Welcome to our meeting.

The date is June 9, 2026.

The time is 7 p.m.

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.

Now I ask that you stand and join us in the Pledge of Allegiance.

I pledge allegiance to the Fire of the United States of America.

Councilmember Shearn.

Present.

Councilmember Stelk.

Present.

Councilmember Conley.

Present.

Councilmember Nickerson.

Present.

Councilmember Brown.

Present.

Councilmember Hazie.

Present.

Councilmember Mendoza.

Present.

Council President O'Neill.

Present.

Councilmember Pollock will be absent.

Councilmember Leonfield?

Present.

And Mayor Steele.

Present.

Also present are Jill Grenier, the City Clerk.

Patrick Brown, the City Administrator, Chelsea Steinkey, the Finance Director, Keith Kurtz, the Public Works Director, and Carrie Fisk, the City Attorney.

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?

7E, I guess has been polled.

Any other items, Council members.

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.

Well, one of the great things about serving as mayor of Grand Island is that this council and I get to see the dedication, hard work, and perseverance of our young people pay off on the biggest stages.

Tonight we have the opportunity to do that again as we recognize these outstanding state champions and their coaches.

Reaching the Nebraska State Track and Field Championships is an accomplishment in itself, but bringing home a state title takes an extraordinary level of discipline and determination.

Tonight, we're recognizing student athletes who not only represented their schools with excellence, but also represented our entire community at the highest level.

On behalf of the city of Grand Island, it's my honor to present certificates and city pins to those individual state champions and their coaches.

Mrs.

Grenier, please assist me.

We will start our recognition with Celia McCoy for track and field state championship class A girls one hundred meters.

One hundred meter hurdles.

And the coaches, Kip Ramsey, head coach.

And Michael Lynn, who is the hurdles coach.

Congratulations.

Next we have Amory Krafka for track and field state championship Class B Girls Pole Vault.

Brandon Harrington, head coach.

I'm not brand.

But I'll take his certificate category.

And also Dave McNeil, the pole vault coach, right?

I had a busy job.

Wonderful.

Thank you for being here.

And now we have a relay team, so I understood understand a couple can't be here tonight, but we have Thomas Schneider, Thomas Birch.

Braylon Wolfe and Graham Stava, who I understood could not be here tonight, so young men, I'll give you their certificates also.

Thank you, congratulations.

And are your coaches here?

I'll just have you stay here because they're going to want to get a photograph too.

And the coaches.

Keith Kester.

Fu Man of On.

Kevin Mayfield.

And Andrea Mack.

I'll give you their certificates if you'd kindly deliver them.

Congratulations.

Thank you so much.

Wonderful.

It's so heartwarming, heartwarming to see our young athletes, although they always make me feel short.

But I it's wonderful to have you here tonight.

I appreciate I appreciate you taking time to be here.

It's good for our community to understand what excellent teachers and coaches and young people we have in our community.

So it's delightful that you would be here tonight.

Thank you again.

Our next agenda item is 6B audit presentation of city financials by Tim Lenz of Creative Planning.

Please proceed, sir.

Yeah, good evening, Mayor and Council.

Thank you for having me.

Yeah, I'm Tim Lenz.

Bergen KDV is the firm that actually performed the audit.

We're related to creative planning, but the audit firm is Bergen KDV.

Just wanted to clarify that.

I'll keep my comments pretty brief.

But I'll just kind of walk you through this 110-page large document at a 10,000 foot level so that you kind of can navigate your way around it if you wanted to look into it further and read it word for word if you want.

So main thing, what we prepare for you starts on page one.

That's the independent auditors report.

And so what that report is saying, the first two paragraphs there is our audit opinion.

We're giving an on-modified opinion over these financial statements in accordance with standards.

As you all know, the city is required to have an annual audit due to state statute.

This has been filed a couple months ago prior to the March 31st deadline.

But here to present that today.

That's the city as a whole on the full accrual.

It has all your long-term assets, long-term liabilities on it.

So you picture your your capital assets, your long-term debt, bonds, etc.

And those can be found on pages 18 and through 21 of the report.

Following that is the fund financial statements, and those are presented on a different basis of accounting, where they're your currently readily available resources, what's going to be received within approximately 60 days of year end, what obligations you're going to have within 60 days of year end.

So that just gives you your current financial position picture there.

Following those statements, there's reconciliations to reconcile what those long-term assets and liabilities are to get you back to those government wide financial statements.

On page eight of that management discussion and analysis, and they'll give you a kind of a year over year comparison, which I think is is helpful to kind of see how the city's grown over the year.

So following those basic financial statements gets into the notes to the financial statements.

Gives you a little breakdown of what your capital assets are and other important disclosures there.

Following the notes to the financial statements, you get into some of your required supplementary information.

Those that information that's required by standards.

Shows what your adopted budget was compared to your actual cash outflows, cash inflows.

Happy to report one of our tests.

We look for compliance with your budget and happy to report that the city did comply with your adopted budget for the fiscal year ending 25.

Following that is other required supplementary information to give more details on kind of some combining schedules to get to your non-major funds or your other combining schedules that are consolidated up on your basic financial statements.

And you can see all your federal funds in your schedule of expenditures of federal awards, which starts on page 98.

A brief summary of all of that test is found on page 108.

I'd refer you to page 108.

Again, it just states that we had an unmodified opinion over those financial statements.

But I would say that the city's made strides forward, even though it reads the same.

Lists out those federal programs that were subject to the single audit.

So those three federal programs were subject to our compliance testing and internal control testing.

Happy to report we had no findings on that.

So clean clean report there.

But that is the 10,000 foot level over these 110 pages.

But happy to answer any questions, dive into numbers, talk all night, whatever you want to do.

So thank you, Mr.

Lance.

Are there any questions, Council members?

Mr.

O'Neill.

Just a quick question.

So overall, you feel like there's pretty adequate segregation of duties in the finance department.

