Bothell, Washington Council Meetings, 18 Jul 2023

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From YouTube: Bothell City Council meeting - July 18, 2023

Description

0:00:05 - Call to Order, Pledge of Allegiance & Roll Call
0:01:25 - Meeting Agenda Approval
0:02:15 - Public Engagement Opportunities
0:02:55 - Staff Briefing: Middle Housing Comprehensive Plan and Code Amendments/City Manager Report
0:05:40 - Council Committee Reports
0:11:20 - Visitor Comment
0:15:45 - Projected Agenda Discussion
0:15:55 - Consent Agenda
0:17:10 - Study Session
1:37:40 - Council Conversations

A

Welcome everyone I now call the July 18 2023 regular city council meeting to order. Please join me in the Pledge of Allegiance.

B

Allegiance to the flag of.

C

B

United States of America.

C

Tutor Republic, for which.

B

It stands one nation under God, indivisible with liberty and justice for all.

A

The City of Buffalo is now providing the option of attending Council meetings remotely or in Person. Public comment will be allowed, both in writing or verbally verbal comments may be taken either in person or remotely sign up sheets were provided online by the city clerk's office via link from the agenda. A call-in phone number was provided on the meeting agenda for members of the public who wish to listen live to the meeting.

A

If you have called in, we ask that you meet your device if a participant fails to mute their connection and causes A disruption to the meeting. The connection will be terminated at this point. We will take a moment to take roll call of the council members by position. Number. Please say here when the city clerk calls your name city clerk, councilmember,.

C

Zorn here mayor Thompson, here councilmember Alder, here councilmember McNeil, here, council member Mankey, here councilmember Dodd, here Deputy Mayo here all present. Thank.

A

You next I'd like to reiterate some meeting guidelines for remote meeting attendees. Please speak clearly and pause frequently mute your microphone when not speaking and the first item on the agenda is meeting agenda. Approval I would like for um Council consensus to pull agenda Bill 23 109, initiating condemnation of a franchise utility easement for the Meridian Avenue South and 240th Street roundabout project, as it was noticed to be heard on July 25th 2023.

D

You need a motion right.

A

D

Okay, oh then thumbs up there.

A

Was shaking heads over there, so I'm gonna pretend like I know what I'm talking about.

E

Yeah and then, when you go to approve the agenda, you just do it as amended, but perfect timing. No one has any objections.

A

All right and you're not hearing anything else, so I'm going to move on to presentations, reports and briefings and public engagement opportunities.

A

We have theater in the park. You can enjoy an evening of heartfelt performances happening tomorrow, night from 7 to 8 30 p.m. At the park at Bothell Landing, we also have a creative arts, Grant workshop with our Arts Commission on July 27th, from 6 to 8 pm at City Hall, to learn about the creative arts grant program and how to apply, and we have National Night Out on August 1st. It's time to start planning your neighborhoods National Night Out Gathering invite an offer to officer to stop by and say hello all right.

A

Next up is um middle housing, comprehensive planning code amendments um I'm going to call in city manager standard. Thank.

E

You mayor, and this will be a combined staff, reading and briefing in city manager, report I, don't have any additional items uh good evening, mayor Deputy, Mayor and members of the city council. As noted in your packet tonight, we do have an update about middle housing code, comprehensive plan and code amendments in the timing of what to expect coming up next, as you'll recall, last week we did hold the public hearing heard from the community members and all of those comments are captured and on the record and will be considered as we move forward.

E

Also as as discussed last week, the our staff is currently engaged in overall comprehensive plan amendments, including one that's going to the Planning Commission tomorrow night and so they're, going to be focusing their attention on engaging on that getting it ready at the same time, also now going through and taking all the feedback that they've received through the middle housing conversations to prepare the comprehensive plan Amendment as well as any code changes with that.

E

That's also with an eye towards the fact that, as we've discussed when this process started, it was before are the state enacted law about middle housing, and now there is state law. So as we continue to get more details about that and make sure that again that what we're doing is informed by it, but then also looking comprehensively at both comprehensive plan amendments comprehensives, the key word there we'll be coming back.

E

Staff will be coming back in the fall for with more information on both of them and we'll again, we'll see what happens with the Planning Commission on the matter that they're considering and having their public hearing on tomorrow night. So those will come back in a tandem. What I, also just want to highlight is that, with that change, I know some people will wonder: okay well, when the fall can be long. So I want to just reassure people that the middle housing web page will be continuously updated, so people can sign up for alerts there.

E

Staff will also be not notifying all parties of record, which is anyone. Who's contacted the council with middle housing. Questions they'll specifically be motivated notified via email. If somebody is hearing this now and hasn't done that before and wants notification, they can contact.

E

Imagine Bothell, bothellwa.gov and ask to be added so again want to make sure that we're clear that there will be plenty of communication and most likely another public hearing and opportunity to hear from our community as well, so we'll be picking that back up in the fall and until then we'll be working behind the scenes. Getting the comprehensive plan amendments ready.

A

Thank you very much. All right next up is visitor comment. Sorry, actually, no council committee reports, council members, council, member zorns.

F

Okay, I'm stepping a little bit outside of committee reports to talk about an event that we had on Saturday, which was really incredible. uh It was uh uh based on uh Cody, Goldberg's, Harper's playground for creating inclusive playgrounds, which I think everybody is very um excited for they had great handouts, including a donation catalog, which I think is genius and I. I have a few highlights to wet your appetite anyone's appetite. Who wants to go? It was. It was taped and recorded So anybody who would like to go.

F

Listen to it, um I, don't think that I don't think this is a spoiler alert for you, but what I pulled out of it was a few main key observations. Nature is a vital playground for opportunities to interact and play it's an optimal childhood development. Opportunity. Fundraising is a great way to ensure that the community is bought in love, that that observation, um we're creating an environment where kids with different backgrounds can create relationship so really important and a really well-designed inclusive Space is really designed for everyone, not just kids with disabilities.

F

It's for everyone so that they can make connections. Super I'm that was very powerful disability is a great uniter and I love. This observation that he made that if you live long enough, everyone faces disability uh and these playgrounds do lend themselves to all ages, including seniors, we're better. When we fight together for the same slice of pie, I thought that's good. That's a good observation and um Vancouver I'm I, don't know if I can wait till AWC to see Marshall Park. Evidently it's about ready to open, but they have one thing they have.

F

Is they they don't call it a skate park? They call it a free, a wheel, Play Zone and then they have for those who are into community art. I would bet, I would say, maybe um Franklin the Turtle. If you read Franklin the Turtle, they have Frank Franklin like sculptures all over the park. His name is Petey and it's interactive.

F

Like there's one place where Petey has his little front legs together and people put flowers, you know just put flowers in his uh and his little turtle arms um and that I think I'm going to leave you with. So you can go watch the video yourself, but it was really good.

A

Comes my brothers yeah.

G

I've got an in the North King County Coalition on homelessness and each of those meetings. The Oaks enhanced shelter provides update, as well as the King County Regional homelessness, Authority, and so we got an update from the oak saying that they're at full capacity and their wait list is so long. They could honestly fill another shelter of its size in North King County. They are holding an upcoming Community picnic on July 22nd, and that is for people who have volunteered contributed and really that's the city of Bothell, because they are one of our granting agencies.

G

um Update from King, County Regional homelessness. Authority is that there was a report on funding from the North King County agencies and how the money that we've sent to the homelessness Authority goes to North King County agencies as well. They are looking for questions. They have questions around. How interested are cities on knowing last reported residents when we talk about?

G

um Where are where are people who are currently unhoused? Coming from what community is their last reported residence? We find that, like I know that here in Bothell, we talk about that as being useful information, so that we know who like how is Bothell contributing. And how are we? You know looking out for our community members as they have to navigate the whole unhoused landscape, and then there is also an update for about a severe weather shelter.

