You feel like we're Mr.

Moss today.

Are we set?

Good evening, everyone, and welcome to the June second, twenty twenty-six Bozeman City Commission meeting, and we'll call this meeting to order.

A few uh housekeeping items just so folks know how to follow along.

Of course, those of you that are in the room, you're here with us in person.

For those wanting to follow along online, uh, if you are streaming from the video page and you want to give public comment at those points, please use the raise your hand feature.

And of course, anyone can always follow along in more passive ways by champ cable channel one ninety or by tuning in by calling in with the phone number that's posted on our agendas.

There will be items.

There will be opportunities to provide public comment on each item as well as consent and general public comment.

We'll make that clear each step of the way so nobody misses their opportunity.

Um, and if anyone submitted written public comment, those were just prior to noon today, that was distributed to myself and all of my colleagues.

If anyone at any point has any uh requirements or assistance uh to be able to follow along, our deputy clerk Alex Snooby is the guy to talk to to make sure that everybody can participate.

Um, without further ado, we will um rise and stand for a Pledge of Allegiance and a moment of silence.

One nation under God.

Liberty and Justice.

Thank you.

Okay, moving on through to changes to the agenda.

City Manager, are there any changes?

Good evening, Mayor.

There are no changes tonight.

Okay, moving on to FYI.

Is there any FYI from any of my colleagues this evening?

Yeah, Commissioner Bodie.

I just wanted to remind everybody that today is primary election day.

And if you have not yet cast your ballot, you have a little bit less than two hours.

It needs to be turned in by 8 p.m.

to the elections office, unless you're a poll voter, and then you can go down to your polls.

But yeah, I hope you all will participate in this election.

Any further FYI?

Is there any FYI from staff?

Thank you, Mayor.

A couple things.

The Bozeman Beat, our city podcast episode just dropped.

And this was a special one.

It was our own Mayor Morrison sat down with MSU president Brock Tessman to talk about MSU, city relationships, AI, a bunch of other interesting things.

So if you want to hear about more from President Tessman, just tune in to that.

I think one of our best episodes yet.

Also, tea with the commissioner in celebration of Pride Month.

The commission is hosting tea with the commissioner in partnership with Queer Bozeman at Steep Mountain Tea.

And that is this Thursday, June 4th from 9 a.m.

to 11 a.m.

And I think our own Commissioner Emma Boddy and our deputy mayor Douglas Fisher are going to be there.

And then one of the most popular events we have is the garden party.

And it returns this Saturday, June 6th, from 10 a.m.

to 1 p.m.

at the Museum of the Rockies outdoor patio.

We'll be there rain or shine.

It's free to the community.

It celebrates outdoor water conservation through the drought tolerant giveaway, plant giveaway, free compost, native seed mix, irrigation supplies, and more opportunities to use our precious resource more efficiently with our gardens and our lawns and our landscaping.

So we're excited about that.

Last year we had over 350 people attend, and we gave away 450 plants, 150 bags of compost and 165 smart watering guides.

So it's very well attended, very well used, and we're excited to be do that again this year.

Thank you, Mayor.

Thank you for those highlights.

You beat me too.

I had forgotten the postman beat.

So I was gonna say that.

Signal further FYI.

Any disclosures from anyone on the commission related to any items in front of us this evening?

Okay, seeing none.

Now we are moving on to our consent agenda.

We've got a weighty one after a few weeks off.

City manager, are there any items you'd like to highlight for the public?

Thank you.

I will do two really quickly.

That project particularly got value engineered out as we worked with uh the school district to build a parking lot and another turf field.

There, the school district, I think, gave up about three and a half million dollars to the city to do that.

It's an amazing partnership.

It wouldn't have happened if we weren't able to work together.

So appreciate the school district.

Appreciate Gallatin County giving us the money to fill in those value-engineered uh elements of the project, the sidewalk, and then we're able to do some additional landscaping.

And also uh another opportunity to partner is with HRDC, uh F3 is a grant from the Bozeman Trail, Bozeman Parks and Trail grant program to human resources, the HRDC to allow them to fund the uh garden planting and maintenance at the Story Mill Park.

So we have a community garden out there.

It's pretty amazing if you haven't been there.

We were concerned because of other cuts in funding that we weren't able to continue that partnership with HRDC.

It's an important one, and we're able to do that.

So those are two things.

Thanks, Mayor.

Thank you for that.

Before we bring it up here for a motion and vote, we will open it up for public comment.

So this is public comment just on consent one.

This evening we do have a consent two.

So anyone in the room that is interested in giving public comment this evening, um, you will have three minutes to offer public comment.

Please just begin with um your first and last name and your relationship to the city, and then you'll have your three minutes to share your thoughts with us.

Any public comment on consent.

Second request in the room and one final request in the room.

Mr.

Newby, are we seeing any requests online?

No, Mayor, we are not.

Okay.

We'll close the public hearing on consent and bring it up here for a motion and vote.

Commissioner Magic.

Yeah, thanks.

I move to approve consent items one through 22.

Second.

It's been moved and seconded.

Mr.

New.

Commissioner Magic.

Aye.

Commissioner Bowdy.

Aye.

Deputy Mayor Fisher.

Aye.

Commissioner Sweeney.

Aye.

Mayor Morrison.

Aye.

Consent is approved five to zero.

Now on to consent two.

Any public comment in the room on consent to.

Second request in the room.

And one final request.

Mr.

New Beady.

Mayor Morrison, I see no request for public comment online.

Thank you.

We'll close the public hearing for consent two and bring it up here.

Commissioner Magic.

I move to approve consent item two.

Second.

It's been moved and seconded.

Commissioner Bodie.

Or sorry, Commissioner Magic.

Aye.

Commissioner Bodie.

Aye.

Deputy Mayor Fisher.

Aye.

Commissioner Sweeney.

No.

Mayor Morrison.

Aye.

This is approved four to one.

Now moving on to public comment on non-agenda items.

So now this is the opportunity for folks to give public comment on any uh matters that fall before the scope and purview of the Bozeman City Commission, but it's not on our agenda this evening.

The same uh mechanisms, rules apply, you'll have three minutes.

Um, when you step up to the podium, um please share your first and last name.

Um the lights will cascade from green to yellow to red.

Yellow is indicating when you have only one minute remaining.

Good evening, Mr.

Blank.

Roger Blank, Bozeman resident.

I'm commenting regarding the NCOD.

There are currently over 70 combined demolition building permits for structures uh for old historic Bozeman.

These are not decrepit structures that are facing demolition, but some recently restored homes like the beautiful blue farmhouse on 7th Street and Olive in Cooper Park, whose owner moved to looming townhouse development.

In your infinite lack of wisdom, you, with all the exception of Commissioner Sweeney, rejected against the desired expressed desire of the public for an interim preservation code, zoning code, as the final is being worked on.

At the rate you're all moving, there won't be a historic Bozeman to preserve since you continue to rubber stamp soulless boxes that the public doesn't want and the market doesn't need.

So how about you take the lead from Commissioner Sweeney, who has the public on her side and demonstrate some effort to do your jobs as public servants and to preserve what may not matter to you, but matters to a great many of us in the community, and make passing a preservation code a priority forthwith before there's nothing left to preserve.

It would also be nice if you stopped rubber stamping soulless boxes too.

Thank you.

Any further requests for comment in the room this evening?

Good evening.

Good evening, Commissioners.

Uh my name is Jason Beatty.

I'm a lifelong Bozemanite.

Uh, and I'm here on behalf of Queer Bozeman and the Bozeman Pride Planning Committee.

Uh, and I want to thank you all for your continued support of our community and our festivals here.

I want to invite you all to participate in Bozeman Pride, which technically started on Friday but runs for two full weeks.

We have over 33 events that are as diverse as our vibrant community in those two weeks.

So it's a busy schedule.

But one I want to highlight in particular is our Lindley Park celebration, Pride in the Park, which is this Saturday from 10 a.m.

to 4 p.m.

We will have a resource fair with over 70 businesses and organizations showing support for the community and sharing the resources they offer.

And this pride is put uh largely funded through business sponsors, in which we have over 32 sponsors this year.

So it's going to be a wonderful pride.

It already is off to a good start, and I'd love to see some of you there.

I know a lot of you are participating in various ways.

So I just wanted to say thank you.

Thank you.

Any further public comment in the room this evening.

Second request for comment in the room.

And one final request for public comment in the room.

Mr.

Newby, are we seeing any public comment requests online?

Yes, Mayor Morrison, we have Cindy Smith online.

Good evening.

Good evening.

Can you hear me?

Yep, we sure can.

Okay, great.

Good evening, Commissioners.

My name is Cindy Smith, and I'm speaking tonight because I have raised serious concerns involving HRDC, public funding, employee rights, whistleblower complaints, retaliation, disability accommodation, and the use of community resources against a former employee who spoke up.

This is not about taking down a nonprofit.

This is about whether an organization that receives taxpayer funds, donor support, and public trust is being held accountable for how it treats employees who raise serious protected complaints, helping the public, not given organization permission to harm workers, ignore whistleblowers, mishandle disability accommodations, or use charitable and publicly connected resources to fight a former employee who has asked for accountability.

The City Commission regularly takes positions on justice, housing, tenant protections, and the rights of vulnerable people, even outside the city limits.

I respect that, but employment rights are also human rights.

Safe workplaces are also a public concern.

Retaliation is also a public concern.

And when an organization operates within city business limits and receives city support, the city cannot simply look away.

My concern is that HRDC appears to be using legal counsel not to address the merits of my complaints, but to try to have an unemployment case thrown out on a technicality.

Not because the facts have been fully and barely reviewed, not because my witnesses were interviewed, not because my evidence, grievance, resignation, or whistleblower complaint were meaningfully considered, but because the process can be avoided.

Something about that does not sit right.

I am asking you to fulfill your responsibility as public officials when taxpayer funds, public trust, city partnerships, and employee safety are involved.

Silence is not neutral.

Silence protects the institution with power.

A good mission does not erase bad conduct.

A nonprofit can help the community and still be required to answer how it treats the people who work inside it.

Tonight I am asking this commission to do three things.

First, formally acknowledge my written complaints and the public accountability issues they raise.

Second, identify what responsibility the city has when an organization receiving city support is accused of retaliation, disability related failures, whistleblower, mishandling, and using public or donor connected funds for legal action against a former employee.

Third, provide a written response explaining whether the city will request clarification, independent review, or accountability from HRDC.

Public trust is not protected by silence.

It is protected by transparency, accountability, and the courage to ask difficult questions.

When there's nothing to hide, transparency should not be difficult.

This is not about taking down HRDC, it is about making sure that organizations with public trust do not become untouchable.

I'm asking you to take this seriously, respond in writing, and remember that employees are part of the public too.

Thank you.

Thank you.

Mr.

Newby, are we seeing any further requests online?

Mayor Morrison, I see no further requests for public comment online.

Okay.

And just seeing that a few folks walked in, are you wanting to give public comment on non-agenda items or on the budget?

Non-agenda.

Okay, then this is well, this is your moment.

Just in time.

Yep, you got here just in time.

You'll have three minutes to start with your first and last name, relationship to the city, and you'll have your three minutes.

Bob Muldowney, I'm a resident of Bozeman.

Um over 30 years ago, Mayor Morrison Commission, thank you for your time.

Over 30 years ago, this commission made a reasonable decision to designate downtown Bozeman as a blighted area under Montana law, freezes tax base at 1995 values of roughly 1.3 million, and direct all new property tax growth into a tax increment financing or TIFF account used to attract developers.

That decision made sense in 1995.

In 2026, that no longer makes any sense.

In fiscal year 2025, 2.97 million in property taxes that would have otherwise flowed to the general fund, the county, our schools, the states, instead went into the TIFF account.

And the butt for incentive test has failed.

The most recently approved downtown project, the 36 million dollar hotel in East Mendenhall, received the TIFF incentive of just $372,000.

Developers do not need incentives to build in Bozeman.

The market has spoken.

Meanwhile, our community is paying the real price.

Bozeman has only 76 sworn officers, 1.27 per thousand residents.

The FBI average for a city our size is 1.65.

The DOJ standard is two.

We're running at least 23 officers short.

Over the last 10 years, our population has grown approximately 37% to 60,000, whereas the city has only added seven sworn officers in that same time period.

Chief Feldkamp has said officers are too busy busy responding to calls to dedicate time to traffic enforcement.

West side residents have lost neighbors to speeding vehicles on roads with no dedicated traffic patrol.

The city's annual share of that diversion, estimated about two million dollars, would flow permanently to the general fund and could bring policing closer to national recognized standards.

No new mill levy, no new taxes.

I'm asking the city commission to instruct the Finance Director to satisfy the series 2020 2020 downtown URD bond by depositing 2.1 million from the existing 9.7 million fund balance into an irrevocable escrow account.

That single act trigger triggers TIFF termination under MCA 715 4292.

No general fund appropriations required, the money's already in the account.

Upon termination, the remaining 7.6 million distributed proportionally across all taxing bodies, city, county, state, and schools, the city share is an estimated 2.4 to 4.9 million immediately available for public safety.

Before asking residents to support yet another mill levy, please examine what this commission has the authority to do today under existing law with existing funds.

Thank you.

Thank you.

And could you uh say your last name again?

Moldowney.

Thank you.

When you spell it, you got it.

You can spell it.

M U L.

Is that a test?

DOW NE UI.

I got the same thing.

What?

It was a test and you nailed it.

Excellent.

Thank you.

Any further public comment requests in the room this evening?

Okay, we'll do a second and a final call in the room.

Do check it again.

Okay.

It will close the public comment hearing.

The public comment portion on non-agenda items and move on to a mayoral proclamation, then a couple special presentations.

As a public commenter uh shared earlier, um, June is Pride Month, and Pride is a uh Bozeman Pride has been a growing and vibrant event and celebration in this community and and by the stewardship and leadership of a lot of folks that are in this room.

Um so I'm excited to um share a mayoral proclamation.

Whereas the city of Bozeman works to create a city where all who live, work, and visit can thrive regardless of life circumstance, and whereas the city of Bozeman is in the state of Montana, which asserts under the state constitution's equal protection clause, the dignity of the human being is inviolable.

No person shall be denied the equal protection of the laws, neither the state nor any person, firm, corporation, or institution shall discriminate against any person in the exercise of his civil or political rights on account of race, color, sex, culture, social origin or condition or political or religious ideas.

