City Council Committee Agendas

Development Services Committee Meeting October 18, 2017 Attendees Present: Mayor Boudreau Council Members: Hudson, Lindquist, Molenaar, Quam, Ragan, Hulst Staff Members: Public Works – Bell, Chesterfield, Love; City Attorney – Rogerson; Police Chief – Dodd; Parks & Enrichment Services – King; Project Development Manager – Donovan; Finance – Volesky Other: John Ghilarducci, FCS Group 1. Presentation by FCS Group on Preliminary Surface Water Rate Results – Blaine Chesterfield: Blaine explained to Committee how Surface Water reserves are shrinking; rates have not been increased for 18 years (since 1999). The FCS Group was hired as a consultant to complete a Surface Water Rate Study for the City. FCS Group is very experienced in conducting rate studies having completed over 1,700 studies to date. John Ghilarducci, FCS Group, gave a presentation on the preliminary Surface Water rate results as follows (copy of presentation attached): Rate Study Process: Revenue requirement (how much money is needed to fund the utility). Rate design (changes to the rate structure itself to generate revenue requirements) and rate credits were discussed. Project Background: A chart was presented displaying historical ESU rate vs. inflation showing how the City has not kept up with either the Consumer Price Index (west region) nor Engineering News Record construction cost index (20 city average). Current monthly rates were shown at $6.05 per ESU (one ESU = 2,657 square feet of impervious surface area). Existing credits for onsite mitigation: 20% for on-site treatment (that meets 1992 DOE stormwater manual), and 60% for on-site direct discharge. Sixteen rate payers are taking the 20% credit and no one is taking the 60% credit. Policies for discussion: Fiscal Policies were evaluated and used for analysis of the surface water utility; including Operating Reserve, Capital Reserve, System Reinvestment Funding (SRF), and Debt Service Coverage – purpose and recommendations for each were described. October 18, 2017, Development Services Committee Minutes Page 1 of 3  Rate structure alternatives were presented and FCS Group recommends the City use the existing structure with the ESU value from 2,657 to 3,200 impervious square feet per unit (one single family residence = one ESU) to reflect current average impervious surface amounts for single family residents. Examples demonstrated that the ESU update would shift slightly the overall cost proportion that is currently paid by commercial rates to residential rates to reflect the higher proportion of impervious surfaces actually occurring on residential properties. Additionally, rate credits were discussed. Surface Water Revenue Requirements: Key assumptions were described including annual cost of inflation, customer growth rates, and operating forecasts. Additionally the preliminary 2017-2025 Surface Water CIP (Capital Improvements Plan) projects were detailed including a capital needs forecast and revenue requirements to fulfill the CIP projects and operational costs. Rate Design & Credit Analysis: An analysis was completed on rate credits with functional allocations and rate components via the maximum credit methodology on the following areas; Functional Cost Allocation, Maximum Credit Calculation, and Rate Schedule with Proposed Credit. Updated ESU Analysis: The ESU analysis segment included; updated maximum credit calculation, updated rate schedule with proposed credit, sample bills, proposed rate in context, and single family monthly rate survey. An overview of the “Next Steps” were presented including the following steps:  Consider adopting a rate increase schedule (from $6.05 to $10.03).  Adopt a new maximum rate credit (30% credit for customers meeting or exceeding standards – eliminating the 60% credit).  Consider changing the ESU value from 2,657 sq. ft. to 3,200 per ESU and rate adjustment to $11.09 per ESU. A discussion was held on the perception of storm water rates. It was stated that a 60% increase might seem too large; however, the rates have not been increased or modified for 18 years and if left as/is, funding will quickly run into the red. All increased rates are for basic maintenance and necessary improvements via the CIP. The presentation will be made available online for councilmembers to review. The rate study will be brought back to Committee next week, October 25, 2017, for further discussion. 2. Approval of Minutes- Development Services: Minutes from September 20, 2017 were approved. 3. Clearing Permit Update: Rebecca Lowell gave an update on the Clearing Permit process. She provided background information and reviewed findings from original ordinance. 4. Permit Software Update: Chris Phillips gave an update on the Permit Software RFP. Seven different companies responded. Top two companies gave presentations to the department staff. Paladin (SmartGov) was chosen, department is looking at an April conversion date. October 18, 2017, Development Services Committee Minutes Page 2 of 3 5. YMCA Update: Rebecca Lowell gave an update on where the YMCA is in their permit process. Recess at 6:35pm Reconvened at 6:40pm 6. 2018 Budget Discussion: Doug Volesky continued discussion from a previous meeting about the 2018 Budget. Items that were reviewed included: budget calendar; and the individual budgets for: Attorney, City Council, Development Services, Finance, Fire, General Facilities, Hotel Motel Tax, Human Resources, Information Services, Library, Mayor, Municipal Court, Non-departmental, Parks, Police, Solid Waste, Streets, Surface Water, TV10 and Wastewater Utility. A discussion was held on the FTE request for a Fire Inspector position, Hotel Motel Tax applicants, Police FTE Request and their request for a Multipurpose Command Vehicle, CDBG Grant and Transportation Benefit District. Decision Points for the budget that were noted included: Surface Water Rate increase, Police new FTE, Police new Command Vehicle, Community Action Request, Property Tax Revenue Increase and Paver purchase. Meeting was adjourned at 8:21 pm Morgan Morrison Morgan Morrison, Finance Department Sherri Pritchard Sherri Pritchard, Public Works Department October 18, 2017, Development Services Committee Minutes Page 3 of 3