G

There are efforts at hand to build capacity in North, King County, so that we can have a severe weather, shelter, that's staffed by trained staff. That was the reason why we've lost the saint dunstan's location is that volunteers were running it and it wasn't.

G

um It wasn't working out very well, because there was a higher level of need that meant that staff needed to be trained to staff to to provide support during those evenings when the shelter was open. So there's more information available at kcrha.org and there's a severe weather, shelter page for people who are interested and that's my update.

A

Awesome, thank you. Both all right last call all right, so you know others. The city has accepted visitor comment and writing as well as accepted sign up sheets for those who wish to speak at tonight's meeting. Written comments submitted to the city clerk no later than 3 pm. Today we're forwarded to All City Council Members and are part of the record when the clerk calls your name. You will have three minutes to speak.

A

Please note that Council will receive your input, but upon the advice of our City attorney, we do not engage in discussion of these topics. Staff will make note of items requiring follow-up city clerk. Do we have anybody signed up.

C

We do mayor Thompson, we received no written comments this evening and we have one person. Roger I do not have a last name for Roger, but if you're here and I do not see him on the virtual, so is anybody named Roger signed up to speak?

C

Okay, uh that's all I have signed up to speak if there's anyone Mr Swanson, if you'd like to step to the podium.

H

Well, I got to keep good on my word last week, I told you about the clerk makes forty thousand dollars a year that drives little kids around. Remember the umbrella joke yeah I got another one for you, but I don't have time for it tonight. It's about jumper cables, it's good! It's really good I'll! Try to get to it next week.

H

uh I want to remind the council that you guys are not the Agents of my altruism right I, give away to charity and I give away a lot. You guys don't get to slice and dice the social Equity that this community has built for 40 50 60 years.

H

You don't get to reassign it to Charities or things you think are what I want you're, not better than us. You're, not smarter than us. They're, not you're, not more compassionate than us. I also want to double down on Ann a guard comment. Last week, man, she's Sharp, HB 1110 form scale and character.

H

Okay, I, like extemporaneous speaking the best but they're too much details. So I wrote this down. Hopefully, I can get through it. Our current vision statement States maintain strong residential neighborhoods through public Investments and physical improvements intended to enhance neighborhood identity through public policy decisions intended to protect neighborhoods from intrusion by incompatible uses. I don't know. Did we got a passing grade on that think about your actions last four or five years.

H

Conveys an overall single-family residential character, I mean that's the way it reads now since 2015.. What have you guys done? Lot p.

H

Honors its past and provides a perspective for the future by preserving significant historic buildings, protects preserves, enhances those features of the natural environment which are sensitive to human activities. Now the rest, it's a detail.

H

The purpose of the natural environment element is to expand upon the community's commitment to stewardship of Natural Resources, expressed in the vision statement and provide a policy basis for City decisions which affect the natural environment.

H

The GMA in part, contains the following goal concerning the environment: protect the environment, enhance the state's high quality of life, including air and water quality. They'll build water. I also want to call your attention to advise code of Washington. You have to write these down. I don't have time to read it. Rcw 43.21, co30.

H

Rc 4321c point 40.

H

H

.31 well, 120 I think these verbal comments I make they are as binding upon you. People thank.

C

You Mr Swanson. Your time is up as.

H

A written statement.

H

Thank you all right, I expect you guys to deliberate on these rcws and come out with a finding thank.

C

You is there anyone else in the audience that wishes to speak I'm, not seeing anyone mayor, Thompson,.

A

Thank you, City Clerk. All right next up is projected agenda discussion. Anybody.

A

All right, seeing none um I, would ask for a motion to approve the consent agenda with the aforementioned edit.

A

Councilmember dot I.

D

Moved to approve the consent agenda. Second,.

A

All right I have a motion to approve the consent agenda from councilmember Dodd and a second from councilman Resorts. Would anybody like to speak to the motion.

A

C

We say yes or no: I want to call your name councilmember zorns.

A

C

Mayor Thompson, yes, councilmember all Dirks, yes, councilmember McNeil, yes, councilmember Mankey,.

I

Yes, councilmember.

C

Dodd, yes, Deputy mayoral cover. Yes, thank.

A

You I guess the thing we moved wasn't on the consent agenda, but we got the motion right anyway.

A

All right um next up, we are going to reset for the study session, we're going to take a 10 minute break, um we'll be back at 6, 28 pm.

B

Recording stopped.

A

All right welcome back next up on our agenda. We have a study session for utility right city manager.

E

Thank you mayor and we do have. This is the one study session we have tonight. uh Council will recall we had some conversations last year during the budget adoption around utility rates and Outreach and how what goes into it.

E

um So tonight we are joined by um by our Consultants, as well as by staff, to talk through a review of utility rates for 2024 and with that I'm going to turn it over to Boyd Benson. Who is our utilities and Development Division manager boy? Take it.

J

Away, thank you good evening and thanks for this time, once again, Boyd Benson utilities and development services manager. Tonight we have John gorducci and Tage Ocker from The Firm, consulting firm FCS group and they're, a financial, consulting firm that specializes in rates and capital facility charges with jurisdictions and such um John are talking to. You want to mention anything about the firm before we jump in or.

K

Sure, and thank you yeah uh as Boyd mentioned. This is what we do. We've been in in business since 1988 um and I'm a principal with the firm so um very pleased to be here to kick off the rate study. We don't have any results to share with you tonight, but.

J

For sure cool, okay next slide, please all right so tonight. This is just a presentation, an overview. The methodology there are no results to share, but this is a opportunity to hear council's feedback and and thoughts and opinions that might help shape this evaluation. We've started this project about well, we had a scope for this about three years ago and with covet it was kind of deferred and the initial kickoff was I. Think March. So there's been a lot of information going back and forth.

J

We've engaged assistance from finance and we're we're going along with the uh with the information. um So once again we're seek Council feedback in question and no formal action is required or requested tonight a real quick overview and then we're going to jump into different um subjects and if you'd like to take this one talkie, yes I'll.

K

Actually, I will kick it to Target in a minute um who's your project manager, on the on the study, um the way that we've laid this out we've got a little bit of background sort of General background on rate studies and then uh we'll talk a little bit about communication and Outreach Boyd will talk about the communication plan and then we'll get into some of the key pieces of a rate study uh fiscal policies. We have some examples of those.

K

The revenue requirement piece, which is a very important piece of a rate study, cost of service and rate design will define those as we go, give you some examples and then, of course, questions and discussion and as we understand it, no action requested from the council tonight.

K

So why are rate studies important? Your different utilities are, are essentially business units within the gut within the city government. As you, as you know, rates are the primary revenue Source needed to recover the costs of each of those utilities.

K

The other thing that that rates do is they they put into numbers uh the different choices you make about priorities and policies and different initiatives that you might have like conservation. They help when set adequately. They help maintain the long-term fiscal health of each of the utilities and and the Integrity of those physical systems there's also a piece to rate studies which is important for accountability.

K

They communicate through the rates themselves and the monthly bills the impacts of the financial decisions that that the council makes the city makes they are important to uh fairness among customer groups. The rates are structured in in a perfect world. They would be structured so that everybody pays exactly proportionally to their benefit or Services required.

K

That's our goal. We try to to achieve that in the rate structures they're also important to the education of folks who are paying attention through public meetings, talk about rates and how they're structured and what the needs of each utility are their communication tool from that standpoint.

K

So what do the rates fund? These are snapshots from uh that. We pulled from the city's website, but they're really useful, high-level summaries of the types of costs that are recovered in rates for each of the three utilities, starting with water. The biggest the biggest number you see up there in the water pie are capital projects, that's about 3.9 million water purchases at about a little less than 2 million Staffing at about 1.7 million, and you see taxes and inner fund Services supplies making up the remainder of the water utilities.

