[00:00:55]
CALL THIS, UH, MARCH 19TH BUDGET WORK SESSION TO ORDER.
WE'LL CALL PLEASE MR. ROY? YES, MRS. KNOLL.
MR. CHAIRMAN, YOU HAVE A QUORUM.
[Additional Item]
TO THE BUDGET PRESENTATIONS, I WANT TO TAKE A MOMENT AND HAVE, UH, OUR COUNTY ADMINISTRATOR UPDATE US ON OUR IT ISSUES SUFFERED TODAY AND THE STATUS OF THE VOTER REGISTRATION, VOTER VOTING PROCESS AT OUR TOWN SQUARE LOCATION.SO, UM, AS THE COURT'S AWARE, WE NOTIFIED YOU TODAY THAT THERE WERE SOME CONNECTIVITY ISSUES AT THE VOTER REGISTRAR OFFICE, AND SO CERTAINLY WE ACKNOWLEDGE THE DISRUPTION.
UH, STAFF HAS BEEN WORKING ALONG WITH THEIR CORPORATE PARTNERS IN SUPPORT, UH, AND THEY HAVE BEEN ABLE TO CONTINUE TO WORK TOWARDS A RESOLUTION.
OUR IT DIRECTOR, UH, MR. WYATT, WHO'S HERE TONIGHT SAYS HE BELIEVES THAT THE SYSTEM WILL BE UP AND OPERATIONAL TOMORROW WITH THE CONNECTIVITY ISSUES RESOLVED.
UH, I WOULD LIKE TO POINT OUT THAT THE REGISTRAR IS RESPONSIBLE FOR VOTING FOR THE VOTING PROCESS, AND AS SUCH, I CAN SHARE WITH YOU THAT THE REGISTRAR OF THE ELECTION AND THE EARLY VOTING PROCESS THAT WE'RE IN TODAY WILL LAST UNTIL APRIL 21.
UH, THE DISRUPTION I KNOW CAUSED A LITTLE ANGST TODAY, BUT AS I POINTED OUT, IT WILL LAST VOTING WILL LAST UNTIL APRIL 21.
UH, VOTERS HAD THE OPTION TO GO TO VICTORY VILLAGE IN THE UPPER END OF THE COUNTY.
WE ARE FORTUNATE ENOUGH TO HAVE MORE THAN ONE VOTING LOCATION FOR EARLY VOTING, AND THEY ALSO HAD THE OPPORTUNITY, SHOULD THEY CHOOSE TO DO SO, WOULD BE TO PROVO TO VOTE ON A PROVISIONAL BALLOT.
SO THERE WERE OPTIONS FOR VOTING AT WASHINGTON SQUARE AS WELL.
AND, UH, HOPEFULLY EVERYTHING WILL BE UP AND BACK TO NORMAL TOMORROW.
I ALSO SPOKE WITH, UH, OUR REGISTER, WAL LETHAM, UM, AND ASKED WHETHER OR NOT WE COULDN'T REGISTER VOTERS IN WASHINGTON SQUARE THROUGH OUR, UH, VICTORY VILLAGE, UM, REGISTRAR'S OFFICE IN WILLIAMSBURG, UTILIZING A PHONE SYSTEM.
UH, THEY WILL LOOK AT THAT IF, UH, IF NECESSARY, BUT HE ANTICIPATES VOTERS BEING ABLE TO VOTE STARTING TOMORROW, UM, IN BOTH LOCATIONS.
WITH THAT, I'LL MOVE ON TO DOUG.
I, I'D LIKE TO GET SOME DETAILS ON WHAT FAILED, WHAT FAILED, HOW IT HAPPENED, WHAT THE REMEDIATION LOOKS LIKE.
WELL, MR. RONAN, AT THIS MOMENT, I DON'T THINK WE KNOW ALL THE ANSWERS TO THAT.
AS I SAID, CORPORATE STAFF IS STILL WORKING WITH OUR OWN IT STAFF TO RUN DOWN ALL THE DETAILS.
WHAT DETAILS DO WE HAVE NOW? WE KNOW ENOUGH TO KNOW THAT IT'LL BE SERVICE WOULD BE A STORE TOMORROW.
WE MUST HAVE SOME FEEL FOR WHAT HAS FAILED AND WHAT AND, AND WHAT IS CORPORATE WORKING ON RIGHT NOW? YOU'RE NOT WORKING ON NOTHING.
SO WHAT IS, WHAT'S BEING TACKLED RIGHT NOW? WELL, IT, AS I UNDERSTAND IT, IT WAS A HARDWARE ISSUE WHEN WE WERE DOING REGULAR MAINTENANCE ON SOME HARDWARE REPLACEMENT.
AND WHEN THE SYSTEMS WERE BROUGHT BACK UP, THEY DID ALL, THEY ALL OBVIOUSLY DID NOT WORK AS, AS INTENDED.
SO THIS WAS THIS SERVER NETWORK SWITCHES.
WHAT, WHAT, WHAT, WHAT WERE WE DOING MAINTENANCE ON? UH, MAINTENANCE WAS THE CORE SWITCH.
SO FOR NON-TECHNICAL PEOPLE, WHEN YOU PLUG UP TO A WIRE, YOUR LAPTOP, PC, THAT CORD OR EVEN CONNECT WIRELESS GOES TO A BOX.
ALL THOSE WIRES CONNECT TO A SWITCH.
THOSE SWITCHES, IT'S A LITTLE BOX, CONNECTS TO ANOTHER BOX, CONNECTS TO WHAT'S CONSIDERED AND CALLED A CORE BOX, A CORE SWITCH.
AND THAT'S THE HUB, THAT'S THE HEART OF THE NETWORK OF WHERE ALL THE TRAFFIC FLOWS THROUGH.
ON OUR NETWORK, WE HAVE TWO CORE SWITCHES, AND THOSE WERE THE SWITCHES THAT HAD TO BE UPDATED DUE TO END OF LIFE.
THEY WERE NO LONGER SUPPORTED.
[00:05:01]
IT WAS A MAINTENANCE ISSUE.WE STARTED AS SOON AS THE WORKDAY ENDED YESTERDAY, THE STAFF WHO STARTED THAT ARE STILL WORKING TO THIS MOMENT.
MOST OF THE INTERNAL SERVICES ARE UP.
THE VOTER REGISTRAR, IF I CAN KIND OF GIVE A LITTLE BIT MORE DETAIL, THE VOTER REGISTRAR IS A VERY SPECIAL NETWORK.
IT'S CONSIDERED CRITICAL INFRASTRUCTURE BY THE, UH, FEDERAL GOVERNMENT.
WE HAVE A LOT OF EXTRA SECURITY AND A LOT OF EXTRA SAFEGUARDS ON THAT.
OTHER NETWORKS, WE CAN DO CERTAIN THINGS AND GET THEM UP QUICKER.
WHEN IT COMES TO THAT NETWORK AND THE SECURITY OF THE ELECTIONS AND THE INTEGRITY OF IT, THERE ARE CERTAIN THINGS THAT WE CANNOT COMPROMISE, WE CANNOT MAKE SHORTCUTS ON.
SO THOSE NETWORKS SURROUNDING THAT SPECIFIC NETWORK ARE VERY METICULOUS.
UM, WE HAVE GOTTEN VERY HUGE KEY THINGS UP.
WE ARE FINISHING THE FINAL THING.
SO I FEEL CONFIDENTLY THAT TOMORROW MORNING ALL SERVICES WITH THE VOTER REGISTRAR WILL BE UP WITHOUT AN ISSUE.
ONE I GUESS IS SERVE IN THE NORTHERN PART OF THE COUNTY.
THAT'S WHY THAT IS STILL WORKING.
HAS THAT ONE BEEN UPDATED YET? NO.
AFTER WE GO THROUGH BOTH INTO SERVICE LIFE, YES.
AFTER THIS WAS A HARDWARE UPDATE, NOT SOFTWARE FIRMWARE SWAPPING OUT HARDWARE.
THE OLD ONES RAN OFF OF ONE 10 VOLTS.
THE NEW EQUIPMENT RUNS OFF OF TWO 20.
SO WE HAD TO COMPLETELY REMOVE EVERYTHING FROM THE PHYSICAL RACK WHERE ALL THESE DEVICES ARE STORED IN, REMOVE EVERYTHING, REDO THE ELECTRICAL IN THERE, PUT THE NEW HARDWARE IN, REWIRE IT.
IT WAS ONE OF THOSE SITUATIONS WHERE THERE WAS NO EXTRA PREP.
WE DID ALL THE PREP WE COULD, WE HIRED OUTSIDE CONSULTANTS TO VALIDATE THE CONFIGURATION EVEN ABOVE AND BEYOND THE STAFF, THEY DIDN'T CATCH IT.
AND WE'VE BEEN ON THE PHONE WITH OUR PRIVATE PARTNERS, UM, CISCO SINCE BEFORE MIDNIGHT LAST NIGHT, CISCO.
SO CISCO DEVICES FAILED, OR IS IT THE YES, THE ELECTRICAL, NEW ELECTRICAL CISCO DEVICE.
SO WE PUT A NEW CISCO PIECE OF HARDWARE IN AND IT FAILED.
THE CONFIGURATION WAS INCORRECT THAT WE HIRED THE OUTSIDE CONSULTANTS TO CHECK, MY STAFF CHECKED THEIR VERY, THE CORE SWITCHES ARE SOME OF THE, ARE THE MOST COMPLICATED PIECES OF NETWORKING EQUIPMENT WE HAVE.
AND THESE AREN'T RUNNING HOT, HOT.
SO I WE CAN'T SWAP ALL THE NETWORK FOR THE BOATING OVER TO THE ONE THAT'S WORKING.
DO THE, WE HAD TO PULL EVERYTHING PHYSICALLY OUT, OUTDO THE SPACE CONSTRAINTS AND HOW LONG THE CABLES ARE PHYSICAL CONSTRAINTS.
I GUESS AT THIS POINT, MY BIGGEST HEARTBURN IS WHY IN THE WORLD ARE WE DOING THAT TYPE OF MAINTENANCE ON CRITICAL NETWORK INFRASTRUCTURE WHILE EARLY VOTING IS ACTIVE, THAT THAT IT SHOULD HAVE BEEN A CHANGE FREEZE.
IT SHOULD HAVE BEEN DONE BEFORE OR AFTER END OF SERVICE.
THE THE VOTING DATES ARE KNOWN.
UNDERSTAND THAT WE'RE, WE'RE PROBABLY GONNA NEED TO TALK ABOUT FUTURE CHANGE.
WINDOWS AND WIND APPLY, CHANGE FREEZES.
I THINK HARDER ABOUT WHEN WE'RE MAKING CRITICAL INFRASTRUCTURE CHANGES TO MAKE SURE WE DON'T HAVE SERVICE INTERRUPTIONS LIKE THIS.
BECAUSE WITH THE, WITH VOTING GOING ON, IT'S NOT THE TIME TO BE DOING THIS.
AND, AND NOW WE'RE TAKING A HIT FOR IT AND PEOPLE ARE MORE THAN JUST BEING INCONVENIENCED AND IT'S THIS, THIS, THIS RATE JUST START, GONNA START RAISING SOME INTEGRITY ISSUES HERE TOO.
SO ANYWAY, WE'LL TALK MORE ABOUT IT.
THANKS FOR HELPING ME UNDERSTAND THE DETAILS.
SO LET'S BE CLEAR ON TWO FOLLOW UPS.
WE DO WANNA SEE AN INVESTIGATION REPORT.
WE WANNA UNDERSTAND WHAT, WHAT WE'VE LEARNED FROM TODAY.
AND THERE'S ALSO A FREEZE ON TOUCHING THAT SECOND BOX ON THE DETAIL POSTMORTEM WHAT HAPPENED, HOW IT HAPPENED, SO FORTH.
I WANT TO HEAR, YOU KNOW, IF THEY'RE SUPPOSED TO GIVE US WORK CONFIGURATION, THEY DIDN'T.
IT WAS A THIRD PARTY VENDOR THAT DID THE PRE-CONFIGURATION.
CISCO, YOU, OUR SUPPORT CONTRACT WITH, UH, THEM IS FOR CRITICAL OUTAGES.
IT WAS A SEVEN ONE CASE, IF YOU'RE FAMILIAR WITH NO, FOR ME.
MR. RON, IF YOU DON'T MIND, I THINK WE'VE HAD ENOUGH.
YEAH, I, I HAVE TWO, BUT I I UNDERSTAND THAT, SIR.
I DON'T THINK WE NEED TO, UH, BEAR ANYMORE.
IS THIS LET'S, UH, MOVE ON TO THE BUDGET PRESENTATION,
[1.* Sewer Rate Study]
PLEASE.UM, WELL, MR. CHAIRMAN, UH, THE COUNTY ADMINISTRATOR PRESENTED HIS BUDGET ON RECOMMENDED BUDGET ON TUESDAY NIGHT.
AND WE BRIEFLY TALKED ABOUT ALL THE DIFFERENT FUNDS THAT REFERENC, UH, MAKE UP THE BUDGET.
AND ONE OF THOSE CLASSES OF FUNDS WERE ENTERPRISE FUNDS.
AND OF OUR ENTERPRISE FUNDS, WE HAVE THE SEWER UTILITY FUND.
ENTERPRISE FUNDS, GENERALLY SPEAKING, ARE DESIGNED TO BE SELF-SUPPORTING.
[00:10:01]
COLLECT, UH, SUPPORT THE COST OF, OF MAINTAINING, UM, THE SYSTEM.UM, AND SO, UM, BEFORE I GO ANY FURTHER, I'D LIKE TO GO AHEAD AND INVITE, UM, OUR ADVISORS FROM PFM, CHRISTIE CHOI AND KATIE PIPER, UM, TO THE TABLE.
UM, ABOUT A YEAR AGO, UM, FOLLOWING ADOPTION OF THE LAST BUDGET WE STARTED, UM, WE KICKED OFF A SEWER RATE ANALYSIS STUDY WITH OUR FINANCIAL ADVISORS.
WHAT WE WANTED TO UNDERSTAND WAS WHAT ARE THE COSTS OF THE SYSTEM GONNA BE MAINTENANCE CAPITAL OVER THE NEXT SEVERAL YEARS, AND WHAT IS GONNA BE THE RATE THAT IS GONNA BE SUFFICIENT TO COVER THOSE COSTS? AND SO WE'VE ACTUALLY, UM, IT'S HARD TO BELIEVE IT'S ALMOST BEEN A YEAR WE'VE BEEN TALKING ABOUT THIS, BUT, YOU KNOW, IT'S A LOT OF COMPLEX INFORMATION.
I DON'T THINK THE COUNTY HAS DONE A SEWER RATE STUDY, UM, AND EVER.
YOU KNOW, UH, WE WERE ABLE TO DETERMINE WHAT THE RATES WERE NECESSARY, BUT AS WE START THIS NEXT, YOU KNOW, FEW YEARS, WE'VE GOT SOME SIGNIFICANT CAPITAL PROJECTS COMING UP, UH, FOR SEWER EXTENSIONS.
AND IT'S ALWAYS GOOD TO JUST DO A RATE STUDY JUST TO MAKE SURE THAT THE RATES ARE FAIR AND, UM, DISTRIBUTED APPROPRIATELY BASED ON USE.
AND SO THAT'S WHY WE KICKED OFF THE STUDY.
