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TO THE BOARD OF ALDERMAN BUDGET WORK SESSION.PART TWO, PRAYER WILL BE OFFERED BY ALDERMAN BRISON.
LORD WILL THANK YOU SO MUCH FOR THE OPPORTUNITY TO GATHER TOGETHER, DISCUSS, AND TO DECIDE FOR THE GOODNESS OF THE PEOPLE, THE CITY.
AND WE ASK FOR YOUR WISDOM AND GUIDANCE AND YOUR DIRECTION.
[1. Discussion of Recommended FY2024-25 Budget]
CITY MANAGER.AND WE HAVE HAD A SLEEPLESS NIGHT WORKING ON, UH, UH, THE BUDGET, UM, BASED ON THE DIRECTION THAT WE WERE GIVEN.
AND SO WE'RE GONNA CO COVER A FEW THINGS BEFORE WE ACTUALLY, UH, GET INTO UPDATED RECOMMENDATIONS.
IF YOU LOOK AT THE, UM, PRESENTATION HERE, UH, THERE WAS, THERE WAS A QUESTION ABOUT STAFFING OVER THE LAST FIVE YEARS, AND UNFORTUNATELY WE DID NOT HAVE ANYTHING TO HAND OUT.
WE'VE BEEN SO BUSY PREPARED FOR, WE APOLOGIZE FOR THAT.
WE'LL, WE'LL SEND YOU AN EMAIL THIS.
SO POSITION HISTORY, UM, WHILE SHE'S WORKING ON THAT.
SO WHAT WE DID WAS WE LOOK BACK OVER THE LAST FIVE YEARS, FIVE YEAR HISTORY WITH FY 29, WE HAD IN THE GENERAL FUND, WE HAD 305 BUDGETED POSITIONS.
CURRENTLY FOR THE FY 25 BUDGET, WE'RE RECOMMENDING 325.
20 POSITIONS HAVE HAVE BEEN INTRODUCED, AND THAT HAS COME FROM HAVING POSITIONS ADMINISTRATION WITH, UH, ASSISTANT CITY MANAGER.
IT HAS COME WITH ADDING SOME TEXT IN TECHNOLOGY.
IT HAS COME FROM ADDING AT LEAST ONE POSITION IN FINANCE.
IT HAS COME FROM ADDING, UH, FOUR POSITIONS IN PD.
IT HAS COME FROM ADDING TWO POSITIONS IN FIRE, RESCUE RESCUE, THREE POSITIONS IN PARKS AND RECREATION WITH THE MOST RECENT TWO POSITIONS BEING FOUR, FOUR FOR PART-TIME STAFF MEMBERS.
AND IT IS INCREASED FROM DEVELOPMENT SERVICES IN THAT TIMEFRAME.
ONE STAFF MEMBER PUBLIC WORKS ACTUALLY HAS SEEN A REDUCTION FROM 48 TO 43, SO A LOSS OF FOUR STAFF MEMBERS.
SO I'M NOT RECOMMENDING ANY CHANGE OR ANY REDUCTION IN, IN OUR OVERALL STAFF.
STAFF IS PRETTY TAXED THE JOBS THAT THEY HAVE TO DO.
NOW, WHILE WE DO HAVE TURNOVER WITH A VARIETY OF PHYSICIANS, AS, AS YOU SAW WITH THE HANDOUT, UH, YESTERDAY, SUCH AS POLICE AND THE TELECOMMUNICATORS, THOSE JUST A CONSTANT REVOLVING DOOR.
WHEN PEOPLE GET INTO DOING THAT TYPE OF WORK, THEY REALIZE EITHER THEY LIKE IT OR THEY DON'T LIKE IT.
SO THAT, THAT'S A CONSTANT CHANGE OVER.
YOU ALSO SAW SOME INFORMATION IN THAT HANDOUT YESTERDAY ABOUT, UH, WHEN IT CAME TO FIRE RESCUE.
UM, THEY USED, IT WAS THE, UM, FIRE SPECIALIST.
I BELIEVE THAT THERE WERE FIVE VACANCIES FROM THAT.
AND, AND, UH, JUST TO GIVE YOU A LITTLE BIT MORE CLARIFICATION, WHAT THAT ACCOUNTED FOR WAS WE RECENTLY HAD A CAPTAIN THAT RETIRED, A FIRE ENGINEER THAT RETIRED AND A, A FIRE SPECIALIST THREE, THAT, THAT HAS MOVED ON.
AND SO WE DID HAVE TWO SPECIAL POSITIONS THAT WERE REPLACED, BUT TRADITIONALLY IN FIRE RESCUE, UH, AND IN POLICE, UH, UH, EMPLOYEES WERE PROMOTED FROM WITHIN TO THOSE POSITIONS.
AND SO THAT'S WHY YOU SEE THOSE FIVE VACANCIES.
SO I'M NOT RECOMMENDING ANY REDUCTION IN THOSE, IN THOSE AT ALL.
UM, WE'RE GONNA GO AHEAD AND, UH, TALK A LITTLE BIT ABOUT DEBT SERVICE.
SO IF WE CAN GO TO THAT SLIDE JUST REAL QUICK.
UH, I THINK JUST TO ADDRESS WHAT THE MAYOR SUGGEST, THERE ARE NOT BODY ALL THREE BY PHYSICIANS CURRENTLY.
THERE WERE, OR SO THAT ARE CURRENTLY VACANT SOME.
SO AT ANY GIVEN TIME DURING THE BUDGET YEAR, WE MAY, WE HAVE 3 25 BUDGETED POSITIONS.
AND SO AT ANY GIVEN TIME, WE COULD BE DOWN 15 OR 20.
WE 15, 20 VACANCIES AT THE GENERAL BASED ON WHAT ELSE, UM, THE MAYOR SUGGESTED MAYBE LOOKING AT THOSE CURRENT MAKING CONDITIONS, MAKING DECISION AS
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WHETHER THEY SHOULD BE NOT ELIMINATED.HE NOT ANYTHING FROM BODY IN IT.
AND WHAT WE HAVE SEEN, AND, AND HE POINTED OUT YESTERDAY, UM, HE WAS LOOKING AT POSITION THAT NOT BEEN FILLED SINCE 2023.
SO WE'VE HAD SEVERAL FOLKS LEFT AT THE END OF 2023.
THAT DOESN'T MEAN THAT WE HAVEN'T, UH, ADVERTISED THOSE POSITIONS.
WHAT MOST LIKELY HAS HAPPENED IS WE PROBABLY DIDN'T GET QUALIFIED ENOUGH CANDIDATES THAT DIDN'T MET OUR STANDARDS TO HIRE THEM.
SO A LOT OF THOSE ARE STILL VACANT.
SO THAT'S WHY I'M STILL RECOMMENDING THAT WE DO NOT REDUCE THE, SO I'VE GOT A LITTLE BIT MORE INFORMATION COMING UP.
IF WE CAN GO AHEAD AND GO TO THE, UH, FUND BALANCE PART, I'M GONNA HAVE KIM TALK THROUGH THAT SO YOU CAN UNDERSTAND WHAT OUR FUND BALANCE SITUATION IS BASED ON THE LAST AUDIT.
I'M NOT SURE IF YOU RECEIVED YOUR EMAIL LAST NIGHT, BUT I WANNA HAVE AN EMAIL, JUST LITTLE, UM, EXPLANATION.
UM, WHAT THIS SHOWS YOU IS THE LAST, WELL, SINCE 2020, WHAT OUR FUND BALANCE HAS BEEN.
AND AT THE END OF EVERY FISCAL YEAR, THESE ARE AUDITED AMOUNTS.
UM, AS OF 20 20, 20 21, 20 22.
IN 2023, AS YOU KNOW, WE TRIED TO DO AN ESTIMATE, UM, OF ABOUT EVERY QUARTER OF WHERE WE THINK WE'RE GOING BE FOR THIS YEAR, WHICH IS DIFFICULT BECAUSE NOT ALL OF YOUR REVENUES, EXPENSES, ASSETS, I BELIEVE ARE REALLY CLOSE ANYWAYS.
UM, IF WE TAKE A LOOK AT JUNE 30TH, 2023, WE RETURNED BACK TO FUND BALANCE A TOTAL OF 9.1 MILLION, BUT OF THAT WE HAD 6.5, WHICH IS HARD TO TELL THE COLOR AT THE TOP THERE, UM, IS FOR WHOLE.
AND THAT IS THE, UM, ASSIGNED FUNDS THROUGH THE A ENABLE FUNDS.
THEN DEGREE IS COMMITTED BY THE BOARD AND IT'S, UM, COMMITMENTS FOR SPECIFIC PURPOSES, BOARD CONSTRAINTS, UM, IMPOSED BY THE BOARD, SUCH AS OUR FUND GOVERNANCE POLICY.
SO IF THAT IS, IS WHAT THE GRID IS, THE RED IS RESTRICTED AND THAT'S RESTRICTED, UM, FOR STATE, UH, STABILIZATION BY STATE STATUTES, FOR EXAMPLE, POWER BILL, UM, FOR STREETS, AND THERE'S SOME PUBLIC SAFETY, FEDERAL FORFEITURE AND, UM, CONTROL SUBSTANCES, ECONOMIC AND PHYSICAL DEVELOPMENT THAT'S ALL RESTRICTED SO THAT YOU CAN ONLY USE FOR THAT SPECIFIC PURPOSE.
SO THAT LEAVES US WITH, UM, 6.98.
WELL ACTUALLY YEAH, FOR THIS YEAR, 6.9.
BUT IT LEFT US WITH, UM, UM, THE FLU IS THE UNASSIGNED, THE UNASSIGNED THAT WE ADDED BACK WAS, SO OF THE 9.1 WE ADDED 1.8 BACK TO UNASSIGNED LAST YEAR, AND THE UNASSIGNED IS BASICALLY MORGAN TWO.
ALLOCATE THOSE FUNDS FOR WHATEVER YOU WISH.
THERE NO RESTRICTIONS ON THAT.
RIGHT? SO, UM, THE, WHICH LEFT US WITH ABOUT, UM, OF THE AVAILABLE, IT WAS 40% OF OUR FY 23.
I'M NOT, WHICH ONE OF THOSE, UH, DOLLAR AMOUNTS YOU EQU TO THE UNDERSIGNED? IT'S THE VERY BOTTOM LINE.
ARE THERE ANY QUESTIONS ON THIS LINE YOU WANNA GO BACK TO? UM, WE TALKED A LITTLE BIT ABOUT DURING HURRICANE FLORENCE, AS YOU REMEMBER, UH, DURING HURRICANE FLORENCE, WE HAD TO USE A CONSIDERABLE AMOUNT OF FUND BALANCE TO DO CLEANUPS.
AND WE FOUND OUT AT THAT TIME, ALL IT TAKES ONE STORM TO GET US IN JAM.
IT TOOK A WHILE, START GETTING THEM REIMBURSEMENT FROM FE EVEN THOUGH WE HAVE BEEN ALLOCATED QUITE A BIT OF MONEY FROM FEMA, WHEN WE DO A PROJECT NOW THAT'S FEMA COVERED, IT'S STILL REIMBURSED.
WE STILL HAVE TO PULL SOME FUND BALANCE, AND THEN WHEN WE GET THOSE REIMBURSED BACK TO FEMA, THAT GOES BACK INTO OUR SAVINGS ACCOUNT.
SO, AND YOU CAN SEE, UM, GO BACK THAT OTHER SLIDE YOU CAN SEE BACK IN 2020 WHERE OUR, OUR UNRESTRICTED FUND BALANCE WAS BACK IN 2020.
THERE WAS VERY, VERY LITTLE HERE.
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WE'VE BEEN FORTUNATE ENOUGH TO BE ABLE TO, ACTUALLY, IT WAS IN THE NEGATIVE.SO WE'VE BEEN ABLE TO GROW THAT BACK TO ALMOST 7 MILLION.
AND THE GOAL IS TO CONTINUE, UM, AND IN THE POSITIVE FUND BALANCE OF THAT.
SO ANY QUESTIONS ON FUND BALANCE CONTINUE? HOW MUCH MORE IS LEFT OUT THERE FROM THAT WE HAVEN'T RECEIVED FROM THE HURRICANE COUNTY? UM, WE HAVE AND WHICH WOULD BE ON IN INCLUDED IN THAT UNDERSIGNED? CORRECT.
THIS, THIS IS A BETTER PICTURE OF WHERE WE'RE AT WITH, UM, VALE WITH HURRICANE FUNDS.
SO YOU CAN SEE HISTORICALLY IN 2019, THAT BLUE BAR REPRESENTS OUR FUND VALE, INCLUDING HURRICANE FUNDS.
SO HURRICANE FUNDS IMPACTED US, SO IN SUCH A NEGATIVE WAY THAT WE WERE SITTING PRETTY LOW, RIGHT? MM-HMM.
AND THEN, UM, AS WE STARTED WORKING ON REIMBURSEMENTS WHERE WE'RE AT TODAY, WE, THERE'S JUST DEFINITELY A LOT LESS OF A GAP THERE.
UM, THIS, I JUST WANT TO MAKE SURE I POINT OUT THAT EVEN THOUGH I JUST SAID 40% FUND BALANCE IS WHERE WE ARE OF UNASSIGNED IN THIS, THEY INCLUDED THE ARPA FUNDS, SO I JUST NEED TO MAKE SURE THAT YOU, YOU DO, UM, REALIZE THAT, SO OUR PERCENTAGE WOULD DROP, IF I SUBTRACTED THOSE ARPA FUNDS FROM THAT, THEN IT WOULD DROP BY TWO 40%.
WE WOULDN'T BE SITTING AT 60 AND 50%.
SO, UM, WHAT WE HAVE OUTSTANDING, THE LAST REPORT THAT WE SUBMITTED, UM, TO THE BOARD, I THINK IT SHOWED $8 MILLION OF, UM, REIMBURSED.
WE'RE WAITING ON REIMBURSEMENTS FROM FEMA OF THAT.
SOME OF IT CAN'T BE QUITE REIMBURSED YET UNTIL THE PROJECTS ARE COMPLETE BECAUSE THEY HOLD ON TO 25%.
WE'VE BEEN GETTING REIMBURSEMENTS PRETTY REGULARLY.
UM, KIM CROWS, OUR, UH, GRANT PERSON HAS BEEN SUBMITTING THEM OFTEN AND, UM, THEY, THEY HAVE BEEN PRETTY QUICK OVERALL TO TURN THEM AROUND COMPARED TO THE PAST FEW YEARS.
SO, UM, SOMEBODY LIT A FIRE AND WE'VE BEEN GIVING THEM A LITTLE BIT MORE, UM, FREQUENTLY.
ANY, ANY OTHER QUESTIONS ON FUND BALANCE? ANY COMMENTS? OKAY.
SO BEFORE WE GET TO ENTERPRISE FUNDS, WE'RE GONNA FOLLOW UP ON WHERE WE'RE, SO WE HAVE A, A VERY LATE NIGHT AND A VERY EARLY MORNING.
UM, WE HAD DEPARTMENTS GO BACK AND GET WITH THE RECOMMENDATIONS AND WE DID SOME FURTHER CUTS.
SO WE DID GO BACK AND CUT DUES AND SUBSCRIPTIONS.
WE CUT TRAVEL AND TRAINING AND WE DID CUT CAPITAL EXPENSES AGAIN.
UM, WE CAME WITH A TOTAL OF $648,025 IN ADDITIONAL CUTS.
THIS BROUGHT OUR DEFICIT DOWN TO $785,475.
SO BASICALLY WE WENT FROM 3 CENTS NOW DOWN TO 1.60 CENTS.
AND SO EARLY THIS MORNING, AS WE WERE REVIEWING A VARIETY OF THINGS WITH OUR CURRENT BUDGET, WE STARTED LOOKING AT OUR DEBT SERVICE FOR SOME LOANS THAT WERE TAKEN OUT THIS YEAR.
ONE WAS THE STANDARD WHITE RECREATION CENTER AND THE OTHER WAS FOR VEHICLE AND EQUIPMENT.
AND BASED ON THE TIME THAT WE APPLIED FOR THOSE LOANS AND RECEIVED THOSE PROCEEDS, WE HAD PLANNED ON, ON MAKING LOAN PAYMENTS IN THIS BUDGET YEAR.
WELL, THE LENDER DOES NOT REQUIRE US TO MAKE THOSE PAYMENTS UNTIL THE NEXT BUDGET YEAR.
SO WE ARE GONNA HAVE SOME EXTRA FUNDS FOR THAT.
SO THAT GOES BACK INTO FUND BALANCE.
AT THE END OF THIS BUDGET YEAR, IT'S GOING TO BE EXTREMELY TIGHT, BUT THOSE FUNDS CAN BE USED TO BALANCE THIS BUDGET AS PRESENTED WITHOUT A TAX INCREASE.
SO ONE OF, LEMME HEAR YOUR COMMENTS IF YOU HAD ANY, ANY YOU'D LIKE TO MAKE BY NOT MAKING THE PAYMENT IN THIS YEAR'S BUDGET, UM, VERSUS THE LAND GETTING THE NEXT YEAR BUDGET, WHAT IS THE LONGER TERM IMPACT TO THAT? WE BUDGETED BECAUSE OF THE TIMING OF THE BUDGET WE BUDGETED, UM, FOR THAT PAYMENT TO TAKE PLACE FISCAL FISCAL YEAR IN THE 5 24.
UM, THE TIMING OF WHEN IT ALL CAME TO FRUITION WAS LATER IN THE FALL BY THE TIME WE CLOSED ON THOSE LOANS.
SO NOW WE, UM, OUR PAYMENTS ARE NOT DUE UNTIL FISCAL YEAR 2025.
SO WE'RE NOT DEFERRING ANYTHING, IT'S JUST THAT WE RECOGNIZE THAT LITTLE BIT OF, UM, SAVINGS IN THAT SENTENCE FOR BUDGET.
THE SCHEDULE HERE, THE SCHEDULE JUST ADJUSTED NO ADDITIONAL INTEREST YOU HEARD? NO, IT WAS JUST THE TIMING OF WHEN WE ACTUALLY CLOSED THAT A LOAN.
AND SO WE'VE ALREADY BUDGETED FOR THAT DEBT SERVICE
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PAYMENT IN, IN THE FOLLOWING BUDGET.BUT AGAIN, THAT'S WHY I, I MADE THE COMMENT, WE DON'T RECOMMEND ANY REDUCTION IN STAFF STAFFING POSITIONS.
UH, I CANNOT RECOMMEND ANY OTHER CUTS TO THE GENERAL FUND BENEFIT BILL, BUT IT, AGAIN, IT HAS BEEN CUT EXTREMELY TIGHT.
NOW THIS DOES NOT MEAN THAT WE WON'T BE SITTING HERE HAVING SIMILAR DISCUSSIONS LIKE THIS NEXT YEAR REALLY ALL DEPENDS ON WHAT OUR GROWTH LOOKS LIKE OVER THE NEXT, UH, 12 MONTHS.
BUT THAT'S, THAT'S WHERE WE ARE.
SO I'D LOVE TO HEAR SOME ADDITIONAL FEEDBACK FROM YOU.
SO, AND I APOLOGIZE FOR THAT BEING IN YESTERDAY, BUT, UM, SO YOU WERE ANTICIPATING RAISING THE TAXES 3 CENTS, CORRECT? MM-HMM,
SO Y'ALL WENT BACK LAST NIGHT AND WORKED OVERTIME AND UNDER TIME AND OUTWIN THE TIME TO CUT THE BUDGET BY $648,000? YES.
AND, AND SO, AND SO WE, WHEN WE STARTED THIS BUDGET PROCESS, WE, UM, WE, WE HAD ABOUT $55 MILLION IN BUDGET REQUESTS FROM THE DEPARTMENTS.
AND OVER THE LAST SEVERAL MONTHS AS WE WERE GOING THROUGH THIS PROCESS, WE ENDED UP CUTTING OVER THE $5 MILLION.
AND SO WE, UH, WE PUT CONSIDERABLE AMOUNT OF CAPITAL TO BEGIN WITH.
UM, WE LOOKED AT THE OPERATING BUDGET AS WELL AND WE CUT THAT DRASTICALLY TO WHERE, UM, BEFORE, BEFORE THIS CUT I TOLD YOU ABOUT, WE WERE OVER, OVER THE LAST YEAR'S BUDGET, WE WERE ABOUT 2.7% INCREASE OVER THE LAST YEAR BUDGET.
SO WE WERE, WE WERE VERY LEAN.
NEXT YEAR IS EXTREMELY LEAN AS WELL.
AND SO, UM, WHEN WE, WHEN WE CUT TRAVEL AND TRAINING, WE, WHAT WE DID HAVE TO DO WAS LOOK AT CERTIFICATIONS ON STAFF.
A LOT OF OUR STAFF, UH, HAVE TO MAINTAIN THE VARIETY OF CERTIFICATIONS.
SO WE COULDN'T REALLY TOUCH ANY OF THAT.
BUT IF THERE WAS ANYTHING THAT WAS DEEMED TO BE, UH, NOT REQUIRED, WE DID CUT THAT.
SO YOU CUT TRAVEL TRAINING, HIGH TRAVEL INTENT TRAINING, DUES AND SUBSCRIPTIONS AND I, AND WE CAN COVER THE CAPITAL THAT WE COULD THAT, AND MATTER OF FACT, IF YOU, I DON'T THINK THAT ALDERMAN BEST HAS THE, UM, THAT WE PASSED OUT THIS SEE THIS.
ALRIGHT, SO IT, IT'S, IT'S HERE.
WE DON'T HAVE TO GO BACK HERE.
AND, AND SO WOULD ANYONE LIKE TO KNOW WHAT WE WE DID CUT OUTTA CAPITAL, SO, YES.
WELL THIS IS IN ADDITION TO WHAT YOU REVIEWED YESTERDAY.
YES, THIS WAS INCLUDED AND, AND YES, THIS WAS ON TOP OF WHAT WE REVIEWED YESTERDAY.
SO WE WENT BACK, WE DID CUT THE TAKE CHANNEL UPGRADES FROM ADMINISTRATION.
WE CUT TWO POLICE CRUISERS FROM NINE DOWN TO SEVEN.
WE HAD A CONVERSATION WITH ALDERMAN ASHER AND ALDERMAN ASHER, IF YOU'D LIKE TO MAKE A COMMENT OF ABOUT THAT SIDE.
YEAH, I THINK THE CANINE IS VERY IMPORTANT FOR OUR POLICE DEPARTMENT.
AND WHEN I FOUND OUT LAST NIGHT THAT THAT WAS GONNA BE CUT, I WAS OFFERED TO PAY, I'VE ALREADY PAID FOR ONE DOG FOR THE POLICE DEPARTMENT.
SO I OFFERED TO PAY OUT OF MY, UM, A RP MONEY, THE $20,500, WHATEVER, HOW MUCH IT IS, $20,500 OUT OF MY, UH, MY FUNDS.
AND I WOULD LIKE TO RECOMMEND TO THE BOARD THE JURY THAT WE DO THAT.
UM, THAT TYPICALLY DOESN'T REQUIRE A MOTION, DOES IT? JUST THE APPROVAL HEADS UP OR THUMBS UP? IT IS CHANGE FROM, SO IT SHOULD BE, PARDON ME.
SO I'D LIKE TO MAKE THAT MOTION THEN THAT, UM, $20,500 BE, UM, ALLOCATED FROM MY, UM, A RP FUNDS TO PURCHASE THE POLICE DOGS, WHICH WERE REMOVED FROM THE CAPITAL EXPENSE AS WELL.
