2026.

At this time, I'll take a roll call.

Altum and Thorpe.

Present.

Alder Roman O'Neal.

And I'm present as well.

Is there a motion to approve the agenda as written?

So moved.

Second.

All those in favor, please say aye.

Aye.

Motion carries.

Is there a motion to approve the minutes from the last meeting?

Second.

All those in favor, please say aye.

Aye.

Motion carries.

All right.

Let's put 15 minutes on the clock.

This is a little bit of a weird one for us.

So if we won't hold you to it perfectly, but uh that's we've been asking all of our other directors to do.

And then I'll turn it over to you folks.

Question about time.

I thought the enterprise fund studies went more than 15 minutes.

Does it?

Maybe my calendar, I just hadn't looked at it in a while, but I thought we were on till 10.

We have an hour.

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

But also, I understand this one's a little different than all the other ones.

So if you that's not what you guys prepared for, I'm fine with that.

Let's let the let's let the timer ding just so we have a sense of how long we're going, but I'm not gonna cut you off then.

Sound good?

How long were you planning on presenting?

Probably five to seven minutes per fund.

Okay, which would be my guess is how how fast David can go.

Cool.

Well, yeah, go ahead.

All right.

Well, I'll get started.

Uh my name's Dave Heider.

I'm with Stantech.

I'm here today to talk about the enterprise funds.

So we're gonna talk about the water and sewer fund, the stormwater fund, and then the refuse fund.

We'll take a similar approach as we go through each of the funds.

Um, and for those of you that have been through this in the past, it's a similar format.

Um, in terms of the approach that we use for each of the funds, we're developing a financial plan.

We're looking at over a 10-year projection period.

And what that allows us to do is forecast the revenue requirements of the system.

So that's what it cost to provide water, sewer, stormwater, or refuse service.

Um that forecast takes the budget and then looks also back at historical spending.

Forecast that budget over the 10-year period based upon inflation factors for each line item.

We're also including capital investments, those that have been made in the past in the form of debt service that you have to pay off, as well as any future uh capital improvements.

That gives us a sense for the costs in the system.

We then do a forecast of the revenues at the current rates and fees to see whether we have sufficient revenues to meet those expenses.

Then we can evaluate whether how the financial plan is working in terms of some key metrics looking, are we able to meet those revenue requirements?

And are we maintaining adequate cash within the system?

I'm gonna try to take this off.

So that's the overall approach.

So as we look at the water and sewer fund, um, the starting point that we have is our fiscal year 27 water revenue requirements.

So this is made up of the various components.

We have operating maintenance expenses, so the day-to-day operations of the system.

You do have existing debt service, about 3.9 million that'll have to be paid in debt service in 2027.

You also cash fund some portion of your uh capital improvement plan, so that's revenues from the from the system, and then we also have a little bit of projected debt.

Overall, the budget um based on the numbers we have increases by about seven percent in fiscal year 27.

This is just that 10-year forecast that I talked about.

So you can see the line item expenditures for operating expenses, 6.89 million in fiscal year 27, and then that grows to about 9 million by 2036.

You can see the various capital expenses.

So we're keeping 1.47 of um annual pay go.

You do have existing debt service that you have to pay off.

We're also assuming that you're gonna bond fund some of the capital projects, so that grows in terms of annual debt service, but the bottom line is about 5.61 million in in capital for water.

When we total that up, we're 12.5 million in terms of revenue requirements or total expenses for water, and that grows over time.

And then to do that revenue sufficiency, we can compare, okay, at your current water rates, how much revenue you generating.

You're at about 9.76.

So clearly the current revenues are not in line with the expenses of the system.

If we don't change rates, our revenues are gonna stay constant.

Uh just what this looks like gets.

If I ask you, how is our revenue going down there in future years?

Is that inflation adjusted?

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

Thank you.

Yep.

So this is just graphically the exact same information.

You can see uh how the bars stack over time.

Um, blue bars being your operating expenses, light blue being that cash fund capital.

So the total of these would be the revenue requirements, and if we keep our water rates constant, that's the red line.

Um obviously your expenses are growing at a at a greater clip than your revenues would because we're keeping them constant.

So if that plays forward, you currently have a minimum or you currently have a cash balance within your operating fund, it's about 12 million for water.

Um we've talked about this in the past.

If you do have those ongoing reductions or ongoing losses on the system, you would eat into that cash balance.

We try to maintain a minimum balance of of six months of your operating expenses in this cash balance, you would fall below that in 29, and by 2030, basically we run out of cash, and that would continue to go negative going forward.

We shift gears and look at the sewer fund before we talk about the um the potential increases.

This is the revenue requirements for sewer system, about 11.3 million, uh, vast majority being your operating expenses.

A big component of that is the wastewater treatment treatment plan expenses that are contracted with the county.

Uh, those are increasing 5% in fiscal year 27.

Overall budget goes up about 5%, and you do have some new debt service, about 280,000 from the 2025 public improvement bonds.

As we play this forward, uh operating expenses, again, the 9.1 million, we inflate that going forward, be about 12 million by the end of the projection period.

You can see your capital expenses.

There's a little bit that's cash fund and capital, existing and then future debt in total, again, 11.37.

Your current sewer rates generate about 8.83 million.

So we're seeing a similar results on the sewer side in terms of revenues not keeping up with expenses.

And then similarly, oh, I don't know what happened to this graph.

Um this is the uh graphical representation again, your revenues being the red line not keeping up with your expenses.

Not sure why that graph is looking bad.

Um, but ultimately going forward, this is what the result would look like in terms of the operating fund cash balance within the sewer fund.

You also have about 12 million, you drop below in 2029 that minimum.

And then we would go negative um cash balance by 2030.

So what we're recommending in terms of um the financial plan is that you continue to do some rate increases.

So water rate increases at 4.75% in 2027, and then we're recommending that you're likely going to need to continue to increase rates at that 4.75% going forward.

Um, this is consistent with what we presented last year.

Uh future increases beyond 2030 are gonna likely need to continue to happen.

Um key takeaway is that essentially each year that we go through this process, we ultimately do determine that it seems like things are being pushed out at a year in terms of when the funds are gonna go go negative.

Um, this is the result with the increases.

So we're showing that if things played out exactly as planned, by 2030, we would drop below that minimum, and by 2031, we would run out of cash.

And so if all expense expenses happen as planned, we do the 4.75 percents, they wouldn't be sufficient.

Uh but each year that we look at this, typically the spending doesn't occur at the level that's been anticipated.

The capital isn't executed as quickly, and therefore it gets pushed out another year.

At some point, if we see a more accelerated drop, we would recommend that you're gonna have to do higher rate increases.

Uh, but at this time, still recommending the 4.75 for both water and for sewer.

Um, again, seeing by 2031, if everything played out as planned, that we would have a negative cash balance.

So combined, um, this is what it looks like with water and sewer together as a combined enterprise fund.

Again, 2031 is when we would go negative.

Um, but again, every single year uh we tend to push that out one more year, and the the 4.75 appears to be appropriate.

But it's something we want to closely monitor to make sure that uh you continue to execute at a level that would allow you to continue to do the 4.75.

So, what this looks like in terms of the actual rates, uh, your rate structure, you have a fixed charge for water and for sewer that's scale based upon your meter size.

This is just applying that 4.75 across the board to both the fixed charges as well as the usage rates.

So the usage rates are shown to the right.

Uh, for residential customers, you have what's called an inclining block rate.

So the more water you use once you step into the higher tiers, uh, the more that water cost per thousand gallons.

So for zero to seven thousand, it's currently five dollars with this with the 4.75% increase.

And then once you're over 7,000 for each thousand um gallons, it's $10.

Nonresidential properties pay a flat unit rate per thousand gallons of 944.

And then on the sewer side, everybody pays per thousand gallons 688.

And again, these are after the 4.75% increases.

What this looks like on a typical customer bill, typical customer using 12,000 gallons per quarter, you bill on a quarterly basis.

You can see the current bill for somebody using that amount would be about 190 per quarter.

With that 4.75% increase, the bill would go up to 199.

So about a $9.10 per quarter increase for your average customer.

And then if you continue with those 4.75s, you can see where you'll be in future years getting up to about 218 dollars per quarter in 2029.

I just want to show you how you compare against some uh comparable and and local utilities currently with the 109.

Again, this is a comparison at somebody single family using 12,000 gallons per quarter, uh, where you currently are in comparison where you'd be in 2027 with the increases, and then where these other jurisdictions currently are.

It's important to note that this is a little bit of an apples to oranges comparison.

We don't know yet what most of these jurisdictions are going to do in 2027.

I know the county is contemplating increases, so likely theirs will go up as well.

And most other jurisdictions generally do increase rates on an annual basis.

So again, a bit of an apples to oranges comparison, but you're still at the lower end even with the increase.

Sure.

Uh can you go back to slide five?

Which one of these categories, or or maybe a better way to put it is what's the breakdown in growth among these categories?

If we're seeing 7% growth overall, is they're each growing at 7%, is one of them growing at 10 and one's only growing at two roughly.

What's the breakdown in growth?

I think the just off the top of my head, I think the the biggest growth is the fact that you do have, you know, as we look at overall overall budget, you do have additional debt coming on.

Um, so that is a component.

Um, but then the other component I think is is probably in the salaries component.

Um we are seeing increases in chemicals and energy um pretty substantial in recent years.

Um that might be one we have to get back to you in terms of a little bit more detail.

Yeah, if you could, though that would be great.

Just between FY26 and FY27 for each one of those categories, what's the percent growth?

And and even I appreciate you getting into salaries if you can, that's great, but honestly, I was just looking for those four things.

Uh Roman O'Neill, do you want to ask questions?

Anybody questions?

Yes, thank you very much.

Um is 31% debt service uh standard for water and sewer.

It really depends.

Um, depending upon kind of the phase you're in.

You we see some utilities that are you know newer, they have less infrastructure that they've had to rehab, and therefore they have lower debt.

Um we've seen, you know, at one time Washington Suburban Sanitary Commission WSSC had about 50% of their revenue requirements was debt service.

So you typically want to be in that 30 to 40 percent would be more common.

Um but each utility is kind of going through a different life cycle in terms of if you're having to do major rehab or significant reinvestment in the system, you're likely gonna have a higher component of of debt.

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

So, Director Vogel, maybe this is is for you.

We're talking expenses revenue to cover expenses.

Um you just addressed one of my questions is managing expenses.

That's you, right?

Correct.

Um and the folks behind me.

Right, right.

Well, I was gonna say something negative, so it's you.

So I have a broad question, which is probably a softball, unless you want to dive into it, which is my concern about increased expenses and management of that.

Um I guess the the softball, the the real question is from imagine expenses standpoint, are we are we managing expenses appropriately so that when we explain the rate increases that we're doing the best job we can to keep the rate down?

So I'll I'll I'll start with um what is the goal of an asset management program for a utility or infrastructure?

And the goal is desired level of service uh at lowest life cycle cost.

It's not lowest cost, because if we went lowest cost, we might not be worried about inspecting fire hydrants, we might not be exercising valves, uh, and we might slow down our uh line replacements.

So you don't you defer those things or don't do them, you have a water main break, your valve doesn't work, so now you start expanding your circle of valves that you try to see if you can isolate that leak so you can repair it.

