I'm sorry you didn't miss yesterday.

What a great day.

If you weren't feeling well, it would not have been good.

It was kind of cold.

Glad you're feeling better.

I'm glad that thank you.

I appreciate it.

Is everybody here?

Is Cece here?

I don't see Cece yet.

Or is Crystal here?

Yes, I saw her on there.

Oh good.

Didn't mean to answer for you, Crystal.

Good morning, guys.

I'm here.

Good morning.

Piping down my first cup of the day, so there you go.

Once I get that in, I'm good.

Mayor, would you like us to get started?

You know, uh, I was gonna wait just a few minutes, but it is 9 01, and I know several people have to get on to other appointments.

I'm sure Cece will be here as quick as she can.

So sure, go ahead.

Uh uh, are you running this?

Mr.

Davis.

I'm gonna kick it off.

Um as I think Tammy mentioned Carlos is uh solo hosting today, so he asked me to introduce this slowly as he runs from one computer to it to another.

So I'll um hopefully I'll give him enough time to do that.

But we very much appreciate your time, this unique time uh on the in the morning, and we will try to be uh brief and succinct, but we did want to give you a little bit more background on equipment services specifically and on the project that we're being asked, uh you're being asked to vote on tonight for some um further debt financing.

On the call today is uh Marlene Druga, uh finance director, Chris Payne, deputy finance director, Kenny McDowell, our engineering director has is um subbing for our project manager, Sean Attillery, who is down with a flu this morning.

And so uh we appreciate Kenny stepping in.

Uh, we've got about a nine-slide presentation for you.

I think it's roughly half is Chris and half is Marlene.

So uh with that, uh looks like we're up on the screen, so I'll turn it over to uh Chris Payne.

Good morning, City Council and Managers.

Uh just wanted to uh introduce myself to get started.

I'm Chris Payne, Deputy Finance Director for Administrative Services.

Hey Chris, excuse me, but cut your cut your volume up a little bit if you can.

We can't hear you real well.

Or I can anyway, I should say.

Is that better?

If I talk louder, does that help?

Give it all you got.

Okay, we'll try to get.

Good morning, council and city managers.

Uh I'm Chris Payne, Deputy Finance Director for Administrative Services.

Administrative services consist of two divisions, procurement services, administrative services, uh, and equipment services, also known as the city garage or fleet services.

Each one services owns the on-road and off-road fleet assets used by various departments to serve our community.

Departments are charged the lease rate based on the vehicles class.

Classes are typically associated with usage.

For example, administrative cars, police pursuit raid vehicles, refuge collection, dump trucks, tractors, etc.

The lease covers the maintenance, repair, and future replacement cost of the vehicles.

Next slide, please.

Wanted to give you a little bit of history about the current facility.

In 2015, a comprehensive fleet study was conducted.

I'd like to highlight the fact facility related recommendations from the study.

All of these recommendations will be resolved with the new facility.

Number one, four additional technician positions are required to adequately service the fleet.

Chris, excuse me, yeah.

I'm sorry.

You need to let Carlos know when he needs to uh move ahead with the slides.

Thank you.

Slide three, please.

Okay.

So again, in 2015, a comprehensive fleet study was conducted, and I just wanted to highlight the five responses from the study that impact the new facility.

Four additional technician positions are required to adequately service the fleet.

The current service bays are at 100% utilization.

We have only added two technicians since the study in 2015.

The second recommendation was additional bays will be required to accommodate an average of 25 new additions to the fleet annually.

Additional space for parks inventory is necessary to service the fleet.

Additional parking space for vehicles requiring service is necessary.

And finally, adequate office space for the administration administrative staff is necessary.

The 404 Patent Avenue property, which is directly across the street from the current service center facility, was identified as an ideal location due to the solid waste operations.

That includes both staff and equipment at the current Patent Avenue facility.

The majority of refuge trucks are serviced and repaired by second shift technicians to be made available for the next morning's routes.

For perspective, it is not unusual to have 10 or more trucks out for service on an afternoon.

Next slide, please.

In addition to being at full capacity, the administrative offices and light duty service phase are undersized.

The additional bays will provide for future growth.

The current facility has 35 surface bays.

New facility will have 44.