UNLESS SOMEBODY WANTS TO SHARE A COST FROM, DO WE NEED A VOICE COUNT
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FOR, WELL, IT, IT'D BE A ROLL CALL, BUT, BUT JUST AS A, AS A QUESTION, I JUST MAKING SURE THAT, BECAUSE YOU ALLOCATED SOME MONIES TO THE, UH, HERE, DO YOU STILL HAVE THAT A CALL? MAY 2ND? I DID, YES.AND THEN WHEN IT CAME TO FIRE RESCUE, WE DID CUT THIS SELF-CONTAINED BREATHING APPARATUS AND WE HEAR FROM FEMA AND PARKS AND RECREATION, WE CUT THE TRACTOR MOUNT BLOWER, AND IN PUBLIC WORKS WE CUT THE SHOP FLOOR SCRUBBER.
THEY REQUESTED A TOTAL OF THREE SERVICE, UH, VEHICLES WITH, UH, WORK BODIES.
WE, WE CUT ONE OF THOSE VEHICLES OUT.
WE CUT THE, UH, SINGLE AXLE DUMP TRUCK OUT SKID STEER, UM, ATTACHMENT OH, AND THE SKID STEER, SKID STEER PICKUP ROOM OF GUTTER ATTACHMENT TO THE STREET PARK.
AND SO WHAT, WHAT PAGE IS THAT ON THERE? THERE IS NO PAGE, THIS IS, DO YOU REMEMBER THIS HANDOUT WE GAVE YOU YESTERDAY? ONE PICTURES? YEAH.
SO THAT WAS ON THE, THAT WAS ON SECOND FROM LAST PAGE.
I ALMOST HATE TO SEE THAT THING GET STUCK BECAUSE I WAS WATCHING THEM DO A, A DITCH AND THE BURN UP THAT WAS IN SUCH BAD SHAPE AND THEY'RE IN THERE BY HAND.
WELL, WE DID NOT CUT THE, THE, UM, SKID STEER MULCHER COMBINATION FOR, FOR THE, THAT'S THE PIECE OF EQUIPMENT THAT'S SO IMPORTANT.
THIS IS ONE THAT DID A LOT OF WORK ON CURBS AND THINGS LIKE THAT.
SO, AND OF COURSE WE JUST, IN THIS YEAR'S BUDGET, WE CURRENTLY HAVE A UNIT THAT TAKES CARE OF THAT.
AND OF COURSE, IF ANYTHING COMES UP WITH, UM, VEHICLES THAT WE'VE HAD ISSUES WITH THAT WE DID NOT BUDGET, WE CAN ALWAYS COME BACK TO THE GOVERNING BOARD, UH, FOR BUDGET.
WELL, I THINK YOU'VE DONE A WONDERFUL JOB.
YOU AND KIM AND WHOEVER ELSE IS INVOLVED, DONE A WONDERFUL JOB IN, IN GETTING THIS DOWN TO WHERE YOU GOT IT DOWN TO.
AND I APPRECIATE ALL YOUR HARD WORK, ALL YOU AND YOUR STAFF'S HARD WORK.
THERE'S VERY LITTLE CUSHION JUST, JUST SO YOU ARE AWARE.
BUT, UM, IF, IF I CAN AT LEAST GET A, EVERYONE SUPPORTS THIS, THEN, THEN WE'LL UPDATE THE FUND BALANCE AND THAT, THAT AMOUNT COMING FROM FUND BALANCE INSTEAD OF 580,000, THAT WOULD BE ONE DAY $365,475.
AND AGAIN, BASED ON WHAT I SAID EARLIER ABOUT THAT DEBT SERVICES ARE NOT PAYING THIS YEAR THAT IT WAS IN THE FUND BALANCE, WE KNOW WE'VE GOT THAT, UM, IT, IT'S STILL TOO EARLY TO TELL HOW MUCH ADDITIONAL FUND BALANCE WE'LL HAVE, BUT WE'LL HAVE SOME UNRESTRICTED FUND BALANCE.
AND THEN WITH THAT, WHATEVER OTHER UNRESTRICTED FUND BALANCE WE HAVE, WE WOULD LIKE TO ALLOCATE THAT TOWARDS RESTRICTED FUNDS FOR FUTURE BUILDING PROJECTS AND CAPITAL SO WE CAN START BUILDING OUR OWN SAVINGS ACCOUNT FOR THOSE THINGS.
SO WE FOR LOANS EACH YEAR FOR, FOR VEHICLES AND CAPITAL.
AND IF WE HAVE A BUILD BIG BUILDING PROJECT COME UP, WE CAN AT LEAST PRODUCE THAT LIFE SIZE IN THE FUTURE.
SO GOALS FOR THOSE, THOSE ACCOUNTS TO BUILD UP OVER THE YEARS.
SO THE CONVERSATION THAT WE HAD, UM, YESTERDAY
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WAS WE WENT AHEAD AND PURCHASED ONE OF THE FIRE TRUCKS.WE ARE WAITING TO HEAR IF FEMA IS GOING TO APPROVE THE PURCHASING THE FIRETRUCK WITH THAT.
UM, WITH THE, UM, THERE'LL BP PROJECT THAT WE ASKED FOR, UM, CHANGE OF SCOPE OF WORK.
AND SO, UH, WE HOPE TO HEAR SOMETHING AT SOME POINT THIS SUMMER, THIS FALL ABOUT THAT.
AND THEN ONCE WE HEAR FROM THEM, WE'LL COME BACK TO THE BOARD AND IF THEY DO APPROVE THAT ALLEGATION, WE'LL GO AHEAD AND PURCHASE FIRE TRUCK AT THAT TIME.
UM, AND BEFORE WE CONTINUE ON, LET'S GO AHEAD AND PASS OUT THE FIVE YEAR CAPITAL.
UM, SO, UM, SENT YOU AN EMAIL EARLIER THIS MORNING.
IT WAS EITHER EARLIER THIS MORNING OR LAST NIGHT, ABOUT FIVE YEAR CAPITAL PLAN THAT WE HAVE.
SO I WANTED TO GIVE YOU A HARD COPY OF THIS AND THAT SHOWS YOU WHAT THE DEPARTMENTS ARE REQUESTING.
NOT ONLY THIS FFY BUT THE NEXT FOUR YEARS.
SO THAT'S THE PLAN THAT WE WORK TOWARDS.
UM, AND OBVIOUSLY THIS CHANGES FROM YEAR TO YEAR AS, AS NEED TO OCCUR, BUT YOU'LL BE ABLE TO SEE WHAT THOSE DEPARTMENTS, THAT'S CITYWIDE DEPARTMENT.
AND SO IF YOU LOOK AT THAT YOU HAVE ANY QUESTIONS, PLEASE DON'T HESITATE THAT.
UM, SO IF THERE ARE NO OTHER QUESTIONS ON GENERAL FUND AND WE'RE GONNA START MOVING.
WELL, I WAS JUST GONNA SAY ASK FOR THE RECORD STILL INCLUDES 2% COLA.
IT STILL, IT INCLUDES 2% COLA FOR OUR, FOR OUR EMPLOYEES.
IT DOES NOT, UH, TOUCH EMPLOYEE INSURANCE.
IT DOES NOT REDUCE ANOTHER PERSONNEL THAT WE TURN IN GENERAL.
AND YOU HAD MENTIONED THE PART-TIME EMPLOYEES FOR STANLEY WHITE REC CENTER.
AND SO ORIGINALLY WE WERE LOOKING AT HIRING THREE BRAND NEW FULL-TIME EMPLOYEES HELP OPERATE THAT.
REMEMBER THAT'S A 35,000 SQUARE FOOT FACILITY.
THERE'S GONNA BE A LOT OF ACTIVITIES GOING ON, SO WE'RE GONNA HAVE TO INCREASE OUR STAFF IN PARKS AND RECREATION.
THEY HAD SEVERAL POSITIONS THAT HAVE NOT BEEN FILLED FOR ONE REASON OR ANOTHER, LITERALLY FOR THE LAST SIX MONTHS.
AND SO I TOLD THE DIRECTOR, YOU HAVEN'T FILLED THEM, YOU'VE LOST THEM.
SO ONE OF THOSE WAS A SPECIAL PROJECTS COORDINATOR AND, AND SHE HAD SOME TURNOVER WITH SOME RECREATION COORDINATORS.
SO THE SPECIAL PROJECTS COORDINATOR HAS BEEN RECLASSIFIED, WE TALKED ABOUT THIS YESTERDAY, THAT'S BEEN RECLASSIFIED AND ACTUALLY PULL THE NAMES UP TO A FITNESS COORDINATOR.
THE OTHER TWO POSITIONS HAVE BEEN RECLASSIFIED, UM, TO AN ENRICHMENT COORDINATOR.
AND THE OTHER ONE WAS FOR A RECREATION ASSISTANT ALL BASED AT STANLEY WHITE RECREATION CENTER.
SO THOSE ARE THREE FULL-TIME POSITIONS WHO WOULD BE BASED THERE PLUS THESE FOUR ADDITIONAL POSITIONS, UH, WHICH WILL BE PART-TIME BECAUSE THAT FACILITY WILL NOT BE OPEN 40 HOURS A WEEK.
IT'LL BE OPEN ABOUT 93 HOURS A WEEK.
AND SO WE'VE GOT TO HAVE THAT PART-TIME STAFF TO, TO HELP MAN, MAN, THE FACILITY IN THE PROGRAM AS WELL AS SOME OF OUR OTHER STAFF FULLTIME STAFF THAT WILL HELP OUT WITH THAT.
SO THAT'S THREE FULLTIME? YES, THERE'S FOUR PARTTIME.
BECAUSE I WAS LIKE, I LOOKED AT THE BUDGET AND IT'S LIKE YOU WERE ONLY GONNA REQUEST FOUR PARTTIME POSITIONS.
THAT WE, WE KNEW THIS WAS GONNA BE A TIGHT BUDGET, SO WE DID NOT REQUEST ANY NEW FULL-TIME POSITIONS.
IT WAS ONLY THE PART-TIME HELP WITH THAT BASED ON WHAT WE'VE SEEN STAFF.
AND, AND, AND I SAID WHILE WE'RE AT IT, WE CAN GIVE YOU AN UPDATE ON WHERE THINGS WORK, WHAT THE FUND BALANCES ARE FOR, UM, ART RELATED PROJECTS.
UM, SO KIM, IF YOU WANNA CODE THAT, SO THIS REPORT IST AS OF APRIL 30TH.
UM, RIGHT NOW WE HAVE, I'M GONNA GO BY WARD.
THE WARD ONE HAS, UM, $300,000 SPENT, 300, ALMOST THREE $20,000 ENCUMBERED WITH A BALANCE OF FOUR 87,600.
AND SO WHAT'S WHAT'S REMAINING ON THAT IS THE HANCOCK STREET CUL, WHICH PUBLIC WORKS HAS BEEN WORKING ON DESIGN.
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THE ELECTRONIC SPEED LIMIT SIGN ELECTRONIC, THE, UH, I'M SORRY, THE UH, MIDDLE MIDLAND BROAD STREET SIGN INSTEAD, UH, CROSSWALK AND STOPLIGHTS THAT IS GOING BE GOING IN FIVE CODE ROAD THIS YEAR.THAT TWO AND 5 83 300 SPENT ABOUT 50,000 IN.
AND THAT'S MOSTLY IN THE SIDEWALKS.
SO WE STILL WORKING WITH ON THAT.
AND THEN WE, UM, $585,000 ACTUALLY SPENT 51,000.
I DON'T THINK THIS HAS BEEN UPDATED WITH THEIR VISION HEARING DEATH THAT WOULD REPORT.
AND THEN, UM, WAS THE BALANCE OF TWO $60,000 TRACK ROAD FOR FOUR, WE'VE GOT 20,000,080 FUNDS FOR FIVE, HAS $63,000 WITH UM, BALANCE OF 4 53 4 WITH EAST.
THOSE TWO PROJECTS EITHER ARE STILL IN DESIGN PERMIT DAYS.
AND THEN WARD SIX HAS 2 27, 5 45 REMAINING.
AND UM, THE LARGEST PROJECT MS, UM, SO
SO RIGHT NOW WE HAVE UM, ABOUT $3 MILLION THAT IS, UM, IS A, A BALANCE FOR ART FUNDS.
I KNOW THAT SOME OF THOSE PURCHASE ORDERS WILL GROW, BUT WE'LL DEFINITELY OF THIS AT THIS POINT IN TIME WILL BE ROLLING OVER SOME NEXT YEAR AND WE'LL BE ASSIGN TO FUNDS.
AND, AND SO IF ANY OF THE ARGUMENTS HAVE, I LIKE TO ALLOCATE SOME OF THAT FOR THIS YEAR'S BUDGET.
I WISH I COULD GIVE YOU NINE, BUT IT'S, WELL, IT'S THE DIRE NEED FOR THE WORKER.
ALRIGHT, ANY OTHER QUESTIONS, COMMENTS ON GENERAL? WELL BEFORE WE MOVE ON, WE MADE IT VERY EASY ON THIS BOARD AND KIND POSITION MYSELF THIS WAY, BUT, UM, NOT HAVE SOME TAX INCREASE BUDGET.
IF YOU'RE PUTTING BLINDERS ON AND JUST LOOKING AT THE BUDGET, YOU'VE JUST MADE IT VERY EASY TO SAY YES, WONDERFUL, NO TAX INCREASE, BUT CAN'T JUST LOOK AT THE YEAR BUDGET.
YOU'VE GOTTA LOOK AT WHAT THE PROPOSED OR WHAT THE IMPACT WILL BE, UH, ON THE NEXT YEAR BUDGET AND THE BUDGET AFTER THAT.
AND THE MORE YOU CUT NOW, THE HARDER IT GETS EVERY YEAR, UM, BY HAVING AT LEAST SOME INCREMENTAL TAX INCREASE YOU, YOU'RE BUILDING IN JUST A LITTLE BIT OF FLEXIBILITY, WHICH WILL GO A LONG WAYS NEXT YEAR TO A LOT OF THIS DISCUSSION AT THAT TIME.
I KNOW I PROBABLY JUST PREACHING TO ONE, NOT BEING MYSELF, BUT, UM, TWO TO JUST FOCUS ON NO TAX INCREASE WITHIN THIS
[00:35:02]
AND THEN WE'LL GET THE NEXT YEAR.UM, AS WE SAID YESTERDAY, 66% OF THE GENERAL FUND BUDGET IS THIS PERSONNEL.
UH, WE HAVE HAD TO SHRINK THE OPERATING EXPENSES DOWN.
AND IN THE REALITY WHERE'S, WHERE'S WE CAN GET, I AGREE WITH
AND WITHOUT DOING THAT, IT MAKES IT VERY, VERY HARD.
AND AT SOME POINT IN TIME WHEN YOU GET TO THE END OF THE CROSSROAD, YOU GO OVER 'CAUSE THAT DECISION WASN'T MADE AT THE PROPER TIME.
THAT'S THE ONLY THING THAT I REALLY LOOK AT TO SAY, WOW, WE GONNA MAKE THAT DECISION.
I KNOW IT'S A TOUGH DECISION TO MAKE, BUT YOU HAVE TO LOOK AT, IF YOU GO YOUR OWN HOME, WHEN YOU GO TO THE MARKET, GO TO THE GAS PUMP, YOU KNOW, YEAH.
YOU CAN PUT IN YOUR CAR, YOU KNOW HOW FAR YOU CAN GO WITH IT.
YOU HAVE TO BRUSH YOURSELF WITH IT.
AND THAT'S WHAT WE HAVE TO DO AS LEADERS TO MAKE THE RIGHT DECISION.
I THINK I FORGOT TO MAKE ONE OF THE POINTS HERE.
WHAT I WAS UM, EXPRESSING IN THIS CHART AS WELL IS RIGHT NOW I STATED THAT WE ARE 41ST, IF WE TAKE ARPA FUNDS OUT, OUR UNRESTRICTED IS 40% FROM BALANCE.
THAT'S WHERE WE WERE AT IN 2018, RIGHT THERE.
AND THEN HER, THEN THIS IS DUE TO FEMA AND LOOK HOW MUCH WE DROP.
SO NOT CONTINUING TO ADD A LITTLE BIT BACK AND BUILD UP OUR FUND BALANCE IF WE HAVE ANOTHER STORM AND WE'RE LOOKING AT SIGNIFICANTLY IMPACTING OUR, OUR, OUR SAVINGS.
AND THEN ON TOP OF THAT, SOMETHING ELSE HAPPENED THAT, THAT WOULD BE CATA STOPED.
YOU KNOW, YOU REALLY HAVE TO ACT ON FAITH AND KNOW WHAT YOU ARE DOING AND MAKE YOUR HEART CALL.
OTHERWISE NOT ONLY YOU, EVERYONE ELSE KNOWS SUFFER BECAUSE OF YOUR DECISION.
HOW MUCH, UM, HURRICANE FUNDS? ABOUT 3 MILLION THAT WE GOT RECEIVED.
UM, I ACTUALLY HAVE THAT IN COURT.
WELL I'D LIKE TO MAKE A MOTION FOR ONE THING.
I'D LIKE TO MAKE A MOTION FOR ONE THING.
IS THAT MOTION I THINK THAT I WAS GONNA ASK, I THINK THE MOTION, A MOTION RIGHT NOW WOULD BE OUTTA ORDER YOU, YOU CAN GIVE ME DIRECTION, GIVE DIRECTION AND CONSENSUS, BUT I DON'T, WE'RE NOT APPROVING A BUDGET.
IF YOU WOULD LIKE TO GIVE DIRECTION YES.
ON AN INCREASE, I WOULD LIKE TO GIVE DIRECTION FOR THE STAFF TO GO TO THAT ONE.
THAT'D CERTAINLY HELP OUT IN NEXT YEAR'S BUDGET.
YOU KNOW, I MEAN WE GOTTA THINK OUT THE BOX MAN.
WE GOTTA MAKE THE RIGHT DECISION.
YOU KNOW, YOU'RE NOT MAKING A DECISION FOR, YOU ARE MAKING A DECISION FOR EVERYBODY.
YOU KNOW, YOU GOTTA LOOK AT THE OPERAT, THE DAY TO DAY OPERATION.
LIKE
THAT'S WHY IT'S CALLED UNKNOWN.
WELL WHAT CONCERNS ME IS IF WE WERE TO HAVE ANOTHER FLORENCE, YOU KNOW, OH YEAH.
WE COULD BE BROKEN IN A HEARTBEAT.
SO ONE PENNY GIVE US ALMOST HUNDRED THOUSAND DOLLARS.
SO DO WE NEED TO GET A NOD WITH THAT TO GIVE THE DIRECTION, GIVE DIRECTIONS TO, TO THE MANAGER, RIGHT.
THEN IF THERE'S A CONSENSUS, WHAT CONSENSUS? YEAH.
BEFORE WE GET TO THE POINT BECAUSE YOUR MORE COMMENT, UM, I WOULD LIKE TO MAKE A COMMENT FOR HIS TAXES CONCERN, UM,
AND IF YOU LOOK AT HIS BUDGET, YOU SEE HOW MUCH OF TAX BASE GOES TO OUR GENERAL FUNDS, WHAT, 41%.
[00:40:01]
WITH ME PERSONALLY, UH, THE WAY THIS ECONOMY IS RIGHT NOW.AND, AND I KNOW WE ALL HAVE TO STRETCH OUR BUDGETS AT HOME AND WE GOTTA DO WHAT WE GOTTA DO TO MAKE IT WORK.
BUT YOU KNOW, I LOOK AT THE BROADER PICTURE HERE.
OUR CITIZENS THAT PAY TAXES DON'T HAVE THIS EXTRA MONEY.
LIKE ALL OF US SITTING AROUND THIS TABLE MAY HAVE.
AND IT IS A BURDEN ON TAXPAYERS.
AND I JUST READ TWO WEEKS AGO, THE STATE'S GOT A BILLION DOLLARS THEY'RE GONNA BE GIVING BACK TO, TO TAXPAYERS.
SO HERE WE ARE, YOU'RE TALKING ABOUT RAISING OUR TAXES HERE.
SO WE'LL BE TAKING THAT MONEY BACK FROM THEM.
AND I, I JUST, I JUST, I PERSONALLY AND ALL OF YOU KNOW THAT I SERVED WITH, ON, ON OUR FIRST TERM, WE HAD, UH, YOU UM, ASTO AND KENZIE AND
AND I STILL HOLD FIRM TO THAT BECAUSE WE GOT A BUDGET HERE AND, AND, AND KIM FOSTER ALL Y'ALL, I APPRECIATE THE HARD WORK.
YOU YOU HAVE DONE WHAT, HOW YOU DUG IN LAST NIGHT AND YOU COME UP WITH YOUR SIX $40,000.
I UNDERSTAND THAT AND I APPRECIATE THAT.
WE GOT A LOT OF FAT IN THIS BUDGET THAT WE CAN TRIM.
OKAY? IF IT MEANS THAT WE GOTTA GO UP ON OUR TAXES FOR OUR TAX PAYERS AND I KNOW YOU'VE TRIMMED IT GOOD AGAIN, I SAW, I LOOKED AT THE SHEET OF THINGS THAT YOU HAVE HAD CUT.
UM, BUT THAT'S JUST MY TAKE ON IT.
I I'M NOT GOING TO, I THINK WE CAN FIND SOME OTHER WAY.
NOT THIS YEAR, WHO KNOWS? BUT NEXT YEAR MAY AGREE MAYBE NEXT YEAR.
I THINK THE PROBLEM IS THAT, AND I'M NOT IN FAVOR OF RAISING TAXES BY NO MEANS, BUT IT'S MAYBE A PENNY THIS YEAR WOULD PREVENT FOUR OR 5 CENTS NEXT YEAR.
YOU KNOW, SOME, AT SOME POINT IN TIME.
THIS HAS GOT, WE'VE GOTTA MAKE SOME CHANGES, YOU KNOW, WE'VE GOTTA DO SOMETHING.
UM, THERE'S A LOT OF CONSTRUCTION GOING ON, THERE'S A LOT OF HOUSES BEING BUILT.
BUT WE REALLY NEED SOME HEAVY INDUSTRY AND COMMERCIAL PROPERTIES TO HELP OUT WITH IS TAX BASED.
MORE BUSINESS WE GET COME YEAR.
IF MY, MY ONLY CONCERN IS, IS THAT IF, IF YOU, IF WE DON'T DO A, MAYBE AT LEAST A PENNY THIS YEAR, THEN NEXT YEAR IT'S GONNA BE FIVE OR 6 CENTS.
'CAUSE IT'S ONLY GOING TO GET WORSE.
AND I DON'T KNOW, YOU WEREN'T HERE YESTERDAY.
SO WITH ALL DUE RESPECT, WE WENT THROUGH THIS BUDGET WITH A FINE TOOTH TONE, THE GENERAL FUND, AND WE CUT EVERY LITTLE THING IN THERE WE COULD FIND, YOU KNOW, AT SOME POINT IN TIME WE WERE DOWN TO RAISE TAXES OR CUT SERVICES THAT I, I DON'T WHAT'S A PENNY? WHAT'S A PENNY GOING TO COST THE HOMEOWNER? THAT'S WHAT WE'RE UM, SHE'S GOT ONE POINT ON HERE.
BUT I'M GONNA HAVE, SO AT 1 CENT OR 350,000 HOME, IT WOULD BE 35 PER YEAR.
MY THING IS, AGAIN, WHEN YOU PROVIDE A SERVICE, YOU PROVIDE IT WITH THE BEST OF YOUR ABILITY.
YOU DON'T WANNA START TAKING SHORTCUTS AND SAYING, WELL WE NOT GONNA PICK UP THIS WEEK 'CAUSE WE DON'T HAVE ENOUGH STAFF TO DO IT WITH.
