to the discussion last month. The particular item that counsel had asked for some additional options around was for restoring $11,000 of funding to each the immigration legal defense fund and eviction legal defense fund so in response to that inquiry staff has come up with three potential options for the council's consideration here the first option would be a reserve option which is to tap into the digital equity reserve that has a farther $22,000 impact to that reserve and you can see in one of the question responses that that we provided, particularly about the balance of the digital equity reserve, it really does not have a meaningful impact on the balance of that reserve in 2030. The other two options are around service level type reductions in 2026. The first would be to decrease the bridge asset management program, and this certainly would have an impact on our ability to respond to repairs and maintenance needs. And generally, as staff, we already have a concern around a lot of our asset management, and this would just put us $22,000 farther behind in that. And then the second option is more operational. It would be a farther decrease in parks operation and programming. And with that, I will pause here for the council's feedback if that works on this $22,000 item before we get into the utilities portion great. Thank you for bringing us options comments from council

preferences

Yeah, could you tell us what? $22,000 looks like taken from the bridge asset management program is that repairing Potholes in a bridge. I just don't know what 22,000 feels like there

Yes. So I'll defer to Deputy Director of PDT, Drew Brooks, who I think joined the meeting online. So I'll let him provide a little bit more detail there in terms of what that dollar amount would mean to the program.

Good evening. Can you hear me? Yes. Yes, so what this would result in is that it wouldn't change our ability to continue our planned maintenance of the bridge program. But what it might have an impact to is when we find, you know, kind of those unanticipated events that happen, we might have to pull from those planned bridge repairs and use those for, say, I don't want to say emergency, but maybe things that are more emerging or more important that we take care of. And so that would just maybe slow down the pace at which we do the regular bridge maintenance program. But we don't think that $22,000 will have a very serious impact on that, but it will have some impact to the pace at which we do those repairs. Okay, thank you for that. And can you just provide some more details on the digital equity revenue?

Yeah, do you have a specific question around that farther from what was answered in the packet so I can make sure we get the right follow-up? No. I mean, the majority of that money is coming from what we refer to as a pilot. So the 6% that each of the utilities pays to the general fund, I'm not sure that Connection is at the full 6% yet because of their build out. When they're fully operational, they'll have that same exact 6%. But we may not be there yet, but that is where the digital inclusion money comes from. Thank you. Other questions? Let's see. We'll do Julie, then Kelly.

Yeah. Thanks for providing the options. I guess because it's the only option with no real impact, I would say the digital equity reserves would be my preference with the hope that throughout all these conversations, whenever these programs come up, I feel like the majority of council is sick of fighting for them.

And we really like we want it to become one of our operational programs. So I hope we're looking to do that in the future.

Thank you. Cuddly Kelly's going to take a little leave of absence for the next 10 or 15 minutes. On this one, before I get to the meat of my comments, and I'll have one minute on the utilities part of it,

so I've got some on these things, but on this particular item, it seems to me,

and the entire city organization, sorry to say that this seems like really a false choice, So we're going to take this new city slush fund in quotation marks that we seem to have extra money in for the digital thing. We have that option. Or we're going to do bridge safety. Or we're going to do parks operations and programming so we might close the specifics, the bathrooms, which are a pretty basic human need. I just have a whole, a big, a lot of trouble that these were the real options of an organization this big, that we're going to close bathrooms, not do as much on bridge safety, or we've got the digital equity revenue. So it's just, you know, the choice is obvious, but this is kind of like I'm going back to deja vu. This is the way things used to be done, and I always resisted. Wasn't always in the majority but no no council is really gonna tolerate this much Anymore in the future these false choices So I don't know if you have any response But I could find a hundred different ways before I'd close bathrooms or cut a bridge bridge repair budget I'd be happy to do that, but I don't think you'd want me to so feel free if anybody has a response or not

I'm happy to respond to that councilman Rolson. So we certainly don't ever want to be in a place where council feels like we're giving them false choices. I do believe that in order to honor again our, we know we're not doing, well, we want to honor our, we're not doing reduction in force. We're continuing the freezes, the other reductions that have already been made. We really are at a place where we're looking at reducing programming or reducing asset management. And when you look at the list of other, I think if we were not at a place of that list of other reductions that have already been taken, we would be in a different place. And the reality is this is kind of the level of reductions that we think are the kind of choices that we're facing. Okay.

