City Council Minutes 2018 07 12 & 08 02 BUDGET

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City Council Budget Retreat Meeting Minutes July 12 &1August 2, 2018 Page 11 of 13 Councilmember Loo noted she has had requests for more community gardens. UTILITY RATES Director Kowar stated staff is adhering to the goal of holding rates at 3-4% increases for the next few years. The Utility Committee reviewed three versions of the CIP projects putting the water rate increase at 3.5% each year for the next few years. They do not think there is a need to bond for any of the projects. For wastewater some projects need to be completed; that totals at 7% per year increases. Director Kowar reviewed four options for stormwater rates. Members discussed the stormwater projects that are triggering the recommended surcharges, specifically the Highway 42/Hecla underpass. They discussed whether or not it should be paid for by a surcharge or paid by CIP or General Fund. The surcharge increase is 110% in 2019, approximately $12/month. Mayor Pro Tem Lipton noted if we fund the underpass entirely through the General Fund it reduces our ability to fund everything else. Mayor Pro Tem Lipton stated it will be easier once we see the whole rate table; we could also ask staff to work with the Utility Committee to come up with other ideas with and without the surcharge without ignoring critical projects. Financial Policies Mayor Pro Tem Lipton stated there are four items that need to be discussed tonight. 1. Direction on budget practice of transfers to the Open Space & Parks Fund. 2. Direction on the staff recommendation to change the Open Space targeted fund balance. 3. Direction on recommendation to revise the City's policy to include the annual fee inflator for the waste removal contract 4. Finance Committee recommendation to establish a separate fund for revenues and reserves from the Recreation Center tax. #1. Direction on budget practice of transfers to the Open Space & Parks Fund. Director Watson stated the Open Space & Parks Fund is not self-sustaining and requires some transfer to sustain itself long term. Staff would like to find a systematic approach for long term financial planning for the fund. Staff recommends taking the 2007 amount of the Parks fund, inflate that by CPI to 2018 and that will be the transfer. Director Watson stated staff is looking for direction so this can be built into the financial policies and brought back for adoption.