The new centralized parts location will allow us to stop frequently used parts, reduce cost by purchasing larger quantities, and improve efficiency by minimizing downtime.

The expanded space will also allow staff to unload and move heavy parts via forklift.

The new facility will feature modernized equipment, including an essential fluids and lubrication delivery system to each service bay.

The automated system will provide accuracy, eliminate waste, and improve safety.

Expanded and defined areas for parking equipment will with various service statuses will remain minimize confusion and potential for accidents.

Some of those multiple services include out-of-service, ready for pickup, waiting for service or repair, and vehicle inventory waiting for service.

Next slide, please.

So Chris, I think we are a couple slides behind.

I think you're a little bit ahead of it.

Should be on slide five.

I think we're right now.

Thank you.

Thank you.

Should be on the slide to start with a loading dock, which is slide should be slide five.

We are Chris.

Okay.

The current facility does not have a loading dot for unloading heavy parts and large drugs.

The new centralized parts location will allow us to stop frequently used parts, reduce costs by purchasing larger quantities, and improve efficiency by minimize downtime.

The new facility will provide adequate space to store, stage, and sell surplus equipment.

Surplus equipment auctions provide an important revenue source for our city's fleet.

The revenue is a component of the lease rate calculation.

At this point, I'll turn it over to Marlene on next slide, please.

Yes, good morning.

The project has been ongoing since 2022 when we had that pre-design, and that allowed us to go forth with a bid for the construction manager at risk project.

Then in August of 24, we issued 30 million dollars in bonds for the project, and the site work began.

However, after a few borings and testing initial grading, um the construction activities halted since um November of 2024.

During the intervening time between then and now, we've done a phase one, phase two environmental site assessment have been conducted.

Was notified, and a soil management plan has been completed.

Also, a change order has been entered in the contract for additional site work and completion of the assessment activities.

Next slide, please.

Yes, this is um the contracts that are in place to date.

We have about 2.4 million for the design work and about 25 million for the construction, and then there's also a little bit additional that was financed for some equipment that'll be on the bays and just equipment at the facility.

So however, this is not enough to cover the remediation costs that are being contemplated now, which are at about $8 million.

Next slide, please.

So this slide provides some comments and consideration for our bonds.

As we mentioned, we issued $30 million in August of 2024 to build the new garage facility, and the garage itself or the new facility will serve as the collateral for that debt.

So there are two items of note for our bonds.

Um in our documents for the bondholders, we said that we would use proceeds to construct a garage.

That is, we're obligated to build a garage, or we would be in default of our bond covenants if we didn't do that.

So we can't use the proceeds for any other projects just because of our documents and our covenants with our bondholders.

Um the second thing is maybe more relevant is relates to the IRS treatment.

So we issued these bonds as tax exempt bonds and on a tax exem basis, and we're only paying the principal and interest.

And what that means is that the bondholders who purchase the bonds don't have to pay income tax on their interest that we pay to them when they file their federal tax returns.

So considering the IRS, if we prolong the time that we're um constructing and taking to get the facility in place, they're allowing those tax exemptions to come and continue.

And if it goes too long without actually having a facility in place, the the IRS may not be favorable to us.

And so a typical window is about three years to issue the proceeds and then to get the project completed and finished in that intervening time.

Um the interest is being paid to the bondholders and such.

So we're already about one and a half years in on the project.

So if we had any type of a covenant default where we say we didn't use the proceeds for the garage, or we took too long to complete it, it could have implications for our credit ratings.

Um, and as just a final consideration, the proposed financing timing also tries to keep the project costs contained so that we can get the construction underway and then completing the remediation to move forward, allow the construction to begin.

Slide um nine, please.

The next slide.

So this is the project timeline.

If we begin the remediation in spring of 2026 or close to now, it's estimated to take until late summer to complete the remediation, and then construction could begin in the fall with an estimated completion of the facility in early calendar year 2028.

So those are our our final prepared slides.

Um open the floor for questions or any other um comments.

Go ahead, Denise.

I just I did have a question.

I um the remediation was referenced at 8 million.

I didn't see that covered uh outside of the 30 million bond.

I thought that or is it 30 million inclusive of the 8 million?

No, it is not um inclusive.

So that was the initial borrowing before we um did any of the site work as we were doing the site work and then finding that we did need to do additional remediation.

