This is an open meeting of the Grand Island City Council.

The City of Grand Island abides by the Open Meetings Act in conducting business.

A copy of the Open Meetings Act is displayed in the back of this room as required by state law.

The City Council may vote to go into closed session on any agenda item as allowed by state law.

At this time I ask that you stand and join us in the Pledge of Allegiance.

The clerk will now perform roll call.

Councilmember Sheard.

Present.

Councilmember Stelk.

Present.

Councilmember Conley will be absent.

Councilmember Nickerson.

Present.

Councilmember Brown.

Present.

Councilmember Hazi will be absent.

Councilmember Mendoza.

Present.

Council President O'Neill.

Present.

Councilmember Pollock will be absent.

Councilmember Lanfeer.

Very pleased to be here.

And Mayor Steele.

Present.

Also present are Jill Grinnere, the City Clerk.

Carrie Fisk, the City Attorney, and Keith Kurtz, the Public Works Director.

Individuals who have appropriate items for City Council consideration should complete the request for future agenda items form located at the information booth.

If the issue can be handled administratively without council action, notification will be provided.

If the item is scheduled for a meeting or study session, notification of the date will be given.

Council members, do you wish to remove any of tonight's consent agenda items for further consideration?

Hearing none, we shall continue.

A sign-up sheet was available in the lobby for individuals wishing to provide input on any of tonight's agenda items.

If you did not sign up to speak on an agenda item, please come forward, state your name, and the agenda topic on which you will be speaking.

Yeah.

No one has come forward, so we shall continue.

Is there a motion to approve the consent agenda?

Mr.

Sheard.

Thank you.

I move we approve the consent agenda items A through N.

And Mr.

Lanfear.

I second the motion.

Thank you.

Any discussion?

Please vote.

Motion adopted.

We will now take up our public hearings starting with 7A, public hearing request from Kamunga Station LLC, D DBA, Camungba Station 2105, West 2nd Street, Grand Island, Nebraska for a Class C liquor license.

Mrs.

Grunier.

An application for a Class C liquor license was filed with the Liquor Control Commission and received by the City on May 4th, 2026.

A notice to the general public of date, time and place of hearing was published on May 16th, 2026.

A notice to the applicant of date, time and place of hearing was mailed on May 4th, 2026, along with Chapter 4 City Code, Alcoholic Beverages.

Department Reports, Departmental Reports were received as required by City Code and recommendation is to approve upon final inspection.

Public hearing is now open.

Is there anyone that would like to speak on this item?

If not, public hearing is now closed.

Mr.

Brown.

I move to approve 2026 TAC 136.

And Mr.

Lanfear.

I second.

Any discussion?

Please vote.

Motion adopted.

7B public hearing on request from venue works of Grand Island LLC.

DBA Venue Works, Heartland Event Center, 690 East Stolly Park Road for a catering designation to their Class I liquor license.

Mrs.

Grunier.

An application for a cater catering designation to their Class I liquor license was filed with the Liquor Control Commission and received by the city on May 5th, 2026.

A notice to the general public of date, time and place of hearing was published on May 16th, 2026.

A notice to the applicant of date time and place of hearing was mailed on May 6, 2026.

And departmental reports are received by city code and recommendation is to approve.

Public hearing is now open.

Is there anyone that would like to speak on this item?

If not, public hearing is now closed.

Mr.

O'Neill.

I move we approve 2025.

And Mr.

Lanfear.

Any discussion?

Please vote.

Motion adopted.

Conestoga North, LLC, Maring Robertson, Irwin, and Centrist, Federal Credit Union.

Mr.

Kurtz.

Good evening.

Before you is a resolution to approve some utility easements needed for the street State Street Road Improvement Project.

Public hearing is now open.

Is there anyone that would like to speak on this item?

If not, public hearing is now closed.

Mr.

Brown.

Moving approve 2026 TAC 138.

And Mr.

Lanfear.

I second.

Any discussion.

Please vote.

Motion adopted.

7D public hearing to consider rezoning 40 acres west of Highway 281 and south of Gunther Road from TA transitional agriculture to CD commercial development zone and consider the preliminary and final plat for Gunther SID subdivision in Grand Island ETJ.

Mr.

Nabity.

Good evening, Mayor.

Thank you.

They purchased this property at Gunther and 281 two and a half years ago or so.

They've been looking at various development things.

They were looking at doing the whole 80 acres at one point.

They've sold off the West 40, so they're just looking at the 281 frontage and that 40 acres right there on the corner at this point in time.

They are looking to rezone that to a CD commercial development zone.

It is in within the gateway corridor overlay zone, so it's required that it come in as a CD or RD zone.

So this would not increase the cost to the county of maintaining those streets.

They would have a private owner's association that would maintain those.

They are proposing a private water supply similar to what Bosselman's has.

They probably won't do a water tower, but they will have a pump station.

It will also be built to city standards so that as we extend down there, we could potentially take that over.

So we have sewer there.

With that, they will be paying the tap fees that are due for this particular property as they get their approvals of their plans.

Right now they have a single lot that they are proposing to develop with a Hyatt Hotel.

They're not sure what the others would be, and the approval tonight is would be the approval of the subdivision layout, the preliminary plat, and the subdivision agreement, the rezoning, and constructing that hotel.

They would need to come back as they look at putting things on the other lots and go before planning commission and council again for approval of those things.

So this is just that one piece.

