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2011-07-07 SpecialMayorTammy de Weerd City Council Members: Keith Bird Brad Hoaglun Charles Rountree David Zaremba NOTICE OF SPECIAL MEETING MERIDIAN CITY COUNCIL NOTICE IS HEREBY GIVEN that the City Council of the City of Meridian will hold a Special Meeting I Workshop in the City Council Chambers at Meridian City Hall, 33 East Broadway Avenue, Meridian, Idaho, on Thursday, July 7, 2011 at 8:00 a.m. The Meridian City Council will be receiving and discussing preliminary budgets and presentations from the Public .Works Department, Water Department and Wastewater Department of the City of Meridian towards approving a tentative budget. DATED this 1 st day of July, 2011. JA Meridian City Council Special Meeting -July 7, 2011 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearings, please contact the City Clerk's Offce at 888-4433 at least 48 hours prior to the public meeting. O CO C~ 00 00 00 .. . .. .. .. .. w~wwoo ocnoo ~ ~ ~ ~ ~ ~ ~ ~ CO CO 00 00 NO,pWWO owcnooo 00 ~oo~oo .. ......... w~~owo ocncnooo n~~~~o ~v c~~~~ ~ ~ . ° . ~ ~ ~ ~ ~~ ~ O N ~ ~ (Q N ~ ~~ N N 0 ~ ~ acs N ~m~' rn~ ~~c~ . ~ ~o~ ~, .~ 3~rn ~ ~~~. N ~ ~~ ~ ~ ~ c~ ~ ~. ~ ~ ~ ~, v,' a ~ ~. N N -' O -. O ~ ~ ~ - CD ~ _ ~~ N L .. ~~ y N ~ r+ O O O rn c c~ N v 3 ~D •/ ~. N Q. ~ ~ ~ ~1 N ~ ~ ~~ ~D ~ ~ ~~ ~ '0 ~D y ~D 0 z c~ ~D Meridian City Council Special Meeting July 7, 2011 A meeting of the Meridian City Council was called to order at 8:00 a.m., Wednesday, July 7, 2011, by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Brad Hoaglun, David Zaremba, Keith Bird and Charlie Rountree. Item 1: Roll-call Attendance: Roll call. X David Zaremba X _Brad Hoaglun X Charlie Rountree X Keith Bird MayorTammy de Weerd De Weerd: Welcome to this special meeting of the workshop for City Council. For the record it is Thursday, July 7th. It's two minutes after 8:00. We will start with roll call, please. Item 2: Adoption of the Agenda De Weerd: Item No. 2 is adoption of the agenda. Hoaglun: Madam Mayor? De Weerd: Mr. Hoaglun. Hoaglun: I move adoption of the agenda as printed. Bird: Second. De Weerd: I have a motion and a second to adopt the agenda as printed. All those in favor say aye. All ayes. Motion carried. MOTION CARRIED: ALL AYES. Item 3: City of Meridian FY2012 Budget Meeting Hearings Council assemble, review any additional materials Public Works -Engineering De Weerd: Item 3 is a continuation of our budget hearings. I'll turn this over to Mr. Barry, because we are focused on the Enterprise Fund today. Barry: Good morning, Madam Mayor, Members of the Council. Meridian City Council Special Meeting July 7, 2011 Page 2 of 33 De Weerd: Good morning. Barry: It's my pleasure to present to you this morning the proposed budget for fiscal year 2012 and -- do I need to turn --let's see. I want to get some audio visual. Here we go. Okay. So -- I'm not sure all of ourAV equipment is working. Rountree: Time's up. Kilchenmann: Thatwas great. Barry: That's our budget fortoday. Bird: That was the budget. Barry: Here we go. All right. Sometimes there is some interference with the AV stuff. Okay. As you know, as a preparation of our budget and Enterprise Fund involves many, many people and, you know, I get to -- I get to present the first part of it, but, really, I want to extend credit to a variety of different folks, most of them are in this room and certainly our Council liaison for this year Council Member Brad Hoaglun and also the Mayor were critical in helping us put together our base budget and also reviewing our enhancements and those things. And, then, a lot of the Public Works staff that you see here and certainly finance staff as well. So, we are grateful for their time, input, on the development of our budget. We incorporated a variety of different approaches in our -- the generation of our budget for this year. First of all, we said that it was priority for us to meet current regulatory and safety requirements. It was also important in the development of our budget to maintain current product and service quality area and delivery levels. We wanted to adequately protect and maintain infrastructure and adequately fund and insure appropriate staff training and the utilization of a variety of different technological resources, as those make us more efficient in our work. We wanted to be conscientious of rates, first making sure that our budget was going to fit within the revenues that are being developed off of the rates and that rate presentation was presented to you in February or March of this year. And, then, also eliminate through our budgeting annually any potential for significant rate increases down the road. We also wanted to utilize the just in time capital financing approach for better leveraging of our capital assets or capital finances I should say. Incorporate performance based principles -- budgeting principles that is in the development of our budget and, then, taking measured approach of the expansion of our strategic assets, meaning we don't want to overbuild or under-build, we want to make sure that we are building what we need when we need it. We wanted to reduce costs where possible. We have been able to achieve significant costs savings in our budget this year, which I'm excited to share some more information about later in the presentation. Continue to maximize our operational efficiencies and, then, lastly, empower our budget stewards, many of those who will be presenting today for you as well. Now, the first question I imagine you might have if you studied the budget summary of the Enterprise Fund is is the Enterprise Fund balanced and I guess it depends on how you look at this particular Meridian City Council Special Meeting July 7, 2011 Page 3 of 33 sort of information. What I have got up here for you on the screen is the Enterprise Fund budget summary right out of your -- your notebooks and if you look in two areas, the ones I have highlighted in red here, you see that the total revenue projected for FY- 12 is about 22.1 million and the Enterprise Fund total expenditures for operating capital is about 25.8 million, which suggests that we are over budget by about 3.1 -- if you round up 3.2 million dollars. However there is a bit of a nuance here that I wanted to explain before we get into the budget, because I don't want you to be alarmed about this as we move forward. You will notice this circle that I have identified on the screen here shows that depreciation expense for FY-12 is about 4.8 million dollars. When you add that depreciation expense in, then, you get that 3.16 million over budget, but if you take depreciation out, that depreciation expense, you actually see the Enterprise Fund budget post a positive of 1.6 million. And so I wanted to go into that just briefly and hear kind of what's behind those numbers. This year in our proposed budget we are requesting about 6.7 million dollars in capital financing needs. Now of that 6.7 million -- and this isn't exact, but roughly two million of that is in the form of replacements or what we call de reciation eli ible projects, with a difference or remainder as new capital p g projects. We are still kind of a young city infrastructure wise, so we tend to see more new capital than we do depreciated capital projects at this point, but that will slowly shift as we mature and our assets age. Now, what happens here is that even though this the request that we have in our budget, a total again of 6.7 million, there is an accounting exercise that is -- that actually increases our budget by 4.8 million does and this is the depreciation. schedule that the Finance Department adds onto -- based on a formulaic approach with regard to what our depreciation set aside should be for the year. Now, this 4.8 million comes on the books and stays on the books, but doesn't get utilized and at the end of the .year comes back off the books. So, it makes it appear that we have 11.5 million dollars in capital potential expenses, when the reality is we only have the 6.7 million. So, this explains more or less the impact on the overall budget and how that translates into having a deficit appear on the books, when, in reality, we will actually post close to two million dollars in net revenue or profit I should say. I don't want to call it profit, because it's not profit, but essentially posting positive revenues. So, this is what it looks like in the whole fund. We are going to -- based on projections for the year take in about 22.7 million dollars in revenues over this next fiscal year and our expenses will be around 21 million, which means that, essentially, we are under budget or as I said we are going to post about 1.6 million positive revenue. If you add in this depreciation expense, then, you get a hit of 4.8 million, as we have talked about, and that sends your budget on paper at 3.1, 3.2 million over budget, when the reality is that 4.8 million is not ever going to be touched. So, I just wanted to brief you on that before we went any further. I will pause here and see if there is any questions on this, because it does have bearing on the remainder of the budget as we go forward in our presentation. De Weerd: Council, any questions? Mr. Zaremba. Zaremba: Madam Mayor, if I may. I understand what you're explaining and its impact on the current year and actually each current year as we went along, but maybe I'm misunderstanding what depreciation expense is intended for. Isn't that suppose to be a savings account that we add into every year that eventually will cover if we have -- you Meridian City Council Special Meeting July 7, 2011 Page 4 of 33 know, if 20 years from now we have to replace the whole wastewater treatment plant or somethin like that? Isn't it a set aside that we actually need to be doing in real money? 9 Bar :Councilman Zaremba, I appreciate your question. Yes and no. The way it's ry currently set up is that the depreciation amount that gets added to the budget is added every year and, then, removed every year. So, it does not compound annually, meaning we would not have 4.8 million this year and, then, set that aside in the budget and, then, add another 4.8 next year to have eight or nine million and, then, the next year add another 4.8. It doesn't work that way, which is I think what you were suggesting. In reality what happens -- Zaremba: That is what I was thinking. Barry: Right. No. In reality, this --this set aside is an annual set aside, it gets added to the budget and, then, not expensed and, then, returned -- and, then, sort of taken off -- not really, quote, unquote, taken off, but it's just not -- it's not utilized. vUhat we would like to do -- and we are working with Finance staff on this -- is we would like to be able to utilize depreciation financing, that 4.8 million, to actually finance depreciation eligible projects, because, then, we wouldn't have to ask for that depreciation financing from new capital money. Does that make sense? What that will do is it will have a net impact of reducing the overall capital expenditures -- or, excuse me, capital needs and allow us to tap into that 4.8 million. The whole idea behind deprecation in the way that we have approached it in the city is that we take our assets and we take the value of those assets and divide it by its life. Okay? Say a hundred years. So, if we have 400 million dollars of assets -- or value and we divide that by a hundred years for an average life span, then, we'd have to set aside four million dollars every year. Correct? So, if we were to do that, the idea is that you don't just set it aside to put it on the books and take it back off the books, you put it on the books to spend a certain amount with the idea that every year you have replaced four million dollars worth of assets, so by the end of that hundred year period all of your assets are replaced. Our problem is that most of our assets are new and don't need to be replaced yet, so that creates a little bit of a complicating factor in how we utilize depreciation financing. Kilchenmann: Could I -- Madam Mayor, Members of the Council, could I provide a little clarification on depreciation? So, what depreciation expense actually -- well, to go back a little -- a 30,000 mile view, the Enterprise Fund is what we call a proprietary fund, so we treat them as if they were a business and we are required -- there are set out in depreciation -- like a building should be depreciated 50 years. That's this -- that's a standard -- an industry standard or a professional standard and so what we do each year is we take the assets individually and calculate that amount that we expense. Just like if you work for Boise Cascade you would incur depreciation expense. We don't just take it out and get rid of it, what we do is net it