And now instead of 20 customers having a four-hour outage, eight hundred customers have an eight-hour outage.

So right right, is there you have this sort of trade-off.

And we have um over the past three or four budget cycles, added one or two positions or partial positions, uh, in order to do uh a better over job overall job at asset management and on the services side, the the the workers in the field, we've also added some positions.

We've we've insourced some functions that we used to contract, um, valve exercising, for instance.

The goal there was was actually to be able to get better service at about the same price.

Um here the I'm not too worried about expenses, uh the things that we can control uh in terms of being efficient or effective because those things are in the the services side, the contract side, um, the cost of producing water, particularly losing water.

We've seen, I think uh we just met with MDE, and I believe we've reduced our total water losses, which means water produced minus water billed, the delta is losses.

We've reduced that by something like 20 or 30 percent over the past five years.

Now that was a bit of a peak because there were some there was a series of breaks or or a few very large breaks that we were able to go after, identify, find those breaks, and then minimize those losses.

But we have a really good proactive program for looking for leaks.

That's reducing some of our energy cost or chemical costs and so on and so forth.

So you to speak to the earlier question that Alderman Huntley asked, which is you know, what's the growth here?

Uh uh I'd bet a good amount of money that the growth is going to be in debt service.

We're just simply executing cap like our capital projects the way we planned to when we when we first came out with our asset management plan in 2018.

Okay.

Thank you.

And and if anybody Diane's not here, so I'm on my own.

Um thank you.

And that's great information about cutting uh water losses.

Uh appreciate that.

My my final question for this, hold on, before you go into a different question, I think Mr.

Johnson had something to jump in with.

Yes, uh, Darren Johnson, senior budget analyst.

I was just gonna say, just with a quick glance.

We're looking at capital projects was like a 700k increase.

Um contracts is like 200k, and then debt services like 200k as well.

So that's some of it just looking at a quick glance, not even going into deeper detail.

Yeah.

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

Yes.

Okay.

Yes.

Thank you.

So last year I was struck when I saw that the graph with uh when uh we run out of money.

Um and this year, to your point, the graph looks exactly the same.

Um the the classic worry is we can pay a little bit every year or pay a lot as we get closer.

What I hear you saying is take it take another year to look at it, see if we're still five years out, which point fourth point seven five is the right number.

Um because what what we don't want to do is go up to a 10 percent increase or something like that.

So you two and and and as well as the folks at the table.

Did you consider going to five percent or five and a quarter percent to push that out farther?

We didn't for exactly the reasons you said.

Once you know, we this is third or fourth one of these I've been to, and it's the you know, the red, we get into the red about three years from now.

And and there are a couple of reasons.

Dave mentioned one of them, which is we don't execute capital projects quite as quickly as we project.

The other one is we always have um a few positions that that are not filled.

And so those, you know, that salary projection.

Uh here we have every position is filled, is the assumption here.

Uh, but the reality is there's always two, three positions that are not filled, and and so that helps us financially as well.

So you know, my recommendation is steady as we go until that point becomes you know, maybe two years from now or next year, uh, then we start bumping things up.

Okay, thank you.

Thank you, Mr.

Chairman.

Yeah, yeah.

And because we have another lever, we can always intentionally slow down capital capital spend as well.

Okay, thank you.

I think we're just gonna move on.

Uh I just want to I'm gonna try and keep an eye on our time.

We have three funds to go, and we've got about an hour.

So I'm just gonna say we'll we'll limit ourselves to we'll uh do questions after each one, like we just did, but we'll limit ourselves to no more than 20 minutes for the presentation of the fund and the questions.

Just telling you guys, go ahead.

All right.

All right, we'll move on to stormwater.

So we just have stormwater and then refuse, so two more funds.

Umat, this is the stormwater revenue requirement.

Total revenue requirement in 2027 is about 3.7 million.

Um we have seen in your recent years just some observations in terms of um spending.

The CIP spending has accelerated, so it's one you know we're watching closely, and you're continuing to cash fund a portion of your capital projects, uh, the retrofits and the MS4 compliance.

We are incorporating 515,000 for the tree program, and that is growing over time.

Um by 2030, it's about 800,000.

Um, and then we also did have some debt that was issued in the 2025 public improvement bonds that that comes in.

So that all makes up the um the revenue requirements for stormwater.

Um breaking it down a little bit more just in terms of this was talked about last year as we bring in this the tree program how much of a component that is of the operating expenses.

So this is just a little bit more detail uh breakdown of the expenses.

You can see the salaries and benefits, the tree program at the 515 total operating then at about uh 2.5 million, um, of which 500,000 is the tree program.

So similar forecast, we take the operating expenses, we inflate those forward, operating at 2.51 going up to about 3.52 by 2036.

You can see the capital expenses, cash funded capital or the pay go, about 700,000.

We have your existing debt and the payoff of that existing debt, and then some projected debt to fund capital projects in total, the 3.71 in comparison to your current stormwater fees um at the current rates, bring in about $3 million.

So we're seeing a similar result as to water and sewer uh revenues are a little bit less than expenses, and that's obviously projected to stay the same as we forecast that forward.

This is what it looks like graphically.

So you can see your operating expenses in the light blue growing over time, your cash funded capital um growing, paying off that existing debt, and then and then the future debt, and then the red line is your revenues with your existing stormwater fees.

So less cash within the operating fund um for stormwater, currently at about 2.5 million.

Um, we're showing that by 2029 you'd be in the red, exhaust all funds within the stormwater fund.

So, in order to address that, um, as I mentioned, you're continuing to execute a little bit more capital, so it is putting more pressure on the fund.

Um, what we're recommending in fiscal year 27 is a 15% increase.

Um that was what was recommended last year, I believe a 12% increase was actually adopted in the stormwater fees.

And then we're recommending seven percents going forward through 2030.

Um nuance this applies to both water and sewer, but has a more impactful um on the stormwater side is is that level of paygo versus bonding.

Uh, we are assuming that about 30 percent of the capital is pay-go-funded.

Um if you were to transition and spend a little bit more in bonding, that would put a little bit less pressure on the fund.

We're showing that by 2030, we would basically deplete the funds within the stormwater fund.

One way to address this would obviously be higher rate increases, but also if we determine that it'd be appropriate to spend a little bit more in debt, that would help to maintain that cash.

But it's one of the things we look at on an annual basis.

But again, we see a similar result.

There's a little bit less wiggle room on the stormwater side given the cash balance.

But again, we're seeing each year that it's pushed out a bit basically a year as we go forward.

To both water, sewer, stormwater, and refuse, we do want to monitor this closely.

We don't want the city to go into a position where all of a sudden you have to do a really sizable increase.

So it's something we do monitor closely.

This is the current stormwater fee structure.

So for residential properties, single family, multifamily, it's just a per unit charge for stormwater per quarter.

So with that 15% increase for your single family home, it would go from $34 a quarter to $39.

Multifamily go from $17 to $19.

And then if you're a non-residential property, you're placed in tiers of impervious area.

And so the more impervious area you have, you fall into one of these tiers, and you can see what the stormwater fees would be with that 15% increase.

This is just a single family bill comparison for stormwater, where you are currently, where you'd be with the 15%.

Again, an apples orange orange comparison because of the fact that these are current rates in these other jurisdictions, and most folks do increase their stormwater fees annually.

Now I want to shift gears a little bit and just talk about the structure.

So this is again how you currently charge single family.

It's on a per ERU or equivalent residential unit basis.

Everybody pays the same.

But when we talk about the non-residential, as I mentioned, you're currently in tiers.

That is less common in terms of an approach that utilities use or cities use because there is a significant variation in terms of impervious area by non-residential property type.

So what we're recommending this year is that you transition to non-residential properties be charged rather than based on tiers based upon their actual measure impervious area as multiples of ERUs or equivalent residential units.

Outside of just the 15% increase, and some would actually see decreases.

So I have three examples here.

If I can just interrupt you for one second, what is IA up here?

Build IA.

Impervious area.

Okay, thank you very much.

Yep.

So effectively that property, property one, their build impervious area is currently about 10,000 square feet because they fall into the middle of that tier, which is equivalent to about five ERUs.

They're paying 196 dollars per quarter under the 2027 rates.

If we actually take their measured impervious, which was 21,000 square feet, we divide that by the ERU, which is the equivalent residential unit, 2100 square feet of impervious area.

They're actually a measured 10 ERUs.

So we take those 10 ERUs times the 39 dollars per ERU, which would mean that they should pay 397 per quarter.

Another example, property two, they fall into that same tier.

They've got 6300 square feet of impervious.

So they're treated the same as somebody with 21,000 square feet, but they actually only have three ERUs.

We take that 6300 divided by 2100, turns into three R U three ERUs.

We multiply the three times the 39, they would pay 119.

And then you do have some properties in the city that are really large, a lot of impervious area.

So somebody's got 200 10,000 square feet of impervious.

They're currently placed into tier four.

That's 64 ERUs.

They currently would pay under the new rates about 2500.

But they're actually representative of about 100 ERUs.

So we take the 210,000 divided by the 210, multiply that by the 39 dollars per quarter per ERU, and they should pay about 4,000.

So you can see the misalignment that currently happens with the tiers.

Most utilities, most cities that have stormwater fees charge non-residential properties in this manner.

So that would be a recommended change.

We talked a little bit about this last year.

But how they would be impacted.

Some would actually see bill reductions, some would see increases.

There's essentially 11 that would see an over $2,000 increase.

There's eight that would see between $800 and $1,000.

And you can see on down the line.

So there's a broad range of impacts.

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

I will come back to that.

Okay.

Thank you.

So in terms of our recommendation, uh, we are recommending for the 27 budget that you assume the current fee structure.

Um but the city does recommend as part of the fee structure change that there be an alternative fee structure for non-residential properties, um, recommending that there be a six-month grace period.

So essentially non-residential properties wouldn't be billed under this structure until um January 1st of 2027.

Um and city staff is provide gonna provide an accompanying enhanced non-residential stormwater fee reduction program.

So if you manage stormwater on your property, uh you'd be able to reduce your bill.

So essentially an incentive to um take action to make sure you're managing stormwater on your property.

Refuse, and I'm gonna pull this up.

Great.

Thank you.

Um look at my question, see if any of you are just clarifying.

Yeah, uh just one to start off.

How did we define multi-family for the purpose of this?

And really what I'm trying to get at is obviously a big apartment building's multi-family, obviously a detached single family home is not, but the middle is uh is a townhouse multifamily, it's a duplex multifamily.

Where do we draw the line on that for stormwater?

Um my understanding is that it's basically if you're a town home or a duplex, you'd basically you would be a single family consider a single family.

So it's only truly multi-unites.

Got it, where you're you're sharing a hallway or something.

Okay.

All right.

Um colleagues, you guys got questions on our older woman O'Neil.

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

Um I'm gonna hold off on my questions because I'm still trying to be possible for you to share.

Certainly.

Thank you.

Yeah.

Couldn't find it.

Oh, okay.

It's already been shared with us.

Okay, great.

I didn't see it.

Thank you.

Yep.

So this may either be a simple question or a long question.

So we'll try to keep the simple answer.

The tree program appears to be 20% of this expense.

What is the tree program include?

Uh the person who runs the tree program isn't here.

Um, but my understanding is it's planting trees.

I think it's also some of uh taking them down, right?

Maintaining them.

