Utility Committee Agenda and Packet 2019 10 30

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City Council Utility Committee Meeting Minutes Friday, September 13, 2019 Page 4 of 6 consideration and will send out for committee to review. Committee talked about meeting in October and determined they will schedule for a future date. IX. Utility 2020 Rates Mr. Peterson referred to the chart on Page 15 of the packet and started with the budget table. Explained the 3 different options. Option A — Proposed 2020 Budget, Option B — New projects scheduled for Council and Option C — Long- term projects that we've been talking through that we are holding as place holders and will dig into these later. Councilmember Stolzmann said that Mr. Watson and Mrs. Balser put together a nice budget presentation for us and the Committee put together some graphs that show all the different funds and so the group looks to the Utility Committee to say, "What are these projects and is this a good idea" so we need to be able to say "these are good". Mr. Peterson stated the majority of requested increases were to bring the budget in line with prior expenditures. So the amendment for the 2020 was re-establishing back to the 2019 level and sometime the 2018 level. Mr. Peterson continued with explaining Option "A" saying they added 2018 actuals for reference. Mr. Kowar continued with describing the professional services line item explaining that consulting services were needed as to address staffing shortages. Councilmember Stolzmann went on to say in the Water Utility budgeting side, this looks like a lot of carry forwards with a large fund balance. Mr. Watson added it was about 15% operational. Mr. Kowar explained we are working on a $50,000 budget level not $10,000 line item level and because we are lean we need some breathing room which some are based on trends and contracts we have. Mr. Watson agreed. Committee continued discussing Option "B". Councilmember Maloney stated he sees this as a long-term investment so it makes sense. Councilmember Stolzmann asked if everyone is in agreement with Option "B"s set of new projects with 2019 Budget and 2020 Amendments. Committee all agreed and is recommending Option "B". Mr. Peterson went on explaining Option "C" with the two large projects that will be over budget and will be carried over in the rates but we listed so you can see them. Mr. Kowar said we are taking the Administration Building out for now. Mr. Peterson stated this is all just for information right now and provide an outlined of the transmission line capacity project. Mrs. Balser asked that right now we are keeping what we anticipated in 2020 and not making any changes. Mr. Peterson said yes then continued with the plan of completing the design allowing for a better cost estimate before a decision is made to move forward with construction. Councilmember Stolzmann then asked if there are any other questions on the different budget adjustments and there were none. She continued and said thank you for taking us through this as it was really useful. Councilmember Stolzmann went on to talk about the Fund Reserves and Combined Reserves chart on page 16. Mr. Peterson explained the different color bars and what they represented. Mr. Peterson went on to explain the other options as aligning with those in the previous discussion. Councilmember Maloney said for a future agenda item we should talk about minimum fund balance. The Committee agreed and requested that this be added as a discussion point in a future agenda.