Yes.

I know you this last year you had some turnover, um, but you had some compensating controls that we didn't have any thing that was that we had to bring to you guys' attention in our report.

Thank you.

No one else has any questions, Mr.

Lenz.

Thank you for presenting tonight.

Yeah, I appreciate you guys allowing us to help you with the process.

Looking forward to working with you guys in the future and and the new finance director as well.

So thank you.

Thank you.

Mr.

Shear, do you have a motion on the consent agenda?

I sure do.

I move that we approve the consent agenda items 7A through N with the exception of E, which was pulled.

Mr.

O'Neal.

I second that motion.

Any discussion.

Please vote.

Motion adopted.

70 approving loan from state reason revolving fund loan for lead service line replacement.

Good evening, Mr.

Schmitz.

Thank you, Mr.

Mayor.

Put together just a couple slides here to tonight.

What we're asking for is the second round of loan money.

Um in 2023, we requested four and a half million, which council approved us to move forward with.

We received that four and a half million.

And in addition to our own crews working on this project, we went out for bids and awarded pricing unit pricing bids to Myers Construction, who has been assisted us through this process since September of 2024.

Right after the winter when weather turned in 25.

So far we've discovered 895 services, and what that means is they will go down and hydrovac around the curb stop and look at both sides to see if there's lead on either side.

And that's how we deduce if it's lead or not.

Um so the 895 that have been vetted, 532 were found to be lead, and we narrowed this down from the beginning to 3,000 potential services.

So of those 3,000, we're finding about a 59.4% rate of lead of what's been discovered.

Um to date, we've replaced 244 services, 178 by Myers, and 66 by our water department.

This is the area we're working in right now.

Give you an idea.

Um you got Broadwell on the left, Vine on the right, um, fourth street kind of near the bottom, and 17th Street near the top.

And so the ones that say done are the ones the zones that were completed last year, and you can kind of see the dates where they're working now.

One of the corridors we're attacking here is 10th Street.

So Howard School is unaffected for traffic here this fall.

We want to get that corridor done.

And we anticipate by the end.

Here's the other stats.

So by the end of 2026, we anticipate we'll have mowed through the whole four and a half million dollar original loan.

Um, we'll have we estimate we'll have made it through 400 service replacements at that time.

Uh we we anticipate with now that this program's in full force, we can get through 250 services a year.

Um that puts us about 2,033 within the 10-year framework of the project.

Um, there's about 1,750 services if we go at the same replacement rate, roughly.

So we're asking for 21 and a half million.

Now, of that 21 and a half million, if we were to get the whole thing, which is not highly likely.

That's that the state has already stated to us that the likelihood of is maybe a third of the what we will request that we can get at this time.

But we're gonna make the full request to finish the program, so it's there.

Of that 21 and a half million, if we were to get it, only 7.7 million would be repayable.

The rest would be forgivable based on the rules of the program.

So I guess tonight um what we're here for is to go after the remaining funds needed to finish out the program.

Um, knowing that the state we may have to come back and make another request because the state's coffers may not be able to allow for the full draw.

And and I will note that the repayment um plan is at zero percent interest rate over 30 to 40 years.

There's two different buckets, so that's another thing.

So even though we're repaying seven million out of the 21, the interest rate we're paying on is zero over 30 to 40 years.

So that's all I have.

Take any questions.

We may get to that.

But first, uh, Mr.

Brown, do you have a motion?

Move we approve 2026 to 143.

And Mr.

Sheared.

Thank you.

I'll second that.

Mr.

Nickerson discussion.

Yes, thank you, Ryan, for an update.

It's always good to see the progress being made here.

And I it seems like last year Myers was just knocking those out right and left, weren't they?

They're on gonna be on that same pace as 250 seems like it'd be a little less than what they were hitting last year.

But oh, they were getting they were peaking at 15 services a week.

That was the peak, and some of it's weather, some of it's situational on each site.

Um, I can tell you they mobilized, I think a week ago, week and a half ago, but last week alone they knocked out 11.

So they're they're moving along.

And um they've they've been a great partner in the process.

Yeah, and again, I want to to thank Gus.

He's still part of it, I'm assuming.

So he's kind of out ahead of everybody trying to coordinate all this stuff, and believe me, there's a lot going on, and when they get to run and fast, he's got to run a little faster to stay ahead and get all the customers lined up because these guys are good, they're quick, and in many cases they're in and out easily in one day.

And uh it just and that's good for the customer because we're not without water, so for very long at all, which is amazing.

And we try to stay our crews stay ahead and do the hydrovac, so our guys are usually out ahead diagnosing um the curb stops if they're lead on either side, and then Myers will sometimes have three to four services under construction at a time, depending on how many guys they have there that day.

Um, so yeah, it's been a real good partnership, and Gus is our our uh pivot on everything, and it helps that he's bilingual too.

So as we go into different neighborhoods, we're able to relay messaging clearly.

Well, it's one of the programs that's a good program that the government is continuing to support, and through this loan process, it's working well.

So thank you for the update.

And it looks like you are making great headway here.

Mr.

Hossey.

Thank you, Mayor.

So, Ryan, uh, when we first started a couple years ago at four and a half million, this was kind of a smaller, I'll call it a smaller project.

Um, but with 21 and a half million, it really caused me to take a look at what we're doing here.

Uh, and of course, it's related to the ordinance that follows tonight.

You know, 1007 six we're asking for basically a 25% rate increase, and the number one cause is this program.

You know, the lead service program was listed as your number one uh one of the reasons.

Um I look at 21 million five hundred thousand and we have seventeen hundred and fifty uh protected service lines to replace that's 12,000 in change per service line.

Now I talked to somebody and we're talking about four to six thousand is what it would cost on the average of a normal service line, you'd have to go and have them and look at yours specifically to be specific about your cost.