Okay, not LaVista because they're landlocked, but the others really all SID development, which is an additional tax on those property owners to pay for the improvements.

So they would know that going in, they would know that that's a possibility.

Planning Commission did hold a public hearing on this at their meeting a couple of weeks ago and did recommend approval of it.

I do have more information for you, but it's the same things that were in your packet.

And I know that there are a couple of people that would like to speak on this item.

Thank you, Mr.

Nabity.

Public hearing is now open.

Nobody signing.

Well, wait, yes.

Michael Stenson.

Stetsman, if you want to come on up and speak.

I'm actually just here to answer any questions of any any that you may have.

Um as Chad mentioned, we've been working with him for quite some time.

Patience and perseverance are the two main critical aspects to development.

So we've been extremely patient and persevering throughout this last two and a half years.

Anticipated moving forward will be some additional commercial retail type approach, along with uh maybe the potential for some multifamily and other developments as we move along.

So I'm really here just to answer your questions.

We urge you for approval.

I know we can't quite do that tonight.

Um, but uh would like to just have your support.

Thank you.

Um Jim, I can't read the last name.

Did you want to speak on this item?

Please state your name.

James McGurus.

I I bought the property just west of the 40 acres.

And I think we got I heard they're gonna put a motel in there.

And I'm against that case.

I think we they'd get enough motel already.

And I don't know.

It's gonna I bought that to have privacy out there, and we get a bunch of people stuff around or then it'd be no privacy no more.

So I don't think they should do it.

No.

Thank you.

Thank you.

Is there anyone else that would like to speak on this item?

If not, public hearing is now closed.

Um since we can't vote on the ordinance, it's by the first reading only, so I'll read the first paragraph of the ordinance.

Umrdnance number 10,074, an ordinance rezoning certain tracts of land within the zoning jurisdiction of the city of Grand Island, changing the land use classification of a tract of land comprising part of northeast quarter of section 13, township 10, north range 10, west of the 6th PM in Hall County, Nebraska, located south of Gunther Road and west of U.S.

Highway 281 in the zoning jurisdiction of Grand Island, Nebraska, from TA Transitional Agriculture to CD commercial developmental zone in the zoning jurisdiction of Grand Island Hall County, Nebraska, as more particular described below and directing that such zoning changes and classifications be shown on the official zoning map of the city of Grand Island, amending the provisions of section 3644 and providing for publication in an effective date of this ordinance, Mr.

Brown.

Approved 2026 TAC 139.

Or you mean 10 10,074.

Thank you.

We would be doing the resolution, not the resolution ordinance, yes.

And Mr.

O'Neill.

Any discussion?

Uh Mr.

Lanfear.

Chad, would they be requesting TIFF?

No, they're not in the city limits, will not be in the city limits, and are not eligible for TIFF.

Thank you.

Mr.

Nakerson.

And just a point of clarification from the city attorney, we can discuss this tonight.

The public hearing portion still can proceed tonight.

The actual ordinance just goes on first reading.

So you can't discuss the merits of the ordinance, but you can have the discussion during public hearing.

We can discuss the you can still hold the you can still hold the public hearing.

Yes, okay, very good.

Okay, so Chad, I did have a question.

I can you pull this up on the screen.

I just I just like people to see where we're talking about.

I was should have given you advanced notice, but it's just good to look at it.

Is this what you were looking for?

Or are you looking at the aerial view?

Can you you can find that pretty quickly, can't you?

Typically, let me give you a few seconds.

Then I have a question about that.

Do we know how many miles this is from the interstate?

It is three-quarters of a mile north of Bosselman's.

North of Bossamans.

Yes.

Okay, north of Boston, sure.

So it is between Boston, it's almost exactly between Bosselman's and Grand Island Trailer.

It would be these two tracks right here.

And this is Grand Island Trailer, which is the edge of the city limits.

This is there's three quarters of a mile to Gunther Road, and then this is Bosselman's, and there's about three quarters of a mile to Bosselans.

And so we've had development, obviously, with Bossamans there.

There's just one property that appears to be between them, and that's just simply farm ground.

Okay.

And I and I'm just curious, and that's not what we're talking about tonight, but that's ultimately what hopes to happen here.

I'm kind of interested in the marketing study or whatever that prompted that this would be a good location for a hotel, because we want you to be successful, and you want to be successful.

So can you share with us some of those what what have you discovered that would make this a good location for a hotel and what would your target audience be your target market?

Because we, as was stated, we have a lot of hotels in town.

And when you put up a hotel, typically, if I'm going somewhere, we want amenities close to where we are, and Bossamans isn't the type of amended amenities that most people would want.

So I'm just kind of curious with the thought process about this being low a location for a Hyatt hotel.

I can answer that from a branding standpoint.

Umatt is making a push into the mid-level market range where they can compete on that mid-market level.

They've always kind of been on the on the higher end side of things.

Um the Interstate 80 corridor was really uh our direction in regards to working within them within the development agreement.

Um I can share with you that they've looked at Grand Island, York, Gretna, all along that corridor there.

Uh their positioning in regards to being the closest to the interstate from the other hotels lends well to what they're going to try to accomplish.

You are very correct in regards to our ability to have to bring some services around that hotel.

That's one of our number one goals is to fill in that retail corridor that we're gonna have along 281 and make sure that we've got some amenities there that they can uh that they can tie into.

Um but I can share that their main impact was smaller rural markets, mid-market range where they could start to have an impact and fill out their market approach to their higher level brand and bring it down into more of a market level.

