But we walked across the square day and see one dragon.

So we practice the case.

Actually, first of all, I can do it.

Oh, maybe they're gonna find six.

Gerald actually.

So they have two.

Yeah, we're gonna go slowly driving so and there will be a job just wanted to round the hands.

No, yeah.

No.

No, they don't bag up here.

I know we got a little map.

Ice cream.

Yeah.

The more you ready.

Yes.

Ron, you ready?

Yes.

Welcome everyone to Elizabeth Town City Council special meeting for September 22nd, 2025.

And I'd like to ask Councilman Lamar Jones if you lead us in the indication, please.

Let's break.

Thank you for our great employees that we have work with this city, Lord.

We just thank you that they keep this man cog and our way of learning every day, Lord.

Thank you, Lord, for the blessings you've restored us, Lord.

Lord, as we go through this meeting tonight, I give us the knowledge and decisions we need to make to keep this city moving in the right direction, Lord.

Lord, thank you, especially for our first responders, our military specialists at home's way over yes, you lift them up a special way, Lord.

Watch over.

Lord again, thank you for the opportunities and blessings you give us every day in this city.

We assist in your great night.

Amen.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands.

One nation under God.

Okay, we will get started with approval of minutes from September 15th, 2025.

If I can get a motion in the second, please.

Second.

All in favor?

Aye.

Opposed.

Seeing none motion carries.

Judge Howard, we will start with you.

Second reading by motion of ordinance number 23, 2025, setting tax rate for all motor vehicles and watercraft.

If I can get a motion in the second to read, please.

Second.

All in favor?

Aye.

Opposed, Judge Howard.

Be ordained by the city of Elizabeth Town that from and after the passage, approval, and publication of this ordinance as follows.

That an ad valorium tax of 11.6 cents on each 100 of assessed valuation of all motor vehicles and water crafts taxable for municipal purposes in the city be in the same as hereby levied as of January 1, 2026.

For the purpose of raising revenue to pay salaries of officers and employees of the city to pay for repairs and maintenance of streets and public ways, the public and other property of the city to pay for lighting the streets, the maintenance and operation of the fire and police departments, and all other proper and legal demands against the city.

Said tax shall be collected by the Harding County Clerk.

This ordinance shall be effective on or after its adoption, publication, and posting as provided by law.

Be it further ordained that the mayor and or as designee is authorized and directed to take all steps necessary to perfect this ordinance.

It was read for the first time on the 15th day of September, and this is a second reading and therefore is available for your consideration.

Any discussion.

Motion.

Councilmember Bishop.

Yes.

Councilmember Fulkerson.

Yes.

Councilmember Isaacs.

Yes.

Councilmember Jones.

Yes.

Councilmember Springsteen.

Yes.

And Councilmember Tyler.

Yes.

Motion carries 6.0.

Thank you.

Ordinance 24 2025, setting franchise tax rate on all eligible bank deposits.

If I can get a motion in the second to read, please.

Motion.

Second.

All in favor?

Aye.

Opposed.

Judge Howard.

Be it ordained by the city of Elizabeth Town that from and after the passage, approval, and publication of this ordinance as follows.

One, there is hereby imposed on all financial institutions as defined by CARS Chapter 136, located within the city for the 2025 tax year, a franchise tax at the rate of 0.025% on all eligible deposits as defined by KRS Chapter 136, maintained by such financial institution.

Two, that all taxes hereby levied shall become due and payable as provided by law, together with special levies heretofore made for street improvements.

If any tax bill is not paid on or before January 1st of 2026, the said tax bill shall be declared delinquent and shall bear interest at the rate of 6% per annum or one half of 1% per month or fraction thereof until paid.

In addition, a penalty of 10% of the amount of tax for general purposes and special assessments shall be added to said bill and collected being the penalty for non-payment when due.

It is further ordained that in the event any such tax bill shall be paid during the month of October of 2025 or November of 252025, a 2% discount shall be allowed by the Elizabeth Town Director of Finance.

Be it further ordained that the mayor and or his designee is authorized and directed to take all steps necessary to perfect this order.

This was first read on the 15th day of September of 2025.

And as a second reading, it is also now available for your consideration.

In discussion.

Motion to approve.

Second.

Councilmember Bishop.

Yes.

Walkerson.

Yes.

Isaacs.

Yes.

Jones.

Yes.

Springsteen.

Yes.

Tyler.

Yes.

Motion carries.

Thank you.

All ordinance 25, 2025, setting 2025 tax rate for real and personal property.

If I can get a motion in the second to read, please.

Motion.

Second.

All in favor?

Aye.

Opposed?

Judge Howard.

Be it ordained by the city of Elizabeth Town that from and after the passage, approval, and publication of this ordinance as follows.

One, that an ad valorium tax of 10.7 cents on each 100 of assess evaluation of all real estate and tangible personal property taxable for municipal purposes in the city be and the same is hereby levied for the purpose of raising revenue to pay salaries of officers and employees of the city to pay for repairs and maintenance of streets and public ways and public and other property of the city to pay for lighting of the streets, the maintenance and operation of the fire and police departments, and all other proper and legal demands against the city.

Two, that all taxes hereby levied shall become due and payable on December 1st of 2025 as provided by law.

And if any tax bill is not paid by December 31st of 2025, said tax bill be declared delinquent and shall owe a penalty of 5% if paid by January 31st of 2026.

