Koenig The next page is our debt schedule for 2004. And basically this is a detail of all the current loans, bonds…that we have out. And the majority of those are paid by the water system debt fund, which is [Fund] Number 412 or 413, which is sewer system debt fund. We also have another bond fund for the water-sewer revenue bonds, comes out of the 403 water revenue bond fund. And then we have the Community Center, which Limited Tax Bonds, that's paid out of Fund 203. And then the LID [97-1] is paid out of the LID Bond Guaranty Fund, which is [fund] 207. And this [unintelligible] fee is paid out of fund 303, which is State Construction Fund. So if you have any questions on our current debt… There's a couple of them, the North Wagley Creek Water, which now has been changed to the 132^nd Street line, we have $920,550 available for the construction on that. We have not done any draws on that loan yet. I don't know if -- Connie, do you want to give them a status report on that project?

Dunn Jon Stack has been looking at the engineering of it and possibly thought that [unintelligible] engineering of it to save the city some money. [unintelligible] with it. Of course, it'll have to come back to the council approve and we have to approve the expenditure of having it engineered. 'Cause we do know that the council at one time voted not to go forward with it at that time. But Jon says that we could actually save the city quite a bit of money, maybe not spend the whole loan amount, in terms of our loan amount for it.

Rowe That $920,000, that's more than enough to bring the line in?

Dunn Jon feels it is.

Rowe Would that go all the way down to Rice Road and loop into 138^th?

Dunn Yes.

Criswell [unintelligible]?

Dunn Yes. He feels that there's a possibility with some of the development that's going on up there, or the possibility of development going on, that there could be some developer paying -- the developers paying back this loan to the city, as part of the development agreement.

Criswell And we can't use this grant money that way, [unintelligible]? We can't be [unintelligible]?

Dunn It's a loan that has to be --

Criswell A loan that has to be --

Dunn Well, he feels that because he's not a drafter, and he's got his plate full -- I don't think he realized how many projects we had waiting for him with regard to the City of Sultan, but it is a pretty involved project, and he thought it would be better serving the city if we did go out to engineer it [unintelligible].

Rowe As I recall, that's a pretty low interest loan, right?

Dunn Yes, it is.

Rowe Instead of having the developer pay that off, couldn't we have a developer pay us an equal amount of money we could use somewhere else and pay the low interest on this? Or can we do that?

Dunn What you charge him for water, you have to spend on water. What you charge him for sewer you have to spend on sewer. I'm not too sure how that works, Laura. I just know that we're looking into getting the developer in there to deal with the city to help pay these payments. So I could guarantee the payments.

Rowe I understand that. But don't we have some higher-cost money somewhere else that we could pay off, instead of paying this? Didn't we have any loans on the --

Dunn Oh, we had loans on the Water Treatment Plant and --

[simultaneous comments]

Dunn I don't know. We'd have to ask the finance person [Laura] sitting two doors down.

Rowe If we have a lower interest loan to pay off some of the high other loans, is what I'm getting at.

Koenig Well, actually, if you look at the interest rate on all of these, you don't have any really high dollar loan amounts out there. I do have one suggestion, though on the -- there's one here, the third one down, the Rural Development loan for $154,000 for the sewer plant. This is one where we had to take out this loan in order to get the million dollars grant. This is a 40-year loan, and it amortizes out to about $329,000 if we pay it off over the next 40 years. It's at 4.75% interest. There are some restrictions on the loan itself, too, that could limit some of your development. I would suggest that we plan over the next two years to pay this loan off. Get rid of it. As I say, it's got a higher interest rate and you're basically paying twice as much as you had to borrow.

Rowe Do we have money in the sewer fund to do that?

Koenig We have some reserve in there. It'd come out of the sewer system debt fund. And there is some reserve funds in there. There's not enough in there to pay it off entirely, but there is enough in there to pay about 50% off of it next year and then in 2005 pay the balance of it off. Get it off your books. As I say, you're making principle payments of $1,700 a year and you're making interest payments of almost $7,000 a year. So it's, you know, I say, it's not really cost-effective to pay it off over the next 40 years. Most of our loans and bonds and that are less than 20 years.

Rowe Forty years. Wow.

Koenig Yeah. It's…

Rowe That's unreal.

Koenig It's like buying a house.

Rowe A house is not even financed over 40 years.

Koenig But the $154,000 that we borrowed, we really haven't made any headway on reducing the principle because the length of the bond.

Rowe How old is that loan now?

Koenig We took it out in 1996, I believe.

Criswell So we've only paid off…

Rowe A thousand dollars.

Koenig Yeah.

Rowe [unintelligible] $8,000.