So the target market is more than likely travelers coming off the interstate.

They're just they just need a place to stay for the night.

They got a motel six there close now.

I think they have a failed hotel that's was across the street.

I think that thing's been out of business for quite some time.

So those are things that make me wonder why would you want to put a hotel in the area where a hotel has failed?

I know the motel six is still hanging on there, maybe use truckers and I don't know who else stays there.

But just we don't want we don't want people to fail in their ventures.

Absolutely.

And so I'm just trying to understand let's reverse that question a little bit.

Those two hotels are very aged.

Very aged.

So now you've got a newer brand where they're trying to expand their market reach and where they like to position themselves.

Um I can share with you that we've identified this along this I-80 corridor.

Again, Grand Island just seems to be our first uh first position where we wanted to get started right away.

So that's that's perfectly fine.

Now who who bears the risk of this triple crown or Hyatt or is a joint venture or um well Hyatt's just a brand.

It'll be it'll be a joint venture situation between Triple Crown uh hotel operator and us as the developer collaboration real estate.

Collaboration real estate is really made up of several local individuals that uh want to see this happen.

And how many rooms again was this?

You know, I think it's gonna end up around 107.

Okay, 109 somewhere in there, uh pool amenities.

Um it's really it's really just designed to you know kind of be all-encompassing, but when you go to register or when you go to do a reservation with Hyatt, Hyatt just doesn't have this type of product in their in their wheelhouse, and that's where they're trying to expand.

And that's fair enough.

I'm just just trying to understand the thought.

No, and I appreciate you you're spot on in regards to us wanting to be successful in what we're going to do there.

I I can tell you we've jumped through a lot of hoops uh to get there.

Our last one we just with with bringing our own water supply in, we just got that approved by Hyatt today coming in here, and they're comfortable if you're comfortable.

So you are to your point, you are jumping through a lot of hoops to make this happen.

So I you know, we wish you all the success in the world.

And uh sooner you get it up there, I guess we're gonna test it and see how it's gonna work.

But yes, yeah, yeah, there's there's more hoops to jump through here, of course.

All right, well, thank you very much.

I was just curious.

Thank you.

Mr.

Shear.

Thank you.

Oh, before you sit down.

Uh two things.

When did you say if all goes well, you would like to open this hotel?

Well, we've going through the SID process.

The first thing we've got to do is start to lay out the infrastructure.

Um, I'm gonna say, and this is just educated guess.

I'm gonna say if we could get mid-summer next year into a construction phase or early spring, that would be our goal.

Okay, it just depends on how the infrastructure lays out.

Blue STEM, as Chad has mentioned, Blue STEM is primarily one of the largest SID financing groups out of Omaha.

They've done a number of them there, um, and they've been working very closely with us on this one.

And to answer your go back to your Mr.

Nickerson on your question.

The SID works really well with what we're trying to accomplish here, where we know that if we go lead off with the hotel, we've got a really good tax generation situation that helps to offset the SID as we move forward.

Well, any time someone comes and says, We've had Grand Island on our radar, or that's who we want to go with.

You're welcome to come back, tell your friends, just keep saying that same message over and over again.

We kind of like to hear that.

So hey, I drove four hours today to be here with you guys.

So rock on.

Well, thanks for coming and thank you.

Your corridor to the south looks very attractive for expansion, and you probably already know this.

Your corridor to the south is is gonna take off here.

There's no question about it.

Thank you.

Is the signage Hyatt or will it be another name?

It's Hyatt Studios is the actual, yeah, is the actual name.

You guys, Mr.

Nickerson.

Just think we'd be remiss if we didn't address the question about you know, someone that's not in favor of it being built, but it's been on the radar in the in the master plan for many, many years that that we wanted to develop along this.

And you know that we have as you come closer into town, you're seeing where it's kind of coming out that way.

Right.

Now, if we can get it this way going in and close that gap.

I know it's change is not always comfortable, but the whole idea has been to develop this all along and and with people that are willing to take a chance to do that.

That's what we would like to see happen.

And I know people who live around there, it will be change, but it is part of the progress of our city and part of the big master plan is to grow that corridor with businesses, and and this is another step.

So we're nine, we're nine-tenths of a mile from the city from coming south.

Yep.

Okay, very good.

Thank you.

Yeah, thank you.

Please vote.

Motion adopted.

Mr.

Nabity.

Thank you, Mayor.

Um this next item before you is amending an RD residential development zone district for Sterling Estates.

Uh they were last here in 2016 and had their plan approved.

The existing development plan showed one 30-unit building and six 12-unit or 10-unit buildings on the property.

Umperty that you did approve the TIFF on a couple of weeks ago.

So what they are proposing now is essentially going back to their original plan, which would have four 30-unit buildings on it in this configuration.

Because it's an RD residential development zone, and they are um changing the placement of the buildings and the number of buildings, it has to come before council for approval of this development plan.

Planning Commission did hold a public hearing on this and did find uh did recommend approval of it.

Public hearing is now open.

Deborah Klein, did you want to speak?

Hi, I'm Deborah Klein, and I'm with SG Communities.

This is really phase three of our property.

It's actually going to be the final phase of it.

Um we've got about 156 units right now.

And what we're looking to do is add four more buildings that are the same style as the type we have now, but we're gonna have some upgrades to it.

Um that'll be 120 more units.

I'm here to answer any questions you may have.

They may after well.

They we won't be able to have questions tonight.

Oh, sure.

