Good evening, ladies and gentlemen.

Welcome to the regular meeting of the Fort Smith Board of Directors for uh Tuesday, September the 16th, 2025 here at the Blue Lion.

Uh as always, before we start, we do the invocation and the Pledge of Allegiance.

And this evening I'd like to invite Director Neil Martin to offer an invitation and Director Lee Kemp to lead us in the pledge.

Before we start tonight, I would like to uh give a moment of silence for the unspeakable tragedy that happened last week, the murder of Charlie Kirk.

Um also a moment of silence for uh Rick Murphy, who uh who's here quite a bit is in is in uh um have a difficulty uh on the medical side.

So just want to uh give a moment of silence for those two, and then we'll get into the invocation.

We are so thankful to be here tonight, Lord.

We're thankful that we get the opportunity to exercise our our rights as as citizens, rights as a board to make decisions that affect our city, our great city.

And Father, I pray that you would be with this country during this difficult time that we've experienced over the last week.

We pray that you would comfort the Kirk family.

We pray that you would comfort uh the Murphy family, and Lord, we just pray that um you would just watch over us, bring um renewal.

Um Lord, we pray that you would just uh watch over our country, pray that you bring revival among the hearts of all of us.

So, Father, we we love you.

We we pray for your wisdom tonight.

We pray that you would watch over us as we make these decisions.

I pray that you be with all those that are going to come speak to us, give them wisdom, and Father, pray that you have mercy on us.

We ask all these things in your precious and holy name.

Amen.

Madam Clerk, please call the roll.

Directors Rigo here.

Good.

Camp here.

George Kitzavis.

Christina Kitzavis?

Here.

Settled here.

Martin.

Here.

All right.

We have a quorum.

Uh does any member of the board have a presentation of any item of business not already on the agenda this evening?

Seeing none, uh, we'll now seek a motion to approve the minutes of the September 2nd, 2025 regular meeting.

So moved.

Uh all in favor?

Aye.

All right.

Just as a reminder, a motion and a second to adopt each agenda item must be offered before director comments are made, and public comments should pertain to the presented item.

Item number one A is an item regarding management agreement with OVG facilities LLC for the Fort Smith Convention Center.

This is a resolution approving and authorizing the mayor to execute the second amendment to the management agreement with OVG Facilities LLC regarding the agreement term and parking.

Uh Mr.

Acting Administrator, whom do we have speaking on this?

Uh I will I will speak to any questions that the board may have on this item.

This item was discussed at the September the ninth uh study session last week and move forward for the consider for consideration this evening.

Okay, did any citizens sign up to speak on item one a uh yes?

We have Kim Fodge.

Thank you for being here, Ms.

Fodge.

Hello?

Okay.

I signed up for the I think it was it should have been the off site catering.

I didn't put that down.

Should be B.

Should be B.

Okay.

So can I come back and talk about that?

Absolutely.

Okay.

I apologize, Ms.

Card.

Okay.

No problem.

For one A be Joey McCutcheon.

That's the same for B.

Alrighty.

Thank you all.

Anyone else, ma'am?

Madam Clerk?

That's all.

All right.

We need a motion to adopt item one A.

So move.

Second.

All right.

Any director comments or questions on item one A?

Director Martin.

So if I remember correctly, did the original agreement, wasn't it three years and then consecutive years?

And now it's five with consecutive years, and now they're wanting to move it to eight with two consecutive years.

Am I understanding that right?

I believe the original agreement was three years with seven consecutive one year terms.

I believe that's where we're currently still under.

I thought we were five.

I thought we were going to be able to do that.

I think it's currently still the three.

And the this this proposal this evening is to make that initial term a total of eight, which is three more than what we've then what's expired already, and then a final option for two years at the city's office.

And nothing changes with the termination clause, or how does the termination clause uh get affected with this?

I haven't read through the termination clause today, so I can't speak for that specifically.

All right, thank you.

But nothing in the termination clause changes.

Yes, uh I have a basically the same question for both A and B, but I'm gonna ask it here so just for A.

Does the additional revenue that we will see by doing this?

Um just it will reduce the $759,000 number uh that we're being asked.

Is that can we will we see that go against that number?

The the more revenue that we that the facility generates, then yes, the less subsidy it will require from the general fund.

Director Martin seems to say that it's not on A?

There's no nothing on A reduces the subsidy.

All it does is it changes the terms and it allows them to do a study on parking.

That's it.

Am I correct?

Am I that's correct?

Yeah, is the spirit of your question though if they were to come back to us later with something that where they wanted to implement parking and that generated revenue, would that go against the balance that we provide to them?

Yes, I'm looking for is there gonna be transparency on did these items actually generate dollars and how much did they generate?

And are we gonna see that actual an accounting of that instead of just kind of thinking it'll lump into it?

I'd I would prefer to see that the amendments that led to actionable changes and generating revenue are actually accounted, and this is what that change brought.

And this is what this change brought.

So I was guessing I'm asking, is that the case that it would be I'm not sure I understand the question, Director Kent?

So uh fair enough.

For further clarification, if 759,000 is on the table, and if we're going to charge for parking and we we heard some estimates of what that could potentially bring, are we going to see some accounting that shows what exactly parking did bring?

I think parking revenue is is included in the breakdown of the shows and such that they they that they put on when they charge the charge fees for parking, but that's not specifically what this the parking in this agreement uh amendment contemplates.

It contemplates uh their offering advice uh OVG offering a parking advisory services to the city in terms of what we how we the city might manage the city's assets, the parking garage in the area around.

That's not specific to charging for parking, although that is something that they sometimes do with ticketed events at the at the center now.

Thank you.

Jeff, let me take a good so as Director Kemp said if we subsidize them 770,000.

These are just examples.

And say parking brings in 100,000.

Is that 100,000 go back into the account?

It I mean it yeah, it does, but it does it in a way that it offsets what they required from the city.

It does not?

It does.

Oh it does, yes.

So that so then they would the next uh another less a hundred thousand less they would require from us if they had it if they had an income of a hundred thousand.

That's right.

Okay.

Okay.

Any other questions or comments on item one a?

All right.

Seeing none, madam.

Oh Director Christina gets out of sorry.

You know, I I think this is a a good idea in theory, but my concern is when we get into these studies, even if they're free, then it it feels like then we've got to take action on these things.

And I I don't know that we have the money to to put into taking action on the parking garage or or things like that.

I mean that's nothing we've we've really budgeted for.

That's my thought.

Okay.

Thank you.

Anyone else before we call the roll on this item?

Seeing none, Madam Clerk, please call the roll.

Directors Rigo.

Yes.

Good.

Yes.

Kimp?

Yes.

George Kittsavis?

Yes.

Christina Kittsavis?

No.

Kevin Settle?

Yes.

Martin?

No.

Motion passes.

Five in favor and two opposed.

Thank you.

Item one B is a resolution approving and authorizing the mayor to execute a third amendment to the management agreement with OVG facilities LLC regarding off-site catering.

This was reviewed at the September 9th, 2025 study session.

Speaking to or introducing this item.

No.

Shannon Davis is available to answer any questions.

Okay.

Thank you for being here.

Madam Clerk, did anyone sign up to speak on one B?

Yes.

Kim Fodge first.

Welcome.

Thanks for being here.

Good evening.

Thank you.

It's good to be here.

Uh being able to do off-site catering.

I do not believe that the city should be competing with local businesses and business owners who are the backbone of this community.

They often donate to various organizations and causes throughout the city, whether it's school, children events and things like that.

And I think that allowing OBG to perform off-site catering will take away from their ability to earn income for their families and their livelihood.

Another concern I have, and I believe if I'm wrong on this, please correct me, is that outside businesses aren't allowed to cater on site at the convention center.

If OBG is allowed to do off-site catering, then I think it's only fair for local businesses to be able to cater at OBG.