And whereas the city of Bozeman and City Commission uphold a commitment to dignity, equal protection, and non-discrimination of all, including the two-spirit lesbian, gay, bisexual, transgender, queer intersex, asexual, and others under the LGBTQ plus umbrella, seeking to live full lives in our community, and whereas June is historically Pride Month, a month celebrating and commemorating the Stonewall Uprising, a watershed moment in the history of the United States in the fight for equal rights for LGBTQ plus individuals.

And whereas the City of Bozeman recognizes that threats to the lives, well-being, and dignity of LGBTQ people continue to this day in our state and our nation, and whereas celebrating the contributions of LGBTQ plus community members and individuals is part of an ongoing work to ensure that all can truly belong in the city of Bozeman.

Therefore, I, Joey Morrison, mayor of the City of Bozeman, recognize and proclaim June as Pride Month throughout Bozeman, Montana, and further urge our city to join in the celebration of Bozeman Pride 2026 with community-driven events from May 29th through June 14th, centered around June 6th, that celebrate community, expression, culture, belonging, and dignity for all.

And I will share this proclamation with the members present of the Queer Bozeman community that have been leaders in making this these celebrations happen.

Also, just for the uh for the public's notice on our special presentations.

They do not have public comment or discussion from the commission on those.

Just for everyone's information.

City manager, would you like to tee up our first presenter?

I sure would.

We have an amazing uh relationship between the city and the school district, and specifically the Bozeman Police Department and the school district.

And I get to talk with the school superintendent and school leadership often, and it is they always take the opportunity to let us know how much they appreciate what the city's doing to help with safety and law enforcement relationship in this school and also the staff as well.

My daughter's a teacher at Gallatin High, and she absolutely raves about the environment that the police officers have created, the school resource officers, and how that is impacting in a very positive way students' uh safety and their school experience as well.

So I'd like to rep um I'd like to welcome Sergeant Scott McCormick.

Uh Scott leads the SRO program, school resource officer program for the city of Bozeman, and other cities often look to us to see what we're doing and ask Scott and his team for advice.

We've also won some national awards, and I don't want to steal Scott's thunder, so I'll stop right there.

Thank you.

Thanks for having me.

Um as Chuck said, my name's Scott McCormick, I'm a sergeant with Boston PD, and I I oversee our SRO program uh that we have in conjunction with the school district.

So I kind of just want to take a brief few minutes tonight to uh give you guys a quick overview of the uh our SRO program.

Um we have an amazing relationship, as Chuck just said with the school district.

Could you move the mic just a little bit?

Oh yeah.

Is that better?

Yes, thanks.

Okay.

Sorry, my voice is a little raspy.

Uh we have an amazing relationship with school district.

They put a lot of trust in us.

Um, and all of the SROs would stand up here and tell you how glad they are that they have the job that they do.

Uh within the district, there's about 8,000 students, about a thousand staff.

So, really, between the five of us, we kind of have our own little city that uh that we kind of police and manage.

Um, so we have four school resource officers, and then me, the sergeant.

Um we have Harley Barbeo, he is over at Bozeman High.

We have Connor Foley, he's a Gallatin High.

Jeremy Tankink is the Chief Joseph Middle School, and Jonathan Ogden is down at SAC.

The middle school guys all take care of the elementary schools that have students that feed in to those schools.

So instead of being kind of locked into one building all day, uh they're out and about uh hitting all the schools, teaching classes, uh dealing whatever is is coming up or going on at those schools.

Uh about a year and a half ago, we were lucky to uh Connor became a uh canine handler.

We got Copper, who's a yellow lab, who's just been amazing at the school district.

She goes out, um, she's she goes to all the schools.

Uh she's probably been pet by about 20,000 people in this town.

Uh it's been great for relationships with with Connor because literally thousands of kids have come up to him, and uh that never would have, just so they could they could say hi to Copper.

So that's been really great.

Uh not only is she great with kids, but she's great at her job.

Um about a month ago, we had a bomb threat at Bozeman I where we had to evacuate the school, and with her, we were able to get kids back into the school way quicker than we ever would have been able to.

And she's also really good at what she's trained to do.

Um, she uh she located the firearm that was used in the homicide uh last week, so that was she's been pretty successful.

Um about six, seven years ago, we recognized uh kind of a gap in the schedule.

Uh the SROs were still working four tens like everybody else at Bozeman PD, which kind of left a gap in the schools.

So we switched to five-nine, not five, nine hour days.

So now there's coverage five days a week, which has been great for the school district.

Um, in addition to these guys working their regular normal week, they work a ton of events outside of school.

They work uh all the football games, the crosstown basketball games, volleyball games, um, school board meetings, parent nights, carnivals, uh, the list goes on and on.

Graduation, which is coming up.

So they're they're very busy and like teachers.

Um they're ready for a break when school gets out.

We follow the uh National Association of School Resource Officers triad model, and that kind of defines our role as educator, counselor, and then law enforcement officer.

I think there's a misconception in the public that that SROs are in the school to bust kids to hand down uh school discipline to we just want to write as many kids' tickets as we possibly can, and that couldn't be further from the truth.

Um, our primary reason for being there is to provide a safe environment so students and staff feel safe coming to school.

Um we build positive relationships with those kids, and we do that by uh first being like an educator.

These guys teach over a hundred classes uh throughout the school year, so they're constantly in and out of the schools or the classrooms.

And being a counselor, I mean they have a lot of kids that come up to them on a regular basis that have things are going on at home or they just they want to talk about something.

Um really law enforcement officer is kind of the last thing that these guys are looking forward to doing in their role.

I mean, nobody wants to, you know, nobody we don't really get any, you know, enjoyment out of sighting kids.

Um about three years ago we started our own diversion program, and that was to reduce the amount of kids that we sent to youth probation.

So this year we will probably have about a hundred to maybe a hundred and fifty kids that will successfully complete our diversion program, which is completely in-house within the school uh with the parents' permission and the kids being on board.

So that's been great.

Uh our MOU with the school district.

Hey, Chuck, let me know if I'm running late at all.

Um our SRO, our MOU with the school district is kind of unique in the sense that uh the superintendents look at the SROs as quasi-administrators.

So they are every day working with the principals, uh, assistant principals, the deans, the counseling staff.

Um, they together with the SROs make up basically the admin team within the buildings.

So they're very involved.

Um, in addition to that, they work with youth probation officers on a pretty regular basis.

They're constantly coming to the schools to check in with kids and touch and base with the SROs, and also a CPS.

CPS is in the schools on a daily basis, working on their investigations, which are often the same investigations that the SROs have or our detective division has.

We conduct about 50 threat assessments a year with the school staff.

Um that can happen anytime there's any violent indications, violent statements.

Uh somebody brings a weapon to school, somebody gets into a fight.

So we will conduct a threat assessment and come up with a safety plan and work with the school district to implement that.

Um the district is great in letting us use the buildings uh for a lot of our training.

So we do scenario trainings, active shooter trainings, building clearing, and it's also a great way for all of our officers to kind of get the layout of all the buildings in case there was an emergency.

And in turn, we we we train the staff at the schools.

Uh every fall we we we kind of do an update on school safety, go over emergency protocols, lockdowns, run lock fights, secure in place, um, all that.

Sometimes people wonder why we fall under the uh detective division.

And uh I think the reason is that the large amount of investigations that these guys do.

They're not just you know sitting around hanging out with kids.

I mean, they're they're very busy with a very high call volume.

Um the uh SROs generate over 2,000 calls for service just within the school year, just for the five of us.

So that's a lot of calls, and we also generate about 500 cases.

So there's there's a lot of cases that we take that uh would normally go to detectives, so we free them up so they can focus on usually bigger things.

Um so these guys are very busy, you know, outside of their what's expected of them from the school district, but they're working on a lot of investigations, which could be anything from theft to you know disorderly conduct in the school to child abuse and sex crimes, and a lot of times, you know, depending on the nature of those, those will end up going ultimately to uh detectives.

A lot of our cases come from the school district.

Uh all the staff are mandatory reporters, so anything you know that kids come and report, they have to report it to child protective services, but they also report it to me.

So I generate a case uh oftentimes before CPS even gets the phone call, and we're already working on it.

So by the time it gets cross-reported to the police department, there's a oftentimes uh we already have a case and are already looking into it.

Um that's pretty much all I had for you.

I'm gonna leave you with a picture of copper.

Um, if you guys have any questions, I'm happy to answer those.

But we don't typically open up for questions, but since you prompted, are there any brief questions for the mayor?

I don't have a question, but I do have a comment.

And I just want to say, as a former schools trustee, you know, I just want to underscore everything that's Sergeant McCormick you said here.

Um I was I was on the schools board when we started up the SRO program and really kind of uh staffed it up and and I confess I was was initially really skeptical of having a police officer in the class in the school, and you are so correct in that the relationships, the safety component is huge.

I mean, one thing I have learned is that that not few things are more important for a kid than having an adult in their life, and for many um kids, the SRO is that adult.

So I really appreciate the relationship your team is building with those students.

The diversion program is huge.

You know, we've had some tough votes here, but nothing compared.

Nothing is worse than foreclosing on a kid's education, and and so the ability that you can you know keep a kid out of a uh um you know out of trouble is just again really life-saving.

So I really appreciate all that you do, and and I've come to really appreciate the program.

And you didn't mention, but I believe the school district pays for half the salaries of our SROs.

They do.

So yeah, we have a great partnership.

I'm very lucky.

So thank you.

Thank you.

I'll I'll just echo that same sentiment.

Um, especially, you know, Deputy Mayor, this will be your responsibility in due time.

Um, SAC Middle School has a prestigious Halloween fashion show.

Um, and uh is it Ogden?

Yeah, Jonathan Ogden.

Um and myself were judges, and it was you could not find a more popular person in that room than that SRO.

Every kid knew him.

He was in a chicken costume, so that did you know that's a bit disarming.

Uh I remember.

But it's a testament to the relationships that they are they are trying to build.

Um thanks, Bear.

Okay, thank you for that presentation.

Thanks.

Thanks for the copper exposure.

Yeah, we got that picture of that's great.

Thank you, Scott, and thank you for all you do.

Uh next is the Bozeman Public Library Summer Learning Program presentation.

And I am pleased uh some people um offer gratuities and gifts uh as part of their presentation.

Um Director George is an expert at that, and uh I'd like to welcome her at our library.

I spoke to a bunch of their employees uh this morning, an amazing group, and um it's we're really lucky to have the Bozeman Public Library in Bozeman.

Thank you, Alex.

I love this picture of copper.

Okay.

Yep.

Okay, let's just use this.

Yeah, okay.

Susan Gregory, and thank you all very much for your time this evening.

I want to talk to you about this exciting and wonderful annual program that we do, the Bozeman Public Library Summer Reading Program, and why it matters, why it makes a difference in children's lives.

I have a little show and tell.

This year, what we're doing with our summer reading program is we're actually making part of it intergenerational.

And so what we have is a theme this year with Scout.

It's the library scout program.

This is Little Scout.

We have several little scouts.

Here are the badges.

There are five badges on here, all designed by our staff.

And if you get all five badges and you put them in your reading log, grown ups too, you get a special badge, another badge at the end of the summer.

And these are lovely.

So I'm gonna pass these around, and Mr.

City Manager, you can get badges as well with your grandkids.

Soops.

I asked our youth services department, Allie Newell to talk to her contact at uh Bozeman School District 7 offices because we know that the number of incoming kindergartners who are not reading at early literacy levels that they should be is much higher than you would think in Bozeman America, even in a community this wealthy and literate.

Um last year, 33% of incoming kindergartners did not meet the district's early literacy goals.

That's a third of the kindergartners coming in of those students.

49% were multilingual learners, and or lived in households with limited economic resources.

Oops, so how do we address that?

We do it all year round at the library.

We start um, as you can see in this slide, with our books and babies program.

I mean, we have people who bring their infants in at two weeks because that bond that grows between the parent of the caregiver and the individual and the child just gets stronger, and they associate reading with comfort and nurturing.

We have programs that are a lot of fun, as you all probably know.

Children like to hammer things.

Whoops, backwards.

And also our story times are a wonderful place for parents and caregivers to meet other parents and caregivers who need companionship or can offer support.

Whoops.

And I'm going in the wrong direction.

There we go.

Some more fun activities.

This is, I believe they're squirting vinegar on baking soda, is that right?

Okay.

And then it does what?

It puffs up.

Oops.

Okay, Alex.

Here we go.

One of our most important programs that we continue through the summer is our Symphony Storytime, and that is so heavily attended, it's not unusual to have 145 or 150 babies and caregivers crammed into the community room, and it's a wonderful thing to have that partnership with the symphony, and they get to play, they get to play with the instruments.

Okay, here's the most important thing that we offer during the summer summer lunch, free summer lunch.

And I want to take this opportunity to thank HRDC and our Bozeman Library Friends and Foundation because two years ago we lost our federal designation to be a free lunch site because the property surrounding the library had become too high dollar and the neighborhood was too prosperous.

So our wonderful foundation said no, no, no, no, we have to step in.

And so our foundation and friends pay for this, and so HRDC, excuse me, provides these meals.

So every day Monday through Friday at the noon hour, it's a free lunch for anyone under 18, no questions asked.

There is no economic ceiling, people get to have lunch together.

So it brings people together, and we also have our wonderful staff who use that as an opportunity for programming.

If you haven't figured it out, what we do during the free lunches and all these fun activities is we slowly get them into using books.

They begin to equate books with fun and joy.

And good food.

If you feed them, they will come.

Oh, we have a special guest.

Woohoo!

Hi!

It's a big scout.

This is Big Scout, our mascot for the summer.

Big Scout can't see very much.

But it wants to do jazz hands.

Did you want to ask me something?

Okay, I know we only we only have 10 minutes.

You know that.

Just 10.

Okay.

Would love at some point, at your convenience, to have his picture taken with you and any other interested people at the podium this evening for the city manager's highlights.

We don't know if this will work.

If not, we'll make a separate appointment with you.

But especially, Mr.

Mayor, Big Scout really has a thing about having a picture made with you.

So I don't know.

Mr.

City Attorney, we can work with you.

Yeah, sounds like it sounds like we're taking a picture right this moment, presumably.

Well, what we can do is we'll take it over at the library.

It's your convenience.

Oh.