Gotcha.

So sorry.

Thank you.

Is there anyone else that would like to speak on this item?

If not, public hearing is now closed.

Ordinance number 10,075, an ordinance rezoning certain tracts of land within the zoning jurisdiction of the city of Grand Island, changing the land use classification of a tract of land, a tract of land described as lot to of Sterling Estate's ninth subdivision in the city of Grand Island Hall County, Nebraska from RD residential development zone to an amended RD residential development zone, approving a change in the development plan as shown on the updated plan approved with this ordinance.

Directing the such zoning change and classification be shown on the official zoning map of the city of Grand Island, amending the provisions of section 3644 and providing for publication and effective date of this ordinance.

Actually, Carrie, can they ask questions since it's a public hearing or not?

If they had any during the public hearing, everybody can speak there, but sorry, I does anybody have any questions then?

Okay.

There's no questions, so resolution 8A.

Approving real estate option agreement with Nebraska Game and Parks Foundation for Camp Augustine.

Mrs.

Fisk.

Mayor, members of council, uh before you on this agenda item is a contract with the Nebraska Game and Parks Foundation for an option to purchase uh real estate that we all refer to as Camp Augustine.

Uh the Game and Parks Foundation is acting as the potential purchaser of that about 156 acres of property uh down uh by the river with the intention of helping uh transform that for eventual gifting to game and parks to run and open if all goes well as this as the another state park in our state park system.

Uh the option that you have before you is to purchase the property within the next three years.

So they could do it earlier than that.

36 months is just the longest they have.

Uh the proposed purchase price would be for the appraised value.

We had the property reappraised about six about two months ago now, and uh the Game Parks Foundation has agreed to pay the appraised value for the property.

They have uh this contract places a one percent deposit in exchange for that option.

Um if they haven't executed the option to purchase the property within 36 months, the property just stays the cities, and we can sell it to somebody else, um but gives them that last chunk of time to uh get that sale ready.

Uh both Game and Parks and Game Parks Foundations have been really fabulous partners through all of this negotiation have made this about as easy of a partnership as one can get, and uh I can't wait for all of you to hear some of the plans they have in place.

Uh it's it'll be a pretty exciting transformation once they get it done, and I think they'll have some good announcements ahead for the pretty remarkable progress they've already made towards making this dream a reality.

This is just the boring lawyer paperwork along the way.

Mr.

Landfair.

I move to approve resolution 2026-140.

Brown.

I second that motion.

Discussion, Mr.

Nickerson.

Well, the big question mark to me immediately was what's up with the three years?

I don't see contracts written like this to where somebody has up to three years to purchase it.

Is there a potential hesitancy, reluctance, funding?

I mean, there's a reason why we have a three-year limit on this.

It's not particularly atypical when they need to close a small fundraising gap or to get the property ready for the actual transfer.

Um, in this case, uh, my guess is that that's largely engineering work just to make sure everything is done and ready so that way when they actually take ownership, they're ready to run and and start construction.

Um, give this option gives them something to fundraise against uh to help raise those funds to pay for all the more boring portions of getting a construction project ready to go.

Uh this is actually a fairly typical option.

Um they pay that earnest money, it's non-refundable if they choose not to.

Um, but given that they've fundraised every dollar they have so far, I think it's a good sign that they're gonna do this.

They probably just need a little bit more, a little bit more time.

And on their end, giving up any money they fundraised before they're ready to use it to make real change is sometimes a choice they might make.

For us, it's enough of a deposit to pay our carrying costs on the property um through those three years.

So taxpayers would have no real additional expense for things like the property insurance during that time.

Um Game and Parks Foundation is also working with the city to take over and help out with some of the maintenance stuff.

We're gonna they've got some good partnership stuff planned to help get that property ready so that way it's in use as soon as they can, as soon as they can get it in use.

But transforming 156 acres next to a river is uh sounds like it's gonna take a lot of a lot of time and uh fundraising dollars.

So the dollar the dollars are are one thing here.

And I appreciate them being willing to take it.

I mean, basically at cost, which is what we spent is what what we're wanting to sell it to.

But you talked about something to do with engineering or something like this.

If they don't own the property, they physically should not be able to do anything to the property.

It's still our under our ownership.

Are we planning on doing anything at their request?

Likely in this kind of intervening time, and again, 36 months is the latest they could possibly do things.

My understanding is they do intend to move faster.

That's just kind of the the expiration date.

Um we we do anticipate coming back with some access agreements to let their engineers, surveyors on site, take soil samples, do a lot of that um that work that's necessary before they can start doing the sort of construction work you're thinking about.

Um I I my understanding of their plans, and I'm sure that can correct me if I'm wrong when they come back to give you the whole sales pitch, is that they will take ownership before you start to see really tangible construction changes.

This will just be the core samples and the uh environmental studies, some of that um prep work that happens before dirt ever moves.

Okay, never heard of a three-year Mr.

Lanfair.

Um actually three years doesn't seem like too long to me.

Um I would I had to stop and think about that.

But to do the job right, what they're gonna have to do with that piece of property is set long enough.

They're gonna have to go into it slowly.

If they're gonna get a first class job with it.

So three years.

I I can live with that.

I really want to see this turn out to be an asset for this how for Hall County and Grand Island.

And I think it probably won't take that much planning.

So I'm in favor of it.

Mr.

O'Neill.

Um, just a couple of questions.