The um the original borrowing of 30 would not cover the remediation.

So that item is about 8 million and it's on an agenda tonight to do additional financing of 8 million just for the remediation work.

Okay, I just think it's important to bring those two together just from a public understanding uh perspective.

Um, well, and would you talk just a little bit about uh I think Chris was hitting on some of the consolidation or efficiency, but are there other facilities that are closing as a result?

Will we bring together teams?

Um obviously this is a you know, oh you know, I guess we're getting about 33 or it's an expensive effort at this point, but it sounds also very necessary in terms of our operations.

Are you or Chris able to talk about what we're bringing together and uh how we're offsetting some of this?

Yeah, Chris, do you want to go ahead?

Yeah, sorry, I was trying to get off mute.

Uh yeah, so the existing facility, uh, the deliverer part of the heavy duty shop or base will be repurposed for other uh operations on the 401 patent revenue side.

Um we've had we've had several meetings during the design of the new facility to consider uh how those bays may be repurposed, but uh there's a strong interest in other departments using those bays, and the new facility will also house procurement services, uh which we're currently renting space uh for our staff.

So there'll be some savings there on a monthly basis that are somewhat significant as well.

Does that answer your question, Council?

It sure does.

Thank you, Chris.

You're quite welcome to you.

Anyone else have a question?

Mr.

Davis.

Well, again, we we are we apologize for the weird time, but based on the small group conversations we had last week, we felt like uh council wanted and needed and deserves some more context on this project while we feel like it's necessary in addition to the particular situation with the remediation.

Um just going back to Mayor Purtain's question.

I'm by moving some of the operation across the street, we will open up some space on Patent Avenue proper.

And we know we have other departments down there that are um outgrowing their current spaces, water resources, transportation, and so forth.

So it will give us some opportunity to uh uh hopefully come back with some design considerations in the future for expansion of those departments as well.

Thank you for that.

Yeah, may I just add to that?

Uh I feel that mentioned that our current inventory is stored in four different locations at 401 Pat New and warehouses, so all of that inventory uh warehouse space that we're currently using will be available for other departments as well when we move consolidate across the stream from the new facility.

Yeah, I think oh sorry, I think you know uh it is a lot of money and it is a lot of money for the remediation, but yet we will be having other departments who can possibly use the facilities there.

So I think that's very important to express to the public.

Can we ask the Tammy?

Sorry, um, just for Marlene or Larry, um, the additional debt that we're voting on tonight, will that have um I know it's taking up some of the the debt capacity, but does that do you anticipate that um directly impacting uh the need for our tax rate change at this point, or can we absorb it under our own ex the existing tax rate?

Or can we absorb it under our own ex the existing tax rate?

So currently we're we're able to absorb it under our existing tax rate, uh just our all our estimates and planning um assumes that we will be able to okay thank you.

Denise, did you have another question?

I had a quick question.

Uh-huh.

Um so I understand that you know this is going to increase uh capacity.

Um can we also speak a little bit to anticipated um speed of which we can get the vehicles um serviced and and back out on the streets.

Um I know there has been some concern about the amount of time it takes for uh some of these vehicles to get service and get back out in the active fleet.

Can we speak to that with this new project?

Yeah, I should I'd be happy to do that.

Uh one of the challenges that we're currently facing has been an extensive period of um vacant positions.

We've had as many carry as many as 12 positions for the last five to six months or longer, quite honestly.

So uh not only do we need to fill those vacant those vacancies, but in the new facility, uh we will be able to expand uh and hire additional technicians as if necessary.

I'll also mention as relative to that is that we are outsourcing a good bit of our work now because of those vacancies and the inability to increase our technician staff is as um resulted in some of those delays that you may have heard about.

Uh but we're working just as hard as we can.

Uh staff is working over time and committed to meeting our service level requirements with our various departments.

Um so there will be some efficiencies in the new facility for sure, and I think that we will see uh positive results uh with this change.

And are those anticipated um hires uh are those currently um uh projected in the budget or we are those outside of the budget?

Um they are they are budgeted positions that are vacant, uh, and we're having a little difficulty hiring and retaining uh technicians, but we're working diligently on that.