WE'VE LEARNED A LOT ABOUT THE SYSTEM AND, UM, THESE LADIES HAVE BEEN JUST EXTREMELY HELPFUL.
SO WITH THAT, I'M GONNA TURN IT OVER TO CHRISTIE TO KIND OF TALK THROUGH THE STUDY.
KICK RIGHT OFF WITH A LITTLE BIT OF A BACKGROUND.
UM, AS SUSAN MENTIONED, UM, WE, THIS PROJECT HAVE BEEN GOING ON FOR QUITE SOME TIME.
AND WHEN WE'RE FIRST APPROACHED, UH, BY THE COUNTY, ONE OF THE FIRST THINGS THAT WE ASKED WAS, WELL, WHEN WAS THE LAST TIME YOU HAD A RATE INCREASE? AND SO YOU CAN SEE THERE, UM, THE RESIDENTIAL RATES WERE, WERE, UM, REVIEWED AND INCREASED BACK IN 2021.
THAT'S FIVE YEARS AGO, COMMERCIAL RATES, UH, MORE THAN 10 YEARS AGO.
UM, FOR, YOU KNOW, AND, AND AS YOU KNOW, WITH INFLATIONARY ADJUSTMENTS AND EVERYTHING ELSE, UM, YOU KNOW, THOSE COMMERCIAL USERS HAVE BEEN PAYING A VERY, UH, LOW RATE FOR AN EXTENDED PERIOD OF TIME.
UM, SO THAT STRUCK US AS, AS A LONG PERIOD OF TIME THAT, THAT YOU ALL HAVE WENT WITHOUT A RATE INCREASE.
SO KIND OF COMING INTO THIS EXERCISE, WE EXPECTED THAT THERE WILL BE SOME, UM, MEANINGFUL RATE INCREASES THAT WILL NEED TO OCCUR TO KEEP IN MIND WITH THE COST OF SEWER SERVICES THAT CONTINUE TO RISE AND, AND THE CAPITAL COSTS CONTINUE TO GO UP.
YOU CAN SEE THERE THE SEWER FUND, CIP RANGES ANYWHERE FROM 7 MILLION A YEAR TO PEAKING AT 12 MILLION A YEAR IN FISCAL 31 TOTALING $47 MILLION OVER A SIX YEAR PERIOD.
UM, AND I'LL TAKE A PAUSE AND SEE IF ANY, UM, UH, ANYBODY FROM THE COUNTY WANTS TO CHIME IN ON THE CIP AND, AND THE REASONING FOR THE INCREASE OVER THE SIX YEAR PERIOD.
SO JOHN CIDER, UH, DEPUTY DIRECTOR OF PUBLIC WORKS.
SO ESSENTIALLY WE HAVE THREE LINES OF EFFORT WHEN IT COMES TO OUR CAPITAL EXPENDITURES, WHICH ARE OUTLINED RIGHT HERE ON THE SLIDE.
UM, WHAT YOU'RE GONNA SEE IS THAT THERE'S A SPIKE SPECIFICALLY IN SEWER LINE EX EXTENSION, AND THAT HAS TO DEAL WITH THE WHITES FAULKNER PROJECT EXTENSION AND THE BIG BETHEL ROAD EXTENSION PROJECT.
UM, WE'RE KIND OF AT A, A TIPPING POINT AS FAR AS OUR SEWER NETWORK.
WHAT WE'RE GONNA SEE IS ESSENTIALLY THE SEWER LINE EXTENSIONS DIMINISHING AND OUR REHABILITATION COSTS, SPECIFICALLY PUMP STATION AND SEWER LINE GOING UP BASED OFF THE AGE OF OUR SYSTEM.
THE CORE AGE OF OUR, THE CORE COMPONENTS OF OUR SYSTEM WERE PUT IN PLACE DURING THE SEVENTIES.
AND GENERALLY THINGS LAST FROM THE 30 TO 50 60 YEAR RANGE.
AND WE'RE RIGHT IN THAT SWEET SPOT RIGHT NOW TO WHERE WE'RE KIND OF MAKING A SHIP BETWEEN EXTENSIONS.
THOSE ARE GONNA DIMINISH AND MOVING INTO BASICALLY OUR REHABILITATIVE, UM, MODE, UM, BASICALLY IN, IN UNTIL PERPETUITY.
SO THAT'S WITH THIS REFLUX RIGHT HERE.
SO WITH THAT AS BACKDROP, UM, WHEN WE BEGAN THIS PROCESS WITH, WE SAT DOWN WITH THE COUNTY AND, AND ONE OF THE FIRST THINGS WE WANTED TO IDENTIFY WERE, UH, WHAT ARE THE COUNTY GOALS AND OBJECTIVES? AND, AND ONE THING THAT, UM, WELL THERE'S SEVERAL THINGS ON THIS SLIDE, BUT I'D REALLY, UM, DIVIDED UP TO TWO PIECES.
ONE IS WE WANTED TO MAKE SURE THAT THE SEWER FUND ON ITS OWN IS FINANCIALLY SUSTAINABLE.
AND WHAT THAT MEANS IS, UH, THE SEWER UM, SYSTEM ITSELF HAS WHAT WE CALL AS A REVENUE REQUIREMENT.
AND, UM, WHAT THAT MEANS IS, YOU KNOW, THE SEWER INFRASTRUCTURE, UM, OR THE SEWER
[00:15:01]
SYSTEM HAS REALLY TWO THINGS.OPERATING AND MAINTENANCE EXPENSES AND CAPITAL NEEDS, AND AN ONGOING DEBT SERVICE FOR ANY DEBT THAT YOU'VE, YOU'VE ISSUED THUS FAR.
AND, AND THOSE THREE THINGS, O AND M EXPENSES, CAPITAL COSTS, AND DEBT SERVICE, WE WANTED TO MAKE SURE THAT THE SYSTEM AND THE RATES WERE GENERATING ENOUGH REVENUES TO COVER THOSE THREE COMPONENTS OF THE SYSTEM WITHOUT ANY RELIANCE ON CONNECTION FEES.
AND I WOULD SAY THAT THAT IS KEY WITHOUT RELIANCE ON CONNECTION FEES.
AND THE REASON WHY WE STRESS THAT POINT IS CONNECTION FEES CAN BE VOLATILE.
THEY COME AND GO AND IT'S HARD TO PREDICT WHAT THAT REVENUE WILL BE YEAR OVER YEAR.
SO, UM, IN OUR VIEW, UM, AS FINANCIAL ADVISORS, UH, WELL RUN SEWER SYSTEMS, UH, GENERATE ENOUGH REVENUES FROM, FROM THE ONGOING RATES AND CHARGES WITHOUT RELIANCE ON CONNECTION FEES.
SO THAT'S ONE THING THAT WE WANTED TO, TO, UM, IN THE LONG RUN ACCOMPLISH WITH THE SEWER SYSTEM.
THE OTHER THING THAT WE'VE NOTICED WAS THAT THERE WAS A LITTLE BIT OF A RELIANCE ON FUND BALANCE FOR, TO MAIN MAINTAIN THE, THOSE REVENUE REQUIREMENTS AND, AND SOME INFUSION FUND BALANCE FROM THE GENERAL FUND FUND BALANCE FROM THE SEWER FUND.
AND, AND THEN ON THE GENERAL FUND SIDE THROUGH, I UNDERSTAND THAT YOU GOT A FUND BALANCE FROM THE SEWER.
HOW DO YOU GET A FUND BALANCE FROM THE SEWER TO THE EXTENT THAT THERE ARE REVENUES GENERATED AND YEAR OVER YEAR AND THE NEXT VERY POINT, THERE HAS BEEN SOME, I MEAN, YOU IMPLIED THAT THERE WAS, THAT THEY WERE, THAT THEY WEREN'T KEEPING UP.
BUT SO I'M TRYING TO FIGURE OUT HOW YOU GET A BALANCE.
AND, BUT THERE HAS ALSO BEEN AT THE SAME TIME, MONEY COMING FROM COMING IN FROM THE GENERAL FUND.
SO THAT'S WHAT THAT'S, SO MY ANSWER, THE ANSWER TO THE QUESTION IS TO THE GENERAL FUND, ULTIMATELY THERE HAS BEEN GENERAL FUND INFUSION, CORRECT.
BECAUSE THERE'S BEEN AN ALLOCATION OF MEALS TAX BEING SUBSIDIZED TO FUND INTO THE SEWER FUND.
SO ALL IN ALL, YOU'RE CORRECT, THERE HAS BEEN GENERAL FUND SUPPORT IN THE SEWER.
UM, SO ALL THIS TOGETHER, WE WANTED TO MAKE SURE THAT WE, UM, COME UP WITH MATHEMATICAL RATES AND FEES FOR BOTH THE COMMERCIAL AND THE RESIDENTIAL USERS TO COVER ALL THE CAPITAL COST INCREASES AS WELL AS THE O AND M EXPENSES AND THE DEBT SERVICE THAT'S ABOUT TO RISE.
UM, AND MAKE SURE THOSE RATES ARE FAIR AND EQUITABLE WITHOUT RELIANCE ON THE YIELDS TAX OR THE GENERAL FUND.
UM, YOU KNOW, THE OTHER THING THAT WE WERE BALANCING, UH, WAS WE ALSO WANTED TO BE MINDFUL OF, UM, NOT INCREASING THE RATES TOO MUCH SO TO SPEAK.
SO WE WANTED TO PHASE OUT THE USE OF THE FUND BALANCE AND PHASE OUT THE USE OF THE MEALS TAX, BUT NOT RIP THE BANDAID OFF RIGHT AWAY BECAUSE THAT MAY, THAT THAT MAY RESULT IN INCREASES IN RATES.
THAT WAS GOING TO BE A LOT MORE THAN WHAT WE HAVE PRESENTED.
DO YOU HAVE ANY CORRELATION ON HOW MUCH THE PUMP STATION AND SEWER LINE OF REHABILITATION COSTS ARE BEING DRIVEN BY THE SEWER LINE EXTENSION COSTS? I WOULD IMAGINE AS, AS WE GROW CAPACITY, THAT'S GOTTA HAVE AN IMPACT ON THOSE OTHER COSTS.
IN OTHER WORDS, IF WE, IF WE STOP RIGHT NOW AND DIDN'T DO ANY MORE SEWER LINE EXTENSION, WOULD THAT REDUCE THE AMOUNT OF MONEY WE HAVE TO SPEND ON REHABILITATION AND AND REPLACEMENT, OR DOES IT NOT EQUAL, DOES IT? SO WHEN WE DO EXTENSIONS, THEY'RE, THEY'RE NOT NECESSARILY, I MEAN, THERE, THERE IS AN IMPACT BECAUSE YOU ARE, YOU ARE PROVIDING ADDITIONAL CAPACITY, WHICH HAS TO FLOW THROUGH PIPES, HAS TO THROW THROUGH STATIONS, BUT IT'S NOT OF, OF THE, YOU'RE, YOU'RE NOT IMPACTING IT THAT GREAT TO WHERE YOU'RE LOSING THAT MANY YEARS BASED OFF THE LIFESPAN OF THE FORCE VEINS, GRAVITY, MAINS, VACUUM MAINS, AND THE STATIONS THEMSELVES.
SO, SO EXTENDING THE SEWER LINES TO LAKE WHITES FAULT AND OTHER PLACES THROUGH FFY 32 IS NOT GONNA IMPACT THAT 13.5 OR THAT $6.8 MILLION.
BUT WE'VE HAD SOME PUMP STATIONS, FOR INSTANCE, BARLOW ROAD THAT'S BEEN IN OUR LIST, AND THAT REALLY IS DRIVEN BY EXPANSION.
SO THAT CASE, IT IS ESSENTIALLY BECAUSE IT, IT'S ADDED THAT THAT'S A CAPACITY ISSUE FOR THE STATION ITSELF, NOT NECESSARILY WEAR AND TEAR ISSUE.
THAT'S, WE'RE ADDING CAPACITY FROM FINON MILLS ESSENTIALLY, WHICH THERE, THERE, IT'S QUESTIONABLE WHETHER OR NOT THAT PUMP STATION CAN MEET THAT CAPACITY, WHICH IS CAUSING THE UPGRADE.
DO WE HAVE OTHERS LIKE THAT OR IS THAT A ONE-OFF, UM, BAPTIST ROAD TO SOME DEGREE BECAUSE OF ROSE HILL.
UM, OBVIOUSLY THE, THE PREFERENTIAL WAY TO TREAT THAT IS WHEN A DEVELOPMENT COMES AND THEY PAY FOR THAT EXPENDITURE IMPACT FEES, WHICH IF YOU LOOK AT LIKE TRANQUILITY, WALLER, MILL, UM, SMITH
[00:20:01]
FARMS, THEY DID, THEY HAD TO ADD PUMP STATIONS ESSENTIALLY TO SUPPORT THE NETWORK.UM, SO JUST WHAT WE'VE BEEN OVER WORKING THROUGH THE PAST YEAR, WE, WE TOOK THE APPROACH, UM, THAT ARE SHOWN IN THESE FOUR BOXES HERE.
WE, WE FIRST SPENT SOME TIME DIGESTING THE COUNTY'S CUSTOMER INFORMATION AND THE CUSTOMER DATA, UH, BECAUSE I THINK CRITICAL TO THE ANALYSIS IS UNDERSTANDING THE COUNTY'S CUSTOMER BASE.
UM, AND THEN WE WENT ON TO REVIEW THE SEWER REVENUE REQUIREMENTS, THE OO AND M EXPENSES, WHAT'S, WHAT IT'S BEEN PA IN THE PAST AND HOW IT'S PROJECTED TO GO UP.
UM, AND THEN WE BASICALLY DID THE MATH TO SOLVE FOR WHAT THE RATES NEED TO BE TO MEET THOSE REQUIREMENTS BOTH NOW AND INTO THE FUTURE.
AND THEN WE'VE HAD A NUMBER OF DISCUSSIONS WITH THE COUNTY STAFF TO TALK ABOUT THE DIFFERENT ALTERNATIVES AND, AND WHAT THOSE RESULTS SHOWED, UM, TO, TO ARRIVE AT OUR CONCLUSIONS.
SO IN THE NEXT FEW SLIDES, WE'RE GONNA WALK YOU THROUGH THE VARIOUS TAKEAWAYS THAT WE'VE DRAWN FROM EACH PART OF THIS PROCESS THAT'S ON THE DIAGRAM.
AND SO I'LL PICK UP HERE AND JUST TALK, UM, AT A HIGH LEVEL ABOUT THE CUSTOMER DATA THAT, AS CHRISTIE MENTIONED, WAS OUR STARTING PLACE AS WE STARTED LOOKING AT THIS.
UM, SO WE HAVE A BUNCH OF DIFFERENT CHARTS HERE, BUT I'LL JUST KIND OF SUMMARIZE.
UM, THE FIRST PIECES THAT YOUR SEWER USAGE HAS BEEN INCREASING, WE LOOKED BACK OVER A THREE YEAR PERIOD AND YOU CAN SEE THAT CHART TOWARDS THE BOTTOM SHOWS THAT IT'S REALLY BEEN STEADILY INCREASING OVER THOSE THREE YEARS.
UM, IN TERMS OF WHO YOUR CUSTOMERS ARE, IT'S PRIMARILY RESIDENTIAL.