Businesses shouldn't have to compete with the city, and I believe it's a dangerous precedent when private businesses have to compete with government.

And finally, while I appreciate their efforts to bring programs and events to the city, I think the city should be mindful of the Kent the content that they bring in.

And I believe a provision pertaining to this should be included with any agreement with OBG.

Thank you very much for your time.

Thank you.

Next we have Joey McCutcheon.

Welcome.

Thanks for being here.

Thanks for having me.

And Director Good.

For you to walk out on a moment of silence is unacceptable.

It's unacceptable.

Everyone saw that tonight.

Is this racism?

Is this is this your way of being disrespectful for a man who just lost his life?

I'd also like to say that that I think that Ms.

Fodge is right on target here.

That's a bad precedent to have public city businesses competing with our private businesses, who, as Ms.

Fodge says, contribute very much to our uh community.

And they're at a it sounds to me like they're at about a 3500 750,000 subsidy disadvantage as a very starting point.

So if we're gonna sub if we're gonna subsidize uh socialism, then are we gonna sus subsidize the folks who are out here who have given of their own time, their money, their effort uh to uh start a business to take risk so that Fort Smith uh can be great.

I would ask uh a no vote on this.

Thank you.

Uh anyone else?

That's it.

All right.

Uh we need a motion to adopt item one B.

All right.

Seeing no motion or second, item one B dies for lack of movement on the floor by the board.

Item number two is a resolution authorizing a partial payment to Forest Brent Incorporated for construction of the 2016 SSA remedial measures subbasin S 007, project number 17-12-C1.

Uh Mr.

Administrator, whom do we have speaking on this tonight?

Director of Water Utilities, Lance McAvoy will speak to this item.

Good evening.

Thank you for being here.

Thank you.

Um this is a consent decree project.

This is for uh partial payment of 1,228,815 and 70 cents.

Uh the original contract was, and I'm just going to round 8.2 million, and we did have a change order that added uh 235,000.

So this adjusted contract is now sitting at 8.5 rounded.

Uh the scope of this project is to replace uh about 3800 linear feet of eight-inch pipe, 200 linear feet of 12-inch sewer.

Uh this is being done by pipe bursting.

Uh then we are looking at uh 2,331 linear feet of 8-inch pipe and three or 603 linear feet of 12-inch pipe that's being remediated by uh cure in place piping.

We are also installing 73 cleanouts and replacing 27 manholes uh frames and covers on this project.

This is funded by the 58 cents sales tax.

And I'll stand for questions.

All right, thank you.

Madam Clerk, does anyone sign up to speak on item two?

Yes, just one, uh Joey McGutcheon.

On a related subject, um I've received, and I'm sure you all have received calls uh from people in uh various departments, uh, people who are quitting jobs because I guess, and hopefully the board knows this, but effective September 29th, 2025, the following programs will be confined to form the new public water works department.

And then they list one, two, three, four, five, six, seven, eight, nine or so uh programs that are going to be uh combined.

And I was also told, although how would I know, because I haven't had a chance to FOIA it yet, uh, that Matt Meeker was going to be transferred to be over the public waterworks department?

And I would ask the question, how does this affect uh Lance MacAvoy?

Uh, and how does it affect other positions?

And shouldn't we give folks notice of what's getting ready to go down, specifically our employees, more specifically the board of directors, and maybe you all knew, but I haven't heard of it, uh, before we institute major changes like this.

I understand that that uh the city administrator has higher fire authority, but it just would seem that in the name of transparency, especially in light of what we're doing uh in this city and the major infrastructures issues that we have that we would we would be consulting with each other.

Uh so those are my comments.

Uh in addition, uh I've asked repeatedly uh why are we not hiring an expert, so an engineering expert, Mr.

Morton and I, Lavon Morton and I have talked about.

Why are we not hiring an engineering expert to deal with this huge sum of money over a huge sum of years to watch and guide?

I mean, when you when you're doing something of this magnitude, it just seems as though it's important uh that we have the best in the in the brightest the the risk benefit uh the the benefit seems would be so high and it would it would help Lance, it would help others do their job.

At least that's my opinion.

Thank you.

Any other people signed up for item two?

No, that's it.

All right.

We need a motion to adopt the resolution.

So second.

Thank you.

It just seems as though it's important uh that we have the best in the uh in the brightest the the risk benefit uh the the the benefit seems would be so high and it would it would help Lance it would help others do their job at least that's my opinion thank you any other people signed up for item two no that's it all right we need a motion to adopt the resolution second thank you any comments or questions from directors director Martin is this particular project on track um I mean it's the eight payment of 8.4 million dollar project as just yeah I think we're sitting at about uh 50 percent of the way through this I believe was one that um started later than the others uh so it it we are going to meet the linear footage and manhole requirements that we had for this year it started uh December 19th 2024 and it's 407 days plus another 60 so 467 days this was one that percent were ahead of schedule a little bit yeah that this this was one that originally someone else was the lowest bidder and withdrew their bid and forrest wren uh stood by their original bid for us um so I appreciate that I'm doing that just one make sure okay anyone else all right seeing none madam clerk please call the roll on item two directors good yes Kemp yes George Kit Savis Yes Christina Kitsavis yes Settle yes Martin Yes Rego Yes it's approved seven in favor and zero opposed thank you item three is a resolution authorizing acquisition of temporary construction easements in connection with the 2016 SSA remedial measures sub basin P008 project number 17-13 C1 Mr.

McAvoy did you have any introductory comments on item three yes this project is actually um we've finished the design it is going out for bid this will be one of the first projects that will be funded utilizing the sales and use tax bonds that we are issuing this is this project includes forty three thousand fifty four linear feet of pipe that will be rehabilitated and 104 manholes uh the total cost of for the easements is 25,582 dollars and eighty cents and it includes 25 tracts of land and I will stand for questions thank you madam clerk to anybody sign up to speak on item three none indicating all right then we need a motion to adopt the resolution in support of item three moved to second thank you any comments or questions from directors seeing none madam clerk please call the vote on item number three directors Kemp yes George Kitzavis yes Christina Kitsavis yes settled yes Martin Rigo yes good yes it's approved seven in favor and zero opposed thank you item four is a resolution authorizing acquisition of temporary construction easements in connection with the 2017 SSA remedial measures and sub basin P009 this is project number 19-18 dash C one Mr McAvoy so this is again a future project the design is completed we need to get the easements so we can finish the bidding process and get construction underway this is 11,000 um 98 linear feet of pipe and 119 manholes um these easements there are 14 of them total and the estimated cost what we have actually is two thousand six hundred and ninety seven dollars and fifty cents and I'll stand for questions.

Okay thank you madam clerk did anyone sign up to speak on item four none indicating thank you we need a motion to adopt the resolution for item four so move second thank you any comments or questions from directors seeing none please call the roll madam clerk directors George Kitzavis yes Christina Kitzavas yes settle yes Martin yes Rego yes good yes Kemp yes approved seven in favor and zero opposed thank you item five is uh similar it's a resolution authorizing acquisition of temporary construction and sewer utility easements in connection with the 2017 SSA remedial measures sub basin FL02 project number 19-19 dash C one Mr.

McAvoy yes so this again is one of those that the design is completed uh it will include rehabilitation of 18,621 linear feet of pipe and 104 manholes 22 tracks in total uh total for all easements 2359 dollars thank you madam clerk did any citizens sign up to speak on this item none indicating we need a motion to adopt the resolution for item five so move second thank you any comments or questions seeing none madam clerk please call the roll directors Christina Kitsavis yes settle yes Martin yes Rego yes good yes Kemp yes George Kitzavis yes it's approved seven in favor and zero opposed thank you item six is a resolution authorizing acquisition of sewer utility easements in connection with the 2017 SSA remedial measures in sub basin MC 06 this is project 19-15 dash C one Mr.

