Utility Committee Agenda and Packet 2020 09 08

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City Council Utility Committee Meeting Minutes Tuesday, August 11, 2020 Page 4 of 5 3. Do we make the 2.5M investment (Windy Gap) 4. Cash Reserves Mr. Peterson said he ran the model to reduce the cash reserves to 25% or 90 days and the smoothing rate would go from 4% to 3.7%. Councilmember Lipton stated we aren't ready to make that type of policy decisions right now then asked if they can bring back to us the historical rate data (3-5 years). Mayor Pro Tern Councilmember Maloney noted that it would be good to see the impact so we can decide if it's a policy we want to bring up. Mr. Peterson did say he does have that information which is in 2016 water increased 13%, 2017 was zero, 2018 was 3% and 2019-20 was zero. Mayor Stolzmann added that we don't have to model all the money in the first year and said she'd be interested in seeing what the rates would be modeled over the years they actually make the payments in. Then see the tap fees recognized in the year that they were received and see the 25% instead of the 30% on the reserves to see that scenario. Mr. Kowar said we can do that as we continue to align with the budget. Mrs. Balser commented that the reason we are here now is because there was discussion that this needed to sync with the budget and that is why we are having these discussions earlier. Committee agreed to schedule another meeting so they get a better understanding and so they and council have the benefit of seeing what the rate increase has been in the last 3 years. Mayor Pro Tem Councilmember Maloney stated he doesn't want to see CIP money removed. Councilmember Fahey agreed and said she thinks we need to maintain existing projects and rates should be based on the projects. • Page 21-28 — Wastewater, Mr. Peterson said the driver for the wastewater fund is farther out than water at around 2029-2030. He said there is only one large project that is critical and is what's driving the 4.5% increase. Page 30-36 — Stormwater, this is where we are below our target reserves with spending and making sure it all lines up. Mr. Peterson said we are using our combined utility fund in this instance. We are showing the large projects (Cottonwood Park and Drainageway 7-1) as being spent in 2021 which brings down cash reserves. Mr. Peterson said the stormwater is a very low fee and not a lot of income on this. Committee accepted the recommendations and no other questions. Councilmember Lipton concluded and highlights what is desired for the next meeting: 1. Analysis on three policy issues 2. Table of utility increases for past 3-4 years 3. Cash Reserves 4. Tap Fees 5. Windy Gap 6. Comparison of other municipalities 12