And most recently changed to four 10-hour weekday shifts, and that has helped us uh receive some additional interest in our position, so we're hopeful, and that's a recent change, but we're hopeful we're gonna be able to fill those positions.

Uh keeping in mind that they're heavy-duty technicians uh technicians that work on the type of vehicles that we service do not typically come fully trained and experienced, so there is some learning curve associated with those new hires, but uh we are currently meeting our service level requirements for our operations and for those departments that use our fleet to service our community.

Thank you.

Carlos, if we could take down the presentation, that'd be great.

Madam Mayor, if I could.

Yes, uh, yeah, everybody can either either raise their hand, they're gonna I'm gonna be able to see the gallery now.

You're fine, you're fine.

Go ahead.

All righty.

I'm looking forward to to this new uh equipment facility, but uh along the same lines as uh councilman Marshall's question.

And I know Chris that we said that we've had some staffing challenges for six or so months, but I I have heard and I have heard constant um comments from those who use the the current facility that it's been much longer than six months.

Uh I I would really like for us to figure out how to fix that uh more rapidly.

Uh is it's not a six-month or three-month issue.

It's it's a more long-term issue, and it is impacting uh all those who use, whether it's it's police or um solid waste or whomever it may be, that we need to find a way to um get those facilities as efficient as they need to be so that they uh our employees can be as efficient as they need to be, and and not necessarily wait for uh early 2028 to get that resolved.

That's a broader question here, and but it is something that I think needs to be said that that we know that there's more of an issue there than just three to six months of staffing.

Agreed, and that was part of my concern.

Right.

And I I think we've all uh been part of wanting to know the the rush on the police cars that that were bought, and then they just sat there in the field for so long because there was no one to uh upfit them for the appropriate needs.

So I think all of that is something that uh we kind of need to be assured, I suppose, that when the appropriate staff is hired, that things like that will not happen again, or that um the cars will be uh serviced in a very quick manner.

I think some of the our public safety is very important, whether it's that or some of the fire vehicles or um you know any of the major vehicles that are needed in emergency situations.

Thank you.

Those are certainly our primary customers, and we share your concern as well.

Um, but not only is it putting cars in service, but we have to be careful that we're performing preventive maintenance on cars when it's to keep them safe.

Um we uh really uh one of the notes I had is uh wanted to share with you.

We I think was on one of the slides that we have you know close to 4,000 tires that we installed, um, and we haven't had two tired technicians now for a number of months, just have not been able to attract uh the applicants for that.

Consequently, we've been outsourcing all of our tower replacements, and that is just not as efficient as doing it in-house for obvious reasons.

Right, thank you.

Mr.

David, Mr.

Davis, um, can you fill us in on whether or not these positions are on the list for human resources or people in culture?

Um, I know tough to fill positions, get extra attention, extra incentive, whatever um extra consideration.

Are these positions on that list?

They are, and they have been advertised, and I'm I'm hesitant only because I don't want to jinx it because we've been so close recently with offers that we thought we had staff and then they um turned us down.

And I know there's a current group uh that's in the final stages of review uh for technician positions, and I just will be honest, my fingers are crossed that we get better news this time.

Are we getting turned down because of the salaries that we're offering, the conditions that they're working at?

Do we have any feedback on why?

Chris, I'm all I'm all the I appreciate that Larry, thank you.

Um yes, absolutely.

We we're getting some feedback, limited feedback from applicants.

Um I guess last month we had three applicants scheduled for interview.

Uh none of the three showed up for their actual interview.

We are competing with the private sector uh in our in our community in our area.

Uh, we're commiting with the private sector.

Um we've we understand from our colleagues in other cities our size, they're experiencing uh similar things, so I don't think it's all related to salary, quite honestly, but it is a significant component.

I'll add to that since we're diving a little deeper, I'll pull back the onion a little bit more.

You know, we've lost three or four technicians to other divisions, other departments within the organization.

So that is a challenge for us as well.

Some of our technicians have actually left to go work in other departments uh for more money.

Thank you.

I think I think we're running into that in a lot of positions.

What is the salary range for these positions?

Any idea?

Or G or a grade.

Oh, they start just I've got no order with me.

12 to 14,000.

So JD does we have positions that are 12 G12 to G14.

I don't know what the control point is that off in, but I can get that information to share it with you.

Yeah, we can't.