In addition, a penalty of 21% of the amount of tax will be owed for bills paid after January 31st of 2026.

Additional penalties and interests will accrue once the Harden County Sheriff's Office transfers delinquent tax bills to the Harden County Clerk as required by KRS Chapter 134.

General purposes and special assessments shall be added to said bill selected being the penalty for non-payment when due.

Five, that the payment of the advalorium tax bill can be received by mail at the Harding County Sheriff's Office at the address of 150 North Provident Way, Suite 105, Elizabeth Town, Kentucky 42701, or in person at the Harden County Government Building at the same address.

This ordinance shall be effective on or after its adoption, publication, and posting as provided by law.

Be it further ordained at the mayor and or is designee is authorized and directed to take all steps necessary to perfect this ordinance.

This ordinance was read for the first time on September the 15th.

This is a second reading and is also now available for your consideration.

So fun fact I had uh Mrs.

Graham do a little research and she looked up all of the rates on real property tax, and I think we went all the way back to 1919, but it was formulated different until 1983, I believe.

And so since 1983, the city council has either voted to maintain the percentage that they had the previous year or decreased it every single year.

They have never gone up since 1983.

I thought that was pretty interesting.

So the whole time you and Tony have been here, you've never raised.

I think it started before us before.

I'm not saying 83, but you weren't long after.

But anyway, I thought that was interesting.

Any discussion?

Motion to approve.

Second.

Councilmember Bishop.

Yes.

Fulkerson.

Yes.

Isaacs.

Jones.

Yes.

Springsteen.

Yes.

Tyler.

Yes.

Motion carries.

Thank you all.

Thank you very much.

Okay, Mrs.

Graham, if you'll forgive me, I am going to reverse the order on the municipal orders and have Judge Howard read municipal order 562025 accepting proposal for naming rights for the historic state theater.

If I can get a motion on the second to read.

All in favor?

Aye.

Opposed?

Judge Howard.

A special meeting of the city council held on the date set out below.

After first being read, a motion to adopt the following municipal order was duly made, seconded and approved.

Whereas the city owns the historic state theater in downtown Elizabeth Town, and whereas the city restored the property as a venue for movies, concerts, meetings, weddings, and other public events.

And whereas the city solicited proposals for the naming rights to the gallery space, which is part of the historic state theater complex.

And whereas the city received two proposals, which were publicly opened on June the 12th of this year and reviewed.

Now be it ordered the city accept the bid from McNolia Bank for the naming rights to the gallery within the historic state theater complex for a five-year period at in an annual amount of $20,100.

Be it for the order that the mayor is hereby authorized to sign any and all agreements, contracts, and other documents to complete this arrangement, be it for the order that the mayor was designee is authorized and directed to take all steps necessary to perfect this order, red adopted and approved the 22nd day of September.

In discussion.

So moved.

All in favor?

Aye.

Opposed?

Motion carries.

Now, Judge Howard, if you would kindly read municipal order number 55 2025, accepting proposal for sale of 710 and 712 East Dixie Avenue, if I can get a motion in the secondary, please.

So move.

Second.

All in favor?

Opposed.

Judge Howard.

A special meeting of the city council on the day till set out here below after first being read.

A motion to adopt the following municipal order was duly made, seconded, and approved.

Whereas the city acquired property at 710 and 712 East Dixie Avenue in August of 2021.

And whereas the city acquired the property to make the property available for redevelopment purposes and has now determined that it is no longer in the public interest to retain ownership of the property at 710 and 712 East Dixie Avenue.

So that the property may be developed by a private business as was intended by the purchase of the property.

And whereas the city solicited proposals or bids for the purchase and development of this property by issuing a request for proposals by advertising on the city's web page and posting a sign on the property for two weeks, notifying the public the property was for sale.

And whereas the city received multiple telephone inquiries and one proposal or bid, which was publicly opened on September 12th of 2025 and reviewed.

And whereas the city followed these procedures to comply with KRS Chapter 82 and its own policy for property sales.

Now be it ordered the city accept the bid or proposal from Dewey and Kelly Cruz doing business as Cruise Properties LLC for the sale of approximately 0.76 acres at 710 and 712 East Dixie Avenue for $190,000, and that the city convey the property to that entity free from all liens for transfer and development purposes, be it for the order that the mayor is authorized to sign any and all agreements, contracts, settlement statements, deeds, subdivision plats, and other documents to complete this property transfer, including preparation of a current property boundary survey and a phase one environmental assessment report, be it for the order that the mayor and or is a designee is authorized and directed to take all steps necessary to perfect this order, read adopted and approved the 22nd day of September.

Any discussion?

Motion to approve.

Second.

All in favor?

Aye.

Aye.

Opposed.

Seeing none, motion carries.

And at this time, I would like to introduce you to Dewey and Kelly Cruz, who are apparently the new owners of that property.

And Dewey, if you would like to get up and speak and talk a little bit about what your plans are, we'd we'd love to hear it.

Oh, yeah, and family.

I didn't mean to do it.

Yeah, if you don't care.

I thought Noah was going to do it, but I guess he's only Noah says R and forced me to Lauren would do it.

Mayor Gregory and City Council, good afternoon, and thank you for your support and your encouragement today.

Your leadership, your vision, your commitment, and the support of not only deucers, but our small businesses and our community are to be convened, commended.

We are excited to explore our family's dreams and vision of what is next for Deusters, homemade ice cream and bakery.