No, no, no.

I'm sorry.

Did you want to do a picture tonight?

Just do it right now.

Oh, great.

Awesome.

We're all in the big room.

Okay, show them the tail, big big scout.

The tail's a big piece of this.

Yeah, I'm sure there's never been a child that's grabbed it or been dragged along by it.

Well, the summer is young.

The summer is young.

Okay, so does somebody want to help us with a picture?

How do you want to do this?

Would you like to?

Sure, why not?

Thank you so much.

We're gonna blow this up and frame it.

Oh.

That's the background.

Okay.

So big smiles.

Big scout.

Is that right?

Big scout.

We're a little scout.

There we go.

Thank you.

Thank you all so much.

Thank you all very much for being such a good sport, and we'll see you at the library this summer.

Oh, and you might want to mark your calendars.

The library will be back in November.

Well, you know, we have a number of other directors in the room who are going to be giving their department presentations in the coming weeks and months.

I think the bar has been uh.

Does transportation engineering have a have a mascot?

No, just think about it.

Oh, a big, a nice cone would that'd go long way.

Um, after two great presentations, we're moving on to uh the main event, our work session on enterprise and special assessments.

Thank you, Mayor.

And uh it's a hard act to follow, but we do a bunch of serious work at the city of Bozeman, and every once in a while feels pretty good to be able to celebrate with the community a lot of the um amazing programming and the amazing uh opportunities we have to provide services to this community.

What makes all that happen is our amazing staff and our amazing staff uses our budget to do this.

If you um look at what we do, everything is uh supported by our budget, which are supported by our taxpayers and our ratepayers.

So tonight we kick off the presentation of the city manager's recommended budget uh for the 2027 biennium.

Uh there are three public hearings scheduled for this budget.

We can schedule additional ones if um the commission desires.

Um tonight, June 2nd.

We're hitting the enterprise funds and special assessment funds on Tuesday, July 9th.

It'll be the general fund and other special revenue funds on Tuesday, June 23rd.

Um, it's scheduled for final budget adoption.

Any other discussion, the commission directs us to, uh, and we can be flexible in those dates.

But this document that um before you, I think you got it on the 28th of last month, is publicly available at the same time on our website.

Uh it represents weeks and months of work by your staff and our director team, and I'm really proud of what it represents, and I'm proud of all the work that's gone into it.

Um we've based it on the commission's adopted priorities and direction we've received from you, uh, community needs, and the director's request for staffing and resources to provide the services that we provide.

Um, our community.

We've tried, we've tried to balance those requests with the available funding.

Every time we do this, we have more requests than available funding.

So we try to look at the priorities of the commission, the priorities of the community, and the priorities of the professionals who lead this organization to uh include uh what we can in this budget.

Um, understanding that um reasonable rate requests, taxes and rates uh greatly impact the cost of living in our community.

So we always have an eye to that.

Um, as in years past, uh, we're not able to fund all the requests, but we've done our best to uh prioritize that.

We now need your eyes on this uh document to let us know how we did and what you want us to change.

And that is the purpose of City managers's recommended budget, which I must present to you by our charter, and then it becomes your budget through your fingerprints on it and the community's uh public comments.

So most concerning to me as a city manager and Melissa as the finance director is the difficulty in estimating revenue in this time of uncertainty in the legislature.

You will remember last time we did this, we found out when we got our assessed values that there was a 1.3 million dollar hit, a reduction to our voted staffing levies in our police and fire departments.

We were able to, at your direction, compensate for that because of the city's strong financial position.

So we take that into account.

Still impact the cost of living in our community.

So I will stop there, and I want to welcome up our amazing finance director, Melissa Hodnet, to present tonight's uh enterprise funds and special assessments.

Hello.

Good evening, Commission.

Thank you for having me back here.

I'll skip over this since Chuck just gave us the overview of our timeline.

But I do want to kick it off with kind of some high-level remarks here about what our role is.

Stewardship of public funds is the number one thing that is my role, and it's a shared responsibility.

It's a shared responsibility with everyone in this room because we've got community members whose money we are a fiduciary for, and we've got staff who are coming up with all of these budgets that are really critical and really important.

So accountability is one of the core ways that we do that.

We need to make sure we can clearly explain how we're managing our funds and how we're managing our budgets.

Compliance, making sure we adhere to our state laws, our cities charter, our city code, and any national accounting standards, and then sustainability is critical as well, making sure that we can sustain long-term financial health over time.

So we'll touch on many of these throughout this presentation.

The budget process isn't just a process, it's a cycle that us in the finance department are working on really all of the time.

It starts a lot of the time with this budget prep and adoption, which is where some revenue policies are discussed, commission priorities are discussed, and we translate that into numbers and we put that in the budget document so that we know how to operate over the next two years.

Then we're proactively monitoring the budget throughout the year.

So budgeted for doesn't mean that money is available, and we'll touch on that quite a bit mostly next week when we talk about the general fund.

But we're always looking to make sure that revenues are coming in as we expect, and we're not just spending money because the budget has been approved.

We do our annual financial reporting, which I will be back here every January to discuss with you, and this is where the final results come in, and we get to say what did we actually do over the past year and how does that compare with what we said we were going to do.

And there are a number of tools that we use.

We have fiscal policies, which are included in an appendix in the budget document.

We have mid-to-long-range financial models, and we'll look at some numbers from a few of those tonight.

And we also have best practices, national best practices from the government finance officers association.

So, in addition to the timeline that commission has seen so far, we started this process back in September.

Um, so this is months and months of work.

Um, preliminary discussions happened in December about our capital improvement program.

So the five-year capital improvement program was developed first and finally adopted in March.

Prior to that capital plan being adopted, departments were working on submitting all of their operating budget requests.

And in between January and us standing with you today and printing that budget document last week, we have done a lot of work projecting revenues, adding the capital plans in with all of our salaries and benefits and our operating costs, and trying to figure out what those impacts on rates are going to be.

So all that final budget balancing happened in April and early May, and here we are, hoping to get a budget adopted here in the next month.

So just wanted to quickly also touch on what shapes our budget.

So obviously, we do start with department needs as they're submitting requests to the finance office and to the city manager on behalf of their departments.

We're also looking at commission priorities.

We're looking at adopted master plans, adopted transportation plans, all of the plans that we have out there on the website.

We're also looking at revenue availability and can we increase rates and what is the appetite for increasing rates, or do we need to look at more of cost management technique?

So we'll talk about that.

So some themes overall for our budget cycle here.

We are focusing this next two years on maintaining our service levels despite the pressures of population growth that continues to impact the city.

We have a lot of infrastructure investments, and we won't talk about that as much because the capital program has been adopted, and we really do want to focus on anything that's that's changed since we talked about that in March, but there is a lot of infrastructure investment to make sure that we long term can maintain infrastructure capacity of our streets and our utilities for the community.

We also looked at cost management.

We have limited FTE requests, limited personnel requests in this updated budget.

We have looked at reducing some of our capital plans and phasing projects to make sure that we can moderate the impact to homeowners.

We're also looking at organizational capacity and transparency.

So we'll talk more about that in a little bit.

But we've done some restructuring of our accounting and our internal services, especially to make it a little bit more clear where the actual money is being spent operationally.

So a quick citywide overview.

Total appropriations are 609.2 million, which leaves 80 million, 80.1 million left in reserves.

And on the right there, you'll see a split out by what we call budget unit or fund type.

And there are some reasons why we split it out that way.

But really, these fund types are all consolidated groups that have similar types of revenue sources and similar types of restrictions.

So they act the same throughout the year when we're looking at any potential budget amendments or any potential things that we need to bring back to the commission.

So the general fund is where we account for anything that's essentially not using a restricted revenue.

Special revenue funds are restricted revenues like grant funding.

We have a separate fund for our community development block grant as an example of that.

Also, our special assessment districts that we'll talk about tonight are special revenue funds.

So essentially, this means that the revenues that come into those funds can only be used on those particular programs and services.

Debt service funds account for our principal and interest payments primarily.

We use these for our general obligation bonds.

Construction funds similarly account for major multi-year construction projects, usually general obligation projects.

Enterprise funds operate typically like a self-sustaining business.

So these are our utilities that we'll talk about tonight water fund, solid waste fund, stormwater fund, parking fund, and um gosh, wastewater fund.

If I didn't say that, I'll get to them all anyway if I forgot one.

Internal service funds finally are funds where we account for central services that are provided to all of those operating departments, and they're funded by cost allocations that come in and are expensed to those operating departments.

So first, I just wanted to talk really briefly about what's changed since the 2025 biennium budget.

So our total appropriations in 2025 were 485 million, and this walk chart kind of shows you three categories of costs that have increased to get to the 609 million in this particular budget.

Operating costs I've lumped all together into one.

So it looks like a larger category, but that is salaries and benefits and all of our operating costs, which includes things like consulting, contracted services, any anything that isn't capital and isn't paying for people.

And both of those categories have increased approximately 15% over the total for each biennium.

So what that equates to is about 7% annually overall.

And that's just reflecting some of some new positions, some new contracted services and activities, but primarily inflationary and negotiated increases.

Capital has increased by 30 million.

And the main driver of that is going to be a couple of water fund projects.

We've got the Lyman Tank rehabilitation, which is a little over 17 million dollars.

We've got another municipal groundwater project in the water fund.

That's another 10 million dollars.

So that comes up with most of that.

And what you'll see is that we have corresponding debt proceeds and grant funding.

So our resources are also increasing in order to pay for those capital projects.

The biggest driver is going to be our transfers, and this again refers to those inter-fund transfers between our internal service funds.

So we'll talk about that in a moment, but this is about a hundred percent increase in transfers from year to year, and again, just a change in accounting of how we're accounting for those internal services.

So we talked about the budget units, but you're also going to see that the budget is organized this year by some new service areas.

So we wanted to really make sure that how we were organizing our departments in the budget reflects what we we all believe that we provide to the community in terms of services.

So we've split these out.

These are somewhat new.

We've got public safety and justice, we've got community livability, community and economic development, infrastructure and utilities, and then central support services, which we'll talk about first, which are fully cost allocated funds.

And then we've got some general fund subsidies that we'll talk about as we get through these presentations as well.

Where does the money go?

So these are those categories, again, I've referred to before.

So the vast majority of our budget, 179 million over the two years is in capital outlay.

The majority of that is consistent with what was adopted in March.

Salaries and benefits is another category which pays for all of the people, all of the staff and all of the benefits associated with those people.

Again, operations and maintenance, things like services, janitorial services, landscaping, things like that, and then internal charges, and we've got some debt service where we've issued debt, we've received debt proceeds, and we have to pay that off over time.

As far as citywide resources, you'll see that our largest resource here is our beginning balance.

So what that means is we've done a good job of keeping a good chunk of money in reserves that we can use when we adopt this budget.

Sometimes you'll see some funds where we're using almost all of that beginning balance, and that's typically intentional.

That's that you would see in funds like special revenue funds where that fund has been kind of building up over time, and then we're looking for big projects to use it on, and we may or may not spend them, but we are likely to appropriate them, which means make sure that we can spend that money if a project arises in the budget.

Charges for services is our next largest category, and most of these are going to be in our enterprise funds.

So our water fund and our wastewater fund in particular are our largest.

No, we've got permit fees separate, actually, so I won't talk about that.

Um taxes are our next biggest source of revenue.

There is um, I should also have the page number, but there's a really good section on revenues in the front of the budget document, and I think probably everyone's looking has looked at it, but for anyone listening, um, I would highly recommend taking a read through.

There's about three pages that talk about all of the different revenues that the city receives.

Um, there's a chart that shows where all of our property taxes go.

It's really great information.

Okay, I'm gonna skip right ahead to the estimated homeowner impact to start our discussion this evening.

Um we won't talk too much about property taxes this evening because we're going to talk about the general fund next Tuesday.

Um, but as most of you know, we are always sensitive to try to avoid increasing all of our rates at the same time.

Um we have been catching up in a number of our enterprise funds from some zero percent increases and um really significant inflationary factors on our capital.

So you are going to see that we have some what look like pretty significant increases in here, um 15 percent, nine percents, but I think it's really important to look at this third and fourth column, the actual increase in dollars on an annual and monthly basis for each of those.

So we'll talk through each of these individually, but um the overall percent change that we're estimating is about 4.7% to the typical homeowner in the first year of the biennium, and then a 6.7% in the second year.

And I just want to emphasize what was said earlier that we we it's very difficult to estimate property taxes and how much those are going to change year over year.

It's also impossible to estimate how much each individual property is actually going to increase year over year.

So we've used an assumption of a three percent increase to the typical homeowner in this analysis, which seems to be typical over um the past 10 years that we look at, but it is very difficult.

Okay, I'll stop there to see if there are any questions so far.

Are there any questions on what we've covered so far?

Yes, thank you.

Commissioner Rubin.

Yeah, thank you for this beginning to the presentation.

I look forward to seeing the rest of it as well.

Um, I I just wanted to go back to the slide where you said um a change in accounting results in 50 million additional dollars in our budget.

Can you um and if there's a slide that's you know that you're gonna get to where we're gonna dive into that a little bit more than I can wait till then, but can you explain why why the change in accounting is necessary?

Yeah, so um the change in accounting, I wouldn't say is necessary, but it's helpful, and I think the next section when we talk about internal service funds will help a little bit, but I would like to just based on your comments clarify all of those internal charges and transfers, the 108 million showing on this screen, that's just money moving between funds at the city.

So it's not us actually sending a check out and spending money, but it is still included as part of our overall appropriations when we talk about our total budget, and that's important because if you um if you didn't account for it that way, you wouldn't see the full cost of operating the water fund, for example, because operating the water fund does cost money in internal transfers when they're transferring money to support the finance department or support the city manager's office.

Great.

So just to kind of repeat back, that's not a 54 million dollar taxpayer expense.

That's just um internally accounting for our transfers.

Cool.

Um, and then secondly, we've gotten some public comments previously about how some other communities wait until they get the taxable evaluations from the state before they finalize their budget, and why does Bozeman do it this way?

Um can you remind us why we are targeting a vote on this budget by the end of June?

Yeah, that's a great question, and I will actually um flip back to the slide to talk about that a little bit.

But um property taxes primarily impact our general fund.

Um so if you look at that, that's about 128.4 million out of a 609 million dollar budget.