But for as long as we've had the water department, these service lines have been the responsibility of the property owner.

So this is a a program that comes in and does it for free, and and so the property owner doesn't have to do it.

But with the rate increase that we're looking at, it really is all of the rate payers are gonna be paying for this, and that's where I think I I'm really gonna draw the line here, and here's here's why.

So when I look at this, whether it's 12,000 uh of a you know, cost per service or six thousand.

I don't know that it matters.

You know, when my mother-in-law who lived on Cleburn, when her service line went broke and she was only getting paid four hundred dollars a month on Social Security, nobody came to her rescue.

You know, and this has been if you buy a house that's this age, there's there's a lot of things that can go wrong with older houses, including lead pipes.

So we put in lead pipes for a period of time, I think specifically around World War II, might have been the time frame, but I'm sure they used them before and maybe some since uh we haven't used lead in a long time, but that's just part of the cost of of any older property.

So I think we've really kind of tipped a scale for me in that uh I I'd like the free interest and no interest, but the problem is we still got to pay back seven almost eight million dollars.

Right.

Even if even if you do it right.

Well, that's that's like a hundred percent of our gross revenue for a year, you know.

So we're talking about a 25%, three eight three annual eight percent increases over the next three years.

And one of the main reasons is this program.

I I'm not for going out and and picking those because they probably have clay sewer tiles, and we probably got other stuff.

They probably have lead paint in their house.

And these houses that are that age probably have lots of problems.

You know, the house that I graduated with you know from high school is like 115 years old right now, and so I get that some of these old houses need lots of things, lots of TLC, including a new service line.

You know, we've talked to people on place, you know, sewer lines.

How do you go from uh a lift station to uh you know so the cost of uh owning a home anymore is pretty pretty difficult, and and this is one where I'm not so sure that I approve changing our policy when where the owner is responsible for the service line cost to all of a sudden we're gonna start paying everybody's gonna have to start pitching in.

So when I when I looked at the I looked at my water bill, you know, and 20 years ago I was paying 192 bucks a year.

Uh 10 years ago I was paying 265 bucks a year.

Uh last year I'm paying 334 dollars a year.

That counts tax and everything.

So it's not a big expense part for my family or anybody else's, probably you know, for residential in Grand Island.

But it's it's just one more thing.

This isn't the only thing that went up in my household budget.

If we do a 25% you know increase, again, it's another 140 bucks a year.

Well, it's on top of everything else that I hear from everybody else.

And so I think when we've now taken it from a four million dollar loan to to do some fix-up, to now we're gonna add another 21 and a half million dollars.

I I think we probably cross the bridge too far for me.

I I'm not gonna be in favor of it because I think these kind of programs at some point don't need to be shared by everybody just to support a specific few who actually own a house of a particular age.

And I think it's it's just one small thing, but it's the 25% rate increase that bothers me, it's the ordinance that's coming up.

Um because I draw the line from one to the other, you know, because I think there's a cause and an effect.

Well, I think that the discounted rate and all that stuff is there and is good.

But I'm like, I don't want to put a 25% rate increase on our water customers, and there's about 15,000 of them, you know, uh and do it, and I don't know that it'll ever come back.

You know, if if we do a the this rate increase in the water, that'll give us about two million dollars or more a year in revenue.

Um, but I'm like, we're gonna have to pay this back, but that's two million a year for every year for the next 30 or 40 years.

And we've been increasing our rates every decade, our rates are getting more and more and more.

This is an issue where I don't think that we can support, I cannot support having everyone in Grand Island changing, because I had to pay for my own, and if mine breaks tomorrow, I gotta pay for that too.

We we own the service lineups, the curb stop, and most of the I would say 99% of all lead is found between the curb and the court, and we own that now in all single family residentials.

So that changed about four or five years ago.

We took over ownership, so you're right, that's how it used to be, but we we do own it now for the because of the very reason that you mentioned where I didn't I didn't think you know, a little lady or somebody on an old house should foot the bill for a twelve thousand dollar service line, depending on which side of the street your service line was on.

If it went bad, you're removing pavement like that didn't sit well.

So we took over that ownership three, four years ago.

So if it's broke between the property line and the main, that's city owned now, and that's where the lead is.

But there's also lead in the service lines into the individual houses as well.

Yeah, but we don't uh replace that with this program.

We go up to the meter, and so what we'll go in, we'll replace the meter.

You're going from the property line up to the house or where everyone inside the house.

We have to take it in if it has galvanized pipe into the house because they say the lead from the the part by the main can leach in.

Correct.

And and you are right that there is a cost right now that of the rate increase um a few percent probably is lead.

There's some other drivers that are are more notable, I would say, and we're getting ahead, that's the next topic.

But but I mean, we have seen some drastic increase in admin services.

We've seen um a jump, still jump in uranium, chlorine, those sorts types of treatments.

And when we came in our expenditures on a CPI adjusted level right now are equal to where they were in 2015.

So our revenue dollar per mount on a CPI adjusted level is the same exp spending power we had in 2015.

Even though we did the rate increases, um the other costs have continued to go up, and we were in a free fall then.

So the only way to combat that is capital.

So if I'm getting ahead on the next topic, but if if we can't adjust capital's where it has to come out, and that just bites you down the road.

But that's that's where we're at.

And again, I'm getting ahead on the next topic, but those three rate increases being asked for would with about a 95% certainty still place us at the lower lowest water rates in the state after three years.

And I'll I'll talk to the ordinance when we get to there too.

But uh cost number two A was administrative costs, went up 44%.

Uh you know, and and we'll we'll talk about it then, but I'm gonna vote no on this, and I'm probably gonna vote no on the rate increase as well.

And I'll I'll talk more when we get to that ordinance.

Mr.

Nickerson.

Well, Ryan, you need to help remind us that uh I thought this was a federal program with funding from the federal government.

It is a federal program, and I don't think we can quit it.