This is for 16,694 linear feet of pipe and 87 manholes, 32 tracks total.

Cost $70,260.

Okay.

Madam Clerk, did anyone sign up to speak on item six?

None indicating.

Okay.

We need a res uh motion to adopt the resolution for item six.

So moved.

Second.

Thank you.

Any comments or questions?

Seeing none, please call the roll, Madam Clerk.

Director settled.

Yes.

Martin.

Yes.

Rego?

Yes.

Good.

Yes.

Kemp?

Yes.

George Kitzavis?

Yes.

Christina Kittsavis?

Yes.

It's approved.

Seven in favor and zero opposed.

Thank you.

We're on to item seven, which is the consent agenda this evening.

There are seven different items.

Item seven A is a resolution approving and authorizing the mayor to execute a loaned personnel agreement with Burns and McDonald Engineering for staff augmentation services for the engineering department.

7B is a resolution adopting annual audit requirements retaining Forbus Mazar's LLP as external auditors and authorizing the mayor to execute a contract with Forbes Mazar's LLP for the purpose of auditing the city's 2025 financial statements.

7C is a resolution authorizing acquisition of water utility easements and temporary construction easement in connection with the racetrack road waterline improvements project number 24-15.

7D is a resolution accepting completion and authorizing final payment, providing construction management services for Creekmore Park Pool, bathhouse, and diving well enclosure.

7E is a resolution accepting completion and authorizing final payment to Bashir's Construction Incorporated for construction of Creekmore Park parking lot improvements phase two.

7F is a resolution accepting the bid and authorizing the mayor to execute a contract with Nicosia Consulting International LLC for the construction of a CNG time fill upgrade to the existing transit fast fill facility, project number 24-62.

And item 7G is a resolution authorizing the purchase of a large heavy-duty transit bus from Gilllig LLC.

Would any board member desire to remove any item from the consent agenda for separate consideration?

Uh D uh D Mayor, please.

Okay.

I have questions on A.

A.

D.

A and D.

Anyone else?

Anything else need to be pulled separately?

Okay.

Uh Madam Clerk, did the any citizen inquire to comment on any consent agenda items?

No.

Okay.

We need a motion to adopt all consent agenda items except for 7D.

And there will be questions on 7A.

Did you want a separate vote or just questions?

Potentially have a separate vote.

Okay, well we can address that as it comes.

Let's have a motion to approve item 7B, C, E, F, and G, please.

So moved.

Second.

All right.

Any comments from the directors on B C E F or G?

All right.

Seeing none, Madam Clerk, would you please call the roll on 7B, C, E, F, and G.

Directors Martin?

Yes.

Rego?

Yes.

Good.

Yes.

Kemp?

Yes.

George Kitzavis?

Yes, but no to B.

B.

B.

Boyd?

Christina Kitsavis?

Yes.

Settled?

Yes.

Motion is it's approved.

Seven in favor and zero opposed, with the exception of seven B, which is six in favor and one opposed.

Okay.

And let's do them just an alphabetical order.

Uh, Director Martin, I believe you had a question on item seven A.

Yeah, just concerns about the dollar amount associated with it.

I know that uh it's a six-month agreement with Ben Mart's $318,000.

Um I did see in the packet that there seemed to be some other hourly rates for others at Burns and McDonald.

Is this just for Ben Martz, or is this for services provided by Burns and McDonald that will include Ben Martz and or that will be Ben Mart's plus others?

It is it is just for Ben.

Uh in the in the agreement, it specifies um the grade that this employee is, and so you refer reference that exhibit A to determine which grade we're looking at for this particular employee.

So I mean it is a it is included that the entire uh rate schedule for all the grades of employees, but the agreement specifies that this particular employees is that grade, whatever I forget it is, 13, I think.

So what do we what's the what's the three hundred thousand?

What is what is that?

That is for that is for time and service.

I mean a full-time employee essentially for six months at that rate, the two eighty-four, whatever that rate is.

For six months?

Yes, sir.

I mean I I mean I don't have a problem with Ben Mart.

thousand what is what is that that is for uh that is for time and service I mean a full time employee essentially for six months at that at that rate the two eighty four whatever that rate is for six months yes sir I mean I I mean I don't have a problem with been Mart's um it's just I will I will say also that uh in the meantime we are uh actively recruiting for a director of engineering as well as project engineers um so this this is a uh in the absence of this contract we wouldn't have a engineer to oversee the uh engineering department in our streets uh CIP Director Kemp what was the when Stan was on board and different and things in the was it was it a around this number or was it less uh we we were using this particular employee as a as a project engineer uh but as a much uh much lower hourly schedule for a week I think it was 10 to 16 hours a week or something like that.

Uh but I mean the rate would have been similar but the the scope of the agreement was not okay.

Madam Clerk today late breaking citizen comment come in on item 7A?

Yes thank you uh Levon Morton wonderful uh welcome Mr.

Morton well let me first say well for I'm Lavon Morton uh I live in Fort Smith I'm a resident here so um let me first say I have nothing against Mr.

Martz I'm sure he's a qualified engineer and those hourly rates that are shown are not uh unreasonable in the world of professional services um what what I would say is this does illustrate a point that I have talked to the previous city administrator and the current acting city administrator and various board members about we need the best firm in the United States to help us with both the water project and the sewer project two different projects I have no doubt that Burns McDonald is qualified firm but there are there are firms in the in the country who've done large cities and who have been down the road that we're going down that we've never been down before this is all a first for us.

Now we're pretty experienced after 10 years but you you wonder is there a different way to approach it that could get it done faster and save money that's my only point I think it needs to be looked at and it might be one of those things where you you give it a look and you decide there's the way we're doing it is the best way there is and if that's the case that's fine at least we try.

So thank you.

Thank you.

Well might I suggest as it relates to item seven A might a might a uh tabling for a little bit of time be in order to motion to table second I'd like to put it if it's okay to put it towards uh a study session so we can talk through it.

Yep I'm I'm good with that.

Sure.

All right madam clerk may you please call the roll on tabling item seven A to a future study session.

Directors director's righto yes good yes Kemp yes George could Christina get saves yes settled yes Martin yes motion passes seven in favor and zero opposed all right thank you and then I believe Director George Kitsabis you had some questions and requests at the Sarah here on seven D.

Sir is not I can stand for questions that you have no I needed her to answer something that's I I'll pass.

I'm good motion to prove item seven D second.

All right any further comments or questions on 7D Madam Clerk please call the roll on seven D.

Directors good yes Kemp yes George get saved Christina Kit Samus?

Yes settled?

Yes Martin Yes Rego Yes approved seven in favor and zero opposed thank you so much uh we're now into the officials forum director good anything to share with us this evening no thank you vice mayor all right you're welcome George Kemp no thank you vice mayor you're welcome director George gets outside yes Jeff when will the financials on the water park be available for the board to look over I will I will share them when I get them I haven't gotten them for the month of August yet I mean did the year in financial statements?

Yes yes.

And they'll be available for the board to look over yes will will there will there be year end maybe October October so there won't be any more the park just closed just uh two days ago.

Okay so there won't be any additional uh expenses that happen October, November, December.

I know that they don't have personal people personnel right so I guess I thought I we would get them in January.

No we typically we get them October well we'll we'll share the August um financials when we get those and then they'll s of course they say submit every every month and we'll be able to provide those when they get them well Jeff let me ask you this if say the park did make some money is the county entitled to part half that profit even though they didn't put in the two point one million for the slides?

Is the county entitled to part half that profit even though they didn't put in the 2.1 million for the slides?

Well, yes.

I mean they are still a 50-50 partner in the park.

Even though they scattered out of 2.1 million.

We have not changed that agreement.

Well, when are we going to change it?

I mean, the Jeff, this isn't right.