UM, AND PRIMARILY USING A FIVE EIGHTH INCH METER SIZE, UM, OVER 90% OF YOUR CUSTOMER BASE, YOU CAN SEE IN THE CHART THERE IN THE BOTTOM RIGHT.
WHAT DOES THAT, WHAT DOES THAT MEAN? 5 8 8 5 EIGHTH INCH.
THAT'S A STANDARD RESIDENTIAL WATER LINE.
IS IT IT'S ON WATER OR IT, IT, SO THAT'S BASED OFF THE, UH, BECAUSE WE BUILD GUY BY CONSUMPTION ON THE COMMERCIAL SIDE.
AND IT DEPENDS, YOUR, YOUR RATES GO UP BASED OFF YOUR WATERLINE SIZE.
IT'S FIVE EIGHTHS ON YOUR PIPE.
SO THAT'S, SO THAT, THAT'S, SO THAT'S KINDA LIKE SET BY, UH, IS IT SET BY US OR SET BY, UM, WATERWORKS.
SO IT'S WHATEVER THE DEMAND IS AND WATERWORKS, WE WILL BASICALLY IT, IT'S WHATEVER THE WATERWORKS METER IS.
SO IT ESSENTIALLY IS SET BY WATERWORKS.
YOUR, YOUR FIRST BULLET SAID STEADILY INCREASED, THAT MEANS NUMBER OF CONNECTIONS IS STEADILY INCREASED THE USAGE.
UM, SO IN TERMS OF THE, THAT, UH, DRIVES THE AMOUNT, UM, OF REVENUES.
SO WHAT'S BILLED BASED ON WHAT, WHAT IS BEING CONSUMED BY YOUR USERS, WHAT IS THAT? SO NOT CONNECTIONS, BUT DON'T, BUT OUR CONNECTIONS HAS GROWN STEADILY AS WELL, SO CORRECT.
THAT DRIVES USAGE, RIGHT? YES.
YEAH, YOUR NUMBER OF RESIDENTIAL UNIT ACCOUNTS HAVE GROWN STEADILY OVER THE YEARS AS WELL.
THIS BOTTOM LEFT CONSUMPTION'S GONE DOWN.
IF YOU LOOK AT THE TREND LINE, THAT'S WHAT WE'RE FOCUSED ON WHEN WE'RE TALKING ABOUT GROWTH.
SO YOU CAN SEE THE DOTTED LINE THERE.
SO IT'S MOVED CYCLICALLY, UM, BUT OVERALL THE TREND HAS BEEN UPWARD.
I MEAN IT'S, IT'S BASICALLY STEADY DROP SINCE 2024 AND IT'S WAY DOWN.
I'M JUST NOT SURE HOW YOU, THAT LINE STAYS THAT HIGH.
WELL IT'S REALLY ONLY THREE MONTHS SHOWING IT'S MONTH OVER MONTH.
SO I THINK THAT THAT MONTH BY MONTH DATA IS A LITTLE, UM, HARD TO READ.
BUT IF YOU LOOK AT IT OVER, OVER AN ANNUAL PERIOD, IT CONTINUES TO SHOW AN INCREASE.
IT'S FE FEBRUARY, MARCH AND APRIL OF LAST YEAR.
WERE THE ONLY MONTHS THAT DOTED LINE JUST YOU MOVING AVERAGE, ISN'T IT? YEAH.
PUTTING IN ALL THE, YOU GO BACK TO 22.
UM, AND SO IN TERMS OF JUST, I HAVE IT JUST A COUPLE MORE HERE.
UM, JUST IN TERMS OF DEMAND OVERALL, UM, IT'S BEEN STEADY, UM, IN TERMS OF YOUR PEAK RATIOS.
SO ACROSS ALL THOSE METER SIZES THAT WE TALKED ABOUT, UM, PRETTY STEADY DEMAND, UM, OVER THE LIFE.
AND THEN IN TERMS OF YOUR BIG USERS, WE ALWAYS LIKE TO LOOK AT CONCENTRATION IF THERE'S ANY CONCENTRATION RISK THERE FOR YOU ALL.
UM, YOUR 10 LARGEST CUSTOMERS COMPRISE JUST 13% OF YOUR TOTAL SYSTEM REVENUES.
UM, SO FROM OUR PERSPECTIVE, NO CONCENTRATION RISK THERE.
AND FOUR OF THOSE TOP 10 USERS ARE RESIDENTIAL
[00:25:01]
BUILDINGS.SO ACTUALLY COMPRISED OF VARIOUS REPAIRS THERE.
SO THE NEXT THING THAT WE LOOKED BEFORE WE GO, I'M STILL TRYING TO DIGEST THIS CHART 'CAUSE I, I WOULD, THE PEAKS AND VALLEYS THAT GOT ME INTRIGUED.
IS THIS DRIVEN BY HOW MUCH WATER THEY USE GOING IN? IS THAT HOW WE MEASURE? THAT'S WHAT THAT GRAPH IS.
IT'S BA IT IT'S GOING, IT'S GOING TO GO UP AND DOWN BASED OFF SEASONS.
THAT'S WHAT I WAS TRYING TO GET.
ALTHOUGH LIKE I'M SURPRISED I SEE A DIP IN MAY.
I WOULD THINK I WOULD SEE AN INCREASE IN MAY AS PEOPLE USING MORE WATER FOR LAWNS AND SO FORTH.
BUT, BUT, BUT AT THE END OF THE DAY IT'S ABOUT WATER CONSUMPTION INTO THE HOUSE, HOW WE MEASURE IT ON THE COMMERCIAL SIDE, NOT ON THE RESIDENTIAL SIDE, BUT THEY WANTED TO STUDY POTENTIALLY A CONSUMPTION BASED FEE AS WELL, WHICH IS WHY YOU'RE SEEING THIS.
SO WHAT ARE THE, THIS CHART COMMERCIAL OR RESIDENTIAL OR BOTH? THIS IS BOTH.
BUT I THINK WE, WE LOOKED AT THAT WITH THE FOCUS ON SHOULD THE COUNTY, UM, CONSIDER A VARIABLE RATE CHARGE BASED ON CONSUMPTION ON RESIDENTIAL.
THIS BECOMES INCREASINGLY IMPORTANT.
YOUR CURRENT RATE STRUCTURE IS A HUNDRED PERCENT FIXED ON THE RESIDENTIAL.
SO, AND, AND THE COMMERCIAL CONSUMPTION IS SUCH A SMALL COMPONENT THAT OF THE OVERALL USAGE THAT AT THIS POINT WITH YOUR CURRENT RESTRUCTURE, I'M NOT SURE, JONATHAN, IF YOU AGREE THAT THE CONSUMPTION DATA IS LESS IMPORTANT COMPARED TO IF WE WERE TO, TO CONSIDER MOVING RESIDENTIAL TO A CONSUMPTION BASED USAGE.
IT IS, I MEAN TO, SO I THINK WE HAVE WHAT, AROUND 900 COMMERCIAL ACCOUNTS AND 20, 21 OR 22,000 RESIDENTIAL ACCOUNTS.
AND THOSE ARE ALL BILLED FLAT FEE, ALL THE RESIDENTIAL BILLS.
BUT, BUT COMMERCIAL IS BUILT ON USAGE.
SO WE'RE LOOKING HERE POSSIBLY GOING TO CONSUMPTION BASED FOR RESIDENTIAL TOO.
WE LOOKED AT ALL, YOU KNOW, ALL THE TYPES OF POSSIBILITIES THE WAY YOU COULD, WE COULD MEET THE REVENUE REQUIREMENTS AND THAT WAS ONE OF THE THINGS THAT WE LOOKED AT.
SO THEY'RE GONNA BE TALKING ABOUT WHAT OUR ULTIMATE RECOMMENDATION WAS AND WHY.
SO, UM, LOOKING AT THE REVENUE REQUIREMENTS, CHRISTIE TOUCHED ON A LITTLE BIT WHAT THIS IS, UM, AT A HIGH LEVEL, BUT THIS IS PUTTING SOME NUMBERS TO IT.
UM, SO WE HAVE THE DATA 24 THROUGH 26 AND THEN WHAT'S DRIVING OUR RATE RECOMMENDATIONS THAT WE'LL GO TO LATER IS THIS, UM, PROJECTION IN 27 AS WELL AS 28.
UM, SO I'LL JUST KIND OF GO LINE BY LINE AT A HIGH LEVEL.
SO THE BIGGEST PIECE OF THIS REVENUE REQUIREMENT, WHAT WE'RE TRYING TO COVER WITH THESE USER FEES IS O AND M EXPENSES.
SO WHAT YOU PAY FOR OPERATING AND MAINTAINING THE SYSTEM.
UM, HISTORICALLY THERE'S ALSO BEEN ABOUT 5 MILLION ANNUALLY IN CASH CAPITAL.
SO WE'VE MAINTAINED THAT HERE AS WELL AS PART OF THIS REVENUE REQUIREMENT.
THERE'S SOME EXISTING DEBT SERVICE THAT THE SYSTEM PAYS AND SO WE'RE INCLUDING THAT IN OUR REVENUE REQUIREMENT AS WELL.
AND THEN SOME OF THE CAPITAL PROJECTS THAT WE SHOWED A FEW SLIDES EARLIER, WE'RE PLANNING TO DEBT FINANCE.
AND SO YOU CAN SEE WE'RE LAYERING ON THAT NEW DEBT SERVICE AS WELL WHEN WE TAKE INTO ACCOUNT HOW MUCH REVENUES WE NEED.
UM, AND THEN CHRISTIE MENTIONED THAT, UM, THERE'S A LITTLE BIT OF SUBSTATION FROM THE GENERAL FUND THROUGH THE MEALS TAX THAT'S GOING INTO SUPPORT THE SYSTEM.
SO YOU CAN SEE WE'VE SHOWN THAT AS A NEGATIVE NUMBER.
SO THAT REDUCES THE AMOUNT OF REVENUE THAT NEEDS TO COME FROM THE RATES.
UM, SO YOU CAN SEE THAT THERE.
AND THEN THE USE OF THE FUND BALANCE, WHAT HAS ACCUMULATED IN THE SEWER FUND IS THAT, UM, LINE EIGHT THERE THAT YOU CAN SEE ABOVE THE TOTAL.
UM, AND SO IN TOTAL, LOOKING AT JUST OVER 12 MILLION IN TERMS OF THE REVENUE REQUIREMENT FOR 27, AND THEN THAT STEPS UP TO JUST UNDER 14 MILLION IN 28.
SO LOOKING AT 28, I THINK WE'RE SAYING TO MEET THAT 14 MILLION, WE NEED 2300, 2 $0.3 MILLION FROM MEAL TAX.
THAT'S WHAT WE'RE FACTORING IN.
UM, SO IT, IT BASICALLY STEPS DOWN THE AMOUNT THAT'S NEEDED FROM THE RATES.
SO WE DON'T HAVE TO INCREASE THE RATES AS MUCH.
AND $2.4 MILLION FROM THE FUND BALANCE YEAH.
[00:30:03]
SO YOU NEED TO MAKE UP 2.4 MILLION OUT OF, UH, INCREASED RATES.IF WE WERE TO NOT UTILIZE THAT FUND BALANCE, WE'D HAVE TO COME UP WITH 2.4 MILLION MORE IN REVENUES.
IN OTHER WORDS, IF WE CAN STOP FUNDING IT FROM THE GENERAL FUND, YOU'LL HAVE TO COME UP WITH 2.4 MILLION.
AND WE DID LOOK AT THAT AND, AND LIKE CHRISTIE SAID EARLIER, WE, WE'VE GOT A PLAN LONG TERM TO KIND OF WEAN OURSELF OFF THAT MAIL TAX, BUT WE COULDN'T DO IT ALL AT ONCE OR IT WOULD'VE BEEN TOO LARGE OF A SPIKE.
BUT HOW FAR OUT DO YOU HAVE TO GO? I THINK IN OUR PROJECTIONS WE WERE SEEING AROUND FI FISCAL YEAR 30, FISCAL YEAR 31 IS WHEN WE'D BE ABLE TO, AND THAT ASSUMES THAT AFTER THIS, WE'RE RIGHT NOW GONNA PROPOSING, UH, RATE INCREASES IN 27 AND 28.
UM, BUT ASSUMING THAT WE CAN HAVE SIMILAR INCREASES IN 29 AND 30, I THINK THAT IT AROUND FISCAL YEAR 31 IS WHAT OUR NUMBERS SHOWED IS WHEN WE CAN KIND OF WHAT, UH, THAT OFF.
SO WHAT FACTORS DID YOU TAKE IN THE CONSIDERATION, UM, AND DETERMINING THAT THIS IS GONNA BE A, THIS WOULD BE A GOOD IDEA.
IN OTHER WORDS, YOU KNOW, SOMETHING, SOMETHING'S GONNA COME ALONG HERE AND SCREW THIS UP.
WHAT'S GONNA CHANGE THAT? WHAT ABOUT INFLATION? WHAT ABOUT, UH, A DROP IN HOME VALUES? WHAT I MEAN WHAT LA OR, OR, OR WE INCREASE HOMES.
HOW, WHAT, WHAT FA WHAT FACTORS DID YOU, YOU INCLUDE HERE? THE, THE BIGGEST DRIVER IS THE ASSUMPTION BEHIND THE RESIDENTIAL ACCOUNTS BECAUSE, UH, YOU KNOW, WE WERE, WE'RE BASICALLY SOLVING FACTORS BEHIND THE RESIDENTIAL ACCOUNTS.
CORRECT NUMBER THAT CAN BE CONSISTENT IN USAGE OR WHAT? CONSISTENT IN TERMS OF GROWTH OF ACCOUNTS.
SO RIGHT NOW THE, THE RESIDENTIAL ACCOUNTS, THERE'S UH, 28,388 RESIDENTIAL ACCOUNTS.
UM, WE ASSUME THAT THAT CONTINUES TO GROW BY AROUND 300 ACCOUNTS EACH YEAR BECAUSE THAT'S THE BIGGEST DRIVER IN ALL OF THIS IS BECAUSE WE'RE WITH THE FIXED CHARGE.
IT'S A VERY SIMPLE MULTIPLY THE CURRENT FIXED CHARGE TIMES THE RESIDENTIAL UNIT AND THAT EQUALS THE RESIDENTIAL.
SO GOING BACK TO YOUR OTHER CHART THAT WAS SHOWING YOU HAD COMBINED RESIDENTIAL COMMERCIAL, YOU IMPLIED THAT UM, THERE WERE OTHER FACTORS BESIDES JUST GROWTH IN HOUSING OR GROWTH IN UH, CUSTOMERS, THAT THERE WAS SOME USAGE THAT WAS DRIVING ALSO THERE DRIVING UP AN INCREASE IN CONSUMPTION.
WHAT WERE THOSE? I MEAN, JUST NORMALLY YOU JUST SIT HERE AND YOU SAY, OKAY, I GOT 10 HOUSES NOW TOMORROW I GOT 20 HOUSES, THEREFORE I GOT MORE HOUSES.
BUT YOU IMPLIED IN THE, IN THE STATEMENTS THAT YOU MADE THAT THERE WAS OTHER FACTORS BESIDES JUST, JUST UH, NUMBER INCREASE.
IT WAS SOMETHING DRIVING USAGE USAGE.
BECAUSE WHAT WOULD BE DRIVING THE USAGE THAT YOU CONSIDERED THAT MORE PEOPLE HAVING MORE KIDS IN A FAMILY OR WHAT I MEAN WHAT NUMBER, WHAT, WHAT ARE YOU LOOKING AT? IT'S GONNA DRIVE UP TO USAGE, UH, SIGNIFICANTLY.