I think you have 10 years from the beginning till it ends.

Lincoln's doing it, Omaha is doing it, Hastings is doing it, Corney's doing it, everybody who has lead is doing it.

And if we don't take the federal money, there's a high risk we're gonna be funding it ourselves 100%.

And what is our percent now with assistance?

40 percent.

We're funding 40 percent governments, national government is doing a federal government's doing about 60 percent.

So the federal government puts the funds in the SRF um program for the state, and the state wheels those funds to the municipalities.

Yes.

Well, let's talk about lead for a second here.

So I used our good friend Google just to talk about lead pipes and all that good stuff, and one of the reasons we don't want lead is because it's a potent neurotoxin that accumulates in the body and causes irreversible damage over time, a little bit at a time, and I know we have tests that can tell us the levels may not be very high, but there are places that might have it, and we have an opportunity to clean up these pipes with clean water for people for health reasons.

It causes birth defects, it has an adverse effect on people, and this is an opportunity for us to help have a shared cost to take care of it, and this is a health thing as well, and that's that's the important part of this.

I own probably several old houses, and I think I've had one so far that's been identified as a lead pipe problem.

But I was grateful for an opportunity for that pipe to be cleaned up.

We got good pipe in there.

I know the people are getting good clean water, and yeah, we bought the these houses were built a hundred years ago, but we have a way to improve that, and this is a way to share that cost.

And when we get into the next thing about our rate increases, I think when you look at the actual amount of dollars, we know that's relatively insignificant in a big picture.

So I I hope that we continue to support this and understand that this is also a health issue that we're having help with, and I want to focus on that.

Like you mentioned, uh, the lead kind of went out around 1960.

So the houses that are most affected are a lot of times the more um impoverished or older houses.

Um, and then on top of it, one of the side uh benefits of this process that nobody talks about is we also check the grounding.

So a lot of old houses were grounded to the pipes in the house, and so as we go through this, we check the grinding.

There's a lot of houses we find that aren't grounded sufficiently, and we're updating those as we go.

Um, so hopefully potentially uh avoiding potential fires in the future in certain cases that we'll never know about Mr.

O'Neill.

I'm glad you touched on the the health aspects of it too, Mitch.

And I I grew up in Grand Island out on the west end of town, and um it was a house at the time that was on a private well, and we had contaminated groundwater when I grew up, and uh you know I was exposed to high risk of that as a child, and I actually took several tests as a teenager young adult uh to make sure I was okay, and I was uh told I didn't have a higher exposure of kidney issues due to some of that.

I think if the city has lead pipe in there, um we have an obligation to replace that if it's on the portions that we own as well, and I think it's very important that we're uh providing clean and safe water to our residents as well.

Thank you.

Motion adopted public hearings eight, a public hearing on acquisition of permanent easements for state street Deers Avenue improvements.

Good evening, Mr.

Kurtz.

Good evening.

Um, this item is uh representing a acquisition of a permanent sidewalk and utility easement needed for the state street project that uh we are currently working on 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.

Move we approve 2026 TAC 153.

Mr.

Lanfear.

I second.

Any discussion?

Mr.

Nickerson.

Yeah, Keith.

I was at my good friend uh Goodyear the other day having more car work done and saw that old roads all torn up up there and all this, and getting a little, you know, I wasn't getting much feedback, negative feedback from because uh one of the guys that basically runs a place was saying uh you know what I think we can live like this for a month, and the end result's gonna be very good.

So my question to you is how are things going so far on that project?

I know it's just begun, but how are things in your opinion?

It's uh like you said, it's just getting started.

Um the businesses that we've talked to are in support.

Uh they all see a need for it.

Uh there's some concerns about how people are gonna navigate once it's done and all of those kind of things.

Um, but for the most part, once we explain it, I think they realize that people are going to adjust and understand how things work.

Um so overall things are good.

That first phase uh will be done hopefully around July.

The next phase on the other side of the of the highway won't start till after July 4th.

Um so that'll be done in the next portion of the project.

So I think that's probably when the real disruption will hit people on the other side of the highway on the east side are finding their way around, so to speak.

So um again, only being a week, it's going pretty good.

So phase two is where the real work gets done.

I mean, as far as all the barriers and the redirection and all that, correct?

And that's roughly a two-month estimate because that when it's all said and done, you were hoping it would be done by the end of August.

Uh I think it'll be a little longer than that.

Uh, if we we held back based on some business feedback until after July 4th holiday.

So I hope it's getting close to done around school start.

Um dependent upon weather and all the things.

Uh one of the big hurdles that we're working on now or facing is the lead time on signal poles.

We need a couple new signal pools for this project on 281 and at Lawrence Lane.

And that is probably gonna be a constraining factor as well.

But we're working on methods to use the existing equipment until the new stuff is here.

So again, we'll try to mitigate that as much as possible, but that is a uh constraint in the timeline.

Okay, and the area that's actually on dug up now, there's gonna be pipe replacement in there as well.

Uh, there's a couple uh storm sewer improvements on the east side of the highway.

There's some culverts that run parallel to the highway on either side that are going to be replaced that are metal pipes today that are rusted out.

Um, but for the most part, there's really not a lot of utility work on this project.

Um there's some, but in comparison to the bigger projects that we've been working on, either out there on South Locust or whatever, the the utility work underground is is pretty minimal on these projects.

Very, very good.

Well, thank you, sir.

Please vote.

Motion adopted 8B.

Public hearing on acquisition of permanent utility easements for 13th Street Sanitary Sewer Main Extension.

Engleman Englman Road to 60th Road.

Mr.

Kurtz.

Yes, uh, this item is for the acquisition of uh utility easement needed to build uh sanitary sewer out too near 60th road.

We're not quite getting there.

Um we're close.

Uh this is to serve the the previous Corn Husker Army ammunition plant out west of town.

Um this project was funded uh in part by LB 600 funds through the state.