against the value of an asset in an account called accumulated depreciation. So, if you have got the assets that was originally 100,000 dollars, each year the value decreases on your balance sheet and it's sometimes confusing, because it isn't really like a true replacement value, so we don't say, okay, Tom, what do you -- you know, what do you think it's going to cost to replace Meridian City Council Special Meeting July 7, 2011 Page 5 of 33 this in 20 years, it's actually that everybody uses the same depreciation standard and in accounting we are not allowed to use market value, we have to use cost, again, looking for consistency across every entity that does business type financial statements. So, when we are budgeting we put it in there, because when we create the monthly financial statements we want to mimic what they look like at the end of the year. So, we want to be tracking them as those audited financial statements will come across. For our budgeting purposes we -- it's -- it's not a cash number. Tom's right, it's not a cash number, it's just this number so that people looking at the income statement will say, um, yeah, this is about what their net income is. We don't do it in the General Fund, even though we convert the General Fund at the end of the year, we will put depreciation expense in. So, the reason we put it on here is to show you -- well, because we want to appropriate it, as I said before, but we have always budgeted the Enterprise Fund on a cash basis. So, that's kind of the difference. And in this budget we actually do do a cash transfer for depreciation reserve, which is a completely different animal. vllas that totally confusing? Yes. Zaremba: No. Actually, I'm following you so far. Kilchenmann: Oh, that could be scary, too. Zaremba: Thank you. Barry: I think what's important in that discussion here is, essentially, that that 4.8 million dollars does not represent an actual cash situation. So, it's just, as I say, sort of an accounting exercise and it makes it appear that the budget is negative by 3.2 million, when, in reality, it's not, we will actually post a positive revenue or positive funds for next year. So, just wanted to be clear about that as we move forward and, hopefully, we have done that. Okay. So, we will continue then. You know, what we do and. have committed to doing for the last several years is compare our budget to the rate model, because we want to make sure that the rate can finance through revenues our proposed budget and I'm pleased to say that that is the case here. You have seen this particular graph before, I won't go into detail, we have talked about this in February or March time. We talked about the rates. Essentially we are bringing stability to the revenue and expenditure side of the Enterprise Fund and each of those lines represents what the undesignated ending fund balance projection is for either water, which is the blue line, wastewater the green, the total, which is the combined of water and wastewater, for the undesignated ending fund .balance and, then, if you want to know entire ending fund balance, meaning all the reserves includes, that's the orange line at the top. So, we are still in good shape here with regard to the projections into the next five years. Just to remind you, we have about 16.4 million dollars worth of reserves set aside in our budget, not on the books. Again, this does not appear on the books, this is just in the pending fund balance how we sort of earmarked each of those. One of the things I wanted to point out -- and I have mentioned this before, but I want to just remind you, because it's good during budget season to remind you, but, essentially, we are in a situation, just as I mentioned, where we are going to collect about 1.6 million dollars in revenues this year above what our expenses are and that's important, because during Meridian City Council Special Meeting July 7, 2011 Page 6 of 33 this period, as we have forecast between 2012 and 2016, our capital expenditures, meaning our financing that we need for capital projects, is about 37 million dollars. So, Burin this eriod we are actually going to see that we are going to collect, hopefully, 9 p more revenue than we are actually going to have as expenses and that will be a period of savings for us and we are trying to offset a big bump here, which is going to occur between 2017 and 2022 where our expenses over the capital -- for capital projects during that period are going to surge to about 77 million dollars. So, we want to use the savings we collect over the next three to four years to offset increases in cost over the next period that I have just described and so you get this save-spend model here that I have thrown upon your screen. That's an approach we are purposely trying to mimic -- if you try to take out of the sort of high peaks and high valley situations as it relates to rates. So, we want to smooth that and have less impact on rates and to do that we are trying to forecast further out and anticipate what our needs are much further out, so that we can make incremental adjustments during the short term. We have incorporated, as I mentioned, some performance based budgeting principles. I can't say this is a performance based budget, but I can tell you that the principles of performance based budgeting -- many of them were incorporated in the development of our budget. We have been tracking through probably about 16 to 18 monthly -- for the last 16 to 18 months, monthly operational meetings that we have where we talk about both performance as it relates to our financials and performance as it relates to operations. One of the things we have been tracking is personnel costs. During the last three to four years our personnel costs have remained pretty steady, but our actual expenses have been -- have been down and this is due to vacancies. When I first joined the department in 2008 there were about 18 or so vacancies in the Public Works Department. That was almost 17 percent vacancy rate in the department when I took over. I'm pleased to report that since that time we have been slowly filling positions as those positions have been needed and right now we are about four and a half positions vacant at this point in time. What's important about that is that over that period that I mentioned from the early 2008 until now we have two million dollars worth of personnel savings, because of these vacancies. Now, as our personnel costs do come up, our budget does not. Okay? And that's what I wanted to explain here. The budgets pretty much remain the same. As a matter of fact, this year we took half an FTE off the books and so have a slight reduction in our budget request for personnel, but our personnel costs are now coming up to what budget is, because we are filling vacancies. I just wanted to touch on that briefly. Our actually operating costs, we have been trending this for the last, as I mentioned, 16 to 18 months and, essentially, based upon a sort of budget run rate our performance trends suggests that at the end of this year we will not spend about 14 percent or so of our budget compared with last year and that's important, because that set the bar for us in the development of the fiscal year '12 budget and we said if we are not going to spend -- we are trying to -- if our efficiencies and other approaches are saving money at this point, we would like to continue that into the next fiscal year budget, so let's reduce the overall operating budget by that amount, if not more. So we have been doing that and here is the effect. Our personnel and operating expenses across the board, when you compare our budget of last year 2020 -- excuse me -- 2011 budget, compared with our 2012 budget, what you will see is a reduction in every area of Public Works. We have a 32 percent reduction in Public Meridian City Council Special Meeting July 7, 2011 Page 7 of 33 Works administration in our proposed budget this year over last year's approved budget, a 23 percent reduction in water, 7.4 percent reduction in wastewater, 3.9 percent reduction in MUBS, for an overall Enterprise Fund budget reduction of about 17.7 percent, which is -- we are pretty proud of. So, this is what it looks like. Our personnel expenses roughly the same as it was last year, with a slight reduction maybe of about 40 to 50 thousand dollars. But, again, that's pretty stable and that represents that half- time position that we released from the Enterprise Fund budget this year. Operating expenses is where we have really achieved some major ground in regards to savings. Our budget last year 13.5 million, this year's budget is just over ten million. So, that's significant. And, then, our capital expenses for last year -- slight reduction here from 7.1 million to 6.7 million for this year's budget. So, we are pretty pleased about these numbers. If you look at our enhancement history for the last, oh, I don't know, ten years or so, this is the lowest enhancement -- this is the lowest dollar value of enhancements that the Enterprise Fund has proposed to the City Council dollar wise in the last five years. So, what we are seeing is a -- as we -- as we try to be more methodical and we try to improve our overall approach in performance-based budgeting and using some other efficiency gains that we have been able to achieve, our overall reduction here is significant for this year's budget. So, I did want to just highlight that. This is the net effect, sort of the big picture summary of the Enterprise Fund as it relates to total budgeted expenditures for the last four years or so. And you can see that if you go back and compare FY-09 where our budget was about 37 million, this year's budget's 25 million and you can see the percent reductions all along the way here that we are pretty pleased to showcase for you. So, in summary, before I turn it over to the staff to present enhancements, I just wanted to point out that our budget is consistent with the rate model, that the revenues projected in the rate model will be sufficient to finance the budget as proposed. We have an aggressive management -- or aggressive management of our cost structures, we are trying to emphasize reduction on operations and maintenance costs, while not reducing quality or service levels. We want to focus on improving execution rates in operations and construction. We have achieved gains in operations and construction. I have mentioned the operational gains that we have achieved. Mr. Stewart will mention the construction improvements with regard to execution rates that we have been able to achieve as well .over this past year. We also want to be considerate of current and impending regulations. You know, we get closer and closer to our -- the new gold standard, if you will, for nutrient removals at our wastewater treatment plant that the EPA would like us to meet. So, that's something that's just on the horizon. And, then, also consideration for depreciation eligible assets, which we talked about, and we want to continue incorporate and focus on continuous process improvements moving forward. So, with that that concludes my component of the presentation. The staff will be presenting various components of the enhancements and operational summaries over the next hour or two for you and, then, we will be happy to entertain any questions you might have at that time. Without further adieu will turn it over to the staff, unless you have questions forme. De Weerd: Council, any questions forTom? Bird: I have none at this time, Mayor. Meridian City Council Special Meeting July 7, 2011 Page 8 of 33 De Weerd: You know, Tom, I do. You mentioned the cost savings and you and your staff have done a lot of best practices in your budgeting trying to get into real time spending and that sort of thing and I recognize that the innovation that your staff uses in finding cost savings for projects and various things, how much of that is from your real- timebudgeting approach and how much of it is cost savings? Barry: Madam Mayor, I'm not real certain I understand the real-time budgeting approach component of your question. Do you mind expanding a little bit? De Weerd: Well, in the past --and I'm pleased to say it was the past -- we -- we'd carry forward a lot of your budget every single year, because it was not budgeted for what would necessarily be expended in that year, but more for an entire project. So, you're still tracking in that sense, but your budget actually reflects today what you're going to spend in that budget year. Barry: Correct. De Weerd: So, you know, the numbers are impressive and I don't want minimize that, because like our General Fund departments, they are trying to get down and looking at actual expenses versus what was budgeted, because it was kind of this