UH, THAT WE HAVE TO CONSIDER IT O OVER AND ABOVE THE, UH, JUST THE NUMBER OF HOUSES OR NUMBER OF PROPERTIES BEING USED.
NO, THE NUMBER OF NEW SEWER LINE EXTENSIONS.
WELL WHERE DOES THAT COME FROM? THAT COMES FROM FROM MORE HOUSES.
WE DON'T JUST STICK A LINE OUT THERE FOR HELL OF IT.
THAT'S WHY I WAS SURPRISED THAT 300 IS SO LOW.
WELL I THOUGHT IT'D BE ABOUT 900 PERSONALLY, BUT, UH, BUT THE, UH, I'M TRYING TO FIGURE OUT, I'M TRYING TO UNDERSTAND WHAT WAS DRIVING THIS, UH, WHAT FACTORS, I'M, I'M TRYING TO FIND OUT SOMETHING HERE THAT I'M, I'M NOT AWARE OF WHAT'S DRIVING THE USAGE OTHER THAN NUMBER OF HOUSES.
UH, IF I MAY, I THINK WHEN WE WERE LOOKING AT THE, UH, CONSUMPTION CHART, UM, AGAIN, WE FACTORED THAT IN BECAUSE WE LEARNED TO LOOK AT ALL METHODS THAT WE COULD, WE COULD GET OUR REVENUE REQUIREMENTS.
ONE OF THOSE WAS SWITCHING TO THE CONSUMPTION METHOD FOR RESIDENTS.
SO FLAT FEE, WE CARE ABOUT THE NUMBER OF HOUSES, RIGHT? AND SO THAT'S WHERE THEY FACTORED IN THE 300 GROWTH EACH YEAR.
AND AGAIN, WE WANNA BE CONSERVATIVE IF WE BET ON A THOUSAND, YOU KNOW, PUT A THOUSAND HOUSES EACH YEAR.
UM, AND WE DON'T GET THOSE, WE DON'T HAVE ENOUGH REVENUE TO COVER OUR EXPENSES.
SO THAT'S WHERE THE 300 COMES FROM.
THE CONSUMPTION PIECE WE LOOKED AT TO SEE WHERE IS OUR AVERAGE CONSUMPTION ON RESIDENTS AND WHAT WOULD WE NEED TO CHARGE BOTH MAYBE A COMBINATION OF FIXED AND VARIABLE BASED ON CONSUMPTION TO COVER THE EXPENSES IN THE FUND.
AND NOW YOU SAID, OH WAIT, OKAY, LET ME JUST PAUSE YOU RIGHT HERE.
SO YOU'RE TALKING COMMERCIAL AND RESIDENTIAL? YES.
SO WE COME IN, WE PUT A, UM, WHAT ARE THOSE THREE BOX PUBLIX? NO,
[00:35:01]
PUT A DATA CENTER IN HERE AND THEY USE WATER.LIKE, LIKE, LIKE ELECTRICITY, YOU KNOW MM-HMM
THEY JUST START PILING UP THE UTILITIES.
SO THAT'S GONNA DRIVE SIGNIFICANT, COULD SIGNIFICANTLY DRIVE UP THE COST OR THE CONSUMPTION.
WHICH WOULD THEN DRIVE UP THE COST FOR EACH, EACH UH, USER.
WELL THE COMMERCIAL ACCOUNTS PAY ON CONSUMPTION BASIS, PARDON? THE COMMERCIAL ACCOUNTS PAY ON A CONSUMPTION BASIS.
SO THEY WOULD BE PAYING MORE OF THE SHARE OF THE COST BECAUSE THEY'RE CONSUMING MORE.
I MEAN, I DON'T KNOW IF YOU YEAH.
AND, AND MOST LOCALITIES, THIS IS VERY DATA CENTER SPECIFIC, BUT DATA CENTERS USE REUSE WATER.
SO, SO LOCALITIES LIKE LOUD AND SPOTSYLVANIA STAFFORD THAT ARE GETTING THE INFLUX OF DATA CENTERS ARE COMING UP WITH A COMPLETE SEPARATE RATE STRUCTURE FOR DATA CENTER SPECIFIC BASED ON THEIR REUSE THAT DRIVEN BY THE STATE OR DRIVEN BY THE COUNTY OR THE CITY OR WHAT THAT'S DRIVEN BY THE COUNTY, EACH INDIVIDUAL COUNTY.
SO WE WOULD HAVE THE AUTHORITY TO DO SOMETHING LIKE THAT HERE.
IF YOU WERE TO ENTERTAIN SUCH PROPOSAL OR, YES.
AND THAT'S NOT UNUSUAL BECAUSE WE HAVE OTHER, UM, COMMERCIAL USERS THAT REUSE THEIR WATER, UM, AND IT NEVER MAKES IT INTO A SEWAGE SYSTEM.
AND SO WE DO HAVE WAYS TO, TO MONITOR THAT TO A CERTAIN EXTENT.
I THINK WATER COUNTRY WOULD BE AN EXAMPLE WHERE THEY REUSE SOME OF THE WATER, NEVER MAKES IT OVER TO THE SEWER SYSTEM.
UM, SO WE WOULD BE ABLE TO IT.
SO WE STILL, THE IN RESIDENTIAL PROPERTY, UH, DO WE STILL HAVE THIS THING WHERE YOU COULD PUT UP A METER FOR YOUR LAWN, LAWN MAINTENANCE AND, AND THEREFORE IT WOULD SAY YOU COULD SUBTRACT THAT WATER OUT OF YOUR, YOUR, UH, SEWAGE, SEWAGE USAGE? WE DO NOT HAVE THAT.
I MEAN RIGHT NOW THERE'S THE FLAT RATE.
I'M NOT AWARE THAT WE HAVE, DO WE HAVE SOME ACCOUNTS THAT STILL GET THAT? I THINK HE'S TALKING ABOUT HRST.
I'M STILL BACK TO THE NUMBER 300 A YEAR.
I MEAN I'VE GOT ROSEDALE SMITH FARMS WATER MILL, TRANQUIL FED MILL ALL COMING ON LINE IN THE NEXT THREE, FOUR YEARS.
THAT'S, THAT'S CLEARLY, THAT'S CLEARLY MORE THAN A 300 HOME AVERAGE.
AND THEN I GOT WADE FAULKNER PLANTATION SPRINGFIELD AS SEWER EXTENSIONS ALL COMING ON IN A SIMILAR TIMEFRAME.
THE NUMBERS GOTTA BE MORE THAN 300 HOMES A YEAR.
WELL, AND I WOULD SAY, YOU KNOW, WE'VE KIND OF LOOKED AT WHAT THE RATES WOULD BE FOR THE NEXT TWO YEARS.
UM, THE RECOMMENDATION FROM PFM IS TO LOOK AT THESE RATES ANNUALLY AT, AT A MINIMUM EVERY TWO YEARS.
SO WE'RE GONNA BE ADJUSTING THOSE CONSERVATIVELY WHEN WE LOOK OUT, WE'RE DOING A LOWER NUMBER AND YOU GUYS CAN SPEAK TO THAT A LITTLE BIT, BUT THAT IS, THIS ISN'T SOMETHING A ONE AND DONE, WE'RE GONNA HAVE TO LOOK AT THIS AS THAT REVENUE, UM, OR THAT CUSTOMER MIX CHANGES.
SAME WOULD BE TRUE FOR A LARGE COMMERCIAL USER.
UM, AS THOSE, YOU KNOW, CHANGE, WE NEED TO KIND OF LOOK AT IT AGAIN AND SEE IF THE ASSUMPTIONS WE'VE MADE MAKE SENSE.
SO, SO IF WE DO OUR ASSESSMENTS EVERY YEAR, SO, AND BE YOU'RE, YOU'RE RECOMMENDING THAT OR SUGGESTING THAT IT MIGHT BE GOOD IDEAS TO DO OUR RATES EVERY YEAR ALSO? ABSOLUTELY.
AND, AND I THINK, YOU KNOW, WE'VE SEEN ON THE PEOPLE THEN WOULD KNOW MORE ABOUT WHAT THEY'RE PAYING FOR WHEN THEY SEE IT GO UP THAT YEAR AND THEY'LL KNOW THAT THAT'S, THIS IS WHY.
AND WE'VE KIND OF TALKED ABOUT WHETHER THAT WAS SOLID WASTE TOO, WHERE WE HAVE CONTRACTUAL INCREASES ON SOME CONTRACTS THAT GO UP, YOU KNOW, 3% A YEAR OR WHATEVER CPI IS.
SO WE KNOW THERE'S GONNA BE AN INCREASED COST OF DOING BUSINESS.
SO EVERY YEAR IF WE JUST ADJUST THE FEES JUST ENOUGH TO COVER THAT, THEN WE REMAIN SOLVENT.
IT'S WHEN YOU WAIT SEVERAL YEARS TO DO THAT RIGHT.
SO YES, IT'S EXACTLY YOUR POINT.
AND IT FOLLOWS THE MODEL OF OTHER UTILITIES TOO.
DOMINION AND VIRGINIA NATURAL GAS, EVERYTHING ELSE GOES UP INCREMENTALLY EVERY YEAR INSTEAD OF THE SHOCK INCREASES EVERY FOUR OR FIVE YEARS.
SO IT WOULD FOLLOW THAT MODEL ESSENTIALLY.
SMALL INCREMENTAL INCREASES BY LARGE, DON'T TELL ME IT'S SMALL WHEN YOU TALK ABOUT DOMINION ENERGY
UM, SO WE'VE TALKED A LITTLE BIT ABOUT THE DIFFERENT ALTERNATIVES THAT WE LOOKED AT, BUT JUST WANTED TO PUT THOSE HERE.
UH, SO YOU ALL KNOW WHAT WAS EVALUATED BY PFM ALONGSIDE STAFF? UM, SO AS WE'VE TALKED ABOUT IT, THE CURRENT, THE CURRENT, UM, STEWARD RATE STRUCTURE FOR RESIDENTIAL IS THAT FIXED BIMONTHLY FEE.
SO THEY PAY THE SAME FEE EVERY TWO MONTHS AND THEN FOR COMMERCIAL USERS THEY PAY BASED ON CONSUMPTION.
AND THAT'S CURRENTLY HOW YOUR STRUCTURE WORKS.
UM, A FEW ALTERNATIVES THAT WE LOOKED AT IS INTRODUCING A CONSUMPTION COMPONENT TO RESIDENTIAL.
[00:40:01]
A FIXED CHARGE, THEY WOULD PAY BASED ON CONSUMPTION AS WELL.UM, ON THE COMMERCIAL SIDE, WE LOOKED AT INTRODUCING A FIXED CHARGE THERE IN ADDITION TO THE CONSUMPTION CHARGE THAT THEY PAY NOW.
UM, AND WE ALSO TOOK A LOOK AT A TIERED STRUCTURE WHICH WOULD CHARGE A HIGHER RATE TO A LARGER USER, UM, RATHER THAN CHARGE THE SAME VOLUME RATE, UM, TO ALL USERS.
AND THEN ON SLIDE EIGHT YOU CAN SEE WHAT THE RECOMMENDATIONS ARE FOR FY 7 27 AND 28.
CAN WE BACK UP FOR JUST A SECOND? SURE.
YOU SAID INTRODUCING A FIXED CHARGE FOR COMMERCIAL USE.
ARE YOU TALKING ABOUT A FIXED CHARGE ON TOP OF THE CONSUMPTION? YES AS WELL.
AND SO THERE ARE, I UNDERSTAND IT.
THAT WOULD BE THEN TO RE THAT WOULD HELP REDUCE, UM, THE RESIDENTIAL, UH, COSTS BECAUSE OF SOME LARGE BUSINESS THAT COMES IN AND USES A, HAS A HIGH DEMAND FOR WATER, STUFF LIKE THAT, RIGHT? THAT'S WHAT, THAT'S WHAT THAT WOULD DO.
SO I'M ASSUMING YOU, YOU UNDERSTAND MY QUESTION, RIGHT? YEAH.
EFFECTIVELY IT WOULD, UM, PUT A LITTLE IT BY HAVING THAT FIXED CHARGE ON THE COMMERCIAL USERS, IT'S EFFECTIVELY ALLOWING THEM TO PAY MORE OF THAT REVENUE REQUIREMENT AND TAKING THE PRESSURE OFF THE RESIDENTIAL SIDE.
WHAT ARE YOU RECOMMENDING? BECAUSE INITIALLY WE'RE CURRENTLY FIXED OR FIXED MINIMUM ON COMMERCIAL AND THEN THEY PAY, THEY PAY ON USAGE IF THEY GO ABOVE THE MINIMUM, ARE YOU STILL MAINTAINING THAT BASIS OF A FIXED MINIMUM? WE'RE WE'RE RECOMMENDING THAT YOU SWITCH TO A FIXED CHARGE FOR EVERYBODY, ALL OF THE COMMERCIAL USERS PLUS CONSUMPTION BASE CONSUMPTION ON COMMERCIAL.
CONSUMPTION ON COMMERCIAL PLUS A FIXED CHARGE.
FOR COMMERCIAL AND RESIDENTIAL? NO, JUST COMMERCIAL.
YEAH, SO YOU CAN SEE ON THE TA WE ARE SUGGESTING DOING BOTH ON THE COMMERCIAL, BOTH THE COMBINATION OF CONSUMPTION BASE, WHICH IS WHAT YOU'RE DOING NOW, BUT ALSO CHARGE A FIXED CHARGE.
IT'S PRETTY APPARENT FROM THIS CHART THAT WE'VE NOT BEEN CHARGING COMMERCIAL CORRECTLY BECAUSE THEY'RE PAYING MUCH LESS THAN RESIDENTIAL.
WELL 11 YEARS IS THE LAST TIME WE, SO MY IMMEDIATE ANSWER IS THEY PAY THE SAME, THE FIXED RATE IS THE SAME ACROSS THE BOARD AND THEN THERE'S A CONSUMPTION FEE ON TOP OF THAT FOR OUR COMMERCIAL USER.
WE WANTED TO GET THE RESIDENTIAL USERS A LITTLE BIT MORE, UM, A LITTLE MORE TIME TO FINE.
GIVEN THAT RESIDENTIAL USERS DID GET A RATE INCREASE LAST IN THE PA FIVE YEARS AGO AND THE FACT THAT COMMERCIAL USERS HAVE NOT GOTTEN ANYTHING FOR 10 YEARS PLUS THEY'VE BEEN PAYING THE SMALLER COMMERCIAL USERS HAVE EFFECTIVELY BEEN SUBSIDIZED BY YOUR SMALLER RESIDENTIAL USERS WHO ARE PAYING $54 AS OPPOSED TO $20.
SO JUST LOOKING AT THIS HERE IN FRONT OF US, 54 57.
WE'RE NOT TALKING ABOUT RAISING THE, THE FIVE MONTHLY FIXED SERVICE CHARGE BY $3 EVERY YEAR.
WHAT THEY'RE TALKING ABOUT? YES, THAT'S WHAT THE RECOMMENDATION IS BUT NO, NO, NO.
OH FISCAL YEAR 28 BECAUSE OTHERWISE 10 YEARS YOU'RE, YOU, YOU JUST INCREASE IT BY 30 BUCKS EVERY, EVERY TWO MONTHS.