Koenig As I say, you're making, what is it? $8,400 in payments a year on it. As I say, that would be one I would strongly recommend that you reduce the principle on that as you have funds available.

Rowe Yeah. I would agree there. Even if you had to borrow money from the water fund to pay off the balance of it, it'd be cheaper interest.

Koenig That's true.

Rowe And pay back the water. [unintelligible].

Flower Can you do that? Can you take money out of one account for another --

Koenig Yes. You have to an interfund loan. And you have to pay it back. Right now the sewer bond fund has a balance of $122,000 in it.

Dunn You have some biosolid issues that are going to be coming up for sludge handling of biosolids handling. [unintelligible] all of our sewer funds or money just paying off loans, because we do have some issues coming up with biosolids.

Koenig Right. That's why I'm suggesting that you use that debt fund which already has money out [and] put it towards reduction of this debt. Use surplus in that to reduce this one down.

Male So we'd cover about half of that?

Koenig um-hm.

Rowe And how much money does the water fund have in it that we could borrow to pay the balance of it off?

[simultaneous comments]

Dunn We've been spending a lot of money.

Rowe Well, yeah. [unintelligible] 3% interest or 4% interest here that the city could recoup it from itself, if nothing else.

Koenig The water fund now, we got $500--we got half a million dollars coming out of it. It has $1.6 million, so a little over $1 million in [unintelligible].

Rowe So we could [unintelligible] another $75,000 out of it and pay the balance of this off, and pay the money back to Connie over…

Criswell Forty years [laughs].

Rowe In 40 --

Dunn No.

Rowe That $8,000 a year, is that…let's see…that $8,500 a year, that'd only be nine years or ten.

Koenig You actually have a payment due on this in December. So if you wanted to pay the balance off and do the same thing, take that surplus balance and pay back your own fund, you would reduce that.

Rowe Reduce that 40-year loan?

Koenig Yeah. Just get rid of the 40-year loan. It's not cost-effective. It was worth it to get the million dollars in grant money, but from a long-term fiscal picture, it just doesn't play out.

Seehuus Maybe the only question [unintelligible] an interfund loan, you'd have to do a resolution, right?

Koenig Yes.

Rowe Does that make sense to everybody to pay that off with our own money?

Criswell Does me…Providing it's paid back.

Rowe Well, yeah. It has to be paid back.

Koenig Interfund loans have to be paid back.

[simultaneous comments]

Dunn What's the timeline on interfund loans? What's the timeline on interfund loans?

Criswell That's what I was saying. It has to be paid back, what do you do [unintelligible]?

Dunn Talking about interfund loans, is there a deadline, or does the council set up for themselves to pay it back? 'Cause I know we've done it in the past here, from the interfund loans, and some of them have gotten paid back quickly and some of them have not.

Koenig There are terms on them, that they're supposed to be paid back within -- most of them don't set more than five years.

Seehuus Couldn't that be part of the resolution, Laura?

Koenig Yes, it is part of the resolution. You have to back up a promissory note on how you wanted to deal with it. And if you can't deal with it, then you have to revise the promissory note.

Dunn So the city can go back and revise that promissory note, correct?

Criswell As many times as it takes [laughs].

Dunn [unintelligible] purse strings.

Rowe Connie is our Social Security program. You know, the federal government, they always go to the social security when they don't have money to [unintelligible]. We go to Connie. She's got all the money.

Dunn But I just -- you know, it's fine -- and I voiced this to the Finance Committee also -- that we want to be careful we don't keep borrowing from water and sewer. And it's a good idea to get rid of a high interest loan. I'm not saying that. But we have to be careful we don't borrow against water and sewer so much or reallocate our funds that we end up putting water/sewer in the hole, like we have, like our general fund's in the hole now. We want to make sure we don't get down to that point where, Now who are we going to borrow from to pay Peter? Who now are we going to rob to pay Peter? I just want to be careful that we don't do that.

Koenig On this particular loan, we do have a payment due in December. We could reduce the principle sum on this, and when the payment comes again in June, revisit it at that time and determine whether we want to just pay the principle off next June.

Rowe Yeah, 'cause I -- any new development that comes in would put money in these funds, is that right?

Koenig Yeah, um-hm. Well, by next June, too, this debt fund should have more than adequate monies to, you know, make its debt payment and pay off whatever principle is left on this. We have $122,000 right now. If we reduce the principle by $20,000, we'd only have $126,000 to deal with in June.

Rowe Why not do it with $50,000 or $60,000 now?

Male We could pay it off.

Koenig Because I want to make sure that I have adequate money in there move the other bond payment [unintelligible] at this time.

Criswell We don't want to [unintelligible], right? [laughs].

