Utility Committee Agenda and Packet 2020 06 23

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City Council Utility Committee Meeting Minutes Tuesday, May 12, 2020 Page 3 of 8 problem with their bills. The City conducted education and outreach of how City bills were calculated. There were a handful of customer concerns that were unable to be resolved immediately. These customer accounts have been flagged and are being monitored in 2020 for possible leaks. Mayor Stolzmann wanted to understand the possible impacts to these monitoring activities from COVID-19 and any possible shortages of staff availability. Mr. Watson stated that with the limited number of accounts, there are no impacts anticipated to the monitoring. Mr. Kowar said Public Works field crews will continue to work in conjunction with Utility Billing to identify possible causes. Page 15 — Mr. Kowar explained the Utility Rate Chart as showing the various rate impact scenarios at a high level and explained this is just informational right now. Councilmember Lipton asked Mrs. Balser if the City was including capital reductions in the budget discussions. Mrs. Balser stated we are looking at all expenses including operational and capital. Councilmember Lipton stated he's glad we are starting some planning and analysis on the different scenarios and asked what the planned timing for setting utility rates for 2021 is. Mr. Kowar said rates are typically brought forward in February or March for implementation in May. Rates are aligned during the overall budget process during the summer and fall. However, the most up to date information is used when setting the rates the following year. Mayor Pro Tern Maloney asked for feedback on the assumption related to no tap fees for three model years an estimated reduction of $5.5 million in revenue from earlier models. Mr. Kowar explained this reduction was intentional to show the level of magnitude of potential impacts. Vill. Windy Gap Financing Page 16 — Mr. Kowar explained the general background to the Windy Gap Firming Project and how council actions are anticipated within the next year. Prior financial plans proposed a large down payment for the project, which has been withdrawn as we await more analysis on COVID-19 impacts. Mr. Peterson stated that project is in early phases of procurement and the participants are working on finalize the Allotment Contract that will determine contractual obligations of the project. Mr. Peterson further explained that the included memo was to show the two options for financing and advantages of each. He went on to explain the "Group Financing" is where all participants would get a joint loan together and "Individual Financing" is where the City would go out on our own to secure a bond and provide the proceeds to Northern to fund the construction. Mr. Peterson explained one of the advantages to Group Finance is that there is access to a partial low interest loan from Colorado Water Conservation Board (CWCB). There is some uncertainty with this loan as the State is dealing with large budget shortfalls related to COVID-19. It is possible the CWCB loan could be withdrawn to cover the budget shortfalls. Another advantage for Group Financing is the ability to categorized payments to Northern outside of the City's debt coverage requirements. This advantage continues to be the major factor in the recommendation towards Group Financing. Mr. Peterson highlighted that the City current estimate is about $18 million out of the projected $575 million bond. 5