I think it's really important that we have these conversations before July 1st so that all of the other departments that are impacted by the city's budget have and know what their direction is starting on July 1st.

And we've intentionally budgeted for new positions and new projects and new priorities in the general fund starting in September.

So we don't plan on starting any work, and we do plan on coming back to the commission with a budget amendment in September if necessary, depending on the results of the Department of Revenues work in our certified values.

Okay, thank you.

Any other questions?

Yep, Deputy Mayor.

So our operating costs are increasing 7% per year, and which is a little above of inflation or the national rate of inflation, right?

And we get a lot of pressure, maybe even expectations or or questions about well, why can't the city's you know operating costs be?

Or there's even an expectation by the legislature that our our operating cost should should increase with with inflation.

Um can you offer a little light of like why for a growing community that doesn't work?

Yeah, and I think we'll talk about some specific examples tonight, but um uh let's use street maintenance fund as an example.

Our miles of streets are growing at a rate that is larger than the rate of of inflation.

So that growth factor is a really big deal here.

Um the increase in demand for all of the city services that we offer is what would cause us to need some kind of increase over just the rate of inflation.

Um we're not trying to serve the same community that we were in um you know 2024 before our first biennium budget was adopted.

Thank you.

If I could add one point to that, um, what we what we don't talk about a lot um because we don't have to uh is our our labor contracts.

And a fire truck doesn't put out fire, a police car doesn't arrest criminals, it's the people and uh which are our most important asset.

And coming out of the pandemic, uh we saw a uh serious recruitment and retention problem in our city workforce, and we've been able to um change that by um making salary adjustments typically our contracts or labor contracts are three years, so it goes beyond a biannual budget trying to uh estimate what those costs will be it is difficult, and so we have great people, we recruit great people and we keep great people now, so that is uh an added um added um cost.

Any further questions?

Commissioner Sweeney or Commissioner Magic.

Uh I do.

Thanks very much.

Melissa, um I don't know if now's the appropriate time to talk about uh the tree assessment, and I know in the past we've talked about a different way to calculate that assessment.

Can someone just speak to that?

Yes, thank you.

I should have mentioned that earlier.

Um we are in the middle of researching what are the legal um options for us to assess our um tree maintenance and all of our four citywide assessment districts.

Um we hope in the next year we can come to commission with that analysis and see if there's something we would like to do differently, um, but we don't have that prepared quite yet.

So we have assumed for the sake of this presentation that we continue with those assessments as a um based on law square footage.

Got it.

Okay, great.

I have just one that's sort of in a similar vein to Commissioner Bodie's about process and timing.

Um so this is our second time doing this as biannual budget, um, and in light of a legislature that seems to get it consistently get its hands in property taxes in some way that makes it hard to predict year over year.

What's the trade-off of doing, you know, planning for the biennium versus going back to just one year at a time?

I think that goes back to what I had said previously about us not budgeting to fund any general fund initiatives until September.

We've done that in both years of the biennium.

So we've really are very, we think about this a lot, we talk about this a lot.

We're very aware that those revenues in the general fund could change and we could be surprised by what the legislature does.

We do keep track of it, which we we try to estimate to the best of our ability what the impacts might be, but um we just try to be conservative with what actions we actually take before those property tax values come in.

So to part of what I'm hearing in that is that the pros of giving predictability in the other funds that are more predictable, more static, is worth it.

Yes knowing that we're just not taking big risks and waiting until after we get our August news for general fund decisions.

Yes.

Okay, and so um, this is this has been a topic of conversation for a long time.

You can see on this chart here that our general fund is a smaller part of our city budget than uh the general fund receives all the scrutiny, all the public comment, that's our discretionary funding.

But you can see on this chart here just what a small percentage, smaller percentage of our total budget the general fund is.

So we're addressing those larger concerns in a timely fashion that allows us to move forward with uh a high degree of certainty.

Any further questions of the section?

Okay, I think we're ready to move on.

Okay, um, before I move on to individual funds and departments, I do want to acknowledge all of the work across the organization that staff have contributed to this budget.

Um, this is a lot of work, and a lot of people have put a lot of time and effort into it over the past few months, um several months, and um especially the budget team.

I really appreciate all of their help.

And we've got some some helpers from our departments here today, too, in case there are any questions that I can't answer, but I'm gonna try to give a good overview.

So I'll talk first about our internal service funds or what we're also calling central support services, and um, we're expanding the use of these internal service funds.

And um really what this does is it allows us to fully allocate all of these shared costs of service so that we know what is the cost of running each of our operating departments.

Um, previously, a lot of these were accounted for in the general fund, and we were making some transfers into the general fund in order to pay for the full cost of the finance department, for example.

Um, now we'll be able to really see full cost of service for our service delivery for all of our departments, including those in the general fund.

Um, the other thing it will allow us to do is really more cleanly see where our general fund money is going.

Um, a lot of the finance costs might have been kind of falling to the bottom of that.

And now you'll see it show up in a general fund subsidy when the general fund is actually going to pay for a project in the finance department.

So it will provide a little bit more transparency both on the operating department side and then also in our our how we're using our discretionary revenues.

So the two new internal service funds that are part of this budget are administrative services, which includes finance, HR, and central administration, so costs of city commission, cost of city clerk, um, cost of city attorney, and the costs of the city manager's office.

We've separated out facilities into its own fund, primarily because it's the largest department that we had in our general fund that was cost allocated previously, also because facilities within it has a number of separate operating divisions so they can keep track of where they are spending their time and money.

So that will also help us in our new accounting system when we um start working towards replacing our accounting system.

The other internal service funds will talk a bit about our vehicle maintenance or fleet maintenance.

We've got a public works administration fund that provides engineering support for infrastructure projects.

They provide our GIS services, they provide asset management services, and then utility billing is also a part of that fund.

And then we've got health medical insurance.

So some of the costs in our salaries and benefits category actually get transferred into this internal service fund, and that's where we actually pay our health insurance providers.

So central support services makes up about 15% of that overall $609 million budget.

And throughout the process of this part of the presentation, I'll show you a little bit why I think it's helpful to allocate these because we'll be able to kind of take this slice out and show where we're truly spending money to get a more accurate picture of what are our service areas without these central support services.

And this just shows you what is being spent by, really, this is more a division level, so we can keep track of what's going on in all of these central support services.

In our facilities fund, one of the main things I wanted to point out is that we are updating our facilities condition assessment.

We're continuing to work on making sure that we are keeping up to date with our facilities conditions, not letting things fall into deferred maintenance.

So that's why you'll see that that's the largest category there.

City administration is a large category, mostly because it's the combination of communications city manager, city clerk, and the city commission's office.

There are some changes happening there.

We do have a new communication specialist recommended in the budget, and that will support City Commission's priority to engage meaningfully with the community.

Another item that's in there is community surveys.

We've included $50,000 a year in that city administration category.

We've also got a communications plan for the tenants right to council program.

The shops complex is brand new.

So this $8 million will help us design a new shops complex.

We know we've been talking about this for a while.

We still don't have the full project cost estimates, but we are hoping to get through the design process so that we can determine what potential rate impacts can might be.

So we're working on that now and over the next year.

In the finance department, you'll see a fairly big number there, which is a lot higher than typical, and that's because we've got the three million dollars for the implementation of our new accounting and human resources tracking software, commonly referred to as ERP.

And that 3 million is has been adopted in the capital improvement program.

I also just want to emphasize kind of what that pays for because it's not actually paying for a new software system, it's paying for all of the support that the city needs to learn how to use a new software system to put all of the data into a new software system and make sure that it's accurate.

It's all of the costs that come along with the timelines and the project management and a lot of the work associated with that project.

So we are in the process of evaluating proposals on that project, and we hope to have some demonstrations over the summer so we can select a vendor by by this fall.

And that's in the public works administration fund.

So our utility billing software right now, our main ERP, which we call NAVLINE, does our all of our financials, all of our human capital management, all of our utility billing, water, waste, water, stormwater, and solid waste, and all of our permitting in our community development department.

So there's some money scattered across some different funds in order to replace those as really three separate systems.

It's not typical for one provider to provide all three of those systems.

A few of them do, but we're looking a little bit more at potentially individual systems there.

There is, I meant to mention a facilities worker addition in our facilities department to help with service delivery for all of our operating departments there.

There is an economic development coordinator also added half time to the city administration budget.

And the purpose of this is to support all of the legislative work that is that we need to track.

And a number of different people around the city need to track.

And this person will help us stay on top of that.

There's lastly a utility billing specialist, a part-time that has been added to that public works administration fund, and that's really just to keep our customer support strong.

So here is where I just wanted to show kind of how we can take central services out of that analysis because it's fully cost allocated, and we can really show citywide as a percent, how are we spending money between these different service areas?

So the costs here showing 50% infrastructure and utilities is including what those departments pay for to help support finance to help support HR to help support vehicle maintenance services.

So we've got 50% of our overall budget allocated to infrastructure and utilities, public safety and justice is 23%, community livability at 14, and community and economic development at 13.

Are there any questions about central support services or internal service funds?

Commissioner Bowden.

Yes, thank you.

Yeah, this has been really helpful once again.

I'm curious about putting the sustainability department in the central support services.

Can you just touch on that decision and if there's aspects of the sustainability department that are actually external focused?

The majority of it is included here in this central support services.

Um the primary pieces of that budget are staff time to work on the programs and also the capital projects that are actually being done.

So when a capital project is done at the water reclamation facility, for example, that project is paid for in the water reclamation in the wastewater fund rather than being paid for out of this program.

But we have treated and and we feel like it is fair to treat sustainability as you know the program management piece as something that benefits all of our city departments.

Gotcha.

Um I know I'm not sure what programming has planned for the coming two years on kind of resiliency, but I know one of the projects coming out of the sustainability department was about heat and smoke preparedness and education work that was I think pretty externally focused.

Um is the way that it's allocated here with the other city departments kind of pay for that public education work?

We do keep track of that, and we would transfer a subsidy from the general fund if there was truly something that was budgeted that didn't um that wasn't benefiting our other departments.

We do keep track of those contracts.

Okay, thank you.

You said you had added an extra step, or I think in the community development department facilities.

Was it facilities to help with um well there was economic development?

You had a half halftime person.

Then I completely dropped the other.

Um so we had a communication specialist, yeah, got that.

The economic development coordinator halftime, a facilities worker, and a utility billing specialist halftime.

Uh, the facilities worker.

Sorry, could you sorry?

Could you repeat what that person is doing or that position will be doing?

Yes, we are trying to expand our facility services to the other city facilities, so this would help have more hours and more time available for facilities to help City Hall, the safety center, the library, and other city facilities.

Thank you.

We've been siloed, smaller city, smaller uh workforce, and uh that is uh challenged us with things like deferred maintenance with um expertise in doing certain projects, and we're pretty excited about this um expanding the role of facilities across the organization.

That's been an incremental shift.

Um we uh had half half-time person uh just focusing on the parking garage itself, uh which is uh not an expertise that neighborhood services or parking has, but it's an expertise that we build and buy in-house with our with our own staff.

They also we don't assign a certain person to a certain building, we assign a number of hours that it needs in that particular case.

We did a pretty significant uh analysis of the deferred maintenance that was happening in the parking garage, and that's about a thousand hours a year.

So that's a half FTE.

We also are doing that in parks.

Um parks staff is amazing at what they do.

Their specialty is not um maintenance uh or or deferred maintenance on physical on physical assets, so we're uh taking that uh burden off of them.

They try real hard, but that's not their area of expertise and experience.

So it's just a couple areas we where we are building the capacity inside of our department to address our uh deferred maintenance, and uh as these systems become more complicated, uh we need higher level of training and expertise.

So that's pretty exciting about uh that capacity and uh performance for these uh most expensive things that we have.

Commissioner Sweeney.

Um I just have one question and thank you very much for all the work that you and all the departments have been doing on this.

Um, so you mentioned the uh shops complex, eight million dollars and design.

That is not entirely for design, um, is it?

Can you speak a little bit more to what the eight million is?

Or is it setting aside some for future construction or um so it is full design, so um we are anticipating this to be a fairly large project.

We are anticipating it to be a phased project, so we don't believe that um we'll be doing the entire project here in the next biennium, but we definitely want to plan it and design for it.

We're designing for it intentionally in phases, otherwise it's very difficult to get that second phase completed at all.

Okay, thank you.

Yeah, Commissioner Magic.

Just one.

Um can someone please explain for those listening what falls into the community livability pot.

Please, yes.

Um sorry, let me pull it up.

Okay, so in um community livability, we've got a new department, which we'll talk about next week called community programs.

This is a new department in our general fund that is keeping track of a lot of the different expenses that used to be scattered in different places in the general fund.

So again, we'll talk about that more next week.

Our senior transportation fund is in there, that's where the voted mill that supports senior transportation is accounted for.

Our community housing program is there, which includes our community housing fund and our community development block grant fund, um, recreation and aquatics is part of our general fund.

That's part of our community livability service area, forestry and parks, cemetery, library, and neighborhood services are all part of that program.

Oh, thanks.

Good sense, thanks.

Commissioner Bodie, you have a question?

I don't mean to cut in line if you've got one.

No, you can go for it.

Okay, um, I I've just been kind of chewing on your sustainability response and um have another kind of follow-up question.

You said that if the sustainability department were to do something that didn't kind of fall under central support services, that um it'd kind of keep track of how much um money was spent on that effort and then kind of transfer some amount from the general fund to cover it.

I am just curious, uh, in your opinion, if that did happen, um, would this put our sustainability department in a position of maybe not being able to do some of those things because they weren't budgeted in the general fund?

Like are they going to have to advocate in the moment to be able to do something that's not a central support service?

It would be no different from them normally being in the general fund if they had a program that wasn't included in the original budget.

They were in the general fund before they would have been requesting additional general fund money that wasn't appropriated at budget time.

So that process would essentially be the same.

Okay, so um maybe I'll just kind of put a pin in, you know, reminding myself to look when we were talking about general fund things next week, how that relates to the sustainability department.

Um I think I just have one question, and I'm also fine to table it for the general fund discussion as well, but just as they were highlighted.

Um the communication specialist, very uh excited and interested in that.

We've been putting a lot more demand over the last couple years on in communications and adding a bit more horsepower, seems like a good decision.

Um, how did we land on 50,000 for the statistically representative survey tools?

Was that just a kind of a rough approximation?

