City Council Committee of the Whole · Monday, March 10, 2025 · City Council Digest

3. AGENDA ITEMS

Light Rail Station Area Vision and Guiding Principles COM 0100

45 min · Thomas Valdriz, Senior Transportation Planner · packet pp.5–419

▶ Watch from 1:12 Open packet at p.5 ↗

Staff report:

C. Draft Central Issaquah Light Rail Station Area Visioning and Guiding Principles D. Executive

Utility Rate Study: Introduction and Revenue Requirements COM 0106

60 min · Emily Moon, Public Works Director Matt Ellis, Utility Engineering Manager Sergey Tarasov, Consultant · packet pp.421–467

▶ Watch from 27:14 Open packet at p.421 ↗

Staff report:

Administration recommends confirming preferred rate scenarios for the three utility funds and the proposed plan for City Council’s review of the study:

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0:02 ↗ yeah

0:04 ↗ okay I

0:06 ↗ could okay hello everyone I council

0:10 ↗ president Walsh call the March 10th

0:13 ↗ Committee of the whole meeting to order

0:15 ↗ at 6:30 p.m. as a reminder we continue

0:18 ↗ to have a remote aspect to our meetings

0:20 ↗ and both staff and members of the public

0:22 ↗ may be participating tonight remotely

0:25 ↗ via WebEx um there are going to be

0:27 ↗ multiple com public comment

0:28 ↗ opportunities at tonight meeting there's

0:31 ↗ a general public comment opportunity at

0:33 ↗ the beginning of the meeting or you can

0:34 ↗ make comments after the presentation and

0:37 ↗ Council question and answer period on

0:39 ↗ tonight's agenda

0:41 ↗ items um I guess I will ask before I

0:45 ↗ make this uh is there anyone

0:49 ↗ online we have no virtual attendees

0:51 ↗ council president okay and there are no

0:53 ↗ attendees in audience so I will just say

0:56 ↗ we welcome your comments if you're

0:58 ↗ willing to read our pack it go for it um

1:01 ↗ or if you just have a thought in your

1:03 ↗ head that you want to express to US city

1:05 ↗ council at isqua

1:08 ↗ wa.gov okay looking on to our agenda

1:12 ↗ we've got two agenda items Comm

1:15 ↗ 0100 Light Rail station area vision and

1:18 ↗ guiding principles and Comm 0106 utility

1:22 ↗ rate study introduction and revenue

1:24 ↗ requirements so we will start with the

1:26 ↗ Light Rail station area vision and

1:28 ↗ guiding principles with Thomas F's

1:31 ↗ senior Transportation

1:40 ↗ planner thank you council president

1:42 ↗ appreciate the time

1:52 ↗ tonight and again my name is Thomas FES

1:55 ↗ senior Transportation planner um tonight

1:57 ↗ I will be uh bringing this back to the

1:59 ↗ committee uh hoping to get your

2:01 ↗ direction on the um central isquad

2:03 ↗ vision and guiding principles that I

2:04 ↗ brought um in

2:07 ↗ January uh so same questions uh hoping

2:09 ↗ to get your feedback uh to understand if

2:12 ↗ you support the vision and guiding

2:14 ↗ principles as presented um which were

2:16 ↗ developed um through Community

2:18 ↗ engagement efference uh from September

2:21 ↗ of 2023 uh to date and if there's any

2:24 ↗ other changes you'd like to see would

2:26 ↗ appreciate your feedback on

2:28 ↗ that so again this is uh a little bit of

2:31 ↗ review I did present this in January but

2:33 ↗ we are expecting uh lots of growth in

2:36 ↗ central isqua the majority of the growth

2:38 ↗ that the community will be getting in

2:40 ↗ the next 25 years will be in Central

2:42 ↗ isqua and specifically in the um green

2:45 ↗ area which is the regional growth

2:49 ↗ Center so in 2016 voters approved the

2:52 ↗ Sound Transit 3 ballot measure this is a

2:55 ↗ uh Light Rail extension project uh that

2:58 ↗ will expand high-capacity Transit

3:00 ↗ throughout the region including the

3:02 ↗ South Kirkland to isqua line so we are

3:04 ↗ expecting one light rail

3:07 ↗ station it'll be at the end of the line

3:09 ↗ and that link uh line will connect

3:12 ↗ through Bellevue uh and up to uh South

3:17 ↗ Kirkland so this is particularly

3:19 ↗ important because we are expecting a

3:22 ↗ significant amount of growth in Central

3:23 ↗ isqua and so this growth will be

3:25 ↗ supported directly by Light Rail and

3:27 ↗ vice versa

3:31 ↗ um so just to clarify a little bit about

3:32 ↗ the roles of uh of Sound Transit in this

3:35 ↗ project uh so this

3:38 ↗ is this ski link project is a sound

3:41 ↗ transit project so just wanted to be

3:43 ↗ clear on that um they will be designing

3:46 ↗ uh planning it they're going to build it

3:47 ↗ and then ultimately they will manage uh

3:50 ↗ the operations um so in terms of uh you

3:53 ↗ know who makes decisions on this they

3:55 ↗ will be making the decision Sound

3:57 ↗ Transit board specifically will be

3:59 ↗ making the decision on where the station

4:01 ↗ will go in central isqua um where that

4:04 ↗ track alignment will

4:05 ↗ be and this is really going to be in

4:08 ↗ alignment with regional priorities so

4:11 ↗ Sound Transit is interested in you know

4:13 ↗ how this affects the region in terms of

4:15 ↗ growth in terms of uh you know

4:17 ↗ operations for them and so us as a city

4:21 ↗ our goal is to really Infuse the local

4:24 ↗ uh Vision the local priorities into this

4:27 ↗ equation um so the vision and guiding

4:30 ↗ principles are the direct uh sort of

4:33 ↗ memorialization of what the community is

4:35 ↗ hoping for um so again uh Sound Transit

4:39 ↗ will be making final decisions but we do

4:41 ↗ have uh we have some pretty sign

4:44 ↗ significant tools that can help us

4:45 ↗ really steer the conversation uh

4:48 ↗ specifically we're looking at zoning and

4:50 ↗ land use uh as well as

4:53 ↗ permitting and so when we talk about

4:55 ↗ zoning and land use we're really talking

4:57 ↗ about uh ways that we can support

4:59 ↗ Transit operations um from like a

5:02 ↗ densities of jobs and housings

5:04 ↗ perspective as well as the amenities

5:06 ↗ that are going to support um a

5:08 ↗ successful Light Rail

5:10 ↗ station so you know locating the station

5:14 ↗ near an area where we've specifically

5:16 ↗ outlined where we want uh Transit

5:18 ↗ oriented development to happen um and

5:21 ↗ this can be through an overlay uh for

5:24 ↗ example uh so if if Sound Transit is you

5:28 ↗ know to put a light rail station outside

5:30 ↗ of where we've identified lots of uh

5:34 ↗ densities and U you know the ability to

5:37 ↗ really build out an area that would

5:39 ↗ support their station if they were to

5:41 ↗ locate it outside of that area that

5:44 ↗ would sort of change their equation it

5:46 ↗ wouldn't be as much of a benefit for

5:48 ↗ them so in my mind I'm kind of thinking

5:50 ↗ about this as like the carrot sort of

5:52 ↗ situation so land use and Zoning is the

5:54 ↗ carrot for them uh and then the stick is

5:58 ↗ our permitting so we do have the ability

6:01 ↗ to say you can't build this here and

6:04 ↗ that's through permitting um so you know

6:08 ↗ as we go through the process with Sound

6:10 ↗ Transit um we do have a conditional uh

6:14 ↗ use process where we can require and

6:16 ↗ ultimately negotiate um some Community

6:18 ↗ benefits so these are sort of the the

6:20 ↗ levers that we have um you know as it

6:23 ↗ stands currently Light Rail service is

6:25 ↗ not in allowed use in central isqua it's

6:27 ↗ not allowed anywhere in the city so this

6:29 ↗ is something we're going to need to

6:30 ↗ change um and you know being strategic

6:33 ↗ we'd want to put it in an area that we

6:35 ↗ would want it to

6:39 ↗ be so again uh Exhibit C is the draft

6:44 ↗ vision and guiding principles um it's

6:46 ↗ been updated since you've last seen it

6:50 ↗ oops excuse me I went way far into the

6:52 ↗ slide

6:56 ↗ deck so just starting with the vision

6:58 ↗ statement um this has been updated and

7:01 ↗ as it stands here's what it

7:03 ↗ says so by 2044 the Central isqua

7:06 ↗ Station area will be vibrant

7:08 ↗ well-connected Hub where people of all

7:10 ↗ ages and abilities can easily live work

7:13 ↗ and

7:13 ↗ Thrive designed for walkability and

7:16 ↗ sustainability it will offer

7:18 ↗ eco-friendly Transportation diverse

7:20 ↗ housing and businesses and safe

7:22 ↗ welcoming and inclusive public

7:28 ↗ spaces the next uh three guiding

7:31 ↗ principles are there for uh really just

7:33 ↗ supporting the vision statement that we

7:34 ↗ have um so the first one is about

7:37 ↗ accessibility and connectivity um

7:40 ↗ essentially you know we're saying that

7:42 ↗ this area is going to be a Regional

7:43 ↗ Transportation Hub it's located near

7:46 ↗ major

7:47 ↗ destinations um it's going to prioritize

7:50 ↗ easy walking biking and Transit access

7:54 ↗ and the parking resources that we do

7:55 ↗ locate here should be thoughtfully

7:57 ↗ placed uh in order to support and um not

8:00 ↗ reduce

8:04 ↗ walkability the next guiding principle

8:06 ↗ is uses and

8:08 ↗ experiences this talks about having a

8:11 ↗ balanced mix of homes businesses and

8:13 ↗ recreational

8:15 ↗ opportunities this community uh Hub has

8:18 ↗ essential services and amenities that

8:20 ↗ make daily life uh easy and

8:24 ↗ convenient and also we want to

8:26 ↗ incorporate sustainable design and low

8:28 ↗ impact development so it really does

8:30 ↗ sort of uh promote sustainability from a

8:33 ↗ neighborhood

8:36 ↗ level the last guting principle is

8:38 ↗ community connections and

8:40 ↗ values this talks about the station

8:43 ↗ being reflective of isqua's values it's

8:46 ↗ our heritage um and the natural beauty

8:48 ↗ that uh people come uh to

8:50 ↗ seek it's designed and it's adaptable to

8:53 ↗ changing needs and it Fosters strong

8:55 ↗ social connections

8:59 ↗ the station area is wellmaintained it's

9:02 ↗ a safe inclusive and welcoming space

9:05 ↗ generally it brings people together uh

9:07 ↗ and enhances quality of life and as an

9:10 ↗ urban center it reflects uh isqua's uh

9:14 ↗ you know desire to um you know both uh

9:19 ↗ support growth but also the existing um

9:21 ↗ Community goals as

9:25 ↗ well so just to uh you know talk about

9:28 ↗ how this vision guiding principles will

9:30 ↗ be used um so it will be used by US the

9:32 ↗ city um it will also be used by Sound

9:35 ↗ Transit so for the city um this is

9:37 ↗ really saying okay this is what the

9:40 ↗ community wants out of this whole thing

9:42 ↗ um it'll help us advocate for Community

9:44 ↗ desires with Sound Transit and it

9:46 ↗ provides a framework for the things I've

9:48 ↗ talked about previously so any zoning

9:50 ↗ and land use changes we want to make um

9:54 ↗ to support where we would prefer the

9:56 ↗ station to go and sort of the densities

9:58 ↗ and uh uses that would be

10:00 ↗ allowed it also supports future

10:02 ↗ Investments so um this council is aware

10:05 ↗ of the I90 Crossings uh as an example

10:08 ↗ that's directly supporting um you know

10:10 ↗ connecting the north and south side of

10:12 ↗ central isqua um that could be helpful

10:16 ↗ um and most importantly uh for me as I

10:19 ↗ am project managing u a project uh we

10:22 ↗ are looking to develop a locally

10:24 ↗ preferred alternative for the Central

10:26 ↗ esqua Station um hoping to kick that off

10:28 ↗ in April um but sort of the main

10:31 ↗ deliverable of that would be developing

10:34 ↗ that locally preferred alternative and

10:36 ↗ this vision would be fed into that um as

10:38 ↗ we develop um specific U criteria for um

10:43 ↗ looking at those

10:45 ↗ Alternatives um looking at how s Sound

10:48 ↗ Transit will use this um you know Sound

10:51 ↗ Transit ultimately they're going to try

10:54 ↗ to find a project that's going to meet

10:56 ↗ everybody's needs um their goal is to

10:59 ↗ meet Regional needs um but you know

11:02 ↗ specifying what we're hoping to get out

11:04 ↗ of it will really Nix a lot of the

11:06 ↗ options that they may provide um just in

11:09 ↗ advance so knowing where we stand will

11:11 ↗ help them have better Alternatives that

11:13 ↗ they will put through their own process

11:16 ↗ um and you know the goal would be to

11:18 ↗ satisfy all needs and this will help us

11:20 ↗ find some win-win

11:24 ↗ Solutions so some of the key challenges

11:26 ↗ that I've mentioned before um we are

11:28 ↗ trying to have a walkable station area

11:31 ↗ but we also acknowledge that because we

11:33 ↗ are an endof thee Line Station folks

11:35 ↗ from outside the community will be uh

11:37 ↗ likely wanting to access the the station

11:39 ↗ so balancing the need for walkability

11:42 ↗ from like the neighborhood level but

11:43 ↗ also acknowledging that um folks from

11:45 ↗ outside uh out east um to the North and

11:48 ↗ South uh may be uh wanting to use our

11:52 ↗ station we do acknowledge that this you

11:54 ↗ know once in a-lifetime infusion of

11:57 ↗ capital and investment into the the

11:59 ↗ community uh will spur economic growth

12:02 ↗ um but we also acknowledge that that can

12:04 ↗ cause an affordability issue so there's

12:07 ↗ some strategies that cities have done to

12:09 ↗ address that we'd like to also take that

12:11 ↗ similar approach um and sort of learn

12:14 ↗ from what other cities have done in this

12:16 ↗ in this

12:17 ↗ area there's going to be some Growing

12:19 ↗ Pains you know as we look long term

12:21 ↗ where we want to go uh versus how

12:23 ↗ Central isquad develops over that time

12:25 ↗ so we're going to want to um acknowledge

12:27 ↗ that there are some challenges with that

12:29 ↗ and again navigating control over sound

12:31 ↗ transits process um we do have limited

12:34 ↗ control but we do have some pretty uh

12:36 ↗ useful measures and um it's all about

12:39 ↗ knowing the tools that you have and

12:41 ↗ using them effectively and timing uh

12:45 ↗ timely so again these are the strategies

12:47 ↗ that we have um we've been learning from

12:49 ↗ Pure cities that have gone through this

12:51 ↗ process we've got many uh strategies

12:54 ↗ that we think can be tailored to our own

12:56 ↗ uh situation

13:00 ↗ um so council did provide feedback on

13:02 ↗ this in January I really appreciated it

13:04 ↗ um since then we have a new council

13:06 ↗ member so I'm really excited to hear uh

13:07 ↗ more feedback um but at that point in

13:10 ↗ January I did uh uh seek to address some

13:13 ↗ of the um comments we got uh so you know

13:17 ↗ making the document more plain spoken

13:20 ↗ balance balancing the need for technical

13:22 ↗ terms was another uh comment um we've uh

13:26 ↗ attempted to do this throughout the

13:27 ↗ document um have added footnotes uh

13:30 ↗ where needed and trimmed out some of the

13:32 ↗ jargon provided additional guidance for

13:34 ↗ the path forward uh so we we provided

13:37 ↗ some strategies for the challenges that

13:39 ↗ we're expecting uh that we think will be

13:41 ↗ uh very useful uh as those challenges

13:45 ↗ arise we also simplified the vision

13:47 ↗ statement and made The Guiding

13:49 ↗ principles more accessible and

13:53 ↗ understandable so again here's a summary

13:56 ↗ of changes um I will also note we also

13:58 ↗ developed a um executive summary which I

14:02 ↗ think might be helpful as well um just

14:04 ↗ to add to the public accessibility

14:06 ↗ component but yeah this is a summary of

14:09 ↗ changes were made um again there's no

14:12 ↗ Financial cost or immediate regulatory

14:14 ↗ impacts at this time but we are

14:16 ↗ formalizing the community's vision

14:18 ↗ providing guidance for future decisions

14:21 ↗ um supporting future policy development

14:23 ↗ and aiding our ability to collaborate

14:26 ↗ with s

14:27 ↗ Transit um so I will pause here and

14:30 ↗ would appreciate um any feedback you

14:32 ↗ have thank

14:33 ↗ you great council president yes just to

14:36 ↗ let you know council member Joe has now

14:37 ↗ joined the meeting fantastic joining us

14:40 ↗ via phone fantastic okay so Russell uh

14:45 ↗ council member Joe we will look for any

14:47 ↗ questions um from you at this time we

14:51 ↗ are on the light rail um item so if you

14:54 ↗ have any questions there I'll start with

14:56 ↗ you otherwise I'll go to the other

14:57 ↗ council members

15:02 ↗ not hearing

15:05 ↗ any

15:07 ↗ no council member Joe any now thank you

15:10 ↗ not now okay fantastic then I will look

15:13 ↗ through starting with council member

15:16 ↗ Ray I just had a a couple of questions

15:19 ↗ for you Thomas um and you talked about

15:23 ↗ and maybe we've talked about this before

15:24 ↗ but I'm doing it again we talked about

15:26 ↗ um zoning and permitting as as tools

15:29 ↗ that we have in our toolbox um is that

15:32 ↗ both for um right away and tracks or

15:35 ↗ stations or

15:40 ↗ both it it would be both so like

15:43 ↗ um excuse me um yeah so the the

15:47 ↗ alignment of the the station is a use if

15:50 ↗ it goes through like our our property um

15:54 ↗ it's assumed that much of the alignment

15:56 ↗ is going to follow I90 up until isqua

15:59 ↗ then it you know it could deviate or not

16:01 ↗ um so if it does you know go into uh

16:04 ↗ land that is within our purview that

16:06 ↗ would be like a a zoning and like land

16:08 ↗ use um component and then what do you

16:11 ↗ see um once we put a bow on this what do

16:15 ↗ you see as the uh most likely short-term

16:18 ↗ uses of these guiding

16:21 ↗ principles is it something we're working

16:23 ↗ on now that'll help or is it more down

16:25 ↗ the road yeah it's it's going to be very

16:28 ↗ useful um

16:29 ↗ as soon as we adopt it uh we're going to

16:31 ↗ use it directly in the light rail

16:33 ↗ planning guide um that's going to be

16:35 ↗ translated into specific evaluation

16:38 ↗ criteria um that's also going to go to

16:40 ↗ council um I believe later in the year

16:44 ↗ uh so it it'll be directly used uh you

16:47 ↗ know as soon as we're we're done with it

16:49 ↗ um it's going to be used for different

16:51 ↗ policy decisions we're going to have to

16:53 ↗ make um it'll be used for a very long

16:56 ↗ time and last question I promise um um

16:59 ↗ so you talked about how other

17:01 ↗ communities are dealing with the

17:02 ↗ affordability issues that arise from

17:05 ↗ having this economic boom come to town

17:08 ↗ but it it made me think about what about

17:10 ↗ Public Safety both um from a police and

17:12 ↗ a Fire EMS perspective have you got any

17:15 ↗ insights speaking right on Q um um any

17:19 ↗ uh insights into how other communities

17:20 ↗ have dealt with that and the impacts

17:22 ↗ that we might

17:24 ↗ expect yeah that's a great question um

17:27 ↗ you know with development are uh

17:30 ↗ requirements to pay into uh you know

17:33 ↗ Fire EMS policing um so that certainly

17:36 ↗ helps with that equation um other

17:40 ↗ communities uh end of the line have

17:42 ↗ experienced like very specific issues

17:45 ↗ that other communities that are like

17:46 ↗ sort of passed through would not so um I

17:49 ↗ don't have a great answer for you but

17:51 ↗ this is something that's definitely on

17:52 ↗ our radar and we will want to

17:54 ↗ incorporate yeah I just um keep keep it

17:57 ↗ on the radar because I think when you

17:59 ↗ have that kind of a economic boom and

18:01 ↗ the density and um there's just the

18:04 ↗ potential for um some unintended

18:06 ↗ consequences there relative to Public

18:08 ↗ Safety so thank

18:11 ↗ you council member Jen um yeah thanks

18:15 ↗ for putting this together I know this is

18:17 ↗ kind of you know the end of a very long

18:19 ↗ process and I've come in basically just

18:21 ↗ at the end um so I have a few questions

18:23 ↗ first I'm curious how the principles

18:25 ↗ will be used for public engagement I

18:27 ↗ know there's already been a lot of

18:28 ↗ public engagement but you know as this

18:30 ↗ development goes on how's that going to

18:33 ↗ happen um public engagement is going to

18:35 ↗ be ongoing for um you know we developed

18:39 ↗ the light rail uh planning guide which

18:41 ↗ develops several actions that will be

18:43 ↗ taking uh especially in the near term

18:45 ↗ but also like sort of down the road um

18:47 ↗ so this vision and guiding principles

18:50 ↗ will be our North Star um that will

18:52 ↗ steer a lot of future conversations um

18:55 ↗ so speaking specifically to the light

18:57 ↗ rail study that we're doing um there's

18:59 ↗ going to be a very extensive engagement

19:01 ↗ process that we're going to do um

19:02 ↗ inhouse um this is going to be sort of

19:04 ↗ one of the cornerstones of um just

19:08 ↗ starting discussions from here you know

19:11 ↗ acknowledging that we've spent you know

19:13 ↗ uh two years working on this thing and

19:15 ↗ we want to build off of that and really

19:17 ↗ drill into what uh the station area

19:21 ↗ might like where that station could go

19:23 ↗ how that alignment might fit in with

19:25 ↗ what we've already established as like

19:27 ↗ the priorities for the community yeah

19:29 ↗ great um and then is this just for

19:32 ↗ questions or can I make comments as well

19:35 ↗ we usually start with questions and then

19:36 ↗ we go to public comment and then we'll

19:38 ↗ get a round of feedback okay cool that's

19:40 ↗ it then yeah um any other

19:45 ↗ questions okay I will ask mine um

19:48 ↗ mentioning the use of um zoning and land

19:52 ↗ uses a way to perhaps guide a station

19:56 ↗ area it the area

19:59 ↗ between the

20:01 ↗ freeway is that something where if they

20:05 ↗ wanted to locate a station there that's

20:07 ↗ already their land and we don't have

20:10 ↗ control over that or is that not

20:14 ↗ true so um I'll say yeah uh the freeway

20:19 ↗ has the right of way for wash do which

20:21 ↗ is a separate um agency um who's going

20:24 ↗ to be part of our conversations they're

20:26 ↗ going to be uh we're going to develop a

20:28 ↗ a uh public agency sort of working group

20:31 ↗ to deal with this um so to answer your

20:35 ↗ question we're sort of we're interested

20:37 ↗ in like the we can think of it as like

20:39 ↗ the quarter mile to a half mile buffer

20:42 ↗ of like of where that station might be

20:45 ↗ and that's sort of where most people or

20:47 ↗ most businesses might benefit from

20:50 ↗ access so so the point that I'm trying