Koenig You don't want to raise rates, sewer and water rates --

Rowe What would happen if we just paid it off now? And then we didn't have the money to do the bond payments in June, at that point we could borrow whatever we needed from the other funds.

Koenig Well, basically the way the bonds read is that if you don't have enough money in your debt fund, then it comes out of your operating fund because you pledged the security of your revenues, your utility funds to pay those bonds and loans.

Criswell [sarcastically] Thanks, Connie, for [unintelligible] that. [laughs]

Dunn Well, most of our debt, a lot of our debts are for water and sewer improvements.

Koenig Yeah, they are.

Dunn I mean, you know --

Criswell We're just picking on you [laughs].

Dunn I just want to make sure we don't keep borrowing back and forth and end up putting ourselves in a bind. I mean, it's always been kinda nice to have that cushion there to borrow or loan out for different things over the last years. It hasn't always been this way for water/sewer, to have enough money in there to do this. And I remember before we did that last rate study, we did a rate study, we didn't, water/sewer was just barely limping along, just like everybody else.

Koenig That's true.

Rowe Well, I think we should make a reasonable payment on it, anyway.

Koenig As I say, that's one that we just need to get rid of, and if you'd like we can come back with a recommendation on how to do that over the next two periods, December and June. [long pause] Okay, what we have attached behind this is a detail of all of the funds. We have two funds that have some problems. And I think I'd like to start with the street fund. Connie says we always start with the general fund and we never talk about her problems. And the street fund is that -- I'm sorry, I forgot to number these pages. I remembered about halfway through making copies today.

Dunn It's on page 16 if you numbered them yourself.

Koenig Let's talk about revenues first. Street fund is the 101 fund.

Dunn Revenue's a real short page, expenditures are a longer page.

Koenig As you can see from the summary, we've got about a $37,000 deficit. And I'm going to tell you what's going to happen with the street fund. Last year the voters repealed the $15 vehicle tax, the extra monies for that. That [unintelligible] about $30,000 worth of our revenues for this fund. So for the past two years we haven't had that money. Through this year and next year we won't have that money. The courts have ruled that it was a valid initiative, so therefore they won't reinstate the tabs. Snohomish County actually repealed the ordinance last year, and quit collecting the money. King and Pierce County continued to collect the money, and now there's a legal issue as to whether or not they will have to pay all that money back to the legal owners.

Criswell See, the courts are costing us more money all the time.

Koenig Well, actually, we didn't budget for it. However, it has created a $30,000 shortfall for the last couple years. One of the things that we've [unintelligible] with a little bit is the utilities taxes that were allocated towards the [unintelligible] fund for the police equipment. When we reduced those down to help offset the operating costs, it also bumped up the street fund because they get a share of the B&O electrical tax. And we get about $50,000 a year and anticipate about $50,000 a year with that bump-up. That's basically what we've always used to pay our street lighting. Somebody asked the other day how many lights we had and when I look on the bills, it's like 461 street lights in town.

Criswell How much per light?

Koenig [unintelligible] going to ask hard questions, too [laughs].

Rowe Why do we have two different motor fuel taxes, Laura?

Koenig We used to run two separate funds. We usually ran a street fund and arterial street fund. And one is restricted. You're supposed to us one strictly for offsetting the cost of street maintenance and construction. The other is just a general tax for purposes of street maintenance. So when we combine the two funds, both of them show up in there. There actually are two different BARS account numbers from the state and the auditor actually tracks both them to make sure that you have correctly accounted for them. So one is restricted and one is unrestricted.

Dunn And the one with [unintelligible] money is part of the restricted one?

Koenig No.

Dunn Oh, good [laughs].

Koenig Right now we allocate 10% of our property taxes towards the street fund. So the anticipated revenue next year is going to be $192,000. You go to the next page, you have expenditures. And they're anticipated to be about $229,000. So at this point we have a $37,000 shortfall. And that fund really doesn't have a lot of money to fall back on. The street fund right now, it actually has a negative balance as of today, but I have a $32,000 reimbursement request out there. So the street fund is only going to end up with maybe $20,000 balance at the end of the year. And it's the same thing. Because of these tax initiatives that have gone by, they keep reducing our sources of revenue. Unfortunately, our expenditure levels have been staying the same. We've been kind of living off of our reserves in some of these funds. And the reserves are dwindling. We shouldn't do that anyway. So, at this point I can't do really much more with this fund without some direction from the council and staff on where do you want to cut?

Dunn You said $32,000 is coming in?

Koenig Yeah.

Dunn And that's for the stormwater management?

Koenig That's for the stormwater management.

Dunn And what's our negative balance today with the street fund?