This project was funded in part by LBE 600 funds through the state.

They're covering 75% of the cost of the project.

Is being covered by Hornaday.

So these easements are needed to place the actual utility in as well as temporary easement needed to construct the line.

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 2026-154.

Mr.

Lanfair.

I second.

Discussion.

Please vote.

Motion adopted.

Ordinance 9A, consideration of approving rezoning lot two of Sterling Estates 9th subdivision from RD residential development zone to an amended RD residential development zone to reconfigure the buildings and units permitted on the lot.

Is there a motion to suspend the statutory rules?

Mr.

Lanfear.

I move we suspend stage taxory for stage statutory growth.

And Mr.

O'Neill.

I second the motion.

Any discussion?

Please vote.

Motion adopted.

Please proceed, Mr.

Navity.

Thank you, Mr.

Mayor.

The item before you this evening was heard at a public hearing at the meeting two weeks ago, and the ordinance was read on first reading.

What you are considering this evening is Sterling Estates, that middle lot where they don't have anything right now.

Ten years ago, their plan was to build six buildings there with a total of 90 units.

They are now requesting to be able to build four buildings with a total of 120 units in that area.

Two weeks ago.

Deborah Klein was here representing the owners of the apartments at the meeting two weeks ago.

They do have a representative from one of our local law firms here.

If you have any specific questions, I will try to answer those.

Ben is back there and has said he would try to answer them, and he can get a hold of Zach Butts, their attorney who has been working with them on this if we need to.

Thank you.

Mr.

Conley.

Please vote.

Motion adopted.

Consideration of approving water costs of service-based rates.

First, is there a motion to uh suspend the statutory rules?

Mr.

Lanfear.

I move to suspend state statutory rules.

And Mr.

Brown.

I second that motion.

Any discussion.

Please vote.

Motion adopted.

Presenter on this.

Okay.

I didn't know I thought Ryan's going to introduce.

I'm sorry.

If you want me to, I can go over those other slides.

I guess.

Let me open the other one too.

I'll just go over these quick, John.

So I put these in the packet, but I can zip over them real quick.

How does Grand Island compare presently?

And I apologize that it's small up on the big screen.

Um currently we have the lowest water rates in the state.

And honestly, it's not even close.

We're 8% below the number two entity.

It's good to be low.

If you get too low, it typically means you're not putting enough money into infrastructure.

That's what that's what it means.

Because everybody's dealing with a different variables, but at the end, there's a lot of commonalities.

So the cost of water in 2015 CPI adjusted is roughly equal to what it was today.

And that has gradually sloped off until the recent rate increases in 24 and 25.

This is our outlook right now without a rate increase.

So when we came to rate increases, we were in free fall on cash.

And basically, the rate increases we put in help pay for the unknowns that hit us after that study was done.

We've added several positions to the admin suite that were not there at the time when we did the last analysis.

And then the lead service program honestly took some cash to get our inventory up.

We have to carry a higher inventory because of lead times and to keep the cruise running.

And also we lag about $800,000 with the state on payment.

So you're doing work and you're getting paid behind, right?

So in essence, you've got a deficit of about $8,000, $900,000 that you're going to carry till the end of the program.

So what is the rate increase in roughly?

So this would be the average customer.

27, it's a dollar ninety-four per month, roughly.

And then if you do another 8% in 28, it's another $1.97.

Another 8% in 29 would be 211 for a total of about $6 per month.

This is small, but this puts it in context.

So percents are very dangerous.

When you're the lowest on the totem pole, a percent is relatively large compared to someone doing an equivalent right at the other end of the spectrum.

For instance, an 8% increase in Grand Island would be equivalent in cash to the customer, as if Hastings did a 2.9 or Omaha did a 2.7% increase.

So that's why you got to be careful with percentages.

And the lower you get, the higher you have to raise to get the same cash draw as the others.

So there's a couple cities out there that have already announced their rate increases going forward.

So I wanted to incorporate that.

So in 26 versus 27, all the blue lines are all the entities who usually do an annual increase, but they just haven't announced it yet, so they're frozen in time.

The green bars are the ones who've already announced the rate increase, and then I put Grand Island what an 8% would look like for us.

So if we raise 8% next year, everybody else static except for the other two entities who've already announced the rate increases, we're still the lowest.

With everybody else, except for the other two entities, we would be the second lowest by four dollars.

And guess who's number one right there?

Lexington.

And we all know what's going on in Lexington.

I think John can speak to that.

Lexington's rates are not going to stay static for two years.

So there's a high likelihood we're still the lowest at that point.

And when you go to year three with another eight percent, we're still second on the list only to Lexington.

So with a Tyson plant closing, I can tell you that that's there's a high likelihood we come out still the lowest.

And that's all these people that are blue, all these blue lines to the right, have been doing rate increases almost annually, so you can just about tell where that's headed because they're all in the same boat we are.

But when you take that to MUD when they do a three percent increase, that's actually a bigger hit to their customer than an 8% is to ours.

So I hate I hate rate increases.

I've said that before.

Like I sympathize with the customer base, but I don't know what to tell you when we are the lowest and we raised 25-4%, and we're still the lowest, high likelihood.

The only where place that goes if we don't have the money, is it comes out of critical infrastructure replacement projects?

That's the only place I can take it out of.

So that's what I'll leave you with, and John, I'll let John do his presentation before we ask questions here.

But I wanted to give you some data up front.

I'll give you yours here, John.

There you go.

Uh mayor, members of the council.

My name is John Kraske.

Uh I was just here a couple weeks ago, second time's a charm, hopefully, on this one.

Um, although the weather outside is looking a little frightful.

So I do appreciate the opportunity to be here to talk about this.

Uh I was talking to Ryan as as you're getting ready for the meeting and saw all the track and field athletes and the applause and everything.

Nobody ever does that for me.

And I and I totally understand why.

I don't like rate increases either.