20:54 ↗ to get at is do we have a risk if we

20:57 ↗ make the permit like the zoned area

21:01 ↗ where they could put a station within

21:04 ↗ the city too difficult that they might

21:07 ↗ choose to put it in between the freeway

21:12 ↗ area as like is there anything any

21:16 ↗ impact that we have on that not being

21:19 ↗ the station

21:23 ↗ location I think the impact would be

21:26 ↗ like yeah like if if you were to be too

21:29 ↗ narrow in your we'll call it a Transit

21:32 ↗ overlay Zone if you were to be too

21:34 ↗ narrow that would really restrict

21:36 ↗ options so as we get to that point as

21:38 ↗ we're thinking about um you know zoning

21:41 ↗ changes yeah we would want to sort of

21:43 ↗ consider that impact and um

21:46 ↗ acknowledging that the station area is

21:48 ↗ going to need a certain amount of space

21:50 ↗ and like there there's um there's like

21:53 ↗ operational components for King County

21:55 ↗ Metro to like sort of provide service um

21:58 ↗ we will want to think about all those

22:00 ↗ options um yeah and yeah yeah I

22:03 ↗ specifically about like the the right of

22:05 ↗ way section for wash dot I think some of

22:08 ↗ that um sort of accessory use would

22:12 ↗ probably not be in that right of way and

22:13 ↗ that's sort of where that would come

22:14 ↗ into play if it were like North or South

22:17 ↗ um of that okay so then if I'm thinking

22:21 ↗ through as we as we go about this

22:24 ↗ process if at a certain point we're

22:27 ↗ looking at those

22:29 ↗ station potential station areas and one

22:32 ↗ of them is in the center of the freeway

22:35 ↗ right away and others are in other

22:37 ↗ locations and we develop a preference

22:39 ↗ that it not be in the center of the

22:43 ↗ freeway rideway it are there ways that

22:46 ↗ we can discourage or make that zoning

22:50 ↗ not

22:52 ↗ possible um I think the answer is yes

22:56 ↗ but Steve and padwa our planning manager

22:58 ↗ on the line and I bet you he has a more

23:01 ↗ complete and better answer than that so

23:02 ↗ I'll let Sten uh take the

23:05 ↗ question yes thank you um council

23:08 ↗ president Walsh if I could just add on

23:09 ↗ to Thomas's response um it is perfectly

23:13 ↗ within Sound Transit right to build

23:15 ↗ within the wash dot RightWay but they'll

23:17 ↗ still need access to the site which is

23:19 ↗ going to be going from outside wash dot

23:22 ↗ right away and so regulations from the

23:24 ↗ city are still always going to be apply

23:27 ↗ because they'll still need Transit

23:28 ↗ access to the site they'll still need

23:29 ↗ vehicle access they'll still need

23:32 ↗ pedestrian and bicycle access and so

23:35 ↗ outside of wash do R of way will still

23:37 ↗ be wanting to work with Sound Transit

23:39 ↗ and on what'll be going on site and on

23:43 ↗ the transit oriented development that

23:44 ↗ will be supporting the Light Rail

23:46 ↗ station as well and so that's where a

23:48 ↗ lot of our influence and our discussions

23:52 ↗ on what the city needs will be able to

23:55 ↗ strongly influence some of the sun

23:56 ↗ Transit decision-making for a station

23:58 ↗ area in

24:00 ↗ alignment thank you yeah I'm just trying

24:03 ↗ to figure out if there needs to be any

24:06 ↗ adjustments to the tools and the the way

24:09 ↗ that we talk about it at this point

24:11 ↗ because obviously we can't make

24:13 ↗ a decision now whether we want it there

24:17 ↗ or not but I don't want to get too far

24:21 ↗ down the road and not have that be in

24:24 ↗ our visioning if that is a strong

24:26 ↗ principle so okay any council member

24:31 ↗ Mars so so the vision and guiding

24:35 ↗ principles is attachment F located on

24:38 ↗ page 337 of our packet right um we're

24:42 ↗ not this evening going through line by

24:46 ↗ line that document is there a point

24:48 ↗ where um a committee uh a council

24:51 ↗ committee will be going through line by

24:53 ↗ line or we as a group will be going

24:54 ↗ through line by line I see lots of red

24:56 ↗ ink and revisions and these are the

24:59 ↗ sorts of things that we historically um

25:01 ↗ have have gotten into the gotten into

25:03 ↗ the details on but that's not really the

25:05 ↗ way you're presenting it this evening so

25:07 ↗ how how is it envisioned that we will

25:09 ↗ provide feedback on this on this ongoing

25:13 ↗ vision and guiding principles

25:15 ↗ doc um yeah it's envisioned that um you

25:18 ↗ know if you had any feedback uh I also

25:21 ↗ have I think a clean version in

25:22 ↗ attachment C or Exhibit C um if you had

25:27 ↗ any you know line by line revisions

25:29 ↗ happy to receive that

25:32 ↗ um yeah any any general revisions is

25:35 ↗ fine as well

25:36 ↗ um yeah H happy to get any any feedback

25:39 ↗ you had on the document I mean I see

25:41 ↗ that it comes to adoption by the council

25:43 ↗ in Q2 of 2025 yes is that when you want

25:47 ↗ the feedback or is tonight supposed to

25:48 ↗ be I'm just used to seeing documents

25:50 ↗ like these go to a committee and then

25:52 ↗ that committee reviews them in detail

25:54 ↗ and you do things you know this is where

25:56 ↗ I I miss council member hun verb tenses

25:59 ↗ and uh and also uh council member

26:02 ↗ Goodman and and um that level of detail

26:04 ↗ that we used to do on documents like

26:07 ↗ this not like hey here's a 300 page

26:09 ↗ document any

26:12 ↗ questions and council president members

26:14 ↗ of the council this has been uh to the

26:17 ↗ mobility and infrastructure committee a

26:18 ↗ couple different times uh based on the

26:21 ↗ council's budget discussions we've

26:22 ↗ wanted to bring these final pieces to

26:24 ↗ the committee of the whole because of

26:25 ↗ its urgency um and importance to the

26:28 ↗ community so uh after tonight assuming

26:31 ↗ we move forward uh we will I think mix

26:33 ↗ it up I think you're going to be hearing

26:34 ↗ a lot about this you're going to be

26:36 ↗ hearing about mobility and

26:37 ↗ infrastructure you're going to be

26:38 ↗ hearing about a committee of the whole

26:39 ↗ when it's appropriate for the council to

26:41 ↗ take full action you're going to be

26:42 ↗ hearing about it in different ways I

26:44 ↗ don't think under the way the council

26:46 ↗ currently operates the council wants to

26:47 ↗ go through line by line at a committee

26:49 ↗ of the whole and so the mobility and

26:51 ↗ infrastructure committee for this topic

26:53 ↗ will'll continue that but you will see

26:55 ↗ this more often here at the committee of

26:57 ↗ the whole because I think one of the

26:58 ↗ things Administration came away from the

26:59 ↗ budget process is we have not done a

27:02 ↗ good enough job of keeping the full

27:03 ↗ Council apprised of all the good work I

27:05 ↗ think M building infrastructure has

27:07 ↗ heard a lot over the last 12 18 months

27:10 ↗ but the full Council hasn't so the

27:12 ↗ answer is you're going to have multiple

27:13 ↗ opportunities for many years to come uh

27:16 ↗ tonight is just one piece of this as we

27:19 ↗ move

27:20 ↗ forward thank

27:22 ↗ you council member Ray not not so much a

27:25 ↗ question ABS not a question but a

27:27 ↗ clarification from mobility and

27:29 ↗ infrastructure which so we did review

27:32 ↗ this document and and made changes to it

27:34 ↗ and some of them were specific and many

27:36 ↗ of them were more um directional like

27:39 ↗ clean this up and you know make it less

27:42 ↗ um technos speak um but also it went

27:45 ↗ through I know it went through the

27:47 ↗ transportation Advisory Board and I

27:49 ↗ believe it went through the equity board

27:50 ↗ also and they also had a crack at some

27:53 ↗ of the um crafting that you of which you

27:56 ↗ are speaking so um

27:58 ↗ so is it perfect I don't know um is is

28:01 ↗ it has it been reviewed

28:05 ↗ absolutely great any other

28:08 ↗ questions yes I'll ask you followup then

28:11 ↗ so I mean did Mobility infrastructure

28:13 ↗ have any were there difficult things

28:16 ↗ where you felt like boy we need to bring

28:17 ↗ these back and and have some tough

28:19 ↗ conversations I mean you know I

28:21 ↗ personally have had questions about

28:23 ↗ potential parking at the end of of these

28:25 ↗ lines right and I imagine that that's

28:27 ↗ come up to some extent but were there

28:29 ↗ were there issues that you think that

28:30 ↗ down the road are going to um require

28:33 ↗ the the seven to to sharpen their

28:36 ↗ pencil I'll I'll I'll I appreciate the

28:39 ↗ question a lot um yeah there are going

28:42 ↗ to be some some additional um

28:46 ↗ clarifications required because it's a

28:48 ↗ guiding principles document and we tried

28:50 ↗ to capture things that could that's why

28:53 ↗ I asked the question of when do you

28:54 ↗ expect to be using this because it's how

28:56 ↗ soon do we need to get this

28:58 ↗ um if there's any other um

29:01 ↗ clarifications or whatever we want to

29:02 ↗ put in how how soon is it going to be

29:04 ↗ turned into uh a actively used document

29:08 ↗ it sounds like it's um imminent um I I

29:13 ↗ think that this

29:14 ↗ is for a vision guiding principle I

29:18 ↗ think it accomplishes its goal is it an

29:20 ↗ implementation plan absolutely not it

29:23 ↗ was not intended to be so you know I

29:25 ↗ think when we talk about what it is and

29:27 ↗ what it isn't it's like um is it

29:29 ↗ sufficiently robust to meet its purpose

29:31 ↗ I think so um you know there are other

29:34 ↗ points of view I'm I'm open to those but

29:35 ↗ I think I think it's it it it

29:38 ↗ gives us an opportunity to say yes the

29:42 ↗ the city staff is headed in the right

29:44 ↗ direction and has a frame within which

29:46 ↗ to move forward to to um activate and

29:49 ↗ actualize what we'd like to see from

29:51 ↗ sound

29:55 ↗ FR council member H well and I'll just

29:57 ↗ also say say too for council's peace of

29:59 ↗ mind um these are like important

30:02 ↗ questions that were captured kind of in

30:04 ↗ a vague way in terms of guiding

30:06 ↗ principles but some of the sharpen

30:08 ↗ pencil more specific questions that

30:10 ↗ you're asking are actually near-term or

30:13 ↗ long-term actions in our planning guide

30:15 ↗ so those are things that will come back

30:16 ↗ to us this is just but one of many right

30:19 ↗ actions that are outlined in our light

30:21 ↗ rail planning guide so and I think this

30:23 ↗ is is this our third touch now as a

30:25 ↗ council so one with m& committee the

30:27 ↗ whole and then back and then I think

30:29 ↗ it's like it's like 17 Pages total for

30:32 ↗ the The Guiding principles right and

30:35 ↗ then the rest of it's like the big great

30:37 ↗ community outreach that you've done and

30:38 ↗ kind of capturing all that that feedback

30:40 ↗ so thank you again for that but just

30:42 ↗ just clarify that council member Mars so

30:46 ↗ I will ask a high level question of you

30:48 ↗ and and of this document um do we talk

30:52 ↗ about in it our expectation of um how

30:55 ↗ traffic or how commuters from further

30:58 ↗ east than isqua will interact with this

31:02 ↗ uh with this transit station Visa

31:04 ↗ parking and buses and all those sorts of

31:07 ↗ things do we set out a vision for how we

31:10 ↗ believe that station um should work for

31:13 ↗ King County folks east of

31:15 ↗ us let's maybe see Thomas do you want to

31:19 ↗ talk about how this um Point talks to

31:23 ↗ those

31:24 ↗ ideas yeah I think as written um this

31:28 ↗ vision is more focused on isqua

31:30 ↗ folks uh in order to accommodate

31:34 ↗ commuters from out east north and south

31:37 ↗ uh we would rely on the I guess the the

31:41 ↗ parking discussion that we have for

31:44 ↗ accessibility and connectivity um for

31:46 ↗ that for that guiding principle uh we

31:48 ↗ talk about the need to balance parking

31:51 ↗ reserves with the neighborhood being

31:55 ↗ walkable okay but I I bring up this one

31:58 ↗ in particular because if the vision is

32:02 ↗ that um sound trans that sound transit

32:05 ↗ is going to serve those folks with buses

32:08 ↗ then the station would need to have a

32:10 ↗ larger number of bus Bays right than if

32:13 ↗ the vision is and you know you know

32:15 ↗ where my concern comes from right it's

32:16 ↗ Marta and the 2,000 stall uh parking

32:20 ↗ garages that are at the end of every

32:21 ↗ single Mar line right so um if we have a

32:25 ↗ vision for how we believe this station

32:28 ↗ we have to we have to talk about how the

32:30 ↗ station will work within Sound Transit

32:32 ↗ as a whole not merely for what we hope

32:35 ↗ to get out of the station right and this

32:37 ↗ issue of how we deal with commuters east

32:40 ↗ of us like I said it has ramifications

32:42 ↗ on um the obvious parking stalls but

32:45 ↗ also the example that I used um bus

32:51 ↗ base so I'm wondering it sounds like

32:54 ↗ there might be some discussion here that

32:56 ↗ maybe we take this to the discussion

33:01 ↗ portion if I just don't think I don't

33:03 ↗ think it's keyed up for that discussion

33:05 ↗ I think I gave an example of something

33:07 ↗ that at some point before this document

33:09 ↗ is formally adopted it seems like the

33:11 ↗ kind of question we'd want to address I

33:13 ↗ I don't believe things are teed up to

33:16 ↗ have that conversation this evening so I

33:18 ↗ think there are items in the document

33:22 ↗ that I would want to bring up uh that

33:24 ↗ speak to those ideas but I kind of want

33:27 ↗ to make sure that we're in the right

33:29 ↗ standpoint so that we can do a lot of

33:31 ↗ back and forth when typically questions

33:35 ↗ are to staff and

33:40 ↗ such but you don't are you saying you

33:43 ↗ don't you're asking the question because

33:46 ↗ you don't think that's there I just well

33:49 ↗ I suspect that there are policy level

33:51 ↗ things around this visioning and guiding

33:53 ↗ principles that need to be hashed out at

33:56 ↗ the level of seven and whether I don't

33:59 ↗ it doesn't sound like we're going to

34:01 ↗ have that conversation this evening but

34:03 ↗ we need to have them before we adopt

34:06 ↗ this great then let's definitely have

34:09 ↗ that conversation because I do want to

34:11 ↗ talk that through in feedback so any

34:14 ↗ other

34:17 ↗ questions no okay let me just check in

34:20 ↗ see if we have any members of the public

34:24 ↗ online council president we do not okay

34:27 ↗ so then going back into comments I know

34:32 ↗ council member Jen had a bunch of um

34:35 ↗ ideas presented there but maybe we

34:40 ↗ start talking about parking and all of

34:45 ↗ that and how it relates to a visioning

34:48 ↗ document so I'll start with uh Deputy

34:51 ↗ counil president D

34:53 ↗ Michelle okay I if I if it's all right

34:56 ↗ I'll get to that question in just a

34:58 ↗ second I just had some general remarks

35:00 ↗ to start off with um my feedback was

35:03 ↗ first of all it's a much more easily

35:05 ↗ read document I really appreciated that

35:08 ↗ that was one of the things that the

35:09 ↗ mobility infrastructure asked for was

35:11 ↗ that uh the readability be uh really for

35:14 ↗ the general public so we can use this in

35:17 ↗ future public

35:18 ↗ engagement

35:20 ↗ um I think uh reading through the vision

35:23 ↗ and then the principles uh I thought

35:26 ↗ they were very isqua

35:29 ↗ in other words they really reflect a lot

35:31 ↗ of other Outreach that we've done and

35:33 ↗ the kind of things that the people in

35:35 ↗ our community are very interested in um

35:38 ↗ uh green spaces and and uh all of those

35:41 ↗ really nice Visions uh I did notice I

35:44 ↗ read through all of the public comments

35:46 ↗ that we received and that you received

35:48 ↗ in your Outreach and I did notice that

35:51 ↗ the highest priority was Safety and

35:53 ↗ Security and comfort uh in the station

35:56 ↗ and so uh and I also noticed there were

35:59 ↗ quite a few comments that said they

36:00 ↗ wanted a public space and we do lack

36:03 ↗ public spaces in isqua so it's very

36:06 ↗ interesting that if you combine those

36:09 ↗ two uh safety and then a place where

36:12 ↗ people can feel comfortable hanging out

36:14 ↗ uh those two kind of go together so uh

36:17 ↗ there are some there are some nice

36:19 ↗ thoughts in there about uh how this

36:21 ↗ could look and feel in our

36:22 ↗ community um we did get comments about

36:26 ↗ tradeoffs not only here tonight but also

36:29 ↗ we got uh Communications email

36:32 ↗ Communications about that and one of the

36:34 ↗ things that I thought uh was in the

36:37 ↗ comments that we received but not maybe

36:39 ↗ so much reflected in the in the final

36:42 ↗ document was this tension between how

36:45 ↗ are we going to preserve the the nature

36:48 ↗ and the character of the community uh we

36:51 ↗ have this multi-million dollar very

36:53 ↗ modern facility that's going to go in

36:56 ↗ and we have the interest in maintaining

36:59 ↗ our history and the character and the

37:01 ↗ look and feel of isqua so um I think

37:05 ↗ that's going to be one of the trade-offs

37:06 ↗ that we're going to be talking about as

37:08 ↗ we go down the road I think we're not

37:10 ↗ ready for the discussion on parking and

37:14 ↗ and access tonight because this is not

37:17 ↗ this is an overall umbrella type of

37:19 ↗ document that will help us narrow in on

37:22 ↗ those things and so um we can you know I

37:25 ↗ don't mind if we talk about parking but

37:26 ↗ I just don't think we're we're ready

37:28 ↗ there this is this is a really highlevel

37:31 ↗ document and to have those other uh

37:34 ↗ discussions I think we don't have the

37:36 ↗ information that we could use to really

37:38 ↗ have those but uh you know we can have

37:42 ↗ that discussion

37:44 ↗ um so uh overall I think it's a very

37:48 ↗ good document it's very

37:50 ↗ aspirational it's like it's like pie in

37:53 ↗ the sky it really is this amazing

37:56 ↗ document we want everything be beautiful

37:58 ↗ but we want it to fit into Oldtown and

38:00 ↗ da da da da uh so there's obviously

38:03 ↗ going to be some things that are going

38:04 ↗ to emerge as more important or more

38:07 ↗ practical or most more Co you know less

38:10 ↗ costly uh that will as we work walk down

38:13 ↗ that trail will come out and emerge uh

38:16 ↗ but I think it's very good to start with

38:18 ↗ an aspirational document that really

38:20 ↗ outlines this will be our dream and when

38:24 ↗ reality sets in we'll have to trim it

38:25 ↗ just a bit so I thought I think good job

38:28 ↗ thank you so

38:30 ↗ much council member Shen um thank you so

38:35 ↗ uh to council member Mar's point about

38:37 ↗ who's the one going line by line I

38:40 ↗ that's like my hobby uh nitpicking

38:43 ↗ language so don't you worry um and I

38:47 ↗ think um overall you know I appreciate

38:49 ↗ that this it seems like it's gotten a

38:50 ↗ lot more plainspoken and better however

38:53 ↗ I still do think that the principles

38:54 ↗ themselves are kind of like awkward to

38:57 ↗ read read like a lot of the sentences

38:59 ↗ are like you're trying to you know put

39:01 ↗ different concepts together into the

39:03 ↗ same sentence

39:05 ↗ and and so that's a bit challenging for

39:07 ↗ me just from you know the guiding

39:09 ↗ principles perspective I think to um

39:11 ↗ council members Mart's point about um

39:13 ↗ the bus connectivity as well um I think

39:17 ↗ that definitely should be something that

39:19 ↗ we highlight at the principles Level

39:20 ↗ under accessibility and connectivity for

39:22 ↗ example it says designed for easy

39:24 ↗ walking biking and public transit okay

39:25 ↗ well public transit you know it's light

39:27 ↗ also does that mean that we're good to

39:28 ↗ go on the public transit or do does it

39:30 ↗ also need to be connected to you know

39:33 ↗ local circulator buses or you know buses

39:35 ↗ from let's say North Bend or snowy you

39:37 ↗ know farther east so I think that should

39:40 ↗ be something that we could move up to

39:41 ↗ the principal level in terms of you know

39:44 ↗ just big picture what we want to do um

39:47 ↗ and I had other comments that I said in

39:49 ↗ an email for example like uses and

39:51 ↗ experiences to me doesn't seem like a

39:53 ↗ principle in and of itself maybe like

39:55 ↗ diverse or varied uses and experience

39:57 ↗ uses and experiences um and yeah I think

40:01 ↗ just generally I I really did like the

40:04 ↗ um the you know uh what the specific

40:08 ↗ actions they were very clear um and

40:11 ↗ whereas I think the principles

40:12 ↗ themselves when there's like a you know

40:14 ↗ a big paragraph it is a bit harder to

40:16 ↗ read and maybe bullet pointing it out

40:17 ↗ could make it easier

40:22 ↗ so um council member Hall do you have

40:25 ↗ yours up down Council member

40:29 ↗ Ray um I'm going to kind of pile on

40:32 ↗ where coun our Deputy council president

40:35 ↗ D Michelle was going and and this may be

40:38 ↗ a discussion around uh document purpose

40:42 ↗ that we might want to be more clear on

40:44 ↗ um you know what's the difference

40:45 ↗ between guiding principles and

40:47 ↗ implementation plan um and and I think

40:51 ↗ and so I'm looking through this from a

40:52 ↗ specific lens and I think others may be

40:54 ↗ looking at it from a different lens so

40:56 ↗ the fact that we're seeing different

40:56 ↗ things is probably not too surprising um

40:59 ↗ I think the parking discussion is

41:01 ↗ premature I think that's going to be

41:03 ↗ completely dictated by where Sound

41:04 ↗ Transit wants to go um as much as we

41:07 ↗ like to push them or uh influence their

41:10 ↗ Direction they are ultimately going to

41:12 ↗ decide what the service model is going

41:13 ↗ to look like whether or not it's there's

41:15 ↗ going to be feeder buses whether or not

41:16 ↗ there's going to be um not feeder buses

41:20 ↗ and we're have a lot of bike racks

41:21 ↗ that's up to them I think that's their

41:23 ↗ discussion or their choice that we can

41:25 ↗ influence um so think that the the

41:28 ↗ document for me helps us to get our

41:31 ↗ heads aligned to what I think are the