arbitrary figure up there. Now, you're really getting into the detail and I was quite impressed sitting down this year and seeing whole lists of what those budgets entail. So, I guess more as we look at showing actual budget savings, I would like to really be able to -- to recognize those staff that have innovative approaches and what those budget savings actually are, so we can point to that, rather than we are really trying to drill down into that performance based budget approach. Barry: Absolutely. And I appreciate your comments and your points and there has been a combination of both efforts from the staff and strategies that have been incorporated into the reduction of our costs for -- that we have been able to move into next year's budget recommendation. Some of these -- I think what we would best want to do is pull all of that information together in our next strategic plan report to the City Council and give you sort of a broad holistic view of how we have done that, because there is so much to talk about that and there is so much that we are proud of that I'd like to be able to bring that back to you and have a longer term discussion, if you will allow that. But briefly I would say -- De Weerd: I would absolutely allow that. Barry: Okay. Fantastic. So, we will do that, because I know you're on a tight time schedule today as well. But, absolutely, we have got cost efficiencies by technological resources that we have incorporated, by efficiencies for electric and gas savings at the treatment plant with the just in time capital financing that we have been using where we don't, as you mentioned, have to carry large sums of money, which taxes our budget year after year after year and the engineers are using project scheduling, Gantt charts Meridian City Council Special Meeting July 7, 2011 Page 9 of 33 now to trend and track projects better and meet project deadlines more reliably. I mean there is 'ust a varlet of different things that we have done and would love to share all of J Y . that with ou, so we will put that on our list of things to talk with you about next time we Y meet. De Weerd: That's rest, because I want it known that we don't take that for granted and g there is a lot that's going on in your department that it would be nice to highlight. Bar :Thank ou ve much. I a reciate your comments. Okay. Without further ry Y rY pp adieu I'll invite the staff up. Mr. Stewart. De Weerd: Oh. And, bythe way, it probably is your Council liaison, you know. Stewart: Madam Mayor, Members of the Council, good morning and some of what you 'ust touched on I'm going to briefly delve into and a couple of the slides that I have today J and, then, I'm also going to present one enhancement to you thats an engineering based enhancement. Talking about carry forward. One of the guiding principles of the engineer department and Public Works in general has been seeking to sort of live by is the concept of ask forwhat you need and spend what you get. And this goes along with the just in time financing model, which we have been essentially using since 2009. As you can see from this slide the carry forward dollars from 2008 through 2011 have been continuing to fall. 2011 actually represents the first year in which we did not have any planned carry forward dollars in the budget, so it was just 2011 where projects that we had budgeted and we had hoped to spend all of that money in 2011, there were no big projects that we were carrying money over into the 2011 budget year. Now that doesn't mean that there wasn't a few projects in 2010 that did have carry forward dollars, but there were no planned carry forward dollars. And I'm confident that through some of the efforts that we have been doing in our capital improvement planning and also our project management that we will be able to continue this trend. You know, perfection is elusive and I don't think we will ever get to zero, but we certainly think there is still room for improvement and we do expect to have even better results in the future. Next I want to highlight for just a moment some information with regards to execution rates. You have seen a graph similar to this in the past, but it has a little bit different shape. This green line that you see here represents essentially or mimics the historical spending patterns that we have had in capital project construction and you will see it's curved and that curved line is, essentially, to represent that during the summer months we have -- you know, where construction is taking place we have an increase of spending over the winter months, so you will see in the early part of the year that's got a flatter slope and that increases as we get -- or go through the year. Currently we are trending at about 69 percent execution rate. This represents a significant improvement over last year. Last year our execution rate was -- for the year -- at year end was about 56 percent. And that actually represented a significant improvement over previous years. So, although we still have a ways to go we are making significant progress in bumping that execution rate up as we move forward and our goal for this year is an 80 percent execution rate and Ithink as we -- we are actually very close to that, in the high 70s until May, we had a slight little bump in May. I'm hoping that as we see the numbers for Meridian City Council Special Meeting July 7, 2011 Page 10 of 33 June and July we will see that come back up and that will be a lot closer to that 80 percent line. I know the staff has been working hard to do things that will improve that. They have been managing their projects better and better and we have a couple of different things, which I will highlight on the next slide, which have helped us to achieve that. De Weerd: Mr. Hoaglun. Hoaglun: Just real quick, Warren. Can you explain execution rate? I want to make sure people don't think you are putting bodies in the ground along with pipe, so -- Stewart: Thank you. I appreciate your question. And, yes, the execution rate is simply if we take the annual budget and we were to divide it by 12 and the execution rate is just our ability to spend that budget appropriately. In otherwords, just looking at it year end, if we were to ask for eight million dollars and we were to spend eight million dollars, we would have an execution rate of a hundred percent. So, does that make that -- explain that? Thank you. Appreciate that. Hoaglun: Thank you. Stewart: Jumping to the next slide. Sort of talked already about the execution rates and how those are improving. Carry forward is improving, but a couple of the things that have helped us to get there earlier I think in this year, maybe the end of last year -- Iguess it was the end of -- it was last year. We actually did a presentation for the --for you guys at Council and the Mayor -- regarding the changes that we had been making in our capital improvement planning process and we presented you with a binder that represented a significant amount of work that we had put forward and I indicated that we were going to add even additional improvements to this year and we have been working on that -- in fact, the capital improvement binder is, essentially, done. We have been waiting for this process to be completed, so we can make sure that the numbers associated with the 2011 fiscal year -- or '12 fiscal year were fairly accurate. Of course we won't know the final numbers until later this year. But, essentially, we wanted to make sure that the information in there was as timely as could be. So, that will be coming.. Along with the changes and enhancements that we had promised, some information with. regards to budgeting -- or for scheduling and so forth. Those changes that we made in the capital improvement process last year paid big dividends to us this year in our efforts during the rate model process and in developing this year's CIP, because it was substantially easier than it had been in the past and we had information available to us to use in the decision-making process that we had not had before. One of the other improvements that I want to highlight for a minute is the idea that -- well, in the past we had never created project schedules in a timely basis. Now, some of the project managers had project schedules that they were using, but it wasn't a consistent process and we didn't have a -- essentially a department wide effort to do that. This year was the first year that we were able to identify which project managers would have projects or would do which projects before this fiscal year even started and those project managers -- excuse me --developed project schedules prior to the beginning of Meridian City Council Special Meeting July 7, 2011 Page 11 of 33 the year. First time we had a schedule for how to get that project complete before year end before the year began. We even refined that process even further in that we have now been -- purchased project management -- or Microsoft project, which is even an enhancement to our scheduling ability, which I think will help us in the future. We are hopeful that we will be able to add to that project management software, which you guys approved for us in last year's budget. We are working with the IT Department and Finance to identify what that is. It's taken a little bit longer than we had anticipated trying to find software everybody can agree is going to meet our needs, but we are in the process of doing that. And that's sort of some of the highlights that we -- you know, we have had in the engineering work group where we are making progress, we are making improvements. We have room to grow, but I think the improvements are significant. And with that I will go ahead and move onto the enhancement that I want to discuss and that would be the enhancement for some hand-held GPS units. We have four handheld GPS units in the --essentially engineering or Public Works group. These hand-held units are used by our inspectors, by our GIS staff, by our engineers and also by water and wastewater occasionally to, essentially, locate infrastructure out in the field, that we can, then, bring into our GIS system and have available for a variety of uses. Two of these units --one is completely broken and is not able to be repaired and the other one is extremely unreliable. In fact, talking to the staff they spend about as much time trying to fix it to make it work as they actually do using it and it's been recommended that -- by the manufacturer that it's sort of at the end of its useful life and that maybe it ought to be replaced as well. So, we are actually asking for an enhancement to purchase two handheld GPS units, essentially one of those would be charged to the water side and one to the wastewater side. And with that I will stand for any questions that you might have. De Weerd: Council, any question? Bird: I have none, Mayor. De Weerd: Thank you, Warren. Stewart. Thank you. De Weerd: Tiffany, if you don't mind, we are going to take a five minute break real quick. Okay. We will reconvene in five minutes. (Recess: 8:40 a.m. 8:49 a.m.) Wastewater Department De Weerd: Okay. We will reconvene our budget workshop. Thank you, Tiffany, for letting us interrupt you. Floyd: No problem at all. Good morning, Madam Mayor, and members of the Council. My name is Tiffany Floyd and I'm the new utilities operation manager. Meridian City Council Special Meeting July 7, 2011 Page 12 of 33 De Weerd: Welcome. Floyd: Thank you. I have been with the city for about a month now, so I'm trying to get up to speed. A brief summary of my background. I received a bachelor of science degree in engineering from Idaho State University, with an emphasis in structural and geotechnical. After graduation I went to work for the potato processing industry as a production supervisor and project engineer for Lamb Weston and, then, a few years later I accepted a job with the Department of Environmental Quality, known as DEQ, and during my 14 years there I held a number of management positions. I started in air quality. I later moved to drinking water compliance and enforcement and, then, ended my years there with regional administration in the Boise regional office of DEQ. I'm excited about this new challenging opportunity and being a part of the City of Meridian's Public Works Department. It's been a challenging first month and I expect the rest of them to be as well. So, we are going to start off with the wastewater division. This slide outlines the wastewater divisions capital enhancement projects, of which you will see we have 19, for a total of 4.76 million dollars. On the left-hand side of your screen you will see a ranking there. That denotes the priority order of the projects and, then, the enhancement number I believe is in your packets and you will