SO YOU GOING LEAVE THAT AND THEN SOMETHING ELSE CAN HAPPEN.
YOU DON'T HAVE MONEY TO GET IT FIXED, SO YOU CAN'T GO BACK WEEK PICK GET UP.
SO WHY WASTE TIME TO SAY, I'M GONNA GET IT TOMORROW.
DO WHAT YOU CAN DO TODAY TO MAKE IT HAPPEN.
UM, WHEN YOU GO TO PUMP GAS, THEY DON'T CARE HOW MUCH MONEY YOU GOT, LONG AS YOU PAY FOR WHAT YOU WANT WHEN YOU ORDER GROCERIES AND YOU GOTTA TAKE YOUR MEDICATION.
THAT'S NOT, THAT'S NOT, THAT'S NOT CONSIDERED.
[00:45:02]
IN ORDER TO GO THROUGH LIFE.UM, WHAT WE HAVE TO DO, WHAT WE GOTTA DO.
IT'S NOT TRYING TO HURT NOBODY, YOU KNOW, IT'S JUST THAT WE HAVE BUSINESS TO RUN.
THIS IS A BUSINESS YOU HAVE TO RUN TO SERVE THE PEOPLE AND YOU CAN'T KEEP PUSHING IT BACK, PUSHING IT BACK.
YOU KNOW, IF YOUR ROOF IS BIG, YOU CAN'T PUT A TOP UP IT FOR THE DAY.
AND I HOPE THAT YOU KNOW, SOMEBODY BLESS YOU WITH A NEW ROOF.
YOU KNOW, YOU HAVE TO, YOU HAVE TO MAKE SOME KIND OF WAY TO GET THAT THING FIXED BEFORE IT BECOMES A REAL SERIOUS PROBLEM.
SO YESTERDAY I WAS THE ONLY ALMAN NOT HERE.
SO HOW MANY WAS FOR RAISING TAXES AND HOW MANY WAS FOR NOT, UH, WE DIDN'T DO THAT.
YOU DIDN'T GIVE ANY OPINIONS OR WHETHER YOU WE GET A LITTLE BIT, BUT IT WAS ONLY TWO I THINK WAS BUT WAS IT TWO? IT WAS JUST TWO WENT RECORD.
WELL, AND AND LEMME JUST BRING UP AND ALL AND I'LL PICK, PICK EVERY YEAR, LAST YEAR ALL THE RENT SAID YOU TOOK THE POSITION OF NO TAX INCREASE WRONG WITH THE MAYOR, UH, WHAT YOUR POSITION EXACTLY WAS LAST YEAR.
CAN YOU EXPLAIN TO ME HOW EACH YEAR YOU CAN STAND BY A POSITION OF NO TAX WHEN YOU SEE A BUDGET, UH, AND YOU SEE THE, THE LEVELS OF INCREASE THAT ARE HAPPENING ALREADY, WHETHER IT BE FOR HEALTHCARE, YOU KNOW, INSURANCES, FUEL, JUST REPAIR COSTS, WHATEVER IT IS, YOU SEE SIGNIFICANT INCREASES HAPPENING EVERY YEAR.
YOU HAVE TO RELY ON THE STAFF THAT PROVIDES THE SERVICES THAT THE COMMUNITY HAS COME TO EXPECT AND WANT.
HOW DO YOU JUSTIFY THESE EVER INCREASING COSTS WITH NO TAX INCREASE EVERY YEAR? I, I, I KNOW THAT IT DOESN'T WORK, IT COMES TO A BREAKING POINT, BUT I'D LIKE TO HEAR FROM EACH OF YOU, SINCE BOTH OF YOU SEEM TO BE ADAMANT ABOUT NO TAX INCREASE.
HOW DOES, HOW DOES THAT WORK YEAR AFTER YEAR AFTER BILL, JUST LIKE IT DID LAST NIGHT, I'M SORRY, JUST LIKE IT DID LAST NIGHT.
STAFF WENT BACK AND TRINITY AND FOUND SOME MONEY IN THE, UH, GENERAL FUND, HALF HALF OF WHAT WAS BEING PROPOSED.
THE OTHER HALF WAS JUST A, I DON'T WANT TO CALL IT A GIMMICK, IT JUST SOMETHING THAT WAS THERE THAT COULD BE DONE WITH NO FINANCIAL IMPACT.
RIGHT? SO THAT YOU DON'T HAVE THAT EVERY YEAR.
SO, BUT, BUT WE DO HAVE EITHER AND, AND NEWBERG HAS GROWTH FOR MANY YEARS NOW AND IT'S NOT ENOUGH TO COVER THE, THE, AND SO YOU'RE EVENTUALLY GONNA SERVICE, JUST LIKE YOU SAID YESTERDAY, AND THANKFULLY WE CAN AVOID THAT THIS YEAR.
AND WHAT SERVICE DO YOU WANT TO CUT? I DON'T HAVE TO CUT ANY SERVICES BASED ON, I'M TALKING ABOUT NEXT YEAR.
WELL, BUT CHANCES ARE ALL YOU'RE NOT GONNA BE ON THE BOARD.
YOU'RE PASSING THE BUCK ONTO SOMEBODY ELSE.
YOU'RE KICKING THAT CAN DOWN THE ROAD.
AND QUITE HONESTLY, I THINK YOU'RE DOING IT FOR POLITICAL REASONS AS OPPOSED TO IN SERVICE TO THE COMMUNITY.
AND THAT MAY COME ACROSS AS BEING HARSH, BUT THERE IS A REALITY FOR THAT THIS NEXT YEAR'S PROPERTY AND I HAVE NOT RAISED, YOU KNOW, LIKE I SAID, I HAVE NOT RAISING TAXES ON THE SAME COMMENT I MADE LAST YEAR ON OUR MOST VULNERABLE POPULATION WHOSE REVALUATIONS DOUBLED IN SOME CASES.
AND THE INFLATION THAT ALDERMAN KINSEY IS TALKING ABOUT, THE MONEY IS GOING TO OTHER PLACES.
WE HAVE RAISED RATES IN, UH, ALL OF OUR OTHER ENTERPRISE FUNDS AND WE HAVEN'T HAD THE DISCUSSION YET ON ELECTRIC.
SO I DON'T APPRECIATE BEING LECTURED ABOUT THE GENERAL FUND WHEN WE HAVEN'T EVEN COVERED THE ENTERPRISE FUNDS, WHICH WE DID RAISE LAST YEAR.
AND ONE WE WOULD PROBABLY RAISE THIS YEAR.
SO TAKING IT IN TOTAL AS A TAX PAYER BILL, THERE ARE A LOT OF OTHER BILLS THAT HAVE TO BE PAID.
[00:50:01]
WE WERE LOOKING AT GIVING DIRECTION TO STAFF FOR THE 1 CENT.WE DID GET THE INFORMATION HERE FOR THE CAME.
SO WHAT DIRECTION DO WE WANT TO GIVE THE STAFF NOW? DO WE NEED TO LOOK AT THE ONE SENT AND GET APPROVAL FOR THAT TO MOVE FORWARD? OR WHERE ARE WE MAYOR, YOU SHOULD COUNT THOSE WHO ROOM SAID AND THEN THAT'S THE CONSENSUS.
ALRIGHT, WELL LET'S DO THAT THEN.
UM, CITY CLERK VOLUNTEER, WE'RE GOING TO DO WE THEN WE NEED TO GO BACK TO A MOTION TO DO THAT.
FOR DIRECTION THEN WE'LL JUST DO A COUNT.
UM, ON THE, UH, I COULD SUPPORT A ONE SEVEN YES THAT I CAN SUPPORT OF 1 CENT
NO MAJORITY STAFF HAS DIRECTION.
ALRIGHT, WE'RE GOING TO GO AHEAD, UH, AT THE ENTERPRISE FUNDS.
SO AT THIS TIME I'D LIKE TO ASK CHARLIE, CHARLIE THIS ONE? YES.
DO WE HAVE A TASK FOR THAT MR. WE DO NOT.
TODD, DO I HAVE A PROMISE? HE'S GONNA DO A PRESENTATION BEFORE WE GET INTO THE BUILDING? GOOD AFTERNOON.
THANK YOU FOR, UH, ALLOWING ME THE TIME TO TALK ABOUT THIS, UH, VERY IMPORTANT MATTER FOR THE ELECTRIC UTILITY AS WELL AS OUR CUSTOMERS.
SOME THINGS KEEP ME UP AT NIGHT AND THESE ARE THE THINGS THAT KEEP ME UP AT NIGHT ABOUT THE ELECTRIC UTILITY.
HOW DO WE PROVIDE ESSENTIAL ELECTRIC SERVICE THAT'S SAFE, AFFORDABLE, RELIABLE, RESILIENT? HOW DO WE PROTECT OUR INVESTMENT IN THE ELECTRIC UTILITY? HOW DO WE ENSURE THAT ELECTRIC UTILITY IS FINANCIALLY HELP? I SPENT A LOT OF TIME AND ENERGY THINKING ABOUT THESE THINGS AND, UM, GIVEN MY CONCERNS, I FOUND IT NECESSARY TO PERFORM AN ELECTRIC UTILITY FINANCIAL.
AND AFTER WE DO THE FINANCIAL STUDY, I THOUGHT IT BE WORTHWHILE TO CONSIDER THE FINDINGS OF THAT FINANCIAL STUDY.
SO I HIRED UTILITY FINANCIAL SOLUTIONS TO BE WITH US, UH, TODAY AND QUOTE THE RESULTS ON WHAT WE WERE HIRED TO DO.
UM, UTILITY FINANCIAL SOLUTIONS, VERY HIGHLY RESPECTED, UM, CONSULTING COMPANY THAT, UH, SPECIFICALLY WHAT UTILITY RATE, DESIGN FINANCIAL INFORMATION WE INSPECTED ALL OVER THE COUNTRY.
I'D LIKE FOR THEM AFTER I GET THROUGH SOME INTRODUCTIONS TO, UH, COME UP AND TALK ABOUT FINDING THE REPORT.
AND WHEN WE SAT, WHEN I SAT DOWN WITH, WITH UTILITY FINANCIAL SOLUTIONS, UM, I ASKED THEM TO HELP ME DETERMINE OUR PROJECTED REVENUE.
NOT ONLY THIS YEAR, BUT GOING FORWARD.
UM, I THINK IT'S VERY, VERY IMPORTANT THAT WE HAVE AT LEAST A THREE TO FIVE YEAR PLAN ON THE FINANCIAL HEALTH AND UTILITY.
I ALSO ASKED THEM TO DEVELOP A A THREE YEAR RATE PLAN WITH REVENUE REQUIREMENTS AND DESIGN THE RATES SUPPORTING THOSE REVENUE REQUIREMENTS AND THOSE RATES THAT ARE SUPPORTING THE REVENUE REQUIREMENTS WOULD INCLUDE BOTH OPERATING CAPITAL REVENUE REQUIREMENTS AS WELL AS A VARIABLE POWER SUPPLY COST.
SO WHAT ARE REVENUE REQUIREMENTS? UM, I KIND OF PUT 'EM IN TWO DIFFERENT CATEGORIES, FIXED AND VARIABLE.
THOSE THAT ARE FINANCIAL EXPERTS IN THE ROOM.
UM, YOU MAY TAKE EXCEPTIONS TO SOME OF MY COMMENTS COMING FROM AN ENGINEER.
[00:55:01]
BE A LITTLE MISPLACED, BUT I'LL TRY TO LEAD YOU THROUGH WHAT I THINK ARE FIXED.AND THESE ARE, THESE ARE ITEMS WE MUST PAY, LIKE OUR POWER SUPPLY.
IT'S 60% OF ALL OF OUR COSTS TO OPERATE THE UTILITY.
AND THERE'S VARIABLE COMPONENTS INSIDE THAT POWER SUPPLY.
AND THERE'S CONTRACTUAL COMPONENTS INSIDE THAT POWER SUPPLY THAT
UM, THEY VARY WITH WEATHER, SO ARE UP WHEN TEMPERATURES ARE WARM, HOT AND TEMPERATURES COLD SALES ARE UP.
OTHER THAN THAT, UM, SALES ARE VERY, VERY NEUTRAL.
IT'S ALSO INFLUENCED BY OUR TERRITORY.
UM, AND IT IS REALLY, REALLY HARD TO GROW SALES.
UM, FOR OUR BUSINESS, OUR INDUSTRY, UM, WE HAVE TO BRING ON SIX TO 700 NEW HOMES TO MAKE THE REVENUE TO MILLION.
SO OUR SALES ARE FIXED, OUR CASH BALANCE MORE FINANCIAL PRESENTATION, BUT IT'S DECLINING.
WE HAVE A POLICY POLICY, FIXED POLICY, GENERAL FUNDS CONTRIBUTIONS TO GENERAL FUNDS HAVE BEEN DECREASING HISTORICALLY AND DEBT SERVICE, UM, THAT'S SOMETHING ELSE WE MUST PAY.
IT'S INCREASING AND IT'S, IT'S A FIXED AMOUNT.
PRIOR REQUIREMENTS, ALSO FIXED REQUIREMENTS THAT I CONSIDER, UM, MANDATES THAT WE HAVE ON UTILITY.
UM, AND THEY'RE INCREASING, UH, SAFETY.
UH, WE CAN'T IGNORE SAFETY STANDARDS.
SAFETY STANDARDS ARE BEING IMPROVED ON A DAILY BASIS.
UM, WE CAN'T IGNORE OUR TRAINING AND EDUCATION FOR OUR EMPLOYEES AND OUR, OUR SYSTEM CT, UH, RELOCATING ALL OF OUR UTILITIES TO RESPOND TO HIGHWAY PRACTICE, BRING THEM INTO TOWN.
BROADBAND SERVICE PROVIDER COMING THROUGH OUR TOWN, WE HAVE TO RESPOND TO THEM.
THEY HAVE A RIGHT TO BE ON OUR POLL.
THEY HAVE A RIGHT TO BE ON OUR, OUR EASEMENT.
IT, IT'S A COST TO THE UTILITY.
THERE'S NOT MUCH I CAN DO ABOUT IT OTHER THAN RESPOND TO IT AND, UH, PAY TO ALLOW TO EXIST ON OUR POLLS.
WITH ALL THAT CONSTRUCTION, OUR UTILITY ROTATES.
THE COST OF THOSE ARE DRIVEN UP RIGHT NOW.
THEY'RE ABOUT FOUR TIMES, SIX YEARS AGO.
UM, OUR LABOR AND BENEFITS ARE INCREASING.
UM, AS WE GO TO THE SYSTEM, UM, AS THE SYSTEM GROWS, MUST HAVE STAFF TO COVER EXPANDED TERRITORY, THE ADDITIONAL CUSTOMERS THAT WE MUST SERVE.
UM, AND INFLATION PRICES GO ON, ON LABOR BENEFITS AS WELL AS ALL OF OTHER ASPECTS OF OUR BUSINESS.
UM, WE SEE INFLATION RATES TO 900%, HUNDRED PERCENT TRANSFORMERS ON REVENUE.
WE'VE TALKED ABOUT THAT BEFORE.
VARIABLE COMPONENTS TO OUR, UM, REVENUE REQUIREMENTS.
HOW DO WE RESPOND TO SEVERE WEATHER EVENTS? UM, WE MIGHT ROLL OUT GRADE A HURRICANE PLANT AND WE'LL GET EVERYBODY BACK ON GETTING QUICK.
OR WE COULD MAKE A DECISION NOT TO DO THAT.
WE COULD NOT SPEND MONEY ON THAT.
SAME THING WITH OUTAGES AND OUTAGE DETECTION.
ISOLATING OUR OUTAGES AND RESPOND TO THOSE.
TAKE TWO O'CLOCK IN THE MORNING OUTAGE.
WE DON'T HAVE TO CALL A GUY IN.
WE DON'T WANNA SPEND THOSE OVERTIME DOLLARS.
WE CAN WAIT UNTIL THE MORNING UNTIL STAFF GETS HERE AND THEN WE CAN RESPOND TO IT.
THESE ARE THINGS THAT WE HAVE SOME CHOICES WITH.
UM, WE'VE MADE HUGE IMPROVEMENTS IN THOSE AREAS OVER THE LAST SIX YEARS.
PUT A LOT OF TIME AND MONEY AND ENERGY INTO IT.
I THINK OUR CUSTOMERS LIKE IT, BUT WE, WE COULD BACK OFF OF IT.
WE COULD NOT BE SO CONCERNED WITH, WITH HOW MUCH TIME AREA WE FOUND METER IN THE BILLING.
CUSTOMER SERVICE IS ANOTHER ONE.
WE CONTINUE TO HAVE WALK IN SERVICE.
CASHIERING, COST MONEY, CASHIERING IS EXPENSIVE.
UM, ALL THOSE DIFFERENT PAYMENT OPTIONS THAT WE OFFER OUR CUSTOMERS REQUIRE ADDITIONAL STAFF TO MANAGE THOSE.
CUSTOMER ENGAGEMENT ACTIVITIES, WE COULD BACK OFF OF FEST AND WE BRING 1 0 1 AND SAFETY AWARENESS THAT WE HAVE TO DO FOR THE COMMUNITY.
[01:00:01]
ALL THOSE EVENTS THAT WE, WE PARTICIPATE IN, AND THOSE ARE ALL KIND OF VARIABLE.WE HAVE SOME, SOME DECISION MAKING ABILITY IN THAT OTHER VARIABLE REVENUE REQUIREMENTS.
UM, SYSTEM AGE, UM, AND IT'S USEFUL LIFE.
UM, HOW MUCH PREVENTATIVE MAINTENANCE DO WE DO OR NOT DO? SHOULD WE JUST WAIT UNTIL THE POLE POLE EFFECT FALLS DOWN AND THEN RESPOND TO IT? SHOULD WE BE PROACTIVE IN TRYING TO MAINTAIN THE SYSTEM SO WE KEEP OUR CUSTOMERS ON AND NOT KEEP QUITE AS REACTIVE? UM, AROSE.
UM, OUR LINE EXTENSION POLICIES UNDER COLLECTING, UM, WHAT WE DECIDED THERE WAS A THREE YEAR REVENUE CREDIT.
UM, AND BASED ON THAT, WE GET A LITTLE BIT OF MONEY UP FRONT.
BUT OVERALL, WHAT I'M SEEING ON THE LINE EXTENSIONS I'M DOING, IT'S A SEVEN TO 10 YEAR PAYBACK BEFORE UTILITY.
ANY MONEY AFTER THE HOUSE IS SOLD, THE CUSTOMER MOVES IN SEVEN, 10 YEARS AND WE'RE SPENDING HUNDREDS OF THOUSANDS OF DOLLARS ON LINE EXTENSION AGREEMENTS, WIRE GOING INTO THE GROUND, BUILDING THIS, UM, TERRITORIAL EXTENSION, BIGGER TERRITORY GETS THE MORE LABOR, THE MORE MATERIAL, THE MORE EQUIPMENT WE NEED.
WE COULD SAY NO TO IT, I GUESS, AND STOP, UM, EXPANDING.
UM, WITH OUR, WITH, WITH THE LOADS THAT ARE COMING TO NEWBURN.
WE'VE HEARD ME TALK ABOUT IT BEFORE.
UM, AND WE CANNOT INVEST, MAKE DECISIONS NOT TO INVEST IN, IN CAPACITY TO SERVE OUR CUSTOMERS.
UH, BUT WE HAVE BEEN CONTINUING TO INVEST THAT AND OUR CUSTOMERS SEEM TO ENJOY THAT AND RESPECT THAT.
UM, LABOR, WE NEED QUALIFIED LABOR.
UM, WE NEED EXPERIENCED LABOR.
THEY NEED TO BE TRAINED, THEY NEED TO BE RETAINABLE.
AND THERE'S PRESSURES IN THE MARKET AND YOU KNOW, THAT'S A VARIABLE.
HOW WE REACT TO THAT, HOW WE INVEST IN OUR, IN OUR STAFF AND OUR LABOR.
THOSE ARE DECISIONS THAT WE, SOME OTHER VARIABLE FORECASTING PRESSURES THAT I'M SEEING IN THE INDUSTRY.
SEEING IN NEWBURN ON THIS UTILITY WEATHER EVENTS, I DON'T KNOW, KNOW WHAT THEY'RE GONNA DO.
YOU HAVE TO BE READY TO RESPOND.
SEVERE WEATHER EVENTS, CATASTROPHIC WEATHER EVENTS.
TOMORROW'S THUNDERSTORM THAT I HAVE TO BRING IN MY ENTIRE STAFF AT TWO O'CLOCK IN THE MORNING AND PAY OVERTIME.
DON'T KNOW WHAT THAT'S GONNA BE, RIGHT? WE NEED TO BE PREPARED FOR THAT.
UH, WE'LL TALK ABOUT IT A LITTLE BIT MORE, UM, LATER ON IN THIS DISCUSSION.
WE DO HAVE CA DECLINING CASH RESERVES.
THAT'S PUTTING PRESSURE ON THE UTILITY.
WE HAVE INCREASE IN POWER SUPPLY COSTS, PUTTING PRESSURE ON THE UTILITY IN OUR SYSTEM AGE.
UM, IN RESPONDING TO OUR SYSTEM AGE, I WOULD SAY WE'LL HAVE TO INCREASE CAPITAL SPENDING, UM, WITH THAT SYSTEM.
AGE BECOMES, LEMME EXPLAIN THIS, OUR ABILITY TO AVOID COSTS IN OUR POWER SUPPLY DECREASE AS OUR GENERATION GETS OLDER AND OLDER AND IT'S 20 YEARS OLD NOW, BEYOND ITS USEFUL LIFE, I HAVE A HARDER, HARDER TIME RUNNING THAT GENERATION TO AVOID THE COST.
CONTRACTUALLY, I'M ALLOWED TO RUN 18 MEGAWATTS A GENERATION.
IT'S WORTH ABOUT $4.7 MILLION A YEAR AND AVOID THE COST.
YOU GET ABOUT HALF NET 'CAUSE OF THE AGE OF OUR SYSTEM.
UM, AND IT'S GONNA DECREASE AS THAT GENER GENERAT SALES START A HARD TIME RUNNING.
UM, AND OUR DISTRIBUTION SYSTEM, UM, IT'S PARTS OF IT ARE OVER 50 YEARS OLD.
UM, SO THAT'S GONNA BE, YOU HAVE TO HAVE THE MONEY TO DO THAT.
OTHER PRESSURES, RELIABILITY, RESILIENCY, CONTINGENCY PLANS.
UM, OUR CUSTOMER EXPECTATION, MORE RELIABLE RESILIENCE SYSTEM.
THEY, THEY, THEY LIKE THAT, THAT'S SOMETHING THAT THEY WANT.
PRESENTLY, WE CANNOT SUPPORT ANY MINUS ONE CONTINGENCIES.
AND WHAT I MEAN BY THAT IS I DON'T HAVE ANY MORE THAN ONE CONTINGENCY.
SO GIVEN THE RIGHT CONDITION AND WE TAKE ONE OF MY CONTINGENCIES AWAY, UM, WE'RE, WE'RE OUT POWERED LAW.
UM, WE JUST CAME REALLY CLOSE TO THAT MISS WINTER, I LOST ONE OF THREE TRANSFORMERS AT GLENBURG SUBSTATION.
GOT IT BACK IN ABOUT TWO WEEKS AGO, 50 YEARS OLD.
UM, IF THAT HAPPENS, WHEN WE'RE PEAK LOADING CONDITIONS BASED, GENERALLY TEMPERATURE DRIVEN, UM, WE'LL HAVE TO PLEAD FOR LOAD SHARING TO OUR CUSTOMER.
OTHER THINGS THAT ARE IMPACTING, UM, UTILITY MANDATES.