Don't we like we've got a tree on Prince George Street that Brian's taking down?

Uh Ms.

Bucklin, you want to answer it rather than me pontificate?

Um, yeah, I'll I'll do my best.

Um, but I I think that um when planning and zoning is here, that's uh that's a good question for for them, um, or as a follow-up question.

Um yeah, so the um yeah, the the urban forester um Brian Um works at um meeting the city's goal for a tree canopy.

Um yeah so the um yeah the the urban forester um brian um works at um meeting the city's goal for a tree canopy so it it is planting trees um working on um various strategies to incentivize tree planting outside of public areas which is the place where the only place where we can directly plant trees um and then all of that maintenance there's an overlay of that work um with planning and zoning and and um critical areas and he does a bunch of plan reviews um as part of the permitting process to make sure that um that the elements of um development plans that speak to tree cover and and and some of those other um oh uh zoning overlays that that they're responsive to those um so he ends up being part of the plan review process for a number of different things as well as sort of the direct service part of planting and maintaining trees okay so those expenses that that are together with that revenue belong to planning and zoning all of them the tree program yeah that that work sits inside planning and zoning yeah okay we'll do that um it different subject um if we are to uh go to this different rate structure are you taking into account maybe this is director of vogel working with the PIO and making sure that that there is a very strong communication program as to the new way to do things the possible delay et cetera absolutely and I'd I'd ask uh and Mike to come up they can speak to this very well but uh in short there's we need to first get council approval right we we need we approach we're here today is kind of the first formal step the fee schedule will be presented in a couple of weeks uh once you know that gets adopted and we're have we have this implementation date of one January which is very unusual usually the fees are set for the year and that's the year but because of this right we need we need an approval and then we need six months to message everything and set up the billing systems and so on and so forth that's really the you know why that six month um delay is is is necessary okay thank you that's you don't yeah that's good as long as it and I assumed you were but worth saying um and I'll just say we had a hearing about this at environmental matters if you not to say you can't ask questions out but if you want to go back and get real detail about it.

Okay.

And then to confirm delaying the rate increase on the non-residential side is baked into the numbers for the uh projection in the years forward is that correct it is so we're assuming the rates go up in um this July and then essentially there's that rate structure change that would happen January one it's a little bit uncertain in terms of the additional revenue if you if you didn't offer any additional fee reductions or credits you'd actually get a little bit more revenue out of this change in structure uh but we don't know necessarily how much people are gonna apply and what reduction they would would see in terms of their bills as a result of that so we're assuming it's revenue neutral from that that point forward so that is factored into the analysis I guess is a short answer.

Okay thank you thanks Mr Chairman so uh oh I'm sorry Mr.

Johnson no just chiming in on um darren johns the senior budget analyst the tree program has been under budget haven they haven't been nowhere near close to what the budget is they're not spending they're not spending budget yeah good to know interesting and just speaking from you know the the peanut gallery it always seemed to me that it was gonna be challenging to ramp up that program it because we have pretty much saturated the land that we own and working with property owners as we found when we try to do sidewalks or uh you know bike paths and things like that that's just a fairly lengthy process so it it it does not surprise me that that spending is uh that that they're just a little bit under under their plan that's why we're taking down a tree on Prince George Street to fix the sidewalk or getting the sidewalk fixed would would it make sense to look at that trend and factor that into the rate increase i.e reduce the rate increase that's I think that's a bit of a tricky question uh because the fund balance is is so low um I I'm just gonna leave that one alone so what I hear you saying is be careful to do that but maybe look at it in the future if we're not yes I think if we're if we're revenue once we hit a point where we're um kind of cash neutral the yes potentially what's the goal of our stormwater program we had this uh you said it so beautifully about the last one uh fund you said lowest possible life cycle cost and level of service residency

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

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

What's the goal of our stormwater program?

We had this uh you said it so beautifully about the last one uh fund.

You said lowest possible life cycle cost and level of service residents expect.

With this, what is the service that we are trying to provide?

Is it some kind of amorphous clean creeks?

Is it a very quantifiable, this much less pollutant?

Is it just plain meet our MS4 goals?

What is that goal?

Combination.

Um, so from the resident level of service standpoint, uh, we want to make sure that the storm drains that we have actually convey stormwater.

So they they need to be maintained.

Uh and and so that's just a basic utility maintenance thing.

Um there are also projects that can, you know, we we can add some additional storm drainage where where some where street maybe doesn't have adequate or it doesn't have any stormwater drainage.

Uh we do fund some of those projects.

I'm uh I'm speculating here, or I'm not 100% confident in the chansure.

I think we use a general fund to do some of that as well.

Um then you get into the water quality thing.

So, yes, MS4 compliance, we have a legal target we need to meet, and that is in and so there are projects there that is a uh reduced pollution goal.

And then there are other um sort of goals, which is to preserve our streams.

Um so the you know, you decrease stormwater runoff, then you decrease erosion as well.

So it is this is very much um a combination of those things, which yes, amorphous would not be inaccurate.

Yeah, well, I appreciate you bringing up also the just not have standing water in places and not have people's yards fled, because that was not something I meant for.

Right.

Um yeah, I just I would love it if we can get to a better way of knowing if we're meeting our goal on this program.

I it's so intuitive in a way on the water program to me, and it's not very clear to me on the stormwater program.

Do we have am I missing?

Do we have performance metrics specific to the stormwater program?

Maybe that's a Miss Buckling question.

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

I mean, I I do see under general fund, we have just number of MS4 permit requirements.

So that's probably somewhat related.

I that's uh Mike Rossberg, Stormwater Program Manager Public Works.

That is a topic of discussion that we've been looking at internally, and a lot of it is related to what uh Burr was talking about, and MS4 is kind of like you said, a very not intuitive goal, but that is a that does cover a lot of the goals that we talk about as far as our state requirements, but also there's that whole we have to just maintain our existing infrastructure as far as just conveyance goes and everything else, which and again, even stormwater requirements at the state level is a growing requirement as far as what we are experiencing in our next permit cycle.

So it's it is a very but it's we should still re you know analyze our goals and make them you know more clear and and because more clear to what we are are doing, you know, with the funds for sure.

Yeah, I just uh I mean environmentalism is something that I care a lot about.

Uh that's why I said on the environmental matters committee.

But at the same time, I think it's like anything else.

We the way to do it well is to be really data driven.

So I won't pontificate too much more.

But would it be helpful to we we do an annual report on our MS4 compliance?

Is that something we provide you?

It's online.

We post our annual report online every year.

Okay, I'll take a look through that.

That sounds like some excellent.

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

Yeah, I'll uh I'll read it before Ben.

Uh okay.

So you started to talk at one point um about we could shift our revenue a little bit more towards bond funding, a little do a little less capital project funding from Pago, do a little more bond funding.

Why if we are currently projecting a 15% rate increase this year and then smaller rate increases in the future, that seems like the perfect scenario for doing exactly what you suggested.

So why is that not the recommendation?

I guess from my perspective, it's as we because of the ramp up in the spending on capital, it's a little bit more aggressive than we've seen in the other funds.

If we get to a point where the city is executing capital at a much greater pace, it may be a point in time where we would want to transition to use a little bit more debt so that we could mitigate those rate increases, would be kind of the argument.

You know, in some instances, it makes sense to pay for that asset over a longer period of time.

Um it's just one of those toggles, I guess.

As we, because of the fact that you you're not sitting on 12 million within this fund, it's it's a smaller amount.

There's just less room for error in that perspective.

So I brought it up as a something to continue to evaluate going forward.

Ideally, if things keep getting pushed out, I think our plan of the 15% and then the sevens in cash funding is ideal because that's more sustainable long term.

But to the extent that we would need to um complete more capital and a more aggressive rate, that would be uh an option.

Could we come up with a projection in which we raise the rates by uh 10%, 12% this year, and then also raise them by a higher, so by a lower rate this year, but by a higher rate in out years because we are doing more bond funding now and less paygo capital funding now.

So that's something we could put on the table for us to consider.

Yeah, we could certainly run that type of scenario.

Yeah, and if if you do it and tell me because of your low fund balance, this is a really bad idea.

I I want to know that.

But I just it seems like something seems like this is a perfect opportunity to smooth out our rate increases.

Yeah, we can certainly run that scenario.

You look like maybe you have something to say, Director Vogel.

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

Sure.

Yeah.

Okay.

Um let's keep moving then.

Just to your earlier question, that um about 23% of the non-residential properties would see a bill reduction.

About see no change, and then the remainder would see a modest increase or a more sizable increase, depending upon their impervious area.

Yep, that's the the political talking point I'm getting out of that is more than half see no or no change or a decrease.

That's great.

Thank you.

All right, so we'll move on to the refuse fund.

Um, just a little bit of background in terms of the refuse fund.

We'll talk about it extensively today, but the city does contract out the majority of the services provided within the refuse fund.

So, really, as a result of that, the refuse fund expenditures are largely outside the control of the city.

Um we've seen increases in fiscal year 27 due to the result of the expiration of your seven-year contract.

So you had to go out to bid last year.

You now have a new contract that begins for fiscal year 27.

Um that's reflected in the in the numbers that we're looking at today.

And then that does that collection contract does include monthly fuel adjustments and annual increases tied to CPI.

So that's really the key driver for the refuse fund.

Um the revenue requirements in total, you can see it's about 4.5 million.

Um, vast majority of that is your operating expenses.

You have a little bit of existing debt, um, but 83% or of that $4.5 million is the contract services.

Um, just to give you some perspective, the OM expenses because of the contract have increased substantially over the last three years, going from 2024 actuals to the budget is about a 30% increase, and that's largely driven by that contract services.

There's a little bit of a reduction in 27 of 250,000 for environmental services, given the new new contract and the curb recycling program for 2027.

So similar forecast, just taking the um operating expenses, inflating them based upon um CPI and other known factors to give us a forecast that hopefully represents what the contract services are going to be going forward.

Again, you have a little bit of existing debt, not much.

Total refuse expenses, 4.5 million revenues with your current refuse fees are about 4 million.

So there is a little bit of a gap, um, not as substantial as in the other funds.

Um what this looks like graphically, again, most of your expenses are operating that 4.5 million, and then you can see if we just keep the refuse fees flat, we would have a growing gap within the fund.

As a result, you've got about 2 million currently in your operating fund for the refuse fund that would go negative by 2029 if you don't adjust the refuse fees, and then it would go further negative in future years.

So revenues um don't currently keep up with the expenditures, largely based upon the the program.

We are recommending an increase in fiscal year 27 of 7.5%.

And then we think 5% increases given the level of the contract services and how that's going to change over time, would be would be necessary to keep the the program sustainable.

And so this fund has operated um closer to your actual expenses, unlike the other funds we've talked about.

In terms of, you know, there's not the capital, the contract is what it is.

So the annual expenses have come in very close to what's been budgeted.

Um with the increases that we're talking about, the 7.5%, and then the 5%, we would maintain that minimum balance.

We would get close to it in 2030.

Um this just assumes we continue with the 5% increases going forward.

You'd obviously be building up some fund balance in future years.

The city evaluates this on an annual basis.

So if you're if you're building up those fund balances, you potentially wouldn't need to do the the increase.

Um but again, at some point in the future, you will have to go out to to bid for the contract again, and there may be a jump up in expenses in in future years.