K

Expenses about you see some key features of the water system, about 83 miles of mains, three reservoirs, four pump stations and fire hydrants, of course, for the sewer utility about 2 million in capital. Less Because treatment is paid for at the tune to the tune of about 6.1 million dollars, so there's less Capital needed Staffing about 1.6 million for sewer, about 70 miles of sewer, Mains four lift stations and for storm water, a whole lot of pipe about 100 and almost 150 miles of pipe and 8 500 catch basins.

K

You see very Capital intensive utility in storm water about 4.4 million and then uh Staffing at about 3.3 million. So the one thing that that we always keep in mind, it's important to remember about rates rates, are established to recover the costs of doing business for each of these utilities. Unlike a general fund where you look at the revenue and then budget to the revenue from year to year, rates are at a cost recovery mechanism.

K

So when we, when we perform a rate study sort of starting from the top of this of this cycle, fiscal policies are really important input to determining how much money is needed from rates, which is that Revenue requirement number. So fiscal policies tell us what Target reserves might be uh prudent in order to guard against Revenue risk or expense risk from year to year.

K

Once we have guidance on those fiscal policies, then we bring in the operating budget the capital plans to determine that Revenue requirement number that's how much rate revenue is needed to meet all the financial obligations of each utility.

K

The cost of service analysis begins to look at that that Revenue requirement pi and determine who should how the pie should be sliced among your different customer classes. That's the rate, fairness portion of the rate study. Are you charging your customers equitably in the rates for different customer classes?

K

That's further reflected in the rate Design This is Where. I mentioned conservation as an example. This is where you might structure the water rates, for example, to incentivize conservation or reflect that value um uh and- and so the rate design is also a communication tool, but designed to recover the needed Revenue. And then we get into uh communication. How are the rates communicated to the rate payers and how is their input and their involvement successfully obtained.

J

And real quick if you can go to the back one slide. Please thank you, though, and just add a few things on to that. When you look at fiscal policy evaluation, this is something we'll work with Finance with and and with the folks they work. The professionals. um Why we're doing this now? Is we've already done a revenue forecast in the past for the 2023-2024 budget? We've already done the capital facilities plan, so we know all these things.

J

So if we didn't do this this year, we'd be coming forward with what you typically see for an annual rate update is okay in 2023, developed, a budget or sorry 2022, and we increased rates in 2023 to we happened to to take care of business there. We have a forecast for 2024, which has a placeholder for inflation in the rest, and was that enough? It has a placeholder for sewer treatment and is that what actually happened so those type of things is this?

J

Isn't you know just it's what's most exciting to me is the cost of service analysis. I mean is: is the demand on the Water System more for high fire flow requirements for commercial, as opposed to um Irrigation in someone's backyard? That may be? Yes, are we doing these larger projects to benefit high volume users? Are they paying their fair share of those projects? So you start looking these things and that's where fcsg brings these components in it says: okay, it's not just conservation of this or that, but okay, this use uses 100 gallons.

J

This uses 100 gallons, but this is occurring all at one time and it means we need bigger pipes and bigger pumps. So they'll look at that. The rate design we think, is important when we get a little further along right. Now we have residential and multi-family and Commercial. Should we be looking at something in between there?

J

There's discussions of adus there's discussions of smaller houses or middle housing, and we don't have to attribute a name to it, but should a 4, 000 square foot home on a quarter acre lot have the same connection charge or the same base rate as an Adu that could be on a lot. That's 1500 square feet. So these are the type of questions and a lot of it's policy, and and that's what we'll have some questions and near the end of that and then the communication plan, which is the next slide. Please thanks um it's.

J

It starts with a discussion like this. We all know what utilities do. We all know that we have expenses and we have Revenue. Are there some certain things that council is looking out towards and we've heard things in the past and we've we've marked those down. um So that's that's discussions. Council. We have information in the utility billing website, we're starting to roll out information in sewer and water bills.

J

Further down the line, You'll see a public hearing, that's that's pretty far along so we'll be coming back in the fall with actual results to say, look fcsg has seen this and this and we're proposing this type of rate. To bridge this this kind of middle ground, or this this or that there'll, be those discussions. Then it's a public hearing where we get to hear from the public, but all this time through we're soliciting information from the public and part of that is, is- is to get the information out most people.

J

If you ask what do you think about rate increases or rate changes, they're going to say no! Thank you, but if you, if you tell them the whole story, hey, we want to maintain our system and improve it over time as opposed to weight for failure where costs are very high. We want to spread these costs out over time. We want to look for opportunities to do these. These repairs with other projects and and get them through I. Think then, instead of hey, stop looking at our rates and potentially raising them.

J

It's then, okay, we understand we like having good water level service and sewer and storm, and so we'll have that and part of that is City E news and website we're looking at storyboards, which we're just talking to our communication. Folks today, where it's it's, it's it's somewhat: interactive, you're, getting information about the process, you're, seeing what it's for and then you're being asked questions. There's a survey being developed to ask those type of things and part of that is to educate as well um and then the mailer.

J

So that's kind of the public Outreach we've heard very strongly from Council in the past that that the public should be involved in this and they should and on the the smaller rate updates, it's been less less participation because they've been kind of Little Steps, but this is where the policy said and the framework sets we're really excited about this uh Outreach component.

J

K

You so we'll do a little bit of a of a deeper dive on some of the benefits of fiscal policies and sound fiscal policies and then give you a couple of of examples.

K

um But what are the benefits of fiscal policies? Well, they lead to very planful, hopefully smooth great adjustments over time, so you don't have surprises and spikes in rates over time. They help the utilities, whether Financial Risk to both revenues and expenses by by carrying some amount of of a cushion there to to handle those ups and downs. There are metrics and ratios that we use to Benchmark the utilities against other Utilities in the region. So you kind of know how you're doing by those benchmarks, I mentioned keeping rates stable over time.

K

That's a that's a very important feature of fiscal policies that sort of smooth rate adjustments over time. They can be very important. Strong fiscal policy is very important to creditors when, if you do need to issue debt, having good fiscal policies is a signal that you have strong financial management um and then the policies and we'll show you examples of this on the next slide can vary by the type of utility.

K

The operating reserve, for example, is typically set as a number of days of cash operating expenses, so, for example, 45, 60, 90 or 100 days of cash operating expenses. That is a a minimum fund, balance Target. So this is not an annual contribution, that's made. It is, if you dip below that minimum Target, replenish it up to up to the minimum. So up in the upper right hand, corner you see what have been the city's policies for water sewer and storm water. You notice, Water and Sewer a 60-day reserve targets and storm Waters 120 days.

K

The reason storm water is 120 days is because it's build on the property tax statements for both King and Snohomish Counties, so you get Revenue spikes in April and October, and you need to have the fund balance to carry you in between those Revenue spikes, Water and Sewer.

K

While water can still be a somewhat volatile, Revenue stream over the course of the year because of Summer usage and winter usage differences, those are very adequate minimum Reserve targets at 60 days and and should be just fine to keep those utilities healthy.

K

So examples of of how those numbers can vary and an operating Reserve Target, and these are targets we will again examine as part of the study the capital reserve, as an example is shown on the on the next page, and these are these numbers are made up just to give you an idea of how the capital reserve minimum balance is often set. We'll look at the cost of the Assets. In this case, for a water utility 35 million.

K

Often we use one to two percent of the total asset value as a minimum fund Target. So you see one and two percent would result in minimum fund balance targets of 350 000 or 700 000, and so you will see those types of choices presented as we move forward with the rate study.