Koenig On November 7^th it was $10,000 and about twenty-two. Plus, we need to do the balance of the interfund loan, or interfund transfer. So you'll see [unintelligible] on the I&I or the stormwater project.

Dunn So with those projections in mind, how do you feel the street fund would end up being, as of 2004?

Koenig I don't anticipate it's going to be more than about $20,000, because we also have another month's worth of expenditures.

Dunn So you're looking at $20,000 in debt, or $20,000 in the black?

Koenig Black.

Dunn For 2004?

Koenig Yes.

Dunn So, really, this problem could be resolved by the loan money that you have, the request in for, from the state, right? $32,000 reimbursement? And then --

Koenig Not really, because you're still only going to have about $20,000 worth of reserves and you got a $37,000 difference in that.

Dunn That's why I was asking whether the balance was going to be in the red for the 2004 budget. If we did all these other things we just talked about, the reserves --

Koenig You're still going to have about $17,000 or $20,000 --

Dunn The [unintelligible] check?

Koenig Yeah.

Criswell That's what we asking, the bottom line. [laughs]

Koenig That's why we're not doing the general fund right now.

Flower Would you explain what the difference? You've got vehicle operation and maintenance and then you have vehicle repair right below it. What's the difference between vehicle maintenance and vehicle repair?

Koenig Actually, this is more for Connie to track the normal day-to-day gas, oil changes, things like that, versus major repairs to a vehicle. Vehicle repair is usually done in an outside shop.

Flower Five hundred bucks is just one visit to the outside shop.

[several simultaneous comments]

Dunn I always check with our [unintelligible].

Koenig It really is. Most of her other vehicles have very little repair work. But some of your other equipment, your tractors and mowers and that, actually cost us more in repairs than the vehicles do.

Dunn Yeah. We just repaired our street-sweeper this year and it was expensive. It had to have new [unintelligible] brushes, new chains, new [unintelligible]. It was expensive to repair. Expensive, $5,000 or $6,000.

Boucher What's the difference in professional services?

Dunn Professional services is --

Criswell [interrupting, blocking Connie's response]. [unintelligible] cost extra.

Koenig Private cost and legal services, computer [unintelligible], auto-cad technician. If you look under shared costs, there's detail under there.

Rowe How much do we need to cut out of this here?

Koenig About $17,000. At a minimum.

Criswell You don't get all these [unintelligible], do you? [laughs].

Dunn Connie? You want to go through what some of these are? The street lighting is obvious. [A small portion of this section was omitted due to potentially sensitive personnel issues.]

Boyd Can I ask you what the PWTF Loan, listed as revenue is?

Koenig That was the stormwater management -- was it stormwater or surface water?

Dunn Well, surface water management plan.

Boyd 'Cause I don't see an expenditure for it. Do we pay that back?

Koenig Actually, if you look at the 2004 proposed, that loan, we can [sounds like she said, "shut"] that project this year. So you will see payments in the debt schedule coming out of the sewer system. We won't have that revenue this year, nor will we have that expense.

Tolson Laura, as I look at this, we're comparing budgets without any actual dollars expended for 2003, and we're trying to make a determination for the [unintelligible] for 2004. Is there within your spreadsheet system, year-to-date expenditures for 2003 so we can make an informed decision on what areas to cut?

Koenig Yeah….

Tolson Is it possible to get that on the list?

Koenig Hmm…

Tolson Or paper?

Koenig Actually, part of it's [unintelligible] this thing. I know everybody has a 10-year history.

Tolson Sure.

Koenig Yeah. And I --

Tolson I was just jumping back to look at the expenditures of 2003 in here, the previous annual report, trying to compare --

Koenig The first worksheet that I wrote up for the department heads included the year-to-date, so then it should come back with their numbers. Because I was changing this on a daily basis --

Tolson Sure.

Koenig -- I quit updating that column.

Tolson Sure. That makes sense. But also to anticipate any anticipated payments that are due [unintelligible], can make the assumption that we're going to be cutting an area of the budget without knowing what the expenditures are. Cutting your nose off in spite of your face.

Koenig Um-hm. [pause] So these numbers, the 2004 proposed, are pretty much based on what actually the year-to-date is right now.

Tolson Okay. Contracts, then, are established, then, with all of the heads, approved by council at this point in time to 2004?

Koenig Yes, they are.

[a couple of simultaneous/unintelligible comments]

Koenig No. They're both three years. The police and the public works are set. The non-union people negotiated, in fact, this last year, and what's included in this year's for non-union is simply the same COLA as the police and that was like 1.2%. It's very minimal. The biggest hit that we took on salaries and wages is in the medical insurance benefits, which went up about 28% across the board. What used to cost $10,000 a year for a family of four, it's a little over $12,000 now, for the City's share of [unintelligible]. We took some substantial hits on that.