That's currently not reflected.

Just in terms of where you compare, um, current annual fee for stormwater for single family resident, not stormwater for refuse, uh, is 431 dollars with that 7.5% increase, it'd go to 463 dollars.

So you're kind of in the middle of the pack.

Sound like a broken record, but most utilities do adjust their um refuse fees on an annual basis.

I know Andorondo County is considering it, so theirs is likely gonna go up.

Um so you'll probably like most likely continue to be in the middle.

And then just to bring it all together, we can talk about refuse, but this is just the total residential quarterly bill with the three funds that we've talked about today.

So water and sewer bill using 12,000 gallons, that's going up nine dollars a quarter, stormwater bill going up five dollars a quarter, and then the refuse going up eight dollars.

So in total, we're looking at about a 22 dollar increase per quarter for typical residential customer with the recommended increases.

I'd be happy to take any questions.

All right, that was fast on that one.

Uh the trash one is always uh simplest.

Umil, you have questions.

I have questions, but they're more towards BER than stand check.

In regards to the trash contract.

Um as you know, the biggest complaint that residents have is that they don't feel that they get bang for their buck in trash collection.

Umstantly, you know, leaving trash at the you know, if I've got three bags in my can and my can's lid doesn't fit my trash is left on the curb.

In the new contract, was any of that discussed?

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

So appreciate you asking the question.

So what right the city the city made a decision uh 10-15 years ago to go from city employees doing trash collection to contract.

And uh we do have a contract structure that I think is is biased towards low cost.

Um and it allows the contractor or a lot of leeway in terms of um going fast, and the way they pay their employees is to move fast.

So uh I structured no major structural changes from the old contract to the new that I'm not aware of.

And Tracy is here, so Tracy, please come on up.

Um feel free to to add your perspective here.

Uh I do feel like the going into a new contract where that contractor has a long performance period ahead of them, where we have a lot of incentives and just primary a lot of disincentives.

Um we have the ability to financially punish them if we're not seeing the service that we like.

They are also bringing a lot of technology to play here, uh, cameras uh on the trucks, so everything is gonna be able to, you know, visually you know, confirm or dispute the these customer complaints.

So I'm cautiously optimistic that we will see uh an uptick in in sort of the the level of customer service.

But uh at the same time, this we had this contractor before, and and it didn't go particularly well then.

So I'm just kind of eyes wide open on I don't know exactly how this is going to go.

But they uh because of so much uh you know they got penalized a lot, MBG did when they when they were with us the first time.

They said, Well, we lost a lot of money on this contract doing the kickoff.

Are you guys gonna be so hard on us this time?

And we're like, yeah, do better.

So what's the length of the contract?

Uh what's the base period?

Four years.

For the new one is ten years.

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

It's it's Tracy.

I think you need to pull your mic a little bit.

Sorry, I'm Tracy Brown, the public works analyst.

Um it is actually a 10-year contract, it's actually two years every two years we can renew up to 10 years, but it's an actual seven-year contract with additional years at the end.

So it's a total of 10.

Total 10 year contract.

I believe uh what's the base period?

Like we are committed to I I I think seven years.

Seven years.

Seven years, and then with options beyond that.

Correct.

So can you what are the standards?

So this is really helpful about speed is incentivized.

That makes sense.

Um when somebody says garbage was dropped in the street, or my trash cans were left in the middle of the street.

What is the standard that the contract requires, and that we should be telling residents to make a complaint or to accept it?

That's what's in the contract.

Where they pick up the containers where they're supposed to place the containers.

So to the to the best, the closest they can without.

Um if they're not doing that, please bring it to our attention.

How about garbage in the street?

They are supposed to be cleaning up, they have the capability of cleaning up as soon as it drops.

They have a broom, they have shovels, they should be collecting it as they get it.

If it's happening, please bring it to our attention so we can address the issue.

And bringing it to attention, how they can put it in through um request report a problem is the biggest thing, because then it goes directly to the supervisor, then the supervisor will go out, take a look and saying, okay, yep, this is an issue kind of thing, and then they will send back the contractor to go back and clean it up.

Okay, thank you.

Great answer.

I I and then you know, in terms of trash in the street, what I do see sometimes is uh recycle bins that don't have a lid, maybe recycling will blow out, a recycled bin will fall over.

That is not the responsibility of the contractor.

Correct.

But I hear you.

I think you have to remember on like a windy day, things are gonna blow, that kind of stuff.

So they do the best they can, yeah.

No, and it's just a hard job, like no doubt about it.

Right.

I don't think we any of us want to stand up here and and say, boy, we're we're very upset with all of these guys.

Like we know they're individually doing a hard job.

It's a question of the contract structure and how we can incentivize them to make sure they're doing they're balancing those two things appropriately cost, speed, level of service, all those.

But to put a final point exactly on what you just said.

Sorry, yeah, yeah.

Hold on, hold on, hold on.

It was all the Roman O'Neill did have the floor.

Let's go back to her.

I still had questions.

Okay.

Thank you.

Can we finish this?

Are you finished with that track?

Okay, sorry.

So just a clarification on who is picking up which trash.

Um, I know city streets, neighborhoods.

Harbor House, is that private trash?

It's not city trash.

Private private.

Um Clay Street is city, but Obery Court is private.

Is that correct?

Parts of Clay Street are uh single family, you know, they front the street, they get we provide the trash collection.

Parts of the homes on Clay Street are actually part of the public housing and uh serviced by their provider.

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

I I don't know their schedule.

So that might be part of our problem on when people are saying that trash was left, because if it's not the same trash day, um because you're supposed to take your trash can in within certain number of hours after it's been but if they have a different trash day for part of the street, it's a it's a long street, four blocks long.

Okay.

Um, and then um but we don't do anything with any of the private companies.

One of the complaints I keep hearing is that there are some companies that are picking up trash at 5 30, 6 o'clock AM.

They're not supposed to start until 6.

They have a per they do get a permit from us.

That's our role with private collection.

Thank you.

Okay, now you can um yeah, just to put the finer point on exactly what you're saying, is we should never have an expectation that the wind blowing garbage out of a can is a responsibility of the trash collection people.

So I appreciated you pointing that out.

So if I could ask you to go to slide 41.

Realizing we're talking significantly less money than other areas.

That the director's talking about.

Is there a way to to plan the rates that causes us to be more stable on on slide 41 or more flat, even if it's a penny or two or three?

Great question.

Yeah, so if you look at specifically around slide 41, we're we're showing that in 2027, we're actually gonna be using some fund balance.

So the we're going from 26, you know, about I don't know, 1.8 million, it's going down to about 1.6.

And then we're continuing that downward trajectory in terms of the actual balance.

That's the gray bars, uh, to 2030, where we're at a at a low point.

And so our recommendation would be to do the increases that we've projected.

But in you know, 2030, if if we are seeing that the expense are leveling off, you wouldn't have to continue to increase rates so that it would stay at that lower level.

Um but unlike the other funds, we are seeing, you know, when you budget a 4.5 million in expenses in the refuse fund, you're spending those.

And so we think it's gonna follow this trajectory very closely.

Um so if you wanted to drop down to that line, you you could, but it would mean that you'd have to do some bigger increases in the future.

I I think maybe the model simply shows a consistent rate increase across all of those future years from from 30 to 36.

There would be nothing present that would prohibit us from changing the model to where um the you know the gray bar more or less you know has the same uh slope as the as the red line.

Lower increases from 31 on.

Exactly your point.

We we would not do this.

In in reality, we would not what you see there is not what we would do.

Yeah, so for purposes of planning, I would not want to say from 31 to 36, we're gonna increase it.

So I hear you, Director Bo Bogle saying it makes sense to keep it that way through 30 30, 31.

At that point in time, the rate increases would we would want to exactly match the expenses for the next year.

If the expenses go up by 1.7 percent, the rate increase would be 1.7 percent.

Yeah.

So for a planning figure, realize that we're talking AI years, realizing it's not gonna change slide 43.

But I guess what I'd like to do at this point is our planning figure make that flat.

We could amend that slide just so that we're saying that hey, we are gonna raise it, but we're looking at a lower rate of increase in the future.

To your point, Director, we may have well, we will definitely have to adjust it.

Right.

Okay, thank you.

Uh that's all my questions.

Thanks.

Uh going back to the new trash contract.

Are there any other changes in that contract that the public should know about?

I'll let you go first, Tracy.

No.

Okay.

There's one.

Oh, yeah.

My apologies.

Gary.

Um I may get the name of the of the road incorrect, but I think it's called Shipwright Harbor back here off of Revel.

And you have what is essentially uh a long driveway, it's privately owned, and uh there may be five homes uh on that on that street or driveway.

When we used to collect trash as city employees, we would go down and people would would walk from the trash cock and they would drag the bins 70 yards back up to the street and then dump them and then return and return the bins.

Uh when we shifted over to contracted service, that those uh we we believe there's less than 10 properties throughout the city that are in that situation.

Those those properties were not explicitly called out in the contract, and the contractor was not required to do that for about 10 or 12 years.

This just kept happening.

Uh and resident and these handful of residents continued to get their service until uh our our current contractor realized that hey, we don't actually have to do that, we're not getting paid for that, and so we're gonna stop.

And uh us being kind of 12 months out from having a new contract, we we we felt it wasn't necessarily worth it to go through a negotiation and try to compel them to do it and all these things.

We said we'll just we'll just roll that into the new contract.

So we've added this, you know, it's not a significant expense, but we did explicitly call out uh less than a dozen residences.

We said you are gonna walk down that driveway and you're gonna pick up that person's trash.

And so well, well, thank you for telling me about that.

Ah, okay, yes.

Um so in that case, just to make sure I'm understanding, the truck doesn't go down.

The people right, no, the people have to walk down, wheel the wheel the bins to the to the street where the pug where the truck is parked.

Because we don't want the trucks going down these very narrow, they're not they're not actually streets, they're in some places, cases gravel.

Um, yeah, if you try to get the we would cause damage if we tried to do it, and and those have been issues in the past.

Got it.

Thank you.

Um can we go back to slide 36.

I almost stopped you in the middle, uh, but I didn't think it was that important.

But I don't understand this third bullet.

Could you just try and explain it to me again?

Okay.

So we have an old landfill that closed in 19, I'll say the early 90s.

Uh environmental compliance costs associated with that closed landfill have continued through this year.

Uh that's uh wells, drilling wells, monitoring wells.

We have a landfill gas program and so on and so forth.

We have fulfilled, we we have told MDE we have fulfilled the requirements of our consent agreement.

It's not a uh it's not a consent order, courts were never involved.

We voluntarily ended into agreement to continue testing to make sure that there was no harm to human health or the environment uh through what's been going on there.

We believe we've satisfied all of those requirements of the consent agreement and we're we're stopping.

So we we're no longer uh going to sample those wells, worry about uh the vegetation clearance so that we can sample all of those costs.

So there are a number of costs at the laboratory costs and so forth that are that are just ending.

And so 250,000 dollars worth of environmental compliance is is stopping.

We will continue to, of course, uh the landfill gas until until all that gas is depleted.

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

Yeah, so we want to keep that that gas pressure low.

That's great.

Oh uh I'm glad you explained it to me.

Congratulations on getting that done.

Um I just have a couple little ones.

The debt on this same slide, we have you know, it's not a lot, but what is that from?