I HOPE WE'RE NOT PLANNING ON THAT TYPE OF PACING.
WE WERE PLANNING ON ANYWHERE FROM TWO TO $3 INCREASE UP UNTIL FISCAL 20 30, 20 20 31 TO WEAN OFF OF THE ALLOCATIONS OF MEALS TAX AND THE USE OF FUND BALANCE.
BUT I THINK THAT THAT IS EXACTLY WHAT WE WILL WANT TO REVISIT WHEN WE SEE, ASSUMING YOU KNOW THE ACCOUNT NUMBERS, WE WERE VERY CONSERVATIVE AND YOU GOT MORE AND IF YOU KNOW THE CONSUMPTION BASED, YOU KNOW, PROJECTIONS WERE ALSO INCREASED TO THE EXTENT THAT WE WERE ABLE TO WEAN THOSE OFF SOONER.
WE CAN DEFINITELY LOOK AT THAT AGAIN AND SUGGEST A LOWER INCREASE IN THE RESIDENTIAL.
BUT I THINK THAT GENERALLY SPEAKING, UM, BEST PRACTICE WOULD BE AT LEAST TO CONSIDER SOME SORT OF INFLATIONARY ADJUSTMENT ON BOTH RESIDENTIAL AND COMMERCIAL YEAR OVER YEAR.
SO, UH, CURRENTLY THIS SAYS CONSUMPTION BASED CHARGE PER CCF IS 3 6 1.
THAT'S JUST FOR COMMERCIAL RIGHT? BUT YOU'RE TALKING ABOUT POSSIBLY GOING TO CONSUMPTION BASE FOR RESIDENTIAL? WE EVALUATED
[00:45:01]
THAT BUT THAT'S NOT THE RECOMMENDATION.WE'RE RECOMMENDING HERE THAT WE STAY WITH THE FIXED CHARGE ONLY FOR RESIDENTIAL AND THEN THESE INCREASES THAT YOU SEE HERE ON THE RESIDENTIAL SIDE.
SO THE ONLY STRUCTURAL CHANGE THAT WE'RE MAKING TO THE RATES IS ON THE COMMERCIAL BY INTRODUCING THAT FIXED CHARGE.
SO THE COMMERCIAL THEN WILL HELP US CLOSE THAT GAP.
UM, I DON'T WANNA CALL IT SHORTFALL, BUT IT'S NO, WHAT IS IT NON WELL THAT'S A GAP.
WHAT IS THAT? THAT'S A NON REVENUE.
SO YOU GUYS CALLED IT SOMETHING ELSE.
BUT ANYWAY, UH, SO WE GOT THAT, THE GAP, WE GOT CLOSE 2.3 MILLION GAP THAT'S GONNA DO BE DONE BY THE COMMERCIAL SIDE.
IT'LL BE DONE BY A COMBINATION OF THE INCREASES ON COMMERCIAL AND RESIDENTIAL RESIDENTIAL, UM, BETWEEN NOW AND THAT 2031 ISH THAT CHRIS OKAY.
SO THAT'S GONNA BE A $3 A YEAR CHANGE FIXED ON THE RESIDENTIAL.
AND AS SUSAN AND IT'S 31, SO WE'RE TALKING FIVE YEARS.
SO HOW DOES THAT, HOW DOES INFLATION PLAY? AND YOU, DID YOU COUNT INFLATION ON THIS? GO AHEAD.
WELL WE DID AND, AND HONESTLY I THINK THAT WE REALLY FOCUSED A LOT THROUGH WHAT THE, WHAT DO WE NEED TO MATHEMATICALLY SOLVE FOR IN 27 AND 28.
I THINK WE DID SOME ANALYSIS ON 29 AND BEYOND, BUT A LITTLE BIT OF THAT WE, I THINK WE, WE WANTED TO MAKE THIS RECOMMENDATION AND THEN REEVALUATE THOSE FUTURE YEARS BUT BE WE WERE CONTINUOUSLY, LEMME COUNT AS FUTURE YEARS BEYOND 28, 29 AND BEYOND.
AND, AND, AND EVEN THE 2028 RATES WERE IS, IS OUR NUMBERS THAT WE PROJECTED TODAY, BUT THESE ARE NOT THE RATES THAT YOU'RE ADOPTING TODAY.
SO I THINK I'M HOPING THAT WITH ONE MORE YEAR OF DATA AND WITH THE INCREASE WITH THE INTRODUCTION OF THE FIXED CHARGE ON THE COMMERCIAL, WE CAN BE BETTER INFORMED ABOUT THE FISCAL 28 WITH MORE CERTAINTY THIS TIME NEXT YEAR.
SO ARE WE GONNA GO, UH, WE GONNA GO TO A SINGLE, UH, ASSESSMENT EVERY YEAR ASSESSMENT IN 28, RIGHT? THAT'S WHAT WE'VE HEARD FROM THE BOARD THAT YOU'D LIKE US TO LOOK AT.
WE WOULD START THAT IN JANUARY OF 28.
WE'LL OF COURSE HAVE, YOU KNOW, A, A MEETING ABOUT THAT IN PUBLIC HEARING ABOUT THE CHANGE.
BUT I DON'T LIKE THE IDEA OF DOING IT YEARLY ON THIS WHEN WE'RE NOT YET AT YEARLY ON THE ASSESSMENT.
I'D RATHER STRUCTURE IT AS A TWO YEAR RATE FOR SEWER TO GET THEM LINED UP.
SO WE DO HAVE OTHER FEES THAT WE ADJUST ANNUALLY.
UM, EVEN THOUGH WE'VE ALWAYS BEEN ON A BIENNIAL, UM, ASSESSMENT, SOLID WASTE IS ONE OF THOSE WE'VE ADJUSTED THAT THE LAST THREE YEARS IN A ROW.
UM, AGAIN, JUST TO COVER THAT, YOU KNOW, INFLATIONARY COST INCREASE.
SO I WOULD SAY THAT WE HAVE OTHER EXAMPLES OF THIS WOULDN'T BE OUTTA LINE BUT UM, THE OTHER THING THAT CAN AFFECT WHAT 28 LOOKS LIKE IS THE TIMING OF THESE CAPITAL PROJECTS AND THE COST OF THEM AS THEY COME BACK.
I MEAN A LOT OF THESE HAVEN'T EVEN BEEN MET YET.
SO I WOULD SAY THAT WE'RE GONNA TAKE A HARD LOOK AT IT AGAIN IN 28 AND SEE WHAT HAS CHANGED.
AND I THINK THAT'S JUST BEST PRACTICE TO, YOU KNOW, MAKE SURE THAT WE'RE GETTING THE REVENUE REQUIREMENTS WE NEED, NOT MORE THAN WE NEED.
UM, BUT ALSO NOT, YOU KNOW, CAUSING A DEFICIT IN THE FUND.
I GUESS I'D BE MORE INCLINED TO GO TO A $4 INCREASE IN TWO OVER TWO YEARS INSTEAD OF $3 THIS YEAR.
$3 AGAIN, EXTRA $3 THE FOLLOWING.
WELL, I MEAN IT'S, YOU GOTTA GET USED TO WHATEVER YOU'RE GONNA DO.
WHATEVER WE'RE GONNA DO, BE CONSISTENT AT IT BECAUSE THAT'S WHAT YOU KNOW.
AND THE PROBLEM WITH THESE MULTI-YEAR THINGS YOU CAN'T REALLY ASSOCIATE THAT'S BEEN A BIG PROBLEM IS YOU CAN'T ASSOCIATE WHAT YOU'RE DOING AND WHY YOU'RE DOING IT.
YOU END UP WITH A HUGE, YOU END UP WITH THESE HUGE BILLS AND PEOPLE THEN GO, WHY IN THE HELL IS THIS PERCENTAGE SO INCREASED HERE WHEN ONLY THIS MUCH PERCENTAGE INCREASE? WELL IF YOU SHOW IT ON A YEAR TO YEAR BASIS, I MEAN THAT'S THE WHOLE KEY OF GOING TO YEAR TO YEAR.
YOU JUST, YOU'RE SEEING, HEY WE GOTTA GO, YOU KNOW, THIS IS WHAT IT'S GONNA COST US TO DO BUSINESS.
OTHER THAN THAT YOU DON'T GET ANY WATER OR YOU, YOU DON'T GET ANY SEWERS.
WHY ARE WE FREEZING THE COMMERCIAL? WHY ISN'T IT GOING UP IN THE SECOND YEAR? WELL THE CONSUMPTION BASED FEE IS GOING UP.
IT'S THE FIXED CHARGE THAT IS REMAINING AT THE $60.
IT'S JUST ON THE VARIABLE COMPONENT.
THEY'VE BEEN PAYING $10 A MONTH FOREVER.
WHY IS THE RESIDENT PAYING FOR THE COMMERCIAL IF IT'S 60 AND 27, WHY IS IT 70 AND 28
[00:50:03]
WITHIN YOU NOW? YOU NOW, OKAY, SO WE DO THAT.I'M NOT SAYING IT NOT TO DO IT, BUT I'M JUST SAYING IF YOU DO THAT YOU JU YOU, YOU, YOU'RE BOOSTING BOTH OF 'EM, RIGHT? BECAUSE THE WHOLE IDEA WAS THE VARIABLE WAY YOU UNDERSTOOD THIS, THE CONSUMPTION ON A COMMERCIAL WAS GOING TO COVER THE GAP.
ALL WE'RE TRYING TO DO IS CLOSE THE GAP, RIGHT? WE'RE NOT TRYING TO MAKE A PROFIT OFF THIS THING.
RIGHT? SO NOW IF WE GO UP WITH THE, WE WE, THE FIXED COST GOES UP, THEN THE CONSUMPTION WOULD HAVE THE CHARGE WOULD'VE TO GO DOWN.
THE GENERAL FUND IS STILL PAYING FOR IT UNTIL 2031.
I, BUT I DON'T HAVE ANY NUMBERS TO LOOK AT FOR 31 ALL I'VE GOT A $2.3 MILLION FOR, UH, 28 COME FROM.
I THINK
I THINK ONE OTHER THING THAT WE TRY TO KEEP IN MIND WHEN WE'RE DOING THIS IS HAVING THE, UM, CLASSES, RESIDENTIAL AND COMMERCIAL PAYING FOR THEIR CONSUMPTION.
IF, IF YOU KNOW RESIDENTS ARE USING 70% OF OF THE CONSUMPTION, THEN THE REVENUE COMING IN FROM THOSE FEES SHOULD COVER ROUGHLY THAT.
IT'S NEVER GONNA BE PERFECT 'CAUSE THERE'S VARIABLES THERE.
AND SO THAT'S ANOTHER THING WE KIND OF LOOKED AT, UM, VERSUS, YOU KNOW, RAISING ONE CLASS WHEN ACTUAL OUR HEAVIEST USER IS RESIDENTIAL.
SO THAT WAS ANOTHER THING THAT WENT INTO THAT FACTOR.
SO THE, THIS IS WHY IT TOOK A YEAR
THAT WAS WHAT I WAS GONNA SAY IS THAT WE CAN GET INTO, UM, MILLIONS OF SCENARIOS 'CAUSE THE REVENUE THAT WE'RE GENERATING IS FIXED AND IT'S ALL ABOUT WHAT LEVER DO YOU WANT TO, IF YOU'RE EXACTLY RIGHT, IF WE INCREASE THE FIXED CHARGE IN FISCAL 28 FOR COMMERCIAL, WE COULD REDUCE THAT CONSUMPTION.
'CAUSE YOU CAN SEE THAT CONSUMPTION BASED CHARGE GOES UP QUITE SIGNIFICANTLY.
IT'S DRIVEN BY THE FACT THAT THE O AND M EXPENSES FROM 27 TO 28 FOR THE SEWER SYSTEMS GOING UP BY 11%.
SO TO ACCOMMODATE FOR THAT INCREASE AND TO TRY TO LEAN OFF OF USING THE MEALS TAX AND THE FUND BALANCE WE NEEDED TO MAKE UP FOR THAT REVENUE AND WE CHOSE TO, IN THIS SCENARIO, SHOW THE $60 REMAIN CONSTANT BUT INCREASE THE CONSUMPTION BASED CHARGE.
AND, BUT WE CAN ABSOLUTELY CHANGE AN ALTER, MAKE AN ALTERNATIVE SCENARIO WHERE THE FIXED CHARGE IS $62 AND THE CONSUMPTION BASED CHARGE IS BELOW $5.
SO WE CAN, WE CAN ACCOMMODATE ANY VERSION OF THIS THAT CAN, THAT, THAT, THAT IS MORE POWERFUL, PAL.
THE POINT IS YOU WANT GET, YOU'RE SAYING YOUR RECOMMENDATION IS TO GET TO 31 ALL EVEN, RIGHT? THAT'S SUPPOSED TO BE THE DIGESTIBLE PILL AND THE, BUT THE ONES WE ESSENTIALLY PUSHING THIS ONTO IS OUR COMMERCIAL PROPERTY.
THEY'VE BEEN FREE GETTING A FREE RIDE HERE FOR HOWEVER MANY DECADES.
SO, UM, I UNDERSTAND THAT IF YOU'RE GONNA CHANGE WHAT YOUR RECOMMENDATION'S GONNA BE, THEN I NEED TO UNDERSTAND WHY.
OKAY? IF WE'RE GONNA INCREASE THE, YOU'RE GONNA INCREASE, UH, THE FIXED RATE OR THE CONSUMPTION RATE ONTO COMMERCIAL AND WE'RE GONNA BE GETTING THERE, THEN THE ONLY THING IS WE'RE ACCELERATING WHEN WE'RE GONNA GET TO THE CLOSE OF THE, UM, FIXING THIS PROBLEM.
SO DO WE WANNA DO IT SOONER NOW? IS THAT WHAT WE'RE, ARE WE SAYING THAT OR OR ARE WE OKAY WITH 31? I MEAN THAT'S, THAT'S A DECISION BECAUSE THEY'RE RECOMMENDING YOU CAN GO, WE CAN DO ANY KIND OF, YOU KNOW, MAGIC WITH THE, UH, NUMBERS WE WANT.
SO WE DID, WE HAD A LOT OF DISCUSSION ABOUT THAT.
I THINK 31, UM, MADE SENSE BECAUSE WE HAVE SOME VERY LARGE SEWER EXTENSION PROJECTS COMING.
WHITES, FAULKNER, BIG BETHEL ROAD, SPRINGFIELD ROAD IS STILL IN THE MIX.
UM, AND SO, SO WAIT A MINUTE WHEN YOU SAY THAT WE GOT THE BIG PROJECTS, OKAY, I GOT I UNDERSTAND THAT.
WHY ARE YOU SAYING THAT? BECAUSE IT'LL BE HARDER TO WEAN OURSELVES OFF THE MEALS TAX WHEN WE HAVE SUCH LARGE CAPITAL COMMITMENTS IN THE, IN THE SHORT TERM WE OURSELVES OFF THE MEALS TAX.
RIGHT NOW THE MEALS TAX SUPPORT SUPPORT IS THAT 12 MILLION? ARE YOU TALKING ABOUT THAT 12 MILLION? IS THAT, THAT WHEN THAT $12 MILLION BILL COMES DUE? YEAH, THAT'S, UH, WELL THAT'S 27TH, SO I DON'T KNOW.