Seehuus Connie? One question on professional services. I noticed in the 2003 budget, it was $5,000 and in 2004 it's $11,655. That's a $6600 increase. What's [unintelligible]?

Dunn Part of it is we have a draftsman that we send out who does all the drafting for our city engineer. And that's part of that. What was it a month, Laura, that you were paying him? I don't remember what the contract or the agreement [was].

Koenig We have $6,000 in there altogether. Part of the jump up this year in professional services, too, is our auditor will be arriving next week. And they were supposed to be here earlier this year. We don't receive $300,000 in federal funds, so we only have to have an audit every two years. Now, our two-year audit is due, and unfortunately it will show up -- we had budgeted it for the 2003 year and it's going to carry over in 2004 now.

Dunn So AutoCAD, auditor, and then…I think that's pretty much always been --

Koenig We've allocated some legal service costs into that, too. So, yeah.

Rowe We didn't have an audit last year?

Dunn No, we didn't. (see Note #1) The audit will be for 2001 and 2002.

Rowe [unintelligible], what's her name?

Koenig Christi.

Rowe She was here last year doing something.

Koenig She was here finishing up at the end of -- at the very beginning of the year, finishing up the 2000 one.

Rowe Okay.

Koenig I think it was in 2001.

Champeaux So, Connie, we've looked at different parts of the expenditures. How can we trim services between $1,000, as I'm looking at possibly salaries and wages?

Rowe How many street lights can we turn off, Connie?

C. Dunn You're going to have to answer that yourself, because you're going to be the ones that get the calls from the citizens. You start turning off street lights, it's going to come straight to the council for its public safety.

Criswell We have some more coming on line which was can develop.

C. Dunn Yeah. Add to that that $461, was it, Laura?

Koenig Yeah.

C. Dunn We're added three cents to that account program, with Vern Nelson's development on [unintelligible]. I'm not sure, C.H., how you handle street lights. That's a real touchy issue because people look at that as being a safety [issue], and we've got street lights up on the Basin Road that we've never had in the past. We did that a couple of years ago. Out Gohr Road we've added street lighting because of all the new houses up there. So when you start adding these houses, then you start adding street lights for safety reasons, 'cause it is, you know, people do go out and walk. And this time of year it's extremely bad.

Rowe That switchback is very -- in the evening, over there on the Basin Road, and [unintelligible].

Criswell With the bicycles on the shoulder.

Champeaux So, Connie, that's my question. How do we bring that fund back into balance without looking at that, or how can we increase revenues to be able to meet the expenditure?

Criswell Same thing that [unintelligible] have to live with.

Champeaux Well, you and I talked about reduce the salaries and benefits, which what you're talking about is people, but in that case then we need to increase revenues to be able to meet the needs out of the expenditures.

Koenig And functionally, for a street fund, revenues are kind of restricted as to where you get them from.

C. Dunn When we talked about the surface water fund, we did talk about a stormwater utility, which would share some of the streets with street cleaning.

Criswell Couldn't we put a toll booth where Trout Farm Road starts out to the city limits, and one up on the Basin Road at the city limits?

C. Dunn We talked about that. We had a couple of [unintelligible] who didn't like that idea.

[laughs]

Champeaux How much, how much we gotta generate?

C. Dunn On this surface water?

Champeaux Yes.

[the laughter and tittering continues from Rob's clever comment, while Bruce ignores it.]

C. Dunn We talked about, originally when we came to council with this, of setting up a stormwater utility or a surface water utility, I think it was like $1 a person across the board. It would take it off of the street, but for sewer, I mean. For sewer, instead of being $41, it would be $40 and stormwater would be $1, to get the start of the generation of the utility up and going, was what the original proposal to the council was. We would create the utility. And then we'd $1.00 from the sewer utility charge that we charge each month, we'd take that $1.00 and start the surface water. You know, you didn't see anything huge, but it would help relief some of that. Because then you'd be paying for street sweeping out of that fund, some of the labor, materials -- I mean, staffing -- you would have a way of generating a revenue. But that's also --

Criswell And basically we did deal with that.

C. Dunn And that does get dealed [dealt] with out of street fund. And the street sweeper is being paid for out of this fund. So a revenue producer would be to do that. I know that there is an issue or what they [taxpayers/citizens] consider additional taxing to the citizens. But when you start talking of revenue and you're talking about a fund with limited resources for those revenues, a utility is one of those ways. And you have a surface water utility which would help with your street -- you'd take money out of the street fund into the other utility, like we have water/sewer? It would be, okay, the street sweeper would go over there, you know, 'cause that would all be keeping the streets clean, in which clean helps utility -- surface water. So, I mean… [trails off].