[01:05:01]
CARBON REDUCTION IS COMMON.UM, WHAT THAT MEANS IS HIGHER, UH, COST UN FUELED EV CHARGING.
UM, YOU'RE GONNA PUT PRESSURE ON US.
UM, PROBABLY MOST LIKELY ON THE CAPACITY SIDE WHERE SOMEBODY WANTS TO BRING IN TWO MORE EV CARS TO THEIR GARAGE AND NOW MY TRANSFORMER AT THE CURBSIDE IS OVERLOADED AND I CAN'T CHARGE THEM FOR THAT.
THE UTILITY HAS TO RESPOND TO CHANGE THAT, THAT TRANSFORMER ROUTE TO SERVE THAT CUSTOMER.
UM, THE GRIP GRANT, UM, AS YOU WELL KNOW, APPLIED FOR THAT IS GONNA REQUIRE A $13 MILLION MATCH.
UM, I'M HOPING THAT, UH, I CAN ACCOUNT FOR A LOT OF THAT $13 MILLION WITH OUR IN KIND LABOR AND EQUIPMENT.
UM, BUT REALISTICALLY, UM, I THINK THAT'S PROBABLY AGGRESSIVE.
SO WE, WE PROBABLY NEED TO BE IN A POSITION WHERE WE CAN BORROW 13 MILLION.
UM, POWER F GRANT, SAME THING.
UM, UM, UH, MAKING APPLICATION FOR THAT ONE THAT'S A MILLION DOLLARS WITH A $333,000 MATCH.
UM, WE NEED TO BE PREPARED TO SPEND THAT MONEY AND PROVIDE THAT CONTRIBUTION.
SO WITH THAT SAID, UM, I'D LIKE TO INTRODUCE A UTILITY FINANCIAL SUBMISSIONS TO, UH, TO DISCUSS THEIR FINANCIAL REPORT AND THEN WE'LL GO INTO, UM, BASED ON THE RESULTS OF THAT REPORT, UM, OBVIOUSLY A GREAT RECOMMENDATION PLAN UNDER COME UP.
ALL RIGHT, HOW DO I GET MY PRESENTATION UP THERE? UH, THERE WE GO.
NO, WELL, GOOD AFTERNOON EVERYBODY.
UM, THANK YOU SO MUCH FOR ALLOWING US TO PRESENT TO YOU TODAY.
I'M VICE PRESIDENT OF UTILITY FINANCIAL SOLUTIONS AND WE DO COST OF SERVICE STUDIES, FINANCIAL PLANS AND RATE DESIGNS FOR UTILITIES ACROSS THE COUNTRY, GUAM AND THE CARIBBEAN.
UM, WE ALSO TEACH FOR AMERICAN PUBLIC POWER ASSOCIATION, UH, UM, COST OF SERVICE STUDY, FINANCIAL PLANNING COURSES.
WE ALSO, UM, SPEAK AT JOINT ACTION AGENCIES ACROSS THE COUNTRY, INCLUDING ELECTRICITIES.
UM, SO WE WERE HIRED TO LOOK AT THE ELECTRIC DEPARTMENT AND PERFORM A FINANCIAL PROJECTION.
UM, WHAT A FINANCIAL PROJECTION ACTUALLY DOES IS IT LOOKS AT WHERE YOU ARE FINANCIALLY TODAY AND WHERE YOU'RE MOVING INTO THE FUTURE.
BUT WHAT I DID WANNA TALK ABOUT A LITTLE BIT ABOUT IS YOUR HISTORY.
UM, YOU GUYS HAVE NOT HAD A RATE INCREASE IN, UM, SEVEN YEARS.
AND IN FACT THE FOUR RATE CHANGES PRIOR TO THAT WERE RATE DECREASES.
WHAT HAPPENED IS ABOUT NINE YEARS AGO, ELECTRICITY, UM, LOWERED THE WHOLESALE POWER COSTS.
SOME DEBT WAS PAID OFF ON THEIR SIDE.
YOU GUYS RESPONDED BY HAVING RATE DECREASES, UM, TO MATCH THE REDUCTION IN POWER SUPPLY EXPENSES.
SO THIS OCCURRED, UM, STARTING OFF WITH A RATE DECREASE OF 3% IN, UH, 2015.
YOU FOLLOWED UP WITH A 12% DECREASE IN SEPTEMBER OF 2015, FOLLOWED BY TWO OTHER SMALL RATE INCREASES IN 2016 AND 2017.
SO THAT'S WHERE YOU ARE HISTORICALLY.
THE LAST NINE YEARS YOU HAVE NOT HAD RATE INCREASES AND AGAIN, YOU HAVE RATE DECREASES.
BUT WHAT'S HAPPENED IN THE LAST, UM, NINE YEARS SINCE THAT TIME, UM, WE HAVE HAD THIS CHART THAT THIS CHART IS SHOWING YOU HERE.
AS LONG AS THIS IS THE COST PER KILOWATT HOUR, YOU CAN SEE, UM, THAT AT ONE TIME IN 20 14, 20, UM, 14, YOU ARE ALMOST AT 10 CENTS FOR WHOLESALE POWER SUPPLY.
THESE ARE THE RATE DECREASES THAT I'M, THAT I'M TALKING ABOUT THAT I TALKED ABOUT.
THIS GRAYED OUT AREA WAS YOUR RATE DECREASE PERIOD.
YOU CAN SEE SINCE THAT TIME 2018, THE COST FOR KILOWATT HOUR FOR POWER SUPPLY HAS ACTUALLY INCREASED DURING THIS TIME.
AGAIN, YOU HAVE NOT HAD ANY RATE INCREASES.
AND THIS IS JUST ON THE POWER SUPPLY SIDE.
SO WHAT WE CAN SEE FROM THE CHART HERE IS THAT YOUR COSTS PER KILOWATT HOUR FOR A POWER SUPPLY ALONE HAVE INCREASED SINCE, UM, THE END OF YOUR DECREASE RATE PERIOD.
IN ADDITION, UM, THIS CHART ACTUALLY SHOWS, UM, THE ORANGE IS ALL YOUR POWER SUPPLY.
THIS ORANGE LINE HERE AND ALL THE FILL IN IS YOUR POWER SUPPLY.
YOUR POWER SUPPLY COSTS ARE ABOUT 70%
[01:10:01]
OF YOUR OVERALL BUDGET FOR THE ELECTRIC DEPARTMENT.THE YELLOW AREA HERE IS ALL OTHER COSTS BESIDES POWER SUPPLY.
THE GREEN LINE IS ACTUALLY YOUR REVENUES DURING THAT PERIOD.
SO WHAT YOU CAN SEE IS, UM, THE, THE MARGIN FROM THE END OF YOUR RATE DECREASE PERIOD TO NOW, UM, HAS GOTTEN SMALLER.
WHAT IS CAUSING THAT, UM, IS THE INCREASE PER KILOWATT HOUR IN THE POWER SUPPLY AND ALSO THE INCREASE IN ALL OTHER EXPENSES DURING THIS SAME PERIOD FROM 2018.
UM, JUST GENERAL NUMBERS, NOT CUMULATIVE.
SIMPLE MATH, UM, INFLATION HAS INCREASED ABOUT 21% YOUR COST DURING THAT SAME PERIOD FOR ALL OTHER, UM, AND ALL OVER ELECTRIC BUDGET HAS INCREASED ABOUT ALMOST 20%.
SO YOU'RE SLIGHTLY UNDER INFLATION.
UM, BUT YOU'RE TRACKING VERY CLOSELY TO INFLATION.
SO WHAT YOU'RE SEEING HERE IS RIGHT NOW THE UTILITY, UM, HAS BEEN OPERATING AND PROJECTED TO OPERATE, UM, AT A LOSS.
AND SO OUR PLAN IS TO HOPEFULLY, UM, LOOK AT KEY TARGETS, THINGS LIKE OPERATING INCOME, CASH BALANCES, AND DEBT COVERAGE RATIO, AND MAKE A PLAN TO SLOWLY TURN THAT AROUND.
THE NEXT SLIDE THAT I'M GOING TO SHOW YOU IS NOT THE PLAN.
WE ARE RECOMMENDING PERHAPS THAT RIGHT NOW WHAT I'M TRYING TO SHOW YOU NEXT IS WHAT WOULD HAPPEN IF WE FULLY MET OUR REVENUE REQUIREMENTS ACCORDING TO, YOU KNOW, PRUDENT FINANCIAL PLANNING.
UM, WHEN WE LOOK AT YOUR KEY FINANCIAL TARGETS, WHAT WOULD IT TAKE NEXT YEAR TO TURN IT AROUND? THAT'S NOT WHAT I'M RECOMMENDING.
I'M RECOMMENDING A SLOWER, MORE INCREMENTAL APPROACH.
I DO WANT TO PUT IN PERSPECTIVE A LITTLE BIT OF WHERE WE ARE TODAY.
UM, ACTUALLY BEFORE WE GET TO THAT SLIDE, I DO WANNA POINT OUT, UM, LET'S GO BACK TO THIS HERE.
I KIND OF ANTICIPATED QUESTIONS OF, UH, WHAT HAS BEEN INCREASING HERE.
UM, IN THE ALL OTHER CATEGORY, I'M ALREADY SHOWN YOU THAT POWER SUPPLY COSTS ON A PER KILOWATT HOUR HAVE BEEN INCREASING, BUT YOUR OTHER COSTS HAVE BEEN INCREASING AS WELL.
THERE'S FOUR KEY AREAS, UM, THAT HAVE BEEN INCREASING.
ALL OF YOUR EXPENSES OBVIOUSLY HAVE BEEN INCREASING, BUT THESE ARE THE FOUR THAT JUMPED OUT AT ME.
UM, THE TOP THREE EVERYBODY IS FACING.
UM, THIS FIRST, THE TOP ONE SHOWS, UM, SALARIES AND EXPENSES FOR THE, UM, ELECTRIC ADMINISTRATION DEPARTMENT INCREASING.
UM, THE SECOND ITEM THERE IS THE ELECTRIC DISTRIBUTION, UM, SALARIES, MOST LIKELY, UM, LINE, NOT LINE WORKERS.
THIS IS ACTUALLY HAPPENING ACROSS THE COUNTRY.
IT IS GETTING HARDER AND HARDER TO RETAIN AND REPLACE AND ATTRACT, UM, TALENTED, UM, WORKERS IN THE ELECTRIC UTILITY AND THE, THE UTILITIES INDUSTRY IN GENERAL.
SO WHAT'S MORE AND MORE IMPORTANT TO BE MAKING SURE YOU'RE, UM, YOU'RE PAYING THEM COMPETITIVELY.
MY UNDERSTANDING IS THIS WAS DONE ON A WAGE SALARY.
SO WE WANNA MAKE SURE WE'RE COMPETITIVE WITH OUR WAGES THAT WE'RE TRAINING OUR, UM, OUR EMPLOYEES AND THAT WE KEEP THEM PASSIONATE ABOUT WHAT THEY DO, UM, FOR THEIR SKILLS BECAUSE IT'S BEING, IT'S HARDER AND HARDER TO REPLACE OTHER, UM, SKILLED UTILITY WORKERS ARE ACTUALLY BEING RECRUITED AWAY FROM, UM, UTILITIES ACROSS THE COUNTRY.
SO THESE ARE VERY IMPORTANT LINE ITEMS THAT WE ARE ACTUALLY SEEING ACROSS THE COUNTRY.
INCREASE, UM, THIS LINE HERE IS YOUR MATERIALS AND SUPPLIES.
UM, WE'VE SEEN JUST THIS, THIS IS ACTUALLY YOUR RETURN FROM FIVE HAVE INCREASED ABOUT FOURFOLD SINCE 2020.
UM, THAT'S DIRECTLY MAINLY DRIVEN INFLATION.
WE'RE SEEING SOME, UM, AREAS, UH, I I THINK GAS AND OIL WILL TRIPLE, YOU KNOW, UP INTO THE 9000% CHARLIE HAD ON HIS SLIDE EARLIER.
UM, SO THAT LINE ITEM IS DIRECTLY RELATED TO INFLATIONARY MEASURES.
THE FOURTH ITEM HERE IS THE TRANSFER TO THE CITY.
UM, THAT HAS INCREASED ABOUT 17% SINCE 2020.
SO THESE FOUR LINE ITEMS, UM, OF COURSE THE BUDGET IN ALL, UM, AND AND EXPENSES IN ALL HAVE BEEN AFFECTED EVERY LINE ITEM BY SOME SORT OF STATIONARY NUMBER.
BUT THESE ITEMS ARE THERE AREA THAT HAVE BEEN, UM, THAT JUMPED OUT AT ME THAT I THOUGHT I MIGHT ANTICIPATE SOME QUESTIONS ON WHAT HAS MADE THAT YELLOW PORTION THAT I SHOWED EARLIER INCREASE BEFORE I GO ON TO THE NEXT SLIDE.
WE'RE JUST GONNA SHOW YOU WHERE, UM, WE WOULD NEED TO GO TODAY TO MEET ALL KEY REQUIREMENTS.
AND AGAIN, I'M NOT RECOMMENDING JUMPING TO THAT FIRST STAGE.
DO I HAVE ANY QUESTIONS? DO YOU GUYS HAVE ANY QUESTIONS ON ANYTHING THAT YOU'VE SEEN SO FAR? OKAY.
QUESTIONS ALSO THROUGHOUT ME AT THE END.
UM, SO THIS IS ACTUALLY YOUR, UH, CASH, YOUR CASH
[01:15:01]
BALANCE.I WANNA REVIEW THIS FIRST, YOUR CASH BALANCE.
I WANNA REVIEW WHAT, UH, THIS BLUE CHART HERE IS, UM, WHERE YOUR RATE PERIOD DECREASES ENDED.
AND AT THAT TIME, YOUR CASH BALANCE WAS RIGHT ABOUT EXACTLY WHAT WE WOULD RECOMMEND YOUR CASH BALANCE TO BE.
THIS TOP LINE HERE IS YOUR MINIMUM CASH THAT WE RECOMMEND ACCORDING TO KEY FINANCIAL STAR TARGETS.
IN THE ELECTRIC UTILITY, THE THINGS WE LOOK AT ARE YOUR O AND M EXPENSES.
I WANT YOU TO BE ABLE TO PAY YOUR BILLS.
I LOOK AT HISTORICAL INVESTMENT IN THE SYSTEM.
IF YOU HAVE A ICE STORM, WINDSTORM, WHATEVER IT MAY BE, I WANT YOU TO BE ABLE TO GET THE SYSTEM UP AND RUNNING TO KEEP YOUR THE SERVICE RELIABLE.
I LOOK AT DEBT SERVICE PAYMENTS.
I WANT YOU TO BE ABLE TO ALWAYS PAY YOUR DEBT SERVICE PAYMENT, UM, AND YOUR CAPITAL IMPROVEMENT PROGRAM.
IF YOU TELL ME YOU'RE GONNA SPEND A MILLION DOLLARS, FOR EXAMPLE, NEXT YEAR, I WANT YOU TO HAVE A MILLION DOLLARS TO BEGIN, BEGIN THAT AT THE BEGINNING OF THE CONSTRUCTION SEASON.
SO WHEN I SAY THAT I WANT YOU TO HOLD, AND THIS, UM, CHART HERE IS ABOUT $19 MILLION MINIMUM.
THAT'S TO COVER THE, UM, RISKS UNIQUE TO THE NEW BERN ELECTRIC.
YOUR CURRENT CASH RESERVE POLICY, UM, IS AT ABOUT 15, UM, MILLION.
AND YOU CAN SEE THE, THE LINE THERE IS SHOWING THAT AT THE END OF YOUR RATE DECREASE PERIOD, YOU WERE ABOUT RIGHT AT THE MINIMUM WE'D RECOMMEND.
AND SINCE THAT TIME DUE, DUE TO ALL THE THINGS THAT WE'VE COVERED, UM, YOUR CASH BALANCE HAS BROUGHT SIGNIFICANTLY.
AND YOU'RE SITTING ON ABOUT 12 AND A HALF MILLION DOLLARS TODAY UNDER YOUR CURRENT CASH RESERVE POLICY.
UM, YOU DO SEE A LITTLE BLIP HERE.
UM, THIS LITTLE BLIP, YOU'LL SEE IT ON THE REVENUE SIDE AND YOU'LL SEE IT ON THE CASH SIDE.
UM, FOR SOME BILLING ERRORS THAT WAS UNIQUE, A ONE TIME THING, YOU'RE NOT GONNA SEE THE, THAT BLIP IN THE FUTURE.
THAT CERTAINLY WOULD ACTUALLY BE, UH, A, A MUCH FASTER SLOPE THERE.
SO CASH BALANCES, UM, ARE DECREASING.
AND AGAIN, THAT'S A FUNCTION OF MAINLY, UM, INCREASED POWER SUPPLY EXPENSES AND INCREASED EXPENSES IN GENERAL.
I WANNA TALK A LITTLE BIT ABOUT AGE OF YOUR SYSTEM.
UM, WE LOOK AT JUST AS AN ACCOUNTANT OR A FINANCE PERSON, I LOOK AT AGE OF YOUR SYSTEM.
IF YOUR SYSTEM IS MUCH, UM, UNDER, UH, 50% DEPRECIATED, IF YOU DON'T HAVE AT LEAST 50% OF YOUR NET BOOK VALUE REMAINING, I WOULD EXPECT YOUR CAPITAL IMPROVEMENT PROGRAM TO BE MUCH MORE AGGRESSIVE.
YOU SHOULD BE REINVESTING IN THE SYSTEM AT A ABOVE THE RATE WE'D APPRECIATE.
UM, IF WE DON'T KEEP REINVESTING IN THE SYSTEM, OUR SYSTEM'S AGING, IT AFFECTS RELIABILITY.
UM, AND UH, THE NEED FOR A RATE INCREASE, THE NEED FOR REINVESTMENT IN THE SYSTEM DOESN'T GO AWAY.
IT ONLY COMPOUNDS IF YOU NEED, UM, YOU KNOW, SOME CAPITAL IMPROVEMENTS TODAY, YOU'RE NOT PUSHING THROUGH.
IT DOESN'T GO AWAY BECAUSE YOU PUSHED IT DOWN THE ROAD.
SO RIGHT NOW, IN 2018, UM, AT THE END OF YOUR RATE DECREASE PERIOD, YOUR SYSTEM WAS ABOUT 45, UH, PERCENT REMAINING NET BOOK VALUE TODAY, YOU'RE SITTING AT ABOUT 39%.
WE WOULD CONSIDER ANYTHING UNDER 50%, UM, STARTING TO BE, UH, MAYBE LOOKED AT TO BE AN AGING SYSTEM.
AND I WOULD EXPECT YOUR CAPITAL IMPROVEMENT PROGRAM TO BE MUCH MORE AGGRESSIVE TO GET, UM, THE SYSTEM BACK TO AT LEAST 50% APPRECIATED OR LESS.
SO THIS IS THAT CASH RESERVE POLICY I WAS TALKING ABOUT IN CASE YOU HAD ANY QUESTIONS SPECIFICALLY ON THAT.
AGAIN, I LOOK AT RISKS UNIQUE TO THE ELECTRIC UTILITY.
UM, AND AGAIN, WE RECOMMEND HOLDING AT LEAST $19 MILLION AND YOU HAVE ABOUT 12 AND A HALF MILLION DOLLARS TODAY.
SO, UM, THIS IS A TABLE SHOWING YOU, IF YOU GUYS DID ABSOLUTELY NOTHING, IF YOU GUYS DECIDED I DON'T, WE'RE NOT GONNA HAVE A RATE INCREASE, WHERE WOULD YOU BE FINANCIALLY TODAY AND INTO THE FUTURE? YOUR CURRENT CLAIM? THE LAST TWO, UM, AUDITS SHOWED YOU WERE OPERATING AT LOSSES.
UM, THOSE LOSSES WOULD CONTINUE.
OBVIOUSLY IF YOU DID, IF YOU DID NOTHING TODAY, UM, YOUR LOSSES WOULD CONTINUE TO GROW.
UM, YOUR CASH BALANCE WOULD TURN NEGATIVE AND OF COURSE YOU WOULDN'T NEED YOUR DEBT COVERAGE RATIO.
THIS IS IF YOU DID NOTHING TODAY.
I'M GONNA SHOW YOU THE NEXT SLIDE.
UM, WHERE, WHAT WOULD IT TAKE TO TURN THIS AROUND IN ONE RATE INCREASE? WE ARE NOT RECOMMENDING THAT WE ARE RECOMMENDING SLOW, UM, INCREMENTAL RATE INCREASES TO MEET FINANCIAL TARGETS.
BUT I WANNA GIVE YOU AN IDEA OF WHERE YOU ARE ARE AT FINANCIALLY TODAY.
IF WE WERE TO MEET OUR FULLY MEET OUR OPERATING REVENUE REQUIREMENTS, WHICH MEANS I'M MEETING
[01:20:01]
ALL MY EXPENSES, I'M MEETING A PROPER RATE OF RETURN, WHICH IS A BREAK EVEN RATE OF RETURN FOR MUNICIPAL UTILITY, YOU WOULD NEED AT LEAST AN 18% RATE INCREASE, UM, FOLLOWED BY SOME INFLATIONARY TYPE INCREASES AFTER THAT.OBVIOUSLY, I CAN TELL FROM SITTING HERE LISTENING TODAY, YOU GUYS HAVE HAD, UH, A COUPLE LONG HARD DAYS.
UM, YOU ARE FINANCIALLY SAVVY AND, UM, YOU, UH, CARE FOR YOUR CUSTOMERS, YOU CARE FOR YOUR COMMUNITY.
UM, SO WE'RE, WE'RE TRYING TO PUT TOGETHER A PLAN TO BALANCE THAT.
WHAT CAN WE DO TO CHANGE THESE TARGETS? UM, WORK TO MORE, UM, YOU KNOW, FINANCIALLY PRUDENT TARGETS, BUT YET KEEP OUR INCREASE AS LOW IMPACT ON THE CUSTOMER THAT WE CAN.
SO THE PLAN THAT WE PUT TOGETHER, UM, IS 5% RATE INCREASES OVER THE NEXT THREE YEARS.
AND AFTER THAT, SOME INFLATIONARY TYPE INCREASES THEREAFTER.
UM, YOUR COST INCREASE, UM, OBVIOUSLY WE NEED TO KEEP UP WITH THOSE INCREASES.
THE REASON YOU'RE FACED WITH LARGER INCREASES TODAY IS KEEP IN MIND YOU HAVEN'T HAD A RATE INCREASE OR A RATE CHANGE IN OVER NINE YEARS WHILE COSTS HAVE INCREASED LATELY.
AND, UM, AND PRIOR TO THAT YOU HAD SOME RATE DECREASES.
WHAT THIS PLAN DOES IS IT ACTUALLY DOESN'T EVEN FULLY FUND REVENUE REQUIREMENTS.
LET'S TALK ABOUT THAT REAL QUICKLY.
YOU'VE BEEN TALKING ABOUT THE GENERAL FUND THE LAST COUPLE DAYS.
UM, WHAT AN ENTERPRISE FUND DOES IS IT'S, IT'S RUN ALMOST LIKE A BUSINESS.
IT PROVIDES A SERVICE AND UM, IT SHOULD BE RECOUPING AND COVERING THE REVENUES FROM THAT ENTERPRISE FUND SHOULD BE RECOUPING ITS OWN EXPENSES, ITS CAPITAL AND ITS DEBT PAYMENTS.
SO WE NEED TO MAKE SURE WE'RE KEEPING IT HEALTHY TO KEEP PROVIDING THOSE SERVICES.
SO YOU CAN SEE A 5% RE INCREASE HERE.