We anticipate that people will ask what our plans are and what our time frame is, but unfortunately we cannot tell you or answer any of those questions right now.

But what we can tell you is that we are going to make our decisions on what is needed, not only for our business, but for our community, and that our children are going to help make a lot of those decisions.

Amen.

And they don't really know all of that yet.

But it will come.

And but even though she's in North Carolina, she continues to be our business consultant and can usually bring Dewey down to some sites.

And she creates our work schedules.

At 15 years old, when COVID kind of changed our business a little bit, we uh asked him if he would start producing our ice cream.

Uh I can tell you that Noah just turned 21 years old last month and is doing a fantastic job of leading and and um doing those uh that production.

Uh it's uh kind of made our uh business stand out a little bit with some local and state awards, and then he's also overseeing our two mobile units that we have.

Um in 2021, our then 23-year-old daughter, Lauren, um, moved to our head baker.

Um I think our granny would be very proud of her for the uh commitment that she's done in that and with her creations and her baking and her decorating uh for some of our most delicious desserts here in our community, and we are very proud of that too.

So thank you.

Um Lauren and Noah have done a tremendous job in the roles at Deucers, and we cannot honest or we can honestly say that because they're consistent products produced, we have had many partnership opportunities, our catering opportunities, our wholesale opportunities, and that we're very proud of, we're very selective with, um, but we're also that has led us to a growing business that we probably did not anticipate 10 years ago when we started.

So our legacy of deucers is not just for our children, but for our community, and we look forward to seeing and cheering on all the other establishments that are coming to the area of the south end of town.

And once again, thank you, and we look forward to our next adventure.

Uh I would like to, and then it's uh it's humbling.

It is very humbling for us.

Uh I was in youth ministry when I started this.

Rick Davis came to me and said, I think you need to make an extra 10,000 dollars.

So I bought the ice cream trailer from him.

He wants a check from me every month because of what's going on.

But I know Rick.

But it it blows our mind.

It blows our mind of how the community has come around us.

Uh but we've got a great community.

And uh we are excited.

We live on that side of town.

Some of you all probably do too.

We're excited about that side of town and what that uh has to offer for us in Elizabethtown and surrounding counties.

And uh I do appreciate this opportunity.

Our family appreciates this opportunity, and uh deucers our goal is every time is to be better, to be better than what we are now, and to grow, and that's our focus.

Uh, there's a lot of times we come back together after a weekend.

What can we do better in in service?

I mean, I want to touch all five senses, and that's what we've always tried to do.

And uh I appreciate the opportunity, and um uh thank you again.

Yes, no, I was giving you a chance.

Mary, if I could this family has been a blessing to this community long before deucers even came around, and they continue to do so today.

They've got an excellent product, but they're also outstanding people.

And I don't know of the time that community event or something hasn't needed something that they haven't tried to work with them.

And I remember Deucers was one of our first vendors down at the Fairgrounds.

Yeah, back when it was a slimmer time down there, and they hung with us, and and uh so we're so appreciative of that.

And we've been able to grow together uh from that event to your own business and the product that you all produce speaks volumes about you all and the care that you all have, not only for the product, but for the community.

So thank you.

It's exciting when you can see a local business expand and have another opportunity here in the community.

So thank you.

Yes, yes.

And many of you all probably wondering where 710 and 712 East Dixie is if you can picture right beside the new firehouse down there on the south end of town where the Almond House used to be.

Uh, that was property that was owned by another local businessman that if you'll recall when we built the new firehouse in 2020, 1920, then we traded property for for the old firehouse.

We traded even for the property that the deucers is eventually going to go on on the south end, and we didn't know at the time why we were while we were well, we knew why we were trading.

We didn't know what was going to end up going there, but so it's always great when you can hold property or you can you can have some inventory that when something pops like pops up like this, you can make it happen and work a deal, and uh it couldn't have fallen into place better.

And I think Councilman Folkerson said it best.

They were a great family contributors to this community long before they ever started making ice cream.

So we're really proud to be able to work with them and continue to grow not only our community, the South End, but uh just everything that's great about Elizabeth Town.

So thank you all very much.

There is a rumor they're working a deal for a discount for the fire department, so that means for the one location.

You stand in the mobile unit opportunity over there.

Oh man, okay, public comments.

City council information items.

October 6th, 2025 meeting will be canceled due to fall break.

So our next meeting will be October 13th, 2025.

And don't forget coming this Saturday, the Heartland Harvest Festival.

Uh Beth, where you and Priscilla want to talk about that real quick.

Not to put you on the spot, but uh I'm putting you on the spot.

So the weather looks perfect.

I know it's gonna rain the rest of the week, but um we have been checking, and the weather looks really, really fantastic.

So, of course, yes, as Jeff said, Saturday, September 27th is the um Heartland Harvest Festival.

If you all remember last year, Hurricane Helene kind of rained on our parade, and so we had to cancel all of our events, but we're back.

Um I think we're bigger than better, bigger than ever for this year.

Um, there's a lot of community events that will happen throughout the the day and some downtown events.

So some of our community events, I'll let Priscilla talk about those.

We have so many things going on in our community.

I mean, it's really gonna be hard for everyone to choose.

Um we're kicking off the morning, of course, with the women's club of Elizabeth Towns Breakfast here at Pritchard from um 8 to 11.

Um tickets can be bought in advance for that or at the door, and we are really looking forward to that great breakfast.

