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:

3825 segments .txt ↗

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 (Attended Virtually)

Tola Marts

Chris Reh

Lindsey Walsh