I'll move on to the October 9th memo. and I'm going to hone in on the sustainability part of the environmental sustainability part of it. It won't take too long. But I just want to read a statement and thank you.

It's a very good memo, very detailed.

In the future, it'd be good to have them, even while the council's deliberating these things earlier on. But it says, this is about the environmental area.

While the department remains committed to zero waste, carbon reduction, and air quality goals, That would be a 7-0 council on zero waste carbon reduction and air quality goals This change reduces project management capacity by approximately 25 percent. That's a large number. That's not 5 percent

That's not 10 percent 25 percent and and And so and also when you look at the reductions which were 6 percent which very few other service areas met That was the charge that they were given was 6 percent and then when you look at this and the social

services aspect now wasn't even touched and the economic was touched very little the environmental

impact is even more than the six percent so um i doubt that i'll ever get unless some changes made i won't get to yes ever on the uh when these changes come to us for a vote but i'd like to drill

down just a little bit it's not clear and i know council doesn't have the memo in front of them probably but it talks about the original budget and it talked about two positions in 2025 2026

for climate future, lead specialist, and a healthy homes. And then it talks about eliminated positions from the general fund, a lead specialist, and a healthy homes navigator. Are those one and the same so we didn't really fill those?

Yeah, I'm going to ask Jacob to come up and...

Lawrence was quick to give up his spot.

That's pretty funny. That's a good one.

So, Council Member Olson, I believe your question is kind of how are we managing the positions funded by 2050 tax and those that were funded by 20-20.

No, I'll get to that later. That's the one I want to give you a heads up on. But I'll get to that. That's even a bigger one. But this is a 2025-2026 original budget. But it's got five new positions, three because we have the 2050 tax, our climate future lead specialist, a healthy homes program specialist. But then down below, it says eliminated positions in 2026, two FTEs from general fund, a lead specialist and a data analyst. I'm not focusing on the data analyst right now. And then currently frozen positions, it has healthy homes navigator. So did we never fill that Healthy Homes Navigator that was, or was that going to be in the 2026 budget? That's correct. That position has not been filled. Okay, so that's just frozen now but not eliminated. That's correct. Okay, so my main thing is that we're reducing our management capacity by 25% zero waste carbon reduction and air quality. But the specific process question is this. When we did the parks part of the 2050 tax, we said, and it's written in there, that it's non-fungible, and I hope I get this not backwards, but you can't. You can't reduce the parks O&M budget and then just backfill it with the 2050 tax. That was real clear council direction because that's what would have been done, you know, in days past unless we specifically said you couldn't do that. So we all on the same page there. You can't, you know, we're going to save a million in the general fund because we're going to fund it now out of the 2050 tax. No, it's got to be at that rate and then a movable rate, reasonable rate after that of inflation. Are you with me? Okay, so the way you proposed this in here is I see you doing that with the climate person. You're closing out a position in the general fund, and now you're funding it in the 2050 tax, and it's completely analogous to what we just said you can't do with the parks and rec tax.

If I may, so I do think there is an analog there, and I just want to clarify some of the details.

So we did have a position that was general fund funded working on work related to our climate future. And we had an approved position to do very similar work funded through 2050 tax. In honoring the request to keep all of our headcount, to have maximal effort on council's priorities while still living within our means,

we had to reduce the general fund funded position, let that position go. And I think it might be helpful to not think of migrating a person who is in that position to the 2050 tax position. So if we look at this as kind of individual or headcount neutral, we filled the 2050 tax position to honor our commitment to doing that work. And we did reduce our capacity. And our estimate is there 25% around project management that is similar but not exactly the same work. So two very similar jobs, two different funding streams. We filled and kept the job funded by 2050 tax, and we reduced the position that was general fund funded. I'll pause there and see if there's any

questions. Yeah, because I even get wrapped around the axle on the fungible, non-fungible, so I'll try it in a different way. The 2050 tax was supposed to be new things on climate, not reducing the general fund climate and then funding it with 2050. That was never intended to be the case. 2050 was not to replace general fund. It was to be to further our work in climate and not be reducing the general fund people working on climate and then funding it with 2050. So what do you say to that?

We had to figure out areas to cut.

