Finance Committee Agenda and Packet 2017 06 12

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City Council Finance Committee Meeting Minutes 05/24/17 Page 3 of 5 Kowar stated that the Underpass project is approximately $225K ahead, and that those savings are available for other miscellaneous work. Finance Committee Members and staff discussed that the Underpass and South Street Projects have resulted in additional scopes of work which were not initially anticipated. The Committee and staff discussed that these projects need to be identified and conveyed to the LRC. Mayor Muckle stated that he believes the LRC has already agreed to help with funding for the South Street Project and that the $325K paid by the LRC is in addition to the 50/50 split initially agreed upon. Council Member Stolzmann requested additional information from Director Kowar on the South Street Project, noting the additional budget request of approximately $400K. Member Stolzmann asked why, as Director Kowar stated, there are savings on the project, additional funding is being requested. Director Kowar stated that contracts negotiated included contingency funds, and the purchase orders encumbered those full amounts. For the savings to be recognized, the contracts and underlying purchase order would need to be amended. Chairperson Stolzmann asked Director Kowar to explain the SCWTP and HBWTP Upgrade budget amendments which total just over $1.5M. Director Kowar stated that a detailed schedule and narrative would be provided for the June 6 City Council meeting. In summary, Director Kowar stated that these amounts will cover the cost of routine maintenance that has been ignored over the years. Member Stolzmann asked about the ongoing operational costs needed to continue such maintenance. Director Kowar stated that the operations budget will not need to be increased for the routine maintenance, and that they will work within the approved operations funding. Director Kowar stated there is new leadership and a renewed culture of pride that will ensure the ongoing repair and maintenance of these facilities. City Manager Fleming commended Director Kowar for his efforts with Public Works staff and in bringing these safety issues to light. Finance Director Watson stated that the improvements may not really be capital improvements, but rather an amendment to the operations budget. Director Kowar stated that the scope of small repairs was so large after so many years of neglect, he felt the costs were more of a one-time expense. Director Kowar stated that going forward, the available operations funding would be used for ongoing maintenance. Council Member Stolzmann asked how these additional projects will impact utility rates. Director Kowar stated they would have negligible impact. Director Kowar asked the Finance Committee for clarification of their concerns regarding the budget amendments. Chairperson Stolzmann stated that, when the budget is out of balance, and there are negative fund balances, she is concerned. 10