Um, and then heading on over to the nature park.

We have the Heartland Harvest 5K.

Um, and you don't have to be an avid runner for that.

If you want to just walk and enjoy that beautiful scenery, we just invite everyone to go out there and uh participate.

We have a free kids fishing derby from 9 to noon, and you can check in there at the bandstand.

And then we have um the Ron Thomas Memorial Fishing Tournament.

You can pre-register for that online, Heartland Harvestfest.com.

Um, but all of those proceeds are going to WHAS Crusade for Children.

Um that one is being sponsored by our Elizabethtown Fire Department in conjunction with the Central Harden High School's bass fishing team.

So we're really looking forward to that as well.

And then if you have a classic or current year, uh late year Corvette, then we are um hosting a Corvette cruise in over at Southeast Christian Church from 10 to 2, and that's a really great activity as well.

They're gonna have some food trucks and all the proceeds are going to local charity as well.

I think that we'll talk about our day.

And we also want to thank um the Parks and Rec department.

They are the ones that are um working for it with the 5K and for the fishing derby, so we want to appreciate those people.

Seth and his team do a fantastic job supporting us in our roles.

Um the downtown events, they start at 10 o'clock on Saturday morning.

So we'll have over a hundred uh craft vendors, businesses, downtown lining uh Dixie and Mulberry.

Uh so you can bring your I always say checkbook, but I don't think people take checks anymore.

Bring your card, your cash, your shopping bag, your wagon, they'll be something for everybody.

Um we'll also have food trucks in the city hall parking lot.

And one of the things that we love about our um downtown event is free.

So we'll have a free kid zone.

Uh, we've got four of our area churches that are coming together that are going to be um working with us and operating that.

So we're really excited and appreciate them.

I think it's Grace Heartland, Severance Valley, not Seven Southeast, First Christian, and Sevens Valley.

So we appreciate those folks for supporting our community event.

So we'll have kids uh inflatables, lots of games, uh, a petting zoo, all of that is free.

So if you have kids, grandkids, just let everybody know.

It's a gift from the city to the community, and and we're really fortunate that we can do that at no charge for for the kids.

The big event um that we're looking forward to is the concert event.

And so while the downtown events go on from 10 to 5, we'll open up that concert event um area at 2 o'clock, and that will be in the Justice Center Park and lot, similar to where we had our block party.

Uh, we've got food vendors on site.

We'll have lots of um refreshments that you can purchase.

Of course, all of the downtown businesses will also be serving that day.

So we're encouraging folks to, you know, if they don't see something at a food truck, visit one of our downtown businesses, they'll have something for you to eat or drink.

But we kick off the day at 2 30 with the cleverlies.

If you haven't um heard of them, they are fantastic.

They're known all across I would say the world, but they're really fantastic.

Um kind of comedic, some bluegrass, some it you just they're just a neat thing.

So Google them.

We're excited that they're coming.

We've gotten a lot of calls going.

The Cleverleys are coming to E Town and it's free, absolutely.

Um, and then at 504 30 ish, we'll have the mixers.

Um, they are the ultimate party band out of Louisville.

Um, Olivia Hinkin, who was on the voice um a long time ago, it seems like, but she's really not that old.

She headlines that, and they play music that everybody knows and loves, and they're one of our favorites.

We have them, you know, we've had them several times at any of our events, and they always bring a party, and that's what we like.

But the headliner is Montgomery Gentry featuring Eddie Montgomery.

Um, lots of great songs.

Our town, something to be proud of.

I mean, the songs are just they're just great.

So all free.

Bring your back chair.

It is festival style seating.

Bring an appetite, come thirsty, and we hope to see everybody there.

No coolers.

You all would bring coolers anyway.

So we're excited, like I said, it's supposed to be 78 and sunny, kind of overcast a little bit.

No rain, it'll be perfect for the festival.

Perfect.

Perfect.

So thanks for your work, ladies.

Look forward to it.

Thank you.

Okay, anybody else?

Yes, first of all, I have something.

I love the peasant leave, and I highly suggest that was a very exciting announcement when the club released for the detail.

So great, great job.

Yes, very much.

Um second um thing is just a shout out to Central Harden's girls' golf team, the E Town Girls Golf Team.

Um, the fifth region um tournament was just hosted at E Town Country Club, and both of the teams are advancing to state.

So those are the two there.

So school you've just started.

Wow.

That's quick.

That's why I was explored school codes.

But yeah, yeah.

So and then the boys play tomorrow, so hopefully the weather works.

Very good.

Anyone else?

Then I need a motion and a second to adjourn, please.

Motion.

All in favor, uh opposed.

Seeing none motion carries.

So we are adjourned from our special business meeting, and we'll transition into our work session agenda.

And I would just say you all do not have to stay for this if you want to.

We are going to start with an outdoor music venue progress report.

Our friends, Tim Mattingley from Congleton Hacker and Elizabeth Town's very own Paul 50, you're here to tell us what's going on at the outdoor concert venue.

All right.

I'm the project manager for the uh outdoor music venue project here in town.

Um kind of an update of what's been happening out there.

Uh, this is actually a photo from about a month ago.

Uh, and then this is a photo from uh sometime last week.

So as you can see, there's been a lot of progress with earth moving and everything, and I'll also getting getting started over here with the uh foundations and some of the parking lots there in the stage area.

Hey Tim, if you don't care, just with that big picture up, align that up for them how where the stage roughly will be sitting and how it'll be pointed.