I I want to make that absolutely clear.

But I have an obligation as your consultant to go through the numbers.

I'm relying on your numbers and your criteria with regard to cash reserves, and telling you what the answer is in my professional opinion.

So just quick overview.

That's the presentation.

It's the same one I gave on wastewater a couple weeks ago.

I looked at the rates in 23, 24.

At that time, yes, there were some rate increases implemented.

Even with those right rate increases, as Ryan said, your rates are still the lowest in the state.

And there are some pretty significant increases in there as well.

So I looked at water and wastewater at that point as well.

Uh again, I went through the wastewater a couple weeks ago, so I'm not going to talk about that, but I do appreciate the opportunity to do both of them at the same time because so much of the data is common to both of them.

Since the last study I did, yes, we had copper, uh lead copper replacement in that study as well.

I think you have some new estimates as Ryan has talked about as on that.

And I and I'm not speaking to the prudence of the program.

I'm just looking at the numbers that your engineers and your staff and your outside consultants that specialize in that type of work have said you need to spend.

So I'm not opining on that.

I'm looking at, okay, if if these projections come through and you get this much federal funding, this is what you have left to pay out of your own rates.

So we had looked at updating those studies next year, but again, with some of the wastewater work that's going on, and uh again, those are long-term rate changes that are being implemented to fund growth on your system, and you know, that's growth that all customers are paying for, whether they're causing the growth or not.

Um again, I think a lot of this capital is maybe dedicated to some older areas of the city, but there is some that's going to critical infrastructure in the newer parts of the city as well.

So we look at a multi-year forecast, look at what your criteria are for cash reserves for the utility, and if you don't do anything, if you leave rates where they are, you spend the money that you're budgeted to spend, you spend the capital that you're budgeted to spend, you're gonna have a deficit of about 1.2 million dollars, escalating to about 2.4 million by fiscal year 2030.

Uh capital is the largest driver.

Uh, there are general OM cost escalation factors in there as well.

Uh you know, those are more typical of inflation.

Dry, it's driven by the capital.

And again, I'm not appining as to the need for that capital or who should pay for it, whether it's old customers versus new customers, because you can argue both ways.

You could argue that the water tower should have been paid for by new customers because the old customers didn't need it.

Um, you know, you could argue the opposite on the lead copper replacement.

So nonetheless, regardless of who pays for it, your water system will be out of compliance with your minimum cash reserves unless you raise rates.

Any I'm just gonna pause there.

Are there any questions on that?

They may after they have a motion.

Understood.

Okay, I proposed rate plan.

Yes, 8% a year for the next four years is what my recommendations are.

Um, as the capital project budget becomes clearer out in 2029, 2030.

You know, you can look at whether that last one is needed, but it is my recommendation based on the near-term forecasts to do the first three rate increases of 8% per year.

When I look at which cause which rate classes are causing the to incur those costs, and I look at fairly broad rate classes.

I don't look at areas of town, I look more of small users, large users.

Uh it looks like pretty much all of your customers need uh a similar rate change.

You know, there's capital uh with regard to water supply, there's capital with regard to transportation or transmission of the water, and then of course the leg copper replacement.

So looking at it broadly, um, it looks like all customers should see a fairly similar rate increase.

And that's fairly consistent with the last study as well.

So the recommendation on this is to increase the service fee.

Um, current service fees $7.30 per month.

It would go up by 37 cents in fiscal year 27.

That'd be October 1st of this year.

Um, you go up again in 28 and 29.

And you have service fees that vary based on the meter size.

So someone like JBS, obviously, their meter fee is way larger than what a uh a residential customer is.

They're going to see a similar percentage increase in their service fee.

So if it was a thousand dollars, it's going to go up to 1,080 as an example.

So with regard to the volume charge, right now you have I think five rate blocks.

And one of the goals last time was to you have this very interesting rate structure on water.

When I started here three years ago, you had like seven blocks, and like your first block was pretty low, and then the next couple blocks went higher, and then they started to go back down.

And I understood the theory.

That a customer who decides they want to water the lawn and keep it green, great.

Somebody who doesn't or has you know has rock lawn or has a lousy lawn like mine, you know, they I you're you're charging the people who are causing the cost, and a lot of your costs are driven by that peak summer day usage and that discretionary usage in the summer.

And then the rate again goes back down.

So at 40 CCF, you'll see that rate drop so that a customer like JBS is actually gonna see if they'll still see a rate increase, but there's going to be some ups and downs within the smaller blocks.

Simpler to administer though, and I think it still accomplishes the same goal.

And then there's one other item uh that's in your rate schedule, which is the unfunded federal mandate fee that covers the cost of your backflow prevention program.

There's a single budget account for that line item.

Uh, that will be increasing from 89 cents to $1.04, and again, that's based on the budget for that specific line item.

So the benchmark residential customer based on 12 CCF usage would see a dollar ninety cent increase.

That takes into account the customer charge increase, the federal mandate increase, and the change in the usage fee.

So again, it's based on 12 CCF with a one-inch or smaller meter, which is what your residential customer typically uses.

And as Ryan indicated earlier, I have a smaller uh group that I look at, he looks a larger group, but I make sure that these rates are updated May 15th.

Um you're still the lowest, and this is what the first step of the rate increase implemented.

Uh Ryan indicated there are others that are looking at rate increases.

I have a presentation on Thursday to a nearby community that's uh located on highway 281 and has a population of more than 10,000 people.

Um they're implementing 1.5% increases most likely over the next three years.

That's my recommendation to them.

Fremont working on a report for them, their increases are probably more in the 5 to 10% per year for the next two years.

Um I don't do any work for the others, but again, I I can point to the issues in Fremont, the issues in Hastings.

Uh they're dealing with flood copper replacement as well.

They're dealing with federal mandates on other parts of their system.

Hastings has a long history of water supply concerns with uh nitrates in their system.