SO I DON'T, WE WHAT WHAT'S THE WEANING PART HERE? THE MEALS TAX COMPONENT.
SO, YOU KNOW, HOW IS, SO HOW ARE WE WEANING OURSELVES OFF OF, IN OTHER WORDS, WHAT DO WE, WHAT, WHAT ARE WE JUST ALL OF A SUDDEN GOING TO END UP WITH A WE, WE, WE DON'T COLLECT THAT MONEY.
WE'RE GONNA END UP WITH SOME HUGE NO PROBLEM.
MARK, DID YOU WANNA SAY SOMETHING? I DO.
SO GENTLEMEN, SO WHAT WE'RE TRYING TO ACCOMPLISH HERE, THE WEANING OFF
[00:55:01]
THE SEWER FUND IS AN ENTERPRISE FUND.IT'S SUPPOSED TO BE SELF-SUPPORTING, RIGHT? WHAT WE'D LIKE TO SEE YOU DO, AND I'M, AND I ALLUDED TO THIS THE OTHER NIGHT IN THE BUDGET CONVERSATION, WHAT WE'D LIKE TO SEE YOU DO IS BE ABLE TO APPLY THE MEALS TAX MONEY THAT YOU'RE SPENDING ON SEWER, WHICH IS AN ENTERPRISE FUND SUPPOSEDLY SELF-SUPPORTING, RIGHT? OBVIOUSLY IT'S NOT, WE'D LIKE TO BE ABLE TO SEE YOU DIVERT THAT MONEY BACK TO CAPITAL TO BE USED FOR THOSE BIG PROJECTS THAT HAVE BEEN IDENTIFIED IN THE FUTURE ON THE, YOU KNOW, THE SLIDES THAT I SHOWED YOU THE OTHER NIGHT.
SO THE PROJECTS YOU'RE TAUGHT, I CAN'T REMEMBER WHAT YOU SHOWED US THE PROJECT, BUT THAT, THAT CHANGE, IS THAT GONNA BE A SIGNIFICANT ENOUGH AMOUNT OF MONEY TO ADDRESS THOSE PROJECTS? BECAUSE THESE, THESE SEWER PROJECTS ARE MILLIONS IN MILLIONS OF DOLLARS INS IN AND OF ITSELF, THE ANSWER IS LIKELY NO.
HOWEVER, THAT IS CONSIDERABLE AMOUNT OF MONEY.
WHAT I TOLD YOU LAST TUESDAY NIGHT WAS MY RECOMMENDATION WAS TO RAISE THE MEALS TAX FROM FOUR TO 6%.
RIGHT? THAT 2% WOULD RAISE $4.8 MILLION OVER THE COURSE OF A YEAR.
SO THAT'S, THAT'S SIGNIFICANT MONEY.
SO AND HALF OF THE MEALS TAX TODAY GOES TO SEWER.
SEWER IN STORM WATER, SORRY, 2%.
ANOTHER 4.8 COMES, COMES INTO CAPITAL IF WE WEAN IT OFF SEWERS, RIGHT? SO WHAT WE'D LIKE YOU TO BE ABLE TO A YEAR IS TO ACCUMULATE SOME CASH.
REMEMBER AT YOUR RETREAT IN JANUARY, THE LADIES WERE HERE AND THEY SHOWED YOU WHAT THE TAX RATES COULD BE AND THEY SHOWED YOU WHAT WE SHOULD DO TO RAISE CASH TO HELP PAY FOR THOSE PROJECTS.
SO THAT REALLY IS THE PURPOSE OF GETTING TO WHERE WE'RE ASKING YOU TO GET TO RIGHT NOW.
SO 31 I'M OKAY, I'M OKAY WITH THAT.
I MEAN, I'M, I'M FINE WITH THAT.
BUT I MEAN, THERE WAS SOME INDICATION THAT NOT EVERYBODY HERE WAS FINE WITH THAT.
YOU KNOW, INCREASING THE, INCREASING THE, UH, USER RATE OR YEAH, USER RATE ON, UH, COMMERCIAL OR THE FIXED RATE ON COMMERCIAL, YOU KNOW, WHICH WOULD IMPLY THAT WE'RE GETTING TO, WE'RE GETTING TO SOLVE THIS WEANING BIT SOONER THAT RATHER THAN LATER.
I MEAN, SO YOU'RE NOT RECOMMENDING, YOU GUYS ARE NOT RECOMMENDING THAT WE PUSH THAT THAT'S NOT A, NOT SOMETHING WE NEED TO DO? NO.
THAT'S GONNA RAISE ALL OF THESE RATES EVEN MORE.
AND AGAIN, UM, BECAUSE WE HAVE NOT ONLY A SIGNIFICANT COUNTY CAPITAL PLAN, BUT WE HAVE A SIGNIFICANT SEWER CAPITAL PLAN.
THAT'S REALLY THE REASON WE DON'T WANNA PULL OUT THE MEALS TAX RIGHT AWAY.
SO WE HAVE, WE HAVE A MEASURED PLAN TO GET THERE AND BE ABLE TO BRING THAT MEALS TAX BACK TO THE GENERAL FUND.
BUT WE NEED TO GET THROUGH A COUPLE OF THESE BIG SEWER, UM, PROJECTS FIRST.
SO IN THE ON, SO FOR THE MAN IN THE STREET, I'M A MAN IN THE STREET, WHAT'S THIS GONNA COST ME ON A BIMONTHLY BASIS OR EVERY TWO MONTHS? WHAT IS IT? $3.
SO ALL THIS TALK FOR THREE BUCKS.
SO MY QUESTION IS, WHEN WE GET TO 2031, WE DONE WELL WHEN WE GET TO COMMERCIAL 31 AND SO THEN WE ARE GONNA BE, IT'S GONNA BE A TRUE ENTERPRISE FUND, RIGHT? THAT'S WHAT THE GOAL IS.
SO IN 32, THE RATES ARE GONNA RAISE WITH INFLATION AND 33 THE RATES ARE GONNA RAISE WITH INFLATION THEY SHOULD AND 30 THEY SHOULD.
OR ANY WEIRD OR ANY WEIRD REQUIREMENT THAT DRIVES UP THE COST OF CORRECT UNTIL WE HAVE ANOTHER BIG CIP THAT'S 2037 AND EIGHT, NINE AND 10.
WELL, AND ON THE SEWER SIDE, I'M NOT SURE THAT'S ANTICIPATED OUTSIDE OF NORMAL ROUTINE MEETING.
WELL, I MEAN, LIKE I SAID, WE'RE AT A TIPPING POINT FOR EXTENSIONS.
WE'RE GONNA DIMINISH THE AMOUNT OF EXTENSIONS WE DO, BUT WE WILL INCREASE ON THE REHABILITATIVE SIDE OF THE HOUSE BECAUSE WE HAVE A HUNDRED PUMP STATIONS, ABOUT 500 MILES OF GRAVITY, UH, UH, FOOTAGE, YOU KNOW, FORCE MAIN, ALL, ALL THAT NEEDS TO BE MAINTAINED NOW, RIGHT? AND WE'RE AT THAT TIPPING POINT WITH THE AGE OF THE SYSTEM.
IT'S NOT GONNA, IT'S NOT GONNA, IT'S NOT GONNA FALL OFF.
NO, IT IT, IT'S IN PERPETUITY BASICALLY.
BUT WE WILL DIMINISH ON THE EXTENSION SIDE AS WE INCREASE ON THE
SO WHAT WOULD BE THE, WHAT WOULD BE THE DOWNSIDE OF JUST GIVING ALL THIS STUFF TO HRSD? I MEAN, SO THAT, AGAIN, THAT'S, THAT IT'S A CONTROL THING.
SO IF YOU'RE PAYING, WE MAINTAIN OUR SYSTEM AT A VERY HIGH LEVEL.
SO IF HRSD TAKES IT AND TAKES EVERYBODY ELSE'S COLLECTIVE SYSTEMS AND HAMPTON ROADS, YOUR DOLLARS ARE GONNA BE GOING TOWARDS MAINTAINING OTHER PEOPLE'S SYSTEMS THAT ARE NOT MAINTAINED AT, AT IT HIGH LEVEL.
THE, THE PART THAT HITS A NERVE.
IS IT GONNA DRIVE OUR COST UP HIGHER IF WE GO TO
[01:00:01]
HRSD? WOULDN'T KNOW.IT COULD, IT'S ALREADY THE CONVERSATION.
YOU MIGHT REMEMBER BACK TO NO, I DON'T.
CHANCE RYAN WOODWARD WAS A DIRECTOR.
PUBLIC WORKS AND, AND PRIOR TO THAT WE HAD A CONVERSATION AT THE BOARD LEVEL, RIGHT? ABOUT LETTING HRSD TAKE ON PART OF OUR UH, SEWER FACILITIES.
AND, AND AT THE END OF THE DAY, IT WAS GONNA COST US MORE, CONSIDERABLY MORE.
SO WE DECIDED TO LEAVE THINGS LIKE THEY WERE OKAY.
'CAUSE THEN YOU WILL CALL HRSD AND NOT RIGHT.
THE OTHER THING IS, YOU WOULD LOSE CONTROL OF SETTING YOUR RATES.
THAT, AND ALSO, LIKE JONATHAN SAID, TAKE IT AWAY FROM US.
THE RATES WE PAY WILL GO TO SUPPORT EVERYBODY ELSE'S INFRASTRUCTURE.
WELL, I MEAN, I JUST, I JUST BRING THAT UP FOR, I REMEMBER, I REMEMBER THIS, I DO REMEMBER THE DISCUSSION, BUT THE, THE, THE POINT IS, UM, THAT YOU MAY LOSE CONTROL, BUT THE POINT ISN IN CONTROL, AS WE'RE NOW DOING NOW, IS THAT YOU GOTTA MAN UP AND PAY.
IT'S LIKE PUSHING THE CIP OFF AND EVENTUALLY THE BUILDING COLLAPSES AND THEN, OH, I GOTTA GO BUILD A NEW BUILDING.
SO IT'S THE SAME WAY WITH THIS.
YOU'VE GOTTA, WE'VE GOT TO KEEP UP WITH IT FOR IT TO BE, FOR IT TO WORK.
YOU MENTIONED EARLIER MISSING SOMETHING HERE, YOU MENTIONED EARLIER 11% EXPENSE INCREASE.
IS THAT FROM 26 TO 27? IS THAT 2 31? WHAT, WHAT WAS THE 11% ROUGHLY? IT WAS THE INCREASE IN THE O, O AND M EXPENSES FROM 27 TO 28.
WHAT'S DRIVING THAT? THAT'S IS THE COMPENSATION STUDY.
UH, I THINK ABOUT SIX OR $700,000 THAT IS IN THE SEWER FUND.
SO SOI SO IT'S A ONE TIME WELL, IN PERPETUITY BECAUSE IT'S PAID EVERY YEAR.
YOU'RE NOT GONNA HAVE 11% PERCENT.
IT SHOULD, THAT SHOULD LEVEL OUT.
RECOGNIZE HAVING 11% INCREASE YEAR COME BACK CLOSER TO INFLATION.
BUT LET'S TALK ABOUT COMMERCIAL.
THEY'VE BEEN GETTING A RATE ONE THIRD OF WHAT THE RESIDENTS PAY.
THEY'VE BEEN GETTING IT FOR A LONG TIME.
AND YOU'RE ONLY SUGGESTING THAT WE COME UP EQUAL TO THE RESIDENTS? COST CONSUMPTION? COST CONSUMPTION WASN'T IN THE PAST.
I THINK THAT WAS MORE OF A, UM, PROBABLY MORE OF A, AN ATTEMPT TO GET MORE BUSINESS REALLY.
WHY ELSE WE DO SOMETHING LIKE THAT.
WELL, I MEAN WE GIVE 'EM INCENTIVES AND GRANTS ALL THE TIME.
WELL THAT, I GET, THAT GOES BACK TO WHAT DOUG'S SAYING.
SO HOW MANY MORE OF THE, OF THOSE WE'RE GONNA GET? WELL, THEY'RE GOING AT SOME POINT YOU GOTTA STOP BLEEDING.
BUT THEY'RE GOING FROM SOME GOING FROM $0 BIMONTHLY TO $60 BIMONTHLY.
MAYBE THIS IS A GOOD SLIDE TO JUST SORT OF YEAH, BECAUSE I THINK THIS IS THE PRACTICAL, THIS IS THE IMPACT TO COMMERCIAL USERS.
UM, AND WE, WE CALCULATED THE BILL, THAT 2000 USAGE COMMERCIAL USER WAS PAYING, THEY'RE PAYING 20 BUCKS, THEY'RE NOW GONNA PAY $60 PLUS THE CONSUMPTION.
YOU CAN SEE THAT IN THAT GROUP IS COMPRISED OF BANKS AND DRUG STORES.
AND SO WE DID THIS FOR 5,000, 10,000.
AND YOU CAN SEE THAT IN NOMINAL DOLLARS.
I MEAN, THIS IS MY, MY PERSONAL PERSPECTIVE IS THAT IN NOMINAL DOLLAR, DOLLAR FIGURES, THAT THOSE ARE NOT UNREASONABLE, UM, FOR, YOU KNOW, A RETAIL ESTABLISHMENT TO PAY $113.
THAT, THAT, THAT SEEMED REASONABLE.
48 SEEMED INCREDIBLY LOW FOR THIS DAY AND AGE.
THAT'S HOW MUCH I HAVE TO PAY FOR A FAMILY OF FOUR TO EAT A CHICK-FIL-A NOWADAYS.
AND SO THAT'S NOMINALLY I THINK DOLLAR AMOUNT THAT THAT SEEMED REASONABLE.
UM, BUT IF ONE WERE TO CALCULATE A PERCENT INCREASE, IT MAY SEEM LIKE A BIG PERCENT INCREASE.
BUT I WOULD SAY THAT THAT IS BECAUSE THE RATES THAT WE WERE STARTING FROM FOR THE COMMERCIAL USERS WERE VERY LOW.
SO IS THAT LIKE 10,000 GALLONS A MONTH? OR EVERY TWO MONTHS? TWO MONTHS.
SO IT'S ACTUALLY EVEN BETTER FOR NOT AS BAD AS IT LOOKS.
MY POINT OF VIEW, I WOULD CHARGE MORE.
THEY'VE HAD A FREE RIDE FOR TOO LONG.
AND WHEN RESIDENTS LEARN THAT THEY'RE PAYING THREE TIMES MORE THAN WHAT A COMMERCIAL PAYS FOR, I THINK THEY'D BE UPSET WITH THAT.
[01:05:01]
AND SO ASKING FOR MORE FROM THE COMMERCIAL USER NOW SO THAT WE WEAN OFF QUICKER.I THINK THAT'S THE RIGHT ANSWER.
SO YOU'RE SAYING THIS $81 A MONTH, LET'S JUST USE THE 2080 $1 TWO MONTHS.
THAT'S, I MEAN, TWO MONTHS, 40 BUCKS A MONTH.
AND, AND WE'RE ASKING THE RESIDENTS TO PAY 57.
IF, IF YOU HAVE A BANK JUST TAKE A BANK OR A DRUG STORE AND THEY'RE ONLY PAYING $81 A MONTH FOR THEIR WATER, TWO MONTHS FOR 40, $40 A MONTH.
A MONTH FOR THEIR WATER AND A COMMERCIAL USAGE, I, I NEED TO GO GET A COMMERCIAL BUSINESS AND MOVE MY HOUSE.