I don't think.

Uh uh, I mean pretty good deal for the county, I'd say.

We'll talk about it later.

Thank you.

Any else?

No, I'm good.

Okay.

Director Cristina can savus.

Um just briefly, I wanted to announce that um today I turned in my resignation um for the Fort Smith Advertising and Promotion Commission.

This is a commission I've served on since January of 23 when I took office as a city director.

Um, you know, certainly not an easy decision, but I believe it's the right one for me and the commission at this time.

Um, you know, it's giving me an opportunity to go out in the community and meet some really wonderful people.

I might not have had the opportunity to meet, and I remain very grateful for that.

Um we've made some meaningful progress, including initiatives like six weeks of paid parental leave that I feel like puts families first.

Um but part of that leadership is knowing when to create space for fresh ideas and new energy.

So by stepping aside, I hope to make room for the next commissioner to bring their own vision and talents for the work ahead.

Um while I will no longer serve in an official capacity, I do remain deeply committed to Fort Smith's continued growth and success and will support and assist in any way I can.

So I'd like to say thank you to my fellow commissioners, the CVB staff, and the community um for the opportunity to serve, and I'm excited to watch Fort Smith's tourism and hospitality industry continue to flourish.

Thank you.

Thank you, Director Kittsavis.

Uh and as one of your colleagues on that commission, uh you were a positive force for good on that commission, and we're going to miss serving with you and appreciate the time and the hard work you put in.

Director Settle.

Uh at the end of this meeting I will be leaving.

Uh my daughter plays for Sportsman Southside volleyball.

And tonight's the annual battle of Rogers Avenue against Northside.

So I'll be uh adjoining as soon as we adjourn the meeting tonight.

Wonderful.

And I hope that your daughter plays well.

Director Martin.

Uh nothing for me, Vice Mayor.

All righty.

Thank you all.

Uh Mr.

Administrator, anything from your office?

Uh yes.

First, I'd like to introduce our new deputy city clerk who's with us this evening on the dais.

Um Morgan Barnell is saying that thank you.

Is sitting there and so um many of you have met Morgan, but if you haven't had the opportunity, please do so.

Wait.

Um also the uh we need to I need to ask the board uh to call a special meeting for next Tuesday um September the 23rd at 6 p.m.

in advance of our regularly scheduled study session uh for the purpose of considering the uh the bond ordinance authorizing the issuance of sales and use tax bonds.

And I need I need uh four directors to uh concur with that.

I concur for that.

I concur.

Is this the bond member from the consent for the cent decree or yes sir?

The bonds we just we just um Yes.

And how much is that gonna be the dollar amount?

Uh nearly 100 million.

But we're not taking it out as in that sum, are we?

I concur.

We will issue the bonds for that amount, yes.

But we're not we're not borrowing the taking the whole hundred million and start paying interest on it, were we?

For 100 million, yes, sir.

Okay, why not do 30, 40, 50?

Well, we the saved a lot of interest.

The election authorized up to 385 million dollars.

We're looking at the first 100 million for the next two years.

We're gonna put 100 million to work right then, right?

Yes, sir.

There we go.

I mean, you'll get your best rates when the more money out to the best rate you'll get, the less you'll get higher rates.

Well, what are we gonna get for 100 million?

There's a there's eight-ish projects that are scheduled for uh awarding bids in late October, early November to start spending that money on consent decree project.

Some of which were the ones that were on our agenda tonight.

So how quick will that hundred?

How long will that hundred million last?

Approximately two years.

Two years.

Then we'll consider issuing it.

Then we'll take out another hundred million, two more years, another hundred million, two more years.

And then we'll then we'll we've got to uh we'll have to figure out uh probably refinance some other bonds for the remaining uh the remaining three hundred million, three hundred-ish million.

Madam Clerk, did you have the uh concurrences you needed to get that meeting scheduled?

Yes, sir.

Okay, thank you.

Anything else, Mr.

Dingman?

No thing.

All right.

We are going to be convening into an executive session here momentarily to approve three appointments to the Central Business Improvement District.

So we will be back soon.

Thank you all very much.

Uh we need a motion to accept the nominations of Trent Goans, Bill Hannah, and Eric Hartness to fill the three vacancies on the Central Business Improvement District.

Do we have a motion?

Oh, so move.

Second.

All right.

Uh all in favor, say aye.

Aye.

All right.

Now we need a motion to adjourn our regular meeting.

Motion to adjourn.

All right, all in favor?

Aye.

All right.

We are adjourned from our regular meeting.

We're going to take a five-minute break and then we will begin our special study session.

Thank you all very much.

Gathering ourselves for the study session.

We would appreciate that.

Go ahead and get started.

This is a special study session.

Uh called to review the twenty twenty-six preliminary budget requests for the water utilities department.

All right, perfect.

Uh the first page I have for you is the budget comparison summary.

So we've just we've been working on this all day, so this is just actually just was actually just prepared just about an hour or so ago finished.

So this is very preliminary with some of the changes that we've made.

So and we appreciate you working with our timelines and and um you know how we're moving through this sort of in a different way than years past.

So we appreciate the work you all are putting in.

Yeah.

Appreciate that.

Um so you can see if the the budgetary comparison schedule we're showing uh the fiscal year 25 projected um we ended the year at 35 percent as a contingency, we're showing an excess revenue over expenditures of a million hundred and fifty-four thousand dollars.

Um the revenue projections are at sixty-eight point seven million.

Um that is a decrease in what we originally projected this time last year.

I think there was the result of that or the the cause of that is we're seeing a decline in volume um in our billings, and I think Lance has some information maybe to talk about that as well.

Yes.

Um I don't believe that's odd.

There we go.

Sorry about that.

Um Josh, could you put up the uh one that you were just sent?

So if you look at your monitor, unfortunately, this did not make it into the pack.

Um if you'll go down to the second page.

This is what we have had in water consumption, water consumption.

Um Lance, may I?

Yeah, uh, because it looks like you've gone uh on to some uh pages beyond the first page in our packet.

And I know I I had a question about back on the um budget comparison summary, and so I would like to ask that now.

Um in the FY24 actuals for expenses, so those what was actually tallied was a shade over 65 million dollars.

We're projecting a shade over 67 million dollars uh as we conclude 2025.

We've budgeted about 80 and a half million on the expense side in FY26.

Can you talk us through a little bit uh what makes up that level of increase?

A large portion of that is capital equipment.

Um and that is something that you know we actually went through this budget line item by line item yesterday.

Um and all of the capital requests that we had were not included in what you're seeing here.

Um vehicles were removed and uh some other equipment.

So to that end, that includes a large portion of capital.

Um, you're looking at going from 59 to 71 million, some of these pieces of equipment, uh VAC truck, um television vehicles for consent decree uh requirements, those are in the million dollar range a piece.

So we end up, you know, it it adds up very, very quickly on that as well as some of the items.

Uh our hydroelectric generator is a three million dollar expenditure that we really need to get fixed and and replaced so that we can be in compliance with our FERC permit.

So there are several high dollar capital outlay equipment that is in that.

The the uh preliminary total for that capital request from what I this was before we cut some of those things, but it was about five point eight million dollars in capital requests that were in that eighty million dollars.

Okay.

Uh Director Martin, then Director Kemp.

How much of this uh how much of this 71 million in operations is water versus sewer?

And secondarily to that.

Are you is uh our are is this trying to justify another water rate increase?

No, sir.

This is we actually cut large amounts out of the budget yesterday of what we originally proposed to try to bring this down to to live within our means.

Well, I'm looking at um uh I mean a number of things here.

First is the 9.7 million or 9.4 million um expenses over revenue.

But depending on what happens on, and I don't know if you've got that in here uh somewhere, but the debt service coverage ratio on the water side.

Um I I'm I'm wondering how much of that 5.8 million or really how much the 80 million um is going to impact that.