I still think we are getting net new capacity. And the way we're figuring that is through different organizational structure, efficiency of delivering services. but for within sustainability services for us to meet our budget reduction targets i mean we're 91

percent personnel we had to look at cutting personnel somewhere in the service area and

just so i'm clear i know what your direction was and so it puts you in a difficult spot because

you were directed to do um and and you met it and then some whereas most uh service areas did not meet the 6% you did. And most of the 6% falls under the environmental aspect of the sustainability department. So you just happen to be the one in the hot seat. But I understand you just followed through with what you're supposed to. But no one still countered the fact that we took $20, $50 and replaced something that was funded in general fund. And that's the Whitney. Could I ask a question? If we didn't have the $20, $50 tax, we would have zero people there.

We had a vacant position that we were able to reduce by. So if we didn't have that position. That's what I'm saying.

If we didn't have the 2050 tax, we would have no one.

I mean, you can think of it as a backfill, or you can see it as if we didn't have the 2050 tax, that job would have gone away.

We had two positions. Two different funding streams. That's what I'm saying. We got rid of one.

Yeah, Council Member Olson. But you wouldn't have had that one without the 2050 tax. It's not a replacement. That's my point.

Yeah, I appreciate the spirit of this, though, which is that it was always intended, 2050 tax was always intended to be additive, not to come back in and say we can reallocate general fund to other things. I think there's some reality here that's similar to what we're facing in transport, right? how we had originally intended those dollars for kind of full-on expansion of service, keeping the existing level of service is requiring investment of some of those dollars now. So what I'd like to do based on this questioning is go back and look at the actual dollar amount investments and make sure that we are – I just want to make sure that we can be fully transparent at a minimum And then if we need to make any adjustments, figure out what alternatives there would be. And I'll just say they're all going to come with painful choices at this point.

Okay. Just want to reiterate that this council, to their credit, has been serious about the zero waste carbon reduction air quality. And why other areas of the city didn't take a 6% hit, this did. And I would argue in excess of the 6% because of the social and the economic not taking it. But I'll move on. Just got a couple more. The data analyst environmental services. I'm not necessarily losing any sleep there, although it's important because you explain how you're going to backfill that. Very good memo, by the way, for all concerned. A lot of work and very well done on the October 9th memo. But it says data analyst environmental position became vacant when the staff resigned to enter graduate program. Then I moved down below senior specialist economic health that did the same thing. The position became vacant when the staff resigned to enter graduate degree program that's not the same person is it no that is not okay that's what it begged the question everybody council's smiling it's like is that the same person and you're calling it two FTEs no that was literally two distinct

people that left the intergraduate program two different positions for two different reasons two different schools two different programs okay would have

not been good. Just a couple more. Code compliance. I just didn't understand the last sentence. There will be work eliminated from the code compliance. I know we all have our things that are important to us, and we worked out in supporting each other's things that are the most important division, but rather level of service changes. The work of this position will become reactive versus proactive, never a good thing really, and will be shared across the other code compliance positions. This is what I don't get. To accommodate the shared work for this position, we're also looking at other service level reductions for code compliance responsibilities. That seems even worse than eliminating one full FTE for code compliance. So I must be reading that wrong. Finance director is checking his watch. I'm not finished yet, though. Council Member Olson, I can give a little

of insight to that. That is some of the things that we have talked about possibly bringing forward in terms of looking at our standard level of things like grass height. Like, would we go from six inches to nine inches? We're probably not going to go to 12 inches. But some adjustment there in terms of the level of regulation that might come forward to council in a future conversation.

Okay. And then on number six, are we going from four auditors? Because that makes your point, and I've always supported the addition of sales tax auditors. I certainly am supportive of it. Now I'm glad council is. You look at the comparative chart there, we're very low. Are we going from four to five, or does it put us from three to four? It wasn't clear to me. It's from four to five. Four to five.

That chart is current state.

Okay. So that's great that it's going from four to five. And then I'll just offline, because council's been generous here, I'll get some other questions on the good charts you put that I didn't quite understand. But thanks, everybody.

Great. Thank you. Anybody else? Emily. I had a question for the digital equity for the grocery tax rebate. That made sense of covering, I don't know who I'm looking at for this question, for covering that they're in the same kind of category and the rebate. So how are we making now the digital equity go over to the legal defense funds?

I think if we look at what the digital equity funding source is, it's a pilot that just goes to the general fund for any use as our other utilities would contribute a pilot to general fund for any use. It has been assigned historically to go towards the digital equity program, but it would really be a revenue to the general fund for any purpose.