WELL, AND AGAIN, WE ARE TRYING TO LOOK AT CONSUMPTION WHO'S USING IT AND WHAT PORTION OF THOSE REVENUES COVER THAT.
AND SO BECAUSE WE HAVE SUCH A LARGE RESIDENTIAL PIECE, THAT'S WHY I THINK YOU'RE SEEING THIS RECOMMENDATION HERE.
'CAUSE WE'VE WORKED COGNIZANT OF TRYING TO KEEP THAT GENERALLY IN LINE.
IF IF COMMERCIAL USERS USE, YOU KNOW, 30% OF THE CONSUMPTION OF THE SYSTEM, THEN THE REVENUE SHOULD BE COMING IN AROUND 30% TO COVER THAT PIECE.
IT'S NEVER AGAIN, IT'S NEVER GONNA BE RIGHT ON.
AND I I TO YOUR POINT, WE DID A LOT OF VARIATIONS OF THIS TOO.
SO I I CAN SEE WHERE YOU'RE COMING FROM IF THAT'S SOMETHING THAT, YOU KNOW, RULE OF THUMB, I WOULD SAY THE COMMERCIAL USER SHOULD BE PAYING TWICE WHAT THE RESIDENTIAL PAYS.
DO YOU WORK AND YOU WORK THE NUMBERS TO MAKE THAT HAPPEN? AND AND LARGE CONSUMERS.
THEN SO IT SAYS, SO THEY WOULD PAY $81 A MONTH VERSUS EVERY TWO MONTHS IS WHAT YOU'RE SAYING? I WOULD TAKE THE $60 FLAT RATE AND DOUBLE IT.
SO IT'S DO DOUBLING RIGHT HERE.
YOU SAY 120 I DOUBLE THE FLAT RATE.
SO WE HAVE SOME COMMERCIAL USERS GOING FROM 20 TO ONE 20, BUT THEY DIDN'T BELONG AT 20.
'CAUSE IT'S RESIDENTS PAGE 60 DURING THAT SAME PERIOD, RIGHT? YEAH.
THEY SHOULDN'T HAVE BEEN PAYING LESS THAN THE RESIDENTS.
I OKAY, I UNDERSTAND WHAT YOU'RE SAYING, BUT I'M NOT HEARING WHY, WHAT, JUST BECAUSE THEY'RE BUSINESS NOW I CAN, I, I CAN SAY THAT.
THIS WOULD BE A REASON TO SAY WE WANT BUSINESSES IN THE COUNTY BECAUSE NOW THE BUSINESS IS GONNA HELP REDUCE THE, THE LOAD ON OUR RESIDENTS.
SO THEREFORE LET'S PUSH MORE AND MORE FOR BUSINESS.
WHY WOULD, SO IF YOU'RE GONNA INCREASE IT, WHY NOT? JUST BECAUSE OF BUSINESS BUSINESS? WELL, YOU GOTTA COME UP WITH SOMETHING BETTER THAN THAT.
WE'VE GOT TO WEAN OURSELVES OFF.
AND SHOULD IT ALL BE ON THE BACKS OF THE COMMERCIAL? ON THE RESIDENTIAL? NO.
COMMERCIAL HAVE TO PAY THEIR LOAN AND THEY HAVE NOT PAID, THEY'VE BEEN GETTING ON THE, THEY'VE BEEN GETTING ONE THIRD OF THE RESIDENTIAL RATE AND IT'S TIME THAT THEY PAID GREATER THAN RESIDENTIAL.
I, I AGREE WITH THAT, BUT I DON'T UNDERSTAND THE VALUE.
WHY, WHY YOU PUT IT THAT NUMBER.
I MEAN, WHAT, WHAT'S THAT NUMBER GONNA DO? WE'RE JUST FIGURING OUT A NUMBER.
WE CAN PULL A NUMBER OUT OF OUR HAT.
SO IF I THOUGHT IT SHOULD BE DOUBLE RESIDENTIAL.
IF WE'RE AT ONE 20, THAT'S ONLY $500 MORE A YEAR, A YEAR FOR THAT BUSINESS.
IF THE RESIDENT IS PAYING THREE EXTRA DOLLARS A MONTH, WHY WOULDN'T THE BUSINESS PAY SIX? YEAH.
BUT THINK ABOUT ALL OF THE LITTLE MOM AND POP STORES UP AND DOWN ALL THE LITTLE SHOP CENTERS.
WE JUST, WE'RE NOT TALKING ABOUT JUST FOOD LINE HERE.
THAT, THAT, THAT MAY, THAT LITTLE BIT OF MONEY MAY BE A DROP IN THE BUCKET.
WE'RE TALKING ABOUT SOME BUSINESSES THAT MAY BE JUST GETTING BY A MONTH TO MONTH AND WE'RE ALREADY GONNA, WHAT IS 75% INCREASE AND ONE YEAR AGO FOR $20 TO $81.
THAT, THAT, THAT'S A BIG SHOCK TO THE SYSTEM.
I DON'T DISAGREE THAT THEY, AND IT'S BEEN 11 YEARS SINCE THEY, SINCE THEY CHANGED.
SO THEY, THEY'VE BEEN, UH, GETTING FREE RIDE A LONG TIME.
AND, AND, AND WE'RE MAKING A 75% INCREASE HERE.
SO, WHICH IS APPROPRIATE, BUT JUST SAYING RULE OF THUMB DOUBLING IT.
I, AND IF I WERE, IF I WAS A MOM AND POP BUSINESS OWNER AND OR IF A MOM AND POP BUSINESS OWNER CAME TO ME AND SAY, WHY DID YOU JUST DOUBLE MY, YOU KNOW, WHAT, WHAT WAS THE JUSTIFICATION OF SAYING WELL DOUBLE WHATEVER THE RESIDENTS PAY.
I DON'T KNOW WHAT I WOULD TELL 'EM.
SO HERE ALONG THOSE LINES, THE IF SO THIS IS, THEY'RE NOT GETTING A FREE RIDE.
I DON'T THINK THEY'RE GETTING A FREE RIDE.
I THINK THEY WERE GETTING WHAT WE GAVE THEM.
SO THEY'RE GETTING A GOOD DEAL.
WHICH WAS A PROMOTION OF BUSINESS IN, IN THIS COMMUNITY.
SO THE THING IS, HOW MANY, OKAY, SO WHEN YOU TALK ABOUT A COMMERCIAL USER HERE IN YOUR MIND IS, ARE YOU TALKING ABOUT PEOPLE WITH BUSINESS LICENSE? THAT'S BANKS, TRUCK STORES, RETAIL STUFF.
WE GOT HOW MANY OF THOSE? HOW MANY OF THOSE? 10,000? WELL, WE'RE NOT TALKING ABOUT HOME BASED BUSINESS.
[01:10:01]
ABOUT 900 COMMERCIAL.JUST COMMERCIAL QUALIFIER COME FROM.
WELL, HOME BASED BUSINESSES, THEY'RE WORKING OUTTA THEIR HOME.
I THINK YOU GOT THAT FROM STEVEN FROM NO, I'M FROM MOM.
ABOUT WHO WE RATIONAL COMMERCIAL BUSINESSES WAS 900.
HOW WAS THE DATA PRESENTED? AND, AND I I I JUST LOOKED AT THE DATA.
59% OF YOUR COMMERCIAL USERS, WHICH IS A SIGNIFICANT MORE, MORE THAN HALF IS ARE IN THE 5,000 OR LESS CATEGORY.
SO YOU ALL, THE COUNTY DOES HAVE A SIGNIFICANT NUMBER OF SMALL BUSINESSES THAT QUALIFY.
'CAUSE I'M MORE USED TO SEEING COMMERCIAL AS DEFINED AS 7,500 AND ABOVE IN SOME OTHER PLACES.
BUT I, UM, THE COUNTY COUNTY'S MAJOR COMMERCIAL USERS BELONG IN THE LESS THAN 5,000 GALLONS CATEGORY.
SO YOU'RE THE, THE, THE, THOSE BUSINESSES FOR THE MOST PART HAVE BEEN ENJOYING $20 TO $48.
AND, AND NOW ARE GONNA SEE THE 81 TO ONE 13.
SO THIS, BUT I'M, I'M GONNA HAVE TO COME BACK TO THIS TO MAKE SURE I UNDERSTAND WHAT WE'RE TALKING ABOUT IN TERMS OF WHO WE THIS TO.
SO THE MOM AND POP, THE MOM AND POPS THAT ARE THE HOU THE HOME RESIDENTIAL, WE'RE NOT COUNTING THOSE IN THIS, THEY'RE COUNTING AS RESIDENTIAL.
EVEN THOUGH THEY HAVE A BUSINESS LICENSE.
WHAT ABOUT THE, WHAT, WHAT I'M GONNA CALL 'EM TIMESHARES OR YOU RENTAL, YOU RENTING A HOUSE OUT.
ARE YOU RENT PARTS OF YOUR HOUSE? IS THAT UH, CONSIDERED A HOME BUSINESS? YES.
YOU'RE TALKING ABOUT THE AIRBNB.
JUST WANNA MAKE SURE I GET TO MM-HMM.
I'M JUST WANNA YEAH, THAT'D BE RESIDENCE.
MAKE SURE WHO WE'RE APPLYING THIS TO.
WE'RE TALKING ABOUT THE BIGGER BOX STORES AND BANKS AND RETAIL.
BUT, BUT SHE JUST SAID 57% ARE NOT THE BIG BOX STORES.
THEY'RE ALL THE LITTLE STORES YOU SEE IN ALL THE LITTLE SHOP CENTERS HERE.
AND WE'RE SUDDENLY GONNA HIT THEM WITH, YOU GOTTA PAY DOUBLE.
AND THEY'RE LIKE, I'M NOT USING ANY MORE WATER THAN I DID LAST YEAR.
WHY? WHY SUDDENLY I GOTTA PAY DOUBLE NOW.
WHAT IF WE LEFT THE FLAT RATE AS RECOMMENDED BY CHANGE THE CONSUM RAISE THE CONSUMPTION RATE THAT WAY IF THEY, THEY ACTUALLY DOES IT MAKE, HUH? WHAT DIFFERENCE DOES IT MAKE? BECAUSE WELL THEN, THEN THEY CAN MANAGE HOW MUCH THEY, THEY'RE PAID BY HOW MUCH THEY USE.
THEY CAN CONTROL THEIR OWN FLOW AND THEY BETTER CONTROL THEIR OWN DESTINY THERE.
OR MAYBE WE DO A LITTLE OF BOTH.
MAYBE A LITTLE, BUT YEAH, I'M JUST STRUGGLING.
THAT COMMERCIALS GETTING A FREE RIDE OR HAS GOTTEN A, THEY'RE NOT GETTING A FREE RIDE.
THEY'RE GETTING WHAT WE GAVE THEM.
WHEN THEY'RE PAYING, THEY'RE NOT FREE RIDE.
YOU, YOU'RE ONLY REQUIRED TO PAY THE TAXES THAT THE LAW REQUIRES.
AND SO THAT'S WHY WE REQUIRED, SO WE DID IT THAT WAY.
NOW WE'RE GONNA DO IT SOMETHING DIFFERENT.
NOW THEY SHOULD PAY AT LEAST FOR THE RESIDENT.
I'M NOT PENALIZE THEM FOR, FOR PAYING LESS IN THE PAST.
I MEAN, YOU GOTTA BE CAREFUL HERE.
I'M NOT PENALIZING, I'M SAYING THEY SHOULD BE PAYING THEIR FAIR SHARE.
AND THAT'S WHAT I'M TRYING TO UNDERSTAND.
I AM AND I'M TRYING TO UNDERSTAND, UH, WHAT THE FAIR SHARE IS.
YOU JUST GIVE YOU, GIVEN IT, YOU'VE GIVEN US A PROPOSAL.
UM, AND I DON'T KNOW WHAT WE GOT TO GO WITH OTHER THAN THAT.
THIS IS SORT OF KENTUCKY WINDED SHARE.
YOU SAID IT'S $3 INCREASE FOR A RESIDENT AND WE'RE TALKING A $6 INCREASE FOR A BUSINESS.
WHY ARE WE EVEN ARGUING ABOUT IT? 'CAUSE WE'RE GONNA HEAR FROM, WE'RE GONNA HEAR FROM FOLKS ON THIS.
BUT ISN'T IT MORE THAN THREE ADDITIONAL DOLLARS? AND SOME PEOPLE DIDN'T, WE'RE GOING FOR 20, 20 TO 60.
IT'S GOING ON THE BA ON THE FLAT BASIS, RIGHT? YEAH.
IT'S THE SAME AS THE RESIDENTIAL OR SLIMY MOORE.
AND, AND THEN THEY'RE IN, THEY'RE IN CONTROL OF WHAT THEY CONSUME.
BUT I'M SAYING PREVIOUSLY UNTIL 2027 PROPOSAL, THEY WERE PAYING $20 FLAT RATE EVERY TWO MONTHS.
AND WE'RE GONNA RECOMMEND BUMPING TO 60.
I'M SAYING BUT THAT, BUT THAT'S MORE THAN $3 A MONTH FOR THOSE GUYS.
I MORE, WAYNE IS, IF I'M A HOMEOWNER, I SHOULD CALL MYSELF A BUSINESS AND GET OUR, GET A WATER RATE.
BUT REMEMBER THE BUSINESSES, WE GET ALL KINDS OF SALES TAX FROM THEM.
SO, SO WHAT DO WE, SO WHAT WOULD BE THE RATE THEN, BASED ON WHAT YOU JUST PROPOSED, WHAT WOULD THE RATE BE FOR A 5,000 GALLON USER? WHAT WOULD THAT RATE BE BASED ON THE INCREASE TO THE FIXED, BASED ON WHAT YOU'RE PROPOSING HERE WITH A, IT'S $3 MORE THAN THE ONE 12 I ON.
I WANT EVERY TWO MONTH BASIS ON A TWO MONTH BASIS.
SO SIX DON'T, THAT'S WHAT YOU'RE, THAT'S WHAT WE SAID
[01:15:01]
FIXED.INCREASE THE FIXED AMOUNT BY, IF IT'S 76 A MONTH COMMERCIAL, SOMETHING ABOUT 160 BUCKS, SEVEN.
WHERE DO YOU GET 76 THOUGHT THAT'S WHAT YOU SAID.
OH, I MAY I MISUNDERSTOOD YOU.
NO, CURRENTLY IT'S, IT WOULD BE 48 POINT 20 AND IT'S GONNA RAISE TO ONE 12.
90, 48 POINT 20 ISN'T EVEN WHAT PAY FOR RESIDENTIAL.
THEY'RE PAYING LOWER THAN WHAT RESIDENTIAL IS PAYING.
THEY THEY JUST, BEFORE THEY JUST PAID CONSUMPTION.
DO YOU KNOW HOW FOR SOME, BUT IT WAS A FIXED MINIMUM FOR ALL.
IF THEIR RATE WAS ABOVE, THEY WERE PAYING 10 A MONTH PLUS CONSUMPTION.
ACCORDING HERE IT SAYS CURRENTLY NO FIXED CHARGE.
HOWEVER, A $20 BIMONTHLY MINIMUM CHARGE SOME FIXED OR SO, I MEAN, OTHER COMMERCIAL WASN'T EVEN PAYING UP.
THEY WERE JUST PAYING CONSUMPTION.