I know that 80 million is includes sewer, but I'm wondering how much that's going to impact the debt service coverage ratio.

The water and sewer um the calculations that we make, that's an allocation that we have been doing to show the difference there.

I mean, so I don't I don't have that calculated at this point.

Yeah, and and I know, uh but that just uh yeah I look at that, that's a big number uh from operations and I mean a lot of the a lot of the operating programs are pure water versus sewer, so we can look at that later in this in this presentation.

Just as we as we all as always do, and I know most of us um are looking at this as that right.

That's staring us in the I know that city administration had asked for two rate increases, one that we passed and then another one to actually go into effect in 25.

The board has not moved on that.

But um we've got to be mindful of that as we go through 26 and uh and make sure that our expenses are down.

Because they are not down here.

Mr.

Richards, was there something additional you wish to say?

Well, just want to remind you that you know we there are capital requests built into the into the twenty-six budget, and the capital expenditures don't have an impact on that debt.

So if the coverage is what your debt service revenue net of revenues available for debt service, uh we don't have to count capital expenditures towards that.

If you take out the capital, you said a 5.8 million, that's some of that's gonna go to water, some of that's gonna go to sewer.

So that puts you at about 73 million dollars, which is uh you know, still higher than the 65 in in 24 and and is gonna be higher than what we're projecting in 25.

So I I think there's gonna be uh uh there's gonna be a concern for me there.

Now let me ask this question.

Um we originally looked at the budget a couple or last week, um we were we were told that every capital or every new need was in that budget.

But you're saying with water and sewer, that's not the case.

Not all capital is included here.

You guys removed some of that, correct?

Uh we did that as a result of the we had a departmental meeting with utilities yesterday.

And so we recommended that they take some of the requests out.

Okay, and so are are we doing that for the groups that we're gonna see coming later?

Let's say we did streets next next week.

Is will that happen or are they are are still all those capital requests baked into those budgets as well?

Um I mean it just didn't depends on where they fall in our schedule.

You'll you'll tell us you'll tell you.

And this is still the first round.

I mean, we're still you know, we're still working on on the budget.

This we're just showing you're basically getting it in real time as we as we work on this.

And I think I think that's a good point because I think it needs to be shared that we're we're seeing this earlier than we've ever seen it before.

And this is before earlier.

And before we're pulling anything out as a board.

So I think that's important for everybody here.

Even though we ask difficult questions and look at talking about debt service coverage ratio, it's important that everybody understands that this is very, very, very, very, very preliminary and not to be taken that this is what it's going to look like when we're done.

Thank you.

I might add if I can the information that's distributed to you on the individual programs that has the detail sheets behind the program page.

Um those in most or all cases, there's a note, there's notations in there where we made reductions during the budgetary review meeting so that you will be able to see what those specifically are.

I think they're listed by amounts and dates and such when we when we did that.

And so you will at least see them in terms of in terms of what we reviewed during the departmental meeting and uh what you're seeing here in the summary page, if you like.

Okay.

Director Kemp, then Director Christina Kinsaps.

Thank you, uh Vice Mayor Regal.

Um had the decrease of 439,000.

Can you speak to that just briefly here?

That is um that's gonna be the the interest earned on the on the fund cash for the operating fund as we spin down money.

Like we're you know, we're showing a 26 budget of a spin down of 9.5 million dollars, so the amount of interest that we're gonna earn is gonna be less because of less less cash for reason for us at the allocated interest to water and sewer.

So the amount of interest that we're gonna earn is gonna be less because of less less cash for reason for us at the allocated interest to water and sewer, and also I mean we're we're anticipating at least a half percent drop in interest rates uh coming up so we've factored in that's what miscellaneous mainly is.

Mainly, yeah, it's mainly interest earned.

What about on management services?

This increase of six hundred and six thousand two hundred and thirty-seven dollars.

We're gonna talk about management services.

Are we is this what we're consulting out?

Um those are gonna be um the allocated some of the uh general fund allocations and management services.

And I did notice there's kind of an increase there.

Um we probably need to look into that, but the distribution schedules that we've provided shows more detail about what's in those what what makes up that seven million or that six and a half million.

Is that related to when we were talking about changing the allocations?

But that was gonna hurt the general fund, but it could have helped water.

No, we've we've kept the allocations the same.

I know we did.

Yeah, it didn't get the votes.

Yeah, so that's it's the same allocation that we've been using.

And then I'm uh on this 12 million operations um, which we're now talking about is mainly capital equipment.

Um is there uh more to come on the nine nine point four million that we're talking about?

I hear you guys talking about you know this is preliminary tonight.

Do we I mean is there more to come on this number?

I mean when you lowering it to lowering it.

Yeah, I would think so.

Well, yes, because my question, I guess, would be when we talk about a 10% holdback, right?

Um and I don't know if utilities is still they're not exempt from that, right?

They're in the 10% holdback, right?

Yes, yes, sir.

So I come through the idea of what is being held back, and how are we able to do that?

Well, I mean, if you look at the F FY25 amended column, you'll see for operations services, for instance, 68 million point six.

Um you look over at 50, you know, what we're projecting to actually spend out of that amended budget, 59.6 million.

So that you know that difference there, I mean that's that's a significant amount of dollars that are included in the budget that we're anticipating to not spend that represents that holdback.

Is that is that tied to just open personnel spots?

It's tied to all all types of things in terms of personnel spots that have remained open, uh dollars that were in the budget for a particular uh contingency or emergency type of expense that didn't get spent.

I mean, it's just related to all all types of dollars that didn't get spent in the budget.

Yeah, I just noticed, you know, when you look over the 10 years, we have the same number of personnel for fire for police.

We have a lot of increase here, 82, and I know that's related to consent decree, but since we're at a different kind of stage in that uh season of working with the government, is there opportunity there if those are open slots to pull back on, or can we as those ever get adjusted, or if we're farming a services out, uh 82 positions is a lot of increased positions, especially when all these other critical services have pretty much stayed the same size.

I might add that this information is based on a budget that's been requested by departments, it's not one necessarily that yet has been proposed to the board for consideration.

So all of those types of discussions in terms of vacant positions and those types of things, yes, those are discussions that we're still going to have.

I just I would that that'd be great.

I'd encourage us to look into that.

Thank you.

If I may, I just did a real quick add up, and it's not everything, but in the current budget, um, we're looking at over six million dollars in capital cost that's currently in what you're seeing here.

And like I said, I didn't add up all of them.

I just went for some of the big ticket items.

So, you know, when you look at that big ticket, you know, one's three point, you know, one's three million in a of itself.

So that you know, again, if if it's something that we can limp along without again for another year, we've we've done that for five years now on some of the equipment, uh, some of it, and we have trucks that are 2,002 and have over 270,000 miles on it.

And you know, eventually they will die.

But you know, that's one thing that we can look at, and the board at their discretion can say no, unfortunately, you know, and unless there is a regulatory need for it, we're not going to fund it.

But you know, that's one thing that we can look at, and the board at their discretion can say no, unfortunately, you know, and unless there is a regulatory need for it, we're not going to fund it, and that that's something that we will do, you know, we will find a way to do our jobs without having new equipment.

Um I would like to point out one other thing.

This 59,670 or 59,670,000 does include the two sets of equipment that the board approved for leaks.

So that's you know, that's again has capital in there as well.

Have those come in yet?

I know what we're everything except for the dump trucks which are supposed to be here uh the middle of October.

And what I'm hoping uh Mr.

Meager will do is uh bring those out and have them lined up, kind of like what we do with uh at least one set of the service vehicle, the dump truck and the backhoe with trailer, so that the board and the public can see exactly what we're gonna do.

Middle of October, very good thing.

So Lance, what are our major equipment expenses?

The three million dollars.