K

J

And just to add to that real quick, um thank you. Robin, uh these restricted funds are really really important. The operating Reserve is really important, so we can keep doing work. Should we not have a revenue, Source but I? Think just as important are these restricted for the capital and the assets we program all our Capital work. There are contingencies in those capital projects that usually cover everything, but this 10 of the average annual Capital project costs one it's it's policy, so we have to do that and fcs2 will look.

J

Is that the appropriate amount, but two? If something goes sideways, we lose a reservoir um as part of a repair project or something like that. Those funds are there. We never touch them. We don't use them as part of these are the funds we can use they're restricted when we present those with the fund balances, don't touch those. This is unavailable and the same with the two percent of assets once again, I think the city of Bothell does a very good job of maintaining and improving systems before they fail, but that's there just for that.

J

This is for Sunrise right. We didn't end up having to use the reserve for that, because we can find the funds during through another Capital project, but those are the ones all sudden we lose a water main valhall and it's not on the on the capital project list of the rest, so I in the last five six years, I haven't seen us actually have to dip into these reserves, which is very good they're there when we need them, but um like I said, fcsg will look to make sure that those are appropriate amounts.

L

All right, so next up is a little bit of a deeper dive into the revenue requirement. Forecast next slide, please. So, as John mentioned earlier, when we're setting rates, the main goal is to recover the cost of providing service, and typically, that comes within three different buckets. One is what it might cost to achieve certain Financial policies that might be replenishing reserves that might be setting rates to generate enough rate Revenue to cash fund. Part of your Capital project program.

L

It could be meeting certain debt covenants for loans or revenue bonds that you might have on the books. Other types of costs can be operating they're, typically a little bit more predictable based on the the budget numbers. These are your people that you employ salaries and benefits inspections, maintenance, Professional, Services, some big ticket items for water, as John mentioned, with those pie, charts purchased water from spu and the Wastewater sewer utility.

L

One of the big ticket items is what you pay to King County to treat sewage and that's roughly half of that pie chart that we looked at earlier and then in any given year.

L

You might be taking on multiple projects in each utility so, depending on the size and number of those projects that can be a little bit more variable year to year, and that's where that advanced planning comes into place in terms of looking ahead six years at a time to make sure that you have enough reserves enough rates to cash fund, part of those projects and if you need to borrow having rates set ahead of time to cover potential new debt service for new loans that you might take on.

L

I think Boyd wanted to touch on a couple of those bolded items. There.

J

um And yeah, and a few of these, um the big one was on the bottom, we'll save that the last but the Staffing evaluation. Typically, we forecast on the utilities at least seven years out, so that covers the capital facilities plan. It's not. Obviously the council adopts a two-year budget and those are set in stone, but we forecast that far out. We typically don't include any staffing increases in that because those come with each budget, but we are seeing new requirements with respect to storm water. The new stormwater permits coming out they'll have additional requirements.

J

So one aspect of this that you'll see that's not in the typical annual update is we'd like to look forward as population increases. Should we be looking to see that Staffing is increased to cover the extra burden on the system? It's it's no decision, but it is. Should we be looking at these things as part of the evaluation and staff would recommend. This is something to consider nothing's ever set in stone because these positions are created with each budget, but it's it's probably something to put in the variables um the wholesale cost.

J

We've been really fortunate with water, it's been a zero percent increase for the last couple years. Spu does a really good job of managing their funds. um King County rates have increased significantly and you'll see this below. This is actually adopted rate in plan. The only adopted rate is the 2024, but uh standard single family residential unit detached on its own lot pays about 144 dollars every two months and of that 52 times, 2 104 is going directly to treat Wastewater.

J

So the the funds used to operate the system, the pump stations. Everything else is about 39 40 every two months. It's actually going to city Revenue. So it's a relatively small component. So when we see these increases being proposed and discussed, it really sends some red flags. We need to make sure that our sewer utility is strong. So if there's a good balance in that utility to help offset future rates, increases staff would say: let's, let's consider that- and these are the minimums. This is like.

J

I said it just about doubles in the next 10 years. Should a fourth treatment plant be needed to improve water quality and and the rest in Puget Sound? You could see multiples of that and increase. So we're really looking at these things is okay. We don't budget for them now, but let's keep them in mind. So we're not surprised in the future. So I just wanted to share a bit about that.

L

Thanks boy, one of the big decisions when looking at each utilities rates is how do we fund the capital program and that can be from cash reserves you've already accumulated from past years. It could be, you know, as new development occurs, they pay for connection charges as they do, for water sewer and storm water, but the rest would be okay, it could come from cash rate revenues and it could come from debt borrowing either through low-cost State loans or, in some cases, revenue bonds.

L

And when balancing these things you know each of these has a rate impact so cash for example. Typically, we recommend trying to cash fund more of your routine repair and replacement projects they're a little bit more predictable, a little bit more scalable saving debt for more of those one-time or larger projects. That would be hard to save up in advance for and by borrowing for those types of projects on occasion can help spread out that cost over time.

L

So, as growth occurs, as new customers begin paying monthly rates, they would then pay a share of that ongoing Debt. Service, typically over you know, say a 20-year period. Cash does have the benefit of you know avoiding interest costs on debt service, but if it takes a long time to save up for certain types of projects, you might have to pay more for the project due to inflation and Debt Service. You can complete the projects Faster by borrowing, but there is an interest cost.

L

So we try to balance a lot of these types of things in the forecast to make a blend of cash and borrowing in a way that helps mitigate rates over time.

L

So when you put it all together, you know how much revenue is needed. That's what we would call the revenue requirement. It's achieving Financial policies, it's meeting your adopted budget operating maintenance costs, o m costs and those bottom two boxes are how you fund your Capital program. You add that all together and that's your annual revenue needs and we we look at it over a multi-year period and then compare what the needs are against your current rate revenues.

L

If there is a deficiency there, that's where rate increases would come into play to make sure that you're always staying at that cost of providing service instead of Dipping down into Reserves.

J

Just a add one or more two things to this so as part of this they'll also be benchmarking analyzes with respect to other utility districts and utilities. So, typically, what we do is we'll bring forward. Okay. This is what a typical bottle customer pays for this use, and this is Alderwood, and this is nud. This is Kirkland. Fcsg will dive into that deeper. So it's it's not just. We have relatively low rates for storm um it's well.

J

We have these rates, because, if this this this and this- and we compare because of this this this this um or let's talk about the water utility and it's okay. Well, we may spend more on Capital now, but that's once again to to prevent failures in the future and that typically costs less than waiting for something to fail.

J

So we'll try to compare things not to say holistically, but um just yeah I'm, not even sure what the word would be, but it's it's looking at different aspects of each utility and how the bills are are completed. It could be the number of employees for for this or the cost per thousand miles of pipe or this or this or this. So it's it's it'll be a little more in-depth than what you see and everyone has different rate structures.

J

One utility may have a high base rate for sewer and a very low additional charge for consumption. Another utility may have a low base rate with with high charge consumption unit, so those type of things we compared a bit. So it gives a little more complete story of why Bothell is unique and a little different.

J

L

Point so I think that wraps up the revenue requirement discussion and then we move into the cost of service analysis and as John mentioned earlier, you know you can think about the revenue requirement.

L

As you know, how big does the pie need to be in each utility and then the cost of service essentially looks at how do we slice up that pie equitably among the city's customer classes and we'll be using hypothetical numbers in the next few slides, but just to give you an idea of what it will look like when we come back in the fall. So in this particular example, you have residential customers generating about 55 percent of overall water utility revenues, 39 coming from commercial and then multi-family a smaller slice.

L

There are six percent and the example that will step through in the next few slides will show how that pie, changes based on the cost of service analysis the before and after picture.

L

So the general flow of a comprehensive rate study would be how much revenue do we need, and then we look at what makes up that Revenue requirement. That's Staffing costs its repair and maintenance.