Criswell Right now, the sewer fund is burdening the cost of stormwater, isn't it? 'Cause we don’t' have a stormwater --

C. Dunn Utility. It's not absorbing. It's not really the street is more absorbing the cost of -- your street fund is absorbing the cost of surface water management.

Criswell Yeah.

C. Dunn But the sewer is going to pay back for the surface water comp plan.

Rowe If we did have a [unintelligible], how much money would that generate?

C. Dunn It's been so long since we looked at this. The surface water planner came. I don't remember the exact number, but it would generate --

Koenig Are you talking about --

C. Dunn -- the dollar -

Koenig One dollar per a utility customer every month? We send out an average of 1,427 bills per month.

Rowe That would be about a revenue of $1,500 a year?

Koenig Um-hm [affirmative response].

Rowe What if we allocated $2.00 per customer?

Criswell What about $1.50?

C. Dunn Well, it was just recommended during -- we had the public hearing and stuff on the surface water plan (See the chart of expenses and/or the Consultant's PowerPoint presentation, on our Sewer page), to do this, to start the utility. Which, you know, you talk about revenue, that would be one way. It would generate a revenue of a dollar. Which is not a lot. But then, with the street fund you would help save, you know, some of the costs would come up, too. That's something that the council, everybody would have to look at because that's been -- not everybody's going to want to do that, because they feel like that you start with that dollar now, even though it's part of the sewer, you start with a dollar now, next thing they know they're going to be paid $5 or $6 like these guys down in Edmonds, who are paying over $8 a household. So they're not going to want to do that. And I think that was part of the thing. You guys didn't want to start taxing, what people would consider as a tax, even though it's part of the sewer now. Because they were afraid -- and it is, it is a concern that eventually it would be $7 or $8 which, it possibly could be. I mean, you'd have to adopt a [unintelligible] you're talking --

Rowe I can see that way of thinking. Except that my answer to that would be that those people show us another way to generate funds to [unintelligible] the budget. If that's the way we do it, then that's the direction.

Koenig [unintelligible], isn't it?

C. Dunn Not surface water management. I can't see from here [referring to the expense chart which was still pinned to the wall]. We talked about -- oh, this is what it cost. This is what the costs were for, the estimated costs to operate a surface water management [program], and it came out to $128,000 a year. So somewhere along the line, you are right, it's not going to be just $1, it's going to be $5, $6 or $7 per household. It would be more for the commercial owner, 'cause they've got a lot more impervious surface, parking, it would be more. So you're going to setting up a fund -- and you need to think about this -- that's going to generate revenue, but it's also going to generate a utility tax, new utility on your citizens, and, you know, we've always been trying to invite people in. But, you know, if you're only developing for a house, a lot of citizens already have a surface water tax right on there [on the sewer bill]. I mean, it's a payment rather than a utility. It comes out with their water, sewer and surface water, or whatever they, whatever amenity that they service. So that was more revenue, [unintelligible] utility, the surface water management utility.

[simultaneous comments]

Criswell ….have a utility fund for stormwater. So you'll have the grant dollars to fund additional projects. It'll actually come up to your capital improvement program, like they're shown here, a list of projects that you want [unintelligible] from. A list of projects that you want to [unintelligible]. That's your funding mechanism, along with the grant dollars.

Bruner There's also a few benefits available through that, all the things listed in there, that will give you a [unintelligible] to help reduce the insurance costs for people buying flood insurance.

Rowe So if we are at this point now, of generating revenues for the city, could that put us on a grant for anything later down the road, or -- ?

C. Dunn I can actually -- [simultaneous comments] …because he has some leverage, a way of proving that you can do something with that grant money. And then you also get loans, which means you can [unintelligible] payment back.

Rowe Sounds to me like that's the way to go.

Criswell Yeah, but I don't think $1 is going to do it.

C. Dunn No. A dollar is not going to do it. 'Cause it did come up at council [unintelligible].

Rowe It'd take at least a buck and a half, by the time you [unintelligible].

C. Dunn Well, see, that's the thing. When you start to [unintelligible] what the original proposal was from Berryman and Henigar, Don Graf, was to start with that dollar, and try to get people used to knowing what surface water grant was about, do the public education, it would help ease this fund because it wouldn't help -- it would help some at first, but then as you go along, say in two years you've got all this tracking of all this information, you could justify to $7. I mean, I'm not sure what Bellevue pays. I think it's about $11 or $12 a month each homeowner pays.

Rowe Do you know if that's what they pay, Jeff [Kirkman].