So I I assume, I mean, obviously you've talked to the game of parks quite a bit, and they seem to feel very comfortable about the three-year uh timeline for this.

It three years is their that's the absolute worst case scenario number.

They lose their right at three years.

Uh my understanding is that if all goes according to plans, they will move faster than that.

Um then um, even with any um sale of it, there's still a commitment for public access.

I mean, obviously that they want to turn this into a state park, but during their transition, there would still I don't know how much dialogue we've had about how much public access there would be during their development.

They have been uh parks department has been doing some programming.

Um we've been in some discussions with them to continue as much programming as can be done while you've got things like core samples coming out for for soil.

There will be a point in time in the middle where public access gets to be a bit restricted.

Um, but based on their discussions, we think that'll be about a year out before it changes from kind of how we use it now.

And now we don't do a ton of public access and programming out there right now.

Um it's a lot of facilitated programming through the parks or the library.

Um, and we have had a tenant out at the house.

Um, and so they do not anticipate having that tenant be able to be there past the year mark.

Gotcha.

Yeah, I I spent a lot of summers in scouts camping out there and a ton of merit badges, and I just want to make sure it continues to get used uh as long as it can.

Um I know the game of parks is really good at fundraising as well, and I still look forward to what they can do in the long term out there.

So thank you.

I think three years is reasonable.

Mr.

Still.

Thank you, Mr.

Mayor.

My question is uh can you enlighten us a little bit on what they plan on doing with the property and how much money they plan to raise and invest into the property and where they're headed with that?

Well, I I hate I hate to be the one that burst some of their fundraising goals and bubbles, so I'll try to be a little vague, let them have that uh little bit of that glory there.

I do know that they have already um are close enough to being able to fundraise all of the purchase and the engineering costs.

I think there's a couple million dollars worth of engineering that has to happen with the goal of getting it to a similar vision to the this study that you guys did with Big Muddy.

Um obviously adapted for state park specific needs and some long-term growth there, um, but it does seem like that's kind of uh the the things may be laid out differently and have slightly different features, that same vision of it being a robust complete state park, not just a wreck area, but a total state park, um, is their vision to do that.

I think um if I remember right, your big muddy steady big muddy study.

Thought that would be over 20 million dollars worth of work, what their schedule looks like to do that, what the fundraising looks like.

Um, I think that's why the foundation does what the foundation does, and I'm sure we'll be hitting the pavement hard trying to get that money raised to move that pretty fast.

But it it does appear it'll be all from what they've relayed, all donor dollars um that that they have an edict from the state that it be uh cost neutral to state taxpayers.

So they've got a big a big load of work ahead of them.

I guess the feedback I'm I'm getting from you and from the state is they they they will increase the the activities of the park and uh and the camping and and the trails and all that, like what we'd plan and there's if there's anything they'll put more money into the project uh and so it'll be a go go win for the city and for the rusk parks.

That's all I want to see is I I want them to build and expand on what we're providing them.

It's it's a gem of a park, and and I'm glad to see them uh moving forward with it some in a good direction.

It looks like it'll be very transformational that they deliver on a tenth of what they're planning on.

It will be a huge huge growth to Grand Island.

And given the plans and the commitments of the folks that have been excited to share their plans even with lawyers, it's gonna be pretty cool when it's done.

Yeah, Mr.

Shear.

Thank you.

Uh just a couple little things.

If this lasts up to the three years, is there any budgeting that we're gonna have to change at any time?

Like no impact on us at all.

Right now, uh the cities carrying costs for the property are largely tied to insurance, um, and this earnest money is enough to cover those obligations.

Um, absent a tornado taking out the building down there.

Um, this will be more than sufficient.

Um, and then frankly, even then they've I don't think they would have us rebuild the structures there.

So this will cover all of those costs, and then some so it's kind of I mean, I'm all for it, don't get me wrong.

But just the math mathing a little bit.

We're gonna spend the 10% over the course of the three years or some of that money to cover some costs.

It's in it's it's just one percent.

I apologize if I said ten percent.

That one percent.

One percent sorry deposit.

Yeah, we're paying those insurance costs as part of our collective pool anyway.

Um it's not a there's no there's no increased expenses, probably if anything, as they start to take over maintenance expenses, it should actually decrease.

Um perfect, perfect.

Seems like this is just one more, I mean it's good timing to have uh somebody want to put a hotel in uh three quarters of a mile away from this down the line.

Uh I think that they will probably with the state park right there have an opportunity to keep it filled in the summer more often than not.

You will set up for those marriages where one person wants to camp and the other person does not.

Yep, yep, that's where my wife would be.

Um I just yeah, I'm all for this.

I've been for this project since the get-go.

I think this is one of those great things for Grand Island, and just another step along the way.

So thank you.

Please vote.

Motion adopted.

Resolution 8B, approving wastewater cost of service-based rates.

Mr.

Kurtz.

This item is pertaining to uh a recent rate study that we have uh completed on the wastewater uh utility.

Uh GIUD, the water utility and the wastewater utility work together and hired a consultant, um JK Energy Consultants to help us evaluate the rates.

We do this every three years.

We last completed this to put into place rates for the fiscal year 2024 budget.

And so we are back again to speak about this.

John is actually here, and he's gonna talk to you about the findings of the rate study that we have completed and our path forward as far as the wastewater rates would be concerned.

I believe he is here.

Sorry about that.

Hi, please state your name.

Yes.

Please proceed.

Okay, mayor, members of the council.

Again, my name is John Kraske.