41:34 ↗ principles so when conversations start

41:37 ↗ to come up with our partners be it wash

41:39 ↗ do or be it sound transit or be it uh

41:41 ↗ King County that we're in a position to

41:43 ↗ say you know we've already thought this

41:45 ↗ went through from a um high level

41:48 ↗ perspective um and we um have a

41:51 ↗ thoughtful way to respond to various

41:53 ↗ proposals so yes I agree with much that

41:56 ↗ I've heard from everybody but I think

41:59 ↗ from my understanding of the purpose of

42:01 ↗ the document it seems to work well for

42:04 ↗ me um so I'll just leave it there and

42:07 ↗ I'm looking forward to what council

42:09 ↗ member Marts has to say council member

42:13 ↗ Marts so I agree that this is not the

42:17 ↗ time to say that we need 427 parking SP

42:20 ↗ spaces not 428 parking spaces this

42:22 ↗ document has some of the kinds of

42:25 ↗ details that I think are important in a

42:27 ↗ vision statement I love the the nod to

42:30 ↗ distributed parking strategy right

42:32 ↗ saying that basic an example of a level

42:34 ↗ of detail that I think should be a

42:36 ↗ division statement is we have a

42:38 ↗ brilliant traff uh Transit Center and we

42:40 ↗ have a brilliant parking ride and this

42:42 ↗ new uh this new facility should take

42:45 ↗ advantage of that and should have um

42:48 ↗ facilities to to that incorporate using

42:50 ↗ that that is a bit us telling Sound

42:53 ↗ Transit how to do its job and Metro how

42:55 ↗ to do their job but that's part of our

42:57 ↗ job right we're trying to tell them what

42:59 ↗ this facility should look like in our

43:01 ↗ community and and it'll involve

43:03 ↗ providing them some feedback so that is

43:05 ↗ a level of detail that I think is

43:06 ↗ appropriate in this document and so to

43:09 ↗ have that I think we should also have a

43:11 ↗ level of detail that says what do we

43:13 ↗ think is going to happen given that

43:14 ↗ we're the the last station on the line

43:16 ↗ right do we think there's any chance

43:18 ↗ he'll extend the line out to to

43:20 ↗ Northbend or not and if not um you know

43:24 ↗ what uh how do we think that's going to

43:26 ↗ work I think that is the same way that

43:29 ↗ to me is the same level of detail and

43:32 ↗ appropriate for this document as the

43:34 ↗ discussion on distributed parking

43:35 ↗ strategy the only difference is

43:37 ↗ distributed parking strategy is only

43:39 ↗ it's sort of putting a fence around it

43:41 ↗ and saying we're just talking about

43:43 ↗ things that are in the city but I think

43:44 ↗ being the last station on the line we

43:46 ↗ have to talk about the folks who live to

43:48 ↗ the east of us there are more of whom

43:50 ↗ every year and I want to make sure that

43:52 ↗ when this gets built that our friends

43:54 ↗ and Neighbors in squami and Northbend

43:57 ↗ you know that this is something that

43:59 ↗ helps make their lives easier too right

44:01 ↗ they're going to want to be in on it um

44:03 ↗ and uh some of them pay Transit Transit

44:07 ↗ fees the way we do and uh so they get to

44:10 ↗ that you know we want to have a system

44:11 ↗ that works well for them as well thank

44:16 ↗ you I'll go ahead and go then um I I

44:20 ↗ appreciate what council member Mars has

44:22 ↗ said there I do think this um document

44:25 ↗ has gotten into some of the det dets

44:27 ↗ around and presents a theory of how we

44:32 ↗ want to build and how we want to create

44:34 ↗ around the distributed parking strategy

44:38 ↗ and also features you know things about

44:41 ↗ balancing walkability with vehicle

44:43 ↗ oriented infrastructure and things like

44:46 ↗ that I I think

44:50 ↗ recognizing

44:52 ↗ that this will likely be a bus

44:55 ↗ connectivity place place and that we are

44:58 ↗ going to have to navigate that as a

45:01 ↗ component of also having a walkable

45:03 ↗ station area that creates a you know

45:06 ↗ livable Lively area I think is important

45:10 ↗ because it's going to be a portion of a

45:14 ↗ potential conflict if a lot of the base

45:18 ↗ floor area isn't just the light rail um

45:25 ↗ the Light Rail and

45:27 ↗ and station area but also bus transit

45:32 ↗ connectivity um that's that's an

45:34 ↗ important element of understanding what

45:37 ↗ the conflicts and the design

45:39 ↗ capabilities will be I think

45:43 ↗ similarly

45:44 ↗ I I could see conflicts around this

45:48 ↗ being an End of Line Station that has

45:50 ↗ the maintenance facilities and how we

45:53 ↗ are able to navigate that as an idea

45:57 ↗ with these concepts of

46:00 ↗ walkability bus

46:03 ↗ connectivity number of parking you know

46:06 ↗ ideas so I I do think there is there are

46:10 ↗ some ideas there whether those need to

46:13 ↗ be in this document or represented in

46:16 ↗ another way but they do seem to be

46:19 ↗ potential conflicts

46:22 ↗ um which is a lot of what I see in this

46:25 ↗ document in this area

46:28 ↗ so council member Hall haven't heard

46:31 ↗ from you yet

46:33 ↗ anything um the most important thing

46:36 ↗ from my perspective is just to start

46:38 ↗ using it I think it's I agree with

46:40 ↗ council member Ry I think this fits all

46:42 ↗ of the uses that it's needed as a tool

46:45 ↗ some of these other questions are very

46:47 ↗ detailed and addressed in the planning

46:50 ↗ guide as things that we'll get to this

46:52 ↗ is a highlevel just visioning tool that

46:56 ↗ primarily the users are our staff in

46:58 ↗ terms of how they interact to a Sound

47:00 ↗ Transit and how we how us as Council

47:03 ↗ think about the different policy changes

47:05 ↗ that we need to make we're going to go

47:06 ↗ back to this document and say oh okay it

47:09 ↗ does say that it should be designed for

47:12 ↗ easy walking biking and public transit

47:14 ↗ or okay it does say that okay so now

47:16 ↗ what do we take from that into policy so

47:19 ↗ um I think in terms of what this

47:21 ↗ document needs to be if fits the bill

47:22 ↗ exactly right and the most important

47:24 ↗ thing is just to start using it as the

47:26 ↗ tool that it is but if there are changes

47:28 ↗ that you're hearing that are sounding

47:30 ↗ simple I mean everything sounds that

47:32 ↗ we're talking about sounds within the

47:34 ↗ exact same ethos that exists already in

47:36 ↗ the report so if there are changes that

47:38 ↗ better capture kind of what you're

47:39 ↗ hearing up here I'm supportive of that

47:42 ↗ too I will just make a comment that the

47:46 ↗ folks who were in mobility and

47:48 ↗ infrastructure seem to have a clearer

47:52 ↗ understanding and sense of it and others

47:55 ↗ are maybe feeling a little bit

47:57 ↗ discomfort in wanting to make sure that

48:01 ↗ cuz when I'm reading over this I

48:03 ↗ definitely pulled out the distributed

48:05 ↗ parking strategy but didn't necessarily

48:08 ↗ see a vision of oh this is you know

48:13 ↗ going to be walkable versus car like I

48:19 ↗ still feel some conflicts there so I'll

48:21 ↗ I'll at least put that out uh Deputy

48:23 ↗ council

48:24 ↗ president yeah just real real quickly I

48:27 ↗ uh to me reading through the comments

48:29 ↗ was really the most helpful thing

48:30 ↗ because it is a high level document and

48:33 ↗ and a high level vision and then you

48:36 ↗ read through the comments that we

48:38 ↗ received and you see the Nuance that is

48:40 ↗ around a lot of the concepts that they

48:42 ↗ tried to capture in a sentence or two

48:44 ↗ and we had over 800 people participate

48:47 ↗ right so we have pages and pages and

48:49 ↗ pages of commentary and uh reading

48:52 ↗ through those commentaries you really

48:53 ↗ get a feel for exactly what that

48:55 ↗ highlevel language is is referring to um

48:59 ↗ uh I think conflict is is almost

49:02 ↗ inherent in the in it and uh identifies

49:05 ↗ in some ways we heard from uh through

49:08 ↗ email from someone who thought that we

49:10 ↗ hadn't identified the tradeoffs and I

49:12 ↗ thought yeah we identified them really

49:14 ↗ well it the conflicts are very clear

49:17 ↗ where we've got this value and this

49:19 ↗ value and the community likes both of

49:21 ↗ those values but in the process of

49:23 ↗ planning this we're going to have to

49:25 ↗ hone those and figure out where we can

49:28 ↗ find compromise and where it's going to

49:30 ↗ be impossible to find compromise and

49:32 ↗ then at that point we'll have to trade

49:34 ↗ off some things so um I think I think

49:37 ↗ overall we've it's it's done a good job

49:40 ↗ of surfacing the the things and

49:43 ↗ especially the community engagement part

49:45 ↗ of it surfaced those conflicts those

49:48 ↗ possible areas where we're going to need

49:49 ↗ to do trade-offs so thank

49:54 ↗ you maybe I'm going to see if council

49:58 ↗ member Joe has any comments we'll see

50:01 ↗ about unmuting you from our side council

50:05 ↗ member Joe thank

50:08 ↗ you yeah great discussion that uh I've

50:11 ↗ been listening to I appreciate the staff

50:14 ↗ uh putting this together and making some

50:17 ↗ of the changes that we had talked about

50:18 ↗ the last meeting um I will be uh new to

50:21 ↗ the mobility and infrastructure

50:23 ↗ committee this year um so I appreciate

50:25 ↗ that we have um council member Ray is a

50:28 ↗ carryover with some of the institutional

50:30 ↗ knowledge we'll certainly listen to the

50:32 ↗ comments and try to make sure that we're

50:35 ↗ um incorporating the comments in there

50:37 ↗ particularly as we look toward parking

50:40 ↗ access and um you know how walkable the

50:43 ↗ um the the sound center Transit will be

50:46 ↗ for us as well um I think that uh I

50:49 ↗ would agree with uh uh the general

50:52 ↗ comments that this is a Visionary

50:54 ↗ document to give us guidance at this

50:56 ↗ point but I appreciate that everyone on

50:58 ↗ the council seems to be pressing to try

51:00 ↗ to make this the best product possible

51:02 ↗ for our citizens and uh I think that if

51:05 ↗ we continue on down that track we're

51:07 ↗ going to potentially get something that

51:09 ↗ uh will work for our citizens and will

51:11 ↗ be a good asset so great discussions T I

51:14 ↗ appreciate all the hard work and that's

51:15 ↗ all I have right

51:18 ↗ now thank you council member Joe going

51:21 ↗ back to council member Jen um yeah one

51:24 ↗ other thing that I wanted to surface um

51:26 ↗ going off both council members Mart's

51:28 ↗ comments on you know Marta which I

51:30 ↗ believe is in Atlanta as well as one of

51:31 ↗ the uh emails we received from the

51:33 ↗ public from the public about you know we

51:35 ↗ should look at all the examples

51:36 ↗ highlighted in here it's like Redmond

51:38 ↗ Federal Way other station in Redmond

51:41 ↗ Kirkland and I think we should you know

51:43 ↗ potentially broaden our Horizons beyond

51:45 ↗ that to and see hey you know what are

51:47 ↗ some other endof the Line stations out

51:48 ↗ there in the world that work well or

51:50 ↗ actually that don't work well like are

51:52 ↗ we open to doing some case studies that

51:53 ↗ didn't work well so we can avoid

51:55 ↗ replicating their mistakes I think just

51:57 ↗ looking at what went well and trying to

51:58 ↗ replicate that then I think the more

52:01 ↗ important things is like what should we

52:02 ↗ avoid that went really badly um and uh

52:07 ↗ yeah that was

52:10 ↗ it okay so where are we sitting we've

52:14 ↗ heard a little bit of conflict um

52:18 ↗ ultimately maybe enough to move forward

52:22 ↗ with

52:25 ↗ this any thought council member Hull I

52:30 ↗ was just going to say I'm not

52:31 ↗ necessarily hearing any conflict unless

52:33 ↗ you are staff are are you hearing

52:35 ↗ anything that you wouldn't necessarily

52:36 ↗ want to update in here I I haven't heard

52:38 ↗ anything um necessarily that um council

52:42 ↗ member Hall members of the council uh I

52:44 ↗ think there's been a couple themes here

52:46 ↗ one has been you want to make sure this

52:48 ↗ is as valuable a document as possible

52:50 ↗ and as clear and concise as possible and

52:52 ↗ we've heard from a few of you this

52:54 ↗ evening some suggestions uh on some

52:57 ↗ language if the council would like us to

52:59 ↗ make one last pass uh leaving the

53:02 ↗ concepts as is and see what we could do

53:05 ↗ um word smithing a little bit um we're

53:07 ↗ happy to do that at your direction so I

53:09 ↗ think that's the the first question or

53:11 ↗ if you feel that the language that's

53:13 ↗ there is sufficient and we can move

53:15 ↗ forward um the second piece has been the

53:17 ↗ discussion regarding parking uh I think

53:19 ↗ you've heard uh from members of the

53:21 ↗ mobility infrastructure committee and

53:23 ↗ from staff a little bit and Andrea

53:24 ↗ Schneider is also on the line and and if

53:27 ↗ you'd like to hear from her as well um

53:30 ↗ this tension between you know highlevel

53:33 ↗ big picture Direction and how we move

53:36 ↗ forward you know if the council feels

53:39 ↗ that this endof the-line parking issue

53:41 ↗ is you know so critical um I think we'd

53:44 ↗ like to hear that tonight from you

53:47 ↗ because then it may be necessary to make

53:48 ↗ a change um you know we're trying as

53:51 ↗ your staff to you know to be honest

53:53 ↗ actors here in that uh you gave us

53:56 ↗ direction to reach out to the community

53:58 ↗ we reached out to the community and what

54:00 ↗ you see in these documents does reflect

54:02 ↗ concern about this sort of

54:04 ↗ interoperability not only from cars but

54:07 ↗ buses all the the tensions we feel we've

54:09 ↗ covered that however you are the policy

54:12 ↗ makers if you as a body feel it still

54:14 ↗ needs to be hit a little harder um at

54:17 ↗ this point we're happy to do that as

54:19 ↗ well at your direction our

54:21 ↗ administration's feeling is is that

54:23 ↗ we've got it covered um the language

54:26 ↗ that exists knowing that there's so much

54:29 ↗ more to come and we want to be

54:30 ↗ respectful to the things that the

54:32 ↗ community and our boards and commissions

54:34 ↗ highlighted because they spent the

54:36 ↗ better part of a year uh working on this

54:39 ↗ document as well so I think council

54:41 ↗ members those are the two questions one

54:44 ↗ uh is additional word smithing requested

54:47 ↗ to make it even more clear the concepts

54:50 ↗ that they there and then secondly does

54:51 ↗ the council wish any other changes

54:54 ↗ regarding the end of the line parking

54:58 ↗ okay uh council member

55:00 ↗ Ray um City administrator thanks for

55:03 ↗ teeing that up um I think that there's a

55:06 ↗ question here

55:08 ↗ that wraps around this notion of uh

55:12 ↗ parking versus additional feeder buses

55:14 ↗ versus whatever is that vehicle and I

55:18 ↗ would like as we go through this final

55:20 ↗ um cut at Vision or guiding principles

55:24 ↗ if we can tease that back to the

55:25 ↗ principle which is something Al along

55:27 ↗ the lines of um the

55:32 ↗ design

55:34 ↗ incorporates the needs of people in

55:37 ↗ isqua as well as the surrounding

55:40 ↗ Community um and

55:42 ↗ I looking for Wordsmith here but that's

55:46 ↗ horrible wording but what I want to

55:47 ↗ capture is what what council member Mars

55:50 ↗ alluded to which is this isn't just our

55:52 ↗ toy to play with it's a regional toy

55:54 ↗ we're End of Line That's special to be

55:56 ↗ the end of the line and we need to have

55:59 ↗ um some principles that talk about how

56:02 ↗ we show up not just for a squad but for

56:05 ↗ those outside of esquad that will be

56:06 ↗ using the esqua

56:09 ↗ station so I will note there is a um

56:14 ↗ point in there it says um the stationary

56:16 ↗ must find the right balance between

56:18 ↗ different priorities such as serving

56:19 ↗ local community members while also

56:21 ↗ meeting Regional Comm commuter needs as

56:23 ↗ an endof the-line station without

56:25 ↗ increasing traffic so I think there is

56:27 ↗ some that is in there but perhaps what I

56:32 ↗ might offer is just a little bit more on

56:36 ↗ the fact that we're an end ofth Line

56:37 ↗ station and we'll have to navigate that

56:41 ↗ as a particular and perhaps that

56:44 ↗ satisfies the um Concepts here given

56:47 ↗ that we probably won't have all that

56:49 ↗ much control over parking choices

56:52 ↗ because it's Sound Transit but uh

56:55 ↗ council member mark

56:57 ↗ we won't have much control over parking

56:59 ↗ options because it's Sound Transit

57:02 ↗ because it's their budget wasn't wasn't

57:05 ↗ this the conversation that I've brought

57:07 ↗ up like three times in the last six

57:08 ↗ months and I keep getting reassured that

57:11 ↗ by us saying what we want we will have

57:13 ↗ some control over the parking situation

57:16 ↗ I mean the lowest cost option will put

57:18 ↗ it be to put a gigantic parking lot in

57:21 ↗ the heart of our city that's how Atlanta

57:24 ↗ did it uh that's the that's the lowest

57:28 ↗ cost option we we're dancing around the

57:31 ↗ issue which is we all believe that that

57:34 ↗ that the the transit station here should

57:37 ↗ have feeder buses that come in from the

57:39 ↗ East that it shouldn't be cars that all

57:41 ↗ come in because we won't have the

57:43 ↗ capacity for it and I think if that's

57:45 ↗ what we believe and that's the vision

57:47 ↗ and that's what we think is best for our

57:49 ↗ planet and for our community we should

57:51 ↗ say so and uh if we don't have any

57:54 ↗ control over what how much Park goes

57:56 ↗ into this station then then I'm

57:58 ↗ fundamentally opposed to this station we

58:00 ↗ do not need multi station parking lots

58:04 ↗ in our city and it would be bad for our

58:06 ↗ city and we should help Sound Transit

58:09 ↗ get to a place where they build their uh

58:13 ↗ their public transportation options out

58:16 ↗ to Northbend and squami such that

58:19 ↗ because we know that's better for our

58:20 ↗ both our community and for the planet

58:22 ↗ thank

58:22 ↗ you uh I will clarify that what I meant

58:26 ↗ was I don't think we would be able to

58:29 ↗ get sound transit to increase beyond

58:31 ↗ what st3 was allocated um was what I

58:36 ↗ meant out of that Deputy council

58:38 ↗ president D Michelle so when we were

58:40 ↗ working on the light rail guide I

58:42 ↗ believe we had commentary at that point

58:44 ↗ about uh the placement which we're not

58:47 ↗ we're not this is not the decision

58:49 ↗ tonight about placement but that the

58:51 ↗ placement of the of the station should

58:54 ↗ uh be amenable to sound trans and

58:57 ↗ expansion out to further into Far East

59:00 ↗ King County uh so that you know the fact

59:03 ↗ that we are end of the line we might not

59:06 ↗ be end of the line 20 30 40 years after

59:10 ↗ 2042 we are talking really long range at

59:13 ↗ this point so uh I think that that

59:16 ↗ concept is is out there but this that

59:19 ↗ really is a placement issue uh not not

59:23 ↗ what is what is this going to look like

59:24 ↗ issue and um so

59:29 ↗ uh there are so many options out there

59:31 ↗ still about where this could be placed

59:33 ↗ it could be placed further down I90 you

59:36 ↗ know there are lots of issues about

59:39 ↗ where it could be placed and then or

59:41 ↗ just a reminder that the city does have

59:44 ↗ the the uh zoning and the permit uh you

59:48 ↗ know power uh to say no we can't we

59:52 ↗ can't do that so we can't put this in

59:54 ↗ downtown isqua for example so so um I

59:59 ↗ think that uh we we shouldn't conflate

1:00:02 ↗ the decision about where this station is

1:00:05 ↗ going to go with how it's going to look

1:00:08 ↗ or the the elements of design that we

1:00:10 ↗ want in it and so forth which is what

1:00:13 ↗ this document is about so that's my

1:00:17 ↗ comments okay I think we have all

1:00:20 ↗ created a lot of feedback um is this

1:00:24 ↗ something

1:00:26 ↗ then that you are ready to take

1:00:30 ↗ forward so based on the council's

1:00:33 ↗ discussion this evening what we will

1:00:34 ↗ bring back and again we've got 400 pages

1:00:37 ↗ in this we're not going to repeat that

1:00:39 ↗ you when you get this back for Action at

1:00:42 ↗ a full council meeting which I think

1:00:43 ↗ April 7th is the date we're looking at

1:00:45 ↗ you'll have one document and that will

1:00:47 ↗ be the document you're asking approval

1:00:49 ↗ on um we will uh take all the comments

1:00:52 ↗ on Clarity and issues related to that

1:00:56 ↗ and we'll do one last scrub um the

1:00:59 ↗ administration's feeling is that you

1:01:01 ↗ know the parking language is sufficient

1:01:02 ↗ we'll review the tape from tonight we'll

1:01:05 ↗ look at the language and if it makes

1:01:07 ↗ sense to tweak something here or there

1:01:09 ↗ which we feel uh more finally gives the

1:01:12 ↗ council's direction on this we will do

1:01:14 ↗ that and present it back to you for

1:01:16 ↗ final

1:01:17 ↗ approval I would just highlight I think

1:01:20 ↗ there was more conversation about end of

1:01:21 ↗ the line and how the that is special

1:01:26 ↗ than specifically parking would just be

1:01:28 ↗ my ask okay and so what so we will we

1:01:31 ↗ will carefully review the tape and uh

1:01:35 ↗ but come back to you with one document

1:01:37 ↗ which will be what 20 30 pages not even

1:01:40 ↗ that it maybe be 178 17 pages so that's

1:01:43 ↗ close to 20 or 30 uh so there'll be a 17

1:01:46 ↗ Page item versus a 400 page item so we

1:01:48 ↗ will stipulate that you have all read

1:01:51 ↗ the Outreach and the comments and so

1:01:53 ↗ we'll have one tight document to bring

1:01:56 ↗ back we'll put it on regular business so

1:01:58 ↗ we have one final opportunity to walk

1:02:00 ↗ you through it uh and then hopefully get

1:02:02 ↗ your approval and move forward with this

1:02:05 ↗ very big

1:02:07 ↗ project H all fantastic okay thank you

1:02:12 ↗ Thomas appreciate your time on all of

1:02:14 ↗ that I I do actually have just a final

1:02:17 ↗ Fun Run of I I do have a little bit more

1:02:19 ↗ presentation um very timely downtown

1:02:23 ↗ Redmond station is opening May 10th and