Jeff Kirkman [in the audience] Yes. Actually, Bellevue is pretty expensive.

C. Dunn But then you're also, you can do -- residential would be one way and then commercial people would be a separate rate. There's different ways to set it up so your commercial's would be -- 'cause you're talking like bigger buildings. You're talking more impervious surface. You're talking parking lots. So there's different ways to set this utility up.

Criswell You could people in city hall [unintelligible] water. [unintelligible].

C. Dunn Yeah, they take it from water and pay for water [laughs]. No, actually, I --

Koenig [unintelligible] something, huh?

C. Dunn -- what we've done with this building and most of our buildings, we've allocated what actually is a building use. Like sewer pays for their water, everybody else pays for their sewer. This building pays for water. So it's -- I mean, it's just paperwork or lines on a paper, but you know…

Champeaux So if we all create a new revenue, and save $17,000-20,000, maybe a half a person.

C. Dunn It could be a half a person. I could be the kind of equipment.

Champeaux What benefits would we be losing? What impacts would we notice?

C. Dunn More chuckholes. More chuckholes, less holes repaired. Less street sweeping time.

Criswell I don't think my street [unintelligible] any less [laughs].

C. Dunn A lot of our streets are getting pretty -- [simultaneous comments]. I mean, when you start cutting manpower, you cut the ability to serve, give service to people. And you talk about the time that they spend on the street sweeper. You talk about maintenance. You talk about all these big, huge trees, these lovely old trees we have all over town? How many man hours a year we go cleaning out the [unintelligible] with a backhoe and a broom.

Criswell Amazing. And then they [unintelligible] right down Main Street and put a bunch more.

C. Dunn Those oak trees, yeah.

Criswell Oh, what a mess those things are.

C. Dunn But you know --

Champeaux [unintelligible]

C. Dunn But, you know, it's time to go out where the big trees are and do the sidewalks, and that's a hand job. That's a man being out there. Property owners, they go out there and rake their yard and they rake it right into the city streets, expecting us to clean it up. Or mow their lawns into the entire street and they expect the city to come by and sweep it up for them. Which actually is against city ordinance. Putting debris from your property onto the city street is against the law.

Rowe Tell us how you feel about it, Connie.

C. Dunn I'm sorry. I got sidetracked.

Rowe I realize that what we [unintelligible] in creating this plan is just a way of shifting revenues from one place to another, but… anybody got any better ideas?

Male Spend less money.

C. Dunn Yeah, well, you can go back to where we talked about equipment and stuff, but I don't think you're going to come up with $17,000 to $20,000. I mean, our wish list is not a gigantic wish list. I mean, part of it is shared with other departments, so if you cut off the street's portion of the PowerPoint projector, well, who's going to pick up the slack? Who's going to pick up that $375 for the PowerPoint projector? What other [unintelligible] will pick it up? It's all you're going to do, is just juggling the money around.

Koenig Water, sewer.

Male [think this was Jim Flower] If you bumped up your, the portion of the real and personal property tax to 13%, that would almost cover the shortfall --

Koenig Yeah…

Male -- but then you're going to take some --

Koenig We're going to talk about the general fund next.

Male -- then you're taking from someone else.

Koenig You're taking it from the general fund.

Champeaux Yeah. [unintelligible] we're going to need to add something that's going to gain us revenue, because the expenditures aren't going to go down. So the reason why we're fretting now is it's only going to get worse year-by-year.

C. Dunn It is.

Champeaux It's the salary, wages and benefits and uniforms and operating supplies and vehicle repair and [unintelligible] services, everything is not going to go down, which is going to help the fund, it's going to continue to go up, which is going to continue to hurt the fund

C. Dunn Right.

Champeaux And if we don't create some type of revenue, or drastically reduce the salaries and wages, we're going to have to find some new revenue to be able to help that fund.

Female Exactly.

Flower Maybe you use [unintelligible] to increase $1.00, than to explain our decrease in services.

Tolson So you're going to take $1.00 off the water/sewer?

C. Dunn It's off the sewer. Just off the sewer.

Tolson Can the sewer afford $2.00-$3.00?

Boyd 'Cause I think people would much rather see a reduction of one [unintelligible]and then --

C. Dunn Just to move it around?

Boyd Yeah. I think I'd rather see that.

Rowe That [would] make more sense to me.

Criswell That way there's not an increase in the bill or nothing like that.

Boyd They'd also be upset if the next year they both, both of them were raised again, too.

C. Dunn Well this is something that we're looking at, that Laura and I and Rick have a meeting with Katie Isaacson on Friday morning to discuss the rate study that's happening right now.