ACTUALLY, I'M ALMOST, UM, COVERING MY LOSSES.
I ACTUALLY WANT YOUR OPERATING INCOME TO BE CLOSER TO ABOUT $2.5 MILLION AND UP TO 3 MILLION, WHICH YOU CAN SEE I'VE WORKED YOU OVER THAT PROJECTION PERIOD.
BUT WHAT I LOOK AT IS I TRY TO BALANCE THESE THREE KEY TARGETS.
OPERATING INCOME, PROJECTED CASH BALANCES, AND MY DEBT COVERAGE RATIO.
I WANNA MAKE SURE YOU'RE ALWAYS GETTING YOUR DEBT COVERAGE RATIO.
ALL DEBT COVERAGE RATIO IS, IS IT'S THE AMOUNT, DID I CASH FLOW ENOUGH IN EACH YEAR TO PAY MY DEBT SERVICE PAYMENT AT LEAST ONE TIME.
ANYTHING OVER A ONE SHOWS YOU HOW MUCH YOU CASH FLOW TO PAY YOUR DEBT SERVICE PAYMENT.
YOUR YOUR DEBT COVERAGE RATIOS ARE, UM, PROBABLY AT LEAST A 1 2 5.
UM, FOR FINANCIAL PLANNING PURPOSES, I'D LIKE YOU TO MEET AT LEAST A ONE FIVE MINIMUM OR GREATER.
YOUR CASH BALANCES YOU CAN SEE SLOWLY GET YOU UP TO THE MINIMUM.
THAT'S ONLY THAT $20 MILLION RIGHT THERE IS ONLY 120 DAYS CASH ON HAND.
HIGHLY GRADE BOND UTILITIES LIKE TO SEE AT LEAST 200 DAYS OF CASH ON HAND.
SO THAT IS A MINIMUM I WANT YOU TO HOLD.
AND THAT'S EVEN ON THE LOWER END.
UM, YOU GUYS ARE LOOKING AT POSSIBLY, UH, BONDING AND ELECTRIC UTILITY.
THE NUMBER ONE TARGET RIGHT HERE IS GOT COVERAGE RATIO, WHICH WE GOT YOU HEALTHY, UM, DAYS, CASH ON HAND, HIGHLY RATED BOND UTILITIES.
UM, BOND RATING AGENCIES WILL LOOK AT 200 DAYS PLUS DAYS.
CASH ON HAND ISN'T, UH, DOESN'T GIVE YOU A HIGHER RATING IN ISOLATION, BUT IT IS ONE PIECE THAT HELPS.
SO IT'S IMPORTANT THAT WE GET THAT UP TO THE MINIMUM.
AND AGAIN, THAT'S ONLY 120 DAYS OPERATING INCOME.
OBVIOUSLY YOU'RE OPERATING STILL, UH, AT VERY SMALL LOSSES THE FIRST COUPLE YEARS AND YOU WORK UP TO YOUR MINIMUM, UM, RATE OF RETURN.
THAT'S NOT A RATE OF RETURN THAT AN INVESTOR OWN UTILITY ENJOYS.
THIS IS A VERY SMALL, UH, I THINK A LITTLE OVER 3% RATE OF RETURN THAT RECOUP.
ONE IS INTEREST EXPENSE ON DEBT BECAUSE IT'S BELOW THE OPERATING INCOME LINE.
AND TWO IS THE INFLATIONARY INCREASE ON THE ASSETS I HAVE INVESTED IN THE SYSTEM.
AND WHAT DO I MEAN BY THAT? BY BUYING A MILLION DOLLAR ASSET TODAY, IT'S GONNA COST ME 1,000,003 IN THE FUTURE AND I'M TRYING TO RECOUP THAT INFLATIONARY INCREASE SO I CAN REPLACE ASSETS IN THE FUTURE.
SO THIS RATE TRACK, UM, JUST THE PURE 5% IS ABOUT $6 A MONTH, UM, TO THE AVERAGE RESIDENTIAL CUSTOMER.
CHRIS IS GONNA COME UP HERE AND TALK ABOUT SOMETHING CALLED A POWER COST ADJUSTMENT.
A POWER COST ADJUSTMENT IS THE NUMBER ONE POLICY UTILITIES CAN PUT THROUGH TODAY TO PROTECT THEIR CHANGES IN OPERATING EXPENSES.
YOU HERE AT NEW BERN, UM, YOUR ELECTRIC EXPENSES ARE ABOUT 7% OF YOUR COST.
YOU CAN MITIGATE CHANGES IN 70% OF YOUR COST CHANGES BY HAVING
[01:25:01]
A PCA.WE ARE DOING EMERGENCY PCAS ACROSS THE COUNTRY.
POWER SUPPLY COSTS ARE EXTREMELY VOLATILE.
UM, AND THOSE THAT DO NOT HAVE A PO UH, POWER COST ADJUSTMENT POLICY IN PLACE HAVE SEEN THEIR CATCH CAMERAS IS DROP VERY RAPIDLY.
UM, SO CHRIS IS GONNA TALK ABOUT, UH, HOW THE COST ADJUSTMENT, WHAT THAT MEANS AND HOW THAT WOULD SUPPLEMENT A RATE PLAN AND PROTECT CHANGES IN THE FUTURE.
HAVING A PCA, UM, REALLY AGAIN, MITIGATES ABOUT 70% OF YOUR CHANGES IN YOUR OPERATING BUDGET AND IT REALLY LETS THE BOARD CONCENTRATE ON THE THINGS THAT ARE IN THEIR CONTROL AND IN GENERAL KEEPS BASE RATE ADJUSTMENTS, UM, MUCH LOWER RIGHT NOW IN, IN ESSENTIAL PLAYING CATCH UP, UM, WITH, WITH THESE RATE CHANGES.
AND WE'RE JUST TRYING TO PUT A SLOW INCREMENTAL PLAN IN, UM, TO, UH, GET YOU WHERE YOU NEED TO BE FINANCIALLY.
BEFORE I TURN IT OVER TO CHRIS, DO YOU GUYS HAVE ANY QUESTIONS? I'M OBVIOUSLY GONNA STICK AROUND.
CHRIS IS GONNA COME UP AND TALK ABOUT A POWER COST ADJUSTMENT AND THE ACTUAL RATE DESIGN FOR THE CUSTOMER AND WHAT DOES 5% MEAN TO THEM, UM, AND 5% MEAN ON A DOLLAR BASIS.
BUT ARE THERE ANY QUESTIONS BEFORE HE GETS UP AND TALKS ABOUT THAT? YEAH, I'LL ASK A QUESTION.
I HAD TO WELCOME A GROUP DOWN AT THE DOUBLE TREE.
UM, I HAVEN'T HEARD YOU TALK ABOUT OUR DEBT RELIEF THAT'S COMING NEXT YEAR.
WHERE IS THAT CAPTURED IN YOUR PRESENTATION? GREAT QUESTION.
SO, UM, IF YOU SEE THIS, UM, SO THERE'S TWO THINGS THAT ARE HAPPENING RIGHT HERE.
ONE IS IT'S KIND OF BLENDED IN HERE THAT, THAT YOU PROBABLY CAN'T SEE BECAUSE I SHOW BORROWING IN THERE AT THE SAME TIME.
SO IF YOU'RE TALKING ABOUT, UM, A DEBT SCHEDULE THAT IT'S FALLS OFF AND, AND YOU'RE FINISHED PAYING FOR THAT, THAT'S GONNA FALL IN THIS LINE RIGHT HERE.
BUT WHAT'S KIND OF SHING THAT OR HIDING THAT, IF YOU WILL, IS UM, THE BOND THAT WE HAVE PROJECTED, THE CAPITAL IMPROVEMENT PROGRAM THAT WE HAVE PROJECTED HERE.
UM, WE HAVE PUT IN $20 MILLION IN GRANT FUNDS IN ANTICIPATION OF RECEIVING THAT.
OF COURSE YOU'RE NOT GUARANTEED TO RECEIVE THAT.
I DO WANNA MENTION REAL BRIEFLY, SO LET'S THAT THAT'S A GOOD QUESTION 'CAUSE I WANNA TALK A LITTLE BIT ABOUT CONCENTRATING ON THAT CAPITAL.
YOU HAVE, UM, TWO CAPITAL IMPROVEMENT PROJECTS THERE THAT ARE, UH, MORE AGGRESSIVE.
ONE IS FOR CAPACITY AND ONE IS FOR UM, THE ALL THE GENERATION FLEET GENERATION TRANSFER THAT CHARLIE TALKED ABOUT EARLIER.
SO, UM, WE HAVE HERE TWO BOND ISSUES TO HELP SUPPORT THAT CAPITAL IMPROVEMENT PROGRAM.
THE GRANT FUNDS YOU CAN SEE THERE, IF YOU DO NOT GET THOSE GRANT FUNDS, WHAT WOULD HAPPEN IS THOSE CAP, THAT CAPITAL IMPROVEMENT PROGRAM WOULD JUST SMOOTH OUT.
SO THE RATE TRACK WOULDN'T CHANGE UNDER THAT SCENARIO.
AND IN CASE ANY OF YOU ARE SITTING THERE SAYING, OKAY, THAT'S A CAPITAL AGGRESSIVE CAPITAL IMPROVEMENT PROGRAM THAT'S REALLY DRIVING THIS RATE INCREASE, SO TO SPEAK, AND THE DEBT IS DRIVING THIS RATE INCREASE.
IF YOU REMOVED ALL OF THAT CAPITAL AND ONLY SPENT $3.5 MILLION A YEAR, WHICH IS, UM, YOUR TYPICAL SPENDING THAT YOU HAVE SPENT HISTORICALLY, THAT RATE INCREASE COULD DROP TO 4%.
SO YOU MIGHT BE SAYING, HOW CAN WE REMOVE THAT MANY MILLIONS OF DOLLARS AND ONLY AFFECT OUR RATE INCREASE BY BY 1%? WELL, IT'S THE CONCEPT OF, YOU KNOW, WE'RE BORROWING FOR THAT, WE'RE SPREADING THAT PREPAYMENT BACK OVER TIME OVER THE LIFE OF THAT ASSET.
UM, SO AGAIN, WE'RE PLAYING CATCH UP WITH THIS RATE INCREASE AND UM, NOTHING INTO THAT, OBVIOUSLY OUR CAPITAL IMPROVEMENT PROGRAM AND, AND OTHER COSTS LIKE THAT.
CHARLIE, DID YOU HAVE SOMETHING TO ADD TO THAT? I WAS GONNA TRY TO ADD SOME CLARITY TO THE NEXT QUESTION AND OKAY.
THE FIVE, THE, THE RATE, WHAT WE CALL RATE ADJUSTMENT IS FOCUSED ON OPERATING THE CAPITAL EXPENSES.
WHAT YOU'RE GONNA HEAR NEXT TO IN THE PCA POWER COST ADJUSTMENT CHARGE IS COLLECTING OUR POWER SUPPLY EXPENSES THAT OUR RATES ARE NOT CAPTURING INSIDE THAT DISCUSSION OF THE POWER SUPPLY COST ADJUSTMENT.
YOU WILL SEE THE CONSIDERATION TOWARDS DEBT SERVICE COMING ON IN 2020 JU JULY, 2025.
THAT ANSWERS YOUR QUESTION 'CAUSE THAT DEBT SERVICE IS NOT CAUGHT OUT AS DEBT SERVICE ON OUR FINANCIALS.
IT'S IN OUR OPERATING POWER BILL WE GET FROM ELECTRICITIES EVERY MONTH.
BUT I THINK WHAT WE'RE GONNA TRY TO, UM, EXPLAIN HERE SHORTLY IS THAT OUR CURRENT RATES ARE NOT RECOVERING ALL OF OUR POWER SUPPLY COSTS.
I KNOW THAT, AND IT WASN'T INTENDED TO UNTIL THE DEBT SERVICE IS SATISFIED NEXT YEAR, 20 MIDDLE OF 2025
[01:30:01]
WAS ALWAYS THE GOAL THAT WE WERE TRYING TO REACH BECAUSE THAT'S WHEN HOW MUCH COMES OFF EVERY MONTH ARE OUR VERBAL, UH, ABOUT 280,000.I'M TRYING TO FIGURE OUT WHERE IN THE PROJECTED EXPENSES HAVE YOU CAPTURED THAT UNDER THE POWER SUPPLY.
YOU WILL, YOU WILL SEE THAT IN THE UNDER POWER SUPPLY EXPENSE AND YOU WILL SEE HOW THAT WILL BE KIND OF AUTOMATIC IN THE FUTURE.
WHEN CHRIS TALKS ABOUT, UM, THE POWER COST ADJUSTMENT, WHICH YOU CURRENTLY DON'T HAVE THAT WE'RE RECOMMENDING IMPLEMENT WITH THIS PLAN.
I APOLOGIZE, I THOUGHT YOU MEANT RIGHT.
IT'S CONFUSING BECAUSE IT'S NOT LISTED IS YOUR, YOUR DEBT, UM, COMES THROUGH POWER SUPPLY.
IT'S SHOWING AS AN OPERATING EXPENSE AND THAT FALLS OFF, UM, THROUGH YOUR POWER SUPPLY EXPENSES.
ANY OTHER QUESTIONS? UM, YES, I HAVE ONE QUESTION.
YOU HAD MENTIONED CONDITION OF THE EQUIPMENT AND THAT THE SAVINGS, WE HAVE LIKE, I THINK YOU SAID 12 MILLION IN THERE, WE SHOULD HAVE MAYBE 18 MILLION IN THE, IN YOUR CASH RESERVES.
FOR THE SYSTEM THAT WE HAVE NOW, WHAT IS FROM, FROM WHAT YOU HAVE SEEN IS UNDERSTAND WHERE ARE WE WITH OUR EQUIPMENT NOW AND BEING AHEAD OF THE GAME.
SO JUST TO GIVE YOU A LITTLE CLARITY, I'M DEFINITELY NOT AN ENGINEER, BUT ALL I DO FROM LOOKING AT UM, A BALANCE SHEET IS LOOK AT THE AGE OF THE SYSTEM AND I CAN TELL YOU WHERE UTILITY TYPICALLY FALLS AND WHAT INDICATORS USUALLY MAKE THAT, UH, CAPITAL IMPROVEMENT PROGRAM GO UP IN THE FUTURE.
AGAIN, YOU ARE AT 30, YOU ONLY HAVE A REMAINING NET BOOK VALUE OF ABOUT, UH, 39%, MEANING YOU'VE DEPRECIATED 61% OF YOUR VALUE IN ASSETS.
GIVEN THE AGE OF THAT, JUST FROM AN ACCOUNTING STANDPOINT, LOOKING AT THAT, I WOULD EXPECT YOUR CAPITAL IMPROVEMENT PROGRAM TO BE MUCH MORE AGGRESSIVE IN THE FUTURE IN ORDER TO BE ABLE TO BRING THAT NET BOOK VALUE.
SO WE HAVE AT LEAST 50% OF OUR REMAINING NET BOOK VALUE.
UM, DO I, WHERE DO I SEE UTILITIES ACROSS THE COUNTRY? I SEE 'EM ALL OVER THE BOARD IN GENERAL.
I SEE UTILITIES THAT ARE, UM, DEPRECIATED 40 TO 60%, WHICH WE LIKE THAT TO BE AT LEAST, UM, 50% OR BELOW.
UM, FOR DEPRECIATE YOUR 61% DEPRECIATED CURRENTLY THIS WHAT WE OWE 61% PERCENT DEPRECIATED.
CURRENTLY YOU HAVE A REMAINING 39% NETWORK VALUE.
AND FROM, FROM THE ENGINEER'S PERSPECTIVE, MY CAPITAL PLAN, MY ASSESSMENT OF THE SYSTEM OVER THE LAST SIX YEARS IS VERY CAPITAL INTENSIVE.
UM, WITHOUT EVEN KNOWING THIS INFORMATION THAT MY PERSPECTIVE THAT IT'S TOLD IT, IT NEEDS REPAIR, IT NEEDS MORE MONEY INVESTED INTO IT BASED ON THIS FINANCIAL REPORT, MY ASSESSMENT MATCHES, UM, FINANCE FOLKS ARE SAYING IT'S AN OLD SYSTEM.
SO WE'RE KIND, IT'S KIND OF A GOOD STANDARD CHECK THAT WE'RE BOTH FAR OFF ON EACH OTHER.
SO WITHIN THE NEXT SIX YEARS OR SO, WE'LL BE LOOKING AT PURCHASING ANOTHER YOU STILL EQUIPMENT? IS THAT WHAT YOU'RE SAYING? EVERY YEAR? OKAY.
WELL CHARLIE, COULD I JUST PUT IT IN THE SIMPLEST TERMS POSSIBLE.
WE HAVE AN AGING INFRASTRUCTURE IN OUR ELECTRIC UTILITY AND WE'RE BEHIND THE EIGHT BALL NOW AND BEFORE IT JUST RUNS ITSELF INTO THE GROUND, WE HAVE TO BECOME MORE AGGRESSIVE IN UPDATING THAT INFRASTRUCTURE.
IS THAT A SIMPLE WAY OF PUTTING THE STATE ELECTRIC? I I WOULD AGREE WITH YOU.
THAT'S WHAT I'M TRYING TO GET.
WE HAVE TO GET MORE AGGRESSIVE IN REPLACING OUR THAT SIMPLE AND COLLECTING THE REVENUE IS REQUIRED.
ANY OTHER QUESTIONS? CHRIS HAS A FEW SLIDES TO TALK ABOUT PCA AND UM, THE, THE ACTUAL RATE DESIGN.
ANY QUESTIONS FOR ME? ALL IS COVERED.
YOU MAY MENTION THAT THE LINE EXTENSIONS WAS COSTING HUNDREDS OF THOUSANDS OF DOLLARS AND WE'RE NOT RECOUPING FOR SEVEN OR EIGHT YEARS BEFORE WE SEE ANY BENEFIT FROM IT TAKING SUCH A LONG TIME.
THAT'S THE WAY THE POLICY OPERATES.
WE GIVE A THREE YEAR REVENUE CREDIT BASED ON THE TOTAL CONSTRUCTION COST
[01:35:02]
AND ONLY THE DIFFERENCE THE CUSTOMER PAY.WE ONLY RECRUIT VERY SMALL AMOUNT OF TOTAL COST.
THAT WAS POLICY THAT WE, WE ADOPTED.
AND WHO IS THE WHICH? UH, THE BOARD.
UM, BASED ON PRESSURE FROM, UH, DEVELOPERS, THAT IS HOW WE RESPONDED TO AND OF THOSE LINE EXTENSIONS THAT I'VE DONE OVER THE LAST TWO YEARS, I LOOK AT THE RETURN LAND WEST BEND AND IT'S ABOUT SEVEN TO 10 YEARS.
NOT EVERY DEVELOPMENT'S THE SAME.
THEY ALL DON'T HAVE THE SAME DENSITY.
THEY'RE NOT ALL APPLE TO APPLE, BUT PRETTY CONSISTENT BATTERY SEVEN, 10 YEARS BEFORE WE RECEIVE ANY MONEY.
AND THAT'S SEVEN TO 10 YEARS FROM WHEN THE HOUSE IS SOLD AND SOMEBODY PLUGGED SOMETHING INTO THE WALL.
SO IT'S A DIFFERENT, IT'S A DIFFERENT MODEL.
DOES THAT ANSWER YOUR QUESTION? YES SIR.
I'M WITH UTILITY FINANCIAL SOLUTIONS AND UM, AS DAWN AND CHARLIE SHOWED ELOQUENTLY, UH, DESCRIBED AND POINTED OUT AND WALKED THROUGH ALL THROUGH, WE HAVE TREMENDOUS PRESSURE COST PRESSURES FROM A VARIETY OF, UH, SOURCES.
UH, ONE BEING POWER SUPPLY, WHICH AGAIN IS THE COST TO GET POWER TO YOUR TOWN DOORSTEP, SO TO SPEAK, OR AT YOUR SUBSTATION TO DISTRIBUTE TO YOUR TOWN.
UH, THAT REPRESENTS ROUGHLY 70% OF YOUR TOTAL ANNUAL EXPENDITURES IN THE ELECTRIC DEPARTMENT.
SO WE WANT TO TALK ABOUT ONE MECHANISM THAT WE HAVE MANY, MANY UTILITIES IMPLEMENTING OR HAVE ALREADY IMPLEMENTED ACROSS THE COUNTRY CALLED THE POWER COST ADJUSTMENT.
SO WITH THE POWER COST ADJUSTMENT, LET ME BACK UP ONE MOMENT.
YOUR BASE RATES HAVE A CERTAIN AMOUNT OF POWER SUPPLY COST RECOVERY BUILT INTO THOSE BASE RATES.
SO FOR THE TIME PERIOD THAT YOU HAVE THE SAME BASE RATES AND YOU DON'T CHANGE YOUR RATES AS POWER SUPPLY COSTS CHANGE, YOU'RE NEEDING TO ABSORB THAT COST DIFFERENTIAL.
SO WHAT A POWER COST ADJUSTMENT MECHANISM DOES IS IT TRACKS ALL THOSE POWER SUPPLY COSTS AND IT SAYS IF COSTS USUALLY ARE 8 CENTS A KILOWATT HOUR AND NOW THEY GO UP TO EIGHT AND A HALF CENTS, I BETTER RECOUP THAT ADDITIONAL HALF CENTS.
SO THE PIECE OF THE PCA BECOMES THAT HALF SET.
SO IT'S BASICALLY A FUEL ADDER IF YOU WILL.
THIS IS A VERY COMMON CONCEPT, UH, IN THE TRUCKING INDUSTRY, MAYBE WHERE THEY BASE THEIR, UH, DELIVERIES ON A CERTAIN COST PER GALLON OF FUEL AND THEN THEY'LL HAVE A FUEL ADDER IF, IF FUEL GOES ABOVE THAT COST.
THEY HAVE BUILT INTO THEIR BASE RATES.
SO WE'RE BASICALLY SAYING YOUR, YOUR BASE RATES RECOVER A CERTAIN AMOUNT OF YOUR POWER COSTS AND AS POWER COSTS FLUCTUATE, WE'RE GONNA WANT TO TRACK THAT AND PASS THAT THROUGH IN A REAL TIME BASIS TO YOUR CUSTOMERS.
SO YOU KEEP UP WITH YOUR CHANGING EXPENSES RELATED TO POWER, POWER COSTS.
NOW THE WAY WE RECOMMEND THAT YOU DO THAT IS ON SOMETHING THAT WE CALL A 12 MONTH ROLLING AVERAGE.
AND WHAT DOES THAT REALLY MEAN? IT MEANS THAT WE TRY TO TAKE A MORE SMOOTH AVERAGE OF POWER COST CHANGES SO WE DON'T JUMP YOUR CUSTOMER'S BILL AROUND AS MUCH ON A MONTH TO MONTH BASIS.
SO AS POWER COSTS ARE TRENDING UPWARD AS THEY HAVE THE LAST NINE YEARS, WE WOULD SLOWLY SEE THAT PCA CREEPING UP TO KEEP PACE WITH THOSE INCREASING POWER COSTS.
SO THAT'S ACTUALLY TRACKED AND THAT PASS THROUGH ON A PER KI WHILE BASIS ON YOUR CUSTOMER'S BILL.
THIS IS, UH, A SIMPLE BASIC, UH, ILLUSTRATION OF THAT.
AGAIN, AS I MENTIONED, LET'S ASSUME THAT YOUR BASE RATES ARE RECOUPING 8 CENTS PER KILOWATT HOUR IN YOUR BASE RATES.
AND THAT OVER TIME WE TRACK THAT.