1:02:26 ↗ I've created for you a self-guided tour

1:02:28 ↗ if you are interested um this is very

1:02:31 ↗ optional um but just so you know there

1:02:34 ↗ will be 10 stations that will be

1:02:35 ↗ accessible from South bellevie Station

1:02:38 ↗ all the way to downtown Redmond um if

1:02:41 ↗ you're interested I have provided some

1:02:43 ↗ questions for you to think about as you

1:02:45 ↗ take this ride um it doesn't have to be

1:02:47 ↗ on May 10th but that is an opening

1:02:49 ↗ ceremony and it'll be a lot of fun and I

1:02:51 ↗ will be there um so if you were to go to

1:02:55 ↗ the these stations uh considering just

1:02:58 ↗ how this might apply to isqua things

1:03:00 ↗ that you like or don't like um I have

1:03:03 ↗ three questions for you to consider um

1:03:05 ↗ how does the station feel um does it

1:03:07 ↗ feel like a destination or just a

1:03:09 ↗ stop um is it easy for you to get around

1:03:13 ↗ uh without a car or with a car and who

1:03:16 ↗ might be benefiting from the

1:03:17 ↗ stationaries development so very

1:03:20 ↗ open-ended questions but these will be

1:03:22 ↗ particularly interesting for us to be

1:03:24 ↗ thinking about um as we plan our station

1:03:27 ↗ thank you very useful thanks

1:03:31 ↗ Thomas oh we get to look forward to more

1:03:33 ↗ and more light rail station openings for

1:03:36 ↗ years to come years to come okay next up

1:03:40 ↗ we have Comm 0106 utility rate steud

1:03:43 ↗ introduction and revenue requirements

1:03:45 ↗ presented by Emily Moon Public Works

1:03:47 ↗ director we've also got Matt Ellis I was

1:03:50 ↗ like I know you were back there but you

1:03:52 ↗ were hidden down there and uh sir teras

1:03:56 ↗ off our consultant and Emily you have

1:04:00 ↗ not brought us an easy topic to end the

1:04:04 ↗ night feel like this is just a

1:04:07 ↗ lighthearted walk in the park right

1:04:24 ↗ okay good evening city council I am

1:04:26 ↗ Emily Moon I'm the Public Works director

1:04:29 ↗ and I am joined by Matt Ellis from my

1:04:31 ↗ department and Sergey tasov who is from

1:04:35 ↗ our Consulting uh partner who is helping

1:04:39 ↗ to do our modeling and provide us with

1:04:41 ↗ all sorts of wisdom on best

1:04:44 ↗ practices this is a big topic we only

1:04:47 ↗ undertake this work every few years um

1:04:50 ↗ so it is important for us to go about it

1:04:52 ↗ in a thoughtful way it also provides us

1:04:55 ↗ the opportunity

1:04:57 ↗ to True up numbers so we have lived a

1:05:01 ↗ few more years we have different idea of

1:05:04 ↗ what our Capital needs are different

1:05:06 ↗ understanding of our operating needs and

1:05:08 ↗ so on and so it's important for us to

1:05:10 ↗ refresh where we are with the utility

1:05:14 ↗ funds so tonight I'm just going to give

1:05:17 ↗ a quick introduction of the study and

1:05:19 ↗ then turn it over to Sergey so that he

1:05:21 ↗ can walk you through um more components

1:05:25 ↗ of it

1:05:26 ↗ our hope is that we can share where

1:05:28 ↗ we're headed on assessing the revenue

1:05:30 ↗ requirements for each fund and provide

1:05:33 ↗ an opportunity to receive some of your

1:05:38 ↗ feedback tonight there are two specific

1:05:41 ↗ things we're hoping to get from you one

1:05:44 ↗ is to just confirm the way in which you

1:05:47 ↗ would like us to continue the dialogue

1:05:49 ↗ around the utility rate study there are

1:05:51 ↗ multiple components we foresee future

1:05:54 ↗ meetings our plan

1:05:56 ↗ um as proposed would be to take the bulk

1:05:58 ↗ of it to the mobility and infrastructure

1:06:01 ↗ committee second piece is we are hopeful

1:06:04 ↗ that you can help confirm tonight your

1:06:07 ↗ preference on the rate scenarios we've

1:06:09 ↗ given you a few options on each of the

1:06:11 ↗ utility funds of course there are

1:06:15 ↗ countless scenarios uh that we could

1:06:18 ↗ have presented to you we certainly have

1:06:21 ↗ played with uh many many for each of the

1:06:23 ↗ utility funds uh but we think these

1:06:26 ↗ illustrate the big choices and so we're

1:06:28 ↗ hoping to get your feedback on those in

1:06:31 ↗ doing so as we present them we'll be

1:06:33 ↗ talking about these things that are in

1:06:35 ↗ the gray font so capital investment and

1:06:38 ↗ reserves debt um how the cash flow for

1:06:42 ↗ each fund is uh affected over time and

1:06:46 ↗ then our achievement of various

1:06:48 ↗ financial management practices and

1:06:53 ↗ policies so this is our overall goal

1:06:55 ↗ this is the goal that was expressed uh

1:06:58 ↗ in our RFQ it's uh very common goal for

1:07:03 ↗ utility rate studying and simply to

1:07:05 ↗ develop new rates for our funds that

1:07:08 ↗ provide for operational and capital

1:07:10 ↗ needs over the next 5year period but we

1:07:13 ↗ look longer term so that we have an eye

1:07:16 ↗ toward the

1:07:17 ↗ future that's our big picture

1:07:20 ↗ goal fine tuning just a little bit more

1:07:23 ↗ we have these objectives again these are

1:07:25 ↗ where ref reflected in the RFP there are

1:07:27 ↗ common objectives for utility rate study

1:07:30 ↗ uh these are also found throughout uh

1:07:33 ↗ various Utility Fund plans system plans

1:07:37 ↗ that we have and so our our goal is to

1:07:40 ↗ ensure that our future rates will be

1:07:42 ↗ predictable smooth and

1:07:44 ↗ uniform establish a defensible basis for

1:07:47 ↗ assigning the cost shares and providing

1:07:49 ↗ equity for rate payers cover the full

1:07:52 ↗ cost of providing Utility Services now

1:07:54 ↗ and in the future

1:07:56 ↗ provide sufficient operating reserves to

1:07:58 ↗ protect the solvency of the funds and

1:08:00 ↗ afford the investment in capital

1:08:02 ↗ infrastructure to ensure current and

1:08:04 ↗ future customers pay their share of the

1:08:07 ↗ system's

1:08:12 ↗ costs this is the timeline that we are

1:08:16 ↗ proposing uh this this is our best laid

1:08:20 ↗ plan and as you see we're hoping after

1:08:23 ↗ this meeting to take cost of service

1:08:25 ↗ analysis deep dive the rate design and

1:08:28 ↗ the uh General facility charges

1:08:31 ↗ discussion to the mobility and

1:08:34 ↗ infrastructure committee hopefully

1:08:35 ↗ returning with a full package that would

1:08:38 ↗ be that draft study with all the

1:08:40 ↗ recommendations and then returning to

1:08:43 ↗ the full city council for uh review and

1:08:46 ↗ adoption at the end of the

1:08:51 ↗ summer I want to touch on just a couple

1:08:54 ↗ of assumptions or inputs that we have on

1:08:58 ↗ the study before I turn it over to Serge

1:09:01 ↗ uh these are uh inputs that we had to

1:09:05 ↗ reflect on a little bit and make sure

1:09:07 ↗ that we were uh providing some guidance

1:09:09 ↗ to the Consultants on

1:09:12 ↗ this the first is

1:09:15 ↗ Staffing so I wanted to be clear about

1:09:17 ↗ what we have modeled in each of the

1:09:19 ↗ scenarios these are the FTE additions

1:09:23 ↗ that are in the background on each of

1:09:26 ↗ those

1:09:27 ↗ scenarios you can see I've added some

1:09:30 ↗ data just to um back up uh some of the

1:09:33 ↗ rationale for why we have proposed these

1:09:36 ↗ positions into the future but I wanted

1:09:38 ↗ to clarify of these

1:09:40 ↗ 11.75 FTE five of these positions were

1:09:44 ↗ included in the adopted 2526 biannual

1:09:47 ↗ budget so it's the remaining uh 6.75

1:09:52 ↗ that are in the model and uh certainly

1:09:55 ↗ would be pending future budget

1:09:57 ↗ deliberations by the city council but

1:09:59 ↗ for the purpose of planning for the

1:10:02 ↗ future we want to make sure that we had

1:10:03 ↗ modeled the additional staffing

1:10:08 ↗ needs the second piece I wanted to just

1:10:10 ↗ mention before I turn it over is we have

1:10:14 ↗ given you a scenario scenario number

1:10:16 ↗ three for the storm water fund where we

1:10:19 ↗ have reduced the modeled Capital program

1:10:23 ↗ both by modifying timing or scope or

1:10:26 ↗ funding source non rate revenue of some

1:10:29 ↗ of the nearer term CIP projects and also

1:10:32 ↗ by capping the Assumption for Capital

1:10:35 ↗ expenditures Beyond

1:10:36 ↗ 2030 to a level that's consistent with

1:10:40 ↗ uh more of our recent historical

1:10:43 ↗ spending that's the background on those

1:10:46 ↗ two assumptions that I know Sergey

1:10:47 ↗ wasn't going to talk to in depth but he

1:10:50 ↗ is a lot more so I'm going to turn it

1:10:52 ↗ over to him now

1:11:00 ↗ well good evening Council and uh thank

1:11:02 ↗ you for taking the time this evening to

1:11:04 ↗ meet with me to talk about utility rates

1:11:07 ↗ for the water sewer and storm water

1:11:08 ↗ utility as Emily mentioned my name is s

1:11:10 ↗ rasa with FCS and virtually I actually

1:11:13 ↗ have with me joining Paul Quinn who's

1:11:16 ↗ been leading the technical portion of

1:11:17 ↗ the study so in case we get into any

1:11:20 ↗ specific questions he'll be able to pop

1:11:22 ↗ in if necessary to answer a little bit

1:11:24 ↗ more details since I don't have have the

1:11:25 ↗ background the backup with me now as I

1:11:29 ↗ present sometimes I get a little really

1:11:31 ↗ excited about rates and I start talking

1:11:32 ↗ really quickly so do let me know if I'm

1:11:36 ↗ just going too fast and I'll definitely

1:11:38 ↗ slow

1:11:39 ↗ down now before we dive into the

1:11:41 ↗ presentation itself just wanted to

1:11:42 ↗ provide you with a brief background

1:11:44 ↗ we're going to start out with a quick

1:11:46 ↗ refresher of the findings of the prior

1:11:47 ↗ study which was completed in 2020 then

1:11:50 ↗ we'll we'll move on to the big picture

1:11:52 ↗ kind of methodology behind utility rate

1:11:55 ↗ setting just providing you with a little

1:11:56 ↗ bit of Education in terms of what

1:11:58 ↗ actually goes into these type of studies

1:12:00 ↗ what are the steps included and then

1:12:01 ↗ we'll dive into going over the key

1:12:03 ↗ assumptions that went into the analysis

1:12:05 ↗ the key components of the study and then

1:12:07 ↗ we'll we'll go over the preliminary

1:12:09 ↗ results focusing on that first step of

1:12:11 ↗ the race process and we'll go over all

1:12:14 ↗ the steps kind of conceptually speaking

1:12:16 ↗ in a couple of

1:12:17 ↗ slides at any time if you have any

1:12:19 ↗ questions please do let me know and we

1:12:21 ↗ can pause and answer answer anything you

1:12:24 ↗ have so just a quick refresher here the

1:12:27 ↗ the last study was completed in 2020

1:12:29 ↗ right in the middle of the pandemic uh

1:12:31 ↗ so there was quite a few issues that

1:12:33 ↗ that the city was trying to address as

1:12:34 ↗ other communities have during that time

1:12:37 ↗ uh the result of the study brought forth

1:12:40 ↗ a four-year implementation race strategy

1:12:42 ↗ I believe the the the initial year 2021

1:12:45 ↗ no increases were implemented so the

1:12:47 ↗ race strategy at that time started in 22

1:12:50 ↗ and went through 2025 so technically a

1:12:53 ↗ 4-year implementation plan

1:12:55 ↗ now the study at that time also

1:12:57 ↗ forecasted cost beyond the 5year period

1:13:00 ↗ or the no increases plus 4year period

1:13:03 ↗ but uh the city likes to revisit things

1:13:06 ↗ as good practice before moving moving

1:13:08 ↗ too far out uh into the future when

1:13:11 ↗ you're adopting actual rate increases

1:13:14 ↗ and that's why we're here today we're

1:13:15 ↗ right at that point in time where the

1:13:17 ↗ prior plan has expired and before any

1:13:19 ↗ new adjustments are implemented we want

1:13:21 ↗ to recalibrate we want to make sure

1:13:23 ↗ everything still makes sense and take a

1:13:25 ↗ look if we need to deviate or or we can

1:13:27 ↗ stay the

1:13:29 ↗ course now before getting into the

1:13:31 ↗ specifics just a brief outline of the

1:13:33 ↗ overall rate study process on here

1:13:35 ↗ you'll see the methodology utilized in

1:13:37 ↗ typical rate setting when performing a

1:13:39 ↗ comprehensive rate study now typically a

1:13:42 ↗ comprehensive study such as this one

1:13:44 ↗ that we're performing for the water and

1:13:45 ↗ sewer utilities primarily as well as

1:13:47 ↗ storm water utility consists of three

1:13:49 ↗ key analytical steps they they have to

1:13:51 ↗ be performed sequentially and we usually

1:13:53 ↗ start with a revenue requirement where

1:13:54 ↗ we Define the overall needs of each

1:13:56 ↗ utility independently we usually like to

1:13:58 ↗ say that each utility needs to be

1:14:00 ↗ assessed individually to make sure that

1:14:02 ↗ every Everybody paying for their costs

1:14:04 ↗ if if there's customers that only use

1:14:06 ↗ one service we want to make we want to

1:14:08 ↗ make sure they're not paying through Sub

1:14:10 ↗ in utility subsidization for a different

1:14:12 ↗ service once we identify the overall

1:14:14 ↗ Revenue needs from a big picture

1:14:16 ↗ perspective we move on to allocating

1:14:18 ↗ those costs to different customer

1:14:19 ↗ classes and trying to answer the

1:14:21 ↗ question if cost differences exist to

1:14:23 ↗ provide service to different C customer

1:14:25 ↗ types so residential customers versus

1:14:27 ↗ multif family customers versus Comm

1:14:29 ↗ commercial customers and so on usually I

1:14:31 ↗ like to use an analogy of of kind of

1:14:33 ↗ identifying the size of the pie of

1:14:35 ↗ expenses in step one and splitting those

1:14:37 ↗ pie p that th those pieces that piie

1:14:41 ↗ into pieces in step two lastly once we

1:14:44 ↗ have identified the overall dollar

1:14:46 ↗ Targets in the first two steps we

1:14:48 ↗ developed actual fixed variable charges

1:14:50 ↗ that we assess to our customers and

1:14:51 ↗ there's different policy objectives that

1:14:53 ↗ we incorporate throughout the process so

1:14:55 ↗ this is just a high level overview what

1:14:57 ↗ actually has to happen sequentially

1:14:59 ↗ before we come back to you with the

1:15:00 ↗ final recommendation the final fixed

1:15:02 ↗ charges the final volume of variable

1:15:05 ↗ charges so today our emphasis will be on

1:15:08 ↗ that first step so we'll we'll take a

1:15:10 ↗ slide or so introducing the topic and

1:15:12 ↗ then we'll get into the assumptions

1:15:13 ↗ behind the analysis as I mentioned in

1:15:16 ↗ the introductory slide at the very basic

1:15:18 ↗ level a revenue requirement is a

1:15:19 ↗ comparison of your rates today to your

1:15:21 ↗ ongoing obligations the big question

1:15:23 ↗ here is can we meet our cost

1:15:25 ↗ at current rates and if not what do we

1:15:27 ↗ do about

1:15:28 ↗ it the emphasis here as you can see on

1:15:30 ↗ the slide as well is that we really

1:15:33 ↗ strongly emphasize that each utility

1:15:34 ↗ need needs to be self-sufficient one

1:15:36 ↗ utility like the water utility is not

1:15:38 ↗ subsidizing the sewer or vice

1:15:41 ↗ versa couple of items to keep in mind

1:15:43 ↗ when developing the revenue requirement

1:15:45 ↗ number one uh we want to make sure we

1:15:47 ↗ cover all costs your direct cost such as

1:15:49 ↗ operating cost Debt Service Capital any

1:15:51 ↗ any of those expenses but also your

1:15:53 ↗ indirect costs meaning that we have

1:15:55 ↗ appropriate Financial policies

1:15:56 ↗ Incorporated we've established the

1:15:58 ↗ financial impact of those policies and

1:16:01 ↗ we have model them appropriately in the

1:16:04 ↗ multi-year forecasting process to make

1:16:06 ↗ sure that utilities are not just

1:16:07 ↗ sustainable today but also are

1:16:09 ↗ sustainable in the future we're prepared

1:16:11 ↗ for any disruptions in the economy in

1:16:14 ↗ the climate H and is just a great guide

1:16:17 ↗ to make sure we're operating within

1:16:19 ↗ specific goals and

1:16:20 ↗ parameters and lastly as the city has

1:16:23 ↗ done a great job of uh looking at things

1:16:25 ↗ from a multi-year perspective is fairly

1:16:27 ↗ important in our opinion not just

1:16:29 ↗ focusing on the test year but giving

1:16:31 ↗ yourselves Alternatives if things are

1:16:33 ↗ coming up like we know uh King County or

1:16:37 ↗ or Cascade water Alliance who provide

1:16:39 ↗ the city with wholesale water uh

1:16:41 ↗ services or sewer Treatment Services

1:16:44 ↗ they have published their preliminary

1:16:45 ↗ increases we know we have a robust

1:16:47 ↗ Capital plan planning for those things

1:16:50 ↗ looking out in the future just gives you

1:16:51 ↗ more Alternatives how to address those

1:16:53 ↗ issues if we just focus on our narrowed

1:16:55 ↗ window of today we might come to a point

1:16:58 ↗ in time in 3 years where we we're forced

1:17:00 ↗ to do a double digit increase or even

1:17:02 ↗ higher uh if we're not being prepared to

1:17:04 ↗ do to address it

1:17:07 ↗ today in terms of some of the key

1:17:09 ↗ assumptions that went into this study

1:17:12 ↗ development and this update the rate

1:17:14 ↗ setting period that we'll be uh focusing

1:17:16 ↗ on will be the next 5 years or so 2026

1:17:19 ↗ through 2030 because we want to make

1:17:21 ↗ sure we don't pull off the cliff so to

1:17:23 ↗ speak we did project our Revenue

1:17:25 ↗ requirements through 2043 so close to a

1:17:27 ↗ 20-year projection we started about it

1:17:29 ↗ last year so we are looking about uh 20

1:17:32 ↗ years outer so in our expenditure and

1:17:35 ↗ revenue

1:17:36 ↗ projections to forecast revenues we are

1:17:39 ↗ utilizing the 2023 billing statistics uh

1:17:43 ↗ that were available for forecasting and

1:17:45 ↗ applying a growth rate the reason why we

1:17:47 ↗ went with a 23 number is that when we

1:17:49 ↗ looked at uh the last three years of of

1:17:52 ↗ consumption information the primary

1:17:53 ↗ utility that really benef benefits from

1:17:55 ↗ normalizing data and weather

1:17:57 ↗ normalization is the water utility

1:17:58 ↗ because there is volatility from Summer

1:18:00 ↗ usage and Peak usage time periods when

1:18:02 ↗ we looked at the data there has been a

1:18:04 ↗ small trend of decline in residential

1:18:06 ↗ consumption and increase in commercial

1:18:08 ↗ consumption which is consistent with

1:18:10 ↗ kind of the trends we saw back when

1:18:12 ↗ during the pandemic when a lot of folks

1:18:13 ↗ stayed home worked from home usages went

1:18:16 ↗ up quite a bit um the residential side

1:18:19 ↗ we saw a trend of that decline over the

1:18:21 ↗ last three years or so from a from a

1:18:24 ↗ consumption perspective based on the

1:18:26 ↗ data we evaluated plus all the other

1:18:28 ↗ work that we uh perform within the

1:18:30 ↗ region so we felt like the 23 year that

1:18:33 ↗ we had available was the latest year but

1:18:35 ↗ also was the most representative year of

1:18:37 ↗ the more normal so to speak hopefully

1:18:39 ↗ more normal conditions and usage

1:18:41 ↗ patterns that that the city will

1:18:43 ↗ experience so we didn't feel like 2122

1:18:46 ↗ data was as most representative of kind

1:18:48 ↗ of The New Normal so to speak now in

1:18:51 ↗ terms of the growth rates we are

1:18:52 ↗ assuming a little bit more of a

1:18:53 ↗ conservative rate of growth from a

1:18:55 ↗ revenue and connection charge

1:18:56 ↗ perspective in order to arrive at this

1:18:58 ↗ rate we kind of uh did a combination of

1:19:00 ↗ internal discussions plus a review of

1:19:02 ↗ historical General facility charge

1:19:04 ↗ Revenue which represents kind of

1:19:06 ↗ one-time revenue from uh new

1:19:08 ↗ construction and we saw especially last

1:19:10 ↗ couple years the growth rates especially

1:19:12 ↗ for sewer and storm water utility have

1:19:14 ↗ been hovering around that quarter perc

1:19:16 ↗ maybe a tiny bit higher for the water

1:19:18 ↗ utility but we really have seen a drop

1:19:20 ↗ off for many communities in the last 6

1:19:22 ↗ months especially with a little bit of

1:19:24 ↗ of uncertainty that's happening in the

1:19:26 ↗ economy right now uh we wanted to be

1:19:29 ↗ just a little bit mindful from a rate

1:19:31 ↗ setting perspective and be uh

1:19:33 ↗ conservative from a growth growth side

1:19:35 ↗ so that's why we're using a quarter

1:19:37 ↗ percent

1:19:38 ↗ there based on the timing of the study

1:19:40 ↗ we are utilizing the 24 budget but we

1:19:42 ↗ did review it in quite a bit of detail

1:19:44 ↗ with your staff uh we had several

1:19:46 ↗ meetings uh reviewing pretty much every

1:19:48 ↗ line item making sure we're including

1:19:50 ↗ and incorporating appropriate expenses

1:19:52 ↗ into our forecast from the budget but

1:19:54 ↗ we're also not carrying forward any

1:19:55 ↗ one-time expenses that were included in

1:19:58 ↗ the budget uh as we'll get into each

1:20:00 ↗ utility and as Emily has presented we

1:20:02 ↗ are also uh adding to our forecast nft

1:20:05 ↗ additions that did not make it into the

1:20:07 ↗ 24 budget so the the the city has

1:20:09 ↗ approved several positions already in 25

1:20:11 ↗ 26 budget we Tred to incorporate it and

1:20:14 ↗ add it to to the 2024 forecast as well

1:20:17 ↗ as looking beyond the first year the

1:20:19 ↗ second year just based on the staffing

1:20:21 ↗ needs that the city currently has for

1:20:23 ↗ the utilities uh we would try to capture

1:20:25 ↗ it with the discussion with your staff

1:20:27 ↗ and that's why we're also going to be

1:20:28 ↗ looking at several FTE editions beyond

1:20:31 ↗ what was already approved in the 25 26

1:20:34 ↗ time cycle now because we are

1:20:36 ↗ forecasting 20 years into the future we

1:20:38 ↗ had to make several escalation

1:20:39 ↗ assumptions kind of using the the more

1:20:42 ↗ recent historical indices plus also kind

1:20:45 ↗ of a a general sense of what we are

1:20:48 ↗ seeing everywhere else we are

1:20:50 ↗ anticipating approximately 4% general

1:20:52 ↗ cost inflation specifically for general

1:20:55 ↗ cost Material supplies labor and then 5%

1:20:58 ↗ for benefits kind of a weighted benefits

1:21:00 ↗ inflation again these are all levers

1:21:02 ↗ that we can play around with but they

1:21:03 ↗ don't

1:21:04 ↗ have too significant of an impact unless

1:21:08 ↗ we really go change to 10% inflation

1:21:10 ↗ versus you know 4% inflation that will

1:21:13 ↗ have a big impact but if we're staying 3

1:21:16 ↗ to 4% 5% there's going to be a a

1:21:19 ↗ reasonable um constant kind of an impact