So I I mean we have uh I mean I'm wondering, you know, some of this would we not be better off contracting it out than sinking money into some of these huge pieces of equipment.

So basically looking at a lease instead of uh a purchase?

Is that what you're when you say contracting?

Or some of these things could we contract it out to a company to do the work?

Are you talking about just equipment for the plants?

So that three million is located in the dam.

Right.

So that's I'm talking about other equipment.

So a lot of those are dump trucks to haul, you know, dump truck for uh Pea Street.

They have three, we're replacing one.

Um, and it hauls sludge almost every day to the landfill.

How much is the dump truck?

Um a hundred and I I feel like it seems like we're getting mixed messages here a little bit because Andy's saying this is preliminary, but then we're also hearing we're living within our means.

Um you know, we're spending down our contingency reserve by half.

We're budgeting a nine million dollar deficit over nine million dollars, and we're gonna have to make cuts somewhere.

I understand the dump truck is 188,640 dollars.

What are the other equipment expenses that would be over, you know, say five hundred thousand dollars?

How many of those are there?

I believe um we have one that I believe is a VAC truck, it is one point oh six million, um, and then we have additional heavy equipment on the uh the wastewater, the sewer line maintenance, which is 136,000 and 119,000.

So I mean those those are the two big ones.

We have uh and I think uh the hundred the one point so I I'm showing one that's I think some of these got combined in here, one that's five hundred and fifty-three thousand, that's for a VAC truck.

Um camera inspection uh vehicle replacement four hundred and nine thousand.

Um we do have country club tank uh in here.

This is maintenance of building and station.

That is 750,000.

That is to strip it and repaint it and do any maintenance that has to be done on it.

Um is it in need of maintenance?

Yes.

It looks like it's in bad shape.

It is in bad shape.

The only one that's in worse shape is loose, which is the one the big tank behind Target, and we do have the money set aside for that, and um we're waiting until the demand for water decreases so that we can take that offline, have it stripped, have the patches made that need to be made, install the required mixing device, uh repaint it, and put it back in line.

Okay, thank you.

So is there just loose or loose loose is on the schedule?

Loose is on the schedule for this year, yes.

And then the the the one that country club for next year.

That's the only one next to the case.

Okay.

That's the one I drive by, and you know it's it's rusted.

It looks concerning.

It is.

It's very concerning.

I I live near Wildcat Mountain and what that one up there.

Believe it or not, Wildcat Mountain is in better shape.

Oh my gosh, it's brutal.

But the issue is that you have a if we tried to clean it, it would knock off the protective coating, the paint, and then we would have to paint it.

And for both of those, the ground storage and the standpipe, I think we're looking at three and a half million dollars total.

Okay.

Thank you.

Um the water towers.

I just there was a water tower in Fienna Hills.

It's a golf ball tower that got cleaned by the water department.

Looked good, but it is looking like it needs to be washed coming up again to keep maintaining it.

But I did happen to ask that provider what he would charge us to wash all the towers.

And I just wanted to say this on record that the quote came back at a very reasonable price at like 33,100.

And I just wonder on these towers that look bad, and understand we need to paint them and different things of nature, but some of it just washing it.

Just getting the black mold off of it.

I know it would be a faded looking tower, but at least it'd be a washed faded looking tower.

The the issue that we have is some of that paint, the the mold on it is so ingrained in the paint that it will chip the paint off, which will exacerbate uh the corrosion that occurs.

And as Director Christina Cassavas pointed out, we're already seeing um oxidation on the outside of country club, which is very concerning.

We we're checking that tank weekly.

Um so if we washed it and it knocked off all the paint, then we would have to paint it immediately.

Um and that's that's actually a required of the Clean Water Act.

I mean, that's the state requires that.

Then are you saying that the painting of one of those towers was three and a half million?

No, that would be for the ground storage tank and the standpipe at um Wildcat.

Uh the um tank for country club would be 750,000.

See, and I just my suspicion is that we could do better than that on painting.

I mean, I know when I was even told about the Fan Hills Water Tower, because we had a hot air balloon event going on, and I didn't want to have that in the photo.

Um, you know, the best prices they were getting at the time were like near 40,000.

And of course we found a guy that did that for a fourth of that.

Well, do what we did with ArcBest uh uh to share in those costs.

So like the one uh on the right near Arc Mist.

ArcBest, the only thing that ArcBest shared in the cost on was their logo being put on it.

The rest of the tank the city paid for 100 percent.

How much was that cost?

But I think they're paying for the maintenance.

That's what we were told.

There is a maintenance agreement that if we have they would split the cost of maintenance within the first 10 years.

Um the paint that was used on that, if you go by, it really doesn't look dirty, it doesn't look grimy because the new paints actually repel water and dirt and mold from forming.

So it could be that we never have to do uh a wash before we we're really supposed to repaint because you're not just repainting the outside, Director Kemp.

You're you're actually stripping the outside and the inside has a uh protective uh paint coating.

So we have to strip both, paint both, make any uh repairs to it, and that's where the extra cost comes in is getting you know people to come out that can strip it down without totally destroying it, re putting all the the coatings on that need to be done in in a way that works very, very well.

And there are only about four or five uh companies in this area that I know of that do that, and it has to be certain paint that you utilize too.

It's not just you know, it's not something you can buy off the shelf at Lowe's, it those are specialty paints, especially for what's inside, it has to be certified to meet the Safe Drinking Water Act, so you're not getting VOCs, volatile organic um compounds leaching out into the water, which can cause cancer.

So there's a lot that goes into it, and that's why those costs are so high.

So, as a point of education and comparison, given that there are you know newer paints out there, newer technologies, uh, newer construction materials, you know, what what is the cost look like to build comparable um new structures that provide the same function as the existing structures that struggle with paint and mold and things like that?

I would have to sit down and look at that.

I know I looked at that in the past and but that was several years ago.

I know I looked at that in the past and but that was several years ago, um, and we were looking at almost two million dollars per million gallons.

Um it could be more.

So if you're looking at painting and keeping that updated, you're actually extending the life of that resource.

Um and that doesn't include the pumps, that's just the construction on the the tank, but I can get updated pricing for you on that.

Just interesting.

Yeah, I just happened to think.

I mean, uh washing to me, even if I understand I appreciate the uh complexity you're talking about of like a repaint thing, but even if it buys us some time, I mean these are all pillars in the community on your line of sight.

Um, and if we put them on a washing every five years to at least scrub them down, it just seems like it would be best practice to keep something going.

On these 82 slots uh that were increased over the years.

Can you give an overview of those increased employees?

Was it line maintenance?

Was it uh was it reading water meters, you know, the growth of personnel in this department.

Can you kind of give an idea of an overview of why is it increased so much?

Director Camp if I may before you go mask a clarifying question.

Was it that the consent decree, Mr.

McAvoy?

Was it that the consent decrease specifically?

It's not that it's specifically mandated positions, but it mandated act activities, functions occur, correct?

Correct.

We actually had certain programs that we had to launch, and I'll give you an example.

The fog program originally had five full-time staff members.

That's what they thought, and when I say they, the consultants and and talking with EPA and all that, five is what the number that was settled on.

Um when we got the fog program up and running, we're doing it with three.

We don't need five.

Uh that ended up saving you know two FTEs that were either utilized elsewhere or were done away with.

So some of these additional staff were due to consent decree to handle, I mean, engineering.

Uh we increased the number of engineers.

We increased inspectors.

We did we had two inspectors to help with private service line program and the SEP program, and that has increased greatly to where we now have multiple inspectors, construction inspectors.

Um the board authorized adding additional staff to waterline maintenance to address leaks.

Um we one thing that's not in here but used to be was the call center didn't exist until around 2019, and that was something that we did as a part-time thing and then became a full-time uh thing in I believe 21 or 22 is when that became full-time budget, and those were before that we were using temp employees.