And certainly in the and Joe is correct. It is a revenue to the general fund for any purpose that we have historically administratively designated for the digital equity purpose and in kind of keeping with the spirit of programs that provide direct aid to the community. This was an available source as we were looking through the options and certainly there are no technical restrictions on the funding.

Okay, that's helpful. Thank you. I mean I think for this I would support the digital equity even though so it's like $315,000 for the first year and then we'd be adding 22 to that and then goes up to 400 and something the second year of using the digital equity reserves

Is is your question about the balance of the digital equities reserves or what's happening to the level of funding for the legal defense programs?

My question is how much in total are we pulling from the digital equity reserves between the grocery rebate and the legal defense funds. Yeah. So what the total is that we're polling

is about, um, it's $320,000 in 2025, $415,000 in 2026, and then an additional, uh, $22,000.

So it's a little over $700,000 in total. Yeah, that's a lot. So, I mean, I think for where we I'm okay with it, but I would hope that in our next budget we're budgeting for the grocery rebate tax And this isn't is the plan for it to always come out of pilot from now on or the digital equity reserve or for the budget to address

The the gap for the grocery rebate so for 25 and 26

We are we are recognizing the digital equity reserve for the grocery tax rebate is a one-time funding source so this is a issue and obviously with the growth we're seeing in the grocery tax rebate as we'll continue to

monitor that program, we know that's a very large and growing pressure that will need to be addressed

in the general fund in 2027. Okay, great. Thank you. Thanks for those clarification questions. I would go for the digital equity revenue as much as I hate to say it. Anybody else?

Trish? I agree with that as well.

And Susan. Okay. Do you have what you need on this slide?

Yes. So I will turn it over to Joe and Randy to discuss the utilities section of tonight's presentation.

If this will.

All right. Happy to transition us over to utilities to talk about two important projects with no less complexity than our general fund projects we just covered.

The focus of tonight will be on our 2026 utilities budget revisions in which we are bringing forward two projects.

We are also going to give an overview of the utilities budgets as a whole for 2026 and then take time to talk about the rates supporting that budget.

No surprises or changes on the rates.

These are the same rates we brought forward to council in 2024 as we were developing a 25 and 26 budget. But we will be going over those rates as well.

To start with a high-level overview of our light and power budget, $183 million annual budget with the largest component of that.

being our purchase power wholesale cost from our partners at PRPA. As we move forward collectively

with them towards our resource diversification, that large segment of our budget is going to go up 6.3 percent for 2026. Beyond the PRPA purchase power, the largest component of the budget in the

2026 budget is focusing on capital investment, replacing our aging infrastructure, particularly cable replacement and things like transformers that we've seen inflate more than your normal

inflationary increases over the past five years. And then a continued investment in operational technology with our distributed energy resource management system, lowering peak demands,

saving costs on our system and power purchases, as well as meeting our climate future goals.

high level highlights for our one water budget this slide would be a combination of our water wastewater and storm water budgets so all three of our wet funds here largely the same story the 2026 budget focuses on capital investment large projects we'll talk about tonight with our halogen water supply project as well as increasing the amount we're putting into our water main replacement program, our wastewater treatment plants, particularly our Drake water reclamation facility, just underwent a condition assessment and has very large capital needs there, and then moving us forward with our OneWater laboratory design that's been in the works for

quite a few years. So to take us to our two revisions we are proposing for the 2026 budget, starting with the Halligan Water Supply Project. This budget revision would be for $10 million. To move forward with the Halligan Project,

we're needing to purchase more environmental mitigation credits. So at a high, simple level, we are expanding our reservoir and we are heightening the dam and we are moving the dam downstream. So we will have wetland and stream impacts for which we need to mitigate for with a mitigation plan approved by the Army Corps of Engineers for us to get a record of