I'm here to present the results of the wastewater utility rate study.

Um I also did a water rate study and thought I'd be presenting that tonight, but I can't talk about that apparently.

So just a quick overview of the presentation, talk about projected financial results, cost of service analysis, rate design, compare your rates to your peer group, and then provide my recommendations for you.

So last time I was here was about uh it was two years ago, um, about the same time uh we looked at the wastewater and water rates at that point in time.

Uh biggest driver of the wastewater rates at that time was looking at future capital improvements, primarily the South Intercept project.

And I developed a rate plan that would gradually increase rates out to about 2030, 2031 to get your rates at a point where you can pay the debt service associated with that project.

Uh so this is an update.

We have updated capital improvement numbers for the South Intercept project and also some greater clarity on some other capital projects upcoming.

So you have rates that are effective right now through you have the next the third step of my original rate increase will go into effect October 1st of this year for fiscal year 2027.

But this this study looks at future rates beyond that.

So when we do the study, I looked at the financial performance of the utility.

I worked with your staff to go through those numbers, and uh develop rates that are fair, reasonable, non-discriminatory, but basically make sure that you're recovering sufficient revenue from your customers and recovering that revenue from the right customers.

The biggest again, the biggest factor in all of this is that South Intercept project.

And the estimated cost at this point in time is about a hundred million dollars.

And it would be constructed over a ser uh a number of years.

Uh, there would likely be a financing that would occur at some point in the early 2030s, and at that point, at toward the end of that, you would have to begin paying debt service on it.

Um the you can't just pay this out of cash.

You'd have to raise, you'd have to double rates for the next five years to ever accumulate that much money.

It makes no sense.

But again, five years down the road, there's a lot of uncertainty with this, but we're just doing the best we can with the projections that we have at this point.

So one thing I wanted to point out was that your OM, your operating and maintenance costs are somewhat higher in this rate study than in the last rate study.

So that did drive that in that was part of the reason for the rate increases.

Um we do have the seven and a half million dollars.

And I I I'll say too, one of the major things we didn't I I did calculate out if you just waited until that you built that project what your rates would need to go up at that point in time, and it'd probably have to go up 60 to 70 percent.

And so it's a very it's it's a desire to phase that in over time and make sure that you're not some homeowner 10 years from now gets a sewer bill and it's double what it was the previous or 70% higher.

Um, and this gives them a chance to gradually plan for that.

So at the last rate study again, the six percent increases, and I had projected at that time that you would need another six percent increase this year, and then smaller increases thereafter.

It's my recommendation to actually lower that first increase to four percent and then continue that series of four percent increases, probably it's going to be probably between 2031 and 2034.

Uh that'll be dependent on the need for additional clarifier at the at the wastewater treatment plant.

So nonetheless, I know you'll need probably the first three just to get to the South Intercept project, but the future ones will be dependent on other capital improvement projects.

Um are there any question questions on what I've gone through so far?

Okay.

So when we do the cost service, I got to figure out which customers are causing you to pay incur costs.

And what I found was that your inside and outside city customers, which are grouped together, um, they're about they would need about a three to four percent rate increase based on this study, and your high strength users, which is think about you know those customers that have large waste streams, have a lot of uh suspended solas, BOD, um, those customers would actually require a somewhat larger increase if we followed the cost of service.

So the recommendation that I've that I've worked with staff on is to go with uh increasing the consumption and customer charge is about four percent annually for the next three years, and then for the high strength customers, uh those customers would see a six percent increase.

And there's also another line item for fines for customers who exceed the limits in their in their contract with the city, they have to uh pay a fine each time they go over that limit.

I'm proposing to increase that limit that's a fine by six percent annually a year, just to provide an incentive for them not to exceed those limits because if they exceed the limits, then you have problems at the wastewater treatment plant, which causes cost for your other customers.

So trying to planning to pass those costs through to the directly to those customers.

I just talked about this basically six percent for all of these high strength uh factors.

I think this is an important factor when you look at utility rates because your customers uh talk to their neighbors, they talk to people in other cities.

Um your rates, I'll say right now.

Um let me let me let me start over.

So you're I compared in this table what the rates would be if you adopt the four percent increase in uh in October of 2027.

And so you're about 18 months out from where we are right now.

These other ones are what the rates are as of today, or actually, well, last week I should say.

So you're toward the higher end of some of these numbers.

Um, but I can tell you too.

I I'm doing rate studies for two of the folks on this list.

I'm not going to say who, and I'm probably I'm projecting rate increases for both of them.

I think your rates will continue to be competitive with this peer group right in the same range of where you're at in a couple years, and perhaps a couple of these will even move a little bit higher than where you're at right now.

But again, that's um that's based on a five CCF usage, it's about $36 a month, would be what that new bill is in October of 2027.

Any questions on that?

Okay.

So my recommendations uh would be to adopt that four percent rate increase.

Uh I've prepared a resolution that I think key uh is part of your meeting materials.

Um that resolution would direct you to uh implement that with the fee schedule changes.

Your sewer rates go into your fee schedule.

So those are adopted by resolution, and those would then become effective again October 1st at 27, 28, and 29 for those future fiscal years.

4% for the basic usage and six percent for the high strength.

I think you should expect that you will see a continued increases after fiscal year 2030 as the South Intercept project comes into greater focus, and as you understand what the need for the clarifier looks like for your wastewater treatment plan.