And sure.

So uh this kind of square that you can see right here, that's actually the stage structure.

So if you're standing where this truck is looking that way, you're gonna be looking out at the crowd.

So there's gonna be a big crowd area, uh, you know, lower bowl with seating, and then an upper bowl with a lawn, uh and then everything kind of back on this side of the site is all parking.

Um, and there'll be a admin building, a concessions building, and then a restaurant building as well, kind of separated from two spaces.

And lots of trees, and lots of trees.

Like there's over 500 new native species trees going in this uh plotland here.

Uh well ago and then you make the messed it up now.

There we go.

Um, so just some kind of more detailed facts.

Uh so far they've moved about 60,000 cubic yards of dirt in total.

They're gonna move about 250,000 cubic yards of dirt on this project.

So we moved a lot so far, but there is a lot still to move.

Um we did unfortunately very early on, noticed that there were some sinkholes on the property, so we read it to remediated two of the three sinkholes so far.

We've got about a third of the footings ready to be poured for the stage structure.

We're also getting started on our underground utilities and MEP and our steel contractors starting to mobilize off of the site.

So they've got a lot of work to do, as you will see in one of these slides.

There's a pretty elaborate steel structure for the stage.

So a couple photos here.

This is a photo of the mass excavation.

This is actually in the stage area, so you can see there's quite a bit of dirt that came off of that area.

And this is a photo actually of the sinkhole remediation, which was a pretty cool process.

Basically, they injected grout into the ground, which kind of capped that sinkhole and prevents further, you know, erosion.

These are some photos here of our foundation operations that really just kind of got started in the last week or so.

Um so a couple photos there, being digging there, and then the rebar over here.

Uh so this is a rendering or uh, I guess a 3D model of the stage structure.

Um so one of the big things that we're working on right now is uh what we call VIM coordination, which is uh building information modeling.

So basically, you know, the design teams come up with all these, you know, they draw everything in their own models, and then on larger scale projects or complex projects like this one, we'll take those models and kind of combine them all, and then we do what's called clash detection to figure out where we're gonna hit things in the field because those models aren't always coordinated very well.

So basically it saves a lot of time in the field and saves a lot of money and go back work and everything else.

So it's one of those things that you don't really see if you go out to the site, but it's a very important part of the process that we're working on.

And these are just kind of some photos here.

This is actually these are both from this uh project.

Uh, this is kind of an example here.

So you can see this is a piece of ductwork.

This blue right here, this is a steel beam, and right there that's a clash.

So, you know, they'll go through, they'll identify those and they figure out what's the best way to move that to make it work.

Um another thing that we're using on this, uh, technology wise, um, is we're gonna be using a lot of drone uh for for you know planning and and things like that.

So we've got a software, it's called drone deploy, and I'll bring up kind of an example of it if it will load quickly.

Um, and you'll actually see this is uh a survey that we did last week of the site, and I will move it out of the way so everybody can come and see here in just a second.

But you can see this actually takes and it'll fly a grid over the project, and then it stitches all those photos together and creates this kind of 3D model of the site.

And so we're gonna do this probably weekly or bi-weekly, uh, and it's you know pretty pretty helpful as far as planning and you know, like I can go in here in this software and figure out how much dirt is in that dirt pile and different things like that.

So on a site of this size, one thing that really gets lost, and it's it's almost been a struggle for us, even uh for the last couple months.

You go out there and you've just got this big open area, it's hard to tell where things are at, and you know, where's a building gonna be or a road?

And so having this, we can overlay all that onto here, and it really helps with uh that you know, planning aspect.

So as we go forward through this, you know, I'll I'll always make sure that we have an updated version of this, and as we come in and present, that way you guys can kind of see what is actually going on out there.

Uh and that is really about all I had for today.

Um and Jason were actually kind of talking about it beforehand.

It's kind of you know, we're still in the early stages out there, but things are really about to start taking off.

Um, you know, once we get these foundations going, we've got our block mason, we've started talking to them.

They'll probably be getting out there here in the next month or so.

So, you know, should start seeing some things go vertical here soon.

Any questions?

I was hoping you're gonna make policy something, but I guess I got nothing else, but yeah, we're uh we're really excited to get this project going and to bring the same theater to the to the area of E Town is you know for me it's personally pretty cool to be a part of this, but we're just happy to bring it here and bring some more uh you know activity to E town.

Keep it going.

More than anything, we appreciate the communication that you all had with our folks, and the update's great, and we hope to get several more.

Okay, cool.

Appreciate you guys.

Thank you.

Well, I'll let you hit hidden mics on that.

Okay.

Next up is our friend Scott Heath from Magnolia River Services.

And he's going to talk to us about our gas rate study.

Scott, how long have you and your dad and family been involved with consulting for the city of Elizabethtown?

Um at least 50 years.

That's what I thought.

At least 50 years.

Yeah.

So Scott Heath with Magnolia River.

I believe this is the first project that Magnolia River Services has done for Elizabeth Town, but that's only because I was with Heath and Associates for 37 years, and my dad was worked back here in the 60s as your as a gas consultant.

Heath and associates sold most of our business to Magnolia River in April.

I'm a full-time employee there.

We still retained Heath and Associates is still in business, and we do gas purchasing assistance, which you're one of our long-term customers.

We've been doing that at least since the 80s.

So we're we've done this for quite a while.