So some of it has been growth based on the consent decree.

Um you look at that, you're looking more at engineering, um, some of the management and the sewer line maintenance group.

Leaks, um, meter reading, things of those.

That's due to you know, staff being added to address those.

Um the plants, the water plants, the wastewater plants have not changed the number of people that work there.

The um environmental quality, we added uh couple of additional positions for um watershed and source water protection.

And I believe we added two, we were using multiple part-time employees.

We went to full-time employees in the lab because we have to have seven-day a week coverage for the testing.

Um we did not add anyone in pre-treatment, and then we added the three for fog.

So there's a few here, there's a few there, and it's something that you know, I'd be more than happy to sit down and go over with anybody or if if you wanted to have a special session to look at each breakdown.

And they're fully staffed?

Uh some of them are, some of them are not.

I I don't believe waterline maintenance is hold on just a second.

Waterline maintenance is not fully staffed, sewer is sewer line maintenance, which is a requirement of the CD is the plants are because that's a re regulatory requirement.

Um environmental is we are not completely staffed in vertical maintenance, so we have positions that we froze or gave up that were in um mechanics, maintenance mechanics for doing preventative maintenance on the wastewater side.

Those positions and a crane operator have been open for some time.

We luckily have a licensed crane operator who is who is also our chief maintenance mechanic, and he works on both water and wastewater running our cranes.

So I mean, off the top, my we we do have a few positions open in engineering.

I'm trying to think going through it.

Well, and there's a you have the ability to furnish us with a complete list with a little bit of time to do so.

Yes, sir.

Thank you.

Um Lance, why such the huge jump in workers' compensation?

Looks like it's gone up over four times from 24.

Um that could be one of two things, and Eric is here and I'll let him speak.

But I believe we did have one gentleman who had a um accident.

He fell and broke his neck.

Um it was a freak accident, and uh believe that has the cost for his care impacts our um workers' comp.

But Eric, is that yeah?

So that's that is why that has gone up is due to that gentleman.

Uh we saw the same thing when we had uh major accident in 2016.

I believe that will stay on the books for how long, Eric?

It's down you'll stay on there for seven years before that will decrease again.

So it goes up for every division within the department?

I'm gonna ask Eric Garvin to come up and answer this because he is the expert on that.

Because I mean, like in communications and training, you know, that's gone from 4400 to over 18,000.

Uh engineering 148 to 616, uh technology like 2200 over 18,000.

Then we've got water treatment 118 up to 64,000.

Yeah, the claim he's talking about is already in excess of a million dollars.

Uh it's looking to be probably in the ballpark of about a million and a half to two million dollars when it's all said and done with.

Uh, and so what we do is we allocate the share out across the city based on based on that increased cost.

So we've had increased claims, dollars, costs, and so we're gonna end up incurring higher stop loss costs as a result of that.

Uh so actually there's an impact to this to workers' comp coverage across the city as a result of that.

Because we self-insure.

Correct.

Well, I mean, we would we would end up seeing the same type of increase even if we were we were not self-insured, but yes.

For one claim.

It can be, yes.

If it's a multi-million dollar claim, yeah, our stop loss carrier is not our best friend right now.

All right.

Thank you, Vice Mayor.

Um, can we go back to the previous page?

On the screen.

Yeah, on the screen.

So Lance, um, management services uh in the expense side.

Uh is the audit position in there in that part?

I don't know.

Uh I don't know if it's in that or policy and administrative services.

Okay, that's where the board sits.

But that is where um it's in policy and administrative services policy.

Okay, thank you.

Okay, so my my question is actually to go along with what Christina Director Savitz, Christina Kasavis said, you know, we need to make cuts somewhere.

And even if we have to, you know, piecemeal the cuts needed, you know.

My my question is um are the internal audit position and the utilities uh audit position part of the functions needed for the consent decree.

Um so hold on a second.

Um back to when the utility internal auditor was approved by the board of directors, and I'm going by memory because I believe this was in 2016 or 17, and it was actually uh Director Keith Law at the time who made the motion, and I think uh Director Penard seconded.

Uh they wanted an auditor to look over um consent decree expenses, and that was the full focus that they were supposed to be looking for.

That has now spread to looking at everything for the entire water utilities as it it stands today.

So it is not a requirement, a federal or state requirement, but it was one that was required by the board.

And I okay I stand by what the board decided at that time, and if the board decided to not do that anymore, I would stand by that as well.

I can recall, you know, seeing the benefit.

You know, is there at this point I well let me first say I think that you have actually shown a great understanding of the scope of the consent decree and the finances as well, especially with Andy helping explaining.

But is there a proven benefit of having that position?

That would be a decision of the board because I mean when I don't want to speak out of uh out of school, so please forgive me if my words aren't eloquent here.

But to me, an internal auditor looks at risk and that risk plays into saving money.

That's you know, you're looking at future reduction of expenses by finding something that you're doing currently today.

So what are you doing today that needs to be changed so that tomorrow you're saving you know a dollar?

That's that's my understanding of what internal audits job is to do.

When you look at some of the audits that have been done and you're going back five years and looking at what we did five years ago, we could have already changed policy.

I mean, our our uh case in point uh PCART audit that we were found not attaching the schedule for the course that we attended, the conference or whatever.

Those aren't attached to that.

That's not the policy we followed.

The policy that we've been following is you attach that to the reimbursement form, the recon the travel reconciliation form, and that's sent different, you know, to a different thing.

So, you know, but we were going back to 23, 24, and 20 and part of 25.

So it's just kind of one of those things doesn't need to change policy.

Whether or not that is a a value or not, again, this is a board appointed position.

Yes, and it is it is under the board's direction, so I can't answer that.

That's something that the board themselves would have to answer.

Okay, thank you.

Okay.

Andy, was there anything else you wanted to uh point out to us um specially about uh the materials in front of us or anything you want to uh make sure to highlight and bring to our attention?

No, I think we've pretty much touched on all the main things I wanted to bring up, and I'm here to you know talk about whatever the board wants to talk about.

Okay, Dr.

Martin.

One thing that I would I would ask Lance, I would like you to uh show the board um if spending were at projected 2025 levels, what would that look like?

So right now, expense from an expense standpoint in 25, we're projecting almost sixty-eight million dollars in twenty-six where we're right now at this point um potentially we've got eighty here.

Well what would happen, what would you remove to get to sixty-seven 591?

Not saying you have to do it now.

Just we want to see what that what the impact would be.

Okay, that's something that we can definitely look at.

Um it would not be just me, it would be others that will be taking over certain programs that we would need to look at.

Sure.

If I may, um Vice Mayor, um Josh, will you go back to the um one that we had gone to for me, because this is something I want to share with the board, and I'd like to also have the public see this because this is something that I know Mr.

Richards has said um multiple times, and I know uh Director Martin loves to see numbers and he loves the data.

So I wanted to provide some data.

And if you look and see, you'll notice that from 24, and this is exactly the one I needed, Josh, from 24 to 25.

We our sales for water was down four percent.

In February, we were down ten percent, ten point four.

It's consumption.

Yeah, that's consumption, and that's what we bill off of.

Now, here's here's the thing.

When we get into April, after April, we are in winter averaging.

So that means whatever your winter average was for a residential, that's your your set.

So when we see that increase of 7.68 percent in June, that may not relate to additional sewer revenue because the winter average, if you know, that went up seven percent, but the sewer is locked at that lower, you know, minus uh 15 percent, say less than what it was the year before.

So that in and of itself reduces revenue.

And you can see in July and August, um, we are still trending down.

Part of this is due to what's called price elasticity when it comes to water rate increases.

And uh I will share with the Mr.

Dingman some articles that I have on that that show when you have a large water rate increase, people use less water for a period of time, and then it will slowly rebound.

The larger the increase, the slower it takes.