WHILE NOW POWER COSTS ARE A HALF CENT MORE COSTING YOU SOMEWHERE NEAR EIGHT AND A HALF CENTS THAT PCA OR THAT POWER COST OR ADDITIONAL CHARGE ON THE CUSTOMER'S BILL WOULD BE THAT HALF CENT.
THESE ARE A COUPLE OF, UH, GRAPHICAL ILLUSTRATIONS OF THIS IS AN ATTEMPT TO SHOW YOU ON THE LEFT SIDE WHAT'S HAPPENING WITH YOUR, UM, UNDER RECOVERY CURRENTLY WITHOUT A PCA.
AND THE RIGHT SIDE IS, UH, SHOWING YOU IF YOU HAD A PCA, WHAT YOUR POWER COST RECOVERY WOULD ACT, HOW IT
[01:40:01]
ACTUALLY WOULD'VE PERFORMED.SO ON THE LEFT SIDE, THIS UM, MIDDLE LINE HERE IS REPRESENTING THE PCA, MEANING WHAT IS THE CHARGE THAT YOUR CUSTOMER'S PAYING THEM BILL, IF YOU HAD A PCA NOTICE THAT THAT'S FLAT LINE AT ZERO RIGHT NOW ON THIS LEFT CHART.
'CAUSE YOU, YOU, THIS IS SIMULATED AND YOU DON'T HAVE THE PC UH, THE TOP LINE THAT'S GOING UP AND DOWN ARE YOUR MONTHLY POWER SUPPLY COSTS.
AND YOU CAN SEE ON A MONTHLY BASIS THAT YOUR POWER COSTS ARE GOING UP AND DOWN FOR A VARIETY OF FACTORS THAT YOU CAN SEE IN GENERAL.
THEY'RE SLOWLY TRENDING UPWARD.
THE GREEN LINE IS SHOWING YOUR CUMULATIVE, UH, RECOVERY, UH, FOR POWER SUPPLY THROUGH YOUR CURRENT RATES.
AND YOU CAN SEE SINCE YOU DON'T HAVE A POWER COST ADJUSTMENT THAT YOU'RE SLOWLY AND INCREMENTALLY UNDER RECOVERING THROUGH YOUR RATES ON YOUR POWER COSTS, YOU'RE BASICALLY NOT RECOUPING ENOUGH FOR YOUR POWER COSTS.
WE PREDICT IN THE LAST THREE, THREE MONTHS ON AVERAGE, YOU'VE UNDERCOVERED BY THE TUNE OF ABOUT $45,000 PER MONTH THAT YOU'VE UNDER RECOVERED.
MEANING YOU PAID THE BILL, WHICH YOU HAVEN'T COLLECTED IT FROM YOUR CUSTOMER DEBT.
AND AGAIN, IT ALL TIES BACK TO YOUR FINANCIAL SITUATION WHERE WE'RE SEEING YOUR CASH BALANCES DECLINE.
AND WE'RE SEEING THE LAST TWO YEARS WE'RE OPERATING IN THE NEGATIVE.
AND AGAIN, EVEN UNDER OUR PLAN WE'RE PREDICTING, UM, THAT YOU'LL STILL BE OPERATING IN THE NEGATIVE, UH, FOR THE NEXT TWO YEARS AS WELL.
SO THE PLAN THAT WE DESCRIBED WITH THOSE THREE YEARS OF 5%, UM, ASSUME THAT WE WOULD IMPLEMENT A PCA METHODOLOGY.
SO ON THE RIGHT SIDE HERE, YOU CAN SEE AGAIN THE ORANGE LINE IS YOUR PCA, YOU CAN SEE IT DOES DO A LITTLE MOVEMENT 'CAUSE THAT'S THE CHARGE TO THE CUSTOMER ON THAT INCREMENTAL HALF CENT EXAMPLE.
YOU CAN SEE WE TRY TO TAKE THAT AVERAGE SO IT KEEPS IT SOMEWHAT FLAT AND SMOOTH AND CONSISTENT WITH THE CUSTOMER, BUT YET AS WE HAVE THOSE INCREASE IN POWER COSTS, WE TRY TO KEEP THAT GREEN LINE AS CLOSE TO ZERO AS POSSIBLE.
SO WE TRY TO MAKE IT STAY A BREAK EVEN.
SO THAT BETWEEN YOUR BASE CUSTOMER CHARGES AND YOUR PCA, UH, YOU'RE TRYING TO STAY WHOLE WITH YOUR POWER SUPPLY COSTS.
I THEN WANTED TO SHOW A CHART OR, UM, DATA IN TERMS OF WHERE WHERE DO WE SEE THE ACTUAL CUSTOMER BILL CHANGING? SO WE WANTED TO SHOW YOU, UM, UNDER YOUR CURRENT RATES IF YOU DID NOTHING, UM, WHAT IS THE CUSTOMER CURRENTLY PAYING? UH, AND IF YOU DO FOLLOW OUR, UM, RECOMMENDED PLAN HERE TO DO THOSE THREE YEARS OR 5% AS WELL AS THE PCA, WHAT WOULD THAT MEAN TO THE CUSTOMER'S BILL? SO WE GENERALLY LIKE TO FOCUS ON THE RESIDENTIAL SIDE 'CAUSE THAT'S TYPICALLY THE MOST IMPORTANT THING TO MOST COMMUNITIES.
WE HAVE DONE A SIMILAR ANALYSIS WITH EACH AND EVERY ONE OF YOUR, UH, DIFFERENT CUSTOMER RATES.
SO WE HAVE THAT DATA AVAILABLE.
UM, BUT I DID WANT TO FOCUS ON THE RESIDENTIAL BILL.
SO YOU CAN SEE CURRENTLY YOUR AVERAGE RESIDENTIAL CUSTOMER PAYS $120 AND 4 CENTS BEFORE TAXES ON THEIR BILL FOR THEIR ENERGY USAGE.
AND WE'RE PREDICTING THAT UNDER THIS 5% PLAN AS WELL AS IMPLEMENTING THIS PCA THAT WE'RE RECOMMENDING NEXT YEAR'S BILL WOULD BE $134 AND 10 CENTS PER MONTH.
SO JUST UNDER, UH, $14 AND 7 CENTS, UH, ADDITIONAL, UH, PER MONTH FOR THE OUTAGE RESIDENTIAL BILL.
UM, OF THAT $14 AND 7 CENTS, YOU CAN SEE THERE $7 91 CENTS OF IT IS DUE TO THAT PCA WE'RE CATCHING UP.
WE'RE KEEPING YOU WHOLE WITH YOUR ACTUAL INCREASE IN POWER COSTS AND ROUGHLY $6 JUST OVER $6 AND 16 CENTS TO THE EXACT IS THE ESTIMATED ADDITIONAL COST AS FAR AS DOING THAT 5% BASE RATE INCREASE.
SO YOU CAN SEE WE LOOK FORWARD OUT INTO THE, UM, THREE YEARS OF THOSE 5% PROGRESSIONS.
UH, ALSO AGAIN LAYERING IN THAT PCA AND YOU CAN SEE OVER THE THREE YEAR, UH, PERIOD, WE GET UP TO A TOTAL AVERAGE ANNUAL BILL OF $147 AND 29 CENTS.
SO IT INCREMENTALLY GOES UP SOMEWHERE IN THE NEIGHBORHOOD OF SIX, $7 PER MONTH EACH CONSECUTIVE YEAR.
AND I WOULD JUST LIKE TO CLARIFY, I CAN'T ABSOLUTELY, UM, IN THE YEAR, AS YOU CAN SEE, THE PCA IS CONSTANT, UM, ACROSS ALL YEARS, UM, 'CAUSE OF MODELING AND WE REALLY ACTUALLY NEED REAL TIME POWER COSTS DO A BETTER.
SO WE JUST PUT UP A FLAT CONSTANT, UM, KIND OF A WORST CASE SCENARIO FOR THE PCA, BUT TO THE MAYOR'S POINT, IN YEAR 2026, WHEN DEBT SERVICE COMES OFF, THAT PCA WILL THEN GO DOWN,
[01:45:02]
IT WILL TRACK OUR POWER SUPPLY COST.SO WHEN THE DEBT SERVICE COMES OFF OUR BILL TO $300,000 A MONTH THE NEXT MONTH, IT'S REFLECTED IN THE PCA COST AND THAT THAT COMES DOWN.
SO THIS ISN'T A TRUE MODEL EXAMPLE WITH AS THE WAY THE PCA IS PERFORMING.
I JUST WANTED TO MAKE SURE THAT CLEAR THAT, UM, I HAD TO GET SOMETHING UP THERE TO TRY TO COMMUNICATE THIS AND THOUGHT WAS PROBABLY LOOKING FORWARD ON TRYING TO MODEL, UM, THE PCA ON ON YEARS THAT WE DUNNO WHAT THE ACTUAL POWER SUPPLY COSTS DID.
DOES THIS TAKE INTO ACCOUNT THE ELECTRIC CITY TRUE UP OR NOT? CORRECT? AND SO AND SO THAT ZERO 0.81 IS REALLY CLOSE TO WHAT THE MONTH AND TRUE UP WOULD BE FROM ELECTRICITY.
IS IT INCLUDED IN THAT? WHAT NUMBER DID YOU SAY AGAIN? THE PCA.
SENSE OF 8.10 CENTS OF A KILOWATT HOUR JUST UNDER A PENNY.
SO WE DID OUR BEST EFFORT TO, UM, CONSIDER THOSE ADDITIONAL RIDERS IN THAT CALCULATION.
SO WITH THAT, I'D LIKE TO INVITE CHARLIE BACK UP TO IF YOU ALLOW ME A FEW CLOSING COMMENT.
THANK YOU, CHARLIE, BEFORE YOU LEAVE THAT.
COULD YOU GO BACK TO, UM, HER SLIDE THAT SHOWED THE PROJECTIONS WITHOUT THE RATE INCREASE? THAT ONE.
SO THE PROJECTED EXPENSES, AND I DON'T KNOW IF THIS IS A QUESTION FOR YOU OR HER, WHAT, WHAT IS INCLUDED? IS THAT ALL OF OUR EXPENSES? THE OPERATE TOGETHER? YES, HONOR, YES.
THAT EVERYTHING THAT YOU LOOK AT IN YOUR TRIAL BALANCE THAT UM, HITS THE ELECTRIC UTILITY AS AN EXPENSE WOULD BE INCLUDED IN THERE.
SO WHAT, WHAT ASSUMPTION DID YOU USE FOR PROJECTED REVENUE INCREASES YEAR OVER YEAR? UM, PROJECTED REVENUE THERE NO GROWTH.
UM, THE, IF YOU SEE THAT COST PER KILOWATT HOUR CHART THAT WENT UP, THE POWER SUPPLY WAS INCREASING, BUT MORE RELATIVELY STABLE.
BUT SALES, UM, DUE TO ENERGY EFFICIENCIES AND DISTRIBUTED ENERGY RESOURCES IN GENERAL ARE GOING DOWN.
SO WE'RE VERY CONSERVATIVE WHEN WE PROJECT GROW.
OKAY, SO HERE, I'LL GO BACK TO MY, MY FIRST QUESTION.
SO UNDER THE PROJECTED EXPENSES THAT INCLUDES OUR WHOLESALE POWER BILL THAT WE GET FROM ELECTRICITY.
SO HOW, WHAT, WHAT IS DRIVING THE PROJECTED EXPENSES TO GROW YEAR OVER YEAR WHEN WE'RE GOING TO BE SAVING THREE AND A HALF MILLION DOLLARS A YEAR, STARTING IN 2026, ACTUALLY IN THE MIDDLE OF 2025.
SO THIS PARTICULAR, UM, YOU SEE THE 2026 MM-HMM
YOU'VE GOT ALL OTHER EXPENSES THAT ARE INCREASING.
THOSE FOUR THAT I SHOWED YOU ALONE, UM, HAVE INCREASED, UM, I THINK IT WAS $6 MILLION.
YOU HAVE OTHER COSTS THAT ARE INCREASING.
SO I JUST WANNA BE SURE YOU HAVE CAPTURED THE THREE AND A HALF MILLION DOLLARS IN SAVINGS FROM ELECTRICITY IN THAT PROTECTION.
YES, IT'S IN THERE IN THAT LITTLE RED TAB.
JUST TELLS US THAT NOTE THERE.
THE, YOUR RECOMMENDED RATE, UM, PROPOSAL INCLUDES THE PCS.
SO CAN I GET MY
UM, THIS RECOMMENDED PROPOSAL RIGHT HERE INCLUDES A 5% INCREASE PLUS A PCA RIGHT METHODOLOGY.
SO WITHOUT A PC, WHAT WOULD WE, EXCELLENT QUESTION.
THESE RATE INCREASES WOULD BE SEVEN, UM, 7.9 FOR EIGHT, BASICALLY 8% FOR THE NEXT THREE YEARS WITHOUT PCA AWESOME QUESTION.
SO OUT OF BEING FORCED INTO HAVING TO ACCEPT THE PCA JUST BASED ON, OR, OR WHERE THE UTILITY
[01:50:01]
FINANCIALLY, WE'RE NOW IN A POSITION WHERE AS AN OUTSIDE ENTITY LOOKING AT THE FINANCIAL HEALTH OF OUR UTILITY, IF YOU, IF IF WE DON'T WANT TO ACCEPT THAT REAL TIME RATE ADJUSTMENT MONTHLY, THEN WE'RE LOOKING AT 78% INCREASES OVER THE NEXT THREE YEARS AND PROBABLY SOMETHING HIGHER THAN 2% BEYOND THAT.CORRECT? UH, OR GO BACK TO THE ALTERNATIVE THAT YOU ARE NOT RECOMMENDED AND YOU'RE LOOKING AT AN 18% INCREASE TO GET US UP TO WHERE WE SHOULD BE TO CATCH UP.
AND THEN INCREMENTALLY BEYOND THAT.
AND WHAT A PCA DOES, IT WILL PROTECT THE RATE PAYER IN THE FUTURE, RIGHT? IT NOT ONLY PROTECTS THE UTILITY, BUT IT PROTECTS THE RATE PAYER.
WHEN POWER SUPPLY COSTS GO UP, THE PCA WILL BE POSITIVE OR GO UP SLOWLY OR INCREMENTALLY.
AND THAT PROTECTS THE UTILITY AND IT ALSO PROTECTS THE RATE PAYER BECAUSE OF, SO YOU CAN AVOID THIS TYPE OF SITUATION IN THE FUTURE, RIGHT? WE CAN HAVE SMALLER INCREMENTAL RATE INCREASES IN THE FUTURE INSTEAD OF RATING AND DELAYING AND THEN NEEDING REALLY DOUBLE DIGIT RATE INCREASES.
IF WE CAN HAVE SMALL YEARLY INCREMENTAL RATE INCREASES TO KEEP UP WITH INFLATION OR CHANGES IN COSTS, UM, WE CAN AVOID THESE 18% DOUBLE DIGIT RATE INCREASES, UM, OR THESE THREE YEARS OF HIGHER RATE INCREASES.
SO, UM, THE PCA IS THERE TO PROTECT THE UTILITY AND IT'S THERE TO PROTECT THE CUSTOMER, UM, NOT ONLY FROM A RATE INCREASE BASIS, BUT IF, FOR EXAMPLE, THAT FALLS OFF THE PCA CAN GO NEGATIVE OR THE PCA COULD BE ONE PENNY IN A MONTH, RIGHT? AND POWER SUPPLY COSTS CHANGES AND IT GOES DOWN AND MAYBE NEXT MONTH IT'S A HALF A PENNY.
IT PROTECTED THE UTILITY FINANCIALLY AND IT PROTECTED THE CUSTOMER.
UM, SO AGAIN, WE'RE ADOPTING THESE ALL ACROSS THE COUNTRY, UM, TO HELP STABILIZE POWER SUPPLY, UH, COSTS BECAUSE THEY'RE SO VOLATILE IN THE MARKET RIGHT NOW.
IT'S JUST YOU, YOU SEE CASH PLUMMETING AND UTILITIES ACROSS THE COUNTRY.
BUT EXCELLENT QUESTION, THAT WOULD BE CLOSE TO 8% FOR THREE YEARS AND PROBABLY MORE BEYOND THAT.
NO, I I I, I APPRECIATE WHAT YOU SHOWED.
UH, AND, AND I HOPE THAT THIS PRESENTATION SCARES, UM, MY, MY FELLOW BOARD AND THAT IS VERY CONCERNING.
THE DIRECTION THAT UTILITY IS HEADING.
NOBODY REALLY WANTS TO TALK ABOUT IT, BUT IT GOES BACK TO DECISIONS THAT HAVE BEEN MADE BY PREVIOUS BOARDS, UM, WHICH HAVE LED US TO WHERE WE'RE AT RIGHT NOW.
WE GO BACK TO THE TEEN YEARS WHERE, UM, GREAT DECREASES WERE APPROVED.
UM, I BELIEVE THE AMOUNT 17, 18%, TWO TO THREE YEAR TIME PERIOD.
AND WHICH THE ALTERNATIVE THAT YOU DON'T WANT TO RECOMMEND IS THE NEED FOR AN 18% INCREASE.
NOW, ISN'T THAT COINCIDENTAL THAT THE DECREASES 11, YOU KNOW, 10, 11 YEARS AGO, UM, OR NOW WE'RE HAVING TO PAY THE DECREASED 17 TO 18% BACK IN THE 10 YEARS.
NOW WE'RE FACED WITH AN 18% INCREASE TO GET US BACK WHERE WE SHOULD BE.
UM, WE CAN MODIFY THAT BECAUSE THAT'S LAST BY, BY DOING SOMETHING LIKE THIS, GOD FORBID, WE'RE TALKING INCREMENTAL INCREASES, WHICH IS WHAT I PREACH EVERY YEAR.
UM, I'LL BE INTERESTED TO SEE THE BOARDS REACTION, YOUR RECOMMENDATION FOR INCREMENTAL INCREASE WITH A PCA.
I WISH WE COULD HAVE A PCA FOR THE GENERAL FUND.
I CAN'T EMPHASIZE ENOUGH HOW MUCH A RATE INCREASE NEED DOESN'T GO AWAY AND ONLY COMPOUND.
SO WHEN YOUR COSTS INCREASE, YOU DON'T KEEP UP WITH THEM.
UM, THAT RATE INCREASE NEED IN THE FUTURE ONLY COMPOUNDS.
AND I KNOW THESE ARE DIFFICULT DECISIONS, BUT IF YOU HAVE A HARD TIME PUTTING THROUGH A THREE OR 5% TODAY, IT'S A HARDER TIME TO PUT THROUGH A 7, 8, 10, 12% THE NEXT YEAR.
UM, SO THAT'S WHAT THIS PLAN TRIES TO DO.
IT'S TRYING TO CATCH YOU UP WHILE RESPECTING THE RATE PAYER AS MUCH AS WE CAN.
BUT KEEPING THE UTILITY FINANCIALLY BOLD, I MEAN YOU CAN SEE THE DIRECTION IT'S HEADED.
WE DROPPED, UM, SIGNIFICANT CASH OR OPERATING AT LOSSES AND WE WEREN'T DOING THAT, UM, FIVE YEARS
[01:55:01]
AGO.ANY OTHER QUESTIONS? CHARLIE, DID YOU WANNA I WAS JUST GONNA WRAP IT UP.
WHAT DID YOU MEAN BY WHEN YOU SAY, UH, YOU HAVE LOAD SHAVING OFF CUSTOMER? NO SHAVING TO THE CUSTOMER LOAD.
SHAVING, SHEDDING SHED, SHEDDING, SHADING TO THE CUSTOMER.
WHAT DOES THAT MEAN? UM, ARE WE TALKING ABOUT COST AVOIDANCE? ARE WE TALKING ABOUT CAPACITY, CAPACITY, CAPACITY? UM, OUR SUBSTATIONS HAVE LIMITED CAPACITY BASED ON PHYSICS.
OUR WIRES ARE DEVICES THAT WIRES, THEY HAVE LIMITED CAPACITY BASED ON OUR CUSTOMERS DEMAND MORE AND MORE POWER.
THE WIRES GET STRETCHED OUT FURTHER AND FURTHER TO SERVE SOMETHING.
IT DOESN'T CARRY ENOUGH POWER TO SERVE THAT CUSTOMER GROUND.
AND THAT GOES ALL THE WAY BACK TO THE SUBSTATION.
AND WE DON'T HAVE ENOUGH POWER AT THE SUBSTATION.
NOT ONLY DOES THE CUST ONE CUSTOMER GROUND OUT, WE HAVE ACROSS THE SYSTEM IT STARTS TO CASCADE.
THERE ARE WAYS TO MEDIATE THAT.
UM, AND MY FIRST REACTION TO THAT UNTIL WE GET SOLUTIONS IN PLACE IS DEFINITELY TO THE PUBLIC IN CONCERN.
IT'S HARDLY THE WAY TO OPERATE ON A DAILY BASIS.
UM, AND CUSTOMERS, UH, CAN'T THAT THEY, TO TOLERATE IT SO LONG, I FOUND IT VERY EFFECTIVE.
COMMUNITIES THAT HAVE, UM, LARGER INDUSTRIAL BASES THAN US, THOSE INDUSTRIAL CUSTOMERS, THEY GET IT WHEN I SAY, HEY, WE GOT CAPACITY PROBLEMS TODAY.
'CAUSE THE SYSTEM IS SO LOADED UP THOSE BUSINESSES, THEY DON'T WANT TO BE FORCED OFFLINE.
THEY'LL SEND A SHIFT HOME, THEY'LL TURN SOME LIGHTS OFF, THEY'LL BACK OFF SOME MOTORS CAN GET MOST OF IT.
BUT MOST OF OUR CUSTOMERS HERE ARE RESIDENTIAL ALL BY SMALL AND MEDIUM-SIZED COMMERCIAL LIGHTS.
TURN DOWN THE AIR CONDITIONING, UM, SEE HOW THEY RESPOND.
THE OTHER PART OF THAT IS WHEN I GET INTO CONTINGENCY SITUATION BECAUSE OF CAPACITY OF THE SUBSTATION, I HAVE NOWHERE ELSE TO MOVE.
WHEN WE TRIED IT INFLUENCE, I'VE TRIED IT AT TIME.
UM, SOUTH SIDE OF THE RIVER, CAN'T CARRY THE NORTH SIDE.
TALK ABOUT IT FOR TRYING TO GET YOU TO FINISH LINE WITH SOME FREE MONEY.
SO JUST WRAPPING THINGS UP, UM, WHAT I JUST WANNA BE CLEAR ON WHAT WE'RE RECOMMENDING IS THAT THREE YEAR RATE PLAN, 5% INCREASES IN 20 25, 26, 27.
ALSO WANT TO EMPHASIZE THAT IT WOULD BE MY OBLIGATION, PROBABLY IT SHOULD BE YOUR REQUIREMENT THAT I COME BACK TO YOU EVERY SINGLE YEAR AND
CAN WE CHANGE THE PCA BASED COSTS? THOSE ARE ALL DECISIONS THAT YOU CAN MAKE.
THEY'RE ALL WITHIN YOUR AUTHORITY.
AND I WOULD SUGGEST WE DO IT ON AN ANNUAL BASIS AS I GET MY POWER SUPPLY COSTS FOR THE NEW YEAR, JUST TYPICALLY AROUND JANUARY FEBRUARYISH THAT I START LAYING OUT REVISING FINANCIAL PLAN ON A RATE LEVEL FOR THE COMMUNITY.
UM, IF, IF, IF THAT HAS SUPPORT, MY NEXT STEP WOULD BE THEN TO, UM, SET A PUBLIC HEARING TO FURTHER DISCUSS, UM, PROPOSE THE RATES AND THE PCA, WHICH WOULD BE ANOTHER, WHICH WOULD BE A WRITER TO ALL READ.