Is it just a is it a legacy from when we had our own program?

Or is it something is there some reason we're still borrowing I know there's no there's no future borrowing.

I'd have to don't recall what that exactly is for.

Is that the maintenance facility or some component of what I'm trying to get at here is are we ultimately going to get to a place where we don't have any debt in the refuse fund?

Yes, I we have no plans to to do other capital projects.

If I had to guess this is something we did at the landfill, perhaps you know, installing the uh the landfill gas system would be a major capital expense that you that we might have wanted to borrow for.

Gotcha.

And then last, and I promise this is not trying to stump you guys, but I I'm not trying to ask you without sounding that way.

You mentioned on one of the slides that we're using CPI to project out future increases.

Why CPI rather than producer purchasing index, what what uh basket of goods are we looking at here?

Is that are you genuinely just using like the same CPI that I would use to adjust for my retirement income, or is this something specific to what we would expect to be buying?

Yeah, it's it's specific to the contract.

So the contract has specific CPI measurement fuel indexes and things of that sort.

So that's that's what we're using.

Perfect.

Thank you very much.

I should have known you were already on top of it.

That's all my questions.

Do we have anything else from either of my colleagues no?

All right, well, we've got you.

Do you guys mind if I go back and ask you a quick question about stormwater then?

Oh, actually, no, I'm sorry, I did have one last question on trash.

Tracy, I'm sorry, this is really it's kind of for you.

Um, we had a bunch of folks go to Sweden and they come back raving about their trash system.

We see in other parts of the US, even where they're trying to do new things with trash.

If you guys wanted to really revolutionize how we deal with trash in the city, what would that look like?

Uh I'll start with one thing that I think we could do.

And this this came as a suggestion through our climate action plan, which is maybe try to keep food waste out of our solid waste collection and disposal.

That's a that's a large cost that's that's heavy.

Uh and then it ends up in landfill and then produces gas and you know all these things.

So I I think that's something that's actually practical and something that a very small municipality like us could could take on with the support of the public.

It means you know it's a lot of work for the public.

If we if we provide you a food waste bin, then you have to use that, and we you know there's a lot of pieces that go along with it.

But I think it's I think that's doable.

Some of the other things you see, you know, in uh you know, I don't know, uh Sweden or Denmark or someplace like that where they have incinerators and they make sure that only things that are appropriate for the incinerators are in the supply chain at all, that nothing you know that shouldn't be in that incinerator ends up being produced or sold in that country.

Those are very much, I would think regional or national level initiatives that would would be beyond something we could tackle.

But you know, the one thing that has has struck me is like, yeah, I think if we if we weighed a residence containers and and you got just like the stormwater program, if you had a financial incentive to use less in stormwater, we we were trying to incentivize these non-residential customers to add stormwater treatment on their properties.

That's really the goal of all of that is you you have you you save money if you treat your stormwater.

Same thing if we did the same thing in uh solid waste, we we could probably reduce our our environmental impact there.

But it's not easy, none of those things are easy, but other other people have done it, so it's doable.

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

Yes.

Yeah, it is.

So what I'm trying to think about is it seems natural to me that what you're talking about could be kind of lumped in with yard waste.

Um but if we're wanting to set this up and we just sign a new seven-year contract for yard waste, I'd hate to set up two parallel systems when really people should put their yard waste and their food waste together.

Do you think that's a major barrier to enacting what you just talked about?

Or is there some way we could kind of get out of the yard waste side of things?

I I don't know yard waste very well.

I I know we collect it, it goes somewhere.

Tracy knows better than I do.

Right now, where we take our yard waste, they don't take food waste with it.

Right.

So that would be we would have to tell where we take and we're upping the composting that we're having at Truxton Park now.

Um we're gonna be looking into uh a different company kind of thing, maybe bringing in more containers, trying to vamp that up more.

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

My compost service costs me money, uh actually.

And they're supposed to give me some nice uh compost at the end of it.

I still haven't seen it.

But um what I'm what I'm trying to get at here is say six months from now, the environmental matters committee wants to have a hearing about how will we set up a compost program.

Is it a totally moot point because we just have signed a seven-year contract for yard waste?

No.

You're I don't think so.

I think we we can we can continue to promote voluntary use of a compost program, and that's got its benefits.

We'll want to take that to the like to the extreme, then we restructure you know, kind of our fees and our and our contract would have to go along with that and all that.

So we um you know, where we more or less paid our customers to to compost.

Okay, thank you.

So as things change, we put it out there so that some things can increase on that purpose.

Oh yeah, well, um maybe we'll have you to an environmental matters committee meeting at one point, Tracy, we brainstorm on that.

Thank you.

Uh I do want to go back to stormwater briefly.

And actually, it's tied right into what you were talking about.

Um we're with this new non-residential structure, which is wonderful with me.

I love it.

Uh the point is that we're charging everybody the same rate per ERU, but we're now charging people who have more ERUs more.

Could we choose to not charge people the same per ERU?

If could we create a progressive rate structure where if you have a hundred ERUs, you're paying more per ERU than if you only have five.

If you're a church you you can't help the land you own or the size of your parking lot right now.

And um so making a tier like we have on the water side.

Well, you you know, you're you're punished because you have 30 ERUs.

You're already going to see a really big change under this.

And so you're going to be very interested in how can I get some stormwater treatment to bring that bill down.

So in in those cases I'm not sure it's it's not it's not like I can really control that in in terms of how much property I own.

But for new development but then the new development is in a different boat because you're already required.

Right.

You're watching that that's not sounding like something we should do.

Okay.

I think I get what you're saying.

And maybe and I'm seeing this for her not her head in the back so maybe we put a put a pin in that we do this we see what impacts it has.

If we still feel like there are a bunch of places that have tons of impervious acres and aren't mitigating and they're not doing anything then yeah then we then we then we look at that.

Yeah for sure.

So maybe I'll make a follow up Ms.

Jackson can we just ask the city attorney to make sure that's legal there's not any reason why we wouldn't be legally allowed to do it.

That's all I've got colleagues anything else on the enterprise funds?

Yeah this has been great.

Yeah I feel like we're oh yeah we're five minutes ahead so let's take our 20 minute break and we'll resume it to well it's your your thing but I'm proposing that maybe we we reconvene at 1015 and and you guys get out a little early.

That sounds great to me yeah uh all right uh is there a motion to recess for 20 minutes and return at 1150 move sorry test for the naval officer's recommendation 1015 is the motion second all those in favor please say aye motion carrying swearing recession are you good to stick with the 15 minutes for this absolutely like like done in 15 minutes or me done getting through the slides in 15 minutes.

For the slides.

Oh yeah yeah five probably okay I just figure we might have a bunch of questions.

All right uh we are back it is 1016 a.m on April 28th.

And Director Vogel the floor is yours good morning.

Uh director of public works uh let the folks in who are with me introduce themselves Tracy?

Tracy Brown public works analyst Betsy McCam, Bureau Chief of Engineering and Construction All right um accomplishments first one uh you're already well aware of City Docs uh progressing very well um and then getting through that grant was a significant challenge uh a lot of environmental and historic preservation hoops to jump through there uh we've talked at length in the previous presentation about the stormwater fee adjustment uh great job there by the stormwater team to get that ready to go and then lastly uh a lot of other things I could have chosen as the third bullet but traffic safety studies for some of our our major corridors has been something we've been trying to get after for two or three years I think that that capital uh project went into the budget at least two if not three budget cycles ago and it's finally underway.

So I'm very excited about that.

And so now we're gonna go to sort of a response time, um, which we know will be we'll be able to unable it, we would not be able to achieve a very quick response time to a pothole report as soon as the winner ends, right?

So if you have a long freeze, a lot of snow, then you're gonna have a lot of potholes, uh, and it will take the crews some time to catch up, and so we we wouldn't be able to respond quickly to all the potholes uh requests that come in immediately.

But over, you know, after that things settle down, hit steady state.

Uh so we we have a uh proposal or an objective for potholes of about 80% of the pothole requests that come in uh get responded to, I think within a week is is what I proposed there.

Skipping down to the bottom of this page, the uh something we're not still hitting, which is our hydrant testing.

We we really want to touch every hydrant every year.

And uh we're we're we're still kind of on a two-year cycle, and that's really just a matter of uh making sure that the people don't get reallocated to some other task who who are responsible for this, and uh that they that they are doing the work quickly and and efficiently.

So there's just some some supervision there.

I I see no resourcing challenges, nothing for uh the city council to help with to get us up to that 1200 number.

Next slide.

Okay, another one here.

Um linear feet of storm drains maintained as a percentage of sewer mains under asset management.

Uh the the reason I've got proposed up there as NA is this is just another one that doesn't make sense.

I didn't I I think I looked through these, I try to find one or two that I I want to change every year.

This one I I probably should have changed last year, but I'm I'm gonna propose that we change it next year.

It's just meaningless.

Storm drains, uh, we our maintenance program involves cleaning out the inlets uh not the actual pipes themselves.

Uh when it comes to being proactive on a storm drain system is really about inspections, which is a which is a different metric.

And then the last thing here is the uh the third one down there, percent of CIP project milestones.

This is this is the first year we we've reported on this.

It's a it's a brand new performance measurement.

And um we kind of think we'll we'll end up at at 70 percent, not 80 percent.

And I and I think next year we'll we'll do significantly better as the you know the staff has a little bit more used to to the projection and what it is we're actually measuring.

Next, please.

No enhancements, no non-personnel enhancements.

Trends here pretty much because there are no enhancements and not much to see here.

I think the only thing uh I would point out is that you see perhaps a big jump in salaries.

That's not because we're adding positions, it's just uh uh mechanical thing, right?

We we propose the budget at all positions are filled, all positions were are are never filled, so um that's why the past salaries are lower than you might expect.

Um I'm sure that's the same with every department that comes here.

Next slide.

Revenue, our only uh revenue comes from our enterprise funds, and we've covered that already this morning.

Next.

And then here's a number that gets a little bit funny because we're commingling enterprise funds um and and general funds for the um our general fund expenses.

And so, but just as I guess what uh what percentage it would be enterprise versus what percentage is general fund.

There, there we go, 73%.

So the only really from a change standpoint uh with respect to the budget is that engineering construction contract services is going down a little bit from where we've been historically.

Um a caveat that I'll point out here is that oftentimes what's in contract services is a budget amendment that a particular council member may propose to have a study performed, be that um the main street reversal study, uh traffic circles, uh road diet on on Bay Ridge, so just to name a few.

So sometimes these things are places where council members say, hey, I've got something I really want the engineering department to do, I'll add $50,000 into the budget.

Um so that's you know, it's kind of where we sit right now, uh, is a reduction there.

And that at that 135, we would not necessarily, if that were to stay the number, we we would be we would not necessarily have a lot of agility in terms of I can just something comes across my desk that that has an emergent requirement, we would end up having to do a funds transfer, most likely.

Um and so that's just an extra extra step.

It means you know, rather than it being entire something that I entirely control, I'm working with finance and the city manager uh to do things that might come up during the year.

And then the the last little bullet there is it's a uh not large numbers, but um phones and software budget has been moved out of our budget, move to ITS.

Again, you've probably seen that from other departments.

And I'm pretty sure I made the 15 minutes.

Or one of the most complex departments.

You you manage to really boil that.