1:21:22 ↗ from those assumptions now in addition

1:21:23 ↗ to those general cost inflation metrics

1:21:26 ↗ we are also forecasting utility taxes

1:21:28 ↗ that the city assesses on the utilities

1:21:30 ↗ the state accise taxes that that are

1:21:33 ↗ assessed on services for water and sewer

1:21:35 ↗ as well as the B&O taxes that are

1:21:37 ↗ applicable to bno rate Revenue uh storm

1:21:39 ↗ water utility rate revenues and non-

1:21:41 ↗ rate

1:21:42 ↗ revenues and then uh the wholesale

1:21:45 ↗ providers have indicated that they're

1:21:46 ↗ going to be raising their rates Cascade

1:21:48 ↗ water Alliance has indicated 3 and A2 to

1:21:50 ↗ 5% in the next 5 years and potentially

1:21:53 ↗ higher beyond that

1:21:55 ↗ uh King County just released her updated

1:21:56 ↗ forecast they're having to comply with

1:21:58 ↗ Nutri requirements discharging to the

1:22:00 ↗ Puget Sound and they're indicating a 7

1:22:02 ↗ and a half% increase in the coming year

1:22:04 ↗ and then 11 and a halfs and 12 and a

1:22:06 ↗ halfs per year adjustments which is

1:22:08 ↗ fairly consistent to what we're seeing

1:22:10 ↗ to other utilities who own their own

1:22:12 ↗ treatment plant so there's a lot of

1:22:13 ↗ requirements coming from the regulatory

1:22:15 ↗ side that are forcing a lot of capital

1:22:17 ↗ Investments for many sewer utilities

1:22:20 ↗ that are having to uh provide treatment

1:22:23 ↗ within our region but also Statewide as

1:22:25 ↗ well so the average inflation we're

1:22:27 ↗ showing is about 5 to 5 and a half% if

1:22:29 ↗ we strictly focus on the weighted

1:22:31 ↗ average uh inflation of typical costs

1:22:33 ↗ like materials and services labor that's

1:22:35 ↗ around 4 and a quar

1:22:38 ↗ per. lastly an assumption that we're

1:22:40 ↗ going to incorporate based on your

1:22:41 ↗ feedback but again we wanted to start

1:22:43 ↗ the conversation somewhere if is that if

1:22:45 ↗ we do utilize bonding and and and

1:22:48 ↗ borrowing for our Capital program we

1:22:50 ↗ typically start the discussion with

1:22:51 ↗ Revenue Bond financing because that

1:22:53 ↗ level of financing is available to all

1:22:55 ↗ utilities you have to go through a

1:22:57 ↗ credit rating approval process you'll

1:22:59 ↗ get a rating and then based on rating

1:23:01 ↗ you you would receive a specific

1:23:03 ↗ interest rate but in general most

1:23:06 ↗ utilities uh if not all utilities uh

1:23:09 ↗ have access to revenue Bond financing

1:23:11 ↗ loan interest loans are a little bit

1:23:12 ↗ more sparse and again they're dependent

1:23:14 ↗ on what's been appropriated what's

1:23:15 ↗ available last couple years there's been

1:23:17 ↗ a lot more funding it's again a little

1:23:19 ↗ bit more uncertain what's coming up in

1:23:21 ↗ the down the road next couple years from

1:23:24 ↗ low interest uh financing perspective so

1:23:26 ↗ to be again a little bit conservative

1:23:28 ↗ we're assuming revenue bonds with a

1:23:29 ↗ 20-year term which is very common for

1:23:32 ↗ utility infrastructure financing 5%

1:23:34 ↗ interest rate 1% issuance cost and the

1:23:37 ↗ borrowing of the reserve included in the

1:23:41 ↗ issuance lastly before we switch gears

1:23:44 ↗ and talk individual policy con Concepts

1:23:46 ↗ and then utilities we'll talk about the

1:23:49 ↗ financial reserve policies that we have

1:23:50 ↗ Incorporated uh the first one is an

1:23:53 ↗ operating Reserve Target which is meant

1:23:55 ↗ to act as a liquidity cion for those

1:23:57 ↗ cyclical fluctuations of revenues coming

1:23:59 ↗ in at a different pace of expenses

1:24:01 ↗ coming out also for seasonalities

1:24:03 ↗ especially for the water utility if we

1:24:05 ↗ have an off year a milder summer uh than

1:24:07 ↗ we anticipate it or less than average

1:24:10 ↗ then we may not generate enough funds to

1:24:13 ↗ to meet our expenses we want to avoid

1:24:15 ↗ strictly going to additional rate

1:24:16 ↗ increases and have enough in reserves to

1:24:18 ↗ cover those fluctuations so the current

1:24:21 ↗ policy for the city is about 90 days of

1:24:23 ↗ cash operating expenses

1:24:25 ↗ which is about $3 to4 million for water

1:24:27 ↗ utility in the next 5 years the sewer

1:24:29 ↗ utility is about 3.3 to 5.2 million and

1:24:33 ↗ storm water is2 to $2.5 million you'll

1:24:35 ↗ notice they scale over time and that's

1:24:37 ↗ because they are tied to the cost of

1:24:40 ↗ expenses and the expenses are projected

1:24:41 ↗ to go up the reserve should accommodate

1:24:44 ↗ accommodate for that increase and

1:24:45 ↗ increase as well the second uh policy

1:24:49 ↗ that we're incorporating it's not an

1:24:50 ↗ official policy for the utilities but

1:24:52 ↗ it's a common policy we recommend it

1:24:54 ↗ also goes in hand with our discussions

1:24:56 ↗ with financial advisers that that work

1:24:59 ↗ with utilities that that do go out to

1:25:00 ↗ the borrowing Market they have indicated

1:25:03 ↗ that they want to see uh cash reserves

1:25:05 ↗ 150 plus days 250 days depending on the

1:25:08 ↗ rating the utility wants to achieve so

1:25:10 ↗ every metric every direction we're

1:25:12 ↗ hearing is that from a at least from a

1:25:14 ↗ crediting ra rating agency perspective

1:25:16 ↗ is that they want to see more cash on

1:25:18 ↗ hand but from a practical perspective we

1:25:20 ↗ typically recommend to have additional

1:25:22 ↗ funds available for for Capital purposes

1:25:25 ↗ that could be for cost overruns minor

1:25:28 ↗ emergencies or unanticipated projects so

1:25:30 ↗ as an example if you have depart the

1:25:32 ↗ Department of Transportation come in and

1:25:34 ↗ all of a sudden they tell you we have a

1:25:36 ↗ project that you weren't planning or for

1:25:38 ↗ or aware of next year it was not in the

1:25:41 ↗ budget but we don't want to tear up the

1:25:43 ↗ street twice because they they do some

1:25:45 ↗ work and then we come come in in that

1:25:47 ↗ same area two years down the road we

1:25:48 ↗ want to piggyback on some of that

1:25:50 ↗ infrastructure savings uh we should have

1:25:52 ↗ enough cash on hand to able to do that

1:25:55 ↗ if something breaks we have a main

1:25:57 ↗ repair or a big asset

1:25:59 ↗ breaks in a in a pump station or lift

1:26:02 ↗ station we want to have some cash at

1:26:03 ↗ least to start that repair now a good

1:26:06 ↗ practice is to have 1 to 2% of plant

1:26:08 ↗ service or uh look at a specific asset

1:26:12 ↗ infrastructure estimate what would

1:26:14 ↗ happen if this goes out and how much

1:26:15 ↗ money we would have to to start the

1:26:17 ↗ repair so for the water utility we're

1:26:19 ↗ using about 2% of plant and service

1:26:21 ↗ which is about $2 million to $3 million

1:26:23 ↗ that we need to have

1:26:24 ↗ on hand and again once we have this

1:26:26 ↗ amount of money we don't need to keep

1:26:27 ↗ funding it once it's available typically

1:26:30 ↗ that's uh that is sufficient and we

1:26:32 ↗ don't need to continue uh having our

1:26:34 ↗ rates set aside additional reserves for

1:26:37 ↗ the sewer utility we looked at an

1:26:39 ↗ emergency project such as lift station

1:26:41 ↗ or collection main going out which is

1:26:43 ↗ was about about a million dollar

1:26:45 ↗ estimate and for the storm water utility

1:26:47 ↗ it was a culvert project which was about

1:26:49 ↗ $2 million which was pretty close to 2%

1:26:51 ↗ of platin service as well so that kind

1:26:53 ↗ of fell in line equally now from a

1:26:55 ↗ practical perspective these are me

1:26:58 ↗ metrics that we want to monitor for the

1:26:59 ↗ rate setting purposes in real reality

1:27:02 ↗ purposes operational purposes these

1:27:04 ↗ reserves don't really need to be

1:27:05 ↗ separated they can be combined as long

1:27:07 ↗ as they can meet a combined Target so we

1:27:09 ↗ personally like to model it and track it

1:27:12 ↗ separately because that just helps us

1:27:14 ↗ make sure we can meet this one this

1:27:16 ↗ Target and that Target but from a

1:27:17 ↗ practical operational perspective you

1:27:20 ↗ know you don't have to do that from that

1:27:21 ↗ perspective as long as there's a

1:27:23 ↗ reasonable logic behind the sizing and

1:27:26 ↗ the the need for those

1:27:28 ↗ reserves the last the last policy we

1:27:31 ↗ have Incorporated is related to debt

1:27:33 ↗ borrowing itself it's a debt service

1:27:34 ↗ coverage requirement and typically comes

1:27:36 ↗ with specific loans such as revenue

1:27:38 ↗ bonds uh they come with a ratio

1:27:42 ↗ calculation which basically need us uh

1:27:46 ↗ uh basically need us to to meet a

1:27:48 ↗ certain debt obligation to to provide

1:27:50 ↗ assurity to our uh debt holders that we

1:27:52 ↗ can make the payment

1:27:55 ↗ now let's get get into the discussion of

1:27:58 ↗ policy perspectives in terms of the

1:28:00 ↗ funding Alternatives uh and decisions

1:28:02 ↗ we're going to need to have some input

1:28:04 ↗ from you the first one is regarding

1:28:06 ↗ funding our Capital typically there's

1:28:08 ↗ three ways to fund our Capital One is

1:28:10 ↗ 100% cash financing usually they'll come

1:28:12 ↗ with a higher front-end uh pressure on

1:28:14 ↗ our rates the second alternative is kind

1:28:16 ↗ of the opposite debt financing if you

1:28:18 ↗ really rely on debt in the short term

1:28:19 ↗ especially if you don't have a lot of

1:28:20 ↗ debt you're going to potentially smooth

1:28:23 ↗ out your rates but but in long-term will

1:28:24 ↗ cost you more there's a couple of

1:28:26 ↗ benefits it's you can enhance

1:28:28 ↗ intergenerational Equity meaning that

1:28:30 ↗ some of your projects are there to bring

1:28:31 ↗ growth online and by funding it through

1:28:34 ↗ debt you're you're allowing more

1:28:35 ↗ customers to come in and join the

1:28:37 ↗ repayment of those assets and then

1:28:39 ↗ you're linning up the cost of the

1:28:41 ↗ project with how with the repayment of

1:28:43 ↗ the project and the duration of the

1:28:44 ↗ project lastly hybrid approach might

1:28:47 ↗ look at funding renewal replacement the

1:28:49 ↗ assets that are being used through rates

1:28:51 ↗ and then funding capacity enhancing

1:28:53 ↗ projects through

1:28:56 ↗ that so as Emily mentioned there's going

1:28:58 ↗ to be a couple of key policy

1:28:59 ↗ considerations that we would like you to

1:29:01 ↗ have in your back of your mind as we're

1:29:02 ↗ going to be discussing specific

1:29:04 ↗ scenarios for each utility the first one

1:29:06 ↗ will be regarding the financing strategy

1:29:08 ↗ do we use cash we want to avoid debt

1:29:10 ↗ some utilities have done that do we want

1:29:13 ↗ to use debt uh maximize the debt to try

1:29:16 ↗ to mitigate the front end increases that

1:29:17 ↗ we might be seeing um that could be an

1:29:20 ↗ alternative the next policy will be

1:29:22 ↗ regarding multi-year rate set

1:29:24 ↗ a couple of your utilities have projects

1:29:26 ↗ that require multi long-term planning

1:29:29 ↗ like the water utility which has a

1:29:30 ↗ treatment plan in it that has been

1:29:32 ↗ discussed in Prior studies that has been

1:29:33 ↗ discussed by councils and prior councils

1:29:35 ↗ as well so we do have to take a longer

1:29:37 ↗ look other utilities don't necessarily

1:29:39 ↗ have a dedicated project schedule and

1:29:42 ↗ might you might want to choose to look

1:29:44 ↗ on it only at a 5-year plan if you do

1:29:46 ↗ that based on our current forecasting

1:29:49 ↗ you might be forced to do higher

1:29:51 ↗ increases in the in in in the next rate

1:29:53 ↗ study five years down the road for the

1:29:55 ↗ next 10th year plan so the big question

1:29:58 ↗ will be do we only plan for today and

1:29:59 ↗ potentially have higher increases

1:30:01 ↗ tomorrow or do we want to have slightly

1:30:02 ↗ higher increases today to keep the

1:30:04 ↗ increases as smooth as possible and

1:30:06 ↗ lastly as Emily mentioned the on the

1:30:08 ↗ storm water side do we try to fund all

1:30:10 ↗ projects we need to fund or only focus

1:30:12 ↗ on the critical projects and we'll show

1:30:14 ↗ you what that means as we get into the

1:30:15 ↗ utility

1:30:18 ↗ specifically so now we'll switch gears

1:30:20 ↗ and we'll talk about each one of the

1:30:22 ↗ utilities question we move on council

1:30:24 ↗ member Marts sure um a ways back you

1:30:27 ↗ said something about what what what's

1:30:29 ↗ what's the regional utility that's

1:30:31 ↗ planning on 11% annualized expense inre

1:30:34 ↗ County treatment can County can County

1:30:36 ↗ what treatment oh the treatment

1:30:40 ↗ treatment and it's usually treated as a

1:30:42 ↗ pass through cost for many communities

1:30:44 ↗ you don't really have a lot of control

1:30:46 ↗ over the treatment uh cost that they

1:30:48 ↗ provide you and that's going to be 11%

1:30:50 ↗ annualized for how long I believe based

1:30:53 ↗ on my collection there's a couple two

1:30:55 ↗ years of 11 and A2 and then several

1:30:57 ↗ years of 12 I'm just going by memory um

1:31:00 ↗ Paul please correct me if I'm off

1:31:02 ↗ significantly but from their recent

1:31:04 ↗ forecast again it hasn't been adopted

1:31:06 ↗ but the recent forecast has increased it

1:31:08 ↗ quite a bit in the short term okay thank

1:31:11 ↗ you council member D Michelle yeah I

1:31:15 ↗ have uh a couple of questions F first I

1:31:17 ↗ think I know the answer to this but I

1:31:19 ↗ think this probably fits into this

1:31:21 ↗ discussion right now what do we offer to

1:31:23 ↗ to our low-income residents in terms of

1:31:26 ↗ relief from utilities could I just get a

1:31:29 ↗ a little overview of that and when we

1:31:31 ↗ talk about low income is that 30% or

1:31:34 ↗ below Ami or what qualifies as low

1:31:37 ↗ income in our

1:31:39 ↗ community and uh I just looked it up uh

1:31:43 ↗ recently the I believe the current

1:31:45 ↗ currently there's a low-income senior

1:31:46 ↗ program that provides a 75% discount to

1:31:50 ↗ Water and Sewer bills as well as Solid

1:31:52 ↗ Waste which we're not talking about

1:31:53 ↗ today and then fully I believe pays for

1:31:56 ↗ the storm water rate I'm not quite sure

1:31:58 ↗ about the criteria for the

1:32:02 ↗ definition oh PSC hug Town energy has

1:32:06 ↗ their definitions oh we follow that okay

1:32:08 ↗ and then my other question in is we're

1:32:10 ↗ looking at Key policy considerations and

1:32:12 ↗ we have these options in front of us

1:32:15 ↗ have we done an analysis of places where

1:32:17 ↗ we could save money uh as part of uh I

1:32:20 ↗ see nodding heads okay so do you want to

1:32:24 ↗ talk a little bit about that have we

1:32:25 ↗ already factored in uh places where we

1:32:28 ↗ can reduce expenses into this analysis

1:32:35 ↗ thanks yes we are always looking for

1:32:38 ↗ opportunities uh we typically spend more

1:32:41 ↗ time on that during budget development

1:32:43 ↗ time uh this exercise is about having a

1:32:48 ↗ healthy dose of

1:32:50 ↗ conservatism uh over costs as we were

1:32:53 ↗ just discussing that we we cannot

1:32:55 ↗ control so uh there are opportunities of

1:32:58 ↗ course on operating side there are

1:32:59 ↗ opportunities on the capital side we

1:33:01 ↗ will be discussing with you tonight in

1:33:03 ↗ particular the opportunities on the

1:33:05 ↗ capital side for the storm water fund

1:33:07 ↗ where we could choose to be more

1:33:09 ↗ ambitious or aggressive or slightly less

1:33:13 ↗ but we we do look at opportunities to uh

1:33:16 ↗ save where we think it's

1:33:19 ↗ reasonable these funds are also heavily

1:33:22 ↗ governed by our regulatory requirements

1:33:24 ↗ and so um we may have less ability to do

1:33:29 ↗ that in in places where we need to meet

1:33:32 ↗ uh those required

1:33:35 ↗ mandates council member Hull let me ask

1:33:38 ↗ just one question about borrowing before

1:33:40 ↗ we move on then so the feds you know are

1:33:42 ↗ playing with this idea of doing away

1:33:44 ↗ with tax exempt municipal bonds is that

1:33:46 ↗ something we need to be mindful of or

1:33:48 ↗ concerned about if we decide to go down

1:33:50 ↗ the debt financing pathway we'll have to

1:33:53 ↗ definitely monitor it but again it's

1:33:54 ↗ very early in the

1:33:58 ↗ process okay okay we're ready for the

1:34:01 ↗ next great and feel free to keep asking

1:34:04 ↗ any questions you might have so we'll

1:34:06 ↗ start our discussion utility specific

1:34:08 ↗ discussion with the water utility and in

1:34:10 ↗ this slide you'll see the key components

1:34:11 ↗ that went into the the definitions of

1:34:13 ↗ the revenue requirement here you'll see

1:34:15 ↗ a table in the upper left that shows you

1:34:17 ↗ a summary of revenues and expenses that

1:34:19 ↗ are included we're showing you ranges

1:34:21 ↗ just to try to avoid to show kind of

1:34:23 ↗ inunda you with numbers so I'll try to

1:34:25 ↗ walk you through the table and it'll be

1:34:27 ↗ consistent between utilities on the

1:34:29 ↗ revenue side at current levels we're

1:34:31 ↗ projecting about 16.4 to $6.6 million in

1:34:35 ↗ in revenues under current rates which

1:34:37 ↗ includes utility tax passrs to the

1:34:40 ↗ general fund and non- rate revenues but

1:34:41 ↗ predominantly is made up of uh rate type

1:34:44 ↗ Fe fees and charges our operating and

1:34:47 ↗ maintenance expenses are approximately

1:34:49 ↗ 10 million getting up to about 12.7

1:34:51 ↗ utilizing the various forecasting

1:34:53 ↗ assumptions

1:34:54 ↗ that an escalation assumptions that we

1:34:56 ↗ discussed a couple of slides ago our

1:34:58 ↗ water purchases coming from Cascade are

1:35:00 ↗ about 2.5 to 3.2 million in this time

1:35:03 ↗ Horizon and we do currently have some

1:35:05 ↗ existing uh loans through drink and

1:35:07 ↗ water State revolving fund program of

1:35:09 ↗ about 300,000 per year which go out to

1:35:11 ↗ about 2041 so that there is an

1:35:14 ↗ obligation on hand and it is still uh

1:35:16 ↗ outstanding outside of the preliminary

1:35:18 ↗ 5-year period in terms of the capital

1:35:21 ↗ plan we have identified approximately

1:35:23 ↗ $44 million of projects that need to be

1:35:25 ↗ completed in the in the 5-year study and

1:35:29 ↗ these projects are the $44 million are

1:35:32 ↗ uh represented in inflated

1:35:34 ↗ dollars in terms of the funding for

1:35:36 ↗ these projects we're anticipating the

1:35:38 ↗ first to use reserves and rate funding

1:35:41 ↗ uh next to use General facility charges

1:35:44 ↗ again General facility charges are

1:35:45 ↗ one-time fees imposed on new development

1:35:47 ↗ they're not ongoing rates so whenever

1:35:49 ↗ somebody connects to to your system they

1:35:51 ↗ have to pay that fee and and we will be

1:35:54 ↗ updating these fees as part of the study

1:35:56 ↗ any grants or contributions in Native

1:35:58 ↗ construction are deducted from our

1:36:00 ↗ Capital plan and then lastly the last

1:36:02 ↗ kind of uh measure of of funding that we

1:36:06 ↗ look at is cap is De debt financing

1:36:08 ↗ which will vary based on the scenario

1:36:10 ↗ would present to you now outside of the

1:36:12 ↗ 5year plan we're also seeing a need for

1:36:14 ↗ another $100 million of projects in the

1:36:16 ↗ next 15 years so again about 40 million

1:36:19 ↗ in the first 5 years adding inflation to

1:36:21 ↗ the additional Capital needs adds

1:36:22 ↗ another 100 million in the in the

1:36:24 ↗ following 15 years or so and all these

1:36:27 ↗ years do include the treatment plan

1:36:28 ↗ which is estimated about $22.3 million

1:36:31 ↗ through 2037 with various timing and and

1:36:35 ↗ adjustments in the capital plan uh as we

1:36:38 ↗ previously mentioned we are including

1:36:40 ↗ the 4.3 FTE for various positions

1:36:43 ↗ between 2026 and

1:36:46 ↗ 2030 so putting everything together on

1:36:48 ↗ this slide you'll see the summary of the

1:36:49 ↗ revenue requirement here the bars

1:36:51 ↗ represent expenses and the line the

1:36:53 ↗ solid black line shows you revenues

1:36:55 ↗ under current rates the bars are made up

1:36:58 ↗ of a solid blue portion which is

1:36:59 ↗ operating in maintenance expenses the

1:37:01 ↗ orange portion which is the purchases of

1:37:04 ↗ water from Cascade a small sliver with a

1:37:07 ↗ green which is debt service and then the

1:37:09 ↗ yellow is net capital net of

1:37:11 ↗ contributions and net of General

1:37:12 ↗ facility charges when we compare it to

1:37:15 ↗ revenues under current rates we can see

1:37:16 ↗ that our rates today can cover our

1:37:18 ↗ operations and a small amount of capital

1:37:21 ↗ but not the entire Capital plan so so

1:37:23 ↗ what we're finding is right now we can

1:37:25 ↗ meet our Baseline needs of O onm but all

1:37:28 ↗ the regulatory requirements the

1:37:29 ↗ treatment plan upgrades and all the

1:37:31 ↗ additional projects were not quite there

1:37:33 ↗ when uh we're looking at those

1:37:35 ↗ projections now on the second slide here

1:37:38 ↗ of the results we wanted to also bring

1:37:40 ↗ in the fund balances because the city

1:37:42 ↗ has accumulated some reserves and what

1:37:44 ↗ we're looking at here is the Shaded area

1:37:46 ↗ represents your current Reserve

1:37:47 ↗ projections assuming nothing's done so

1:37:49 ↗ this is a baseline scenario and Compares

1:37:51 ↗ it to the the combined balance Target

1:37:54 ↗ Over the 5year Horizon represented with

1:37:56 ↗ a solid black line as you can see we

1:37:58 ↗ currently are meeting and exceeding our

1:38:00 ↗ minimum targets but if we do nothing

1:38:02 ↗ with our rates and continue on with the

1:38:04 ↗ the the capital plan that was identified

1:38:06 ↗ we would go below Target by about 2028

1:38:09 ↗ and then fully deplete our balances by

1:38:15 ↗ 2029 so in summary again in the short

1:38:18 ↗ term we're able to meet our operations

1:38:20 ↗ if we go a little beyond our short-term

1:38:22 ↗ 5year period if we really go beyond that

1:38:24 ↗ uh time period without doing rates we

1:38:26 ↗ would start to default on our debt

1:38:28 ↗ service next outside of that 5year range

1:38:31 ↗ and then operations our Capital really

1:38:33 ↗ is the short-term driver so the three

1:38:35 ↗ scenarios that we presented or want to

1:38:38 ↗ present to you all kind of center around