L

It's paying Debt Service, you have certain staff working on the water distribution system, certain staff working on you know, pump stations Etc and we try to slice up with the input of City staff comprehensive plans, the total cost of the water utility into these different functional buckets. You have customer billing postage. Those are customer costs.

L

You have costs related to providing typical average demand throughout the day throughout the year and as Boyd mentioned earlier in one of his examples, some customers use more water at certain times of the day. Certain times of the year, you know, Watering your yard, filling up a pool Watering your garden. So all of those different types of uses have different impacts on the system. So by trying to slice up the revenue requirement into these different buckets, we can then see. Okay, single family uses the system.

L

This way, multi-family doesn't Peak as much in the summer for irrigation commercial uses it in a different way and may have different fire flow requirements than single family or multi-family. So we try to figure out how much each customer class should be paying compare that with what they are. Currently paying and that may indicate some sort of cost recovery shift amongst the customer classes. That would be independent of the overall Revenue needs of the utility.

L

So as an example on the next slide, this is a pretty common water usage profile for a water utility. You can see residential customers, often one of the largest in terms of overall water use, and they also typically Peak the most often in the summer months as irrigate, their lawn and other water usage types commercial, depending on if it includes city parks or schools that are watering, athletic fields, may see some peaking, but not as much as commercial and then multi-families pretty flat. So these types of things influence the cost of service analysis.

L

So, just as an example, you know commercial customers, often one of the smaller customer groups in terms of percentage in this case they're nine percent of overall accounts, but they make up a pretty significant portion of overall water usage. So they'd get a small slice of the customer costs, but a much larger share of Base demand or average water demand, as they use nearly half of the overall water that is consumed in this particular example utility.

L

So, in the end, the result of this particular example in a revenue neutral scenario, what we found was multi-family was subsidizing, single-family and Commercial customers, and one one potential item here is you can make that change the next year, but more often than not water utilities and cities will phase in these impacts over multiple years to try to mitigate impacts on any one particular customer group in one year so spreading that out over multiple years you can see that multifamily might see flat rates or even rate decreases, while residential and Commercial need to increase a little bit more to make up the difference.

L

So that's the type of analysis that we'll be doing for each of the utilities, in particular Water and Sewer.

J

For sure, and once again this is an example: only these aren't real numbers so but I think the main takeaway is: what do you need the total revenue and how is it existing collected? Currently, what do you need same total revenue? How should it be connected collected in the future and then how do you make those changes? So uh I just wanted to reinforce that yeah.

L

Example, numbers only yes,.

J

Cool next slide, please oh, go ahead. Did you ever.

L

Comment: John, okay, so last slide in cost of service. Just shows how that beginning pie would end up being sliced. After the cost of service analysis, you can see see one particular shift multi-family going from six percent of overall revenues down to four and a half percent of overall revenues, and that would be what we would say is a more fair way to recover costs from the different customer groups.

L

So when we look at this, for the city of Boston, we'll be looking at usage statistics for your own customers, the ins and outs of your overall operating and capital budgets and coming up with a tailored analysis for your utility.

L

And lastly, nearing the end here is rate design, as John mentioned. This is a really a primary way to communicate with your customers when they get that bill. Every couple of months, they'll see a water line item a sewer line item, not storm water, because that's billed on the property tax statements, but I wanted to touch on that water box there on the left. This is for a single family customer, it's the rate schedule for 2023, and this is the way that the city is already encouraging water conservation.

L

You can see that there's a base fee that applies no matter how much water you use and then, depending on how much water is used in a billing period, you might be paying.

L

You know three dollars and 43 cents per 100 cubic feet in that first block all the way on up to that top block, which is nearly three times as much the rate, so the more water you use, the higher that unit rate goes and the higher your water bill would be it's a good way to communicate within with the customers of water usage, correlates to your overall bill. Every couple of months.

J

And real, quick on that last slide. Just just so you you don't have a heart attack with the 951 per CCF. Our average residential consumption is 11 ccfs every two two months. So it's it's good I'm, not saying that's the increase. The the rate scale you see up. There is used by many jurisdictions to promote water conservation and it does a good job, but we typically see that we're right around the 1011 CCF. So it's most folks are paying the lowest rates available.

J

This is mine, um so staff and management have been looking at some possible approaches for rates, and these are just ideas and feedback is good at this at the end of this or any time, but when, when you look at how we treat rates and facility charges they're different, so what we show on the right hand, side is what's charged by King County to buy into the system as a facility charge, your new service, you do this, it's not the same for everybody.

J

If you have a bigger impact on the system you're paying more for buying in and for the share of projects that will help mitigate those impacts, so adus are 0.59, a large home is 1.16. We don't do that currently here at the city of Bothell, for water or sewer. So this is something should we be looking at this this approach and it actually makes really good sense. It's based on really sound financial evaluations, um actually I. Think fcsg did this for King County back in 2018 2019, it's generally accepted.

J

Can we do something like this for water? We could right now. The smallest meter you can get is a three-quarter inch meter. That's the same. Three quarter inch meter for this person's four thousand square foot home as this person's 800 square foot Adu. Should they be paying the same amount?

J

Does that three-quarter inch meter, which is our measurement, represent the same burden and the answer may be no so staff is, is looking forward to be part of the solution with the missing middle and the adus Council may not have determined what that actually looks like right now, but there is. There are Provisions for subdivision in there to achieve those densities.

J

So if you have a single family residential unit on one lot with one meter and that turns into four Lots with four meters, which is good, that's ownership- you don't want someone else in charge of your water meter if you own that property right well, do those four smaller units have the same impact as four single family residential units. The answer is most likely. Not they don't have the yard space. They don't have this.

J

So we're looking at those type of opportunities and we're really excited about that and that's part of the information that fcsg will be looking at as well, so we're we're making sure we're an active voice in this and and and making sure that we can. We can get things pointed in the right direction, so you will see some discussions about new rate categories.

J

King County uses a 1500 square foot threshold for where they start looking at smaller uses micro, housing, adus metal housing, and it may be that staff recommend a management and to counsel that yeah. We might look at that as well. Now that's for facility charges, which is part of this evaluation, but I shared that first, because rates. The main part about this is is the same thing. Everyone pays the same base fee for water, it's 35, Plus your water usage on top.

J

Well, that may be fair and Equitable once again, there's one unit paying 35 dollars and all sudden, that's now four Lots with four small units should they be paying four times thirty five dollars. The answer is: maybe yes, maybe no one of the approaches staff's. Looking at is, we have a discount for senior and low income and it's 75. Could discounts be applied to these base rates and the rest, and we're really excited about this? Other utilities are, are looking to react to these things and we're trying to be part of the solution.

J

Working with Community, Development finance and the rest. So you'll see some of these things as pretty strong recommendations for consideration, because we think they make sense. People should pay their fair share, but and Adu does not have the same burden in in the staff person's opinion, as a fourth axis Griffin home. So you'll see some of that.

J

um Thank you. That's it uh so on this. This is the time for discussion. We we. um If we could go one more slide. Please Robin! We have some um some just starter questions. This is this is to get your feedback and understand what council would like to see out of this evaluation.

J

Yes, ma'am um yeah the two questions up there does council support they're, easy ones, um they're they're, just out there to start the conversation. Do you support continuing the senior uh disabled, low-income uh discount right now? It's it's, it can be improved. um Our language is old, there's other things that SEO students look at to make sure we're in accordance with the Washington State Charter and the rest, so that that's being looked at. We have draft white papers for that.

J

So that's one and then is Council interested in seeing staff work on new rate categories for some of these newer residential uses that they really do fall between the crack, a multi-family unit. Let's say Ross Road apartments right, that's!