We have the total wetland credits and stream credit needs for the project. We have most of that covered in the Halligan project budget right now. This $10 million is needed to get us to completion and get us the full amount of environmental credits to move forward with our mitigation plan. them. These numbers are not firm yet. We're still working with the Corps on final determination on how many credits we'll need, but we anticipate we'll get that soon. The two projects listed here, the two we're investing in, were under contract with the North Fork Pooder Mitigation Bank, and the Rocky Mountain National Park Moraine Mitigation Bank is what we have a contract pending with. We'll need to be under contract with them to secure these credits so we can move

forward and that's really what this budget revision will go towards as far as timeline and

why we need it for 26 this mitigation plan needs approved for us to get our record of decision to start construction on the halogen project so we are tracking towards a record decision from the core in august of 2026 and we'll need this budget revision to go under contract with that second mitigation bank this appropriation will come out of water fund reserves that we have available for this purchase and then we anticipate that being those reserves being replenished or back back filled with a loan we have in with the state right now low interest loan through this colorado water

conservation board we're anticipating a hundred million dollars as part of our funding stack with THIS, THAT WILL BE OUR FIRST FUNDING USED, AND THEN WE'LL HAVE A REVENUE BOND TO COMPLETE

THE PROJECT. ALSO WANT TO POINT OUT FOR THESE MITIGATION CREDITS, IMPORTANTLY, ONCE WE PURCHASE THESE AND HAVE THESE, THEY'RE REALLY A CITY ASSET THAT IF THE HALLEGAN PROJECT'S DELAYED OR HAS TROUBLE WITH PERMITS, WHICH WE'RE NOT ANTICIPATING, THESE MITIGATION CREDITS COULD BE SOLD AND WE COULD RECOOP THE COST OF THEM, or we could apply them to another project.

The second revision for utilities for the 2026 budget

is related to our customer information system, our CIS billing system. As council is aware,

we are replacing our billing system for utilities.

We pushed the go-live date from October 25

that now has a new go-live date for May 2026.

This is not an increase in software costs or project costs for our new system.

This is for us to continue with our legacy systems that we're using today now that we need to cover those and continue our billing system until that new go live date.

And I will hand it over to Randy to cover our rates that are supporting the 26 budget.

All right. Good evening.

As Joe mentioned and as council is fully aware, we set the two-year budget and what we're proposing tonight would be year two for the 2026 budget for each of the utilities.

And the slide in front of you shows those increases for each fund, 6% for electric, 9% for water, 8% for wastewater, and 6% for stormwater. What's in common across all these funds is really the O&M costs that are increasing.

What makes electric unique is two-thirds of our expenses go to Platte River for wholesale expenses And then the remaining third is for a distribution system And then the water wastewater and stormwater funds in addition Joe highlighted the different capital projects that we are faced with in the coming years for those We will be working with the communications team So the preliminary plan is to come to council November 3rd for with ordinances on each of these pending discussions tonight. And then we'll be working with communications on outreach. We've got different things planned with commercial accounts meetings that we have in person to update them on rate increases. And also, you know, things like rate brochures and getting our website updated and things along those lines. So that work will be happening after council approval and before year end.

So what does it look like for a typical residential bill? We pulled data specific to single-family homes because they typically pay for all four services, whereas multifamily typically doesn't pay the water-wastewater bills.

So again, this is focused on single-family. And the averages that we show under each fund are specific to Fork Owens.

so the 620 kilowatt hours for electric 7,000 gallons for water so on and so forth so for 2025 a typical bill is right around 190 dollars and with the applied rate increases for 26 it would be just short of 204 dollars per month for a difference of about 13.48

since. We've been asked to bring commercial comparisons as well, and just to set the stage

here, we've got a large variation in what a commercial account is. There's some very large accounts, or very small accounts, all the way up to our industrial customers. This

would be an example of something along the lines of maybe a small restaurant, gas station,

something along those lines. But the percentage increase would be essentially the same, right

around, this shows 6.9%. Typical bill is about $1,250 in 2025 with an increase of about $85

per month. Flipping back to a residential comparison, so we do reach out to our neighboring communities and try to understand what their proposed increases are for 2026. So this incorporates

more industry average consumption levels. So this would differ from our slide two

from two slides ago. We use the CAMU average which would be 700 kilowatt hours a month

and then we've got a higher water consumption here. So I just want to point that out but when We put everything on an even playing field, and we do sum up the totals across the four funds. Four columns, even though we're not lowest for every single service, in total, we still do come out the lowest at about $230 per month.