1:38:40 ↗ how do we fund that Capital plan the

1:38:42 ↗ first scenario looks at funding that

1:38:44 ↗ 20-year plan with cash only the second

1:38:48 ↗ scenario really focuses on maximizing

1:38:50 ↗ the debt and then the last scenario

1:38:52 ↗ tries to put a hybrid alternative

1:38:54 ↗ somewhere in the middle you notice you

1:38:57 ↗ we will not provide you at this time a

1:38:59 ↗ short-term scenario of 5 years only

1:39:00 ↗ because uh we do have to fund the

1:39:02 ↗ treatment plan and we did receive a lot

1:39:04 ↗ of guidance that we have to do that

1:39:06 ↗ project and since it scales outside of

1:39:08 ↗ the 5year plan we're we're not looking

1:39:10 ↗ at that option but Emily did note there

1:39:12 ↗ are other scenarios that we looked at

1:39:14 ↗ there's a lot of scenarios infinite

1:39:16 ↗ amount of scenarios so to speak that we

1:39:17 ↗ can run these are kind of the bookend

1:39:19 ↗ options that we wanted to show you kind

1:39:21 ↗ of the the highend the lowend and maybe

1:39:23 ↗ somewhere in the middle but we can

1:39:25 ↗ definitely generate potentially other

1:39:27 ↗ Alternatives based on discussion

1:39:30 ↗ today before we go on we've got a

1:39:33 ↗ question from council member Hall can

1:39:35 ↗ you repeat what you just said around the

1:39:37 ↗ new treatment plant because one of my

1:39:38 ↗ questions was going to be do we really

1:39:40 ↗ have to factor this into our rate

1:39:42 ↗ scenarios so what did you just say about

1:39:44 ↗ the water treatment plant in particular

1:39:46 ↗ since the treatment plan starts within

1:39:48 ↗ the 5year plan and we can't just start

1:39:50 ↗ and stop it uh and it goes outside of

1:39:52 ↗ the 5year plan

1:39:54 ↗ we are we are looking at a scenario

1:39:56 ↗ funding the entire 20-year plan you'll

1:39:58 ↗ notice one of the policy questions is do

1:40:00 ↗ we only focus on 5 years which we'll

1:40:02 ↗ have for the next utility I believe and

1:40:05 ↗ but for the water utility because once

1:40:06 ↗ we start on the treatment plant we kind

1:40:07 ↗ of have to address it and finish it so

1:40:10 ↗ we did not generate that scenario only

1:40:12 ↗ for this

1:40:13 ↗ one okay I think I'm at least following

1:40:16 ↗ the logic what you said there okay and

1:40:18 ↗ we'll have a discussion about it okay

1:40:20 ↗ and do let me know if you want to

1:40:21 ↗ clarify that somewhere

1:40:24 ↗ so as we get into the results on slide

1:40:26 ↗ 24 you'll see a table summarizing each

1:40:28 ↗ scenario and I'll briefly describe it

1:40:30 ↗ and then we can uh evaluate what it's

1:40:32 ↗ telling us each scenario will have the

1:40:34 ↗ uh the annual increase these are annual

1:40:37 ↗ numbers that would be in effect each

1:40:39 ↗ year depending on your preference next

1:40:42 ↗ we show the average residential Bill

1:40:44 ↗ using about 12200 cubic feet or 12 CCF

1:40:47 ↗ of month monthly consumption this was

1:40:49 ↗ based on historical statistics that we

1:40:51 ↗ saw for a typical user on an annual

1:40:53 ↗ basis so since you Bill b monthly we're

1:40:55 ↗ showing the bill B monthly but sometimes

1:40:57 ↗ it's easier to to think about on a

1:40:59 ↗ monthly basis so we can simply divide it

1:41:01 ↗ by two and that would mean 6 CCF is used

1:41:03 ↗ or 600 cubic feet is used on a monthly

1:41:06 ↗ basis currently your your customers

1:41:08 ↗ using that much are paying about

1:41:12 ↗ $18.7 uh and different scenarios will

1:41:16 ↗ layer different levels of an impact to

1:41:19 ↗ that average bill the last piece for

1:41:22 ↗ each scenario that we're showing is the

1:41:23 ↗ amount of debt that is assumed within

1:41:25 ↗ the 5 years and you'll notice a column

1:41:27 ↗ to the right showing you kind of a sum

1:41:29 ↗ total for that rest of the duration the

1:41:31 ↗ other 15 years so let's quickly go

1:41:34 ↗ through each scenario starting with the

1:41:36 ↗ cash funding only if we're going to try

1:41:38 ↗ to fund everything through cash for the

1:41:39 ↗ entire 20-year duration we would be

1:41:41 ↗ looking at about 6 and 3/4% increases on

1:41:44 ↗ an annual basis which is still slightly

1:41:46 ↗ below the prior forecast if you may look

1:41:48 ↗ at the the slide two I believe or three

1:41:50 ↗ in the presentation the anticipated

1:41:52 ↗ increases were slightly higher for the

1:41:54 ↗ first two years what that would mean for

1:41:57 ↗ a typical customer is a $734 increase in

1:42:00 ↗ 2026 uh if you put it in the monthly

1:42:02 ↗ terms it'll be slightly over

1:42:05 ↗ $3.60 uh on the per month basis for 2026

1:42:09 ↗ only scenario two looks at maximizing

1:42:12 ↗ debt that means for your about $149

1:42:15 ↗ million program over the 20 Horizon you

1:42:17 ↗ would be borrowing close to half of it

1:42:19 ↗ 70 $70 million would need to be financed

1:42:22 ↗ to bring down the increases to about 4

1:42:25 ↗ and

1:42:25 ↗ 3/4% that would uh present an impact of

1:42:28 ↗ about $5.7 in 202 six for a two-month

1:42:33 ↗ period if we look at it on the monthly

1:42:35 ↗ terms it's about

1:42:37 ↗ $255 or so lastly the hybrid scenario is

1:42:40 ↗ somewhere in the middle it tries to

1:42:41 ↗ reduce the amount of debt that you're

1:42:43 ↗ borrowing closer to 20% or so of the of

1:42:45 ↗ the capital plan at 29 million in the

1:42:48 ↗ back end and another 1.4 in the front

1:42:50 ↗ end the increases would would be some in

1:42:53 ↗ the middle at about 5 a

1:42:55 ↗ half% got a question council member

1:42:57 ↗ right great um thank you uh how much you

1:43:03 ↗ mentioned that we currently have

1:43:04 ↗ outstanding debt how much do we

1:43:05 ↗ currently have you

1:43:07 ↗ know I would have to go uh and double

1:43:10 ↗ check we have about $300,000 both

1:43:13 ↗ principal and interest over the next 16

1:43:16 ↗ years how you know what the principal is

1:43:18 ↗ um the outstanding principal not going

1:43:20 ↗ over top of my head but Paul if you do

1:43:21 ↗ know that please do let us know

1:43:24 ↗ yeah so we have about $1.9 million of

1:43:27 ↗ debt outstanding at this moment so kind

1:43:29 ↗ of chump change relative to the numbers

1:43:30 ↗ we're talking about that's correct okay

1:43:32 ↗ um and then for your calculation

1:43:34 ↗ purposes what kind of an interest rate

1:43:35 ↗ were you assuming and it was I'm

1:43:38 ↗ thinking was a 20-year term 20-year term

1:43:40 ↗ 5% interest rate 1% issuance cost okay

1:43:44 ↗ great

1:43:44 ↗ thanks councilman rang um two questions

1:43:48 ↗ first in the maximized debt funding

1:43:50 ↗ scenario what would our Debt Service uh

1:43:52 ↗ coverage ratio be so when we do uh these

1:43:56 ↗ scenarios we make sure we comply with

1:43:58 ↗ all the covenants I would uh estimate

1:44:00 ↗ over 2.0 but not lower than one and a

1:44:02 ↗ half uh Paul please do correct me if I'm

1:44:07 ↗ wrong you give me a moment here I got to

1:44:10 ↗ load

1:44:12 ↗ it for all the options we do uh make

1:44:14 ↗ sure that we comply with the with our

1:44:16 ↗ coverage but uh Paul will let us know

1:44:19 ↗ the lowest number we we forecast okay um

1:44:23 ↗ and then on option one cash funding the

1:44:24 ↗ 20-year CIP does that mean that we're

1:44:26 ↗ going to get all you know raise all the

1:44:29 ↗ cash needed to fund the 20-year CIP

1:44:30 ↗ within this 5year period or would that

1:44:33 ↗ you know it smooth it creates a smooth

1:44:35 ↗ trajectory based on the forecasting cost

1:44:37 ↗ we have so it's not going to raise all

1:44:39 ↗ the needs but gradually over time it

1:44:41 ↗ creates a scenario where you have enough

1:44:43 ↗ cash throughout the forecast looking at

1:44:45 ↗ some of the peak years in the future

1:44:47 ↗ that are causing us to have a deficiency

1:44:49 ↗ so it's not necessarily we just build up

1:44:51 ↗ a big war chest today and just stop and

1:44:54 ↗ do nothing it keeps 6 and 3/4 over time

1:44:57 ↗ so we're gradually depleting the reserve

1:45:00 ↗ but also slightly increasing it at the

1:45:02 ↗ same time so a general reduction of

1:45:04 ↗ reserves trying to keep it above Target

1:45:06 ↗ levels that we have demonstrated but

1:45:08 ↗ some years a little higher some years a

1:45:09 ↗ little lower um so as a followup

1:45:12 ↗ question so that assumes that we're

1:45:13 ↗ going to also you know continue

1:45:15 ↗ increasing rates past 2030 as shown in

1:45:18 ↗ the slide um and then with scenarios two

1:45:22 ↗ and three would the debt financing also

1:45:24 ↗ you know how would that look past the

1:45:27 ↗ end of this forecast period so starting

1:45:29 ↗ in 29 every we anticipate every two

1:45:31 ↗ years or so a new debt issuance with

1:45:33 ↗ this plan so by by keeping the rates as

1:45:36 ↗ low as possible that was the intent of

1:45:38 ↗ scenario two trying to keep them as as

1:45:40 ↗ as minimal as possible with all the

1:45:42 ↗ parameters that we have identified we

1:45:44 ↗ realistically recognized that the city

1:45:46 ↗ would not go to the market annually

1:45:48 ↗ because of the cost of financing so

1:45:50 ↗ typically at the very bare minimum it's

1:45:53 ↗ two to three years so we anticipated

1:45:55 ↗ every two years I think for new issuance

1:45:57 ↗ for this strategy again it's a starting

1:45:59 ↗ discussion point and we can definitely

1:46:01 ↗ modify those assumptions as

1:46:04 ↗ well and just as a followup so in that

1:46:07 ↗ Max debt scenario the lowest point for

1:46:11 ↗ debt coverage would occur or or was

1:46:14 ↗ projected to occur in 2041 and that

1:46:16 ↗ would be a 1.27

1:46:19 ↗ times so in that case the pretty far out

1:46:23 ↗ there The Debt Service we anticipate

1:46:25 ↗ would be The Driver of the pressure and

1:46:27 ↗ we would keep the rates uh over time as

1:46:30 ↗ smooth as possible with 2041 being kind

1:46:33 ↗ of the choke point of the strategy

1:46:34 ↗ obviously 2041 is far far out there a

1:46:37 ↗ lot of things can change but you know

1:46:39 ↗ for modeling and discussion purposes we

1:46:41 ↗ have to uh go around the parameters that

1:46:44 ↗ we

1:46:47 ↗ have thanks

1:46:50 ↗ okay next we'll move on to the utility

1:46:53 ↗ is going to be very similar so uh

1:46:55 ↗ hopefully this will go a little faster

1:46:57 ↗ for everyone the the rates here

1:46:58 ↗ projected are collecting about $ 15 to

1:47:01 ↗ $22 million under current levels one

1:47:04 ↗ caveat here with existing revenues is

1:47:06 ↗ that we're assuming the King County

1:47:07 ↗ portion of rates is passed through and

1:47:09 ↗ we're only focusing our rate strategy

1:47:12 ↗ regarding the local the local portion of

1:47:14 ↗ the rates since we don't have any

1:47:16 ↗ control over King County we're only

1:47:18 ↗ going to be addressing the local share

1:47:20 ↗ of Revenue so that's why you're seeing

1:47:21 ↗ an increase in existing Revenue because

1:47:23 ↗ we are passing those on onm expenses

1:47:26 ↗ from the local side are about3 million

1:47:28 ↗ to $4 million within the 5 years King

1:47:30 ↗ County you can see here isolated is

1:47:33 ↗ about 10 to 17 million with those levels

1:47:35 ↗ of inflation that we talked about before

1:47:38 ↗ this utility currently does not have any

1:47:39 ↗ Debt Service and the 5-year plan for

1:47:42 ↗ capital is about 21 million now similar

1:47:44 ↗ to the water utility the future uh rate

1:47:48 ↗ periods also anticipate another $45

1:47:50 ↗ million of projects that would need to

1:47:52 ↗ be funded and the mix of funding is very

1:47:54 ↗ similar to the water utility as we

1:47:56 ↗ talked about now what does that mean

1:47:58 ↗ here the the bar will look very similar

1:48:00 ↗ but the capital PL planning needs are

1:48:02 ↗ not a significant component except for

1:48:04 ↗ the first year for the sewer utility

1:48:06 ↗ we're able to meet our onm expenses and

1:48:09 ↗ keep up with King County because it's

1:48:11 ↗ it's a a flow through expense the

1:48:13 ↗ capital we're not just quite keeping up

1:48:15 ↗ but we're fairly close uh on this

1:48:17 ↗ projection and the reason again why the

1:48:18 ↗ slope of the line is increasing like

1:48:20 ↗ that is because we are passing through

1:48:22 ↗ the County

1:48:24 ↗ charges in terms of reserves this is

1:48:26 ↗ where the big question of timing comes

1:48:28 ↗ on hand if we only focus on the 5year

1:48:30 ↗ plan our starting point of reserves is

1:48:32 ↗ meeting our minimum requirements and if

1:48:34 ↗ we do nothing with rates altogether

1:48:36 ↗ we're going to be drawing them down down

1:48:37 ↗ to the minimum by 29 and it would still

1:48:40 ↗ be above zero by 30 but below the

1:48:42 ↗ projected minimum coverage or minimum

1:48:44 ↗ Reserve levels if we take a peak outside

1:48:47 ↗ of the 5year period This is where we

1:48:49 ↗ start to really hit zero and uh and go

1:48:52 ↗ negative if we continue on with our path

1:48:55 ↗ of the capital plan so this is where it

1:48:57 ↗ gets a little tricky because when we

1:48:58 ↗ talk about scenarios well if we just

1:49:00 ↗ zoom in on tomorrow or today we're doing

1:49:02 ↗ great we might be you know we don't need

1:49:04 ↗ to do anything as soon as we zoom out 3

1:49:07 ↗ years four years seven years then things

1:49:09 ↗ don't look as great so from a policy

1:49:12 ↗ perspective how zoomed in or zoomed out

1:49:15 ↗ do we want to get in this case so for

1:49:17 ↗ the scenarios for this utility we have

1:49:19 ↗ prepared slightly differently scenario

1:49:20 ↗ one will only focus in on that 5ar

1:49:22 ↗ window that we are talking about for

1:49:24 ↗ setting rates scenario two we'll look at

1:49:27 ↗ the 20-year plan and both scenario one

1:49:29 ↗ and two will be cash driven and cash

1:49:31 ↗ funded and lastly scenario three we'll

1:49:33 ↗ look at performing the entire 20-year

1:49:36 ↗ plan but but you using as much debt as

1:49:38 ↗ we can to keep rates as as uh low as

1:49:41 ↗ possible so similar tables the only

1:49:43 ↗ caveat and difference here on the on

1:49:45 ↗ this slide is that we're showing you

1:49:46 ↗ both the local share the share that the

1:49:48 ↗ city has control over in each bill

1:49:50 ↗ comparison at the top of the bill comp

1:49:52 ↗ comparison then we're showing you the

1:49:54 ↗ King County pass through portion that

1:49:56 ↗ you don't have control over and then the

1:49:58 ↗ total bill the reason why we wanted to

1:49:59 ↗ show you both is that this is what your

1:50:01 ↗ customers will be seeing but we really

1:50:03 ↗ are focusing on the local portion of the

1:50:05 ↗ increases and the increase that we're

1:50:07 ↗ showing only applies to the local

1:50:08 ↗ portion this does not represent the

1:50:10 ↗ additional incremental King County

1:50:12 ↗ increases that are embedded in those

1:50:14 ↗ rates so for the cash scenario for the

1:50:16 ↗ 5-year plan only just making sure that

1:50:18 ↗ we can keep up with our reserves we're

1:50:21 ↗ projecting close tol aary level of

1:50:23 ↗ adjustments of 3 and 1/4% per year which

1:50:25 ↗ be about dollar a little under $150 for

1:50:28 ↗ 2026 for a typical residential home on a

1:50:32 ↗ bonly basis which is close to 75 cents

1:50:34 ↗ on a monthly basis for the local share

1:50:37 ↗ only scenario two which takes into

1:50:39 ↗ account the entire 20-year plan trying

1:50:42 ↗ to cash fund it that would bump up from

1:50:44 ↗ three and a quars now per year to 7% so

1:50:46 ↗ instead of $150 it's closer to 320 by

1:50:49 ↗ monthly or if you put in the mon monthly

1:50:51 ↗ terms about doll 60 per month more

1:50:54 ↗ lastly scenario three uh maximum debt

1:50:57 ↗ alternative would reduce that from

1:51:00 ↗ sevens to 4 and 3/4 per year but would

1:51:05 ↗ require $28 million which is a little

1:51:08 ↗ under 50% of the capital plan uh within

1:51:11 ↗ that 20-year Horizon of

1:51:15 ↗ borrowing any questions for the sewer

1:51:18 ↗ side

1:51:21 ↗ okay and then we'll finish things off

1:51:23 ↗ with a storm water utility here again

1:51:25 ↗ revenues are projected at $7.5 to6

1:51:27 ↗ million per year before any adjustments

1:51:30 ↗ just simply growing grow growth expenses

1:51:33 ↗ are 7.8 to 10.1 million now notice right

1:51:35 ↗ here this kind of is foreshadowing to

1:51:37 ↗ the next slide that are onm expenses are

1:51:39 ↗ already greater than our rate revenues

1:51:42 ↗ uh at current levels so this doesn't

1:51:44 ↗ mean take into account the capital

1:51:46 ↗ program of of the $31

1:51:48 ↗ million now the funding for the the the

1:51:51 ↗ the capital plan is very similar to uh

1:51:53 ↗ the other two utilities so what does

1:51:55 ↗ that mean when we look at the revenue

1:51:57 ↗ requirement here you can see even

1:51:58 ↗ starting in year 1 and 25 we're barely

1:52:00 ↗ breaking even on our onm expenses we're

1:52:02 ↗ actually a little bit in the deficit

1:52:03 ↗ using reserves already and as we go on

1:52:06 ↗ to the Future and our inflation picks up

1:52:08 ↗ over time as we add staff to our uh to

1:52:12 ↗ our uh Workforce we are be becoming a

1:52:15 ↗ little bit more and more deficient every

1:52:16 ↗ year so not even bringing in capital

1:52:19 ↗ we're not able to meet our obligations

1:52:21 ↗ there was this would draw down our

1:52:22 ↗ reserves pretty quickly running out of

1:52:24 ↗ cash by about 28 if we stay on course

1:52:26 ↗ without any

1:52:29 ↗ adjustments so in terms of scenarios

1:52:31 ↗ because this utility is slightly

1:52:32 ↗ different again unlike the first two opt

1:52:35 ↗ scenarios where we we were able to meet

1:52:37 ↗ our operating needs and Debt Service for

1:52:39 ↗ the water utility in the short term here

1:52:41 ↗ we're already starting kind of in the

1:52:43 ↗ Hole uh on the back foot so to speak so

1:52:45 ↗ for the first scenario we wanted to

1:52:46 ↗ generate and this is for illustrative

1:52:48 ↗ purposes only this is not a recommended

1:52:50 ↗ option we wanted to see what would cost

1:52:52 ↗ as to catch up with operations so

1:52:53 ↗ ignoring any level of capital whatsoever

1:52:56 ↗ how much of an adjustment we would need

1:52:58 ↗ to be able to fund our onm expenses

1:53:00 ↗ second option looks at okay let's fund

1:53:02 ↗ the entire 20 Capital 20-year Capital

1:53:04 ↗ plan uh and then the last option what

1:53:07 ↗ happens if we defer our non-critical

1:53:09 ↗ projects outside of the 20year

1:53:11 ↗ projection so there are some projects

1:53:13 ↗ that are critical others that we have a

1:53:15 ↗ little bit more flexibility and we can

1:53:17 ↗ potentially look at waiting for you know

1:53:20 ↗ receiving State funding Federal funding

1:53:21 ↗ if it ever becomes available and only

1:53:23 ↗ then taking and addressing those

1:53:25 ↗ projects uh which is a policy option at

1:53:27 ↗ your disposal as well so in terms of

1:53:30 ↗ summaries just to keep up with omm we

1:53:33 ↗ estimate you would need about 6 and a

1:53:34 ↗ qu% just to catch up over the 5year

1:53:36 ↗ horizon this doesn't mean you're going

1:53:37 ↗ to get there meeting your omm expenses

1:53:40 ↗ in year one this is a smooth smooth

1:53:43 ↗ option to get us to being uh cash

1:53:46 ↗ neutral by 2030 meaning that we're

1:53:48 ↗ eating into reserves over the time

1:53:49 ↗ Horizon over the 5 years just to give

1:53:52 ↗ give give us a smooth run R run Runway

1:53:55 ↗ to to get to self-sufficiency for

1:53:57 ↗ operations in that 5-year plan if we

1:54:00 ↗ layer on the entire Capital plan and we

1:54:02 ↗ avoid that financing

1:54:05 ↗ altogether uh we anticipate that would

1:54:07 ↗ be about 16 and 3/4% adjustments now the

1:54:10 ↗ storm water utility is the smallest from

1:54:12 ↗ a combined Bill perspective out of the

1:54:14 ↗ three so percentage a larger percentage

1:54:17 ↗ will be a smaller dollar bill compared

1:54:19 ↗ to the total bills for the water and the

1:54:22 ↗ sewer utilities and then lastly the cash

1:54:24 ↗ funding critical only projects uh would

1:54:28 ↗ would be about 10% now we ran other

1:54:30 ↗ scenarios we looked at debt financing

1:54:32 ↗ but because we wanted to focus our

1:54:35 ↗ attention to about three scenarios

1:54:36 ↗ otherwise there just too many options to

1:54:38 ↗ start a discussion and the conversation

1:54:40 ↗ uh these are the options presented we

1:54:42 ↗ also ran a Deb scenario which could drop

1:54:44 ↗ the scenario 3 to about 7 and 3/4% for

1:54:48 ↗ the next 5 years followed by 5% there

1:54:50 ↗ after so there are lovers that we can

1:54:52 ↗ pull with debt introducing debt into it

1:54:54 ↗ but again we wanted to avoid putting too

1:54:57 ↗ many numbers on the screen here as well

1:54:59 ↗ and getting feedback from

1:55:01 ↗ you and really this is the last slide

1:55:04 ↗ that we have on the next one a typical

1:55:06 ↗ comparison oh it looks like a little

1:55:09 ↗ Shader moved a little bit here uh here

1:55:12 ↗ we have the comparison of a typical

1:55:13 ↗ residential Bill what it will what it

1:55:16 ↗ costs a customer on a bimonthly basis to

1:55:19 ↗ to receive water sewer and storm water

1:55:21 ↗ services in the city's nalii which is

1:55:23 ↗ highlighted with a shaded area versus

1:55:25 ↗ other neighboring utilities for same

1:55:27 ↗ level of usage now I always want to

1:55:28 ↗ caution that this is a little bit of an

1:55:30 ↗ apples and oranges comparison every

1:55:32 ↗ utility is different the typography is

1:55:34 ↗ different uh the level of service they

1:55:36 ↗ receive is different some utilities

1:55:38 ↗ receive have their own treatment plans

1:55:39 ↗ other utilities procure full service

1:55:43 ↗ treatment or Supply so there's just a

1:55:45 ↗ lot of volatility in addition to that

1:55:47 ↗ some utilities also defer maintenance

1:55:49 ↗ trying to keep the rates uh as low as

1:55:51 ↗ possible while others try to be

1:55:53 ↗ proactive as well so I caution to

1:55:56 ↗ everybody apples and oranges comparison

1:55:58 ↗ but it's a very common question that

1:56:00 ↗ that gets asked by everybody including

1:56:01 ↗ the community members so we wanted to

1:56:03 ↗ share that information with you today as

1:56:04 ↗ well so a typical Bill currently pays in

1:56:07 ↗ the city about $312 B monthly uh on the

1:56:10 ↗ uh comparing your neighboring utilities