Specifically, as it pertains to rate studies, we did a cost of service study for the city's gas system in 1998 and in 2009.

I did both of those.

The component was 2012.

And so you you take a base rate and you add the cost of gas to it as a pass-through.

And that cost of gas changes every month, but the base rates haven't been changed since 2012.

And when I refer to a cost of service study, I want to give you just a little bit of a background.

So we sent a data request, it was extensive, and both finance and gas system responded to it.

We've looked at several years of financial and operational performance, looked at the line item budgets and your budget forecast, read your audits.

Every invoice for the last year, made sure because that's your biggest expense.

We want to make sure we're modeling that correctly.

And then the next one there assigned uh operating expenses to the rate categories.

That's a pretty big uh task in itself, and that is not uh hard science.

That's not that's there, there's some subjectivity to that.

And so what we've tried to do is to say what percentage of your operating is really attributable to the general customers, the heat rate customers, your interoperable customers, and as an example, and we we use different metrics to do that.

Sometimes we assign it based on the number of customers within those categories.

Sometimes we assign it based on the sales volumes in those categories or the peak day requirements of those categories.

And just as an example for that, every customer's got a meter, you send uh an employee out, read the meter, it comes back, you generate an invoice, you put it in the mail, you collect the bill.

So those expenses like that, we allocated on a customer basis, right?

So the general and heat rate customers make up 99% of your customer base, and so those particular expenses we allocated those on a on a per customer basis.

And then on a usage basis on a sales basis, you know, your cost of gas, your incremental cost of gas every for every MCF that you sold, you bought, and so that's allocated on a on a usage on a sales basis.

Things like your City Gate station or major regulator stations that are really capacity related.

We allocated the majority of that on a sales basis.

So we've we've we have an idea, we've we've helped systems operate for years, and so we kind of know where what those costs are for, and we allocate it.

And if you've got a different rate consultant, they may allocate it a little bit differently, but they all use the same type of guidelines.

Um and so that was part of what we did.

And then we've got a rate model, and it's a pretty advanced uh Excel spreadsheet, and we can model number of customers of the usage for different weather scenarios, and then when we start changing the rates, we can match it back to your cost of service to try and um when you say that your rates are cost of service based.

What that means is if the general rate customers are responsible for 50% of the cost, then you'd like to kind of recover your 50% of the revenues through the same class, so that you don't have one class of customer subsidizing another class.

So we used a model to uh run some scenarios and design the rates.

Then we took a look at where your rates were or are now, and where we recommend that they go relative to your neighboring systems, um the other gas systems in this part of the state, uh, just to see competitiveness.

We looked at where they were for industrials for alternate fuels, unfortunately, gas prices are well below alternate fuels, so you're not finding much pressure on that, and then we um developed you know our recommendation for um for the rates.

So that's really I'll be glad to answer questions about the the in the woods part of that if you want, but I just thought we'd go through the executive summary and you know go through the findings and then the recommendations.

So like I said, the last cost of service study that you did, it was in 2009, and I believe that there wasn't immediate action taken on that, but that there was uh most of those recommendations were implemented in 2012, and like I said, your general and heat rate customer classifications 99% of the customers they only use 53% of the gas.

So your uh industrial interruptible customers, they use 46% of your gas.

Um the gas system really hasn't grown, it's been very stable.

Um, and uh your your number of customers is is almost identical to where they were in 2009, uh, and the the uh industrial usage has been very steady as well.

Um, your consumption characteristics for your customers relative to other gas systems is very typical.

You use about the same amount per class for the weather.

Uh, the last three years of what we looked at in in depth, they were all uh warmer than normal, but they weren't real warm between two and a half and twelve percent more.

Um, like I said, your industrial customers consumption has been amazingly uh constant.

Um you've got a loss non-accounted for that we put in the model.

Uh you've had some variation in it over the years, we assume 2% for the model, which is pretty standard.

Um, and then you've got um a method whereby the gas department looks at your invoices for the gas supply, and the incremental gas that you're buying used to be a little more the the purchasing used to be a little more simplistic.

Um, you've got a storage field, which is great because when your load goes up and down, you kind of use the storage field to balance things, but as time has gone on, you're making more mid-month purchases, um, and then you've also got a new contract with peak offer prepay, and so it's coming in at a different level.

And the storage tracking was what actually went on was really not representing the math very well.

And so we we talked with Matthew and Ed and Jeff, and we've kind of come up with a new way to calculate the weighted average cost.

It's going to be simpler, and it's going to be more in line with your actual cost.

So that was part of what we discovered and think that we can improve on as going forward.

Probably would normally be a little bit more than that, but you've had some very high capital costs the last few years.

Your non-gas cost says 2009 have gone up significantly.

So in 2009, you your operating budget, not counting your gas, was about $2.5 million.

And in fiscal 24, it was about $4.2 million.

And so these capital costs are of the last few years have made that 4.2 number a lot higher.

You've used some funds to build a new gas and public works administrative building that that came part of that came out of the gas budget.

And then you've made some major improvements in your Sicilia storage field.

And let me just tell you every gas system in the country would die to have your ceserious storage field.

It's a great asset, it helps it helps you keep prices down.

Your base rate, which was is supposed to be recovering that hasn't kept pace for it.

From 2020 fiscal 22 to physical 25, your budget was a deficit in cash flow between two and a half and 3.2 million dollars a year.