We were already here for an hour for the yeah, that's true.

Um yeah, you're gonna make me even be short on questions.

But um I'll let all the Roman O'Neill start with questions.

Great, thank you.

I have a couple of questions, um, and they're more less, I guess, budget and more just operations.

Um street sweeper.

I know that's one of your performance measures.

And we've talked in the past.

Is there any possibility of some type of schedule to the residents?

And I don't want to, I don't mean to say every Tuesday it's going to be this, but it would be helpful.

The thing that I hear over and over again is, oh, I wish they were new, I would have made sure my cars were off the street.

Is there an opportunity for us to say this ward is the first week of the quarter or whatever?

Is there any chance of having some type of schedule?

There's a chance.

Um right now we we are fairly rudimentary in terms of how we how we manage this.

Um so it's it's very difficult to predict how much we're gonna get done in it in any given time.

We are in conjunction with exploring ways to be more efficient and effective in snow removal, um very close to to entering into an agreement with a software company that can have uh routes, planned routes, and once we get that visibility and a and better control on what we're doing, I think there'll be an opportunity to forecast better.

Um just because we are small, we have only a couple of pieces of equipment, we have two operators.

Uh then you throw weather in in into the mix that it it's just very difficult to know exactly.

Yeah, we can do we can hit every eight weeks on this particular schedule.

Uh you could expect the first week of the uh of every other you know, let's say for instance, the first week of an even numbered month, your your neighborhood's gonna get swept.

We we're not there.

Um but it it's possible that we could get a little bit more uh next week, you know, a little more it could go out, or some the possibilities are there.

It's just nothing I can promise in the very near future.

I would just also like to add that the major caveat with anything like that is parking restrictions and the appetite for that.

I've looked into it as part of the stormwater program because the MS, you can get credit through the MS4 permit uh for street sweeping, and it's just difficult with trying to present parking restrictions associated with street.

People knew, right?

I think the Alder Woman's question is if folks knew that their street was going to be swept, they would voluntarily park elsewhere or in their in their driveways or something.

Right, exactly.

Um, that's where you're going with that, though, Betsy.

I I feel like uh even if I they knew there are some folks to my board who would not be very happy about it, but it's worth considering.

I mean, right now your street they go around your car, you know.

They are undercover.

Because you don't know how you have no idea when they're coming.

If I knew that the first week of the you know, even numbered months, there was a possibility of that, I would make sure that the midshipmen who park in my street that we moved their cars, that we, you know, because they are sitting there longer.

It just there's some opportunities for people to have the ability to actually have their areas swept.

So let's say in in it in a hypothetical future world, and I don't want to spend a ton of time because we we probably have other you know forums where we could we can address this in depth.

Um but in a hypothetical future world where there isn't there's a an exact route that the sweepers take, you would be then if we could share that information and they would say, Oh, I always know that when they go to this street, I'm the next day.

Yeah, then that then the residents could kind of keep an eye on our website and they would see the maps and they would see the routes, and they could they could kind of self do what you're saying because they would know.

Right.

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

Exactly.

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

That would be great.

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

Right.

Um my second question is we talked briefly about places like Clay Street, West Washington, which are city streets that could use weeds from sidewalks, things like that, more so than other areas that maybe don't have as many renters on them.

Um we talked a little bit about it, and can we make a plan so that at least at the beginning of the season, those areas are looked at by maintenance, street maintenance staff?

The answer is yes, we could.

I think it's a matter of policy whether we should.

So I I think that is something maybe another committee or uh the council in a working session, maybe it would be it's a working session topic is what is what is the appetite of city leadership to say this neighborhood will we'll do what is your uh your responsibility as residents is to make your neighborhood look pretty, or if you want to, you don't have to.

But if you want your neighborhood to look pretty, you've got to do it.

But other neighborhoods, we're gonna go ahead and take care of that for you.

That feels to me like a policy decision.

Um, and I'm not opposed to it because we've already done it downtown.

We we already gave up on uh fleet, Cornhill, Maryland, East, and we just said that there's just for because of the Airbnbs or whatever it is, people don't take care of their neighborhoods or the shops don't have a weed eaters, they don't take care of their neighborhoods the way we do in the more you know residential uh owner occupied homes.

So I I just gave up on that one.

I got tired of looking at weeds downtown and I and and and we're spending like ten thousand dollars a year to make downtown advisory been very well received.

But I had a heart I had a lot of heartburn.

I wrestled with that ten thousand dollars for a while before I just said we're gonna do it.

So there's an opportunity to do it, it's just a matter of uh I I would like some direction from uh either mayor or council, whatever, uh on on where you stop.

That's that's my that's my problem is you you you say this street and this street, but but what about this other street?

I don't know.

So if I asked for specific streets and was able to find 10,000, that could happen on those streets.

Yes.

Yes.

Again, just try to keep in mind.

How do you limit something this and how do you how do you take a fairness sort of approach to it?

And if you're if you're comfortable with it, you'll you'll hear no objections from me.

I'm just pointing out that as uh as decision makers, as policymakers, that's that's a little where these things get tricky.

We used to have a crew that did it about 10 12 years ago, I'm told.

And once every other week they were there cleaning up, making sure that the sidewalks were free of weeds, and it came out of a budget at some point in time, so it stopped.

So probably along the same time we got rid of the trash.

When right, public work services used to have a lot more people than we do now.

I think you know, services were 60 at one point in time, and now they're 25.

Okay, thank you.

Those were my two questions for now.

Thank you, Mr.

Chairman.

Um Director Vogel uh I have to start by saying thank you.

Uh the amount of work that public works does that people don't see um is amazing, and uh across the board, the amount of effort that's going in is great.

So thank you.

Let me first talk about snow.

Um, and I think it just might be a yes-no question, but you talked of a uh after an extensive after action effort about technology and other equipment.

We talked about authorities, um, but but from a budget perspective, does this budget include everything that you think it should include in order to prepare us for snow removal next winter?

But from a budget perspective, does this budget include everything that you think it should include in order to prepare us for snow removal next winter?

It does not.

It does not.

The one piece we we just have to kind of tackle this one piece at a time.

The one piece that we we we went after first was the software that we want to be able to give turn by turn directions.

We want to be able to know in real time where our drivers are.

And the snowpaz system that we have now, well, helpful in terms of communicating to the public, maybe where our plow has been is not really an effective operational tool.

So we've done our market research, we've interviewed with various firm or companies and found the product we want.

And we know that we can afford that out of our our budget.

We'll have to do a funds transfer to be able to pay for that using 20 FY26 funds.

How we pay for that next year still an open open question.

It would seem to be under the the approach that is being taken in this budget by the administration is that that would be an an ITS cost.

But again, there's always uh a place if you're looking to come up with uh $20,000 or so or $25,000.

That should be something we should we should be able to manage.

You keep in mind, right?

We we built the budget in December and January.

And and then and and so things just sort of lag like this.

But we always have these these ways of being flexible in the year of execution.

So what the while the budget doesn't have that $20,000 in it, we're gonna we're gonna find the money.

There's some setup costs, so the the upfront cost might be 40 or 50,000, the recurring tail to that is is less.

Um and then you know, equipment side, that's just that's just tough to do without a fleet manager.

Um and so we you know, we're kind of used to having um uh a fleet manager, Danny Horwath, you know, so where he would he would walk us through okay, what are your what are your needs for fleet and what's affordable, and and he would present that.

We're just kind of in a little bit of a of a transition period right now.

So fleet management will be something that will be a big uh focus effort, I think, in the next budget in the 28 budget.

That the reason you don't have a fleet manager right now is because it went to central services, or it's just because somebody retired.

Oh, okay.

Yeah.

Thank you.

Sounds like you're working the trash.

Uh so it sounds to me like this city council should put an amendment in the budget and lock in $25,000 for that software.

Fair.

Thank you.

Um the next question is uh I I'd like to pile on to the to the street sweeper conversation, but maybe rather than go to a solution uh to take some advice I've received and and focus on the problem.

Um I I believe we should make a transition in Annapolis, and I represent e-sport so I'll specifically talk about esport and clean our streets better and our sidewalks.

But let me talk specifically about streets.

I would like to work with you and uh Alderwoman O'Neill to explore what the what the best way is to clean our streets.

In Esport, our problem is cars, because the street sweeper, it's an obstacle course, and so it's exceptionally inefficient for the street sweeper to operate, and arguably the street doesn't look a whole lot better as they weave in and out.

And so I would like to put some priority, and if I would ask for your advice after this meeting, if we need to put resources into it, but to clean our streets, because what happens in Eastport is the leaves, the junk, the cars, they never move.

The it the well, first of all, the normal stormwater washing doesn't clean it as much as effectively, and when it does, all that stuff goes right into the creek.

So I'd rather pick it up uh in a in a street sweeper or something.

So is that the best way forward is is to sit down with you and Alder Woman O'Neal and whoever the right people are and look at the plan or to turn it over to you and ask for a plan.

Turn turn it over to me.

Uh I think that's something we could we could target.

Uh we're in 2026 now for for some time, like sometime in 2027, we pilot maybe not all of Ward 8, but a subset of Ward 8 where we go to, I was just in Boston a couple of weeks ago, and there's a sign that's you know that it tells you on this day of this week, or maybe it's this day every week, uh, do not park here.

Uh you will be towed.

And that's I think the only answer that it's got to be signed right there on the street.

So we have to have a plan, we have to be able to to communicate that plan and then execute on it.

Uh it's it's doable.

I I would very much like to explore that.

I I am willing to take the hit on loss of parking for a period of time to do that.

Again, I think it's communication.

So I look forward to that.

Thank you.

And and by the way, also I think if we need to capital investment or leases or whatever for additional machinery, I think we're very open to that discussion.

Can I jump in with one little question on that?

Is the limiting factor right now the machinery or the people for the sweet sweeping?

Street sweeping.

More people is my observation.

We we've got a few pieces, and I think some work better than others, uh, but people uh certainly in the winter times different story, right?

Because the sweet trooper doesn't just sweep it, it also cleans with water.

If the ground is cold, we don't really want to do that for for the fear of of icing and things like that.

Um thank you.

Next subject, sidewalks.

I feel like I'm partnering with one of my colleagues on each one of these topics.

But um, thank you for uh the level of effort uh that you're going to in sidewalks.

And quite frankly, Alderman Huntley's question about street sweepers is where I am on sidewalks.

What is your limiting factor on doing more sidewalk work?

Is it by by by sidewalk work you mean large scale repairs, not responding to your resident complaint?

Correct Limiting factor, yeah, but both budget in the Capitol uh and then the people to manage that budget.

Um Betsy's just completed interviews for another engineering position.

Uh if we were to be fully staffed in the engineering department, that would not be as much of a limiting factor.

It would just simply be the budget.

But but I think we're spending all of the sidewalk repair capital budget as it as it is.

Okay.

So what I hear is you've got a uh pupil challenge now, but you're you've already got the slot, you're filling it.

Work that, see how that goes.

And no.

Well, I heard that.

I think the thing is was is right now the the staffing and the budget are in sync.

Yeah.

If you were to raise the budget, and I didn't have when I weren't fully staffed, we wouldn't be able to spend the money you added in the budget.

Right.

So that's exactly where I was going to be.

They both have to go up together.

We're funded on the people side, we're good there.