Boyd So it appears to me like I would look at the sewer and see how far --

C. Dunn It can drop?

Boyd -- you can drop it. And then take that money and call it --

[simultaneous comments]

Boyd …if we have to raise our sewer fund, we have to raise our sewer fund.

Rowe That makes sense to the other guys, too?

Criswell But I wanted to talk [unintelligible] about not getting an increase in their bill.

C. Dunn At this time.

Voices At this time.

Criswell Yeah.

Flower It's still kind of a shell game.

Voices [agreeing].

[simultaneous comments]

Criswell The thing is, it's a shell game, but it works -- if that would work, then nobody gets harmed.

Champeaux We're not creating a new, a new tax, either.

C. Dunn At this time.

[simultaneous comments]

Boucher It's like a bait-and-hook, you know? I mean, I understand it, but once you get a tax in -- and that's what it is -- it's a tax -- it's like in-law. It doesn't go away. [laughter] I could see us reducing our sewer fee by a $1.00 one year and then put it back and then some, and then pretty soon the surface water's goes from a $1.00 to $3.00 to $5.00 to $10.00.

Flower We don't have a choice, though.

Criswell Yeah. That's the way -- [simultaneous comments]

C. Dunn It's a very hard choice. It's a very hard decision.

Flower Unless it impacts services.

C. Dunn We're down to pretty much bare. I mean, we [unintelligible].

Male Unless we're setting on cutting people, I don't see what other cuts we have.

Champeaux It sounds like we either create revenue or we have to cut services.

Criswell You could still say if we're going to reduce your sewer, and that revenue that we're receiving from that, we'll continue to receive it, but it now goes into this fund, and this is what it's for. So you're not pulling anything -- you're not doing anything that's [unintelligible].

Seehuus I'm not saying you're doing anything illegal. I'm talking about perception. The person in the street doesn't really stay up with the city on what's going on.

Boyd You don't have to stay in tune to know that, "Well, by God, they're going to get me twice as hard five years from now."

Criswell Well, that's the only thing that you have.

[simultaneous comments; someone says something about sending out a newsletter to explain]

Criswell Exactly. But what I'm saying is, if you do this one, put this one on at the same rate, then they're not going to scream like they've been cut, because it's not costing any more money. Rather than saying, "Well, we're going to start charging you $1.00 to get this thing [unintelligible] up."

[simultaneous comments]

Flower Has to be explained somehow. In as simple a form as possible, say, "This is what we're up against. We're going to try to make this as easy as possible and phase it in over the next few years."

Boucher If you say, "This is what we're up against," they're thinking, "This is what you're up to."

Criswell Yeah. Exactly.

McPherson I think they're being more correct --

[simultaneous comments]

Criswell Well, I don't know how much more up-front you can be than you just -- in your newsletter you'd say, "[unintelligible], but this is what we're doing. We're creating this fund for our surface water. It's not going to cost you any more at this time. But we're getting it started because we're required to have it." You don't have to be -- you're not trying to hide anything from them. It has to be done.

Tolson [unintelligible] with this type of a thing. Say, "This is reality. This is what we're facing now with the laws that are before us. We have to deal with this. It's got to be paid for. We don't have the money for it anyplace else. It has to come from the actual -- what's being used here." And if you put that in front of people in that way, it's palatable for them. I mean, they can swallow that pill. The thing is is I think a lot of people will feel like they're being set up. If there's some way that we could put a cap on the top end of this and say based upon what our anticipated expenses are, looking out projected four to eight years, this is where this could top out at. Now it's $1.00. This could top out in four years at $5.00. You and I both know if something is out in front of us, saying, okay, it's a buck now that's put in front of us, I can handle that. But if it's going to be $25 or $50, especially, I don't think there's any way that we could stipulate for them that [unintelligible]. We can assess that, because I know that's a concern for a lot of seniors that are on fixed incomes.

Rowe And I don't know any better way to put it to people than that. But there's still going to be a lot of them that say, "Oh, yeah. They've figured out another way to zap me."

Tolson Oh, yeah. Services cost.

Koenig One of the things that we want to look at in this rate study, the initial rate study that was done, we raised the rates from $36 a month to $41 a month. Well, that $5.00 goes right now towards paying off the cost of the sewer plant. That's the existing users' share of that project and the other bill that was incurred for it. And when we initially did that rate study - and that's why we're looking at it again -- is that when those loans -- and we did some five-year loans -- were paid off that we should be able to reduce the sewer cost back down. But then, these requirements for the surface water utility came back. So what we're looking at is, can we use that existing $5.00 and play with that a little bit, to not have to raise people's rates right now, but still be able to fund that surface water utility?

[The discussion continued, but we could not find the time to complete the transcription. Sorry.]