Then you can see the different communities there going up to about $274 in Greeley.

with affordability being at the forefront of a lot of our topics right now and utilities being mindful of affordability with these increases just want to highlight the the great work we're

doing around our utilities affordability assistance and we continue to be a leader

in this space among utilities with our income qualified reduced rate potentially 25 off of bills for those income qualified customers our water conservation and energy service teams do

excellent outreach for helping our customers lower their consumption to save on bills

we have one-time payment assistance programs for those with acute emergency needs for once a year and then partnering with the county and state where we can on their energy assessments and home assessments so to help those customers save on bills in that regard as well

So, we would normally like to end our rates with a utility's outlook on what our rate projections look like for the financial future of our utility. We have a lot of key processes in place and underway right now that are going to better inform that picture for us in the next couple months once we're finished with these processes. So in anticipation of our 27 and 28 budget, we'll be coming back to Council early next next year with a better rate outlook picture as we go through some of these capital planning processes we're updating our CIPs through our new process that we're calling EPMO our Enterprise Project Management Office really taking a data-driven approach to our capital improvement plans and looking holistically at the utility and then the major projects I've pointed out we're underway or in key decision points in design with Hal again our Drake water reclamation facility and water quality lab and then on the light and power side drake substation and of course um prpa's integrated resource plan so a lot of good work and answers i know we need to bring to council um to give a good rate outlook and financial plan for the future so a lot of information there tonight but really bringing us back to our uh main point which was these two 2026 budget revisions that we want to bring forward with adoption of the budget in November so that's what we have and I'll hand it back to mayor thanks thank you I

have something so I see the rate increases oh one why is drinking water more just question and then to the other budget discussions have been about

budget cutbacks and I see rate increases do we have any budgetary plans for utilities on any slimming or because their enterprise we're not considering

those just a awkward question um so to the the second part of the question is this new budget cycle um is going to be a new process with our two new executive directors and the utilities finance team really looking a hard look at our ongoing budgets as we're doing across the city in the same way looking at you know fte vacancies and repurposing planning to do a lot of the same work we just went through the exercise on the general fund because we know those rate pressures um are going to be there. And a lot of our rate increases right now are capital replacement. So if we were to scale those back, it would really be a direct impact on what we're putting

into our infrastructure. Okay, great. Julie? Yeah, thank you very much. And I always do appreciate that you end these with all the different ways that there's assistance. So keep doing that in the future, please. Just a couple of questions. Well, kind of a tongue-in-cheek question. The Project Phoenix, is that our name for it?

That is an internal name. The software is called Vertex One.

Okay, I love it. And we've been talking about this since I think everyone here has been on council. So very excited to see that happen. And then I know October 9th, it sounds like there was an energy board meeting. I don't think it was in our read before packet. Do we know if they recommended what their recommendations were? Yeah, we went to Energy Board last week and

were planned for the Water Commission this Thursday, and they were supportive of this presentation and the rates being brought forward and asked a lot of good questions. Okay, great.

Thank you. And then for my benefit, I don't know if it would help others on council too, but I think when we do these comparisons with other communities, it might be helpful to have another column to showing the cost of living in each community. Just for a little bit more context, I mean, I don't think it's going to have any big reveals, but it just might help me

think more deeply about these comparisons. So I'd appreciate that. So I guess I didn't really have that many questions. So I'm supportive. I mean, I know this is what we talked about when we talked about the two-year budget. as always it is a lot for some people and that's really encouraging taking advantage of those assistance programs I guess I do have one final question and that's we did you know finally end our or win our lawsuit with open national which was the first supposed to be the first system so was that money which I

I believe is 10 million upwards, 21 million, so twice as much as I was saying. Is that just backfilling some other things we were doing, or do we have big plans for that, or what's happening there?

Yeah, so 21 million split among the four main utility funds, light and power, water, wastewater, stormwater. So about 7.5 went to light and power, 5 to water, and then 2.5 to wastewater, stormwater. Those are going into the reserve, so in some respects we'll help our financial picture

as we do capital planning, potentially lowering some pressure on rates, but they're not earmarked towards a specific project right now, but in a reserve financial health picture of the overall utility.

Anyone else? Kelly.

Thank you. I'd like to drill down just a little bit on the mitigation for Halligan, and thanks for pointing out that it'll result in impacts to both wetlands and streams. I appreciate that. So do we just purchase these things and we don't have to do anything about the loss of wetlands or streams other than this purchase? Are we planning on doing anything else or does this just let us?

I know that these are the preferred method from the Corps for projects to go and invest in these legally backed, approved mitigation projects and get credits that way rather than doing them yourselves and potentially not getting credit applied to them or them approved. So I just know that this is the preference that the Corps is suggesting we go this route of purchasing these credits.