So you had monies in your fund balance, and you were planning on taking it out, and you have taken it out, and actual cash flows for the last three years, they range from uh deficit of 927,000 to a little over three million dollars.

Um so I mean that's that's not sustainable.

That that's uh it's partially due to increased capital, but it's also due to your operating costs have gone up and your base rate hasn't.

Um your audit, I I thought was particularly interesting.

You you've got an adjustment that you do for the inventory balance for the Sicilian storage field, and then you make another journal entry for pensions, and if you look at those, they vary by hundreds of thousands of dollars each year, and so it looks like your your net position is going up and down, and really it's just a I you know I don't know about the the pensions is a non they're both non-cash issues, but um I found that rather interesting.

Um your rates are are are were based on the cost of service format in 2009, and they're they're generally um they're generally structured like that, but because your your non-cash your non-gas uh cost have grown, and they've mainly grown to take care of the general and heat rate customers, um, and you're losing money, you're losing cash.

So what's the the general and heat rate margin categories are not recovering what we consider to be the allocated cost, the high low factor and the interruptible were basically a break-even, maybe just a little bit over recovery, but basically a break-even.

Um then um, you know, the conclusion to that is there, you know your base rates not adequate to add to to recover the the revenues you need.

Um the last bullet point on the findings is when we did compare your rates to similar categories between general heat, high low factor, and interruptible around your neighboring systems in Kentucky, your rates were the lowest of the ones we compared.

And one reason they're the lowest is because you're not covering your cost, you're not recovering enough revenue.

Um, but even the recommendations were getting ready to recommend recommend the sizable rate increase, even with the higher recommended rates, they're still going to be in the in the lower in the lower uh portion of rates around the state.

Um you live in one of those other areas, but they don't.

Excuse me.

I mean, it's always nice for us to say that our rates are still lower than Henderson's, but they don't live in Henderson.

That's right.

Um like I say, we can I can uh address anything.

I know you guys have have the studies on the uh on any of the technical exhibits.

I'll be happy to talk to you about that.

I I figured you just want the bottom line, and um they um Ed asked me to um present several scenarios, and um so this top line is a do nothing scenario, and just kind of following that from left to right.

If you we this is for a test year, okay.

This is not any particular year.

What we did is we took your 2026 budget and we added some inflation to it and looked at some of the one-off uh capital expenses and adjusted for that, and we kind of projected this to be a 2028 budget.

So if we set rates at a 2028 budget, we're probably going to be a little bit high on the first year two, and then if you if you waited five years to do another rate increase, you might be under under collecting on the the next couple of years.

And you don't have to do it that way.

You could set rates for this year's budget and then just adjust them every year if you wanted to do that.

But it's been it's been your price, it's been the city's practice to kind of go multiple years between rate adjustments.

So we we took that approach.

Um, and so you've got the top row, the facilities charges that are currently in place, um, there would be no increase, and then uh percentage increase.

So then there's three scenarios, and one the number one scenario there is where we would make a recommendation is to raise the rates so that your cash flow is a break even.

Um, and so that would be I would think a minimum adjustment because you can't just keep uh coming out of your phone balance with it.

And so the the way that we think that's the most appropriate way to do it, your facilities charges are way low to other gas companies.

Um like the facilities charges that is the charge whether you use gas or not for each category for the month.

Um the general and heat rate six dollars, and we're recommending it go to 10.

The high load factor is currently 25, we'd recommend it to 40, and the industrial is uh 125.

We recommend it go to 200.

And we're suggesting that that regardless of the scenario one, two, or three, that you do the same the same facilities charge adjustment for all of them, and then the the base rate change dollar per MCF is shown for each category there, and the last four columns there, that is the effective percentage that your customers are going to feel, okay, between the rate the raised facilities charge and the raised base rate, and um and that's the cost of gas.

Um we've we've estimated the cost of gas for all the scenarios to be the same.

So one relative to the other, the the the customers, the impact on the customer uh under this first scenario here.

I don't know, is there a I don't know if there's a pointer on this or not, I'll just point.

But the the impact for the general customer would be 28%, the heat rate customer 34%, high load 22 and 0.8 for interruptible.

Like I say, when we allocated these expenses, these these categories were kind of uh the interruptibles were pretty well carrying their own weight, and we're we're short or in these over here.

And so scenario two is that you get back to even plus, and then you're at a plus 250,000, and that would help you replenish some of your fund balance that you've drained the last few years.

That would result in these increases and an increase of look at 30% for the general 37% for the heat heat customers, 23% for the highway and 2.6 for the end of the room.

What does that mean in the average bill?

I do.

Because if you look at 27%, that looks large, 30% looks large, but the dollar sends because what would that look like?

Yeah, so your general rate customers is a combination of residential and commercial.

And they average 125 or 125 MCF a year.

And the heat rate customers are almost all residential, and they just have a furnace, right?

That they don't use gas for anything else.

They only average 82 a year.

And the the the fact that the because the general rate customers have small commercial in there, the average use is higher than a typical residential.

But if for the for the typical general rate customer, um the scenario number one, their um rate would go up $17.80 a month.

Uh the middle one is nine $19.30.

I'm sorry.

I'm looking at the wrong category.

The general rate goes up 1980 for scenario one, 21 50 for the uh scenario two, and 2316 a month.

That's I mean, it'll be more in the winter than the summer, but that's where it averages.

That's just gonna be and if you go down to the heat rate customer, it's $17.80.