track it as they go through the slides on the enhancement projects here in a minute. The number of the next slide will cover projects as the chemical feed building, sewer line extensions and, then, the opportunity to expand our reclaimed water distribution system. We are going to start off with Tracy and Clint, who are going to go into enhancement number two, drying bed, centrifuge, conveyor. De Weerd: Thank you, Tiffany. Welcome, Tracy and Clint. Crane: Madam Mayor, Members of the Council, good morning. Thank you for your time. I want to say we are excited to have Tiffany as well, so -- De Weerd: We can tell. Crane: The first enhancement is to resurface our drying bed for our sludge that is discharged from our centrifuges. You can see the asphalt is in need of repair. The one picture up in the corner you can kind of see the wall there that is built with those precast concrete blocks. This year one was accidentally hit and knocked over and damaged one of the conveyor supports. So, this is actually a two phase, three year CIP. The first phase here our intent is to resurface the beds and put some permanent concrete retaining walls and, then, we are going to come back in a couple years and talk about replacing one of the augers and the reason we are going to come back in a couple years is we'd like -- we think we can get a couple more years of life. So, that will be nearer to the end of its service life at that point and, then, we would come back. So, we would get the surface prep'd and ready to go, get the mounts and everything poured in and, then, in a couple years come back and talk to you about putting a new auger on there. Meridian City Council Special Meeting July 7, 2011 Page 13 of 33 Dolsby: Our next enhancement is for some modification to the secondary pump station that we have built out at the wastewater plant a few years ago. We have had some operational issues that Tracy and his team have worked very hard to overcome over the last several -- or last couple years with a little bug that's called microthrix. It proliferates in the colder time of the year, causes settle ability problems at the wastewater plant, so, then, you have to reduce the amount of time that the bugs that remove nutrients stay in the aeration basins and that damages the nutrient removal capabilities of the aeration basin, so you have this balancing act where you're trying to keep the plant in nutrient removal without washing out the solids and it's become a very large issue for the plant over the last couple years. So, this enhancement will implement more of a -- more of a permanent solution to that problem. Next enhancement is for fermentation at the wastewater treatment plant. This is for design services for some fermentation upgrades, which are upgrades of a help to increase the stability of the nutrient removal process in the aeration basins, as well as do some improvements to the thickening of the solids that come out of the process that go out to the landfill as biosolids -- will increase the percentage of solids, potentially, that are coming out of the thickeners, which will decrease the amount of solids that go into the digesters, which kind of thereby increases capacity of the digesters and can postpone the construction of a new digester. Next enhancement is flow monitoring. Over the past couple years we have increased our efforts to monitor flows around the collection system, identify areas, such as downtown, that have more leaky sewers. The picture that you see there actually is a flow monitor, it's kind of a cutout of a manhole. Down at the bottom you can see the monitor itself, the little white thing, that actually signifies the light -- the ultrasonic beam that goes into the water to measure the flow that goes through the collection system. Crane: So, this next enhancement is for design and construction of bulk chemical storage and a centralized. chemical feed system for the secondary part of the facility. It has numerous .benefits. One of the things, as Clint alluded to, the Microtrix, a couple times a year we have to feed a significant amount of chemicals to control that. The average dose of poly-aluminum chloride is about 5,400 gallons and right now we have to buy -- if you look in that picture on the bottom, we have to buy it in these 300 gallon totes and so it's -- according to our chemical supplier, it's about 25 or 30 percent more expensive to buy it in those smaller quantities. Plus every time we do that dose that chemical has to be handled 18 times, because we have to have 18 of those totes in order to do it. Where if we had a chemical bulk tank we could get one tanker in and fill it. The second part of it is it will help us stay in compliance with our reclaimed water permit, because currently our filters -- we have ten micron floor size in the filters, meaning that any particles smaller than ten microns pass right through our filters and we don't have a coagulation system in front of it to use the chemical to make those smaller particles bigger to get caught on the filters. Most reclaimed water facilities do have some kind of coagulation that they can employ in those instances. So, part of this project would be to get that coagulation system in front of the filters. We did have a couple of instances this spring where we were unable to meet the tribidity limits and we didn't have the coagulation system that we could turn on. A third benefit of this project also is to put polymer in our waste activated sludge. We have a full scale trial going on right now and we have been able to demonstrate that we can double the percent solids Meridian City Council Special Meeting July 7, 2011 Page 14 of 33 of the waste activated sludge that's being put into our digester. That's really significant, because it decreases the amount that we are putting in there by 50 percent and it maximizes capacity and through put. And, finally, this will be designed with the future phosphorus limits in mind as well. So, as those phosphorus limits come down we will have to have some kind of chemical feed system to put the metal salts in there to bind up the phosphorus. Dolsby: Next enhancement is the continuation of a project that's going on this fiscal year to modify secondary clarifier number three. We tore the guts out of that clarifier, ordered a new mechanism, we are in the process of replacing that -- the guts of that clarify and also upgrading secondary clarifier numberfour, the scum removal system on that clarifier as well to provide additional capacity -- or not additional capacity, but to take advantage of the capacity that we have out at the wastewater treatment plant. This enhancement for sewer main replacements -- as we identify damaged or deteriorated sewer lines as part of our CCTD camera program or part of the flow monitoring program that we have, we are requesting funds to repair those lines. You have probably seen a lot of those repairs going on this year in the downtown area. De Weerd: Probable just got more phone calls and -- Dolsby: That's -- yeah. That's correct, too. De Weerd: Speaking of best practices. Dolsby: Do everything we canto reduce the amount of those in the future. De Weerd: Well -- and I think we had a good suggestion off of the last contact that Max had is if we can let the neighbors know when that work is going on in those areas ahead of time, so they can close -- button down the hole, that would -- that's a great suggestion. Dolsby: Yeah. Have door knockers and let people know ahead of the project. De Weerd: Uh-huh. Yeah. Dolsby: The next enhancement is another enhancement that we ask for every year for sewer line extension in coordination with ACRD projects primarily. Like this year, for instance, we have got the Franklin Road, Ten Mile to Linder project, is one of the main ACRD projects that's going on. Also a little bit of workup in the Ustick -Ten Mile intersection project that they are doing as well. The next enhancement is for the survey of manholes in the collection system. Every two years we like to go around and survey the manholes in the collection system for a condition. Also confirm depth and size of the manhole for our sewer model. As you can see the manhole we have got a picture of here is in pretty bad condition, so when we find ones like that we want to replace it or rehab those manholes. This enhancement is for reclaimed water improvements in association with the ACRD project at Ustick and Ten Mile. The intersection, the project Meridian City Council Special Meeting July 7, 2011 Page 15 of 33 there, we want to take advantage of that project and put in reclaimed water lines to the end of their taper on their intersection project. This next enhancement is part of a multi- yearenhancement for odor control. This is for design services and some construction of odor control improvements at the plant, mainly centered around the headworks, primary clarifiers, which are some of the major sources of odor at the plant and we have got a little picture of an odor scrubber, which is one of the options we are looking at as an odor control unit out at the wastewater plant. These next two enhancements you will see both in water and wastewater. They are for SCADA remote terminal and base station upgrades. Right now we are in the midst of a SCADA master plan that is working to identify areas that we need to make improvements to in our SCADA system that talks between the lift stations, the wells, the PRVs out in the system, back to the wastewater and water division, so we are working to improve communication and this enhancement for remove terminal, as well as this base station upgrade enhancements are just funds that are requested to make some of those improvements to our SCADA system. The next enhancement is for some laboratory equipment and upgrades. This enhancement would provide our laboratory with a new autoclave and an additional composite sampler. The sampling analysis programs have increased as we add reclaimed water and those kind of things and both our NPDS permit and reclaimed water permit require extensive bacteriological testing. An additional autoclave helps insure that we have the necessary sterilization equipment to continuously perform the bacteriological testing and how -- and whenever possible we like to keep it in house, because it simplifies chain of custody, increases turnaround, it's easier to track problems, that kind of thing. The additional composite sampler -- it's just essential to have those in the places, so that we can get those compliant samples and make sure that they are --they are taken and that they work well. Crane: The next enhancement -- this is the second half of a two year security enhancement at the facility where we are installing the Linelle card readers like we have here at City Hall. The current project that's going on right now -- we are putting this access into nine of the fifteen buildings at the facility. The next -- this part of the enhancement will finish out all the buildings, including the tertiary filter building that's being built -- being constructed this year and since we have eliminated the graveyard shift we kind of -- we have minimal staffing at wastewater at night, so security has become an increased concern for us. And this enhancement here is for an additional sewer line inspection camera for our CCPV van. And, really, it's to help minimize down time. This is a specialized piece of equipment that when it has an issue it has to be sent back to the factory and it's happened a couple times to us and we lost two weeks of productivity for the whole -- because it shuts the whole crew down. These cameras are subjected, as you can imagine, to the harshest environment that there is. Our camera now is beginning it's third year of operation. There is an additional complication to it, because most of these lines have to be cleaned with high velocity sewer cleaner just prior to running the camera down it, so you can get a good look at it. So, when we have this truck go down, a lot of times we will get a duplication of effort from the sewer cleaning crew, because when we want to inspect that line again they will have to come back around and make sure that they clean that line again so we can take a look at the Meridian City Council Special Meeting July 7, 2011 Page 16 of 33 camera. So, this is just to insure that we can keep that crew and the piece of equipment in service as much as possible. Dolsby: This enhancement is for reclaimed water lines in coordination with the ACHD project on Franklin between Ten Mile and Linder. It's to install lines while they have got the road torn up when they are doing their widening project next fiscal year. Next enhancement is to take the sewer that we built a few years ago -- it went from Black Cat lift station all the way down to Fuller Park. This is to take it from Fuller Park out to the corner of Ten Mile and Pine, which will enable us to take out -- take out of service two lift stations there and will enable that flow from Marywood and Mosers lift station to go back -- gravity back to the Black Cat lift station. And our last enhancement is for the design and installation of a reclaimed water line that goes from Ten Mile Road to the Lake View Golf Course. It's part of the. effort to get Lake View onto our reclaimed water system. We are also, in conjunction with this -- right now we are performing a feasibility study that will identify other improvements that aren't related to this enhancement that the golf course has to make or -- that's the approach we are going to take is we are going to go back to the course with the study and see if they are willing to make improvements to the course that are required to get either nine or 18 holes of the course under reclaimed water and see where we go from there. De Weerd: So, that would happen first? Dolsby: Yes. De Weerd: okay. Crane: With that we can stand for any questions on the wastewater enhancements, if you would -- De Weerd: Council, any questions? Bird: They all seem logical to me. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: The very last one brings up kind of a side question. If -- I like the idea of serving Lake View with reclaimed water. If we do that what happens to their irrigation water rights? Is there some way to capture those and use them elsewhere? Dolsby: They would -- Madam Mayor, Councilman Zaremba, they would maintain the irrigation rights. They would probably still have to pay their assessment, so they would still have rights to use the irrigation water that they have on the course. Maybe they would use it as a backup to their water. I don't know that they would be able to use it on Meridian City Council Special Meeting July 7, 2011 Page 17 of 33 a different part -- spot of land or -- they could -- those rights are usually tied to the parcels that they are on, but -- Zaremba: So, it wouldn't be lost. Dolsby: Yeah. The irrigation district would still want you to pay the assessments, even if you're not using the water, is my understanding. Zaremba: Okay. Crane: And, Councilman Zaremba, I would add to that that we are kind of letting -- hoping that folks will maintain their irrigation rights and their systems, too, because we only have one treatment facility and if anything happens in that treatment facility, like turbidity limits or total nitrogen, there is a chance that until we can get that reclaimed water back into spec we would have to shut the system down. So, we would work with them in conjunction to try to maintain that --that secondary source in the -- because we don't have -- like wells, we don't have 22 treatment plants or something like that that's contributing the water, so in the beginning especially until we --fills up the robustness of our reclaimed facility, we would try to get people to make sure that they maintain more than one way to irrigate. Zaremba: Great. Thank you. And a second question, if I may. Again slightly different direction. Several years ago there was a problem with struvite build up in the pipes out there and I know there was astudy -- I know we have been doing things to mitigate that and there was a study to see if we could actually reclaim some of that and do something. Refresh my memory on what happened with that. How are we doing with struvite? Dolsby: Council .Member Zaremba, I appreciate your question. One of the reasons I said that the chemical feed system was in the secondary part, because a few years back we did install a chemical feed system at the digester specifically to feed ferric chloride to help with the struvite problem. I would say we are in a struvite management mode, meaning we haven't really solved the problem. We -- we are trying to manage the problem as best we can. We are just finishing our facility plan that we funded over the last two years and so that struvite recovery is a part of that planning and it is being incorporated into the CIP, so we are in management mode right now and kind of working on prioritizing those projects and we will be bringing that back to you at some point. Zaremba: Great. Thank you. De Weerd: Were we not looking at a partnership with a private entity on the struvite and -- Crane: Madam Mayor, yeah, we were and we still are, in fact, but they --they gave us a proposal that we looked at and we have kind of done our own staff analysis and weren't Meridian City Council Special Meeting July 7, 2011 Page 18 of 33 in a hundred percent agreement with the numbers that --that they were putting forth, as well as the City of Boise and several other cities are doing the same kind of thing with another competitor, so to speak, and so one thing we thought is we have some other improvements we want to make and we can kind of step back and see where this market goes and see kind of the competition -- right now when we were with that proposal, the Estera folks were the only game in town, so to speak, so competition we thought might be good for us if -- if we just take a step back and wait to see what happens. De Weerd: Competition is always good. Crane: Correct. That's what -- Bird: It keeps you honest. De Weerd: Any questions, Council? Bird: I have none. Rountree: None. De Weerd: Thank you very much. Water Department Crane: With thatwewill turn it overto ourwaterfolks. De Weerd: Morning, Dennis. Teller: Good morning. Good morning, Madam Mayor, Members of the Council. I thank you for your time this morning and hearing out our presentation. First off being new to the City of Meridian -- I have been here for about five months. I want to introduce myself. My name is Dennis Teller, I'm the new water superintendent for the water division here in Meridian. I just recently relocated here, actually, with my family from my home state of Arizona. I was born and raised there, so this is definitely a change forme in climate. I love the weather. And I bring with me 18 years of experience in both public and private water utilities. I've had a chance to, basically, work my way up from a meter reader back in the early '90s up on all phases of management and overseeing just about everything from customer service to meter reading to capital improvements and so on. I do want to say I'm honored forthe opportunity to be part of the City of Meridian and the chances I get and look forward to a prosperous future here and -- De Weerd: Well, it's great to have. Teller: Thank you very much. With that -- go to another slide. I did want to speak to our first slide of capital replacements. Originally we had a truck slated -- a vehicle Meridian City Council Special Meeting July 7, 2011 Page 19 of 33 replacement in our fleet to upgrade a smaller vehicle to a larger one ton. The purpose of this was to get a more robust versatile vehicle that could handle the towing and hauling capabilities. But since my tenure here I have had a chance to look over and assess the current fleet and really come to the conclusion that this is something that we don't need at this time. I would like to respectfully request the withdrawal of this from the budget. This is not something that we -- I'm not saying we are not going to do in the future, but it's something we will probably come back and look at. But at this point we are not oin to ursue this purchase. With that I don't know if you have any questions 9 9 p on that. If not, I will turn it over to Tiffany for our first presentation for water. Floyd: Okay. Once again, Water Division, this is our enhancement summary. We are ranking, again, priority -- or denotes the priority order and, then, the enhancement you will follow along as Kyle and Dennis, walk you through that. They are going to cover projects such as water main replacements, secondary -- or, excuse me, security upgrades and, then, waterline extensions to help expand and improve our distribution system. Kyle is going to start us offwith the source water master plan. Radek: Madam Mayor, Council Members, I have to apologize, I didn't realize we were going to have enhancements that we weren't asking for on this, so you are going to like Dennis more than you like me. De Weerd: I just wondered where yourtiewas. Radek: I need to be true to my -- to myself and how I dress for the City Council, so you know you're talking to a guy who gives you the straight answers, so -- not hiding behind any ties. The source water master planning includes a myriad of activities that we have largely begun on -- one thing you may or may not remember, we have asked for a source water master planning enhancement for three years, including this year, and in FY-10 we asked for 458,000 dollars, in FY-11 we asked for 391,000 dollars, and as you can see the amount's decreasing and that's because we are doing a lot of upfront work. We have made a lot of progress in securing water rights turning permits into licenses, doing proof of beneficial use examinations. This enhancement includes a lot of work in source water protection for planned development, for groundwater modeling and development of rules to protect our source water. We also do monitor and aquifer testing and really projects that will pay dividends in the future for us. The groundwater reservoir number two is a project that we have been working on and in design and I'll give you a little bit of brief background on where we have been on this project. We have had five neighborhood meetings in total. First we introduced the concept to the neighborhood and, then, our second meeting was some more detail and the reasons why we wanted to have this reservoir or why we needed this reservoir and why the reservoir was -- was selected in the place where we selected it. and, then, we got some of the neighborhood concerns and, then, we developed some criteria with corroborating with the people at the meetings and, then, we responded to those criteria and the number of people that we talked to ranged from in the beginning about 30 up to about l0 and, then, in our last neighborhood meeting, which was a couple weeks ago, we had about a dozen people that heard our response of here is -- here is -- we took your Meridian City Council Special Meeting July 7, 2011 Page 20 of 33 criteria that you gave us to just tell us, you know this is -- this is what would make this project okay in our backyard and we responded to that and said largely we -- we can meet these criteria, except for a couple points. So, what the next steps are in this project is we are going to research the area that we initially searched to see if maybe things have changed since the initial search, maybe there is a property that wasn't available then that's available now and that was kind of our pledge to these people to say, okay, we have heard you, we have an open mind, we are going to apply these criteria that we have developed to the larger search area and see what comes up. Maybe we come back to the same site. It's an entire possibility. But maybe we have open minds and we find another site that's -- that's more appropriate. So, this enhancement is to continue the efforts in design, in public meetings. We may need some professional assistance in property search or in producing some renderings. or materials to share with the neighborhood that we have been working with. Teller: Okay. Our next slide here is for an enhancement to provide a little bit more robust emergency lighting and signals on our current fleet. If you notice down in our -- the left corner photo there our current lighting is rather small. You don't see it very easily and it's a major concern for us with our operators and the general public that while we are out and working on the streets, which are continually getting more and more crowded and busy as the city grows, we want to make sure that they are visible and people are -- are slowing down and protecting not only themselves, but our workers. This particular enhancement is going to upgrade the -- to a bar light on top of the trucks that provides not only rearward facing, but fonNard facing lights. They will actually have the ability to control traffic with the directional strobes that go left to right on each vehicle, plus, each truck will be equipped with a strobe at each corner, basically, like a police officer orfire vehicle. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: On the light bar issues, I agree with doing it. One of the things we run into with the police department and the fire department is that because they have the light bars they have to leave the engine running at times when you might shut it off, because they have to supply power to the light bars. Teller: Correct. Zaremba: And it isn't practical for them to have solar light bars, because sometimes they need to run them at night. I would assume that most of the equipment that you're talking about doesn't need to be run at night. Is there any thought of getting solar light bars that would not require the engine to be running all the time? Teller: Well, we have not looked into the solar lighting, but these are actually an LED type lighting that is very, very low power draw and you can run a light bar and strobes on a vehicle with the engine offfor several hours without having any -- Meridian City Council Special Meeting July 7, 2011 Page 21 of 33 Zaremba: Oh, good. Teller: --significant drains on the battery. Zaremba: That solves my problem. Thank you. Teller: Our next enhancement is forthe purchase of barricades and traffic cones to kind of provide amore -- more definition of ourwork zones and secure the public against any kind of issues when they come across an unmanned work zone at night. These --these particular enhancements going to incorporate barricades with lights so they can also be used at nighttime and, basically, just for like better protection for our operators, which we don't have at this point. Dees: I won't say the B word, I swear. Well, maybe once or twice. Could Vanna please bring forward the -- John made me do this. He says you folks are visual type people and you like to see stuff. Well, we started out with a bolt. De Weerd: Well, that's not what he told me. Dees: Oh, is that not what he told you? And, then, he brought you a bunch of broke stuff. Well, this is a good one. This is a backflow assembly and it was a dual connected backflow assembly that we removed. So, it has adouble --double purpose. We started out with a bolt like this, of course, for our inventory and if you look carefully you will see some of those bolts installed right there, so it's -- you can see that we use these things everywhere. That is a backflow assembly. If you want that placed in your yard just give us a call, we will come right on out. De Weerd: That's pretty big. Dees: It is. It's a four inch assembly. The program -- backflow program was established actually in December of 2009 when you passed the ordinance and in March we implemented the -- 2010 we implemented the program for--forthe community. The 300,000 dollars that we had in the budget last year and was projected to have in the budget this year for backflow prevention measures was removed and instead we are replacing it with this enhancement. One of the things that the enhancement does, the 250,000 dollar enhancement does is funds the continuation of a ten dollar rebate for assembly testing in the community. That rebate has been widely successful. I had my doubts and Councilman Rountree said, no, no, no, it will work and he was absolutely correct. People call and right after they have had their backflow assembly tested and they say, hey, be sure and get things in so that I get my rebate. So, it has been very successful and whether or not you continue that in future years, just to let you know it is successful and it's working. You will see how good it's working here in just about a minute. The other thing we do is we were worried initially about folks that -- especially the contractors, the testers, would say, well, we are not going to get as much business as we had before, because it's not a free program anymore. As it turns out we had one Meridian City Council Special Meeting July 7, 2011 Page 22 of 33 vendor call us and complain that he had too much business and we backed off a little bit. So, it was kind of a nice problem. So, the testing program is being successful. Last ear we had an 86 percent compliance rate with. our free program, we thought that was Y rett ood, but this year we are at 108 percent. The reason we are so high is because p Y9 the are voluntarily now coming to us and saying, hey, you know, I got one of those Y thin s and I don't want my water shut off, so here is my test. Sign me up. So, that, g a ain, has been a very successful program. We have got 72 assemblies we have 9 identified that way. Last year we turned -- this year so far we have turned off 188 eo le from March until now for not having their assemblies tested. We have turned p p back on 155 of those 188. Those people agreed to have their assemblies tested and did so -- complied with that. The 33 that remain off and are still off today are mainly homes that are vacant or commercial lawn sprinkling accounts that they just don't need it right now, so they are not bothering getting the things tested. There are people who -- like (said, we have 4,676 assemblies that we track that are primary preventers that need to be tested. Again, that's up by 72 assemblies. So, the program, again, has been very successful in identifying more assemblies. We have removed 97 dual connected assemblies just like that and we spent about 25,046 dollars in doing it. We have at least 213 more to remove before March of next year, so we are on track with getting those all removed. There may be as many as another 650 of those assemblies, so we are kind of hedging our bet a little bit and that's why we are being careful with the enhancement for this year. We are in the process of physically checking all the neighborhoods to make sure we pick up all those dual connected assemblies, based on the premise that we will have to rebate about ten -- the ten dollar rebate for 5,000 customers next year, we think we will need 50,000 dollars in the enhancement to cover that. Also, again, we threw in another 200,000 dollars for the 300 dollar rebate just in case we need it for those 600 or so assemblies we believe may be still in the community. All in all the program has been widely successful, we are very pleased we did it, thanks to your guidance and we have one of these available if you want us to install it someplace. Do you have any questions? De Weerd: Council, any questions? Bird: I have none. Rountree: No. De Weerd: Thank you, Rich. Teller: Thank you, Rich. The next enhancement I would like to talk about is security upgrades for our existing well sites. This is part of an ongoing security upgrade for the water division facility. We requested 20,000 dollars to be utilized to fund security upgrades at selected water production facilities to further protect our detective assets from vandalism, improvements -- with improvements, such as perimeter fencing, security lighting, motion sensors, andlor electronic locking devices. We have had some issues at some or our sites with kids and skateboards and rocks and we'd kind of like to keep them away from at least their first point of contact with our facility. Facility Meridian City Council Special Meeting July 7, 2011 Page 23 of 33 determination will be selected in order by our most compromised sites and we have got -- that we have had previous occurrences with and we feel are at the greatest risks. Radek: The next enhancement is well reconstruction. This is a critical enhancement to make sure that our wells are -- we keep them productive and -- and that we know what the condition of them is and also so that we can respond to issues like we had out at Well 16. This past year we had planned to evaluate and rehab Wells 19 and 22, which we did, but we also had Well 16 and 20-B come up with a -- a test for uranium above the maximum contaminant levels and with this money we were able to go over to Well 16 and not only evaluate, but make some improvements that allow us to continue to pump that well and more importantly. we were able to evaluate and find out that that well is -- is -- had some serious issues and it needs to be addressed and I will address that in one of the -- one of the next enhancements. Well, the next enhancement. Like I say, we --Well 16 came up with uranium over the maximum contaminant level designated by the EPA and we went over and did. some evaluation and this well was constructed in 1994 and at that time we didn't have the same well construction practices we do now, we didn't use PVC casing, we didn't use the telescoping -- telescoping well screen that we were able to fill with filter material and develop like we do now, we were not able to work on this old style well like we .could work on our new wells and this well is, essentially, reaching the end of its useful life, it has a casing that's -- that's very corroded and will likely fail within the next five years, so Well 16-B is a plan for the design of the next well that we want to put on the same site and the reason being that we have a good pump house, we have a good generator there, we have a good well lot, a good place to distribute the water, there is a lot of significant infrastructure there that we don't want to waste and we will most likely be able to put another well on that same site and return the productivity and just. as a side note I know that Rita Cunningham was present someplace when I said that this well was only about 16 years old and her little depreciation alarm went off and -- and I saw this little look on her face and I said that was your depreciation alarm, wasn't it, and she said, yeah, but just to let you know the wells that we construct now, the way we construct them, the materials we use, we are not talking about 16 year old wells or 25 year wells, we are talking about 50 year wells and maybe beyond that. So, we have made a lot of progress in our construction techniques and our materials, so -- so we shouldn't have to be replacing infrastructure every 16, 20 years. I must have accidentally gone backwards on it. Bird: Trying to get two of them? Radek: The next enhancement is Well 10-B. This is a great example of how it's difficult to budget a project a year and a half in advance when you don't quite know what the project might turn out to be. Well 10-B .was shut off in 2008 for, again, uranium above the maximum contaminant level and that well has been -- had been in service since -- from (believe 1975, '77, something like that. So, it had quite a few years of service and our --our concept was to go in and do a test well, figure out where we could find some better water, if we could find better water at the same site. We did a successful test well, found some very high quality water that we would target and we were going to proceed to deepen that well and to deepen the well you need to get down there and pull Meridian City Council Special Meeting July 7, 2011 Page 24 of 33 out the well screens and the well screens, of course, they have been in there for 30 some ears and they are, you know, 300 feet down and there is a chance that you Y , mi ht not get those well screens out and that's exactly what happened. We didn t get g ,. the well screens out. In fact, we put some more stuff in -- McClaren well Drilling has a baler down there at about 350, 400 feet that -- that is now part of a time capsule encased in -- in pressured grout. So -- so, it turns out we could not rebuild that well and when we removed the pump house -- we picked it up and put it aside, we moved the pump house, we actually found the pump house was a little rotten and it was an old -- basically ashed -- a framed shed, so some of the framing was rotten, so the original project that was deepening the well, putting the same pump house back in place, morphed into a different project. So -- so, now we are drilling a new well we have to do a new pump house. Again, just like with well 16 we have infrastructure in place, we have a good test well, we have good water quality, we have water rights, we have a well lot, and it will serve pressure zone three, it's a place where we need the water, it's still a good project, it's still a good place to have a well, so we are going to continue, we have a production well that we intend to drill by the end of this fiscal year, but the money that we budgeted for this project initially isn't going to do it for the --for the changed project. So, this -- this money pays for the --the pump house and the pumping facilities that will be installed next year when we get this well back -- back on line. Teller: Okay. The next enhancement we have is for chlorine analyzers at ourwell sites. Proper chlorine levels in the distribution system are crucial in order to maintain water quality, provide adequate protection from potential contamination. Currently chlorine levels are measured daily by hand with our operators at our 18 wells. This is a very time consuming process, it provides -- we are the only one data reading per day. INe don't really have a really good picture of what's going on on a 24 hour schedule. Also there is no alert to operators and disinfection system failures or dosage issues, which can lead to acidically unpleasing brown water or odor complaints. we are all familiar with those. As an ongoing capital upgrade in addition chlorine analyzers will