My apologies.

So if you do it in incrementals, much like what the board has done with sewer rates, that you don't see that price elasticity as much because it's just us, you know, people expect a little bit of inflation.

So do I think these will rebound?

Yes.

When will they rebound?

That I cannot say.

But for right now, we are seeing a decrease in usage which impacts um our revenue.

Dr.

Kemp.

Yes, I think if we could see a simple breakdown also, just thinking through like as we get closer to these discussions and and really getting to voting.

If if we can see a quick easy list of the equipment and then a quick easy breakdown of the FTEs.

And you know, I wrote down all the things you said there about the various things because it kind of helped me open my brain.

But since I'm not in the day-to-day, uh, if I could see how those FTEs are allocated across the department, um, especially even as we talk about the public works concept and discussion and the reframing of things where where that kind of comes into play and the impact of that as well, because I know that that will that will be a exchange of some FTEs as well.

And so I just I would love to see a breakdown, a simple one-off document that says this is the flow of of employment.

And I would echo that.

Um it's good to have for any of these departments.

I mean, it's good to have the supporting information for the broader context, but it also you know, we should not have to hunt and find through once we've had these meetings and and illustrated what it is we'd like to see pulled out.

Um, you know, it's much better to have that as we move forward into the discussions and the votes to be able to reference rather than you know trying to make sure everybody's on the exact same page of a of a packet of you know, multiple, multiple pages here like this.

Thank you.

Director Catz.

Hey, Lance, back to the consent agenda.

Explain to me what loan personal agreement with Burns McDonald means.

Is that anybody can do that?

Something he could uh share with you uh number number at loan is well, is that something we could talk about uh once we've concluded the business that we discussed.

That's for engineering.

Yeah, engineering.

So uh we did do you remember Bob Roddy?

Yeah.

This is basically a Bob Roddy to help out until we replace, you know, Steve Park left, uh Mr.

Dingman and Mr.

Geffkin hired Bob Roddy to fill in until such time as we could hire a new uh director of water utilities, and that's what this is, is it's basically somebody to fill in to keep things operational until we find somebody and last let me ask you do we not have enough people on staff inspectors, uh engineers to do this stuff without hiring Burns McDonald.

We're spending million, we're spending we're spending tens of millions of least people every year.

Not not with Burns and McDonald.

The we have we have inspectors, we do not have project engineers, and we do not have uh engineering administration engineers.

So no, the I mean this and this is not for Lance and Utilities, this is for essentially the streets side at this point.

And so I mean when Stan retired, Stan was the last project engineer we had on staff, and as the director, there are four project engineers in engineering that have been vacant for a number of months now, many of them for multiple years.

And so that's what we're trying to back.

The board recently took action to approve a an engineering pay scale.

Uh, we're doing some concerted effort to try to recruit engineering to recruit engineers and all manner of new engineers coming out of school and also seasoned project engineers that can help teach those new engineers what to what to do and how to do it.

And so we are we do not have adequate engineering staff, and so that's what the loan to personnel agreement was about.

So we started we we we started s what, eight new consent degree projects in September.

Seven or eight, what was it you said?

So we will be putting uh there, I believe six out for bid.

We'll have a couple of more that go out for bid.

Um in addition to that, there will be um design so that we can get the next designs done to put out for bid.

But please realize that uh water utilities engineering group, we are I think we're down one engineer.

All the other positions are filled um at this time.

So that's where we've got a little bit of a benefit, and I will tell you that water and wastewater are totally different than streets, bridges, and drainage.

I mean, it's not the same uh engineering concepts because you're dealing with things like that.2 something million dollars with Burns McDonald's for for uh for engineering for this consent decree work for these projects to hire to hire Burns McDonald's to help with the there will be a project management agreement that we're working on to bring to the board for um managing consent decree.

Managing consent agreement.

There's no way we can do this in-house.

No, sir.

We we have we have engineer and utility site has has some engineers on staff, but they but our staff engineers do project management, not necessarily project design.

And and this this one that Mr.

Dingman was talking about is to ensure it's basically kind of what uh two of the citizens spoke about tonight about having someone who has dealt with consent decree to make sure all the reports are filed, that all the controls are in place, um, that we're getting the best price that we're but we don't we don't have the people on staff to do this is what I'm saying is what you're saying.

Yes, we do not.

And and even when we're fully staffed, we don't necessarily we don't fully we wouldn't fully staff for that sort of activity.

But I mean we would we wouldn't do our own project uh complete project design.

Our engineers manage designed projects, and so that's why we typically will come through with with uh design agreements for uh any of our any of our local engineering firms, Garber, Hawkins Weir, um McCormick, Crafton Toll, and all all of those that we can bring design services agreements to the board for to design projects, are when those projects are designed, then our staff engineers, the project ma project engineers manage those projects through fruition.

And also do we also do uh project inspection as as they go along.

And sometimes we do also hire out project observation and inspection services.

Are there's it?

Um are there any other questions about the preliminary proposal we saw tonight on the 2026 budget?

Uh Lance on the when I was looking through these, just trying to thumb through real quick uh on the packets that we were handed here tonight to the information to go through.

It looked like and I'm trying to find it again now because I've looked through all of them.

On the chemicals, there was a big adjustment.

Was that a part of the big pullback that you guys tried to come up with?

And then it looks like the the pullback was substantial, and then the the new number is only a couple hundred thousand higher than where you feel like you're gonna be on the actuals.

Is there has there been a change in how you guys handle chemicals or did you find I mean how are how are you able to do that?

So this was a discussion that was held yesterday.

We did some projections for where we are at and can in production for this year and where that's going to end by the end of this year, and that's why we we had uh some additional funds that we were not gonna be using.

For next year, we we basically looked at similar production for this year.

Now, here is I I'm gonna be truthful with you.

This is very conservative.

If we have a very dry year and we have to produce more water, we may need more water chemicals, so I may have to come back to the board and say, hey, we've exhausted how much we have in water chemicals, I need additional funds to be allocated.

Um but as Mr.

Dingman and Mr.

Richardson uh mentioned to me yesterday, we do not need to tie up funds for scenarios that we do not know if it will happen or not.

So we went very, very conservative on the chemicals as well as on some of the repair of equipment.

Yeah, because it we what's interesting is the twenty twenty-four actuals are two point almost two point nine.

The original was almost, you know, we're getting close to four point two.

There was an amendment to bump it up, which is interesting to me to 4.3, but then the projected actual is 2.8.

Yeah, I don't remember why that was bumped up.

That's why I was trying to figure out.

It seemed as if we thought something might happen drastic, and then so there was an amendment, but then now the 2.8 is the actual coming back at 3.1.

The only thing I could think of is if that was part of it was already under PO from December, and it didn't bill until uh sometime in 25, and that was the uh carryover for that bumped it up.

But we have we've really tried to watch our chemical feed as well.

We're not you know, one of the things that we've uh done training on is making sure we're not overfeeding or underfeeding.

Either one of those will cost you money and time.

So uh we're really watching that closer with our supervisors and and chief operators.

I just encourage you and thank you for y'all's efforts and your meeting, and I know you guys have scrubbed it, and I think that that's one good discussion you all have had.

And I mean, on the onset, looking out on the outside, looking in, it's really hard for me to figure out how you find 9.4 million dollars.

Um, but I'm curious to see where the conversations go with staff and administration and figure out what you guys come up with because when I look across these numbers, there's only certain spots that had any sort of major variants.

So it's uh it's it's down to me a conversation of new capital equipment is a huge part of that.

Yeah.

Any other comments or questions for Andy or Lance?

All right.

Thank you all for your time.

Thank you for the work put in thus far.

Um we will entertain a motion to adjourn this special study session.

So moved.

All right, we are all in favor.

Aye.

All right, we're adjourned.

Thank you so much.