Finance Committee Agenda and Packet 2023 08 17

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City Council Finance Committee Meeting Minutes June 15, 2023 Page 2 of 4 Councilmember Hamlington asked how accurate the estimated costs for replacement are and there was a discussion about cost estimates. Questions from the Public: None. Solid Waste Hauling Contract Request for Proposals (RFP) Discussion: The Director of Public Works and Utilities presented the Solid Waste RFP process. This process to solicit bids for the next 5-year agreement begins in November. Staff reminded the Committee that this RFP is for a waste hauling service and all vendors will handle the City's waste the same. Questions from the Committee: There was an extensive discussion around the RFP rating system and the committee requested changes to the proposed rating weight percentages, most especially with reference to increasing the weight of customer service as a criterion. Staff will update the RFP rating weights per the Committee's comments. 2024/2025 Utility Rate Considerations: The Director of Public Works and Utilities presented the preliminary 2024 utility rate recommendations. There was a discussion around reserve levels, unexpected project costs and the current reserve fund policy for capital projects. The City currently doesn't have contingency for large CIP projects and Public Works is concerned about having reserves to cover unexpected cost increases as projects proceed. Mayor Maloney asked what the 2022 turnback was and asked that it be included in future reports. The Director of Public Works and Utilities noted that having turnback set to zero provides a small layer of contingency and true turnback helps keep rates down. There was a discussion around the City's water rate increases versus the US average CPI. Actual increase amounts will be included in the budgeting process. Questions from the Committee: Councilmember Dickinson asked what has changed in the past few months to change the recommendations from what was presented in February. The Director of Public Works and Utilities indicated that they information that has come to light with the master planning process affected the rate recommendations. Public Works is also now has more information on actual project costs versus estimated costs. It was noted that, with the recent rains, it is likely water revenues will be reduced by around 20%. The City has also been more aggressive with purchasing water rights as water rights are lower in cost at this time and it's prudent to purchase at the current lower rates. Councilmember Hoefner noted that the City's constituents expect a high level of service and reliability and the City's first priority is to ensure service quality and reliability. He noted that being more consistent in rate increases each year would help to avoid very large price shocks in one year. Councilmember Hamlington agreed with Councilmember Hoefner about constituent expectations regarding services. She asked if there were lessons learned from disaster events such as the 2013 flood, Marshall Fire, etc. which impact the planning for reserves. She noted that, given the frequency of these events, keeping a reserve makes sense. The Director of Public Works and Utilities shared approximate costs related to a few major disaster events in the past 10 years and restated that having a reserve is important to the City's ability to continue providing service during these events. 4/57