AND I'VE DRAFTED THAT LANGUAGE.
I CAN SHARE IT WITH ANYBODY THAT WANTS TO LOOK AT IT.
UM, PRELIMINARY, LOOK AT WHAT THAT P LOOKS LIKE.
SCOTT HAS LOOKED AT IT, BUT HE'S PULLING YOU BETTER UNDERSTAND WHAT OBJECTION.
[02:00:02]
SO ONCE AGAIN HERE, LET'S GET BY BY THIS.UM, WITH THIS GRADE PLAN I TALK IN, UH, AND, AND REALIZED COST, UM, TOTAL COST OF SERVICE TO BUY ALL YOUR ENERGY 12 CENTS PER KILOWATT HOUR AS WE ARE NOW UP INCREASING THE 14 CENTS.
UM, NOT ALL THE DEVIS THAT THEY USED FOR DECAL PLACES.
PRETTY, PRETTY STANDARD 14 CENTS PER KILOWATT HOUR.
YOU'RE JUMPING UP 15 CENTS PER KILOWATT HOUR.
YOU CAN SEE, UM, THE AVERAGE TYPICAL AVERAGE RESIDENTIAL CUSTOMER WOULD EXPERIENCE ABOUT A 14 HERE AND ABOUT A INCREASE HERE, INCREASE HERE THE NEXT YEAR.
SO LOOKING AT IT, UM, HISTORICALLY, IT'S A GOOD STORY TO TELL.
I THINK YOU GUYS HAVE DONE A WONDERFUL JOB ON KEEPING OUR RATES DOWN.
UM, YOU HAVE A HISTORY OF OF RATE, UH, REDUCTIONS IN 2014, GETTING TO WHERE WE'RE AT AT OUR CURRENT RATE.
IT'S 10 YEARS THAT YOU'VE, YOU'VE UH, UH, KEPT THE RATES DOWN FOR YOUR RESIDENTS AND UM, NOW'S THE TIME TO CATCH UP.
AND AS YOU CAN SEE IN 2025, WE'RE STILL LOWER THAN WE WERE IN 2014.
WE'RE ABOUT THE SAME RIVER IN 2015 AND IN 2027 WE'RE ABOUT THE SAME AMOUNT AS 2014.
PRETTY AMAZING TO BE ABLE TO KEEP THE RATES GO BACK TO THE RATES WE HAD IN 2014.
GIVEN ALL THIS EQUATION THAT'S LOOKING AT, UM, FROM THE COST, UH, THE CUSTOMER EXPERIENCE, TOTAL BILL COST.
UM, SO BACK IN 2014, CUSTOMERS TOTAL BILL WAS JUST UNDER $150.
NOW THE CUSTOMER EXPERIENCES ABOUT $120 AND WE GRADUALLY, UM, STEP UP, GET BACK UP TO AROUND 50 CUSTOMER.
THIS IS THE SAME INFORMATION JUST LOOKING AT IT, UM, DIFFERENTLY FROM THE COST PER KILOWATT HOUR PERSPECTIVE.
UM, THE COST OF CHARGING PER KILOWATT HOUR, UM, GRADUALLY INCHES UP WITH THIS RATE PLAN TO WHERE WE WERE SLIGHTLY OVER.
UM, CHARLOTTE, YOU SAY IT GOOD STORY AND IF THERE IS A BIG AND THERE THAT, AND BEING THAT THE DECISIONS THAT HAVE BEEN MADE AS PART OF THIS STORY, UM, HAVE NOT ADDRESSED THE CAPITAL NEEDS OF INFRASTRUCTURE UTILITY, WHICH HAS NOT BEEN ADDRESSED AS IT SHOULD.
SO, AND THAT'S NOT REALLY REFLECTED IN THIS AT ALL.
UM, AND IT SHOULD BE IN ADDITION TO JUST LOOKING AT THE RATE, WE HAVE TO BE LOOKING AT THAT COST OF AN AGGRESSIVE CAPITAL PROGRAM TO GET, GET THE UTILITY BACK INTO BETTER OPERATING CONDITIONS.
MAYBE IT'S A BETTER FROM CUSTOMER'S PERSPECTIVE.
I'M HAVING A HARD TIME UNDERSTANDING SOMETHING WHEN IN JULY OF 25 WE, WE HAVE A DEBT SERVICE COMING OFF THAT'S GONNA SAVE US $280,000 A MONTH, RIGHT? HOW, HOW, HOW CAN WE HAVE, WHY DO WE HAVE TO GO UP IN OUR RATES? WELL, WE'RE GONNA BE SAVING $280,000 A MONTH.
$280,000 A MONTH IS NOT ENOUGH.
YOU NEED MORE THAN 3 MILLION A YEAR.
I, I THINK, I THINK ONE THING THAT WE NEED TO START TALKING ABOUT IS WHERE DOES THIS CITY WANT TO SEE ELECTRIC UTILITIES GO? OKAY, WE SERVICE CUSTOMERS.
HOW FAR DOWN THE HOW LOT? YES, SIR.
SO IN THE PAST, EVER SINCE THE LATE EIGHTIES, WHENEVER ELECTRIC CITY'S WHOLE THING CAME ABOUT, THERE WAS SO MUCH DEBT SERVICE.
THE
[02:05:01]
THOUGHT, BUT IT'S SHORTSIGHTED.BUT I'M JUST SAYING BACK THEN FROM THE 1980S UNTIL NOW, THAT WAS THE PHILOSOPHY.
GET MORE CUSTOMERS, YOU SPREAD THE DEBT OUT, IT EASES THE BURDEN ON EVERYBODY.
I'VE, I'VE ASKED THIS QUESTION NUMEROUS TIMES.
WE'VE GOT CUSTOMERS, MYSELF INCLUDED THIS ON DUKE ENERGY, RIGHT SMACK DAB IN THE MIDDLE OF THE CITY OF ER, ACROSS THE STREET FROM ME IN THE CITY OF ER ELECTRICITY.
I BELIEVE THAT THERE NEEDS TO BE A CONVERSATION WITH DUKE BECAUSE PERSONALLY I'M NOT INTERESTED IN CONTINUING TO GROW OUTSIDE OF OUR
OKAY? I I UNDERSTAND THE BENEFIT OF MUNICIPAL SUPPLY POWER.
WE GET OUR CITY OF NEW CUSTOMERS GET THEIR POWER ON QUICKER AFTER A HURRICANE THAN DO CUSTOMERS DO.
TYPICALLY, THAT'S A BENEFIT TO OUR CUSTOMERS, OUR SYSTEMS. DO WE WANT TO CONTINUE TO OPERATE THIS ENTERPRISE OUTSIDE OF THE CITY LIMITS WHEN THERE COULD BE OPPORTUNITIES TO SWAP CUSTOMERS AND LET DUKE TAKE ON THIS EXPANSIVE COST OF EXPANDING THE SYSTEM.
I'VE MET WITH DUKE, NOT INTERESTED, NOT INTERESTED IN SWAPPING, NOT INTERESTED IN DEFINING TERRITORY.
I THINK THE OPTION THERE, TO YOUR POINT, IS US MAKING CONSCIOUS DECISIONS TO SERVE OR NOT SERVE THE NEW VOTE AND THE AMOUNT OF MONEY REQUIRED, THE DISTANCE WE HAVE TO GO TO SERVE THAT ROAD.
I DON'T WANNA GO TO RAW, LIKE PICK UP A LIGHT BULB, BUT I THINK DENSITY WOULD HELP US.
BUT, UM, WEST BLUE'S GROWING, UM, MY MARCHING ORDERS ARE TO SERVE.
UM, WE'RE FILLING IN, UH, THE BLUE WATER RISE AND MORE ACROSS THE STREET'S GONNA GO.
UM, DO WE SERVE THAT? UH, IT'S CUS CUSTOMER CHOICE.
UM, THOSE ARE DECISIONS WE COULD MAKE ON, ON DO WE WANT TO CONTINUE TO, TO GROW AND, UM, AND FILL IN THAT DEFINITELY SAID TO FILL IN THE WIRES THAT WE HAVE AND, AND TRY TO ADD DENSITY TO OUR INVESTMENT ALREADY.
UM, AS WE ALL KNOW, I, YOU STRETCH A MILE WIRE OUT A MILE LONG AND ONLY HAVE ONE CUSTOMER TOUGH TO RECOVER IS A TOTAL COST WITHOUT WIRE BASED ON THE ONE CUSTOMER.
I'VE TALKED TO HIM SEVERAL TIMES, BUT WE'RE SERVICING BLUE WATER EYES, RIGHT? YES SIR.
YOU DON'T THINK DUKE WOULD BE INTERESTED IN PICKING THAT UP? THEY TOLD ME NOTHING.
I'VE ASKED, I'VE ASKED TO SWAT, I'VE ASKED TO DEFINE TERRITORIES.
I'VE ASKED TO, UM, IF NOW THE NEXT SECTION, IT STARTS IN BLUE WATER RISE.
THEY MAY HAVE GONE TO, BUT THEY'RE NOT, THEY'RE PROBABLY A MILE AWAY.
THEY HAVE A DISTRIBUTION TAP THAT HAS ONE CUSTOMER ON 'EM THAT'S HUNTERS BRIDGE, ESSENTIALLY ONE THAT ONE THAT RUNS DOWN THROUGH THERE.
UM, IT IS ALWAYS OFF AND DURING STORM ION CONDITIONS, IT'S, IT'S BACK IN THE SWAMP.
THEY HAVE A, A PLAN TO, UM, PUT AN EXPRESS FEED AND REPLACE THAT.
UM, BUT THEY, OTHER THAN AT OBTAINS THE RIGHT OF WAY, THEY HAVEN'T DONE ANYTHING.
CLOSEST LOCATION THEY, THEY COULD GET TO SERVE IT FROM WOULD BE BACK ON, UM, EVANS MILL AROUND OR THEY HAVE TO GRAB THE 70 BUSINESS DECISION.
BUT THOSE ARE THE TYPE OF THINGS THAT WE CAN DECIDE ON.
YOU KNOW, THE NEXT SECTION OF WESLEY, YOU WANNA SERVE IT OR NO, I'M THERE ALREADY.
I WOULD, I WOULD SUGGEST THAT WE, WE PICK UP.
I'M ALREADY INVESTED IN GETTING THERE.
I WOULD SUGGEST WE RECOVER THAT INVESTMENT.
AND THE LAST, THE LAST PIECE FOR ME, THIS ANALYSIS WAS BASED OFF OUR SYSTEM ALONE.
AND WHAT WE HEAR IN THE COMMUNITY ALL THE TIME IS NEW, HIGHER THAN DUKE NEW HIGHER THAN DUKE.
AND WE ALL KNOW THAT OUR UTILITY BILL HAS WATER, SEWER, TRASH PICK OF EVERYTHING ELSE.
AND HAVING TO EXPLAIN THAT TO A CUSTOMER SOMETIMES ISN'T EASY.
HAVE, DO WE HAVE AN ANALYSIS? AND I KNOW IT'S HARD TO SHOW COMPARISON, BUT IS THAT WHAT THAT IS? YES, SIR.
SO THE BLUE IS, THE BLUE IS NEW BERN 2024.
THE, UH, GREEN IS TIDELAND, UH, THE RED IS DUKE ENERGY.
[02:10:01]
UM, DUKE ENERGY IS, UH, THEY HAVE THEIR RATES FOR 2027 HAVE ALREADY BEEN APPROVED BY THE PUBLIC COMMISSION.I DON'T KNOW WHAT THEY HAVE APPROVED OR NOT.
SO I I LEFT THEM FLAT ACROSS THAT.
THIS IS THE MOST IMPACTFUL SLIDE THAT'S MEETING ALL.
THAT'S WHY I LEFT IT TO THE LAST
THAT'S WHY I JUST TURNED AROUND AND ASKED HER.
I SAID, DID YOU GET A PICTURE OF THAT? UM, WHAT ELSE DID I HAVE? THIS IS SHOWING IT THE SAME WAY, BUT IN, UM, IN COST PER KILOWATT HOURS.
UM, SO WE'RE AT, WE'RE AT 12 CENTS NOW.
UM, DUKE'S AT OR NOT 15% DUKE'S AT 15 CENTS PER KILOWATT HOUR NOW 16.
UH, THEY'RE GOING TO, THEY HAVE APPROVED 17, 17 AND 17 AND WE'RE STILL, WE'RE HEADING TOWARDS 16.
IN, IN YOUR POSITION, WOULD YOU ADOPT THE PHILOSOPHY WHERE NEW NEWBORN MIRRORS DO RATES? NO, I THINK THAT WOULD BE, UM, SHORTSIGHTED.
UM, HOW COME? BENCHMARKS ARE GREAT.
I THINK THEY'RE RELATIVE, BUT WE HAVE TO BE CAREFUL HOW WE USE BENCHMARKS.
FEEL LIKE IF YOU ASK ME THE SAME QUESTION, SHOULD WE HAVE THE SAME RATES AS WASHINGTON OR GREENVILLE? WE HAVE DIFFERENT FINANCIAL PLANS, WE HAVE DIFFERENT FINANCIAL OBLIGATIONS, WE HAVE DIFFERENT INDUSTRIES.
UM, SOME HAVE BUILT CAPITAL, SOME HAVE BUILT, UM, FUND BALANCES OVER THE LAST FIVE YEARS, 10 YEARS.
SOME ARE ABSORBING THESE COSTS RIGHT NOW AND THEN THEY'RE RENTING CATCH UP.
SO I THINK, I THINK IT'S IMPORTANT THAT WE, WE LOOK AT OURSELVES, THAT'S THE BEAUTY OF, OF, OF PUBLIC POWER, UM, IS THAT IT'S OUR DECISIONS.
IT'S WE CAN REFLECT ON OURSELVES WHAT WE NEED FOR THE UTILITY, WHAT WE PUT WE THINK OUR CUSTOMERS NEED.
WOULD I LIKE TO, TO TO GO TO 17 CENTS PER KILOWATT HOUR TODAY? ABSOLUTELY.
I COULD USE A LITTLE BREATH ROOM.
CHARLIE DOES PCA AS PART OF THE TRUCTURE.
THEY DO, THEY DO MOST, THIS IS THE ONLY UTILITY I'VE EVER WORKED AT THAT DOESN'T HAVE A PCF.
SO YOU SAID YOU WOULD GO TO 17 CENTS TODAY, WHICH IS WHERE DUKE IS AT AND WE'RE AT 12 AND YOU'RE RECOMMENDING A 5 CENTS KILOWATT INCREASE, RIGHT? MM-HMM
I WAS JUST SAYING THAT AS YOUR UTILITY DIRECTOR, IF I CERTAINLY I WANT, I WANT TO PUT CASH AS SOON AS POSSIBLE AND I WANT TO HAVE ENOUGH MONEY TO DO ALL THE CAPITAL IMPROVEMENTS THAT YOU CAN AND PAY THE STAFF, THE QUALIFIED STAFF THAT KNOW WHAT THEY'RE DOING.
IF I CAN GET 17 CENTS A KILOWATT HOUR A DAY I'M TAKING, IS IT RIGHT FOR THE COMMUNITY? THAT'S NOT WHAT WE'RE COMMENDING.
WASN'T THERE ONE SLIDE THAT SHOWED THE CURRENT KILOWATT RATE FOR KILOWATT HOUR AT 12 AND THEN IT WOULD BE GOING 14? YES.
I I DIDN'T UNDERSTAND THAT QUESTION.
I JUST KNOW THAT AS, AS REEL SAID EARLIER, HE WAS TRYING TO SIMPLIFY WHAT CHARLIE WAS SAYING.
THE SIMPLEST THING FOR US WHEN WE'RE TALKING TO OUR CUSTOMERS AND OUR CITIZENS IS HOW DO YOU COMPARE THE DUKE? AND IF YOU'RE TELLING ME THAT A 5% ANNUAL INCREASE WERE STILL LOWER THAN DUKE, THAT'S AN EASY STORY TO TELL.
RIGHT? AND I, AND I THINK THAT IF, IF YOU ALLOW ME TO MOVE THROUGH WITH THIS RECOMMENDATION AS WE PROGRESS THROUGH THE PUBLIC HEARING PROCESS AND ADOPTION PROCESS, WE ALREADY HAVE A LOT OF CUSTOMER INFORMATION PREPARED AND READY TO GO.
UM, WE TWEAK IT BASED ON WHERE WE LINE UP.
WE HAVE TALKING POINTS FOR OUR CUSTOMER SERVICE REPRESENTATIVE.
WE HAVE TALKING POINTS FOR OUR ELECTED OFFICIALS.
WE HAVE TALKING POINTS FOR STAFF AND THEY DID QUESTION ABOUT IT.
UM, WE ALL HAVE, WE HAVE THAT IN OUR HIP POCKET ALMOST FINISHED AND READY TO PUT THE FINISHING TOUCHES ON SHOULD ONCE WE FIGURE OUT WHAT DIRECTION YOU GOING, IT WOULD ALMOST BE NICE IF THE ELECTRIC BILL WAS A BILL BY ITSELF.
I, THAT WAY YOU DON'T HAVE TO EXPLAIN ANYTHING.
I I GET PEOPLE CALLING COMPLAINING THAT THEIR ELECTRIC BILL IS $300 MORE THIS MONTH THAN IT WAS LAST MONTH.
SO WHEN YOU START LOOKING AT IT, IT'S THEIR WATER BILL AND THEIR SEWER BILL THAT COSTS MORE, NOT THEIR ELECTRIC, BUT THEY JUST SEE THE BOTTOM LINE.
[02:15:01]
BUT IT WOULD RAISE COST FORHEY CHARLIE, THE THE BUILDING, YOU RECONSTRUCTED THE BUILDING TO SHOW EACH INDIVIDUAL CATEGORY OF WHAT THEY'RE USING.
NOT EVERYBODY'S HAPPY WITH IT, BUT, AND, AND WE HAVE LIMITATIONS WITH OUR PRINTER AND THE TECHNOLOGY.
IT'S NOT EXACTLY WHERE I WANT IT TO BE.
AND THERE'S A COST, YOU KNOW, FOR ALL OF THAT.
AND THIS WAS THE BEST IN MY MIND.
YOU'RE SAYING YOU WERE ASKING US FOR THE NEXT FIVE YEARS GO WITH THE 5% INCREASE AND THAT 5% INCREASE INCLUDES THE TRUE UP AND THE PCA AND THE DEBT SERVICE GOING UP.
OH, ANY OTHER QUESTION? CAN WE JUST STATE GIVE DIRECTION IF, IF YOU'D LIKE TO GIVE DIRECTION ON THIS AT THIS TIME, WE'LL TAKE IT.
THINK TO THINK ABOUT IT PERSONALLY.
THAT'S A LOT OF INFORMATION THAT, AND, AND WE CAN SEND THIS INFORMATION OUT, UM, IF YOU WANT IT.
I WOULD ALSO TELL YOU THAT UM, TIME IS PROBABLY IMPORTANT.
WE'RE ALREADY RECEIVING POWER BILLS FOR THE RIGHT ACROSS PAY BILL, SECOND MAY BASE COMING.
AND I'M SURE AT SOME POINT IN TIME, SENIOR MANAGER WANT BALANCE THEIR UTILITY.
RIGHT? I NEED TO KNOW WHAT REVENUES PUT IN THERE.
WHAT, WHAT DETERMINES THE PCA AMOUNT? I'LL TRY TO EXPLAIN IT.
THIS MAY BE BE A JOB, BUT WE, WE'VE LOOKED HISTORICALLY OVER THE LAST FOUR YEARS, TRIED TO FIGURE OUT HOW MUCH, GIVEN OUR CURRENT RATES, WHEN OUR CURRENT RATES WE'RE COLLECTING ALL OF OUR OPERATING REQUIREMENTS AND ALL OF OUR POWER SUPPLY REQUIRE WHAT WAS, UM, COST OF POWER AT THAT POINT IN TIME.
AND THAT BASE WILL BE STATED AND IDENTIFIED IN THE RIDER ORDINANCE THAT I WOULD PROPOSE.
UM, AND THEN IT BECOMES THE DIFFERENCE BETWEEN WHAT THAT BASE RATE IS.
THE ASSUMPTION IS THAT BASE RATE COVERS ALL OF OUR OPERAT OPERATING CAPITAL EXPENSES.
WHAT WE NOW NEED TO RECOVER IS THE POWER SUPPLY.
SO EVERY MONTH STAFF WILL THEN TAKE THE DIFFERENCE BETWEEN LAST MONTH'S POWER SUPPLY BILL AND THE EIGHT 10TH OF THE PCA.
PUT THAT ON THE CUSTOMER'S BILL OF A SEPARATE BINARY.
ACTUALLY IT PROBABLY BE ABOUT, IT'LL LAG ABOUT TWO MONTHS OF TIME JUST BECAUSE OF WAY POWER COSTS ARE RECEIVED AND THE RESPONSE, CAN I ASK A CLARIFYING QUESTION? DID YOU SAY THAT THE 5% INCLUDES EPA OR IS IT, ARE THEY TWO SEPARATE? TWO SEPARATE.
THE, THE ANALYSIS ON THE REVENUE PROJECTIONS DONE, THE 5% PLUS THE PCA BEING BASIC 0.01, MAKE THAT CONFUSE THAT.
SO THEN IF I'M NOT MISTAKEN, SHE SAID THAT WITH THAT 5% THAT ARE ONLY THE, UH, COST INCLUDE FROM THE CUSTOMER OF $6 WITH WITH THE PER MONTH WITH THE 5% AND WITH PCA 2025 FISCAL YEAR ENDING 2025.
THE AVERAGE CUSTOMER, RESIDENTIAL CUSTOMER.
AND THEN THE 2026 OF THOSE SEVEN.
I DON'T THINK WE'RE GONNA TAKE WELL IN MY HEAD ANYMORE.
[02:20:04]
WHAT, WHAT MORE DO YOU NEED TO DISCUSS ON THIS? I MEAN, Y'ALL ALREADY GIVE A DECISION.I THE GENTLEMAN'S COME BEFORE THIS BOARD MANY OF TIMES AND TALKING ABOUT THE ELECTRIC RATES AND INCREASES AND WE KEEP ON, I USE, UM, ALL KEEPING DOWN ROAD.
YOU KNOW, HE'S, I CONSIDER HIM MY EXPERT BECAUSE HE
I WOULD, I DUNNO WHAT I WOULD DO WOULD WHAT WE WOULD DO WITHOUT YOU, BUT I DON'T SEE WHY WE GOT THE ESTIMATE ON THIS.
I MEAN, THIS IS NO BRAND TO ME.
AND I SIT HERE FOR A WHILE AND STRUGGLE THROUGH A LOT OF IT.
THOSE TWO WHERE IT MIGHT, YOU EXPLAINED IT VERY CLEARLY TO ME AND YOU AS WELL.
SO I DON'T HAVE A PROBLEM WITH MAKING A DECISION.
SO WE GOT ONE IN SUPPORT OF THE RECOMMENDATIONS.
CAN I GET FOUR? JUST NEED ONE MORE CHOICE.
IS IT MY PRESENTATION NEXT? WE GOT THREE THAT'S IN FAVOR OF APPROVING THE RECOMMENDATION.
ARE YOU IN PAYROLL OF OH MY GOD.
SO THIS, COULD WE GET EVERYBODY'S YEAH, I'D BE HAPPY TO SAY I, I SAID EARLIER THAT I'D LIKE MORE TIME TO DIGEST IT.
IF THE BOARD'S READY TO MAKE A DECISION TODAY BEFORE THEN MOVE FORWARD WITH IT.