J

You should know the number of units, but I'm not going to say because I'll get it wrong, but that's one two inch meter that serves that entire facility they're paid they're, paying their fair share. It's they're getting a lot of use that isn't 57 units with with their each each meter. So it's really easy with multi-family.

J

When you have large units where it's not you know, Foundation to Rooftop ownership, just get a bigger meter, because everyone's sharing now then, when you get your own meter, because that's what you want to see, if you, if we're lowering the barriers to affordability and housing, it's it's set up, so they get their. It could be a rental, it could be a condo or it could be fee, simple property and they will have their own meter. You can't have someone else paying for your your sewer water.

J

So those are the type of things we're talking about with this new rate and facility charge evaluation.

J

So those are the kind of the prompts and we'd love to hear some some thoughts or feedback. Please.

A

I'm, a yes on both um the utility rate discount program, I'd, really like to see that go toward the people that need help the most so I'd be particularly more interested in seeing that for folks that are you know low-income people with disabilities I'm not sure about just purely based on age, because you've got wealthy people that are older, I, don't know why we would give them a discount, but for sure, if they're living on a fixed income and they're below you know some manner of income cap absolutely and I'm I'm, maybe as excited as you are about the different, not just buy-in fees, but also rates scaled to home size.

A

That makes all the sense in the world like we should charge people for the impact they have and what they use and um the the more we can, the more we can make that accurate. uh The happier I would be so super excited to hear about that too. Thank you.

G

I would Echo the mayor in that um I'm sorry, the editor in me is coming out, um disabled instead of disabled, um thank you, um yeah and then and and I think. The mayor makes a good point that, um when, like I think we use the term senior to describe people on fixed incomes, but that's not necessarily reflective of the actual demographic that we're talking about. So um you know people on fixed incomes. You can be on Social Security and a younger adult on a fixed income yeah. Thank you.

M

I got a novel um all right, so one two and three. So if one and two are yes, the question becomes who pays? Who helps to offset it so that I would I'd want to know I'd want to get some more information around that. So, if we're reducing for Middle housing, there's already a burden, we're putting on single family housing, and then on top of that, if we're doing more, what is that? What does that really look like um when we talk about the size of a home, the size of a home? I?

M

Think you know where I'm going with this? It does not correlate to the number of people who are in the home. So as an example, if you have a 2, 000 square foot home four bedrooms, three kids, two adults, five, five people living in that home. They do not have an irrigation system and they all take showers.

M

They wash their clothes, that's a single family home, and then you have five adus that have five individuals living in them is the use potentially the same possible so I just like to make sure that when we talk about the size of a home, we understand it doesn't relate to people in the home or the use of the home. It's it's just a square foot, it's an arbitrary number um when we.

M

So when we talk about the utility rates for like sewer as an example, we're studying sewer, we talk about capital projects. Do we take into consideration the new lining that we're doing as well in these studies? Because because I know, we've talked about that and we're saving money, um we're improving and we're being able to do more with our money. So I want to make sure we're we're continuing to have that conversation.

M

um The word fair share came up quite a bit, paying a fair share and so I'm going to be really curious as we go through the conversations on what that really means when it comes to equity across our entire Community, not just facets of our community, based on the type of way you live in the community right. So there was a big step.

M

You had the commercial piece up there and you know the residential and the multi-family, and you gave the example, which was just an example, but when I looked at that, it said multi-family has that uses that pays more than single family, but in essence it depends on who's living in what type right so just want to make sure that we we're talking through that a little bit um when it comes to the storm.

M

I think it was 120 day model to recoup so is, is storm going to continue to increase tenfold because of the new storm water policies that are going into effect or how is that going to work? Foreign.

J

If it's okay, to respond to some of these, because this is a discussion- oh.

M

J

Cool um yeah so storm, it's it's also. There's we have a lot of storm staff and that's because of the compliance and the rest. We have a very significant stormwater system. So when you, when you think about like, is it going to increase a lot? The answer is probably no, as we improve things and as storm water. You know you see Redevelopment and the rest things get better and better and better there'll still always be a background and they'll still always increase the requirements. But but these numbers we're talking about like sewer with sewer treatment.

J

The answer is no, we don't anticipate unless and we get fair warning as well. These npds permits come out about every five years, there's a new one coming out draft within the next few months, so we know what's coming and we can program it and we've got a bit of a bit of a leeway but I'm thinking that 10 times in the rest, you're kind of alluding to the Sewer treatment that that is out of her control and- and we just do our best.

M

um Yeah, you do amazing job I mean I've, sat through a few of these now with you, and uh the work that we do here at the city in the thoughtful process in which we go through is amazing, so I'm really not questioning that when I'm, what I'm like where my mind goes, is we talk about growth?

M

We need to have this conversation about utilities and the infrastructure right and the importance of that. So when we start saying, let's add different housing types right, we're not going to use the word middle housing, housing types. um What is the? What is the true impact? So if you add a thousand units on one road, what is the true impact? You talk about one meter for a multi-family or a commercial structure. What is what is the real impact, so that's kind of where my mind goes is making sure that we have.

M

We have conversations around that as far as the infrastructure piece, the water, so the utilities that we currently the utilities that we currently pay for are those owned by Bothell or we are they outsourced, meaning are we paying other jurisdictions so, like our our rates, for instance, for sewer treatment, is being paid to King, County, correct, correct.

J

For treatment just like, if the wholesale rates for treatment and for purchase- but these Utilities in my opinion, belong to the rate payers because we're just administrators of this system, it's an Enterprise fund. It's set aside as a business to make sure that you know it's not drawing funds off or planting funds to somewhere else, but yeah.

J

In my opinion, they're it's owned by the ratepayers and it's it's it's our mission to do the best we can with that and keep rates as low as possible, but also to make sure that we collect revenue and I, know I'm getting off on a tangent here, but but I'm not sure all utilities see it that way. Because to me this: isn't this isn't an asset the city owns?

J

This is a system that our community uses and where to to do the best we can to keep rates low but collect enough to do the work we have to do so. We don't have problems in the future. We're doing lead service lines, inventories! You don't some of these things.

J

We should bring forward and discuss more, and maybe we will in the future, but right now, there's there's Federal requirements through the EPA to map all our service lines and understand which ones could be led and that's in reaction to what happened to east coast and so these little things that we're doing in the background uh infiltration in Florida the sewer. So there's more of those Capital facility plan type discussions.

J

But what we're doing is we're making sure we're ahead of the game on that and I'm, not sure why I'm saying all this stuff, but I.

G

Really want to really want to reiterate that we need that this is.

J

This is the community system we're the stewards of that system. We want to collect the the appropriate rates and do our our work well and then I, don't I, don't and you brought up the you know.

J

Fair share, I, don't know another way to say that, because to me this you could you could equate it to equity, and this is I'm not sure it's okay to say this, but I really don't think if, if it's one home and 580 use that these five adus should be paying the same as this one home, where all of a sudden, we have one lot that we forecast in the future for one meter at 77 400 and now it's going to have five units and now we're gonna get 35 000. to me.

J

That's not Equitable, because these five units will likely not have the same burden as for single fam or five single family residential rates, and that's that's. Those are the type of things that that fcsg will look at a bit. Part of this is policy, though, because some jurisdictions, utility districts right now, nope, it's got a meter. It's going to pay the full facility charge, it's got a meter, it's going to pay the full rate. Well, did you account for that housing? When you did your forecast? No, it's brand new.

M

Yeah I agree with you what I guess what I'm saying on that that piece of it I got two two more things: I want to and then I'll close out, but I guess what I'm saying is. If I have five people live in my house and then fight people living that smaller house and then, if I, duplexes or whatever, adus or whatever.