Additional money in the capital project, we we'd be able to use.

So our constraint today is both, because we have a we're short people, not a lot of money in the sidewalk budget.

Um people's thing was solved in last year's budget.

Now we're hiring the position.

Right.

And and the budget would need to increase to do more sidewalk repairs.

So to put a finer point on it, when you fill the you have a double problem in people.

You've got an empty billet, and then you got a cap on, or not a cap, but you only have two two people to do that.

So my point is is if we were, and to confirm what you said, if we were to raise the capital money for sidewalks, your two people that are working it would need to be beefed up.

As long as we're fully staffed, right?

And people people leave, as long as we're fully staffed, we could spend more money.

Okay.

Perfect.

We're in the budget, we have enough, but we have a vacant position right now.

Gotcha.

Um a general question that sounds easy, but I'd like you to make it as hard as you can.

If we were to give you another 5%, how would you spend it?

In other words, not in this budget that you wanted when you cut 5%.

We didn't really cut.

The only thing we we did uh go down on was the engineering construction contractual services.

That was we didn't, I don't think we took a full five percent.

That was a fairly small amount.

Um kind of as I said as I went through the slides, it's not that we wouldn't be able to do everything we needed to do.

It would just be there's some extra administrative steps involved from, you know, if you have an engineering construction contractual services budget that's got plenty of money in it, a new requirement comes comes along, you just take care of it.

In the future, we'll have to move money probably out of salaries into that budget and then and then spend it.

Um I don't see that as being a big concern.

In the larger the bigger question of what would you do with um an extra, you know, let's say a million dollars a year.

I'd I'd have to actually specifically think about that.

Okay.

Thank you.

Thank you.

And thanks again for what you do.

Thank you, Mr.

Chairman.

I'm gonna also ask about sidewalks, I don't want to shock you.

Uh so but actually I would start with roads.

Which is to say, I think the question that the city manager has proffered before about roads and sewers and a lot of different things probably works does is are we keeping up?

And looking at your performance benchmarks, which by the way what you did with getting rid of that number of potholes performance benchmark, like take that bottle it and give it to all the other department directors, because that is the mindset that we need on these performance metrics.

The number of potholes repaired is not a good performance metric.

And so huge kudos on that.

What I'm trying to get at though is I think we are keeping up, but I think we also have a big backlog.

And tell me if I'm wrong, but my understanding is we do have a backlog on some of these where now we're completing repairs for things like streets and and sewers at the rate that they degrade.

But given that past administrations didn't do that, it seems like we're not necessarily gonna catch up.

We're keeping up, but we're not catching up, is my sense.

Does that feel accurate to you all?

I have my opinions on that Betsy go first.

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

I don't think we're keeping up.

I don't, yeah.

I think our infrastructure is aging and we haven't been able to keep up for many years.

I think we do what we can with the staff and the resources that we have, and we ensure safety and mitigate as much risk as we possibly can.

But I think we're getting better in terms of our asset management program and really keeping an eye towards um, you know, the type of work when we do it and how we do it, and as we be as we are getting more improvement in that area to help advise the work that we do do.

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

Well, that's that's right.

Are we are things getting objectively demonstrably worse in you know, let's take infrastructure right?

Uh roads, road condition, sewer condition, water main condition.

I can't say that they are.

I I really feel like we're keeping up or very close to just sort of treading water.

Um that's that you know, just my opinion.

Yeah, I think it's a little bit hard.

It's kind of like hey, we had a cold winter or a hot summer, the climate is changing.

I I don't know, there's noise that, right?

Some years you have a lot of water main breaks, other years you have less.

You have to evaluate those trends over a long period of time to really see uh an underlying signal.

So it's it's it's a little bit of a of a subjective opinion.

But I I I think I I think we're keeping up.

What would it take to catch up if we wanted an improved level of service?

Um yeah, it's gonna take more more people more money in in each of these areas.

Ms.

Buckland.

So uh um, sorry, Vicky Bucklin, acting city manager.

Um I'll jump in uh about a couple of things, um, which these guys might cringe at, but we'll I'll watch their faces to see.

Um, I think there are there are a couple of things that for me stand out when we're talking about this particular space.

Um, one is that um in a perfect world, we would have very regular um condition assessments that we could keep an eye on as far as are we keeping up, right?

Um because as indicated, depending upon the weather in any given year, um, depend uh and and other factors, um, one year may be harder on our infrastructure than another.

And uh a regular set of of condition assessments um would help us keep track of that and both prioritize and then give us that sense of you know, how are we doing on here's what we expect for a normal distribution uh of condition assessments if we were keeping up.

Um I think that that's not reasonable for us to assume that we're gonna have anything approaching real-time condition assessments all the time, right?

Those are gonna be snapshots in time, but I think that those and public works does do them, and I think helps set the agenda for what the priorities are and acts as a little bit of a reality check once those comes in, those come in in terms of how are we doing.

So I think having it from a performance perspective, um, having those conversations a little bit in tandem might help help for you guys to kind of have a better sense of what they know more intrinsically because they're used to seeing that stuff.

And the other thing is that you know the city's been around a while.

Um we have not, but we have not as we've grown over time.

The the build-out of infrastructure has not been linear, right?

We've had periods where there's been stronger growth and and all that, and so we budget as though this was essentially an even number year after year, but it's not really, right?

It's clumpy.

The the growth of the city was clumpy, and therefore the the refresh of the infrastructure ends up being a little bit.

And to make things even more fun, um water's a great example.

We have plenty of water pipes that were built in 1870, 1880, 1900, 1910, in fantastic condition.

They're gonna probably give us another 20 or 50 years.

We have a lot of water pipes that were built between 1920 and 1950.

They, you know, the quality of materials that were used during that period were not as good.

Those are the ones that are failing.

Well, that is.

So it's not just the you know, the linear growth of the city, it's the construction means and methods of a particular period or an era, and and those are those are places where we where we have problems.

So it's it's a complicated decision, you know, how you assess condition.

Roads is one where we can assess condition pretty well.

We have a periodic four-year assessment, and and I can look at that, it's hard to aggregate that data, but the way I analyze it is how many zeros and twos are out there, and are those zeros and twos on, you know, kind of a road that's got 10 houses on it and and low traffic.

Okay, that's we can live with that.

But if it's kind of a main sort of connector road, and we got lots of zeros and twos on connector roads, that's that's a problem.

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

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

Um which is why these these metrics here that are in you know inspected uh are really really important.

Linear feet of sewer beans inspected.

That's we get we got to keep up on that because that's that's running a camera.

And then we get to see what's the condition of that sewer line is, and if uh if we can, if it's in bad shape, we line it, um, which is much quicker and you know less disruptive than having to dig a giant trench and replace that.

Yeah, so as far as you know, I I still think the underlying question is the right question.

Are we keeping up?

Um it's just that getting at that answer is in a perfect world, we'd have all of this information at our fingertips, but that's not the world we live in.

And so we we use these proxies to try to um to get a better feel.

I didn't see you guys cringe through any of that, so I'm super happy.

So then the proxies are you know, water main breaks is something, but those are highly variable sure.

Um problems are a little bit more consistent.

And of course they depend on resident behavior a little bit, but the condition of our of our pipes is important there too.

So when we have sewer overflows, uh sewage coming out of a manhole, uh, that is something a trend we can we can readily see um and and the sewer backups into people's basements and things like that, um, which are a little bit less visible to the public, but that's another indicator of how we're doing on our on our overall, like on a long-term capital maintenance, but also how we're doing on the operating side of uh of maintaining those lines on a day-to-day basis.

What I think from all of this is that you guys have put a lot of thought into it, and you have something of a plan, you have the ability to let us know whether we are just keeping up, we're not keeping up, or we're keeping up and catching up.

At some point, I would love to have more visibility on that, but I from what we're hearing today, I can trust that like you guys are working on that.

And the last thing I'll say on that topic is just um you said real time, we're not gonna get real time.

That every time they hit a pothole, they're letting that San Francisco Department of Public Works know, which is fascinating.

There's some really interesting technology coming out.

Yeah, there's some AI stuff coming out.

I I'm sure you get a bunch of solicitations.

I occasionally get cold calls as well that of new stuff that's out there.

So yeah, there is interesting stuff coming down the pike.

Yeah, and you can imagine just even like aerial photography of it.

Um to transition, I want to talk a bit about salaries and benefits.

My big top-line concern here is that you know, as you were talking about earlier, there's almost always yonder spend in salaries and benefits.

Everybody kind of does.

But engineering construction budget salaries and benefits is a good 20-ish percent above what was budgeted from what I'm looking at.

What caused that this year?

Uh mapping of salaries was inaccurate.

Mapping, how do you mean?

That's maybe not the word that that these folks use, but um a given position maybe is supposed to be charged to water and sewer, but got charged against general.

So you would have been looking probably at the general fund.

And so inappropriate charges from that a position that was budgeted one way but charged a different way.

Not something we control in in the department.

Got it.

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

But well under when when you see the final numbers, it'll be well under.

Gotcha.

Finance is correcting that.

Mr.

Palakall or Mr.

Johnson, you guys want to weigh out on this?

Can you repeat the question?

Sure.

I understand the COSO.

Yeah, yeah.

So the ENC budget summary, the FY26 projected number is significantly higher than the FY26 budget.

And I'm just trying to understand why that is.

Good map.

Darren Johnson, uh senior budget analyst.

So, yes, what uh director Burr was stating in regards to the mapping.

So when new positions are created in the system, they're added as just ENC or the uh DPW, and it automatically gets routed to ENC.

So, what happens is some of the positions need to be split, let's say ENC, or they need to be 50-50 water sewers.

So that's what we're doing as far as like the workforce plan now.

So, what you see in proposed for 27, that should be reflective of the adjustments that were made.

So we should be good to not go over the budget based upon what the mapping is is happening.

So when we submit these new mappings, it should balance out.

And if we need to you know move the charges to the correct um division, we can do that as well.

Okay, that makes total sense.

I appreciate it.

Um this is just a a note, not a question, but to Mr.

Palicall, I think DPW is one of the areas where we should look at what their regular vacancy savings are and have a line item for that.

I mean, we were talking yesterday on the phone that can't necessarily know an HR where they have eight people, but DPW with six 30 in the general fund, six sixty in the general fund.

Uh there should be a clear enough trend that we could put that in.

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

So noted.

Yeah, thank you.

Um I'm gonna talk a little bit about snow also, and apologies if it makes you twitch.

But I'm not I'm not here to compare.

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

I'm not here to complain about the the results, but I do want to look at the money.

Um our snow budget is where we're way over budget, which makes sense because we had way more of a snowstorm than we would expect.

But what I don't understand is why did nobody ever come to us about that?

Why like how can we be $600,000 over budget on a 170,000 dollar budget, and it doesn't require any kind of fund transfer supplemental appropriation or anything like that.

And this is that's probably less to you threatening pay.

Yeah, yeah.

So we will be coming to you.

Um it happens, we do it full-through transfer.

Uh, the reason we're doing it as a fourth quarter transfer because invoices were still coming in.

Uh, we still have processed invoice with them invoices within like the last month or so.