I MEAN, I PERSONALLY, I LIKE TO LOOK AT SPREADSHEETS AND THE NUMBERS AND THE DATA VERSUS THE POWERPOINT.
I CAN TAKE ANY SPREADSHEET THAT KIM GIVES ME AND I CAN MAKE YOU A POWERPOINT THAT SAYS WHATEVER YOU WANT TO TAKE.
BUT I WOULD LIKE TO SEE A LITTLE BIT MORE, BUT IT DOESN'T MATTER.
SO I MEAN WE, WE JUST HAD A PRESENTATION THAT HAS SHOWN THE IMPACT OVER THE LAST 11 YEARS OF DECISIONS BEING MADE TO REDUCE THE RATE
WE CAN PUSH IT OFF IF WE WANT AND THE UTILITY GONNA BE JUST THAT MUCH FARTHER IN THE WHOLE NEXT YEAR, THE YEAR AFTER THAT.
I'M, I'M HAPPY TO ANSWER THAT.
AND AS AN ELECTED OFFICIAL, I WOULD LOVE TO HEAR AN ELECTED OFFICIAL FOR OVER 10 YEARS.
I'VE HEARD FROM NUMEROUS CUSTOMERS THAT OVERPAY ON THEIR ELECTRIC BILL FOR DECADES AND THEY WERE PLEASED WITH THE RELIEF THAT WHERE UP.
AND, AND SO SHORT TERM DECISION THAT CREATED LONG TERM PROBLEMS THAT TO ME IS NOT RESPONSIBLE GOVERNING BY PREVIOUS DAYS OR BY NOT.
WELL, I'M GLAD TO SEE THE IMPACT YOU'RE MAKING IN THE TWO YEARS.
WELL, I DON'T FEEL MAKING MUCH OF AN IMPACT.
WE, I THINK YOU, THAT'S, THAT'S PRETTY GOOD IN GOVERNMENT.
WE ALL HAVE OUR OWN DECISIONS THAT WE, WE HAVE TO MAKE.
AND I PERSONALLY THINK YOU HAVE MADE AN IMPACT.
I THINK EVERY ONE OF US HAS MADE WE HAVE BOARD AND YOU ALSO HAVE ONE DETECTIVE.
WE ALSO HAVE TO REMEMBER WE GOT SIX BOARDS.
EVERYBODY IN HERE TO REPRESENT DIFFERENT ASPECTS OF OUR CITY.
I REPRESENTED WARD SIX FOR MANY YEARS.
THEY HAVE A DIFFERENT OPINION THAN WARD ONE IN WARD FOUR, WARD FIVE, RIGHT? EVERYBODY GOT THEIR OWN OPINION.
SO THEY TALKING, THEY MAY SAY THIS WILL NOT BE ADOPTED IN LINE WITH THIS BUDGET APPROVAL.
IT'S GONNA TAKE TIME FOR STAFF TO WORK WITH THE ATTORNEY ON THIS PART OF THE PUBLIC HEARING.
COULD BE AT SOME POINT LATE JUNE, POSSIBLY 1ST OF JULY.
AND THEN, THEN THAT PROCESS WILL FOLLOW.
SO, UM, THERE WILL BE, UM, TO BALANCE THIS CURRENT BUDGET FOR THE ELECTRIC UTILITY, UM, THERE WILL BE UNBALANCED OF CASH ON HAND ALLOCATED CASH ON HAND.
USE THE BALANCE OF THIS FOR THE ELECTRIC.
SO WE'VE BEEN GOING FOR A WHILE.
IF ANYONE, ANYONE LIKE TO TAKE A SHORT BREAK? YES.
A MOTION WE GO OUTSIDE AND WARM UP.
[02:25:01]
ALRIGHT, BACK IN SESSION HERE.AND THE NEXT SAVE TIME, WE, WE'VE GOT THE ENTERPRISE FUNDS COMING UP.
WE GOT WATER AND SEWER FUND GOT HERE.
IF YOU HAVE ANY QUESTIONS, I NEED TO HAVE TO ADDRESS THEM, OTHERWISE WE'RE ALRIGHT.
SO WE DID NOT TALK ABOUT THE ELECTRIC FUND.
CHARLIE TALKED ABOUT THE RATE INCREASE.
SO OUR NEXT IS THE ELECTRIC FUND.
IF YOU HAVE ANY QUESTIONS ON THAT BUDGET.
CHARLIE'S HERE AND HE'S HAVE YOU TO ADDRESS.
I DO CHARLIE, UM, YOU HAVE, YOU HAVE 10 VACANCIES IN YOUR DEPARTMENT.
UM, SEVEN OF THOSE HAVE BEEN VACANT FOR OVER A YEAR.
ONE OF 'EM BEEN VACANT SINCE JULY OF 21.
TWO OF HAVE YOU HELP PROVIDE SOME CLARITY.
UM, ONE BY ONE ENGINEERING POSITION.
I WRONG I CAN'T, SHE WAS MAKING MORE SUPERVISOR REDUCTION.
UM, THAT IS SOMETHING I'M PLANNING ON USING THE FUTURE.
I HAVEN'T ADVERTISED THAT YET FOR, UM, THAT GROUND, GROUND, THOSE, UM, UTILITY CONTROL SYSTEM OPERATOR THAT'S TURNOVER.
THE ONE THAT'S FROM 2021, THE ONE THAT I PUT IN THERE.
UM, IN RESPONSE TO BROADBAND PROVIDERS, NOT REALLY INTERESTED IN GIVING THAT UP YET.
UM, WE ARE EXPERIENCING, UM, I'M SHORT HANDEDNESS AND, AND OVERLOAD IN THAT CONTROL ROOM, SO I'D LIKE TO HANG ONTO THAT.
UM, BUT I, I GOTTA HIRE THE OTHER ONE FIRST.
UM, WE'VE CONSTANT, THAT'S A NICE SHIFT JOB.
UM, THAT OPERATION RUNS 24 7, 12 HOURS SHIFT, SPECIAL PAY.
UM, BILLING SERVICE REPRESENTATIVE, UM, SERVICE TECHNICIAN ONE WE HAVEN'T BEEN ABLE TO, UH, TO FILL YET.
SERVICES SUPERVISOR, UM, THAT HOLDING FOR A PROMOTION WITH, UM, I GOT ALL THE STAFF OVER THERE.
UM, I HAD UH, PROBABLY MY MOST EXPERIENCED UM, SENIOR AS ONE YEAR AS SENIOR.
UM, SO, UM, RESERVING THAT FOR ONE OF THOSE INDIVIDUALS TO STEP UP WHEN THEY'RE READY TO SUPERVISOR.
THAT ANSWER YOUR QUESTION? YEP.
ANY OTHER QUESTIONS ON THE LETTER? OKAY, WE MOVE ON TO SOLID WASTE.
DOES ANYONE HAVE ANY QUESTIONS ON SOLID WASTE? I DO HAVE ONE QUESTION.
I FIND OUT WHERE I WROTE, I JUST HAD A QUESTION ABOUT THE PERSONNEL REQUEST WASN'T APPROVED, RIGHT.
[02:30:01]
PUT THIS DOWN.UM, CURRENTLY THOSE ARE BEING HANDLED BY PAM AND SHERRY.
PAM AND SHERRY HANDLING ALL, ALL THE SOLID WASTE SALT RIGHT NOW.
AND DO WE KNOW WHAT THEIR BREAKDOWN IS OF WHAT PERCENTAGE WOULD BE SOLID WASTES VERSUS PUBLIC WORKS CURRENTLY, SHERRY PROBABLY AT LEAST 50% SOLID WASTE.
SO IF YOU PUT THOSE TWO TOGETHER, 25% IS SOLID WASTE VERSUS 75% BEING PUBLIC WORK, MOST LIKELY BETWEEN HER.
UM, THE OTHER QUESTION I HAD, UM, WAS, AND I KNOW THIS WASN'T APPROVED EITHER.
JUST A QUESTION I HAD FOR YOUR PUBLIC WORKS SINCE YOU'RE UP THERE.
UH, THE SENIOR ACCOUNTANT, UM, YOU WERE ASKING FOR A SENIOR ACCOUNTANT, WE CURRENTLY HAVE THAT POSITION, HER ROLE BEING FILLED FROM TEMP SERVICE RIGHT.
AND CAME FROM FINANCE, BEEN UTILIZING AND SHE HAD BEEN A HUGE ASSET UNDERSTANDING THAT CURRENTLY WE HAVE NOW THIS IS
WE CURRENTLY HAVE DIFFERENT CONTRACTS THAT ARE ACTIVE OVER $13 MILLION OF WORK.
THIS HELPS FACILITATE THAT IN OUR GRANT RESPONSE IN ALL OF OUR CONTRACT.
SO, SO FROM A SUPERVISORY STANDPOINT, WOULD THAT PERSON, IF IT WOULD'VE BEEN FUNDED REPORT TO YOU OR FINANCE? EITHER OR.
WOULD'VE BEEN FINE BECAUSE IF SHE'S A DIRECT CONDUIT TO OUR FINANCE DEPARTMENT, THAT IS WHAT SHE'S SERVED AS THIS CONDUIT.
SO DO WE HAVE ANY OTHER PHYSICIANS LIKE THAT IN A DEPARTMENT THAT DOESN'T REPORT FINANCE? NO, WE UM, ACTUALLY RECOGNIZE THE STRUGGLE, THE CHALLENGES THAT THEY WERE HAVING.
AND SO WHEN I BROUGHT IN THAT TIME, UM, AND SAW HER SKILLSET SPECIFICALLY REACHED OUT AND WORKED WITH GEORGE TO PUT HER IN THAT ROLE, SHE DOES A VERY, VERY GOOD JOB OF KEEPING THEM, UM, FOLLOWING THE CLIENTS WITH YES.
FOLLOWING THE PROCESSES AND THE POLICIES.
UM, AND SO SHE'S WORKED AS A LIAISON AS WELL JUST TO KIND OF HELP THEM UNDERSTAND WHY WE ASKED FOR WHAT WE ASKED FOR AS WELL, UM, TO GET THEIR BUY-IN REALLY.
AND UM, WE FOUND THAT IT'S VERY, VERY SUCCESSFUL.
SHE'S HELPED WITH THE BUDGET PROCESS AS WELL.
YOU KNOW, UM, SO SHE DEFINITELY HAS BEEN AN ASSET OVER THERE AND UM, UM, SHE UNDERSTANDS FINANCE WELL.
WE, SHE CONTINUES TO REPORT BETWEEN THE TWO TO ANSWER YOUR QUESTION.
I, THERE'S NO, NOBODY ELSE THAT'S SET UP THAT WAY.
I WOULD THINK IT WOULD PROBABLY FALL UNDER FINANCE, BUT WORKING TOGETHER AS I WOULDN'T BE A DIRECT REPORT NECESSARILY.
'CAUSE SHE DOES REPORT OUT TO PUBLIC WORKS.
DO WE KNOW WHAT THE COST OF HER EXPENSES TO THE TEMP SERVICE? UM, YES, UH, NO.
I FORGOT TO ASK YESTERDAY WHY SHE'S LOOKING FOR THAT.
I KNOW YOU SAID Y'ALL DISCUSSED, UM, WAS IT SOLID WASTE YESTERDAY? YES MA'AM.
DID YOU HAVE A A RATE INCREASE? YES.
AND THAT'S REFLECTIVE OF AGAIN, OUR CONTRACTUAL OBLIGATIONS WITH G.
SO THEY HAVE THEIR, UM, OUR RESIDENTIAL IS BASED OFF THE SOUTHERN CPI, WHICH WAS 3.7 THIS YEAR, BUT IT'S CAPPED THREE.
UH, THE COMMERCIAL CONTAINER, UM, WAS BASED ON THE SAME, SAME SOUTHERN CPI TRADING, BUT THAT IS ONLY FACTOR 5%.
SO RECOMMENDATION IS RIGHT NOW WE HAVE 35 CENTS A MONTH, A MONTH FROM 19 19 35.
AND THERE'S ALSO BEEN AN ADDITIONAL $1 TIPPING FEE, UM, AT THE LANDFILL THAT WE HAVE TO COVER ALSO.
YOU SAID 19 TO 1935? YES MA'AM.
AND THAT, AND, AND WE DID THIS LAST YEAR, WE HAD A LARGER INCREASE FOR WHAT I CONTRACTUAL INCREASES EVERY YEAR UNLESS WE GET TO THE DEFLATIONARY STATION WITH OUR ECONOMY.
I WOULD LIKE TO DO IT THIS WAY, THAT WAY WE'RE NOT TRYING TO CATCH UP.
WE CAN JUST KIND OF STAY WITH, WITH WHATEVER OUR PASSENG CALL STARTS IN THE CUSTOMER.
WAS THE CAP ANY CAPITAL FOR SOLID WASTE APPROVED? YEAH, WHEN THE ONE VEHICLE AND THAT'S, THAT WILL BE SWAPPING TO OUR LITTER CREW AND THEN WE HAD SOME REPAIRS TO THE ST LICENSE ON THE ROAD THAT NEEDS LITTLE MORE SUBSTANTIAL REPAIRS, BUT IT STRUCTURALLY AS GOOD VEHICLE WE JUST NEED TO DEFROSTER
[02:35:01]
SOME OF THE INTERNAL ELECTRICAL WORK TUNNEL, LITTLE STEEL FUNCTION.ANY OTHER QUESTIONS? NO OTHER QUESTIONS ARE OTHER FUNDS.
AND KIM, WOULD YOU LIKE TO, THAT STARTS ON PAGE 2 39.
SO THE PAGE 2 39 IS YOUR, IS THE MSC FUNDS.
THERE'S NOTHING REALLY SIGNIFICANT IN THERE.
DO YOU HAVE ANY QUESTIONS ON THAT? ALMAN, FRILL AND ROYAL BOTH ON THE COMMITTEE QUESTIONS ABOUT THAT? UH, I DON'T HAVE THE COMMITTEE WORKING THROUGH REVIEW PROJECT, SO IT'LL BE A LITTLE WHILE.
SEE ANY RECOMMENDATIONS, OTHER PERFORMANCE MARKET, WHICH WE'VE ALREADY ADDRESSED AND WE'LL AMEND THE BUDGET IF WE NEED TO MISS THOSE PROJECTS ARE APPROVED.
UM, THERE'S NOTHING RECOMMENDED I 2 42, 2 43 AND 2 44.
THE REDEVELOPMENT COMMISSION AS WELL AS 2 45.
SO ON THE REDEVELOPMENT COMMISSION, THE, THE MANAGER RECOMMENDED 43.
DO WE KNOW WHAT THAT WAS GONNA BE USED FOR? AND SO THIS DID NOT COME OUT OF GENERAL FUND FUND BALANCE.
THIS COMES OUT OF THE REDEVELOPMENT COMMISSION FUND BALANCE.
THE ONLY THING THAT WE ARE, THAT THE GENERAL FUND IS COVERING FOR, UM, THE REDEVELOPMENT COMMISSION IS THE SALARY AND BENEFITS FOR THE EXECUTIVE DIRECTOR AS WELL AS TRAVEL AND TRAINING, REDEVELOPMENT, COMMISSION FUND, BALANCE COVERS, EVERYTHING ELSE.
DO WE KNOW WHERE THAT FUND BALANCE IS FOR DEVELOPMENT COMMISSION ROUGHLY? BECAUSE I KNOW THAT THEY, BECAUSE THEY HAD SOME AR FUNDING FROM DERMAN FOR THE PROJECT FUND FOR THE ALVIS MM-HMM.
AND THEN THEY DIDN'T USE ALL THAT, RIGHT? MM-HMM.
BUT THAT STAYS WITHIN THE
WE DON'T TRANSFER THAT MONEY OVER TO THAT FUND.
SO WE COULD, UM, TRACK IT STAYS WITHIN THE, SO THE, THE DELTA AND WHAT WAS APPROVED WITHIN SPEND VERSUS WHAT THEY SPEND SAVED IN THE OFFER ACCOUNT.
AND SO WHAT WAS THAT TOTAL, MR. HUGHES THAT YOU SAID YOU THE, UM, TRAVEL AND TRAINING AND THE SALARY AND SO FORTH? THAT TOTAL? BEAR WITH ME ONE SECOND.
UM, THAT WITH THE TRAVEL AND TRAIN, UM, I THINK THE REQUEST WAS, LEMME GIVE THAT TO YOU THAT THAT WAS CUT AFTER THE LAST NIGHT AS WELL.
I WANNA MAKE SURE WE GIVE YOU THE ACCURATE INFORMATION.
YOU SAID POTTED THAT WAS CUT THOSE, THE TRAVEL AND TRAINING REDEVELOPMENT COMMISSION IS ABOUT 360,000 SOMETHING.
IS THAT ALL PLANNED ENCUMBER? WE HAVE TO, IT TAKE US OUT.
IT SHOULD BE NOT, NOT DO WHATEVER HAPPENS WHEN THEY PUT THE MONEY FOR THE CLINIC IS NOT PART OF THAT.
SO WITH REDEVELOPMENT, COMMISSION, TRAVEL AND TRAINING, THE REQUEST WAS $3,500 AND, AND WE KNOCKED THAT DOWN TO 25, 20 $500.
AND THEN THE, SO ACTUALLY YOU CAN SEE THAT ON PAGE ONE 20 IN YOUR BUDGET BOOK SHOWS THE GENERAL FUNDS PORTION, PORTION OF REDEVELOPMENT.
IT'S GOT HIS SALARY AND BENEFITS.
AND WHAT PAGE IS THAT AGAIN? THAT IS UNDER THE
[02:40:01]
DEVELOPMENT SERVICES DATA PAGE ONE 20.OKAY, CAN YOU THEY REQUESTED 35 25.
AND THE PROFESSIONAL SERVICES, WHICH IS THE SALARIES 1 0 5, 2 52 AND FRINGE BENEFITS IS 38,870.
YES, WE HAVE NPO ON PAGE 2 46 AND 2 47.
THERE'S, IT'S, IT'S ACTUALLY BROKEN UP INTO TWO DIFFERENT PROGRAMS, UH, DIVISIONS, RIGHT? YEP.
THEY'VE GOT TWO DIFFERENT GRANTS THAT SUPPORT THAT.
YOU'LL SEE THAT THROUGH PAGE TWO 50.
AND THEN GRANTS AND 2 51 IS, UM, WE CLOSED OUT 2320 AND MOVED IT TO 20.
THAT'LL GET AMENDED WHEN WE CLOSE OUT THE YEAR AND WE ROLL IT FORWARD SO WE DON'T BUDGET FOR THAT.
AND THEN 29 11, WHICH IS ON PAGE 2 53 IS THE E NINE ONE AND THE EXPENSES ARE ON 2 54.
SPECIAL REVENUE FUNDS ON 2 55, UM, POLICE RESTRICTED REVENUE AND 2 56 REVENUES ARE, UM, THE GRANT IS 2 58.
THOSE REMAIN OR WE DON'T BUDGET FOR THOSE 2 61 AND 2 62.
WHAT CAN SOMEBODY REFRESH ME ON WHAT THAT IS IMPROVEMENT GRANT WORK? IT'S FOR A CERTAIN AREA.
IT'S BASICALLY, UM, FIVE POINT CORRIDOR REDEVELOPMENT AREA.
UM, THOSE BUSINESSES HAVE THE OPPORTUNITY TO APPLY.
I THINK WE NORMALLY HAVE $10,000 ALLOCATING THAT.
AND UM, TRADITIONALLY WE'LL AWARD TWO GRANTS ANNUALLY, UH, FOR THAT PROJECT.
IS IT ALL IN THE COMMISSION AREA? NO, NO.
OUTSIDE OF THAT, THEN WE MOVE INTO SOME CAPITAL FUNDS.
43 11 IS THE WATER, UM, CAPITAL RESERVE ON PAGE 2 63, 2 64, WE HAVE SEWER CAPITAL RESERVE ON PAGE 2 65 AND 2 66.
UM, GO RIGHT THROUGH TO 2 71, WHICH IS THE EMPLOYEES, UM, BENEFITS FUND FOR INSURANCE.
DO YOU HAVE ANY QUESTIONS ON THOSE? SOMEBODY QUESTION.
[02:45:02]
UM, 51 IS NOT A SPECIAL ATION.UM, DID, DID YOU, DID UM, I, I KNOW I'VE TRAINING, UM, CUT.
AND WAS HE, UM, SPECIAL PROBATION AS WELL? YES.
NOW ANOTHER QUESTION, UM, FOR THE SPECIAL PROBATION C DEVELOPMENT, UM, THOUSAND 25, WHAT IS THAT? WHAT IS THAT MONEY? THAT, THAT IS IF THE, THE BOARD HAS A PROJECT THEY WOULD LIKE TO ADDRESS OR, OR, OR, OR A STUDY THAT, THAT YOU WOULD LIKE TO CONDUCT THAT THOSE ARE THOSE FUNDS.
IF, IF IT ENDS UP BEING, IF YOU, IF YOU WANT TO, TO DO SOMETHING AND, AND WE NEED ADDITIONAL FUNDS, IT JUST BE IN THE FORM OF A BUDGET AMENDMENT.
THIS YEAR WE DID NOT USE ANY OF THOSE FUNDS.
THAT'S WHY WE HEADED DOWN TO 25,000.
ETT EXPLAIN TO ME AGAIN, SPECIFICALLY IF I COME TO YOU, IF I HAVE A PROJECT OR SOMETHING, IT, IT, IT, IT WOULD BE GENERATED BY THE GOVERNING BOARD.
UM, SOME EXAMPLES IN THE PAST WHEN MANEUVER HIGH SCHOOL FOOTBALL TEAM WON THE STATE CHAMPIONSHIP WHEN WE PROVIDED LUNCH, THAT WAS SOMETHING THAT WE USED IN THE PAST.
I THINK ALSO THERE MAY HAVE BEEN A PROJECT THAT COMES UP IN THE MIDDLE OF THE YEAR AND THERE MAY NEED TO BE AN APPRAISAL DONE.
I THINK SOME OF THOSE FUNDS HAVE BEEN USED TO BE LIKE APPRAISALS ALMOST LIKE A, THE APPROPRIATION FOR US.
IT'S ALMOST LIKE AN APPROPRIATION LINE ITEM FOR THE FURNITURE.
AGAIN, I APOLOGIZE FOR MISSING THIS MORNING.
UM, OR EARLIER TODAY, DID YOU GET THE CONTRACT, THE LIBRARY? NO, WE, OKAY.
SO THAT'S ALL THE FUNDS THAT WE WERE SET TO DISCUSS.
UH, SO THE NEXT ONE AGENDA IS COMMENT.
ANYBODY WOULD LIKE TO MAKE A PUBLIC COMMENT ON THE ABOVE SECTION.
THAT IS TO DISCUSS A PERSONNEL MATTER, UM, SECTION.
HONOR, I DO HAVE FOR THE PARTTIME EMPLOYEE IN PUBLIC WORK WELL, OKAY.
UM, AT PARTTIME WE PAY 34,500.
THE REQUEST WAS FOR 28 FOR PARTTIME.
DID THE 20, THE RETIREMENT, THE DIFFERENCE TWO WAS THE, UM, THE REGULAR PAID TEMP AGENCY VERSUS WHAT SHE RECEIVED.
[3. Closed Session]
SO, UM, WE'LL NEED A MOTION TO GO CLOSE SESSION.IT WILL BE PURSUANT TO 1 43 3 18 11.
FURTHER DISCUSSION, HEARING ALL A AYE.
OKAY, WE'RE BACK IN OPEN SESSION.
IS THERE ANYTHING ELSE TO DISCUSS? MOTION TO CLOSE.
ANY FURTHER DISCUSSION? ALL IN FAVOR SAY AYE.