If I could just I'm sorry.

If I can tag a question onto that, just um, since if you're going to come back, um maybe also share with us the overall um operational costs or or or expense as the um at full complement.

So once you would actually have those positions filled, how's the operational cost for where we are today compared to what it will look like with this facility up and running?

Absolutely.

Thank you.

I'd love I'd love for us to do an analysis.

Obviously, if we're paying outside resources to fill some of these positions because we don't have them, um, my assumption is um that cost may exceed what our cost is would be if we were performing this work ourselves.

Um the premium that we're paying, if we were not paying that premium, could we add it to our salaries, come out even and have better output?

Um, so I'd hope that we can take a look at that.

I know that's a hard question to answer just off the cuff.

Um, but it would be good information to have, especially as we're heading into next year's budget, um, to see how that will look going forward.

So you you pay both the premium and then just the logistical time loss.

Um exactly.

So I think it's being done somewhere else, it has to be delivered to and then delivered and then received back.

Um so you have to factor that in as well.

So there's an opportunity cost of not raising the salary level that we're we're trying to hit.

And I know salary does isn't everything, um, but I mean we think we need to at least know what we're looking at there.

And I would like to see um just because a lot of times, and I and I know this is on the agenda for this evening, and I've got a really no issue with it because I think we need it.

However, um I do think it would be to our advantage.

Are there other cities that are doing the same services that we are and what they are paying those technicians?

Because I know a lot of this is specialized.

I know a lot of it is um you know, something that maybe other cities don't do, maybe they um, you know, maybe they have privatized that, but I can see the benefit to us, you know, having it in-house.

I certainly see that, but I'm I'm just curious about the other cities, and I apologize.

I didn't think of that question um last week or when we were talking about this before.

That's a great question.

Um, if you don't mind, I'd like to comment on that.

Um what we're seeing is our salaries are not that necessarily that far out of line with other municipalities.

However, the service that we provide is significantly different.

Other spot mechanics don't do welding, uh don't do a lot of welding, for example.

We pretty much perform all functions of repair with the exception of body work.

Uh, we don't do any body work, but we do replace engines and transmissions.

Uh, we have the skill set to do all of our upfitting for police cars and other administrative cars in-house.

So we typically carry a higher level technician in terms of skill set than other agencies do, and again, perform a lot of the you know more advanced functions than you typically find in municipal garage.

I have a question.

Um, just when it comes to what the fee of um if you were in the private sector, what you could earn from that particular um specialty field, it sounds like we're asking them to do a lot uh for a minimum amount, uh, which is why you can't keep staff.

Um, so I would along with Tammy be interested in are we paying them what their value is?

It would be my my suggestion in looking into uh because if you can everyone has to make a living, and um you're gonna go to the place that provides the best living for you.

So are we valuing them and what we're asking them to do?

And if I could I'm sorry, go ahead.

I'd like to respond to that.

We just recently uh had our conversations and with our human resources partners and ask them to evaluate uh that exact thing.

And uh again, you know, we're talking about earlier comment.

Our salaries are not necessarily uh extremely obvious that work out alone.

Uh but the the when we're comparing ourselves with other agencies, they're paying similar salaries, some more some less, but not exactly for the same work.

So it makes it difficult to level size that to get an honest comparison.

Yeah, if I can say it it sounds like we're we're answering the question as we asking or asking the question.

We're we're low in staff, uh, we're losing people because of pay because they're doing a job that is uh more intensive than uh others are doing, and if we're having that problem now when we expand and have the new facility, and it'll be even worse.

So we're gonna have to address this now, and whether it's is bringing in those um third-party roles, whether it's just a matter of of increasing the pay so we can keep those, retain those that are good.

We have an example here recently in the past couple of years, GPD.

This is going down the very same path.

We were losing good people, losing folks because of pay.

We increase the pay, and and by the way, we were at a deficit of 120.

We increased the pay, and things improved rather quickly.

So I think we have a model.

I think we we understand what the issue is, it's just a matter of executing it.

And I think I think that's clearly the concern we're we're addressing here.

Is um the project is already costly.

We need to uh approve additional funding.

With with that, we need to make sure that the service level increases and the response times shortened.

Um, otherwise nothing's really changed.

So we we've got to address that issue.