1:56:13 ↗ that is on the lower end and I know for

1:56:14 ↗ a fact that quite a few of these

1:56:16 ↗ utilities are going through their own

1:56:17 ↗ rate studies several utilities will be

1:56:19 ↗ passing rate adjustments in the coming

1:56:21 ↗ months as well for 26 if if they haven't

1:56:23 ↗ done so already so uh other utilities

1:56:26 ↗ are going through very similar

1:56:28 ↗ discussions as you are as

1:56:31 ↗ well and with that uh any additional

1:56:36 ↗ questions I don't before I go on let me

1:56:40 ↗ just check in with council member Joe

1:56:44 ↗ and see if there are any questions on

1:56:47 ↗ the utility rate study I'm happy to come

1:56:49 ↗ back to you but I just want to make sure

1:56:50 ↗ to always check in with the phone

1:56:53 ↗ um no thank you appreciate that um I had

1:56:57 ↗ a question about uh our debt financing

1:57:00 ↗ and uh whether or not our the the debt

1:57:03 ↗ that we put out there is um a tax-free

1:57:07 ↗ debt or they are taxable bonds and if

1:57:12 ↗ the uh ability to have them non- taxable

1:57:15 ↗ goes away from um the federal

1:57:18 ↗ Administration how that might impact our

1:57:21 ↗ overall financing if it's a factor thank

1:57:25 ↗ you I believe the current debt is very

1:57:28 ↗ limited it's through a drinking State

1:57:30 ↗ revolving fund loan which I believe is

1:57:32 ↗ taxfree loan if the taxfree bonding

1:57:34 ↗ availability goes away again we'll have

1:57:36 ↗ to take a look at it most likely it's

1:57:37 ↗ going to be a more costly investment a

1:57:39 ↗ higher interest rate so we could model a

1:57:42 ↗ slightly higher cost of borrowing as

1:57:44 ↗ well into these scenarios which would

1:57:46 ↗ add a little bit of pressure we're being

1:57:47 ↗ hopefully a little conservative of p%

1:57:49 ↗ sens but again who not you know the the

1:57:51 ↗ several ities that I've talked to that

1:57:53 ↗ issued um depending on their rating have

1:57:55 ↗ been in the fours uh recently more

1:57:58 ↗ recently is very hard to forecast what

1:58:00 ↗ the interest rates are going to be in

1:58:01 ↗ the next couple years they've been

1:58:03 ↗ really low 3 four years ago at 3 and a

1:58:05 ↗ qu% but they've also been very high in

1:58:08 ↗ the past as well so this is again using

1:58:11 ↗ a conservative rate hopefully

1:58:14 ↗ but there's a lot of things up in the

1:58:16 ↗ air that could change pretty quickly

1:58:19 ↗ too okay thank you Council member Joe

1:58:22 ↗ I'll make sure to come back to you for

1:58:24 ↗ feedback I'm going to go to everybody

1:58:25 ↗ else for questions starting with Deputy

1:58:27 ↗ council president D Michelle and I

1:58:31 ↗ believe we have a couple final slides so

1:58:34 ↗ if we could perhaps just finish at the

1:58:35 ↗ presentation

1:58:37 ↗ okay well we're asking questions right

1:58:40 ↗ now so that's that's fine yeah we will

1:58:43 ↗ definitely go to the direction slides at

1:58:46 ↗ that point um but any

1:58:48 ↗ questions uh yeah in the packet I it I

1:58:52 ↗ think there was a statement about if we

1:58:53 ↗ did debt

1:58:55 ↗ financing um that that would defer

1:59:00 ↗ um rate

1:59:02 ↗ increases at some point there would be a

1:59:05 ↗ sort of a drop off where rate increases

1:59:07 ↗ would really increase significantly is

1:59:09 ↗ that at the end of the 20 years

1:59:12 ↗ projected or what are we talking about

1:59:14 ↗ in terms of deferring increases so that

1:59:18 ↗ I'm thinking about the smoothness of

1:59:20 ↗ this uh can you just get into that a

1:59:22 ↗ little bit um how that works so

1:59:26 ↗ typically as we kind of went as an

1:59:28 ↗ example we'll go back to utility that

1:59:31 ↗ has a debt option so in this case uh

1:59:34 ↗ cash fi financing the full plan is 7

1:59:38 ↗ perents the max Deb scenarios are four

1:59:40 ↗ and 3/4 perents being in a vacuum the

1:59:43 ↗ the the the percents will be in effect

1:59:45 ↗ for a longer period of time outside of

1:59:46 ↗ the 20-year period so the cumulative

1:59:48 ↗ increase would incrementally get larger

1:59:50 ↗ over time because we have to cover the

1:59:52 ↗ the interest but in the short term

1:59:53 ↗ especially because the city doesn't have

1:59:55 ↗ a lot of debt today or any debt for the

1:59:57 ↗ sewer utility it would actually help

2:00:00 ↗ reduce the rate pressure now that ties

2:00:03 ↗ up your money in terms of debt financing

2:00:05 ↗ once you borrow the money you have to

2:00:07 ↗ repay it back and you can't dictate it

2:00:09 ↗ or deviate it for any reason especially

2:00:12 ↗ if it's bonds because you do have to

2:00:13 ↗ meet coverage for cash financing unless

2:00:16 ↗ a project is extremely critical right at

2:00:19 ↗ at extreme times you can defer project a

2:00:21 ↗ year or two unless the system is just

2:00:22 ↗ falling apart so there are pros and cons

2:00:25 ↗ with it and usually the the the greater

2:00:27 ↗ cost with a debt scenario comes in the

2:00:29 ↗ cumulative perspective over years

2:00:32 ↗ definitely outside the 5-year

2:00:35 ↗ period council member

2:00:38 ↗ Hall thank you a couple questions um um

2:00:42 ↗ first and and if

2:00:44 ↗ it's better answered with the direction

2:00:47 ↗ needed slide feel free to go to that but

2:00:49 ↗ I the memo made it seem like it was more

2:00:52 ↗ Direction needed was is this the

2:00:54 ↗ right uh sample of um scenarios that m&

2:01:00 ↗ should look into and like are we on the

2:01:01 ↗ right track or is the administration

2:01:03 ↗ asking which one within each fund would

2:01:05 ↗ you like to go

2:01:08 ↗ with the lad we are hoping to get some

2:01:11 ↗ specific feedback from you about which

2:01:15 ↗ of the three scenarios for each of the

2:01:18 ↗ funds seems preferable to you that will

2:01:21 ↗ will enable us to do the next scope of

2:01:24 ↗ work that we need to do okay thank you

2:01:27 ↗ um okay then let's go back to the water

2:01:30 ↗ treatment plant thing then so um there's

2:01:33 ↗ a lot going on you talked about Cascade

2:01:35 ↗ water too there's a lot going on there

2:01:37 ↗ we've got in the future new tie-ins with

2:01:39 ↗ Tacoma for Tacoma wholesale water so is

2:01:42 ↗ is the new water treatment center

2:01:44 ↗ something we have to uh acknowledge in

2:01:48 ↗ um our SC our rate scenario rate setting

2:01:51 ↗ scenario for the water fund or is that

2:01:53 ↗ or can we I know we've said we'll

2:01:56 ↗ eventually transition what is it 2037 to

2:01:59 ↗ having a new water treatment plant

2:02:00 ↗ online is that something we can revisit

2:02:02 ↗ for the sake of rate

2:02:08 ↗ setting the short answer is no um we

2:02:11 ↗ have already put ourselves on a path

2:02:14 ↗ where we need to begin planning this

2:02:16 ↗ year we need to move to land

2:02:19 ↗ acquisition next next year year we have

2:02:23 ↗ uh early design that is included in this

2:02:27 ↗ next 5year rate study uh we're we're on

2:02:31 ↗ a path the window of time that we have

2:02:35 ↗ to be

2:02:36 ↗ flexible has closed for the most part

2:02:39 ↗ it's it's possible that some of those

2:02:42 ↗ phases that I spelled out in the memo

2:02:44 ↗ could be a little shorter but some could

2:02:45 ↗ be longer depending on uh trouble

2:02:49 ↗ acquiring land or permitting or

2:02:52 ↗ um Capital Construction becoming more

2:02:55 ↗ difficult for many reasons uh Council

2:02:59 ↗ gave Direction a few years ago that we

2:03:01 ↗ were to pursue this timeline and so now

2:03:05 ↗ we're at the point in time we need to

2:03:07 ↗ take that first step and and therefore

2:03:09 ↗ as Sergey has described we need to start

2:03:12 ↗ accumulating the funds to pay for each

2:03:15 ↗ step of the

2:03:19 ↗ process okay but

2:03:23 ↗ do we need to walk this path I mean

2:03:25 ↗ Council set the policy to walk this path

2:03:27 ↗ like you've said but this council could

2:03:28 ↗ say we don't necessarily need to have a

2:03:32 ↗ water treatment plant by 2037 if we're

2:03:34 ↗ still confident in our ability to

2:03:36 ↗ purchase cheaper wholesale water from T

2:03:38 ↗ or through Cascade is that a

2:03:40 ↗ conversation we can have as part of this

2:03:42 ↗ so that we don't have to account for I

2:03:45 ↗ mean that's

2:03:46 ↗ 22 whatever million dollars for a new

2:03:49 ↗ treatment plant that we could

2:03:50 ↗ potentially avoid has no obligation

2:03:53 ↗ Beyond 2037 to provide us with the

2:03:55 ↗ increment of water that we will

2:03:58 ↗ need okay so we can't plan for what we

2:04:02 ↗ don't have a a secure commitment for

2:04:05 ↗ purchasing water is what you're saying

2:04:06 ↗ and it would be risky to do otherwise

2:04:08 ↗ that's correct okay I understand and

2:04:10 ↗ council president members of the council

2:04:11 ↗ if I can just add um you know we we need

2:04:14 ↗ to be prudent with the facts as we know

2:04:17 ↗ them as I think you've heard tonight

2:04:18 ↗ there are many facts that can change um

2:04:22 ↗ and so if the council wishes to have

2:04:24 ↗ further discussions with Cascade that's

2:04:26 ↗ always a possibility but the fact is

2:04:28 ↗ director Mo said we have they have no

2:04:31 ↗ obligation to provide us water beyond

2:04:32 ↗ that so we have it's a little chicken

2:04:35 ↗ and aegish piece but there's so much

2:04:38 ↗ here that could change uh but we have to

2:04:41 ↗ pick a path and we have to go and so

2:04:43 ↗ building the plant currently isn't part

2:04:45 ↗ of that path to move forward um but it

2:04:48 ↗ can change it may change uh but we need

2:04:50 ↗ to be mindful of the path that we

2:04:54 ↗ on I want to add to the questions on

2:04:58 ↗ water treatment plant if anybody's okay

2:05:01 ↗ with that before moving on um if we in

2:05:06 ↗ two years 3 years got a commitment from

2:05:10 ↗ Cascade water in order to um be able to

2:05:13 ↗ purchase water that would enable us to

2:05:16 ↗ not have to have a water treatment plant

2:05:18 ↗ or def defer it is that something that

2:05:21 ↗ we could work

2:05:22 ↗ into a future scenario

2:05:25 ↗ by recognizing A reduced

2:05:33 ↗ cost so it's a possibility I I want to

2:05:36 ↗ be clear about where we are with Cascade

2:05:39 ↗ Cascade gives us a base amount of water

2:05:42 ↗ and then we have bought under a

2:05:44 ↗ temporary agreement and increment to

2:05:46 ↗ cover well five while it's out of

2:05:49 ↗ operation we still need to provide for

2:05:52 ↗ that increment of water going forward

2:05:55 ↗ above the base plus any growth that is

2:05:58 ↗ needed in addition to that water

2:06:00 ↗ treatment plant will provide other

2:06:02 ↗ opportunities for us uh most importantly

2:06:05 ↗ the ability to more effectively and

2:06:08 ↗ efficiently treat for a number of um

2:06:12 ↗ constituents in the water so there are a

2:06:15 ↗ bunch of reasons to pursue the water

2:06:17 ↗ treatment plant I don't think that's

2:06:18 ↗ what we're revisiting here there's a

2:06:21 ↗ Poss ility yes that we can go back and

2:06:23 ↗ renegotiate with Cascade we need to

2:06:26 ↗ recognize that we're one of only you

2:06:28 ↗ know we're one of their many members

2:06:31 ↗ they have other obligations as well to

2:06:33 ↗ provide future water use to all of those

2:06:37 ↗ communities and uh you know it's not

2:06:40 ↗ certain that they would agree uh they

2:06:42 ↗ have done enough of their water planning

2:06:45 ↗ to understand their future forecast will

2:06:48 ↗ allow for them to extend our current

2:06:50 ↗ agreement which they have uh already

2:06:53 ↗ agreed to do from 2034 to 2037 but

2:06:56 ↗ beyond that they have told us they

2:06:59 ↗ cannot provide the additional water

2:07:01 ↗ because of commitments to other

2:07:04 ↗ communities and I'm not trying to argue

2:07:07 ↗ any of those points I'm just saying if

2:07:09 ↗ we got favorable information we would

2:07:12 ↗ use that to reduce future costs

2:07:14 ↗ certainly and that's true of every

2:07:16 ↗ assumption yeah in this study as we get

2:07:18 ↗ new information whether it's good news

2:07:21 ↗ or bad news we will refine those

2:07:23 ↗ assumptions and we will understand how

2:07:27 ↗ how can we respond is it through rate

2:07:30 ↗ reduction is it through um decreasing

2:07:34 ↗ the amount of borrowing that we think we

2:07:36 ↗ need to take on absolutely okay thank

2:07:39 ↗ you um council member Jen and then

2:07:43 ↗ council member MZ great thank you um so

2:07:47 ↗ just to make sure I'm understanding this

2:07:48 ↗ correctly so um the cash funding the

2:07:50 ↗ full Capital Improvement plan so even

2:07:53 ↗ you know we're projecting like 7% rate

2:07:56 ↗ increases through this 5year period but

2:07:57 ↗ then you know over the next like 10 to

2:08:00 ↗ 15 years would the projected rate

2:08:01 ↗ increases be lower than if we went with

2:08:03 ↗ the debt financing scenario and could

2:08:05 ↗ you provide some detail on what that

2:08:07 ↗ would look like I believe the annual

2:08:10 ↗ increases would be at seven but again

2:08:12 ↗ Paul has the numbers right in front of

2:08:13 ↗ him I think the plan goes 7% is pretty

2:08:16 ↗ much through the entire the 20 year

2:08:18 ↗ Horizon is that right Paul yeah so the

2:08:21 ↗ sevens go through

2:08:23 ↗ 2034 and then it would switch to an

2:08:26 ↗ inflationary type adjustment each year

2:08:28 ↗ whereas the max debt scenario the four

2:08:31 ↗ and 3/4 would continue through

2:08:37 ↗ 2039 CC M

2:08:40 ↗ Mars thank you I want to ask maybe it's

2:08:42 ↗ the same question but in a slightly

2:08:44 ↗ different way um a few years ago it

2:08:47 ↗ feels like a few years ago and

2:08:48 ↗ somebody's going to tell me it was a

2:08:49 ↗ decade ago we did a a giant

2:08:52 ↗ water uh education and decision making

2:08:56 ↗ process here as a body and we did like I

2:08:59 ↗ don't remember how many but like four

2:09:02 ↗ gigantic uh uh community of the whole

2:09:07 ↗ type meetings where we talked about our

2:09:09 ↗ future and and like Taps and all the

2:09:12 ↗ various water options and whatnot and we

2:09:14 ↗ got really well educated and so the

2:09:16 ↗ question is have things changed such

2:09:19 ↗ that that decision

2:09:22 ↗ effectively needs to be Revisited like

2:09:25 ↗ have the fundamentals of our

2:09:27 ↗ relationship around here on water change

2:09:31 ↗ such that we need to have that colossal

2:09:36 ↗ activity again because the amounts of

2:09:37 ↗ money are staggering and at the time

2:09:39 ↗ there were decisions that we were making

2:09:43 ↗ that uh you know in terms of our

2:09:45 ↗ relationships with the various water

2:09:46 ↗ providers that were going to be

2:09:48 ↗ important um like you know our

2:09:50 ↗ investments in our own water uh

2:09:53 ↗ generation potential versus buying etc

2:09:55 ↗ etc so that's my question um do we need

2:09:58 ↗ to have that

2:10:00 ↗ colossal uh reassessment of our water

2:10:04 ↗ strategy is is what you're really saying

2:10:06 ↗ has the have the fundamentals change

2:10:08 ↗ since that activity and the tricky part

2:10:11 ↗ I wasn't involved in the in the prior

2:10:12 ↗ discussion so I'm not sure if you guys

2:10:14 ↗ have the knowledge I don't you know with

2:10:17 ↗ many providers around the region I think

2:10:18 ↗ Seattle is negotiating with their

2:10:20 ↗ wholesale custom customers cost of water

2:10:22 ↗ is not going to be cheaper anywhere else

2:10:25 ↗ so it's it's hard for me to say not

2:10:27 ↗ being part of those prior discussions

2:10:29 ↗ and what you have had with Cascade

2:10:31 ↗ directly I'm not sure if you

2:10:34 ↗ have I guess the short answer is I don't

2:10:37 ↗ think that those macro assumptions or

2:10:39 ↗ our world view on water has changed

2:10:43 ↗ dramatically U I'm not sure exactly

2:10:45 ↗ which series of meetings you're talking

2:10:47 ↗ about and it could be to what I finally

2:10:49 ↗ call my isqua coma time

2:10:51 ↗ where I was not here uh but we look at

2:10:56 ↗ those bigger picture questions every

2:10:59 ↗ time we do our system plan and we have

2:11:03 ↗ recently done that and so I feel fairly

2:11:06 ↗ confident that we have a good handle on

2:11:08 ↗ that big picture and it has not changed

2:11:10 ↗ dramatically I mean the big knobs were

2:11:12 ↗ buying chunks of Lake Taps and investing

2:11:15 ↗ in our own polls from the aquifer

2:11:21 ↗ and for the part that that Emily was on

2:11:24 ↗ her sabatical for you know was when

2:11:28 ↗ Cascade came to us and said we have

2:11:30 ↗ excess capacity and so we were going

2:11:32 ↗ down a road that said we have to build

2:11:34 ↗ treatment we needed to build it soon we

2:11:36 ↗ have no choice and then we came and said

2:11:38 ↗ Well turns out there's capacity from

2:11:42 ↗ Cascade and so that was something that

2:11:44 ↗ changed that and that was the last rate

2:11:47 ↗ study more or less when we said okay

2:11:49 ↗ we're going to fold that into the

2:11:51 ↗ discussion it puts off the need it does

2:11:53 ↗ not eliminate the need for treatment as

2:11:55 ↗ you've heard tonight but it did put that

2:11:57 ↗ off and so it's very difficult to make

2:12:00 ↗ 100% absolute statements about any of

2:12:03 ↗ this and so what you're hearing from us

2:12:05 ↗ is this is our best professional path

2:12:08 ↗ that we see and as as director moon has

2:12:10 ↗ said we know we only have a contract to

2:12:12 ↗ get water from Cascade to a specific

2:12:14 ↗ date there is no other provider we have

2:12:17 ↗ wells we need to work that ourself are

2:12:20 ↗ there Lots of other variables floating

2:12:22 ↗ around there absolutely are do we want

2:12:24 ↗ to get into each and every one with you

2:12:26 ↗ this evening no we do not no but my

2:12:28 ↗ question and I'm not suggesting we do it

2:12:30 ↗ all this evening but my question is do

2:12:31 ↗ we want to reopen some of those big

2:12:33 ↗ questions have the fundamentals changed

2:12:35 ↗ such that that decision that we made

2:12:38 ↗ whatever it was five or six years ago

2:12:40 ↗ should be Revisited and the answer is

2:12:44 ↗ no thank

2:12:48 ↗ you I'm going to check back in with

2:12:51 ↗ council member Joe just to see if you

2:12:53 ↗ have any questions at this point before

2:12:56 ↗ we go

2:12:58 ↗ to probably lack of public comment um

2:13:01 ↗ but giving that an

2:13:05 ↗ option and is council member Joe

2:13:08 ↗ unmuted from our

2:13:11 ↗ side yeah I have no questions at this

2:13:14 ↗ time thank you okay fantastic just

2:13:16 ↗ wanted to touch base there we had a

2:13:18 ↗ bunch of questions okay uh any public

2:13:21 ↗ members

2:13:23 ↗ online no we do not okay and none

2:13:27 ↗ in the room as well so if you want to

2:13:30 ↗ just continue those last few slides so

2:13:32 ↗ that we get the direction needed and

2:13:35 ↗ then we will give it to you absolutely

2:13:39 ↗ so as we said at the beginning what

2:13:41 ↗ we're seeking tonight is to First

2:13:44 ↗ confirm that you are okay with taking

2:13:48 ↗ the next round of in-depth dives into

2:13:52 ↗ the rate study to the mobility and

2:13:54 ↗ infrastructure committee and then having

2:13:57 ↗ the committee refer those

2:13:58 ↗ recommendations and the proposed plan

2:14:01 ↗ back to the full

2:14:02 ↗ Council so that's question one and then

2:14:06 ↗ question two again knowing these These

2:14:09 ↗ are Ballpark scenarios meant to

2:14:12 ↗ illustrate possible

2:14:15 ↗ choices we are seeking some feedback

2:14:19 ↗ from you as to uh your preferred

2:14:22 ↗ scenario for each of the various

2:14:27 ↗ funds great so I'm going to suggest we

2:14:30 ↗ keep that slide up so that we can all

2:14:32 ↗ refer to it oh you guys raised things

2:14:36 ↗ okay I was going to say because I was

2:14:38 ↗ looking the other way council member

2:14:40 ↗ Mars so I'm I'm going to do that thing

2:14:42 ↗ that is probably annoying at times but

2:14:44 ↗ I'm going to put on the little 16-year

2:14:46 ↗ hat because this is this kind of

2:14:49 ↗ conversation has come up over and over

2:14:51 ↗ and over again over the last 16 years

2:14:54 ↗ and I think that one way to look at it

2:14:56 ↗ and the way that I personally like to

2:14:58 ↗ think about it is you know is there an

2:15:01 ↗ annualized rate increase level that we

2:15:05 ↗ consider too much right is is there a do

2:15:09 ↗ we as a council want to say and

2:15:12 ↗ historically we have said something like

2:15:14 ↗ five or six% per year um is is beyond

2:15:18 ↗ that is is not territory that we

2:15:20 ↗ generally want to go into if we can

2:15:21 ↗ avoid so I personally would look at this

2:15:25 ↗ and let's say you use a a 6% bogey you

2:15:29 ↗ know what would it take in each of these

2:15:32 ↗ uh to hold at 6% right um for water um

2:15:37 ↗ it means you you don't want to use cash

2:15:40 ↗ fund right but you could you could get

2:15:42 ↗ away with the the hybrid funding um with

2:15:45 ↗ sewer um you know it means a different

2:15:48 ↗ thing and with storm water you just

2:15:50 ↗ would have have to go um with that first

2:15:54 ↗ option and the and and it's smaller

2:15:57 ↗ dollar involves amounts but the the

2:16:00 ↗ percentage increases are just eye

2:16:01 ↗ watering so again that that's just one

2:16:05 ↗ way to do it but it is a way that we've

2:16:06 ↗ talked about historically is saying we

2:16:08 ↗ don't want to be in the business of

2:16:09 ↗ passing more than five or six% on

2:16:11 ↗ annually to our folks if we can avoid it

2:16:13 ↗ um because that really becomes very

2:16:15 ↗ difficult for a lot of folks even though

2:16:17 ↗ like I said storm water isn't huge

2:16:18 ↗ amounts of dollars um so that that would

2:16:21 ↗ be the strategy that I would suggest

2:16:22 ↗ thank

2:16:24 ↗ you um council member

2:16:28 ↗ Hall thank well first of all thank you

2:16:31 ↗ for all the clearly the very detailed

2:16:34 ↗ hard work that staff and Consultants

2:16:36 ↗ have have been living and breathing in

2:16:38 ↗ this work so I appreciate that and and

2:16:40 ↗ you're seen in that so thank you I'm

2:16:42 ↗ also very bummed that I'm not on the

2:16:44 ↗ mobility and infrastructure committee

2:16:46 ↗ anymore cuz um this just sounds really

2:16:50 ↗ fun um

2:16:51 ↗ but uh yes okay with in-depth Dives

2:16:54 ↗ going to m& um we have very

2:16:56 ↗ distinguished members of our Council