M

If each person takes the same amount of showers and uses the same amount of water, are we going to be paying the same amount based on the usage? And if the answer to that is yes, then I'm okay. But if the answer to that is no I'm going to pay more because my house square footage is bigger, then that's inequitable to me right, yeah, I, agree! So so, but I'm agreeing with you if it's everybody's going to pay the same amount.

M

So to me it just it just want to make sure I have a conversation, the cost recovery piece, I'm glad you brought up ensuring that we're cost recovery cost recovery not today, but also looking into the future.

M

I know we're setting this for 2024, but making sure that we're we're looking into the future, and the last piece I want to leave with is is the the impact fees, because growth has an impact on our community and ensuring that we're at least having somewhat of a touch on that during this conversation, I think is going to is going to be important on what how development pays for that one-time impact.

M

J

And just one more and we're taking a little more time than we thought, but this is It's really appreciated this feedback. So there is a facility charge evaluation as part of this study, but it's not to look at the total revenue for the facility charges. That's that's set. We did that two years ago. It's to say: okay, is this right? Should this Adu be paying 7 4 400 for this three-quarter inch meter and this this all pay the same so that that the denominator won't change? It's it's the numerator, sorry, the top won't change.

J

It's a total amount of funds, but all of a sudden I'm not saying this happens. Let's say every home in the city of Bothell gets an Adu right and they all have their own meter. Well, that changes everything I mean it changes the growth.

J

Is it going to change significantly the amount of improvements we have to do we're not going to know that until we get through the comp plan and the cfp, but we'll be looking at that, um so it really is looking at buying and getting back to your it's, not impact, because it's facility charges and they just have little different ways. We can use them facility.

M

I love the way you think and I'm I'm going to spend it on you. What happens if I live in a 4, 000 square foot home by myself and now I'm paying more than the guy? Who is an Adu in my backyard.

J

It's it's a really good point. Yeah.

M

You're saying yeah something that I know you guys do a great job. So that's I'm, just throwing that out.

J

And right now we're not looking at changing your usage charges for what you use. It's like the basement. Okay, sorry.

D

Okay, thank you. um So for the the first two questions, my answers are also yes: um I having lived, I grew up in a 1100 square, foot home and now I live in a bigger home, but with the same amount of people ironically, and it you, we used to have a schedule for showers, and everyone had to be out the door at eight eight a.m and everyone had like a timeline and if you went over, someone would turn off the light on you. It was a whole thing, um so I I do think.

D

There's definitely different water usage in different living situations, but I would want to see numbers and examples and data to back that up before we make the decision, um but yeah I, just based on past research, I've done I would I would say yes for sure if the data bears that out um and then I did want to ask um councilman brought up a super good point that that had me thinking so you mentioned, who offsets reducing costs for some households, I, guess I, don't think of it like okay, if we're gonna charge someone on a fixed income, less I'm gonna pay more.

D

So can you tell a little bit about how those programs are funded and how we do offer those discounts.

J

Yeah for um for sure, those are good questions so right now for senior low income and the rest, it's just policy it it you, you could ask someone like fcsg to say well, do do low on people, use less water and less burden on the on the system, and that's really hard to answer so right. Now, it's policy and it's the same with um senior disabled, uh disables um and and on that we're even looking at okay. Well, how do the counties do this?

J

Because, right now we have our own walk through the, but but there are some things that counties already have set in place where they have really good ways to to get this going. So if someone is applying for tax exemption which takes care of our storm water fees through the county, why are we making them come back in and do the same thing for us, I mean: can we piggyback those things and I really think it's it? You both bring up good points, I'm I'm, paying more who's, paying less I.

J

Think, with these increases in types of housing, we'll see actually more growth as anticipated and we'll have more customers in the community so that that should offset things pretty well so I'd, rather not think of this as okay I'm charging, this single family residential unit, more I'm, not significant to that and I'm charging, this Adu less I'd say well. We never anticipated the revenue from this Adu and the burden on the system is relatively small.

J

So can we work that all together to show this, where we can lower affordabilities to housing or barriers to housing, but still I wish there's another way to say fair share, but it really is. They still should pay for their fair share. If, if you're paying two dollars, fifty cents per 100 cubic feet, you're going to be paying the same amount, if you use the water, but should you be paying the same base rate or the same buy-in rate? And that's where we're trying to get? Does that answer your yeah.

D

No, it helps and I think I think for me, I'm looking at it more as a as a as a policy decision right like there are times where we all you know, when a child gets free or reduced lunch, it's not like I'm, paying more for my son's lunch for someone else to have free lunch.

D

We as a society are saying: okay, we're going to pay for this child's lunch so that they can eat so I'm I totally appreciate and am behind offering people of of low income or on fixed incomes um opportunities to make sure that you know they can afford to the utilities in their homes. So.

G

D

um For me, I'm for it, thank you.

F

At least I think I'm going to be faster. You guys are all making great observations and and uh comments.

F

um I love the the brain Think Tank here um I appreciate the fairness, peace that you're, focusing in on the firstborn in me, and anybody who's been a parent fairness is a big key. Important word that we all function by so I do appreciate that um two things. Yes, on the tooth on your first two questions there, my caveat is: middle housing is not necessarily affordable, housing, it's market rate, so I think I would like. If you're talking about making some allowances, I would look at middle housing that has affordable some.

F

Like a Ami attached to the units, the buildings, then I would like to see that versus just a blanket. If it's middle housing, it automatically gets special consideration and then I have a question about sewer.

F

Our discussion here is not going to cover sewer or yes.

J

Most definitely.

F

Okay, so here's my question because I'm all about rain water percolating through you know land, if you have let's say two comparable pieces of property that are a half acre same water, drainage, same level. You know slopes and that kind of thing, and one is, has 25 percent of it, built out for say, a single family home and another one has a multi-family or commercial. Where there's a lot of storm water that is shed off the building? Is that ever considered in sewer rates.

F

G

K

Sorry it is, it is uh confined to storm water rates, it is dealt within the storm water rates, but um not you know, we don't have combined sewer and storm water systems anymore. That used to be commonplace. With that separation sewer has been treated entirely different. You know, infiltration to inflow is still an.

F

Issue sewer I meant strictly storm water.

K

Oh so yes, it is, it is dealt within storm water, okay,.

F

Yeah and the rates are reflect that you both start with s yeah sorry about that. Well, yeah, okay! So it is. It is looked at in the star, moderate and.

K

We'll show you how the rate structure does uh address that when we, when we get to that perfect.

F

Thank you, I'm, going to yield the floor here, but I just want to say, have fun spending your summer noodling all the numbers here. Oh.

K

J

And just to add to this and I didn't mean to be talking so much, but I get excited about this, so chime in any time. But you brought up a really interesting point because for my frame of reference, when I think of other housing types it might be on smaller Lots, they probably have one they get, you get more of them. So you get more connections and more Revenue, but they have less burden.

J

But but if let's say there is a housing type that is deemed affordable and has the restrictions and has everything else, I mean it. It's that's a policy decision just like seeing your low-income disabled and those they're, not a lot of those.

J

So that's a really good one that we're gonna just make sure we document, because that hasn't really come up yet there's this portability is in everything, but if, like with House Bill 1110, if you can get an extra unit or extra two units and and restrict them as affordable, maybe that should be looked at as well, because that is a policy thing. So that's that's! Pretty cool.

I

I'll keep my my comments short for the first one I think classifying it as like a needs based discount program is probably the best way. The classifications up there face the same issues you get whenever you classify any group of people. You've got people at the high end. You got people at the low end.

I

You got people in the middle and there's just no way to say just because you're disabled you don't have high income just because you're retired you didn't save a lot for your retirement or are living off a pension or whatever it may be so I'd say needs base for that one um and then the second question I think councilor McNeil kind of hit at home with what I was thinking as well.