It's a high level estimate.

We hope that I feel confident that could support at least one survey per year, likely two, but it's it's a very rough high level estimate.

Okay, thanks.

And I think that's it.

I think we're ready to move on.

Okay.

We will dive into enterprise funds here.

So the first chart on your left here is showing our enterprise funds um by fund.

Our biggest fund is our water fund, uh, wastewater fund coming in next, solid waste stormwater, and then parking.

Our enterprise funds primarily expend money on capital outlay.

So, again, we aren't going to spend a ton of time talking about the different capital projects in this plan because that was adopted very recently in March, but we will talk about some changes that have taken place between adoption and now.

Um, salaries and benefits and operations and maintenance and internal charges are all relatively similar if you look at them in total throughout these funds, and then we've got some debt service as well.

We'll talk about.

Okay, so first I just wanted to talk very briefly about the parking fund.

I think the most important thing to focus your attention on here is the graph to the right, which shows our revenue and expenditures over a four-year period, including during the budget cycle.

Um, we have a very healthy parking fund at the moment.

Um, we are consistently covering our expenditures and we're saving up money for potential major maintenance.

Um we uh hope that we don't have to use it, but we do want to make sure we have some pretty significant reserves in that fund.

So it looks good.

Uh, we're building fund balance over the next few years.

We are spending a little bit of operations and maintenance money on some one-time items.

We're planning to do a rate study.

Um, we are planning to do some kiosk replacements in the parking garage, and we're also looking at some lighting upgrades in the parking garage.

Our solid waste fund has three divisions.

We've got our residential and commercial uh trash collection division, we've got our recycling and organics division, and then we've got some special services, which is um primarily bulky item pickup.

We are looking at 4% increases to rates over both years of the biennium.

We are um applying that to all customer classes.

The increase would be less than $10 a year for a resident who has a 35 gallon tote.

We are in the middle of working on a rate study, so we do hope to have some more information to come back to commission with in the near future from that rate study.

Um we initially were planning to do this a year or so ago, and we really wanted to wait until we had a full year of the organics program running.

So we had the data to use and to plug into that cost of service analysis.

So the program is growing.

We've got about 1,800 customers.

And we have got some stats here.

We've removed 1,200 tons of organic material from the waste stream since we started the program in April of 2025.

So still working on growing that program.

There are a couple of one-time items here in the 27.

There's an electric gate installation that's included.

And then it's the final year of activities that are supported by the EPA that support the organics program.

So that grant funding will run out in fiscal year 27, and we'll be looking at fully operating that organics program.

This is the only thing the city does that we compete with private enterprise in.

So private enterprise has the ability to adjust their rates that they charge in the city versus the rates that they charge outside of the city.

And we have to pay all of our costs through those rates.

So we're continually, and Nick and his team watch this all the time, and they do amazing work to try to remain competitive so that the citizens have a choice, and it keeps keeps the private haulers honest, honestly, to not, you know, to charge what is an acceptable rate for all of these services.

So I just wanted to point that out.

I know the commission knows that.

We always take those into account.

We think about how much we're gonna charge our rate increases.

We have uh we ran our fleet into the ground earlier, and we're having to catch up now, and uh we are, and it's working and it's it's a going concern, but we're always thinking about that as we talk about our solid waste enterprise fund.

Okay, I've got a couple of slides to talk about the water fund.

We spend the vast majority of our water fund money on water treatment.

We spend 30% on water operations and then about 3% on water conservation, which has been growing since the last biennium.

63% of the water fund appropriations are going to be in capital, and those are consistent with what was shown to the city commission in March and what was adopted in March, with the exception that we've created a separate fund for our water impact fees.

We've done the same thing for wastewater, but essentially what we plan to do is account for the 100% of the cost of capital in the water fund, since the water fund is who will ultimately own the capital asset at the end of the project.

And then based on how much is eligible for impact fee funding, you'll see that impact fee funding come in as a transfer in from the water impact fee fund.

So it's really just a change in location of where that project lives.

All of capital will now live in the water fund going forward.

We are looking at recommended increases annually of 9%.

This is consistent with what we've talked about in prior years, and we've got some slides at the end here to compare some of our rates to other Montana cities, and I'll talk a little bit more about that.

Some of the main drivers of the operations costs in this fund are water meters.

We do replace a number of water meters every year on an annual basis, and we're also purchasing new water meters for new developments.

Chemicals is a huge expense here for our water treatment.

We've got annual purchases of lake water and insurance premiums that are driving some of those significant operations costs.

We are also going to see that internal charges are increasing, and that's paying for a portion of the design of the shops complex.

So here I wanted to start looking at some of those financial models, and the water financial model really does run out 20 to 30 years, but really the most relevant information is based on our five-year capital improvement plan because we've spent a lot of time and energy and effort in making sure that that five-year plan is up to date and accurate.

So what I wanted to show you first here this is rate revenues and operating expenditures.

So what this chart is showing is actually excluding any capital outlay, and you can see that our rate expenditures are fairly easily covering all of our operating expenditures.

So as a reminder, that's all of our staffing, all of our operations, and all of our debt service, and that actually includes those internal charges as well, where they're paying that out.

Um what is not fully covered is capital.

So this chart is quite a bit messier.

Um that's why we tend to show it in a more simple way because it really um increases by a standard percentage from year to year when you look at these simple terms.

But when you're looking at giant capital projects, you're looking at some projects in fiscal 28 that are debt funded and grant funded that are causing this chart to look a little bit crazy.

But if you added these all up over the six-year period, our deficit of revenues minus expenditures is approximately 14 million.

So essentially, we're drawing down that fund balance, which you can see that's the black line on the chart there is showing how our fund balance is decreasing over the six years.

So all of these projections are with the 9% revenue increases included, just to illustrate why we really need those.

And then one thing I wanted to highlight here is because this chart can sometimes look a little bit crazy.

Um, one of the things that we look for when we're looking at a six-year period is making sure that by the end of that six years our revenues are exceeding our expenditures.

Um that's the ideal situation that we're looking for with our long-term sustainability plans.

So you can see in fiscal year 30, that's not the case, but we're making sure that by 31 with the revenue increases that we have in place, we are covering our full expenditures.

Uh, wastewater fund, pretty evenly split between the water reclamation facility and our wastewater operations.

And again, 56% of the wastewater fund is going to be in capital.

There are, there is one change to capital here, but it isn't actually a change to the total cost of the capital improvement program.

It's actually just some movement.

So if you'll recall in March, we added some additional money to the base hydraulic project.

Um, this is a significant project that we were looking to add a little bit more for this fiscal year 27 in order to push phase two outside of the five-year plan.

So that project has been rebudgeted.

Typically, what the commission is used to seeing is that we carry those forward.

But in order to show in the budget the full cost of that project and not just the little bit that had been added in March, we just rebudgeted the whole, it's about approximately a 10 million dollar project that you'll see in there.

So it looks like an increase to the CIP.

Um, it's not.

It was budgeted in fiscal year 26.

We're just going to rebudget it rather than carry it forward.

We're looking at recommending 3% increases to wastewater.

That's about 20 dollars a year to the typical residential homeowner in fiscal year 27 and about 27, 21 dollars in fiscal year 28.

And significant drivers of the operations costs are utility locates, some software maintenance, lab analysis, engineering, and we are issuing some debt for some capital projects in the biennium.

Similarly, the six-year projections will look first at rate revenues and operating expenditures.

So again, um, looking good in covering our rate revenues with our operating expenditures, but you can see that we are still drawing down fund balance in this fund.

Um, and we'll look a little bit more closely at that with the capital and the debt proceeds included.

So we are looking at in the last couple of years of this plan right now.

You'll notice, as I just said, we look for our revenues to be higher than our expenditures in those last few years of the plan.

We are not looking that way right now, but this is another great example of that fiscal cycle.

We are constantly monitoring and updating what we think is going to happen in the future.

There are some capital projects that are up in the air towards the end of our five-year CIP plan right now.

So we're not planning rate increases now to support projects in fiscal year 30 and fiscal year 31.

We want to make sure that those are going to happen and they're going to happen on time before we propose any rate increases as a result of that.

We're also, as I mentioned, still working on cost of service analysis for not just solid waste, but for our utility funds too.

So we'd like to do that, make sure we have the right rate classes paying the right amounts, and that will help us have a little bit more information before we look at any rate increases above an inflationary 3% in wastewater.

Okay, and then stormwater.

We're looking at some, again, what look like pretty significant increases: 15% in the first year and six percent, but drawing your attention to the dollar amounts, that is nine dollars to the typical homeowner for a year in the first year, and then four dollars to the typical homeowner in fiscal year 28.

We are seeing some just general increases in operations and maintenance.

Our contracted services is going up, inflationary rates are um increasing.

We do have some debt issuance costs.

I did mean to mention earlier when I talked about those debt issuance costs, kind of why we do that.

It helps us with these rate impacts when we're looking at those long-term financial plans to spread the cost of an asset over its useful life, so that the rate payers are paying for the cost of that asset over its useful life rather than having significant spikes in our rates when we have big CIP projects and reductions in rates afterwards.

This helps keep things a little bit more consistent.

We're also seeing stormwater fund appropriations increase as a result of the SHOPS complex design.

They'll be a part of that project as well.

And there are revenue expenditure trends up here as well in fiscal year 26.

There were some fairly significant capital items that are non-recurring.

So you'll see that those costs are dropping a bit over the budgeted biennium, and we are seeing that in fiscal year 28 we have revenues higher than our expenditures, which is good.

Looking at the six-year projections, again, just to kind of look at that long-term rate plan.

We are anticipating needing some additional increases above 3% after this biennium.

We'll continue evaluating and updating our financial models.

We're also looking at a level of service study for stormwater that we're likely to talk to the commission about in the near future.

Um we'd like to look at what are the options.

Should we be increasing our level of service that we provide to the city in stormwater and what would that cost?

And there are definitely some trade-offs there.

So this is our preliminary plan now, assuming no changes to service levels, and we'll have that conversation at some point in the near future.

Um, and then some rate comparisons.

So these are what we could find from Montana Cities.

Um I do want to acknowledge that Great Falls is the only one that is showing rates effective from the prior year.

The rest of these are actually for fiscal year 27, where we've seen that folks have already published rate increases.

So, water bill, we are seeing that we are proposing to be $53.46 to the typical homeowner.

That is the highest, obviously, on this chart to state the obvious.

And we just want to acknowledge that we are in a little bit of a catch-up phase still from all of those 0% increases in water.

You saw the six-year model.

Our capital plan is a significant driver of the rate increases.

We're covering our operating costs significantly, but we have some pretty significant capital projects that need to be done to make sure that we are rehabbing our original infrastructure that has been throughout the city.

So again, that big project, the Lyman water source rehab, 17 million dollars, and that municipal groundwater project is 10 million dollars.

And those will be debt funded, but that still means we have some more debt to pay.

And we also have a debt coverage ratio requirement.

So our rates need to cover up to at least 1.1 times our debt service once you subtract out all the rest of our operating costs.

So we will we will be hitting that debt coverage with this plan.

The um other note I wanted to acknowledge too is that um the city of Bozeman has essentially all surface water, which is not typical of all of the cities on this list, and it's more expensive to treat in order to deliver that to our customers.

We also have the most aggressive water conservation program, which is funded as well through this, and I think it's something the commission and community is very proud of.

It does cost money, okay.

Um our proposed sewer bill is approximately 57.19 to the typical homeowner on a monthly basis.

Um and we're falling you know towards the top.

Um, but we've got a few cities in Montana that are higher and a few cities that are lower, and we we kind of feel comfortable with proposing rates in this range.

Um stormwater similarly, uh $10.12 on a monthly basis is what we're anticipating.

And um as you can see, we are close to the highest.

Great Falls does have a higher rate than us, but um, we think $10.12 per month is a reasonable fee for the service that we're providing.

At that point, I will stop if there are questions on enterprise funds.

Great, thank you.

And just for as we're trying to plan if and when we do a break, how many more sections slides do we have?

Um I don't know exactly how many slides, but we're mostly just talking about um forestry, parks and trails, and then transportation tonight.

Okay.

We feel good to keep going.

Okay.

Um, Commissioner Bodie, any questions?

Yeah, thanks.

I want to return to um that uh water rates slide and um I know that you you mentioned several things that kind of contribute to our rate being higher than others, including the surface water or aggressive um water conservation efforts, which thanks for lifting that up, City Manager.

Um I'm just curious if these other communities are also kind of catching up in their rates and also put them on pause during the pandemic.

I don't know if if you have the context for that, but uh I I'm wondering if if Bozeman is unique in having um kind of provided our our residents with a little bit of relief during pandemic years and is now this kind of catch up phase.

Yeah, I don't I don't personally know.

Um that's a good question.

And I can certainly reach out to them to find out where they are in that process.

Great.

Yeah.

I saw um our our director there shifted.

I don't know if that means he knows the answer or not.

Um but I I always like to make stuff feel like they it was worth their time to come.

Uh good evening, Mayor Deputy Mayor and Commissioners uh Sean Coates, utilities record.

Um, yeah, I do think there is a lot of catch up that's being done statewide.

Um part of what you're seeing here on the rate, though, I'll just highlight is is we are making some capital expenditures that are fairly high.

So Melissa noted the 17 million dollar investment and basically our original water supply and alignment source, and that's intended to rehab the tank and then the pipeline basically from the source to the tank and then from the tank all the way into town.

And that's a project that we've had to kick the can down the road a number of times just to keep rates low.

So I think when you have the discussion uh with the other communities, you know, what are those projects that they've kicked the can down the road, and at some point you they have to pay that bill, right?

So that's what you're seeing here in our rate partially, but I I think there's another element, and you know, Melissa alluded to to it is that it, you know, all of all of our water sources are surface water sources, and it just take it costs more to treat service water than it does groundwater.

Groundwater sources you basically can pump it right out of the ground and then pump it right into the system, oftentimes with a little bit of chlorine addition.

But um, in our case, because it's surface water, we have to go to that high effort of treating it.

Thank you.

That's helpful.

Yep.

And thanks for being here tonight.

Deputy Mayor.

Just uh maybe following up on Commissioner Buddy's.

You know, I remember two years ago, there was a big emphasis on needing to catch up.

Um this seems like we're we're kind of over that hump, but I'm wondering just how how um how much further we have to go and were there other funds, and I for I forgot was it was mostly water and sewer and stormwater that where we were playing catch up two years ago.

