Utility Committee Agenda and Packet 2020 09 08

Home Browse Search

City Council Utility Committee Meeting Minutes Tuesday, August 11, 2020 Page 2 of 5 Watson if this is normal. Mr. Watson stated our financial policy is 25%. Mr. Kowar commented that 120 days cash reserve has been an established policy but could be adjusted. Councilmember Lipton asked if there was a Bond Covenant requiring a certain amount of cash. Mr. Kowar said he would have to check but thinks it just covers debt coverage and Mr. Watson added that he believes that's correct. Page 10 — Water Fund Cash Reserves is a graph showing the water fund is sitting on healthy cash reserves and over the next seven years we plan to spend down as we go through the various CIP projects. Mr. Peterson explained what happens after 2027 where we should start building the fund balance a little more but don't to be over collecting. Mayor Pro Tern Councilmember Maloney asked if we should be looking at all three utilities for the debt services. Mr. Kowar said we are and explained the difference between debt service and cash reserves. Councilmember Lipton stated it is also looking at rates individually. Mr. Peterson said the goal is have all the funds stand on their own. Occasionally a large capital expense is allowed to pull one fund down below for a year or two. However, if this extends in duration it eventually gets the funds out of balance and there is the danger of funds to start subsidize each other. Page 11 — Delaying Projects, Mr. Peterson said this shows what happens if we delay a project and assumes we use the smoothing option. Councilmember Lipton asked if Windy Gap plays into this. Mr. Peterson said this assumes the 2.5M cash payment with Windy Gap and the $900,000 +/- annual payment that will get adjusted based on what is ultimately selected. Page 12 Removing Projects, Mr. Peterson explained this is if we take money out while trying to keep the smoothing rate and described the percentages. Mayor Stolzmann commented on the value of this data and how it enables a good discussion on what our policies should be on our service and what kind of reserves we want. She said that Council is supportive of preventative maintenance and keeping our facilities up to date and she hasn't heard anybody wanting to defer projects that need maintenance. Page 13 — Alternatives is a continuation of the delayed and Mr. Peterson described how the percentages worked over the years and how it all comes together. Councilmember Lipton asked if there was any interest from the committee members to have no increase for 2021-2022. Mayor Pro Tem Councilmember Maloney and Councilmember Fahey indicate the desire for defensible rates that avoid arbitrary determinations. Councilmember Lipton then directed staff to move on from these scenarios. Page 14 — Water CIPs, Mr. Peterson started with the CIPs that were removed by staff with a reduction of $831,470. Councilmember Lipton asked if there are any projects scheduled over multiple years. Mr. Peterson said yes there are a few projects like the SWSP enlargement that are anticipated to occur over more than a single year. Councilmember Fahey asked if the chemical tanks were taken off or postponed. Mr. Peterson said the upsize project was 10