provide consistent dosage. monitoring that when synced with our SCADA system will provide critical real-time information and we would be able to trend and utilize for planning of our daily system and insure water quality. We will utilize -- I'm sorry, I read that twice. The requested 50,000 dollars is anticipated to fund eight of our 18 well sites and we are currently doing eight this year. So, you will see this probably one more time next year. Radek: The next enhancement is SCADA base station upgrades. we currently have a SCADA master plan in -- in progress where our SCADA system for both water and wastewater is being evaluated and we -- we fully expect that there will be recommendations to upgrade the radio computer equipment in the SCADA base station at the water department and this -- this kind of an upgrade I believe would be necessary, even without a master plan, but the master plan is the way to do it, you get the right equipment for the long term. And our next enhancement is -- is very similar, except it's for the remove terminal, the radios that we have in our wells and our PRV's we have, basically, 40 locations throughout the city where we send signals about what's going on in the system back to the base station and so -- so we will want to --and we -- we have a system that works and we have -- we have developed it over time, but we Meridian City Council Special Meeting July 7, 2011 Page 25 of 33 have developed it over time, but we have developed it over time without a master plan, now we will have a master plan, so we have kind of a system that's I guess maybe the right word would be band aided together or it's been developed as we went. It works -- it works fine, but we want to be -- be able to continue to improve in the future. The water main replacements, this enhancement is for replacement of aging or undersized water lines or water lines that -- that are made out of materials that we wouldn't -- we wouldn't allow to be put in the ground today. We have been actively engaged in waterline replacements now for two fiscal years and in fiscal year'10 we replaced 2,800 linear feet of waterline, give or take a couple linear feet, and in fiscal year '11 we have replaced 3,500 linear feet and fiscal year'12 we estimate we are going to replace about 4,900 linear feet and the number's largely going up because of the fact of the split corridor is coming up in 2013 and we are doing a lot of work in preparation for the split corridor and weare-really learning a lot of things. We are --the water main replacement work is -- is telling us a lot of things about what it's going to take in the future to replace our aging infrastructure as it ages. A lot of the, you know, construction issues we are going to have and we are making a difference in water quality and fire flows when we -- get to the end of the fiscal year we expect to give you a report on waterline replacements and I anticipate we will have a picture for you of fire hydrant before and after with the before being this brown .water that's barely spilling out of the fire hydrant and, then, afterwards it's nice clean water that's gushing out of the fire hydrant all the way across the road and that's the kind of difference we are making. We are taking substandard fire flows to fire flows that will protect the -- the infrastructure we have in downtown. The next enhancement is pressure zone one and the graphic here shows you that in Meridian generally from the southeast to the northwest we slope downhill and that's evident and that's where our sewer goes and as you go downhill you increase pressure in your distribution system and if you don't have it divided up into pressure zones you get what might happen in this --this red line, this --this red line represents a hydraulic grade line, which is just a way to say the energy in the water and if all this water is at rest the energy in the water is really represented by the pressure in the distribution system, but the red hydraulic grid line that goes over 90 psi as the place where we deliver it, that's -- that's too much water pressure to be given to -- to homes and as we expand into the west and northwest, the -- that's an area where we don't have pressure zone one established yet and those pressures are high now and they will get higher and higher as -- as those homes go further downhill and further to the west and north. So, the way we mitigate that is we have a -- you can see the -- well, you can see a little box down .there that says PRV and do you see where the --the blue HGL line stops, the pressure reducing valve, takes the pressure down and starts over again. We like to -- we like to run our pressure zones between 60 and 80 psi, so we -- 60 is at the top of the pressure zone, 80 is at the bottom of the pressure zone and, then, we start over again with a new pressure zone at 60 and so we can keep those pressures manageable, keep people with plumbing from leaking and having to make repairs and we can conserve water better that way as well. And this -- this project is a long-term project, it's five PRVs for the whole project, but this phase of the project we will put in three PRVs. The next enhancement is water improvements and upgrades and there is a lot of different kinds of things that this enhancement can entail. Specifically what we intend to do with the enhancement forthis coming fiscal year is put three to four variable Meridian City Council Special Meeting July 7, 2011 Page 26 of 33 frequency drive harmonic filters in at our -- at our pump houses and this is something we have been doing for the last couple of years, because the -- the variable frequency drives take an alternating current and -- in one phase and they put it in a bunch of phases and they stack the current and they, you know, do funny things to the current and what you get is a reflection and you get dirt going back in the system and Idaho Power doesn't like that. So, that and with some surge projection in our zone five, which is a small pressure zone, we only have about 15 customers up there, so that's what that's intended for. The next enhancement is water line extensions and just like with sewer line extensions, the bulk of this enhancement -- in fact, all of this enhancement is intended to be used with -- in conjunction with ACRD work and specifically I believe we have Franklin, Ten Mile to Linder -- it's the same projects Clint mentioned and it just happens that the -- the water -- the water is generally already in these places and the sewer is -- in essence, the sewer has to be built, but the water is already there, but it will need to be adjusted in certain locations and stubbed out to certain properties. Teller: It doesn't like my finger at all. Okay. Our next enhancement is for the purchase of leak detection and line locating equipment. Currently the water division handles only one set of line locators that is used for locating water and sewer lines throughout the city. These locators are over eight years old and nearing the end of their life. At this point a back up set of locators is now required to continue locating activities during down time, such as repairs and recalibration. There is not a lot of facilities around that actually repair these, so down time could be upwards of a month. To address leak detection, this is kind of a new technology for the water division, it's based off detecting and deciphering audio frequencies created by water leaks and this equipment will be utilized to reduce repair time for accurately pinpointing sources of leaks and minimizing the excavation and damage to the surrounding areas, such as hard case, like sidewalks and asphalt. Currently defined water leaks we are really kind of just hunt and chasing. With this equipment we will be able to -- to narrow down and get into a small area where we are only just replacing say a section of sidewalk versus three or four sections of sidewalk or a small portion of a lane of traffic and, you know, this will definitely increase our efficiency and cut down our cost of replacement of these materials. This will also be used to compliment our fire hydrant maintenance program. It's going to identify our leaking internal valve assemblies, which we currently cannot do. Leaking fire hydrants cause corrosion inside of them and we have a dry barrel fire. hydrant here in Meridian and when you have a leaking main valve that drains or does not drain, it fills up, when the firefighters go to actually operate that hydrant the staff and shims will break and making the hydrant inoperable. The line locators and leak detection equipment will increase our division efficiency and we will have a collection of tools for our operators' use and more thoroughly complete their duties. Okay. Our final enhancement -- since the purchase earlier this year of the vacuum extracting trailer we kind of uncovered some -- some interesting things and discovered more potential in the machine. We basically bought it for potholing and cleaning out valve cans, but we have discovered that it's actually capable of doing more robust projects, such as service replacements and line repair -- line repair excavations. This trailer also came set up with a hydraulic output connection capable of running tools such jack hammers and tampers. Now, this enhancement is for the purchase of these tools, along with a small chipper hammer and Meridian City Council Special Meeting July 7, 2011 Page 27 of 33 pavement breaker to assist in removal of hardscape items, such as concrete and asphalt. These tools provide a complete excavation package that will increase staff efficiencies by reducing personnel needed to bring required equipment to job sites and for the removal and replacement of the hardscape. This additional equipment will also serve as back up pneumatic -- backup to pneumatic equipment and backhoes during repairs and replacements. And with that any questions? Rountree: Madam Mayor? De Weerd: Yes, Mr. Rountree. Rountree: Back on your enhancement number four, the security upgrades, is that part of the long range plan to improve security at the time or is that the finish of it or do we have -- Teller: It's part of a long range plan. This is the continuation. We are actually in the process of doing an upgrade --several upgrades this year. Rountree: What's -- what's the total cost of that -- of completing that plan? Because it seems to be that an incremental approach might not be the best way. Let's maybe get it done. Teller: Well, the total -- if you want to address that. Radek: I .can speak to that, Madam Mayor, Council Member Rountree. We don't have a security master plan as such. We have a vulnerability assessment that we have been kind of working through, but we haven't -- we haven't really added up in total what the total upgrades needed to satisfy the requirements of that vulnerability assessment would be and that's something we should do and I think you're right, it might be a good idea to just -- you know, if we have security issues that we need to address, we should just address them. But that's -- that's what we have been doing the last -- last two cycles, we have been just saying, well, we know we have issues, let spend a little money on them and get going, but I think, yeah, you make a good point. Rountree: Well, I think if you look at it as a total package, the equipment you buy is compatible with your future acquisitions and when you do it incrementally like this you're going to have stuff that's going to be obsolete by the time you get the plan in place, so I'd say take alook -- take a hard look at it and see what it's going to cost. To me that's critical. Radek: Yeah. I would say thus far we haven't made anything -- any -- any improvements that would be a compatibility issue, since fences are fairly compatible with future fences, but we haven't gone that far. But, yeah, I think you're right, there will be radios and cameras and things like that. Rountree: Thank you. Meridian City Council Special Meeting July 7, 2011 Page 28 of 33 Bird: I agree. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: At a recent Association of Idaho Cities conference I attended one of the sessions which was an infrastructure maintenance kind of a thing. I know annually we go around and flush the water system to get sediments and stuff out of it, but one of the people at the meeting mentioned that they had a situation in their city where the fire department went out to a fire hydrant to respond to a fire and the valve didn't work, nobody had turned that fire hydrant in ten years and they said that people need to have a valve exercise size program and I -- do we have something like that where we -- Teller: Yes. Zaremba: -- test every valve every so often? Teller: We have currently got a valve exercise program and we work on that daily. We are averaging about 300 valves a month right now that we are operating and we are also implement a fire hydrant program where we are going around and identifying all of their hydrants. The actual ID numbers of them, the make, model, serial number. So, we have got on hand parts and supplies for them. We are operating those and we are also capturing the flows of these hydrants, so we will have this for our ISO rating in the nearfuture. Zaremba: Great. Thank you. Teller: Okay. Hoaglun: Madam Mayor? De Weerd: Mr. Hoaglun. Hoaglun: Dennis --and, then, will that information be incorporated in the GIS system? Teller: Yes, it will be incorporated. Well, the major -- the physical attributes of that will be -- we will put into GIS. The rest will go into our Hansen program for our --our daily operations and maintenance of that equipment, yes. Hoaglun: And just ask your opinion on the GIS system and how it's planned to be operational with --that IT laid out. Is that going to work for you guys? Meridian City Council Special Meeting July 7, 2011 Page 29 of 33 Teller: Yes. It's going to work. We are working hand in hand with them and everything we are doing right now is great and we are definitely headed in a positive good direction. Hoaglun: Thank you. De Weerd: Any further questions from Council? Rountree: I have none. De Weerd: Thank you both. Teller: Thank you very much. Barry: So, Madam Mayor and Council Members, we appreciate your time and attention this morning. That concludes our presentation for the Enterprise Fund enhancements and brief overview, so if you have any questions at all we would be happy to entertain those, otherwise, I believe you have a recess and, then, deliberations, so thank you, again, foryourtimeand support. De Weerd: Okay. Thank you, Tom. Well, we will go ahead and take a break and reconvene in 15 minutes at 10:00 o'clock. (Recess: 9:46 a.m. to 10:01 a.m.) Council budget decisions and discussion De Weerd: I will go ahead and reconvene this meeting. We are in the discussion portion of our Enterprise Fund budget deliberations and so I will turn this overto Council for discussion, further questions that you might have. Hoaglun: Madam Mayor? De Weerd: Mr. Hoaglun. Hoaglun: I just had one comment when the presentation -- on the hand-held GPS units, the request for two of them. It sounds like with one not operation at all, the other one might be headed out the door. That would be something I see if there is an opportunity in current budget year and there is funds available, I wouldn't be opposed to a budget amendment to get one of those sooner, as opposed to later, waiting until the new budget fiscal year, but just a comment on that, Warren. I wouldn't be opposed to signing that as your Council liaison if -- if that became available, because that looks like that's something that is needed and could be on the verge of going out and, then, the other one could be part of the -- the regular -- the new fiscal year type thing, so just to comment on that. Meridian City Council Special Meeting July 7, 2011 Page 30 of 33 Warren: Okay. Thank you. Definitely consult with our business ops and see if there is an opportunitythere. Thank you. De Weerd: Thank you. Further questions, comments? Rountree: Madam Mayor, just a comment. I think it's a very clean and precise budget that's been presented and I appreciate all of .the staffs work and the Mayor's work and Council liaison, great effort. I don't have anymore questions and I don't have any recommendations for changes. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: I'd second that with the deal that, Tom, your department and all your employees certainly come in with enhancements that they needed, that is practical. I do hope your model for saving carryovers, while we are slow like we are now, can be refined so that as we get busier we can keep it down in a little bit better range than it used to be. But overall this is a very, very good budget. I appreciate it. I have no problems at all signing off on it. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: Not to be redundant, but I think it was an excellent presentation. I appreciate that many of the enhancements are actually the third year of an ongoing project and also appreciate all the effort that has been put into saving money and being very careful with money and saying, gee, if we did this now we could save more later and all of those are very much appreciated and -- and I will add -- I guess sometimes there is a hesitancy to include the enhancements that have been withdrawn, but I appreciate seeing those and my memory isn't always perfect, but next year when it comes back again, you know, you say, okay, this is something you have been saying you need for two or three years and maybe it's time that it be moved up in priority. So, I do appreciate also seeing the withdrawn ones. I think that's helpful. But excellent work, everybody, all year long and on the budget. So, thank you. De Weerd: Well, I guess I will just give one more plug to the benefits of Public Works Week. I think that the tour that we got and --and some of the things that we were able to view, you know, firsthand were evident today during your budget presentations and that puts a face to an issue or an improvement needed and as I mentioned to the staff last week at the. water department meeting, Public Works Week had a lot of intangible benefits to it in knowing more about the systems and certainly seeing the pride of our -- of our employees and the pride they take in the operations and the improvements that are ongoing. So, again, hats off and I appreciate the finance department and the Enterprise Budget process as well and how fluid it was this year. It was a lot smoother. Meridian City Council Special Meeting July 7, 2011 Page 31 of 33 again, notable improvements and how it's improved over the last number of years. So, great appreciation to the process this year. Hoaglun: Madam Mayor, I just want to echo your thoughts -- your comments on thanks to the Finance Department fortheirwork. I mean this is a major undertaking every year. It's a process that takes a lot of effort and we don't have a big Finance staff, but they get after it and get it done and what the public doesn't understand -- I think they see this and go, gee, the Council accepted everything and there weren't, you know, many questions, you know, gee, they let them off easy. But they don't see the inside process where Public Works meets with Finance Department after they have gone through their internal process and, then, they meet -- we have the meetings with Finance and in this case Public Works and you're there and Council liaison is there and that's where a lot of the fireworks are, even though everyone's very nice about it, but there is hard questions asked and they have to justify and there is a lot of back and forth and getting more information and grilling goes on and whatnot and it's a process that works, so by the time we reach this point we have a really good presentation and budget that's before us with a lot of those issues already ironed out and making sure what we are spending is absolutely necessary to keep the city moving forward and I just appreciate having gone through it for the first time with Public Works and they are alarge --the Enterprise Fund is huge and to go through that and see what goes on in the different divisions was informational forme and appreciate Finance and Public Works working on, because it is -- there is a lot to -- a lot of moving parts and different things. So, my hat's off to Finance and everyone else that goes through this process, because you make it work for us and that really helps. Thank you. De Weerd: We did try to throw them a curve ball or two and they will always came back. Greatly appreciated. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: I would move that we would go ahead and get these preliminary budgets out and published, set our budget date forour public budget hearing. Zaremba: Second that, but I do have some discussion. Kilchenmann: May I add one -- Madam Mayor, may I add one thing? On the amendments, if we -- if the amendments aren't completed now we will need to do those in a separate hearing process, because we couldn't pass the deadline for Todd to get all the noticing done to do it as we have been doing it with the regular budget process. So, we'd kind of like to avoid doing any amendments after this point. I know-- I know Public Works can find their 8,000 dollars to replace one now. So -- but that's just a point. Now, if we have to we will, but it will have to be a separate hearing process. Meridian City Council Special Meeting July 7, 2011 Page 32 of 33 De Weerd: And that's fine. I think we can have that discussion at the director's meeting on Tuesday and -- and so we will -- it doesn't have to be dual. So, that's fine. Okay. We have a motion and a second. Discussion, Mr. Zaremba. Zaremba: Madam Mayor -- and this is back to one of the very first sheets that Stacy supplied us with yesterday and this is on the General Fund balance and projection of where it is likely to go in 2013, '14 and '15. I very much appreciate that the current budget that we have been talking about for fiscal year '12 does not take the three percent increase, but I think we need to have adiscussion -- if we look forward to '13, '14 and '15, should we be looking ahead and, okay, we are not going to take three percent, but we should put one percent in or something like that in order not to run into a big hole in -- it looks like 2014, where we may be in trouble and I think if we can anticipate that, do we need to do something smaller now to prepare for it? I guess that's a question to Stacy, but it's also a question for discussion. Do we want to consider that. Kilchenmann: Madam Mayor, Councilman Zaremba -- but the reason that that fund balance goes negative is -- if we follow the Capital Improvement Plan as we have it now -- so, the big item that throws us negative is building a new fire station and staffing a new fire station. So, I think for the future and when we start doing our CIP planning again, we probably do want to look at how much property tax we are going to take. I think for this year -- I think we have -- I think we are fine not taking it. I mean we have balanced the budget, we have a surplus, but it's definitely, as you said, a consideration for the future, but we have to decide -- well, it's probably not realistic for us to do the fire station in '13, even if -- you know, even if we took the three percent each year, but just if -- it's just a planning document that you want to keep in front of you, so that you do ask questions like, at what point do we need to start taking the additional property tax, what services are we are going offer, et cetera. Is that an answer? Zaremba: Yes, it is. Okay. So -- De weerd: And, Councilman Zaremba, I can tell you that that has had a lot of discussion in our senior management meetings in what to recommend when we came to Council with our budget. and it will have a lot to do with our capital improvement plan and --and as we take another look at that, this --over the next coming months, what we can do with that and see what growth does as well. It's -- what's going to happen out in the Ten Mile area, with Center Cal coming on board, you know, what that means and so there is a lot of consideration that we hope we can bring something back to you that you can chew on. Zaremba: All right. I appreciate that. Kilchenmann: Madam Mayor, Councilman Zaremba, I -- we do appreciate you asking that, because as the Mayor said, we have discussed that extensively how long we can go without taking an increase and not stop adding anything to our base budget, so appreciate the question. Meridian City Council Special Meeting July 7, 2011 Page 33 of 33 Zaremba: Thank you. I certainly appreciate not taking the increase. I think that's ood g if we can do it. De Weerd: We thought it was the prudent thing to do this year. Zaremba: Yeah. De Weerd: Further discussion on the motion? Bird: I have none. De Weerd: Madam Clerk. Roll-Call: Bird, yea; Rountree, yea; Zaremba, yea; Hoaglun, yea. De Weerd: All ayes. Motion carried. MOTION CARRIED: ALL AYES. De Weerd: Well, we are at the end of our workshop session and I would entertain a motion to adjourn. Rountree: So moved. Bird: Second. De Weerd: All those in favor say aye. MOTION CARRIED: ALL AYES. MEETING ADJOURNED AT 10:20 P.M. (AUDIO RECORDING ON FILE OF THESE PROCEEDINGS) l ~ 9 ~ oil .~? MAYO T MY De WEERD DATE APPROVED q l i f ~ t ti ' f ~ { [ a y ~ ~ ~ ~~` ~R ~ '~ ..'ice' ~ r~41`•: w ~' ~ a • ~! `''`f , ~, 0 ,5 ~ ~ $ `, v r ~ ~ ~;4 ''~ ~! ~ ,"' ,. ATT~S . ~µ w ~. .~ ~ ~ ~"~ `~ _ C L. 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