But I thought we were playing catch up in almost all our funds two years ago.

And I'm wondering if we have kind of caught up and how much further we need to go.

Yes, great question.

I think um I will emphasize uh the point that our utilities director made that there are some pretty significant water capital projects happening still over the next two years.

Um so that's why you're kind of seeing that 9%, 9% over the next two years for the water funds.

But we are anticipating based on our current capital plan that those increases could go down to 3% starting as early as fiscal year 29.

Um I do want to again acknowledge that the construction of the shops complex is not yet included in these financial models and numbers, so that we'll have an impact that we will have to come back to the commission and discuss.

Um but uh so we'll a combination of the catching up and these very large significant capital projects that are coming up just within our two-year period and in our five-year plan are causing these increases.

If you look at um wastewater, again, we're we're recommending three percent increases per year over the next five years, and um stormwater, let's see.

Um we've been able to adjust that model to get us down to those three percent increases at the end of the five-year period, um, but not necessarily by next biennium.

So we're close.

It's really helpful.

Thank you.

Would this be an appropriate time to ask about like the impact fees or the enterprise funds for like for say water?

Because I'm just I just noticed um I mean there's two questions wrapped up in this.

One is we're seeing growth slowing, you know, just in Bozeman, in terms of for impact fees, right?

And I'm just wondering how we're accounting for that is the first question.

And then the second question is this I know it's particularly for water and particularly like the FY28 budget, we see it just a big jump in the in the expected revenue from impact fees compared to 27.

And same with the enterprise funds, and I'm wondering how does that calculus work?

Like how'd you get to that number?

So, um, you're looking at the number that's coming into the enterprise fund from the impact fee fund.

Yes.

Um, so those numbers are all coming from the percentage of a capital project that's eligible for impact fee funding, and what's available in fund balance in those funds.

From the fund itself, yeah.

Okay, fair enough.

So then how do we are we counting for what's maybe you know what's going into that impact fee fund overall?

Um, how do we account for a slowing economy?

What is that doing to our?

We kind of had that discussion during the CIP, but I'm just wondering where does that how does that ruffle all these numbers?

Yeah, we're we're trying to be very conservative with our impact fee revenue estimates to make sure that our capital plans are in line with um you know what our impact fee revenue would look like if it were fairly conservative.

Um so we'd rather accelerate projects if we get more impact fees than we planned than delay projects because we don't have the impact fees that we were expecting.

Um so I think we've been pretty conservative with revenues over the two years on those impact fee funds.

We do sometimes issue debt that is paid by impact fees as well if we don't have enough fund balance sitting in those funds.

So there are a couple projects.

The capital section and the debt service section will show you which projects are funded by our debt financed, and then we can pay those over time as revenues come in.

So that's another strategy that we've used on some of these projects in order to make sure we can get them done within the two to five year period.

Thank you so much.

Commissioner Smeedy.

Thank you.

Uh actually the slide you had up was great.

Um, I notice a few of them that have this line addressing the beginning fund balance, and it's always kind of continually going down.

Is that how we're tracking our expenditures on capital?

Um, so this does include capital in it this particular chart.

Um, so it's not how we're tracking capital.

What you're seeing happen is that we are kind of strategically using that fund balance over the five years to balance our increases to rates.

So the more we draw down fund balance, the less we need to increase our revenues because we can afford those expenditures in another way.

Um we do have some target levels of reserves, which we have in our financial models, and we do um try to maintain.

We've got an operating reserve of two months.

Um we've got some, not there's not as much in stormwater, but in water and wastewater.

We have particular reserves for our debt service.

Um we have to keep our impact fee um funds in reserves.

We have cash and loo that has to be kept in reserves.

So you will see that in the individual fund pages where we call out how much is required to be reserved in the two years for those funds.

Thank you.

That's my only question.

Commissioner Magic.

Thank you.

Um, the water rate comparison chart just has got me thinking about a couple of questions.

Um we have a tiered rate system, and uh this might be a question that people know it can answer, but I'm curious if the other communities have a tier rate system as well.

And I assume with our rate here that's the tier one increase the average.

Have we thought, are we just proportionately increasing from tier one to your two tier three within this system?

So they're all gonna go up equally, or could we possibly put more of the burden on tier two, tier three?

Does that make sense?

Yes.

Um, so what we're doing right now is we are spreading that.

We we call it more of a rate revenue increase.

We spread it across all classes of customers when we're just looking at revenue requirements.

We do work with our utility rate consultants, and we are working on a cost of service analysis, and that is a much more detailed analysis that will tell us who should be paying which levels of rates between our different tiers.

So, what could come out of that is different tiers.

Maybe we're we don't have the right tiers.

Um, but what's likely to come out of that um is some analysis saying okay, your tier one customers are paying X percent below or above their cost of service, and your tier two customers are paying X percent above and below.

And there will be some options of how to handle that.

And when might we see the results from that?

I'm not let me see if I have the timeline in my notes here.

Um I do not, but I can get that to you.

Okay after a break, maybe.

Curious.

Yeah, thanks.

Thanks.

Thank you.

Many of my questions have been asked, but I've got a couple.

Um, one that's sort of messy, but because I know this touches on multiple different things, but it's really we've had a lot of uh conversations about ADA compliance and trying to get as much of you know downtown, civic centers, parks, etc.

Um, to be more accessible.

We've got projects that are using um parkland in Wu dollars to finance those.

We've got I guess I'm I'm trying to see what are the other opportunities, you know, and I see that I think we have some in the arterial collector district um fund as well, but what are the opportunities around I mean parking crosswalks, etc.

that um yeah, that just sort of take action on some of the walk audits we've had with folks like Ability Montana and and things like that.

So kind of a messy question that crosses a bunch of different pieces, but just trying to see as we're gonna be chewing on these things, and if we were wanting to carve out um more to put towards projects like that, like what are the what are the existing mechanisms that we might be already looking at?

What whether the parking fund or whether we're just kind of looking at what we're what we're currently doing.

I I think it would depend on the opportunity.

I mean, it would be helpful to know more about which what those projects are, and then we could look into the budgets to figure out where that funding could come from.

I'm not sure if I'm fully answering.

Yeah, I I think um many of those are transportation related.

So I think um we should have Nick Ross uh involved in that part of the conversation.

I do know that we're installing a path right now in Lindley Park and Accessible Path, and that's that's a parks project.

So I think that uh great it's determined greatly by what the project is and what fund it it comes out of.

And I guess sort of where I'm going with this is that I I my suspicion is if we start to look under the hood in more places, more parks or other parts of of the community that we know, um, you know, whether it's our bike and ped gap analysis or otherwise, that we would find the projects and whether we want to be saying, here's X amount of dollars from Y funds that we want to specifically set aside for opportunities of you know promoting accessibility.

It doesn't if it's you know not something we necessarily need to have a solid answer to tonight, but I think that's something that I've been kind of chewing on is we're getting these really the more it seems the more we're looking, the more opportunities are coming up, and they're beautiful and exciting.

And so maybe when we get to transportation, Melissa, Nick can come up and talk about that because I do know that we're looking, and I do know that we're making improvements, those are very expensive, particularly in curb cuts and uh accessibility uh as it relates to our sidewalks and streets.

But yeah, let's get to that, maybe dig a little deeper when we get to transportation.

Okay, um, one other uh the on the water fund, the uh the chemicals added to water.

Um I think there's been you know a conversation that we've not had that comes to us every now and then um is fluoride in drinking water, and I can't remember if it's Sean has said before 0.65 or 0.7 milligrams per liter or something is where we want to be, and I don't know where we're at.

Um whether that one, I know that there's risk to staff having to handle these chemicals, they're not cheap, and there's what's the are is that something we're thinking about of doing a study to say is there enough natural fluoride that's coming in the water that we don't need to do this anymore?

The short answer to your question is yes.

We also have some pretty significant capital investments that we have to make in the tanks, the store of fluoride storage tanks at the water treatment plant.

We are also having challenges getting fluoride as our supply is Utah and Utah outlawed it.

Uh so um I've I've asked Sean to um to uh um keep an eye on that.

Do you have anything that you'd like to mention tonight, John?

Yeah, the only other thing that I would add is currently my uh Bozeman is the last uh city in Montana that does actually add fluoride to its water supply, so everybody else has discontinued the practice.

I'm just feeling particularly sensitive.

I I'm sure everybody saw it's stung, Belgrade, best tasting drinking water in Montana.

And we're coming for them.

And I know that the staff uh at the treatment facility, they love the chemicals.

They love fluoride.

That's that's what became abundantly clear on the tour with them.

Um and so, yeah, just trying to figure out where that both from not wanting to compromise public health, because I think I've I've gotten different opinions when I've talked with folks in the public health world, but you know, wanting to make the best decision that for ratepayers and I appreciate that.

I think it's timely.

I sense that now uh sooner rather than later is time to have that conversation with the commission, the community.

Uh last time we had it, it was very contentious, and um not that we've been avoiding controversy.

I certainly have a lot of our own, but I think uh let me get with Sean and uh come back to you shortly with uh a plan to have that community conversation.

Great.

Any further questions?

Oh, more coming up.

Commissioner Magic.

I was gonna answer my question really quickly about who has a tiered system.

I checked with the AI if AI is correct, and Billings and Belgrade and Bonesman all have tiered water system uh water rates.

The other cities don't, Missoula, Kalisville, Great Falls.

So it's just the B cities that have uh tiered water rates.

Thanks for that, Commissioner Bodie.

Um I'm just now curious about what portion of our chemicals in water cost is fluoride, and that is maybe not one thing we know off the top of our head, but um perhaps if we do.

John, do you happen to know that?

Uh we've got Jill Miller uh here tonight.

She might know the answer to that one.

But the uh the other thing that I would add is because it's such a corrosive chemical, um, one of the things we do have in our capital plan is to rehab uh what the fluoride storage tank.

So, for example, if we were to decide not to continue to use fluoride, we wouldn't have to do that rehab work.

Good evening, commissioners, uh Jill Miller, water plant superintendent.

The annual, well, the every two-year cost of fluoride is about $20,000 the last time we bought it.

This time it'll probably be close to 30,000.

So we only buy a tanker for the sourdough plant once every eighteen, 14 to 18 months.

So that's helpful.

Thank you so much.

Um, and welcome to the stand.

Okay, I have just a couple other things.

Um, the EPA grant ending, um, I'm curious about the impact that will have on our organic rates, or if that grant was just kind of covering the cost of setting up the program.

So the grant was covering some of our operator costs.

Um the ending of the grant is included in all of the numbers that we've shown tonight.

So those 4% increases to rates over the two years takes that into account.

Okay, great.

Um, and then lastly, I just for the public record, want to note that you said the words our water model runs out 30 years, and I want to be really clear that that does not mean that we're running out of water in 30 years, but that the model is projecting out to 30 years, and then the model stops at that point.

Is that correct?

That's correct.

Thank you.

Okay, cool.

Probably not something anybody else was thinking, but I just, you know.

Any other questions?

Oh, just one that's maybe more it's part comment, part question.

I uh the enrollment in our organics program.

Um, I feel like every time I tell someone about it, they're like, oh my god, I didn't know that was a thing, and they sign up immediately.

Is there uh, you know, some if we considered putting trying to carve out some communication, you know, evangelizing the good word of the swamp to folks.

We've definitely um tried to put some information out there, especially as this program was rolling out, but I can absolutely look into what else we can do to get people more informed on that program.

And we've had a brief conversation.

I want to market our amazing solid waste program to the community, and there's some um antitrust laws that we have to be aware of there.

Um and um, but we provide an amazing service.

I met with our Solid Waste crew just a couple days ago, and and man, it just folks are professionals and they go above and beyond in service to the community, and I think that's worth something.

So I I think there's an opportunity to um market uh as long as we don't run a foul of any uh competition, it's unique in the solid waste um arena, but we have a great service, and I think we ought to talk about that.

That includes organics that includes recycling and it includes it includes trash.

So we're gonna look at that this coming year.

I've um we've had conversations with the commie.

I think building some capacity in that division like we talked about earlier is gonna is gonna pay benefits as well.

Okay, thanks.

And just to clarify, I seem to be the only one that ever said swamp, but it that's what it had on the on all the materials.

Solid waste organics management program.

And I just feel like we're missing something.

I received a really nice mailer on the, you know, idea that you could get a recycling bin and compost here in the past month.

So there are someone's trying to get the word out.

That came from Nick Ross personally.

It was signed.

I appreciate that.

And I am signing that tomorrow.

So it worked, just uh delay.

Okay, any further questions on this section?

Commissioner Bodie.

I'm sorry, I I keep stewing on things.

Um Commissioner Magic had some asked some questions about whether we could charge different tiers of service more.

And I I think what you maybe didn't say is essentially could we overcharge some tiers that are big water users to make it more affordable for residential people who are not using as much.

Um is it legal to charge people more than the cost of the actual service?

So I'm not sure exactly what regulations are out there.

I will say it isn't is not expressly illegal to not charge the exact cost of service because when we do this cost of service analysis, we are not going to be spot on.

There are going to be changes that are needed, and typically those changes are phased in over time.

Um I can look a little bit more into whether or not we have to move towards that cost of service or if it's an option to have different classes of rate payers subsidize other classes.

Yeah, I think I'd be interested in knowing what that might look like and what the impact could be to our um our ratepayers who are maybe most strapped for um for costs, and then if that's uh uh offset that this community and this commission could get on board with for some of our other users.

Any further questions on this section?

Okay.

Are we full steam ahead or nice?

We got a little derailed there, so I didn't know if that meant we needed a break or not.

But I think it's right.

Okay.

Um let's do a four minute break.

We'll come back at 8 15.

Four minutes.

Okay, we will resume the presentation on our first round of the budget.

Okay.

Thank you.

Welcome back.

Um we're gonna talk a little bit about transportation department budgets.

Our um noticed agenda item this evening was specifically to talk about enterprise funds and special assessment districts.

So we're really here to focus on the arterial and collector district and the street maintenance district.

Um, some of these other funds we'll talk about still because they do impact those districts, um, especially the gas tax and the impact fee fund.

MPO is also part of our transportation program.

Um, we're not planning on talking about that in a lot of detail um unless there is some interest from the commission to do that.

Um, and lighting districts, we have um a hundred over a hundred lighting districts throughout the city.