And beyond that, I would say just as these things occur, uh keep an eye on your rates, keep an eye on your financials, and make sure that you're in good shape for uh to fund that debt service when it hits.

And and it I I will say too, I think it's it's I've worked with a client who was not very proactive about capital improvements.

I'm just gonna say it like that.

Um they ended up having to expend a lot of money in a short period of time to basically get in compliance with their permits with the state, and because it was in a short period of time, the cost was a lot greater, and they basically had to double their rates over the course of about two years.

And you're not in that situation here.

You're being very proactive about these improvements, and you're making sure that you're not gonna surprise your customers with massive rate increases at some point in the future.

So, although this isn't the best news in the world, I wish I wasn't uh recommending a rate increase.

I never like to do that, but it is important for your financial integrity.

It's important to for the condition of your system to make sure that you're funding these improvements going forward and that you're serving your customers into the future.

So, with that, I'm through with my presentation.

I'm happy to answer any questions or if Keith has any further comments.

I I don't have any comments unless you guys have questions or or concerns.

We'll have to do a motion first.

Mr.

O'Neill.

I move we approve 2026-141.

And Mr.

Lanfeer.

I'm second.

Discussion, Mr.

Nickerson.

So you covered a lot of territory and raised a few questions for me.

Because the foundation of all of this really is because of capital improvements.

And I think you hit that at the very beginning, because we've learned some pretty expensive lessons over the years here in Grand Island when we've taken on some big projects that we let get away from us.

And this is a way of staying proactive and making sure we're ahead of that curve.

When we talk about things like the South Intercept project, expand on that a little bit, Keith, as far as what is that?

It's a huge project.

Why is it 100 million dollars?

Because I think we dealt then we have a 70 million project, 70 million dollar project we did on the last big project we did.

So this is speaking to the same project, and and I think there might be a discrepancy.

100 million dollars projected out into the future.

I mean, we're looking at a timeline in we need to have it in service.

We're projecting to need it to be into service, uh, the south interceptor um completed by 2037.

I'm saying it we we need to start that about at least five years early.

In fact, we're we're we're talking about do we need to start even planning a route for this now before things develop, so it's harder to build later on.

It's it's a big project, and and as well as John didn't hit on it.

Uh, we have we have the potential need for a clarifier project out at the treatment plant.

Our estimates today, about 11 million dollars, which that would probably happen before the South Interceptor, um, a couple years earlier, or three or four years earlier, actually.

Uh so that could come into play.

The other thing, um, our capital improvement budget does take into account in this study, some potential regulatory changes that the state might implement.

Uh so this is kind of what I'm gonna call worst case scenario on the uh on the capital side of it.

Um as we go forward, obviously in three years we're gonna be doing the same thing when these things come into focus a little bit better.

We we can kind of tell the timelines.

Like John said, we're trying to do the best we can.

This is too big of a thing just to wait.

We gotta we got to project something.

Um so all those things put into play.

Plus, John hit on it a little bit.

Our own OM costs are a little higher than what we projected three years ago today.

Obviously, inflation and all of those kind of things, operational cost.

Um so we did tweak our CIP just a little bit and some of our rehab type stuff that we've been doing and being very proactive on.

Uh, we kind of backed off on that just as midgen uh to help kind of keep these rates in check a little bit.

Obviously, it's still an increase, but we're we're adjusting a little bit.

I think we got the the worst of the worst kind of taken care of, so I think we have a little time on that.

So all of those things put together are affecting this.

So I don't know if that answers your question.

Well, I I still to somebody that's watching this or reading about it.

When we talk about a hundred million dollar project, what in a nutshell, what does that so the hundred million dollar project is the south interceptor?

So I don't know if everybody knows or not.

Lift station 28 is on the southwest side of town.

Obviously, town is growing south and west.

A lot of new development down by the hospital, all of that wastewater has to flow through town now.

Our existing South Interceptor is running through town, it is sized for 30 or 50 years ago, let's say uh we're running out of capacity, so we can't handle the growth.

So our projections are based on we have a lot of flow monitors within the system.

We're watching all of this, we're keeping an eye on it.

We build models again.

This next CIP, which we will bring to council here with our budget.

Our plan is to do a uh collection system study to and again it's an update just like this to see where we're at in the grand scheme of things hydraulically with all the capacity.

We don't want to hinder growth if somebody wants to come to town.

I need to provide the growth to them or the capacity to them to handle it.

So with all those things put into play, we're saying that that we're gonna run out by 2037 of room.

And these projects don't happen overnight, so we're trying to look forward to that.

We know it's gonna be a thing, much like we did the north interceptor 10 years ago, because we ran out of capacity on the north side of town, we're looking at the same thing on the south side of town.

So that's the the scary monster we're looking at on that.

And that's a great way of explaining it.

So thank you.

Because it's it's gonna it's gotta happen.

It has to happen when you need to plan.

For any capacity growth to occur, whether it be residential or industry.

Okay, very good pleasant surprise when you say you're gonna recommend four versus six, but I'm wondering what drove you to that decision or not split in in the middle.

So I I do want to clarify one thing, as John had mentioned, and then I'll let him speak to it.

The six percent, which was planned for his projections last time was for fiscal year 27 and 28, and then backing off.

What this study is showing is we still are looking at the 27 six percent, and that's gonna be proposed in this next budget.

But based on our numbers now, the 28 and beyond, we're looking at four instead of the six.

And why is that?

Because the costs are not where we thought that it would be.

I would just say, as we looked at the timing of some of the capital projects, we looked at your cash reserves.