Okay, so in the broad sense, I don't really like, and I accept that, in the broad sense, I don't like these mitigation plans because oftentimes there's not enough eyes on them. I trust us more than I trust other places.

But so how legit are these, and how do we know that is the $10 million going to go to regional projects, state projects, or a project that nobody pays attention to in Mississippi?

be? These two, and we can get more detail, are Halligan Project Managers here. The two we had

listed are regional and we'll know where they're at. So the first project is going to the North Fork Mitigation Bank doing work locally on the Poudre River. And then the second project is up in Rocky Mountain National Park establishing wetlands and doing stream restoration up there. Great. And as

far as we know, this is a real legit process.

Yeah, legitimate process. Those projects are approved by the Army Corps of Engineers and

legally backed. Well, historically, my faith in the Army Corps is not that strong, but... Yeah, so I guess we're going to.

Councilor Olson, yes, this is a legit thing, right? It's approved by the Army Corps of Engineers through their permit process, but it's also approved by the EPA, and it's also approved by the United States Fish and Wildlife Service. So there's a lot of federal eyes on these. These are accredited banks. They're a very long, complicated permit process. There's certain metrics and triggers that they have to meet. They're very expensive to build and they're very complicated to maintain. And these will be maintained in perpetuity. And that's one of the reasons why the core prefers that a project owner invest in a bank like this, because it's really hard. Perpetuity is an awful long time. It's very hard for an organization to stay on top of these banks and maintain these operations forever and ever. But these will be. And it really is hands-off for us. They're very expensive, admittedly, but they are a bank that will result in the offsets that we need.

The actual, you know, wetlands will be there. They will be monitored. The stream restoration will occur. It will be monitored. So, you know, that's why the Army Corps prefers we go that route.

One of the few times I've agreed with the Corps, I think it probably is better because we'd probably try to, I know we'd try to do it right and in perpetuity, but others might not. So I think they're probably right and requesting this Nationwide and that was a great answer. Thank you. Sure

Trish

Thank you for bringing this to us just kind of looking forward to that 27 28 budget I might be off but anecdotally it seems like there's been a lot of water breaks and water main breaks this year Have there been in a normally high number?

um yeah one problematic one with uh our lame water main break that if we just look at o&m costs from our aging infrastructure costs over uh two hundred thousand dollars in repairs um so water main replacement is something we're probably behind on and we're putting a lot of

data to that on what are we doing five percent a year i'm thinking back to several years ago i think like the recommended is ten percent and we're at five percent i just wanted to see if that's

accurate for replacement of our system. Yeah. Yeah. So if we look at like a PVC pipe should last a hundred years, we need to be replacing our system 1% a year to keep up with a hundred year replacement cycle. A lot of our assets aren't living to that hundred years. Um, I think that lame ductile iron pipe was put in, in the eighties. Um, but we're, we're even far behind probably our

1% replacement. So was it, was it half? I just remember we were doing like half of what was the

We're probably at a half a percent replacement and need to get closer to one would be closer

Yeah, okay, so I just wanted to think about that as we're moving forward and we do have these these reserves coming in from What Julie pointed out so the open settlement, so I just wanted to bring that up. Thank you for all the work on this

I had an additional question. Do we do rate smoothing because these are capital investments mean every have we thought out that far?

Yeah, we do in a way of when we have these large capital projects, we'll look to debt finance them. So offset the rather than paying for it in cash all up front with a large rate hike, doing the best we can to pay for that overtime as well as structuring that debt in a way that we can rate smooth. So that as well as quite a few different factors are going to be a part of our finance plan.

I see that we're moving forward in a new era of utilities financing and the way we see that. So I approve of that going into the future.

Because that's tough.

I mean, it's easy to get just because, you know, you'd be an enterprise.

You're like, well, we don't have to worry about this stuff.

But I can see that that's changing. So I'm happy with that. Thank you.

Anybody else?

No?

Go ahead.

I don't have questions. I just appreciate the work. I thought this memo was very, very clear.

And I don't have a lot of questions because I felt like I understood what you were presenting.

So thank you for that.

Great. Is there more?

That concludes what we have tonight.

Great. Do you need any more from us?

I don't think so we have what we need okay great

I get to ask this question that always cracks me up

do council members have any announcements I don't even know what it is

no the announcement is we'll see you next Tuesday thanks for Collins goodnight

Thank you.