Um they're fairly straightforward.

We assess the cost of electricity and any maintenance to homeowners in those districts, and there's um detailed financials on those in the budget document, so I won't go into too much detail there either.

Transportation similarly to utilities, significant amount of capital um appropriations, fifty-four percent.

So we won't be focusing too much on that again, except for what has changed.

Um, I did want to draw your attention to the gas tax fund, which we have reopened this year.

Um, we thought we were simplifying things by accounting for the gas tax as part of our street maintenance district.

Um we are now as we're implement looking towards implementation of our new accounting system.

We are trying to make sure that our accounting funds are aligned with the state's system, which is called bars.

And the state does have a separate account for the gas tax, so we thought it would be prudent to split that back out and go ahead and move some of our projects over there.

So the street annual chip friction ceiling and millen overlay project that's in the CIP has been moved to this fund.

No changes to the dollar amounts have been made.

Um, and there are a little bit of operations and maintenance expenses, which is road supplies that are associated with those projects.

This allocation comes from the state based on our population and our road miles and um the annual distributions that we're expecting this year are approximately um this biennium are approximately two point one million dollars per year, and we are budgeting to fully expend that um over the two years.

We plan to spend a little bit less in fiscal year twenty-seven and ramp up that spending a bit more in fiscal year twenty-eight.

So, our street maintenance assessment district is our next assessment district to talk about.

Um, we are looking at recommending eight percent increases to assessments in the first year of the biennium and 6% in the second year.

That equates to approximately $24 the first year annually for a typical residential homeowner and $20 annually in the second year.

Over the next five years, when we talked about the capital plan, we discussed this, but we're planning for another 40 additional miles of city maintained streets.

To make sure that we can service all of those streets, we are looking to recommend to add two streets operators to this street maintenance district in fiscal year 28.

Another change that we did make to the capital program is to add another $150,000 each year to our multimodal transportation improvements project.

So originally in the capital plan that was $150 per year.

Now we've got $300 annually, and we want to make sure that we are using this budget to support commission's priority to advance multimodal transportation improvements.

We have some strategic use of debt funding in this district.

And again, this just helps us spread the cost of those capital items over time so that we're not seeing huge spikes in assessment increases when we purchase significantly large and expensive capital items like street sweepers and graders.

We are showing the use of some beginning fund balance you can see in that chart over the four years.

And you can also see that we are planning on expending more than we're receiving in revenues over those years.

So again, knowing that we have a potential shops complex project that we are going to be coming back to the commission to discuss, we are likely looking at continued increases that are larger than inflationary after the fiscal year 28.

That is not.

But I don't think anything has changed since what was adopted in the CIP.

Good just one moment.

Yes, I did have a slide on arterial and collector, but nothing has changed.

So I did um take that slide out to make sure that we were being cost time efficient tonight.

The capital plan for arterial and collector is consistent with what we adopted in March, and there is really nothing else in that fund.

The Arterial and Collector District is going to help start supporting some of the public works administration internal charges.

So that will reduce internal charges slightly for street maintenance, but that's the only other thing besides what's been adopted in the capital plan.

And as a reminder, that arterial and collector district pays for the portion of arterial and collector reconstruction projects that are not eligible for impact fees.

So almost all of the projects that are done in the arterial and collector project, arterial and collector district fund have a share of that project, and then the other shares paid for by street impact fees, and the increases that we're looking at over the biennium are 3%.

So then I will take questions on transportation.

Commissioner Bowie?

Yeah, I have maybe like a general question, and that I just seems like a lot of these funds are starting at kind of a higher fund balance and we're spending them down.

I'm seeing that trend across a bunch of different slides.

So less about street specifically and more about kind of like how are we in the position that we are in now that we're spending down a bunch of accounts rather than having.

I don't know why why didn't we spend that money earlier?

I guess is the question.

Yeah, the most important reason for this, and this goes for all of the funds across the city, is that we tend to have some savings in our budgets.

So we budget to be able to fully execute all of our plans and projects to be fully staffed over the two-year period, and that almost never happens for most of our funds.

So you will see that in past budget presentations as well, that we do typically end up when we're doing this biannual budget process, having more beginning balance than we anticipated because of that savings and being able to then use that beginning balance to our to buy down rate increases that are needed over the two-year period.

Would you say that we are setting themselves up in this time to be in the same position of a high fund balance, even though it doesn't look like it on these graphs?

If we have vacancy savings two years from now, we'll we'll also see our starting fund a little bit higher.

Yeah, and I think that's where it's really important to remember that we're looking at these all the time.

We're looking at these models whenever anything changes.

We typically have some vacancy rates included in our long-term financial models.

Um we have also capital utilization rates included in our financial models.

If you look at most of our funds historical capital utilization, we use somewhere between 70 and 80% of what we budgeted in a fiscal year.

And then what happens is that money gets carried forward, which pushes other projects to a future year because we don't have the staff capacity to manage that many projects at once.

So yes, we're factoring that in, we're looking at it fairly constantly.

And if you know, for some reason we are partway through fiscal year 27 and we're not seeing any savings in the street maintenance fund, we would start having that conversation about okay, are we are we really getting fully staffed?

Are we going to be permanently fully staffed?

Are we going to be able to execute this level of capital plan over the next few years realistically?

And if the answer is yes, we would have to be looking at potentially higher increases in the future to cover our five-year capital plan.

Right.

And if this commission or this community felt comfortable with having less of a cushion, we could potentially offset some of these rate increases, but then be in a position in the future where we would really just have to increase those rates if we got a little sideways.

Yeah, I think that's fair.

I think the strategy that we're using here is using historical savings to reduce our impact on rates.

Um it would be a pretty significant shift in strategy to use estimated future savings to reduce that impact.

Does that make sense?

Yeah.

Deputy Mayor.

Thanks.

This is a great slide to keep it on.

Um, so we see some deficit spending over in our streets district over the next few years.

And we this doesn't include the shops complex, which of which I'm imagining streets would be a bigger user of and therefore be a bigger um uh stakeholder in order, you know, have a bigger share or responsibility to pay for.

Are we?

I just wondering, you know, I know we wanted to keep these increases low as we can, but are we setting ourselves up for a big hit in potentially in 2930 if you know we we keep this pattern here going?

I'm just wondering how do we how do we we know that shops complex is coming?

Can we soften that?

It seems like it's gonna be a big blow, particularly for street maintenance.

Do we want to soften that blow a little bit in advance of it or or is that I mean, how do we how should we think about that up here?

Yeah.

So we're going through that exercise right now and to Commissioner Sweeney's earlier question about why 8 million is typically 10% of the estimated costs.

And in order to phase that project appropriately, we need to have the whole project designed.

And now we're we're working with all of our director teams.

The big users of this are Sean and Nick's crews, and we're looking at all of that financial modeling right now.

So we just got or just completing the planning part of that.

Next phase will be to see what we can afford to do in phases and how that impacts rates.

So it's a great question and is absolutely kind of foretelling what we're gonna be coming back to the commission next as we continue to look at rates, continue to look at rate models with an eye toward uh our capital needs.

I'll just add, um, we we may potentially be back in time to talk about this before we take the assessment increases in the fall.

Um, but we definitely will be back in time to talk about this before we take our fiscal year 28 final assessment increases.

Um, but it's always an option to kind of get ahead of it.

Um, and we do think about that.

The timing was just difficult with this budget cycle and where we are in that design process.

Well, I also appreciate the kind of a philosophy that we don't want to collect money that we're not going to spend yet from this particular public.

So yeah, I appreciate that.

Thank you.

Commissioner Sweeney.

I mean, I just want to thank the two of you for bringing up these things because this is my first budget that I'm looking at and I'm watching these beginning fund balances go down, and um, and sometimes our revenues are not meeting our expenditures, and like that feels frightening.

So thank you for just confirming that that is in fact what I'm seeing.

Yeah, Commissioner Magic.

Yeah, the gas tax.

So gas tax allocated by the state, but we set the rate, right?

So Nick's shaking his head.

Can you please come up, Nick, and explain?

And give just a little bit of history because I'm not sure others are aware that I mean, we put that before the voters here in the past couple of years to increase the gas tax.

Where would that have gone?

And please explain.

Sure.

So uh the state fuel tax now is the um the old traditional gas tax plus the uh Barsa Bridge and Road Safety Act funding that uh the state passed, I believe, in 2017.

And so that now both comes to the both of those uh funding sources come to cities like Bozeman uh as um like uh director Hodden explained, as basically a formulaic allocation based on road mileage and population.

Um I believe it's counties that have the authority to assess a uh an individual fuel tax.

The Galton County took a run at that a few years back, and that's what unfortunately uh was denied.

Got it.

And the Gallatin County ballot measure was that an increase to our current county fuel tax, or was that just a fuel tax that would have been new?

Uh I believe it would have been um I don't don't quote me on the specifics and the mechanics of it, but it would have been an increase.

Uh it would have been um uh county specific.

So Gallatin County specific increase that would have gone only though to Gallatin County.

So basically uh to help the county pay for their costs of uh street and bridge maintenance uh that would not have come to the city of Bozeman ourselves that we could have spent in our budget.

But they could potentially allocate some to us since we have streets that are impact.

That would be a very interesting conversation to have with them, yeah.

Yeah, so just I'm bringing this up as kind of another source of revenue for streets that uh we have tried to um enact before I think it's worth trying to pursue again today.

Uh this year is probably not the right year, considering we have like a 28% to increase in gasoline.

Thanks, Nick.

So you people will remember when we worked really hard to get that local option fuel tax, and um it was authorized by the legislature, was authorized by Gallatin County.

Next session, they removed it.

The legislature did.

So we do not have the option um to um to uh and it was two cents a gallon, and that passed, and then next session gone.

So that was that's the local option fuel tax that you'll probably remember.

Some of us will remember that got repealed immediately in the next session.

And so that happened after it was on our ballot.

Whatever that was uh six years ago.

Okay, we just just to be clear, that local option fuels tax in that Missoula passed wasn't just to pay for streets.

It was it was like another revenue source for the city.

But what we were talking about here in Gallatin County was specifically the money raised could only be used on streets, right?

There's a distinction between those two levies or ballot questions.

I don't know if you limited.

Yeah, I don't know what we're talking about.

I saw a nod from Director Ross.

I'm gonna count that as a win.

Great.

Any other questions?

All of mine were asked.

So if there's no further, I think we're ready to keep going.

I'm sorry, we I had one more question.

Um the gas tax, it looks like it's the same allocation from year to year.

Is that not increasing with inflation?

Is that going to be a flat for the foreseeable future?

Um I think it's mostly rounding, it's increasing slightly from year to year, but we don't expect a huge change in that allocation.

They do publish those early.

Um, so we can we would take a budget amendment if that does come in higher than we anticipated, but we're just being conservative.

Okay, thanks.

Great.

Okay, um, moving on.

We have two more special assessment districts to talk about.

First, we'll talk about our forestry tree maintenance district.

Um, we're recommending increases of 15% in the first year, which is about five dollars to the typical homeowner annually.

We're recommending eight percent in the second year, which is about three dollars to an annual homeowner on an annual basis.

Um, one of the major drivers of the increase here is the internal charges to pay for the design of the shops complex, and again, we do anticipate um adding some more funding potentially to this in future years.

Um, we're not buying down quite as much fund balance in this fund as some of the others.

We are um hoping still to make headway on increasing that green revenue bar compared to our blue expense bar rather than continuing to use fund balance to support our expenditures.

Um Parks and Trails Assessment District.

Um, we're looking at some financial trends over the next few years.

Um, if you look at our um total projected assessment revenues, which is what's showing up here in the light to green bars.

Um, they look kind of not green on the screen.

But um, then blue is going to be our total expenditures.

So what we're showing is a pretty significant gap.

Um, but that is primarily capital projects.

So similarly to our water and wastewater um models, we are able to fully cover the costs of the people and the contracts that are doing the parks maintenance.

It's those significant capital projects that were we're having trouble trying to afford on the current assessment rates.

So we are looking at 15% increases each year for parks and trails to support some of the capital projects in the capital improvement program.

Um, you will see in the capital section of your budget, there's a list of changes to the adopted capital program, and there have been quite a few changes in this parks and trails district.

Um, some of it is pushing things out into future years.

Um, some are just reductions in order to try to minimize the impacts on assessments for this particular district, and we felt that this was kind of a good balance of both, um, especially once adding in that shops complex design funding in here.

Um, on the screen, I have a brief list of some of the big projects that are planned for this biennium still.

Um, we did add some money to bike fill community park.

The city's expenditures stay the same.

The city was always planning on spending 500,000, um, but there is another 750,000 that the city will actually expend, but will receive the grant funding for that from the land water conservation fund grant.

Um, so we have to have that as part of our appropriations in order to manage that contract.

We've got a significant number of fleet and equipment replacements in the two years.

Some playgrounds gate park improvements, trail connectivity, and pickleball courts, which are in the two-year period.

So this is just to go back to that overall estimated homeowner impact slide and remind everyone that we'll be talking about property taxes and general fund in more detail next week.

But all of the other assessments and fees are really made up of the funds that we've talked about this evening.

Coming up with that 4.7% increase in fiscal year 27 and 6.7 in fiscal year 28.

Any questions on parks and trails, forestry, or anything else.

This is my last slide.

Okay.

Any questions on this last section?

Commissioner Magic.

I've got to get Mitch to at least come up here.

He's been here all night.

So when is the splash pad gonna open?

Well, um, we had the county health department there today.

Um, and when I was over there before this meeting, the electricians were switching out the pumps.

We're in the final stages of this, and so it's we're trying to get it open this week.

That would technically be a a soft opening, and then we're tentatively planning a ribbon cutting for June 17, but um communications will push that out as soon as we have the uh confirmed green light uh from the county health department.

Sounds good.

We might like hold off approving the budget until the splash pad up.

It's it's we're we're incredibly close, and it is one of those where staff and contractors are there every day, all day right now, just trying to do the final push.

Turn it on tonight at night.

And I'll tell you, I would say this the county health department was great today, and they're willing to make they're making themselves available when we're ready to call them back out.

So we can get them there in the morning, and when we turn it on, we're we're gonna leave it on.

Excellent.

Yes, I can't wait.

Thanks.

I think we're welcome without you know, we don't need the county to tell us we can who are they to say that we can do with the right.