That when I did the study a couple years ago, it looked like there might be a pinch point in 2028 that would require an additional six percent.

It looks like that pinch point's pushed out a couple three years, so we can phase in a smaller rate increase than in in 2028 in the fiscal year 28.

So it sounds like this is quite a comprehensive plan that you do.

I mean, it's uh detailed.

I will say most rate studies I perform.

Um I usually look five years out.

And when I started this one back in 2020 with with your folks, we were talking about the long term, and and I'm like, okay, yeah, we're gonna extend this out, we're gonna do a comprehensive long term because uh again, I didn't I I don't think it would be fair to your ratepayers to just push this can down the road and then in 2032 say, surprise.

Um I just think this this is a much better approach.

Oh, and four percent is more palatable.

I mean, it it's still an increase, but it's palatable.

Then my final question is when we show our comparison, and you may or may not have the answer.

I think I know what it is, but why is Carney so much less when it comes to the first?

I guess when we got into the second session there, second, the five CCF, it starts to come up a little bit, be a little more comparable.

But I noticed that the uh at the three, they're about half of what we're at.

And my recollection is they have a lot lower customer charge and then a higher consumption rate.

So you know they start lower and it's a little steeper, and yours starts higher and and and has a has a lower slope to it, I guess is the way to say it.

Just the price model, just the way they yeah, that's our price model, yes.

Once we get into the five CCFs, I mean things are within a reason.

And my guess is Carney still has some projects that they're gonna have to jump on one of these days, and you got to pay for that somehow.

And a lot of these folks, I mean, like I said, I'm working with two of these other ones on rate studies, and they're facing capital project expenditures, maybe not a hundred million dollars, but it's it's everywhere.

I mean, there's there's cost pressure on all those.

Well, and and I'm gonna add a interject a little bit.

I think the big thing on this isn't exact numbers, dollars, but in the grand scheme of things, again, this is this is the fiscal year 2028 proposed rate, 18 months from now.

So take that into consideration with our peers, as well as this is a snapshot.

If they're staring a big project in their face, and they've kept the rates low, maybe a little too long, you know, like we don't know where they're at capital-wise, and I mean, I think we're doing the right thing looking forward, uh, you know, and keeping things maintained.

Again, we've been pretty proactive on some maintenance type things that I don't want pipes to fail in the ground if I can mine them and and treat them today.

You know, so it it's just a snapshot.

So I but we're in the game.

I mean, we're we're within the within the reason uh uh on the rates.

And what's the difference between the three and the five CCF?

Is five more of a residential?

Is it a little bigger than the resident normal reservoir?

Probably like an apartment, yeah.

Maybe the two people house household, whereas a five CCF uh might be like a a family, obviously, and then the seven would be if you got a lot of kids or like to take long showers, I guess.

I don't know.

All right, very good.

Thank you.

That one's definitely big.

Excellent.

Mr.

O'Neill.

I think uh Mitch asked a couple of questions I had, but basically, especially in the south end of town with the amount of capacity we currently are using, the amount of growth, we're gonna have real problems if we don't get this done in the early 2030s here.

It sounds like the the plan here is really just to try and stair step into these infrastructure investments rather than walk into a cliff down the road.

And I think that's a lot more palatable to do that over a longer period of time uh than a drastic sudden change.

Uh just to clarify, too.

You said still the the regular residential customers will be four percent, but you're what you call the high strength users will be at six, correct?

Yeah, okay, and I agree with that as well, too.

Um I think that's very reasonable.

Um I I I support the uh way to try and kind of stair step into this as well.

Mr.

Kurtz, for the sake of me and others who may be listening.

What is a clarifier and why do we need another one?

Uh it's a part of the treatment process.

Essentially, uh the solids will be settled out to to purify the wastewater.

I'm gonna I'm gonna say uh so that we can discharge it an appropriate rate.

Um so when we add another one, again, we're just adding volume to our plant.

This is at the treatment plant.

The interceptor project is pipes getting it to the plant.

What's the timeline?

Anticipated timeline for another clarifier.

Um right now we're saying 29 to 30.

Thank you.

Please vote.

Motion adopted and then on this ordinance it'll just be by title ordinance number 10,076, an ordinance to amend Grand Island City Code section 3530 pertaining to water utility rates to create or modify such section as necessary to clarify and/or make general corrections to various sections therein to repeal any ordinance or parts of the ordinances in conflict here with and to provide for publication effective of the date of this ordinance.

And to review and potentially authorize the preparation of a proposed settlement of a regulatory matter by the city attorney.

Is there a motion to adjourn to executive session?

Mr.

Lanfair.

I move we adjourn to executive session.

Mr.

O'Neill.

I second the motion.

Any discussion?

Please vote.

Motion adopted.

We are adjourning to executive here.

I'm drawing around here.

You're very welcome.

Who are you picking on tonight?

Ryan.

Is there a motion to return to regular regular session, Mr.

O'Neil?

I move that we turn to regular session.

Any discussion?

Please vote.

Oh, I missed somebody.

Any guys, I don't know if mine.

Okay.

Motion adopted that language.

It's in the documents.

Yes.

Gotcha.

Sheard.

Thank you.

I move that we authorize the city attorney to develop and submit a proposed settlement of a regulatory matter and to execute any documents which may be necessary.

Mr.

O'Neill.

I second the motion.

Any discussion?

Please vote.

Motion adopted.

We are adjourned.