Uh, and again, whether that's by increasing pay, um, or whatever the case may be, we've got to deal with that.

Otherwise, nothing changes with this project.

Yeah, uh uh correct me if I'm wrong, Chris, but what I'm hearing is it's not specifically the pay, but the workload uh that's attached to the position.

So is there a way that we can address that to see if folks could uh either segment the workload, we have uh folks that are doing specific functions of that workload as opposed to uh having to perform it all, but still keeping it in-house, because what I'm hearing is that it's not necessarily uh the difference in pay, but the difference in the workload, which would also impact your your daily uh I guess life and in capacity.

Yeah, I totally understand what what you're saying.

Uh I think it's uh a host of different things, a number of different things.

Um, you know, pay is certainly a factor.

Uh again, I'm saying it's not we're not seeing a significant difference in and when you compare the pay numbers, but what what there is a difference is is in the the type of work we're doing.

For example, if we compare ourselves to one of the heavy truck providers in our local community, uh they're not servicing garbage trucks, so they're not having to crawl into the back of a garbage truck that just came off of a rail and weld with uh a floor.

So there's a significant difference in what we're requiring our technicians to do for the same or slightly maybe even slightly better pay, the job is very different.

You know, you can change a brake drum on a heavy dunk truck, or you can change a brake drum on a garbage truck, a very different experience environmentally, very different experience.

So would you say, Chris, that you know, um a lot of this is on-the-job training type uh work.

Of course, it certainly sounds like it.

Is that is that correct?

Absolutely.

We can get heavy-duty mechanics and they're fine with you know the major component systems, hydraulics, you know, transmissions engines, possibly.

Um the things that they don't have are gonna be related to the municipal equipment that we operate, uh, the private sector doesn't necessarily operate again.

Garbage trucks are different from dump trucks, police vehicles are different from what Honda works on, for example, in their garage.

Very different requirements.

We put over a mile of wiring in a police car after it's delivered to us, police ready, so to speak.

We add an additional mile of wiring and cabling, custom installations, those kinds of things, just to give you a tip of the iceberg.

And before I love to invite council out to our existing facility sometime and see the level of work and the comprehension required to service the police.

Sure, and I think uh, you know, we can all look at that as we've got a little bit of time here before the facility is built and ready to go uh to look at all these things, and and I certainly would like to leave it up to you all because um what I'm hearing is that perhaps we need to look at as was mentioned earlier by my colleagues.

Well, with the savings of you know, kind of farming out the work, then we're gonna have where it will be in-house, and perhaps those that go into the specialized areas could receive some kind of pay boost or something or designation or um expertise uh title, or you know, we need you all to look at that and and how that is done in other areas as well, because I I'm sure there are other cities that do the same kind of work and train the same type of expert work.

Mayor, mayor, our mayor and counsel, I would I would say you know, this is that does that conversation is actually going into a good direction as we kind of get into a space where we start talking about strategy, pre-budget some of those discussions.

This is just one of one of several examples of what we will have to show you from a strategic standpoint.

Uh, if you're looking at the combination of both salaries, also I'll remind you that this is a byproduct of some of our growth payments as we increase our capacity.

Um, you know, this is one of those trickle down you know, things in our service delivery when you when you have such uh intense growth, uh, and but also at the same time the need for services come along with that.

This is one of the things that we look at and have to plan for.

So, you know, this is a uh I feel like this is a really good conversation going in the direction that you'll see holistically in different areas that we'll we'll have to reflect on.

And I do want to say, you know, to stay on topic, you know, this is the subject for this evening.

Uh and um uh we we certainly need to take into consideration everything that's been mentioned here today, and I appreciate that.

We very much appreciate your time.

It is like saying this weird and odd hour, but I hope you have a better feel for the scope of the project.

Um, why we believe it's needed, why we believe it's justified that we complete the project on site um and get it ready for sort of the next generation of as the manager said, expansion of service and all the rolling stock that'll come with it.

And I did want to make sure there weren't any more questions from council before closing out.

Anyone?

I assume um Mr.

Davis, are you finished?

We are, and again, thank you.

Thank you all.

I don't think we really need a motion to adjourn or anything, so thank you so much, and we'll see everyone later.

Thank you.

Thank you.

Right.