BUT IT HAD TO BE GREATER THAN $20 BY A MONTHLY.
SO YEAH, THEY WERE PAYING 24 A MONTH.
SO EVERYBODY PAID AT LEAST $20? YES.
WELL THEY PAYING ACCORDING, ACCORDING TO THIS, WE'RE PAYING, WE'RE PAYING $24 AND 10 CENTS A MONTH.
NOW THEY'RE GONNA BE PAYING 30.
I MEAN THAT'S, I KNOW THAT'S CORRECT.
SO THAT'D BE 60 BUCKS A MONTH PLUS 60 EVERY OTHER MONTH.
NOW WE'RE ALWAYS PAYING CONSUMPTION.
THEY'RE PAYING THE DIFFERENCE HERE IS CONSUMPTION HAS GONE UP.
BUT I'M SAYING THEY WERE PAYING $10 A MONTH BEFORE.
NOW THEY'RE GONNA BE PAYING 30 A MONTH IF THEY WERE TO USING A 2000, A 2000 GALLON USER IS WHAT YOU'RE REFERRING TO? NO, I'M LOOKING AT, AT THE OLD, WHAT THEY WERE PAYING THAT $20 WAS A MINIMUM CHARGE.
SO THEY DIDN'T HAVE ENOUGH CONSUMPTION TO TAKE 'EM.
THEY HAD TO PAY BEEN 20 AT LEAST THAT WAS 20 BUCKS.
AND NOW, AND NOW THEY'LL BE GOING FROM 20 BUCKS TO 60.
81 BECAUSE WELL, THAT'S WHAT THE CONSUMPTION FLAT RATE 60 FLAT RATE WOULD BE.
WELL, WE'RE TALKING ABOUT BOTH RIGHT.
SUMPTION WE'RE TALKING ABOUT BOTH A FLAT AND A FLAT RATE, WHICH WOULD DRIVE IT TO MORE THAN 60.
THAT'S WHAT, THAT'S WHAT, THAT'S WHAT THEY'RE PROPOSING RIGHT HERE.
IT WOULD BE $21 OF CONSUMPTION.
UM, OR TWO IF YOU'RE USING 2000 GALLONS RIGHT.
WELL, I MEAN THIS IS WHAT YOU GUYS WERE PROPOSING TO BEGIN WITH.
WAIT, WHAT'S THE, IT'S, IT GOES FROM 20 TO 65.
IT GOES TO WHAT THE RESIDENTIAL HAS PAID ALL ALONG.
THEY'RE NOT GETTING, THEY'RE NOT GETTING COUCHED.
WHAT, WHAT DO THE EQUATION LOOK LIKE WHEN YOU LOOKED AT CONSUMPTION ON THE RESIDENTIAL SIDE? WELL THE, WHEN WE LOOKED AT THE CONSUMPTION INTEGRATION, WHAT WE LOOKED AT WAS LOWERING THE FIXED CHARGE FOR THE RESIDENTIAL AND INCORPORATING THE, THE VARIABLES.
SO INSTEAD OF THE $54 BIMONTHLY CHARGE, WHICH EQUATES TO 27 PER MONTH, WE LOOKED AT LOWERING THE FIXED CHARGE BY $10 ON A MONTHLY.
SO I GUESS IT'S $20 AGGREGATE.
SO WE LOOKED AT A $17 MONTHLY FIXED CHARGE AND INTRODUCING A $2 71 CENTS CONSUMPTION PER KILO GO.
AND THAT, THAT'S $19 AND 21 CENTS.
AND WHAT'S THE AVERAGE USAGE YOU HAVE? IT'S AROUND 5,000 GALLONS.
FOR A HOUSEHOLD OR THAT'S WHAT THEY DON'T REALLY CALCULATE, UH, OR PDC AND LIKE THAT.
SO, SO HOUSEHOLD, TYPICAL HOUSEHOLD USES 5,000 GALLONS OF WATER EVERY MONTH, EVERY TWO MONTHS.
THAT'S WHAT THEY USE AS THE BASELINE FOR A RESIDENTIAL ERU DID, DID YOU LOOK AT, YOU GUYS ARE, OH, SECOND, DID YOU LOOK AT, AT PUTTING A DOLLAR VALUE AMOUNT ON PER GALLON OR PER A HUNDRED GALLON? I FIGURE WHAT THAT VALUE IS AND JUST SAY EVERY A HUNDRED GALLONS YOU USE, YOU GET CHARGED THAT AMOUNT.
FLAT RATE, JUST PURE CONSUMPTION.
HOW MUCH YOU USE IS HOW MUCH YOU PAY ON THE RESIDENTIAL SIDE ACROSS THE BOARD.
SO IT WAS ALREADY LIKE THAT FOR COMMERCIAL RESIDENTIAL.
BUT, BUT WE KNOW, WE KNOW THE TOTAL COST IS MAINTAINING THE SEWER SYSTEM ANNUALLY.
[01:20:01]
THAT COST TO GET TO, TO BREAK EVEN.ALL WE WANNA DO IS BREAK EVEN.
SO AGAIN, YOU SAID YOU LOOKED AT IT, YOU PUT A DOLLAR AMOUNT ON PER HUNDRED GALLONS OF USAGE, WHATEVER THAT DOLLAR AMOUNT IS WITH IT.
AND, AND YOU, AND WE KNOW THE TOTAL AMOUNT OF USAGE ANNUALLY AND WE KNOW, UM, WHAT IT COSTS ANNUALLY.
DO A LITTLE BIT OF MATH AND GO THAT'S, THAT'S THE DOLLAR AMOUNT PER USAGE AND GO, THAT'S WHAT YOU PAY.
SO YOU PAY BASED ON WHAT YOU USE.
WHAT, WHAT DOES THAT LOOK LIKE? HMM.
I DON'T HAVE THE NUMBERS RIGHT IN FRONT OF ME, BUT WE, WE DID RUN THE NUMBERS.
THAT IS NOT WHAT WE TYPICALLY RECOMMEND BECAUSE THERE, AND THERE IS A MANUAL THAT IS BEST PRACTICES FOR WATER AND SEWER SYSTEMS CALLED, UM, M1 MANUAL.
AND THE BEST PRACTICE, I WOULD SAY IN GENERAL IS TO HAVE A FIXED COMPONENT TO YOUR CHARGE.
BECAUSE GOING TO A HUNDRED PERCENT VARIABLE EXPOSES LOCALITIES TO A LOT OF RISK.
MEANING, YOU KNOW, IF YOUR CONSUMPTION DROPS DROPS, YEAH.
THEN THAT REVENUE SIGNIFICANTLY CAN DROP.
AND IF YOU HAVE A FIXED CHARGE, LIKE FIXED COMPONENT OF, UM, YOUR, UH, UM, A REVENUE SYSTEM LIKE THAT SERVICE LIKE CAPITAL, THEN YOU'RE, YOU'RE IN A BIND.
SO I, I THINK HAVING A FIXED COMPONENT TO, AND THAT WAS PART OF WHY WE RECOMMENDED INTRODUCING A FIXED COMPONENT TO THE COMMERCIAL USERS AS WELL.
HAVING A STABLE SOURCE OF REVENUE, UM, IS IMPORTANT.
SO WE, WE RAN THE NUMBERS BUT WE, THAT WAS NOT A, A, A, A PATH THAT WE HAD RECOGNIZED.
'CAUSE THE DOWNSIDE IS EVEN IF THERE WAS NO USAGE, YOU STILL GOTTA PAY TO MAINTAIN THE SYSTEM.
WE GIVE A YEAR, SEE HOW IT'S WORKING.
AND WE'RE MAKING A SIGNIFICANT JUMP HERE.
AND THEN, AND JUST BECAUSE WE DECIDE WHAT WE DO HERE DOESN'T MEAN THE FUTURE YOU DON'T CHANGE.
UM, I WANNA MENTION SOMETHING THAT THE PFM TEAM, ONE OF THE MEMBERS OF THE PFM TEAM SAID WHEN WE WERE ON ALL THESE CALLS, 'CAUSE WE WERE HAVING THESE LIVELY DEBATES LIKE FOR THE PAST YEAR, ABOUT WHAT IS THE BEST WAY TO, TO SKIN THIS CAT.
AND I THINK ONE OF, UM, MATT THAT WAS ON THE TEAM SAID, YOU CAN'T TURN AN AIRCRAFT CARRIER ALL AT ONCE.
LET'S DO IT THEN LET'S RE YOU KNOW, ASSESS IN A YEAR IN TWO YEARS.
AND SO I REALLY LIKE THAT ANALOGY.
IT'S REALLY, I'VE PROBABLY SAID IT AGAIN LIKE A THOUSAND TIMES BECAUSE IT REALLY IS THAT LIKE, I DON'T THINK WE CAN FIX IT ALL AT ONCE.
LET'S, YOU KNOW, KIND OF MOVE INCREMENTALLY TO GETTING THERE.
SO I THINK THAT WAS KIND OF, YOU KNOW, THE ADVICE THEY GAVE WHEN WE WERE HAVING THE SAME KIND OF COMMENTS LIKE YOU HAD, UM, ON, ON WHAT THE BEST APPROACH WOULD BE.
WELL, I DON'T SEE US TRYING TO, I MEAN I, I SEE US FIXING THIS OVER A PERIOD OF TIME.
I'M OKAY WITH TAKING OUT TO 31.
I MEAN THINK SMART PEOPLE WORKING THIS STUFF SEEMS TO WANNA RECOMMEND THE, UNLESS, UNLESS AND BUT MESSING WITH THE NUMBERS, I SAY THERE'S NOTHING WRONG WITH 'EM.
BUT IF YOU MESS WITH THE NUMBERS, THEN IT CHANGES.
IT CHANGES EITHER HOW FAST WE FIX THE PROBLEM OR, BUT I MEAN IT'S, THAT'S ESSENTIALLY IT.
YOU INCREASE THE AMOUNT MONEY BEING COLLECTED, THEN YOU ARE REDUCING THE TIMEFRAME, REDUCING THE TIMEFRAME.
UH, I, YOU KNOW, I SO DO YOU DO REALLY, DO WE THINK THE COMMERCIAL RECOMMENDATION HERE IS, IS UNFAIR? IT, IT, IT'S GOT A FIXED COMPONENT TO IT AND IT'S GOT A USER COMPONENT.
AND THE COM AND THE RESIDENTIAL HAS WHAT? JUST A CONSUMPTION OR FIXED? FIXED, FIXED.
SO, SO THEY'RE NOT GONNA END UP WITH NOW SOME REALLY WILD BILLS GOING UP AND DOWN AND WE'RE GONNA HAVE A VERY CONSISTENT, UH, REVENUES REVENUE COMING IN.
SO, SO I THINK WE'VE ADDED, WE'VE INCREASED THE COMMERCIAL AND WE'VE ADDED ON A CONSUMPTION THAT INCREASES.
SO THEY'RE NOT, THEY'RE NOT GETTING THE, THE, YOU KNOW, WHAT THEY WERE GETTING BEFORE.
TEST FOR ME WILL BE A YEAR FROM NOW.
ARE WE ON TRACK TO LOOKING AT THE MILL TAX? WELL, I WOULD HOPE SO.
I MEAN, I'LL JUST COME OVER AND STEP ON YOUR FEET.
I COULD ALWAYS THE CONSUMPTIONS ACT.
JOHN JONATHAN DID I HEAR YOU SAY YOU WERE, WERE TO COME OFF THROTTLE OR NOT, NOT FOR NEW CONNECTIONS, BUT FOR SEWER REPLACEMENTS, EXTENSIONS.
SO I MEAN, BASED OFF WHERE WE'RE HEADING, WE'LL DIMINISH IN THE EXTENSION CATEGORY AND WE'RE GONNA BE INCREASING IN THE REHAB CATEGORY.
SO WHAT'S HAPPENING IN WHITES FAR? WHAT'S THE IMPACT OF WHITES? FARTER? WELL, I MEAN WE'RE STILL
[01:25:01]
DOING THAT PROJECT.SO WE'RE, WE'RE SAME PLACE, SAME, SAME PAGE, SAME SCHEDULE.
WE'RE WE'RE A LITTLE BIT BEHIND BECAUSE WE REVALUE ENGINEERED THAT PROJECT.
UM, WE'RE ESSENTIALLY, IT WAS LOOKING LIKE A 25 TO $30 MILLION PROJECT.
WE HAD TO REGROUP, REASSESS, AND WE FOUND AN ALTERNATE APPROACH THAT'S PROBABLY GONNA SAVE US ABOUT $10 MILLION TO SERVE MOST OF THAT AREA, WHICH ENABLED US TO PUT BIG BETHEL ROAD AND STILL HAVE THE SAME REVENUE REQUIREMENTS.
THAT'S A BIG, THAT'S A BIG STATEMENT.
AND WE, IT'S, SO I HAVEN'T HEARD ANYBODY USE THE TAP FEE WORD YET.
SO ARE WE ADJUSTING THE COST OF THE TAP FEE? I DON'T THINK THE RECOMMENDATION AT THIS TIME IS TO, WE HAVEN'T ADJUSTED THAT NUMBER IN LIKE A GAZILLION YEARS.
NO, THAT'S A IT'S A BIG CHUNK.
AND THAT NOT ONLY THAT, THAT'S JUST A TAP FEE.
THAT'S NOT THE YEAH, THAT'S GETTING THE CONNECTION THERE.
CONNECTION THAT CAN DOUBLE, TRIPLE THE TAP FEE.
WE WANNA ENCOURAGE AS MANY PEOPLE AS POSSIBLE TO GO ONTO THE SEWER SYSTEM RATHER THAN AVOID IT.
IF WE PUT IT, WE PUT IT IN HERE, THEY GOTTA USE IT.
THAT'S, THEY'RE NOT, WELL THEY WANT SPEND, THEY DON'T HAVE TO PUT HOOK UP.
THEY DON'T HAVE TO DO A HAWK UP.
THEY DON'T HAVE TO DO THE, YOU GOTTA PAY FOR THE TAP.
YOU DON'T WANNA MAKE IT SO INCREDIBLY EXPENSIVE THAT NOBODY GOES ON IT.
CHRISTIE, THANKS FOR YOUR WORK.
NICE SEEING YOU LADIES AGAIN, JUST TO BE HERE.
AND I JUST WOULD WANNA INTRODUCE AMANDA CANNON IN THE BACK.
SHE'S OUR UTILITY, UH, SERVICE MANAGER.
UH, Y'ALL PROBABLY MET HER BEFORE BUT I JUST WANNA GIVE HER A SHOUT OUT 'CAUSE SHE PROVIDED A LOT OF DATA FOR THIS.
AND ALSO SHE'S THE ONE THAT WHEN WE HAVE RESIDENTS WITH QUESTIONS ABOUT THEIR BUILDING, ESPECIALLY DURING THE RECYCLING, UM, AMANDA'S JUST BEEN AMAZING, YOU KNOW, TALKING FOLKS THROUGH THAT CHANGE.
SO I JUST WANTED TO GIVE YOU A FACE TO THE NAME 'CAUSE I KNOW YOU'VE ALL PROBABLY HEARD ME MENTION HER BEFORE OUR, SHE'S ANSWERED YOUR RESIDENCE QUESTIONS, SO THANK YOU.
DO WE HAVE ANYTHING ELSE? ANY OTHER QUESTIONS? ALL THIS MEETING ADJOURNED.