2:16:57 ↗ there so I trust them um to make good

2:16:59 ↗ recommendations back to us and of course

2:17:01 ↗ we'll follow along um I think my initial

2:17:04 ↗ feedback is very similar to council

2:17:06 ↗ member Marts I'm really highly sensitive

2:17:08 ↗ to cost of living right now I have a

2:17:09 ↗ feeling it's going to show up as one of

2:17:11 ↗ the number one issues again in our

2:17:13 ↗ community survey this year um and so I

2:17:16 ↗ think um it makes sense to try to

2:17:18 ↗ balance come up with the balance to

2:17:20 ↗ approach for each of these um rate

2:17:24 ↗ scenarios so I think that's scenario

2:17:26 ↗ three for all of them is that right um

2:17:31 ↗ so I think that's kind of the biggest

2:17:32 ↗ thing on my mind is yes we have a we

2:17:34 ↗ have a lot of needs but we also um have

2:17:37 ↗ to understand that cost of living is on

2:17:39 ↗ everyone's mind and so um that's kind of

2:17:43 ↗ my initial thoughts on that um I also

2:17:46 ↗ don't know if we we might have already

2:17:48 ↗ done this before in the past but I think

2:17:50 ↗ we should share our story around the

2:17:52 ↗ sewer fund with King County we're all

2:17:54 ↗ just trying to meet needs but but the

2:17:57 ↗ increase at the county level we should

2:18:00 ↗ be able to share a story with them that

2:18:01 ↗ it is forcing us to have to cut back on

2:18:04 ↗ not meeting some of the needs that show

2:18:06 ↗ up in our community and here's how so on

2:18:08 ↗ and so forth so um disappointed but

2:18:12 ↗ again understand that um you know

2:18:13 ↗ everyone's trying to meet um needs and

2:18:16 ↗ thank you for kind of taking a minute to

2:18:18 ↗ walk us through the water treatments

2:18:19 ↗ that thing um now that we've walked

2:18:22 ↗ through that a little bit the logic of

2:18:24 ↗ why we need to keep walking down the

2:18:25 ↗ path right now makes much more sense to

2:18:28 ↗ me so thank you I'm just you know always

2:18:29 ↗ trying to think of we were all so

2:18:32 ↗ excited because we're like oh a cheaper

2:18:33 ↗ path right for wholesale water um and um

2:18:36 ↗ but anyways I I appreciate your thoughts

2:18:38 ↗ on that and and then keeping an eye on

2:18:40 ↗ whatever happens in this tax exempt uh

2:18:43 ↗ Municipal Bond space will be um

2:18:45 ↗ interesting as well thanks again for all

2:18:47 ↗ the work those are my initial

2:18:49 ↗ thoughts deputy council president D

2:18:53 ↗ Michelle thank you

2:18:56 ↗ um so the these are tough decisions to

2:18:59 ↗ look at

2:19:00 ↗ so uh I agree um with uh customer behal

2:19:06 ↗ that people are really really sensitive

2:19:08 ↗ to uh rate increases and tax increases

2:19:12 ↗ right now um and I am looking at this

2:19:15 ↗ kind of through the lens of a senior

2:19:17 ↗ citizen who's on a fixed income as many

2:19:19 ↗ of our senior CI citizens are um however

2:19:24 ↗ uh I also asked the question earlier

2:19:27 ↗ because I know that people who are low

2:19:29 ↗ income and on fixed incomes and so forth

2:19:33 ↗ also really cannot handle large sudden

2:19:38 ↗ increases and so I am really looking at

2:19:41 ↗ what's going to be the smoothest path um

2:19:45 ↗ if we have to increase how can we do

2:19:47 ↗ that in a gradual way over time

2:19:51 ↗ and if we for example set a cap of 6% or

2:19:54 ↗ whatever all we're doing is kicking it

2:19:57 ↗ down the road where we would have to

2:19:58 ↗ have higher increases later on which

2:20:01 ↗ would benefit me

2:20:03 ↗ possibly but thinking about people in

2:20:06 ↗ general uh it's a really hard thing to

2:20:09 ↗ all of a sudden get a a big increase and

2:20:12 ↗ so I'm much preferring the idea of if we

2:20:16 ↗ have to do increases let's do them

2:20:18 ↗ slowly and gradually so for under

2:20:20 ↗ waterer I had marked that the hybrid

2:20:23 ↗ funding appealed or it seems to me the

2:20:27 ↗ the best way to handle that um under the

2:20:31 ↗ sewer um you'll notice that I'm not

2:20:34 ↗ going for the

2:20:35 ↗ debt under the sewer one scenario 2 and

2:20:39 ↗ then under the storm water um uh

2:20:43 ↗ scenario 3 I think we're just going to

2:20:46 ↗ have to look at cutting some of those uh

2:20:48 ↗ projects and I know council member James

2:20:50 ↗ asked for a list of the projects that

2:20:52 ↗ might be cut and I can't find that email

2:20:55 ↗ but that was a really good list and so

2:20:57 ↗ if you could send that to us uh before

2:21:00 ↗ the mobility and infrastructure uh

2:21:03 ↗ committee meets on this topic I would

2:21:05 ↗ really appreciate that I think we have

2:21:07 ↗ to know exactly what what we would um

2:21:10 ↗ end up cutting if we have to do that

2:21:11 ↗ last scenario so um so those are

2:21:14 ↗ preliminary you know first cut looks um

2:21:19 ↗ and as a member of the the mobility and

2:21:21 ↗ infrastructure committee yes send that

2:21:23 ↗ to the m& committee glad to talk that

2:21:26 ↗ over but um I'm not feeling really good

2:21:30 ↗ about going into debt at this particular

2:21:32 ↗ time uh we've got so many other things

2:21:35 ↗ on the on the table where we might have

2:21:38 ↗ to go into debt I I I would hate to take

2:21:41 ↗ that as this is our first step into

2:21:44 ↗ another round of debt I'd rather have us

2:21:47 ↗ try to to do it through gradual rate

2:21:50 ↗ increases and using the cash that we

2:21:54 ↗ have and and not going into debt so

2:21:56 ↗ those are my thoughts

2:21:58 ↗ thanks council member Jen yeah I agree a

2:22:02 ↗ a lot with what um Deputy council

2:22:04 ↗ president D Michelle said I think I mean

2:22:06 ↗ the debt service coverage ratio of 1.27

2:22:08 ↗ means that 80% of our revenue is going

2:22:10 ↗ to be going towards Debt Service that

2:22:12 ↗ freaks me out because if what if there's

2:22:14 ↗ some other you know Capital expense that

2:22:16 ↗ pops up in 2040 and we're you know

2:22:18 ↗ already all B out are we going to have

2:22:19 ↗ to raise rates by by 20% in one year I

2:22:22 ↗ mean I'm definitely planning on being

2:22:23 ↗ around by then so uh not hoping to not

2:22:26 ↗ get hit with um you know drastic rate uh

2:22:30 ↗ increases in the future so I think

2:22:31 ↗ definitely you know doing the hybrid

2:22:33 ↗ funding where possible I think on sewer

2:22:36 ↗ um there also um I wonder if there could

2:22:39 ↗ be a scenario 4 which is more analogous

2:22:41 ↗ to the hybrid funding scenario 3 for

2:22:43 ↗ water um that's halfway between you know

2:22:45 ↗ that cash fund and maximizing debt

2:22:47 ↗ funding um and then similarly on the

2:22:49 ↗ storm water based on my convers with the

2:22:50 ↗ public works director earlier today um

2:22:54 ↗ you know cutting out some of those

2:22:56 ↗ non-critical projects doesn't

2:22:57 ↗ necessarily mean that we're not going to

2:22:59 ↗ that we're completely not going to do

2:23:00 ↗ them it's just that we will only do them

2:23:01 ↗ if we can get grant funding and we're

2:23:03 ↗ not going to ratee base those things

2:23:05 ↗ which I think makes a lot of sense and

2:23:07 ↗ you know for me I'm like I would love to

2:23:09 ↗ do all these because they're

2:23:10 ↗ environmental projects but there is also

2:23:12 ↗ you know grant funding for those that

2:23:14 ↗ potentially doesn't exist for things

2:23:15 ↗ like moving your uh storm water line or

2:23:19 ↗ whatever the case may be

2:23:22 ↗ Council

2:23:23 ↗ M I got to start with a question because

2:23:25 ↗ I I'm I may be unclear but what's The

2:23:29 ↗ Debt Service on if we want 100% debt

2:23:32 ↗ what's The Debt Service as a percentage

2:23:35 ↗ of um

2:23:37 ↗ Revenue roughly I mean you don't have to

2:23:39 ↗ get it to the

2:23:43 ↗ penny are you referring to a specific

2:23:45 ↗ utility and specific scenario or what do

2:23:47 ↗ you no if if we if we debt funded

2:23:49 ↗ everything

2:23:52 ↗ what would be and then we took that

2:23:54 ↗ number of debt service so let's say it's

2:23:57 ↗ $100 and then we had revenue of $500 I'd

2:24:00 ↗ say 20% of our Revenue went to Debt

2:24:03 ↗ Service I just want to know what

2:24:04 ↗ percentage of our Revenue if we did

2:24:06 ↗ everything with debt would go to to Debt

2:24:12 ↗ Service right so maybe we can provide

2:24:14 ↗ you a table I mean the answer is going

2:24:15 ↗ to vary pretty significantly depending

2:24:17 ↗ on what year we're looking at I mean

2:24:19 ↗ it'll be much lower on the front end um

2:24:22 ↗ but as you add more and more debt you

2:24:24 ↗ know that percentage would increase over

2:24:26 ↗ time yeah give me a

2:24:28 ↗ Range uh can you turn your microphone

2:24:33 ↗ on I'm just trying to get a rough order

2:24:35 ↗ of magnitude is it 50% is it 5% is it

2:24:37 ↗ 90% so a couple clarifications for Paul

2:24:40 ↗ and internally Paul why don't you give

2:24:42 ↗ us a number for the debt scenarios by

2:24:47 ↗ first year last year so a large

2:24:50 ↗ component of the cost will be on M as

2:24:52 ↗ well so it will be a portion of cost the

2:24:54 ↗ second clarification I want to make is

2:24:55 ↗ that none of the debts maximum debt

2:24:58 ↗ scenarios are assuming 100% debt

2:25:00 ↗ financing because of coverage forces you

2:25:02 ↗ to generate a certain amount of cash

2:25:04 ↗ eventually so none of them will be 100%

2:25:07 ↗ debt financing so that's just a

2:25:08 ↗ clarification so if Paul if you whenever

2:25:12 ↗ you get a chance if you can let us know

2:25:13 ↗ those two points it'll be zero in the

2:25:15 ↗ beginning probably the end the high end

2:25:18 ↗ point uh that's where

2:25:22 ↗ we we'll probably see the biggest

2:25:23 ↗ component in 20

2:25:25 ↗ years and just so I know what to to tell

2:25:29 ↗ you all are you looking for a combined

2:25:30 ↗ for all three utilities or do you want

2:25:32 ↗ the answer by utility oh give me a

2:25:34 ↗ combined if you can if it's easier to

2:25:37 ↗ give it to me by utility give it to me

2:25:39 ↗ by

2:25:41 ↗ utility I can give it to you to uh

2:25:44 ↗ combine just give me a couple minutes to

2:25:46 ↗ put those numbers together okay well

2:25:49 ↗ well you're doing that I and and the

2:25:51 ↗ reason I'm trying to get at this is um I

2:25:55 ↗ don't know how much of our Revenue we're

2:25:58 ↗ going to be spending on on debt service

2:26:00 ↗ which is is significant but my my

2:26:04 ↗ Baseline feeling is that we ought to

2:26:06 ↗ debt fund to the maximum level we can

2:26:09 ↗ because that way we are sharing the cost

2:26:12 ↗ of these enhancements that we're doing

2:26:14 ↗ with uh future residents as well as

2:26:17 ↗ current residents whereas if we do

2:26:19 ↗ everything with about pay as you go it's

2:26:21 ↗ the current residents that are paying uh

2:26:24 ↗ all of the all of the costs so um and I

2:26:27 ↗ am also very sensitive to rate increases

2:26:29 ↗ and maximizing our utilization of debt

2:26:33 ↗ um helps with that and though I

2:26:36 ↗ appreciate the questions about the

2:26:38 ↗ federal government making U municipal

2:26:40 ↗ bonds not tax deductible um we would go

2:26:43 ↗ to the market with the bonds now and we

2:26:45 ↗ would lock in the rate now and so it

2:26:46 ↗ wouldn't matter to us oh yeah wouldn't

2:26:49 ↗ why didn't we say that we would be doing

2:26:53 ↗ um borrowing every two to three years

2:26:55 ↗ okay so there would there would be a a

2:26:57 ↗ curve of that yeah okay because we do

2:26:59 ↗ have reserves currently sorry about that

2:27:02 ↗ because we do have reserves right now

2:27:03 ↗ we're trying to balance the strategy

2:27:05 ↗ because if we issued that too early our

2:27:08 ↗ rates are not high enough potentially to

2:27:10 ↗ support it so we're structuring the the

2:27:13 ↗ the issuance only when we're we're

2:27:14 ↗ needing him and that's currently in the

2:27:16 ↗ back end of the forecast okay

2:27:20 ↗ right anyway um just from a directional

2:27:22 ↗ perspective I mean and I think we have

2:27:24 ↗ lots of really great conversations to

2:27:25 ↗ have going forward um my my bias is

2:27:28 ↗ towards the uh debt maximize the debt to

2:27:31 ↗ a within a reasonable um limits that

2:27:34 ↗ makes sense to our Consultants about how

2:27:37 ↗ we should do this and what what what is

2:27:39 ↗ Affordable to

2:27:41 ↗ us Paul how's it

2:27:44 ↗ coming another two minutes okay sounds

2:27:47 ↗ good council president May yeah go ahead

2:27:50 ↗ just to add one clarification uh

2:27:52 ↗ particularly for Council Members Mars

2:27:54 ↗ and Hall again scenario number one on

2:27:58 ↗ storm water is not is the only one on

2:28:01 ↗ this page we are not recommending

2:28:03 ↗ because it only solves for our operating

2:28:06 ↗ deficiency so it would mean no capital

2:28:08 ↗ projects or we'd have to severely cut

2:28:10 ↗ operating which would be difficult in

2:28:12 ↗ storm water in order to take on capital

2:28:15 ↗ projects so I just wanted to make that

2:28:18 ↗ clear it's a it's a problem with the

2:28:22 ↗ 6% I may clarify it for councelor Mars

2:28:26 ↗ um would the 6% be sufficient it's if

2:28:28 ↗ it's 6% for all three combined for an

2:28:31 ↗ average bill not limiting each one so

2:28:33 ↗ let's say storm could be a little higher

2:28:36 ↗ but water could be a little lower and

2:28:38 ↗ that way the combined bill is 6% for a

2:28:40 ↗ typical residential

2:28:42 ↗ home as an

2:28:44 ↗ example we're we're we're we're getting

2:28:48 ↗ into the sort of esotericas of of the

2:28:50 ↗ policy you politics you raise a good

2:28:52 ↗ point I I'm not you understand my the

2:28:55 ↗ the philosophical point right and I said

2:28:57 ↗ in my comments that storm water is a

2:28:59 ↗ much smaller dollar amount than than the

2:29:01 ↗ others so I I fundamentally I think you

2:29:04 ↗ you raise a good point I'm I'm

2:29:06 ↗ always my conversation is always when I

2:29:09 ↗ go out and talk to people in the

2:29:10 ↗ community and they want to talk to me

2:29:12 ↗ about the costs of things right I I

2:29:15 ↗ think what you just said would be a good

2:29:17 ↗ way um could be a good way for me to

2:29:20 ↗ have that conversation with folks and

2:29:22 ↗ say you know yeah in individual areas

2:29:24 ↗ it's a little bit more in other areas a

2:29:26 ↗ little bit less but you know we're

2:29:27 ↗ looking as a whole understanding our

2:29:30 ↗ impacts to your tax bill and uh and

2:29:33 ↗ trying to keep that at a reasonable

2:29:34 ↗ number so so thank you for that

2:29:36 ↗ suggestion it sounds like a a reasonable

2:29:38 ↗ way to think about it thank

2:29:41 ↗ you and so this is Paul go ahead Paul

2:29:45 ↗ yep so um just here with some numbers so

2:29:48 ↗ I am ignoring storm water right now

2:29:51 ↗ since we haven't proposed a scenario

2:29:52 ↗ that includes debt being issued so just

2:29:55 ↗ looking at Water and Sewer combined

2:29:58 ↗ right now with the one water issue um

2:30:01 ↗ total debt service is about 2% of

2:30:03 ↗ combined Water and Sewer Revenue rate

2:30:07 ↗ Revenue that is if we look out towards

2:30:10 ↗ 2043 under both of the max debt

2:30:13 ↗ scenarios that percentage would climb to

2:30:15 ↗ about 21% of uh total rate revenues

2:30:20 ↗ right thanks Paul

2:30:23 ↗ perfect okay um before go to you I'm

2:30:26 ↗ just going to see council member Joe if

2:30:30 ↗ you've got any feedback on these

2:30:33 ↗ scenarios and whether you're comfortable

2:30:35 ↗ with this going to

2:30:38 ↗ m& thank you um I'm looking forward to

2:30:41 ↗ having this discussion more in depth in

2:30:44 ↗ the uh l& committee um I think that uh I

2:30:49 ↗ would agree that that for storm water

2:30:52 ↗ S3 is a good idea to keep the critical

2:30:56 ↗ CIP items Grant funded um I I know it's

2:31:00 ↗ difficult and we're a salmon City uh we

2:31:02 ↗ have to have some um based reality in

2:31:06 ↗ terms of where we are as as a a city

2:31:09 ↗ however um I'm in favor of uh water

2:31:12 ↗ hybrid funding three at a 5.5% increase

2:31:16 ↗ and Sewer cash fund 20 years CIP at 7%

2:31:20 ↗ increase um I think that uh the graph

2:31:24 ↗ that showed where isqua is with respect

2:31:26 ↗ to our peers is very helpful in the

2:31:29 ↗ conversation um you know when we're out

2:31:31 ↗ in our community and then the general

2:31:33 ↗ weighted conversation that we're only

2:31:35 ↗ increasing it by 5% overall uh is also a

2:31:39 ↗ good way to think about it um but I'll

2:31:42 ↗ look forward to seeing what other ideas

2:31:44 ↗ come forward and and look forward again

2:31:46 ↗ to the discussion at L and I thank you

2:31:50 ↗ okay um do you have comments then

2:31:53 ↗ council member Hall yeah just to clarify

2:31:55 ↗ I was not advocating for scenario one in

2:31:58 ↗ storm water it's scenario three so thank

2:32:00 ↗ you thank

2:32:01 ↗ you great um so looking at my general

2:32:07 ↗ comments I agree that our community and

2:32:10 ↗ the time period is very highly sensitive

2:32:12 ↗ for rights and so we need to be very

2:32:14 ↗ specific on that however I'm highly

2:32:18 ↗ sensitive to the idea of of borrowing

2:32:22 ↗ because it increases the cost overall

2:32:25 ↗ and I think that's very important it

2:32:27 ↗ also locks us into scenarios in the

2:32:30 ↗ future so I would like us to be very

2:32:34 ↗ careful about selecting that my

2:32:38 ↗ preference in general is that we scrub

2:32:42 ↗ that CIP as hard as possible um in all

2:32:45 ↗ of our scenarios to make sure that we

2:32:48 ↗ really really truly need these

2:32:50 ↗ in the time periods that we have

2:32:52 ↗ suggested and that we cannot delay um

2:32:56 ↗ some of them as ways

2:32:58 ↗ to reduce costs so um in general I would

2:33:05 ↗ say I think you've given me a good

2:33:06 ↗ reason why we need to fund the 20-year

2:33:09 ↗ CIP in water and so in that scenario I I

2:33:16 ↗ think my concern over debt um outweighs

2:33:23 ↗ the concern over rate increase and so I

2:33:26 ↗ would prefer

2:33:28 ↗ S1 I think in

2:33:31 ↗ sewer um you've given me a reason that

2:33:33 ↗ we need to go beyond 2030 but not

2:33:36 ↗ necessarily a reason that we need to do

2:33:38 ↗ the full 20-year CIP um and so I think

2:33:42 ↗ my preference would be somewhere around

2:33:44 ↗ s

2:33:45 ↗ 1.5 looking at a 10-year CIP that is

2:33:50 ↗ funded um so hopefully getting a rate um

2:33:53 ↗ somewhere between the 3.25 and the

2:33:56 ↗ 7% and then with storm water um I

2:34:00 ↗ definitely prefer S3 as funding the

2:34:03 ↗ 20-year critical items on the CIP only

2:34:08 ↗ and so I think just in general I

2:34:11 ↗ recognize that storm water is in the

2:34:13 ↗ scenario that it is

2:34:15 ↗ because we maybe didn't have as healthy

2:34:18 ↗ of a balance in that scenario where

2:34:19 ↗ where we weren't able to fund all of the

2:34:23 ↗ operating and maintenance expenses let

2:34:25 ↗ alone the capital and so I I understand

2:34:27 ↗ why we need to do that high of a rate

2:34:30 ↗ increase at this time and considering

2:34:33 ↗ it's a smaller portion of people's Bill

2:34:35 ↗ I'm hoping that we can get closer to

2:34:38 ↗ that 5 and a half to 6% overall um and

2:34:44 ↗ hopefully limiting uh the debt as much

2:34:47 ↗ as possible that gives us just a lot

2:34:49 ↗ more flexibility in our future scenarios

2:34:52 ↗ without tying us into something that

2:34:55 ↗ says oh I'm sorry Community we cannot

2:34:58 ↗ fund this water treatment plant that we

2:35:00 ↗ need 25 years down the road because

2:35:03 ↗ we're still paying off debt from the

2:35:05 ↗ last 20 years and so as much as yes

2:35:09 ↗ those products are being used by Future

2:35:12 ↗ users those future users also want us to

2:35:16 ↗ have the flexibility um that is needed

2:35:19 ↗ to do the financing um of or to select

2:35:24 ↗ the projects that are needed for each of

2:35:26 ↗ our utilities in the future

2:35:28 ↗ so so I think you've heard from

2:35:31 ↗ everybody but I think you probably heard

2:35:33 ↗ lots of different things so let me have

2:35:35 ↗ you reflect on that and see if you need

2:35:38 ↗ more um consolidation of thought sure

2:35:41 ↗ thank you I I definitely heard a variety

2:35:44 ↗ of opinions I did hear some

2:35:46 ↗ clustering I heard uh some common ities

2:35:50 ↗ around kind of staying at the I'll say

2:35:53 ↗ midpoint middle scenario um I Heard more

2:35:58 ↗ people express some willingness to take

2:36:00 ↗ on some debt than uh those uh expressing

2:36:05 ↗ no desire for debt um so I think we have

2:36:09 ↗ enough information again this was early

2:36:11 ↗ moment in time I think we have enough

2:36:13 ↗ information to start to play out some

2:36:15 ↗ additional uh scenarios as we weave in

2:36:19 ↗ the next part of the conversation which

2:36:21 ↗ really is about um cost sharing

2:36:23 ↗ allocations between classes of uh

2:36:27 ↗ customers and I think we'll be able to

2:36:29 ↗ deliver uh some choices to you that that

2:36:33 ↗ hopefully meet most of these opinions

2:36:35 ↗ and

2:36:36 ↗ marks it was good feedback just uh

2:36:39 ↗ reflecting back to council members do we

2:36:41 ↗ feel like we provided uh good

2:36:44 ↗ information and that staff is going to

2:36:46 ↗ take it all of that okay f fantastic I

2:36:51 ↗ will return to council member Joe just

2:36:53 ↗ because you're on the phone and I want

2:36:54 ↗ to make sure I give you 100% chance to

2:36:57 ↗ uh reflect in if there is anything

2:37:00 ↗ needed at this

2:37:02 ↗ time uh no closing remarks thank you

2:37:04 ↗ looking forward to uh hearing this in

2:37:06 ↗ committee again thank you fantastic I

2:37:09 ↗ figured that was the case but you know

2:37:11 ↗ since you're I don't see a visually I

2:37:14 ↗ have to make sure to check in okay um

2:37:17 ↗ looking back to our agenda we've got go

2:37:19 ↗ to the order anybody have

2:37:22 ↗ anything didn't anticipate it okay then

2:37:25 ↗ we will adjourn at 908 pm thank you

2:37:28 ↗ everybody

Approved minutes

Extracted from the next meeting's packet, where this meeting's minutes were approved as a consent-calendar attachment.

Open PDF

Attendance

Council / Members (7)

Barbara de Michele

Zach Hall

Kelly Jiang

Russell Joe

Tola Marts

Chris Reh

Lindsey Walsh

Staff (3)

Wally Bobkiewicz, City Administrator

Andrea Snyder, Deputy City Administrator

Chris Grabowski, Deputy City Clerk