So we wanted to make sure we had everything finalized before we came to you guys to make the transfer.

like that and this is that's probably less to you threatening not me yeah yeah senior budget analyst so we will be coming to you um it happens we do it fourth quarter transfer uh the reason we're doing it as a fourth quarter transfer because invoices were still coming in uh we still have processed invoice with them invoices within like the last month or so we wanted to make sure we had everything finalized before we came to you guys to make the transfer so we will be coming to the committee with a transfer it's just we wanted to wait until everything's settled yeah and is there some kind of requirement in code about essentially like how far outside of the budget the mayor can go on something the city manager can go on something before needing council approval yeah yeah the the limit is um uh 25,000 dollars um and um can't move between funds so anything that's a movement between funds outright has to come to council and um and I can't do supplementals so it if it hasn't initially been appropriated I can't do that on my own so you guys see anything that's that's new money um or money that's moving between funds but inside a fund up to $25,000 um city manager can can approve.

And is there a timeline by which that has to by which something that's above that above that $25,000 threshold has to come to us no there's not a timeline in code there the timeline ends up being uh more driven by practicality um in my experience and and you guys may have a different perspective but um the city keeps Munis fairly locked down in terms of um uh how your ability to overspend individual lines so the city has a pretty high incentive to bring things um in a in a reasonably timely manner for some things uh for for most things frankly I don't know if you Darren if you've got a different answer Aaron Johnson senior budget analyst so the reason we like to wait is because we rather try to cover it in house so we try to wait till we get closer to the fourth quarter so we could take a look at salary savings or we could take a look at areas who haven't spent funding that was allocated for certain things and we pull from those pots versus coming to you guys and say hey we want to use contingency so if we don't need to use contingency we rather pull the funding that we have that was allocated if we have vacant positions we know we're gonna have some salary savings so we rather pull from the funding internally versus coming to you guys and moving funding from different pots.

So that's why we wait till fourth quarter.

Yeah I I appreciate all that I just uh I have a little bit of a concern that we could have a situation where we're gonna find some way to pay for snow removal we all agree snow removal is a great thing like we needed it but in a different circumstance having 1700 budgeted and the administration spending eight hundred thousand dollars could be a real problem for something else that we wouldn't necessarily want to wait three four months to have the council say no you can't do that so I don't know that's not a question just a complaint there is a disaster fund or kind of a rainy day fund set up almost for this reason continuency there for it's contingency yeah um you look like you have something to say on this you want to do you want to wait till I talk or do you want to stay on the same subject?

This is same subject on SNEL yeah yeah so are you talking about STEW?

Yeah okay go so I think it's really important that the director of public works in the city had the authorities to spend the money in whatever a state of emergency or whatever it was we wouldn't want to cause a delay but I do share I think the sentiment here that we should have a process that makes that automatic that's different than the director of public works deciding he wants to spend 5000 on something different that is not an emergency.

So this is what we talked about in the after action is is does the director of public works have the and the mayor have and the city manager have the authorities to spend to commit resources in times of crisis and it seems to me that there should be a difference between times of crisis when money has to be spent without coming to the city council and normal times when this when the the director of public works halfway through the year says I I we didn't budget for this but we need to do this it's not an emergency I want to come to the finance committee and the and the city council to move money and so I don't know if that's a problem that gets solved today but but it seems to me like we should look at legislation that that doesn't question that that literally gives the director of public works the city manager and the mayor the authorities in times of crisis to spend money that's different than in routine times.

But but speaking of the routine times, and just from from my perspective, I can't do that.

I can't, I have no mechanism to overspend any account.

Um I think up to $25,000, city manager can approve that.

But that's that's a that's your that's your control.

That's the authority you've given the city manager is um he or she can improve up to $25,000 uh via funds transfer and inform council afterwards or or whatever.

Um so I'm already pretty constrained.

I can't do it.

Right.

I I have I have what's in my budget and to spend a penny over.

I I don't have the ability to do that.

But you did it during the snowstorm, I hope.

Right.

But that that's my question.

Because for instance, in snow, we just told contractors go out and do stuff and send us a bill.

We didn't actually have to follow the normal process of I'm gonna write you a purchase order for $50,000 as soon as that purchase order hits the system, that money is gone.

And if I don't have $50,000 in that account, I can't write that purchase order.

The system won't let me.

So unless we're using these emergency authorities to authorize work that we haven't even written a purchase order for, uh, that I don't have that ability.

And and that's my my question is has the city council given you the financial tools in order that nobody second guesses you up to a threshold that you call the contractors and said go to work.

You called a couple dunk trucks, you you did this.

If we order salt, it it's it's fine, and then and then we reconcile the accounting later.

Right.

So that's the only example that I can think of where that's that where that is allowed.

Hurricanes, sure.

Tornadoes, natural disasters.

I don't know what the policy is that that allowed me to do that.

We just did it because it's what we always do.

We need to look into that.

Yeah, I actually just made a note.

I've got a running uh list of things to have hearings on when we have a new finance director and uh we're done with the budget.

But uh what I think I'm hearing from you is if you have emergency procurement authorities, you essentially have emergency spending authorities.

Facts.

And that uh explains it to me.

Uh but yeah, we do do need a bigger discussion on that.

But thank you for indulging me in this this far.

Still on snow.

We're I totally understand again, we should not be budgeting as much for FY27 as we spent in FY26.

But why are we budgeting less in FY27 than we budgeted for in FY26 across contractual services and supplies for snow?

Or as always feel free to tell me if I'm wrong and I'm looking at the wrong numbers.

But I'm gonna uh ask Darren for help on this one.

Can you repeat the question, please?

Sure, I'll I'll try to repeat it.

Um year over year, budget 2020 for snow, 2026 to 2027, contractual services and supplies.

Is there a decrease?

One reason could be, and I and I know this to be true, uh, some brine equipment, right?

The capital outlet that was capital outlet capital outline.

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

So okay, on the supplies and other, I I just tug into a little bit, and it actually looks like it's because we are not you're you're not getting allocated for fuel oil anymore.

So I guess that's going through central services now.

Yeah, Vicky's nodding her head.

And then yeah, it looks like we're decreasing contract services.

So any explanation, Mr.

Johnson?

Darren Johnson.

Um as Burr stated it was 46,000.

That was capital outlay, that was full of the Lodge Bryant tanks, uh, it was for something else that had to do with Brian, but that was 46,000.

10,000 that was moved to ITS.

So that's like 56,000 right there.

Got it.

So that the 10,000 going to ITS, that's what I was trying to search down.

Okay.

That answers my question, I think.

Yeah, cool.

Makes perfect sense.

Um can you tell me any more about this 125,000 dollars we have gone for traffic engineering and traffic studies?

Uh do we already know where that's going to?

This is under uh engineering construction's contract services.

It's listed for us as traffic engineering support studies and improvements.

I mean, I guess that's Jeff's authority.

It's that maybe just uh a note that's in the budget documents that's not quite accurate.

That's all contractual services for the engineering department.

John's and we had to pay somebody to do a traffic study like that's the kind of thing that it popped up and you'd have if we were gonna pay somebody to do the um the engineering work for that which we didn't we we did that in-house we we could we could use that money but we the way we actually installed that work was we used the traffic safety improvements capital project our our other choice there is the service like the streets operating budget which we we would have been another choice but that's a very limited budget and is always spent yes uh I'll save a conversation for that for Thursday the streets the general streets or no you're saying operating not capital correct so streets right people that are out yeah but we repair streets using our operating budget using our our crews um and and they can repair streets or maybe even uh they might have a small contra very small contractual services uh amount in streets we would eat we usually go through that so when it comes to traffic safety things I typically go and use the um traffic safety capital project so you were just saying streets budget is very small when I look at this I see four point three million dollars of streets operating budget that doesn't seem right to me is what's going on there maybe that what the heck could be going on there streets budget summary is listed for us at 4.3 million dollars in operating budget that can a lot of salaries obviously yeah yeah but we're not really spending three million dollars a year on salaries for streets are we I mean if we are that's I'm kind of impressed but yes doesn't sound like a particularly strange number uh to me I I think of that group as being 2530 people average salary 1000 if you you know salaries and benefits sure yeah if you if you you know back in the napkin that sounds about right yeah if you look up in the staffing summary the streets team has about what Bur said in terms of there's 14 equipment operator ones three equipment operator twos two equipment operators and then six uh public works maintenance worker ones and then an assortment of other folks and some temporary laborers as well got it okay I don't mean to belabor this point I I think I just got thrown off when you said it was a small budget and the small like the things that are kind of not fixed costs it's pretty small got it relatively Mr.

Johnson you have something to add um Darren Johnson senior budget analyst no I was just about to say projected for um streets is like 2.9 million yeah projected for 26 and if we look at actual so 25 is around 28 2.8 million so voluntary thank you I have a couple questions about the water fund you mind if I ask those now water water fund sure um any particular reason why we're switching some people from water supply and treatment facility over to water distribution looks like we're switching a public works maintenance worker into there and uh utility mechanic into there interesting I'll defer to finance maybe Tracy seems like she knows I we're not we're not decreasing the staff at the plan I can tell you that I'm just curious why we're moving it on our spreadsheet it looks like we're moving from one part of it to another part.

Tracy Brown public they were actually put into the wrong last budget they were put placed into the wrong budget they were placed in water plant they should have been placed in water distribution so we are correcting it part of the um correction we did with the one of last years was enhancements was a couple of folks to work in water distribution um but I guess when the budget actually got finalized it they went to the wrong place.

Correct thank you very much uh a couple other just little ones the water plant operation system update what is that seems like a good thing but what is it?

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

And so we're not we're getting a whole new software for that it's at the end of its life like kind of some 20 year old program that's no longer supported by any way it doesn't run on you know Windows 10 that kind of thing.

Yeah I'm not looking for things to get rid of I will actually uh disagree with Pip Moyer over here and quote the late uh the not latencies the former alderman from Ward 8 who would tell me that the most two most important things we do are clean water in and dirty water out.

So uh that's you know trash and what'd you say, trash and snow?

Pretty important also.

Uh last thing just gonna ask you about is the vertical assessment management project for our sewage pump stations.

What is oh am I saw?

Uh I was just curious what that is, but if it if you don't know off the top of your head, you should definitely get back to me.

I don't even know to be honest.

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

Oh, just are they are they working?

Uh the same kind of thing we were talking about.

I think it might must be just another little piece of the asset management program.

So a pump station is a tank, it kind of stores um you know our our wastewater, and then the pumps pump it to the next place on the uh on the on its way to the treatment plant.

It's kind of what Vicky stated is the condition assessment.

It's can assessing the conditions of each pumping station.

Yeah.

Um the last thing I have for you is just the congratulations.

One of the things that stood out to me in your accomplishments was consolidating fire hydrant data sets.

And that's like super not sexy, and I'm sure nobody in the public is even going to be listening to me talk about this, much less know that it happened.

But that is the kind of thing that I'm sure makes us all more efficient.

And I'm really happy when I see stuff like that where we're using technology to better manage our public infrastructure.

So thank you.

Any last any questions from either of my colleagues?

We got a little more time.

We're good.

All right.

Well, we could wrap up a little bit early.

I thought we were gonna spend a bunch of extra time on DPW, but no.

Um we don't we don't have anything.

We can't do this fund transfer, Kaylee and let me know.

It's not she didn't put it on the agenda.

So I I think we're ready for a motion to adjourn.

So moved.

Second.

All those in favor, please say aye.

Aye.

Meeting adjourned.