The second scenario is $19.30, and the third scenario is $20.87.

So really for a typical residential, it's gonna be about $20.

About $20 a month.

Okay.

That's fair.

Yeah, yeah.

And again, I think the public can understand that better.

Yeah, right.

Um, so we're we I mean Magnolia River would recommend would lean towards this this second scenario because I think you need you need to get some more cash because you've you've gone through a whole lot of your your fund balance.

So I think that would be a more um more better um to provide some funding for uh capital in the future.

Uh if you did the second scenario, um this is an exhibit in the study.

Your here's your existing rates, and there's your um uh individual adjustments, and these are the same percentages as on the prior slide.

Um if you look at um at where you are compared to the neighboring systems, if you're on the heat rate, which would be a residential rate, the the way all of these slides work, this is flat maybe uh decreasing a little bit, and the reason this tables up is when you take your uh facilities charge and average it in when you're averaging ten dollars on the first deck of arm is ten dollars, but on the second deck of term, it's only five dollars each right.

So that that's what this is the impact of your facilities charge.

So if you're using five on the month, you would come up here and that would be uh uh all in seven dollars, and same thing for all these.

Here's your the ones that we compared it to.

So even though we're recommending a 34% rate increase in the rate for the heat customers, you're down here.

This is Carrollton, who has a great industrial base and very high load factor, it's a lot easier for them to have lower rates than it is for you.

But anyway, your rates and their rates are very similar now.

Um, if you if you raise the rates of what we have projected, this heat rate is still below, still below all your your neighbors.

Now this is another slide that's a little subjective because you change yours every month, the investor owns will estimate theirs for three months, and then they'll make an adjustment in three months.

And so on any snapshot, this could go up or down a little bit.

But this is this is pretty much shows you the relationship.

If you took your general rate to your residential rates, so if you had more than more than just uh primary heat, then again the black line is where you are, the debt nice dollar line after the rate increase, you're still below most of the other systems.

Um general rate for commercial customer, same story here.

Um the higher rate is still well below a lot of the other.

Use your high load factor rate, uh, same story and the uh interoperable rate.

Um there's a couple, there's some other more competitive ones.

But you're still you're in the game, you're you're well you're well below global gas, which is the ones that surround you.

Um so that's a real quick uh real quick run through of it.

I'll be glad to take any questions.

Um I hope I didn't go too fast, but at the same time, I didn't want to I didn't want to bore you with that.

Was it it within your scope or outside of your scope?

This question may be.

Was there any thought given as you look at these rates to um the opportunity to expand our customer base?

Because for some reason we've been black, uh, which is amazing to me because I am a gas customer at my house and I love it, a gas heat one.

To is there something that we're missing for the developers that will put gas in the system?

Uh is there is to be able to broaden that base to help absorb this cost among more than our current base.

I um I found it very surprising that your your you had your customer base hasn't grown.

We haven't done a lot of we haven't done a lot of work for you in the last few years.

Um, I'm not sure we didn't have the money as you can see, but I'm not sure what um opportunities that you might have missed or are um or I I don't I don't really know the answer to that question.

Um the mayor said that you you your community is growing, and if it's growing, I don't know why your gas customers aren't growing also.

Now apartments and multifamily structures, that's a hard sell.

So if you're getting a lot of that, that's just a hard sell.

The subdivisions I don't know why we could we could try and you know dive into that and see if we could help you with that, but but I don't know why most other systems are are keeping pace with the their population growth.

Yeah, and I you know I don't know sometimes and I don't know if this is your case or not, but sometimes investor own utilities are already up against your and you may be growing, you may be expanding your city, but they're already there.

So I don't know how much of that's in apply.

So I don't obviously I think it's just nobody's nobody's doing that.

There's not an incentive where we we're not selling that benefit enough to developers and even the industrial base that we have here, we're continuing to grow with jobs.

So to me, to still be flat, we're missing the boat somewhere.

We have good product, product's not bad.

Yeah, okay.

So what is that?

What is that other reason?

Um because we're not gonna be able to keep pace even even on a if we take option three, we continue to do that.

I think unless we develop more customers here, we're gonna have a hard time running this as a utility.

Well, I mean it as a city.

Well, I think you know, if you if you raise your rates to that second scenario, um you're still very competitive.

Right, right.

So it uh and your industrial base as you've kept it, right?

And so there's a lot of our our our uh customers, you know, when when gas prices go up or things get tight, if they're if they're you know they got 10 plants around the country and their rates are high, they go, but if they're here in Elizabeth Town and their rates are low, they're gonna keep this plant, right?

So I you know you you've been able to you haven't lost any industrial load.

I don't know why you haven't, and that's another recruitment thing.

Um we do a lot of work in the Carolinas, and any more a company doesn't a manufacturer doesn't come in to the state without his handout, like what property tax incentives, all that are gonna give me, and um so that you know that drives some of it.

I don't know how competitive this county is with other parts of the state, but that could that could be that that might be some of the industrial recruitment.

Uh you may be getting out recruited by other counties.

I I don't know.

I I don't know the answer to that.

Yeah.

Free gas.

We're not high right now, that's for sure.

Thank you for making the trip from North Carolina.

Thank you, and we appreciate your patron very much.

So unless you all have something else you'd like to talk about, I need a motion and a second to adjourn.

I know you're upset.

A little bit.

Motion though.

All in favor.

Seeing none, motion carries, we are adjourned.

Thank you all.