I I say with water rates, um, I've I've done them from the east end of the state to Colorado.

The biggest driver is geography.

You can't control what's underneath your city.

Uh you can't control where your water is.

Uh, like a fall city, for example, there are all their waters under the influence of the Missouri River, so they have to treat every single gallon of water they sell.

You're not your treatment expense is far lower than theirs, but it's solely geography.

Hastings has that nitrate uh program where they basically filter out nitrates and inject the water back in.

That's expensive.

And your geography is such that you don't have to do that, and it's a very fortunate thing.

And again, look at all the other rates.

Again, I think you you've done a great job with your system.

I think you've also done a great job of identifying what your future capital needs are.

I mean, I got I go into some cities and say, okay, what's your capital project plan for the next five years?

I don't know.

Well, I should look and see what we spent for the last five years.

You've been very proactive about identifying what your needs are and making sure that you have the funding through the rates to take care of those needs.

My recommendation again, 8.8% increase annually over the next three years.

Implement the block simplification, and then implement the increase in the federal mandates monthly charge.

By 2030, I think you may need another 5%.

It's hard to say I had 8% earlier.

Um I think the number should have been 5%.

I apologize for that.

But again, I I didn't include that in this rate ordinance simply because it's so far in the future.

There's so many uncertainties that I don't think it's appropriate to do that.

So with that, I appreciate the information.

And I can also attest, I live about 10 miles south of Lexington.

Um, and yes, there will be impacts for that entire community from what's going on there.

So again, I appreciate the opportunity to be here.

Um, and I'm happy to answer any questions once the motion is uh on the floor.

Thank you.

Mr.

Sheard.

Uh I wanted to give a round of applause, but I'll hold off.

Um I move that we pass uh ordinance nine B.

And Mr.

Conley.

I'll second that motion.

Discussion, Mr.

Hossey.

Thank you, Mayor.

Uh John, I think your numbers are right on.

I mean, you and I have worked together for a long time, and I appreciate what you do.

I think my my question are about the numbers we give you, not the way that you look at those numbers.

So when I looked at page 352 of our packet, this is our cash projections without a rate increase.

Ryan, my question's probably on your end.

Um, you know, about five years ago, our uh the red line, their admin and operating expense was about five million, and then in 2025, it looks like it's eight to maybe even nine million.

That's like a 60% increase in the administrative uh costs, you know, in just in the last five years.

You know, that's what the unsustainable part of this is we can't have these expenses.

So I go to your uh agenda memo.

You know, the first thing was the lead service program.

There's the second thing was uh under cost was administrative costs.

So it says administrative costs are up 44%, largely due to the water fund sharing, uh, the expansion of full-time employee positions in legal HR and city admin.

So I'm like and I, whenever we hire another lawyer, whenever we help HR, all of this stuff comes back and translates into a rate increase.

When you add people, this isn't free.

Somebody's got to pay it.

And so when I look at these things, and then I go down to the other costs is you have dedicated two water department employees to work on this lead service program.

So we have costs beyond the 8 million in that new loan we just approved in the resolution.

We we've got costs, just two people are working on this every day.

And so this lead service program is significantly affecting our operating or admin and operating costs.

And so when I see a 60% increase in the last five years, that's what's driving it.

You know, and then when I look down on the usage, you know, uh Ryan does a great job of looking at these statistics.

Our usage is down six percent between 20 FY23 and FY25.

And currently this year we're down two and a half.

So what happens for John's numbers is that because we're we're not I see people not watering their yards.

I got neighbors that don't water their yards because they have financial issues.

Um they're not watering.

So I'm like, I'm grateful when it rains because then the neighborhood looks a little bit better.

So now we have to increase our rates by everybody else who is still watering our yard to cover the cost of people who are not watering their yard.

So it it it's a very hard thing to for me, and I I'm not gonna approve it.

I I understand it completely, I know where we're going.

The problem I have is I have to point out these things so that when we make other decisions, that these things translate into rate increases for the water.

And I'm sure the same is gonna be true of other entities inside the city.

We could be electric, could be could be sewer, you know, it could be anything.

You know, but every time we make these decisions, they're not done in a bubble, and we see them bubble up here in the case of the water needs, you know, another 25% increase.

You know, and and and again, it it's maybe it's a large number, but I'm like, it still comes down in my house.

Uh I'll just say in my house, it's 140 bucks a year.

But you know, I just got a postcard last couple weeks, you know, here my assessed value went up again.

Um I already went up 150,000 in the last three years, you know, and it's that assessed value translates to three times my increase in Social Security.

These are real challenges for people in fixed incomes, and 140 bucks.

I have to point out the obvious.

There's things that we make decisions on that literally come down and affect all these other things.

I'm gonna vote no on it, but we need to figure out how to curb our admin expenses, and not everything needs to be passed through.

Yeah, and again, I totally sympathize with with the the customer, right?

That's why we passed the ownership of the service line.

Those those are are real things.

The two FTEs do cater partly to lead.

They were also partly needed, I'll be honest.

So I don't know how to compare myself other than to my peers as far as how we're doing with the financial resources you are giving us.

And to operate one-seventh of our income gone to uranium treatment facility and still be the lowest by eight percent.

I I feel like we're being good stewards of the of the city's money.

Now with the administrative cost, what needs to be realized is water is about I I don't have seven and a half million, eight million dollar budget, and what's the city's overall budget?

350, 340, maybe I'm wrong.

Water pays ten percent of legal cost, ten percent of admin costs, seven percent of HR costs.

That's that's the share.

It's not ten percent of three hundred and fifty.

So it hits water heavily when those positions.

I'm not saying we don't need those positions, I'm just saying when we did the last rate study, there were several things that have been added, probably for good reason, but they weren't included in that.

We we didn't have foresight at that time, so some of those rates were eaten up.

Some of it is due, like Chuck said, our usage is down.