Any other questions while Mitch is at the podium?

I'm not sure if this is a Mitch question or uh one from Melissa, but I I think I'm just getting my wire wires a little bit crossed between the voted levy for parks and this district, is are these the same or different?

Um the parks and trails district is what was voted on um by the public.

That was May 5, 2020, and that's the complete use of funding for the parks and trails division of the department.

Right.

So we we voted to create this district, but we didn't vote on a set fee, and so that is correct.

We can increase the fee without going back to the voters.

That is correct, yes.

What was uh what was approved is that we would set the budget um right with the commission, and so that would be uh set and reviewed annually.

Um, and that was in the ballot language.

And does this district sunset?

Is there a time when we have to go back to the voters to ask?

There is not, but there is a provision where the voters can or the city um can can sunset um the district if if that's desired.

Okay, but no no specific trigger of when when that is correct.

It did not have a timeline, it was not a five-year, 10-year, 20-year sunset to to go back to the voters on the question.

Okay, thank you.

You're welcome.

Any other questions?

Commissioner Sweeney.

I have no questions either.

Is that that's that's it?

Yeah, and I just I just want to thank Melissa.

Do you have any closing comments?

Uh if there's something that um that you're uh that triggers a question for you, just send them our way and we'll get those answered or uh really appreciate uh this is incredibly complex budget, and so if you have we try to answer questions that you have from the dais, uh and we'll do our best.

If we don't know, we'll get back to you.

And if you have any questions in the meantime, just send them our way and we'll get you answers.

So really appreciate the interest the commission has and uh this process.

Great.

Um before moving on to discussion up here.

If there is any, um we'll open it up for public comment.

Um any public comment, I think we're down to just staff in the room this evening.

Um Alex, are we seeing anyone online?

Mary Morrison, we are not okay.

Seeing no public comment, um, we'll close the public comment portion of this item and bring it up here for a discussion.

So this was just you know, wanting to give all of us more bytes at the budget.

It's complex, there's a lot of pieces to it.

Um, so we don't there's no action we're taking tonight, but wanted to open it up if there's any comments or ideas.

Anyone's floating around.

So I I do feel quite nervous that um we seem to be doing a lot of increases, and you know, while it isn't a huge impact to households, um we are also at the same time spending down that funding, and so you know, in a few years.

If we have something like COVID where we want to pause rate increases, we might be in a more like we might not even have that option.

So you know, it seems it seems like vacancy savings is not like a reliable, it's kind of also not actually like a desirable thing, right?

Like we we want to have staff because I'm just concerned that maybe because growth is slowing, we're gonna have to look at some things, either operations or capital.

I don't know.

Yeah, deputy mayor.

Um I uh yeah, I I guess I'm I'm not concerned about spending those things down because we we that's essentially last year's savings that we have have put essentially in the bank, and then and then it's you know, having sat through a couple of these, you know, we we do that it looks like a dire line, but then you know we're back again to uh you know a robust fund balance.

So, you know, I think as a as a philosophy, this the city has a tradition, or at least I know you know staff has a tradition of of not wanting to collect money from ratepayers' users, the city, the public, just to have it in a balance for a rainy day fund.

But um, and that's something I I personally support, you know.

So um, but I I wanted to speak most really to the to the how um Melissa, how you started off this this conversation with the the focus on stewardship and transparency, and I really just appreciate that.

I want to I always love to bring in the act for and the um and the financial reporting that we have, you know.

I think we have a 41-year record, I believe, of of really robust um, I don't know, I forget the award, but it's it's the highest award we have.

I was in high school when we started that trend.

I believe, you know, Mr.

Wynne, you were just starting as a firefighter.

And um, you know, it's it's it speaks to the to the stewardship and the focus on stewardship that that we we as a city put on this.

And so I really appreciate that.

I do find it astonishing that this room is empty of the public.

We can fill this, those seats talking about sidewalks, talking about I wouldn't know, any number of things, but this is where those decisions really are made.

And so it's just um that that said, I'm we're here we are.

Um, just to speak briefly, I would support looking at that fluoride, and maybe we I can speak to the empty room here, you know.

But I would support looking at that.

If we can 30,000 is not a lot, but if we can avoid that capital up or outlay on on the anti-corrosion for the for the for the pipes and and storage, fam, we I think we should we should do that.

Um, I also appreciate the the look on on debt and uh and and the focus on kind of stability and consistency.

That's that's definitely uh I think it's really important to be you know not to have big spikes up one up or down in in terms of spending or in terms of taxes and and I think that really helps.

And I think that's uh that's about it.

Um, I'm looking forward to the discussion on the general fund, but I do appreciate this.

This is the bulk of our budget, these funds, and so I'm glad to have it a thorough look and I appreciate the questions for my fellow commissioners on all these.

Yeah.

Thanks.

Commissioner Bowdy.

Yeah, thank you.

Um I'll just kind of join the um the deputy mayor in saying that I I feel comfortable with our practice of starting with that um bulk of savings from our previous budget and then kind of spending it down, just noting that we're we're never actually spending down to zero.

Um we're holding some reserve, the kind of um recommended amount of reserve for a city of our size and in those funds.

So I don't think that we are um getting ahead of our skis or anything here, and that um if we are lucky enough or unlucky enough to have vacancy savings in future years, then that's um something that we can kind of apply for it again.

And if not, I don't think we put ourselves in a really negative situation.

And then I'll also just say that I think when the community has the ability to bear some of these cost increases to make sure that we are not deferring our maintenance in times of relative prosperity, um, that gives us more resiliency as a community to hold costs steady in another situation like a COVID pandemic, and so um yeah, not to say that we're all doing great in this time um cost of living is definitely a problem, but I um I think that to the best of our ability, we should be making progress on some of our deferred maintenance.

So I'm I'm on board with that.

Um I'll put a third towards this let's explore whether or not to keep fluoride.

Um I'm also interested in the potential savings of that, and um I was shocked to hear that we're the only Montana community doing that.

Um that that surprised me.

Um, and so yeah, it would definitely not be um a anomalous thing for us to take another look at that, and it seems rather rather timely, especially considering the cost in that particular fund that we're asking um our taxpayers to bear, and maybe we can just lighten that a little bit.

I want to just again kind of lift up this interest in looking into the tier of water service and whether or not it makes sense to have some users subsidize others.

I think the way I understand it works, they're already doing that.

We do have people who use more water paying more per gallon than people who use less.

Um, and I just want to maybe learn a little bit more about as we increase the rate.

Are we doing a flat increase in each tier, or are we continuing to keep that distribution, right?

Like I'm getting a little bit mathy here, but if it's a flat increase every time 10 years from now, the difference between the most high water user tier and the least water user tier won't be as big as the difference that it is today.

So just want to like maintain the original intent of that distribution and um think that that could potentially help support some folks who are being more water efficient or maybe can't afford to use as much water.

Um and then I really appreciate seeing the allocation for the statistical surveys and being able to do one or two of those a year.

Um $50,000 does feel really generous to me.

Um, and I will do some some investigating to see how much I think one survey might might cost and um can can also look into like some basic quotes of uh what could be appropriate.

And I I think there's potential for maybe some savings in that area, but um very much want to make sure that we have enough to do a survey if if we decide that that's a valuable thing to employ as a tool.

And um yeah, I look forward to the next conversation on the general fund next week.

Thank you.

Commissioner Magic.

Thanks, Mayor.

Um, I'll be real quick.

So I think I was the only commissioner here during the pandemic and during those years, those budget years, we deliberately held back, you know, making any steep increases because the community was clearly suffering.

So and we did that saying, you know, we're gonna catch up as years come up.

So we're doing what we said we're gonna do we were gonna do.

Uh there was really no surprises.

Um to the public, you know, I think it is a shame that uh the public, this is very typical, it does not show up for budget meetings.

I can't imagine why.

But if there were any way to kind of showcase the first 20 to 30 pages of the budget document, and kind of put that out there because I think it's a really helpful primer for the average person to read.

They might be daunted to look at the 100 multi-page full budget, but the 20 to 30 pages might be more palatable.

Um I agree with the water-tiered system if it's possible, possible to increase the higher tiers and help subsidize the lower tier.

That was kind of the intent of my question.

Um I'm pro-fluoride, so I don't know if I support not putting.

And then lastly, uh just thank staff.

And I think next week we're gonna look at starting the meeting earlier.

Great.

Thank you to my colleagues.

Yeah, I'll I'll be brief as well.

Um, similarly interested in the tiered water user.

How do we, yeah.

If if you're using less water, how do we reward that?

Um the uh I want to be clear.

I I'm I'm in support of the of removing four from the water on the condition that uh you know it passes a health assessment that was unnecessary or gratuitous.

Um I do think if we take four eye out of the water, we should put something even crazier in.

Um we should swap it with something else.

GLP ones.

We could put GLP ones in the put Ozempic into the water.

We're putting peptides in the water chronicle if you're listening.

Um, because to me the main the main thing that struck me when doing tours of the water facility um was not the cost.

The cost is one part, but it is that it's it's a it's an intense chemical that staff are having to interact with and use.

Um, and whether that's uh, you know, for staff safety quality of life, et cetera, not just the the cost, because the cost as we heard is is pretty nominal.

Um I am curious about what our additional spots to uh carve out small injections of money for ADA projects.

Um I'll dig into what those are and talk with with staff.

I don't have anything prepared here to talk about, but um, just wanting to continue lifting that up.

I know there's a ton that's already um uh pretty ambitious amount put aside in the arterial and collector district piece, but just wanting to telegraph my interest in that.

Um just uh I I one I really appreciate um Melissa and your team on on this on all the effort that goes into this, but I I don't know if it's having looked at a few of these, but this one felt much easier to to walk through.

Something of the formatting, the high-level changes at each level was was really helpful.

Um, and I think in the uh, I know it's not popular to say, but I love taxes and seeing how efficient a tax dollar, how much it translates to when we are seeing you know Netflix subscriptions going up and things like that.

Like just thinking of what are the insane things that we have to spend.

We opt into spending on a monthly basis versus you know, four dollars a month gets you, you know, a stormwater system, you know.

It's like, you know, I think those are important parts to be able to talk about how effectively government can address these, but um mayors aren't supposed to say that they're supposed to say we're doing everything we can to cut taxes, but they're doing we when we come together, we can do incredible stuff.

Um but yes, I'm looking forward to our general fund conversation.

Any further discussion?

Yeah, deputy mayor.

I think I think we have the making of a next Boseman Beats podcast right here.

Taxes, why I love taxes.

Yeah, and the first 20 pages of this document.

I said that in my I one of my first interviews.

They said, Why'd you run for office?

And I said, I love government, I think taxes are awesome.

They didn't put it in the paper.

You've got the microphone.

Um, I do want to add my yes to the water rates, uh, the the tiered um water rates investigation.

And I think I I would never look at it as a subsidy of the lower rates.

I think if we could set a policy of saying we don't want a lot of excessive water use, and that would be one of the, you know, the the the rising economics would be one of the ways we make that policy happen.

Um, but I'm all for that.

Agreed.

Yep, city.

I can make a couple of comments.

One, thank you very much.

You can this is um from our perspective, this is this is a great conversation.

Two, um, I think it's it's fundamentally interesting how um by reducing uh water consumption, we increase water rates.

So it costs us the same to make water, take care of our system, whether we use a lot or none.

So it it's a fascinating conversation that we and we we all agree it's a it's our most precious resource, and we should reduce it.

By reducing it, we have to charge more for it in order to run our system.

And so it's uh it's just an interesting interesting thing to think about, and that's why our partially why our water rates are so high when we use the least amount of water per person in the Montana cities and even in the region.

So I just think about that.

Also, we have the most efficient water system in Montana.

We leak less, um, and that takes more money to do that.

We have the most advanced leak detection system.

We had a presentation from Sean on that.

It's amazing.

We're catching little tiny leaks, and that's expensive.

So that adds to the cost of our water system.

So as we work through this, we'll investigate those tiered rates, what we might represent, but the less water we use, the more we have to charge for our water.

Um, to uh comment that Commissioner Sweeney made earlier uh about um being in a position to address uh something like we did in the pandemic, and I appreciate uh Commissioner Magic's comments, we were not in a position, financial position to hold rates flat, and we're seeing the results of that now.

So as we think about uh fund balance, as we think about also during the uh during COVID and after, we couldn't get our projects done because they were too expensive.

Many of them were too expensive.

We didn't get bids, we didn't get competitive bids, so we put those projects off and off and off.

So our capital fund balance, I think you saw that.

And I think that the that the graph that that we should pay most attention to, um, yeah, any graph that goes down is bad, except the costs.

But the the blue and the green are the two most important things our revenue and our expenditures.

And I think we're seeing some amazing some really important and positive trends in those two things based on the work that Melissa and Sean and Nick and our other directors and Mitch are doing in their operations.

So I'm I'm pretty proud of that from a city.

We are we're we're balancing our books, and we they weren't always balanced, and we were deficit spending, and we weren't deferring maintenance, and now this commission has had the political will, and the staff has the operational uh professionalism to write those ships.

And I I just want to leave on that.

So thank you for supporting us.

Thank you for uh making those really hard decisions that need to be made in order to do the work that this city is doing for this community.

Thank you.

Thank you for that.

Um good reminder of what things that we're we're chewing on here.

And I I also just want to appreciate um my colleagues on the commission.

I even though it's an empty room to the of the public, um, I just feel proud of how much everybody clearly dove into this and wanting to you know do our due diligence.

Um we have a few more opportunities to to get into this, but um I appreciate everyone despite an empty room.

Um stepping up to the plate on this.

Um we will wrap up this item, and there is nothing else on our agenda other than our second round of of FYI.

Are there any FYI from the commission?

I actually did um had hardly any meetings in May.

So uh I just wanted to highlight that May was historic preservation month, and um the there were a lot of board meetings, so I will not give you all an update on the ones that I sat in.

But um the historic preservation advisory board did um sort of prioritize the work among the landmark program and code updates and NCOD um revisions, so that felt like a pretty you know important moment in deciding how we're gonna go forward with a bunch of different um pieces.

And uh Extreme History Project is kicking off their summer walking walking tour season, so check out their website and find some time to do a walking tour.

Thank you.

Any further FYI?

Any FYI from staff?

Okay, seeing no further business to come before the city commission, this meeting is adjourned.

Goodbye.