So your rates go up, but your usage goes down, and you you don't get the benefit that you you were shooting for.

So that that's a fact as well.

All I know is absent the revenue stream we need, your expenditures and capital are the only place that that goes.

And that and if we remember back 15 years to the wastewater system, that's not a good avenue either to just start sucking it out of main OM.

So I guess that's that's all I have.

Mr.

Nickerson.

I think you've done a very good job of presenting the case for an increase.

I don't have any concerns about that overall because we know costs are going up everywhere.

And what really boils down in most people's minds is how is how's it going to affect me personally?

And and you've summarized that as well.

That basically it looks like it's gonna be a two dollar additional cost per month.

And then it'll be next year would be an additional two cost two dollars per month.

In the big picture, that's relatively small as far as I'm concerned.

I know two bucks is still two bucks, but we also need to be careful with what you were saying about the uh percentage thing, you know, it's going up eight percent.

I use the example a year or two ago when I had a fit when cat food went from fifty cents a can to fifty-five cents.

They increased my cat food usage by ten percent, but it was a nickel, it was a nickel a can.

We are looking at eight percent increase, but it's two dollars a month.

And with that two dollars a month that we all share, we now have the ability to help fund the things that we need in the future.

Now, costs of everything have gone up.

So, do you do you have any information off the top of your head?

Just some of the increases in equipment or materials that you've had to deal with lately because that's part of all of this as well, because that's part of that planning process.

Anything come to mind?

Uh, a lot of this, like I said, a lot of the stuff was in the last, I mean, through 2021 through COVID, that year or two after COVID, we saw inflation, you know, skyrocket.

And so we raised our rate seven percent those two years, but we had a bunch of incurred costs that weren't foreseeable at that time that kind of ate that up.

So we're still trailing in that regard.

Now, with these eight percent, I hope we come up the backside and we go zero.

And I'll give you a foreshadow right now for electric.

I'm gonna come to the budget, I'm gonna ask for zero.

So we're the lowest electric retail electric rates for residential in the state.

I'm gonna ask for zero this year, where you're gonna see most electric utilities in the state raise rates again.

I would say 90% are gonna raise rates this year.

We're gonna ask for zero.

So that's that's the other side of the coin.

And because of how we operate, you almost have to look at water and electric together because that's we have overlap.

We have resources that overlap and and collectively, you know.

I think we're sitting pretty good.

Okay.

Well, I think the other thing, John, I appreciate your comments about your dealing with the a city that is proactively planning their future.

And I I think that speaks volumes as well, because you've got to have a plan, and those plans convert into dollars.

Those dollars then have to we have to work backwards to figure out what do we need.

It's the same way we do our budget.

We're looking ahead and what what effect do we have today by making adjustments that will help fund us in three, four or five years from now.

And I think those are very important.

For me, water is an insignificant amount of money a month because we have a two-person household, and I think my bill last month was 25 bucks.

And in that 25 bucks was the meter fee and all the other things that go into it.

My actual water usage was fee for the water itself, it was maybe $15, $10.

So for me, it's not a big deal, but I everybody's household isn't like mine.

So they're probably get more than $25 a month.

But overall, in the big picture, we are in a very favorable position, and we do to make we do need to make those adjustments in order to fund the things that we need in the future.

And so I think you've done a great job presenting the need tonight, and I will support it.

Please vote.

Motion adopted 9 C consideration of approving salary ordinance.

Is there a motion to suspend the statutory rules?

Mr.

O'Neill.

I move to suspend the statutory rules.

And Mr.

Lanfear.

I second any discussion.

Please vote.

Motion adopted.

Please present about this, Mr.

Schmidt.

Thank you, Mayor.

Council.

Uh simple one tonight.

Just uh a few meetings ago you uh approved the creation of the water distribution crew chief.

Uh this ordinance just moves them from the non-un group non-union group to the IBEW utilities group, which will align with the other crew chiefs in that contract, like the electric distribution crew chief and the electric underground crew chief.

Thank you.

Thank you, Mr.

Sheard.

Thank you.

I move we approve uh ordinance 9C.

Mr.

Conley.

I'll second that motion.

Discussion.

Please vote.

Motion adopted a consideration of approving rezoning 40 acres west of Highway 281 and south of Gunther Road from transitional agriculture to commercial commercial development zone.

Uh is there a motion to suspend the statutory rules.

Mr.

O'Neill.

I move to suspend the statutory rules.

And Mr.

Sheard.

Oh, second.

Any discussion.

Please vote.

Motion adopted.

Please proceed, Mr.

Navity.

Thank you, Mr.

Mayor.

Um, the item before you this evening, there was a public hearing before council two weeks ago, and the ordinance was read on first reading.

Uh you council did actually approve the resolution as well.

I asked that it be brought back because the resolution was contingent on the rezoning being approved, and it wasn't approved at the last meeting.

So to make sure we do these in the right order, we've put it back on so that you're reapproving that again this evening.

Um, or have the opportunity to reapprove it.

The um planning commission did recommend approval of this.

We did have representatives here, and I think some pretty substantial discussion during the public hearing two weeks ago.

We do have representatives that are here and looked at this and said, Why are we at the end of the agenda?

I said we had to do that in order to put these two items together and get them in the right order.

So I'd be happy to take any questions that you may have, and they do have representatives here if you have any questions.

Thank you, Mr.

Navity.

Mr.

Hawsey.

Thank you, Mayor.

I would move to approve ordinance number one zero zero seven four.

And Mr.

O'Neill.

I second the motion.

Any discussion?

Please vote.

Motion adopted.

Um so now we need to do another motion for the resolution.

And Mr.

Hawsey.

Uh thank you, Mayor.

I move to approve resolution 2026 139.

And Mr.

Sheard.

I second.

Any discussion?

Please vote.

Motion adopted.

Thank you for your patience, gentlemen.

We have completed our agenda.

We are adjourned.