I

In my home, there's five of us before we bought it. There were two people and I look around my neighborhood for all about the same house. Size varies two people to six, seven people. So how do you charge based on square footage when you don't know the number of people living there?

I

So that's a tougher one, I think um opened ideas open to you know what you think is an equitable way to do it so look forward to seeing what you come back with on that, but I just off the top of my head, I can't think of how you would properly assess that but I'm not in this field of work, so I will defer to you all as you Embark upon this body of work but I think that's!

I

That's all the feedback I have.

J

Really not trying to take too much time, but this is a valuable conversation so like for water there's a base rate, you pay and then it's all usage. That's very Equitable! You can it's what you use right and you look at the base rate for sewer. We have a built-in for CCF allowance. Now, that's where we're looking at another rate, it could be that you just pay a base rate and you pay for all your usage.

J

What gets difficult is with like King County. um You don't use any and you're paying 104 to the city, so we can pay Kent County. So those are the things that we're really looking into and that's where we look at these other rate classes, because multi-families build differently.

J

Multi-Family is build on usage and you might find that when you do this evaluation, if you Bill on usage, which we are allowed for certain classes, they actually pay much less per dwelling unit like I, don't know, maybe a third, so those are the type of things we're looking at. So we can't address everything: okay, there's one person here and there's five people here, but that's why we're looking at sizes and classes and usage? So we really want to focus on yeah.

J

We have to pay King County for this we have to pay spu for that. How can we make it? So it's it's the fair share thing. The.

I

Water, the water Point's an interesting one and I wasn't going to say anything about it, but um it is also difficult because if you have six people in your house, four five people, six people you're gonna quickly cross over that threshold into paying more for the higher CCF rate.

I

Even though you know, if you look at the ratio of water usage per person, it could be equal but you're automatically penalized for it, because you're in a higher category and I I didn't think about this until I started, paying for water myself and I can go around telling my children like turn off the water faster, take less baths more showers.

I

You know things like that, but in the reality of things, I I can have little effect on that so I, you know I kind of stuck with paying always the second tier, usually sometimes the third tier in the summer. Unfortunately, with trying to keep um things watered in my yard, my previous homeowners put in a lot of landscaping which requires water. So, um but you know that's that's a tough thing too and I don't I, don't necessarily know that. That's a fair way to do it, but I understand why it's done. Conserving water is important.

I

It's going to become more important in the future, so it does make me think like how can I conserve water, but it's also out of my control in some ways too. So it's it's what it is, but I'm glad glad that we do think about it in that way,.

N

Yeah this housing type thing is interesting, like the new housing types- weren't, even legal until just recently, so this is all new problems that we're trying to discover and explore and analyze so, which is a good I'm very interested in this. But I have a motor philosophical question.

N

The city exists to provide services to the community, to its residents right to maintain or improve their quality of life. Like that's why the city exists, the government exists to do this. There are exceptions, but in general um and I really really we're not a federal government. So we don't have a printer in the basement where we print cash, you know.

N

So we have to make some money, um and, but here that we're thinking of this thing as a business, which is a for-profit, usually businesses have a fiduciary responsibility to you, know, return to the shareholders or our rate payers and we're trying to uh the the issue we have here is that where are you Monopoly like you, have to pay us or you don't get service right? There's no competition, so we get to set the rates. I know we're trying our best to not really gouge and all that so I.

N

That's why it's a philosophical question: why are we um not thinking of other ways of raising funds in the future, maybe not in the next couple years, but like think about it, for in the next 10 20 years or whatever that will maybe from the general fund to fund some of this stuff so that our we won't have to raise six percent every or seven percent to the worst day and like then, towards the end of the decade, you know. So that's what my philosophical uh question as I was looking at this.

N

This has been my question every time we come here. We say you know raise the rate it's like dang. Why are we doing this so we're supposed to provide a service and I realize where there's costs associated with providing the service? Was there other other ways to fund it, and that's the fun that question I have in general, you know.

J

I would love to have this because I have really strong feelings about this, because I I I, this utility is very serious but I'd love to hear what fcsg has to say about that before I say something.

K

If it's okay, I'm just going to take that one that that is, that is a great philosophical question. Oh and I'm, I'm I, hope, I, don't overreach here, but um utilities like we're talking about water sewer, storm water. They have um very important Health considerations right. If you don't provide clean water, that's a health risk to the population so to subject them to annual prioritization against all the different uh all the different services that are provided by a city.

K

You know that police, in some cases fire all these other you are, you are putting at risk the health and safety of the population. So these these Services have been carved out and they are utilities because of that fact and treated as their not-for-profit businesses they're only businesses in the sense that you determine the cost of providing the service and then the revenue needed to recover those costs. That's what the rates do. That's the the price.

K

If you were a business that you would be charging in order to recover the cost without profit, only the cost of providing that service so and it is to take them out of that of that general fund framework, where you would be prioritizing them against other really important needs every year because of the health, uh health and safety concerns.

K

um So I hope that does that get at it.

N

Just to respond I mean we know police required fire required like we're not going to say we're not going to pay like we can say: utility is required.

J

Well, you can, but we have state and federal mandates. We have to comply on, I mean there's, there's all these things that are in the background, that if we don't get those things we don't have our certification.

N

No I am so I understand, no no I'm just trying to get this recovery. It's.

J

It's it's a tough one, because it is not for profit. It's. This is our service. It's a we're stewards of this utility and it really is tough and I have to be really I'll pick on Parks. Today this isn't. Okay, do we want new turf or do we want a water main there's, no regulatory agency that says you're going to replace them all their safety stuff, we'll just close the park, but there's no regulatory agency as you've got to do that and even with police.

J

Are we going to we're going to swap out the cars this year or next year? um And that's that's important as well, but it really is. We have to do these things. We have to comply with Department of Health for water and that's that's gets all back to the growth management act. I live out in the woods. I've got a well in a septic system. It fails. I, get sick, oh well, I'm, not impacting my neighbors. That's different here we're responsible and that's why we have GMA.

J

That's why we have all these services and we have to hit those, but.

N

That wasn't my my question. My question is yes, given those things, why is the burden of supporting these things on their ratepayers, not and.

J

That's some other sources and there could be sources, we can get grants, we can get loans, we could ask Council for arpa funds for utility projects.

N

J

D

Also, our whole city is not are not all rate payers under these systems. That's because I don't pay into the city, water or.

N

The next question is that this is only for a subset of the bottom residents right so like what happens to me with no children, they'll.

J

Be going through the same thing and I hope they listen to their. Their board is like we listen to council and we listen to to our community I, think and I'm, not just saying I think we have a good level of service and reasonable rates at the city of Bothell and I. Think that the fact that we can use those people for plowing streets and responding to emergencies we can, when we need to I, think it makes the city stronger.

J

Full-Service city is much much stronger than a city that just provides, in my opinion, police fire Parks, because when someone needs to shut down a street or respond to an emergency, you have that economy to scale so yeah. So there are other funds, but it typically is grants for loans or one-time subsidies from something or or like, but I mean. Can we put turbines in the water mains to generate electricity yeah? You can do that. Some people do that to help fund that stuff.

J

Can we put cell towers on City facilities yeah we do that those funds come in, but I would like to hear more about these thoughts in the future, because maybe there's some Avenues just like that: affordable housing. Let's treat it this way that we might be able to take advantage of- and you folks might have some things to say.

K

About well the only other thing and I and I wish I could say this with authority, but I'm not sure that you even legally have the option to do it. Another way you know we're talking philosophically, but um and then I mean there are. There are other funding sources like Boyd mentioned, you know, if you can get grants and Loans we would. We would always recommend that you pursue those. They just reduce the burden on the rate payers.

K

They don't ever erase it, because operating costs are not covered by grants and Loans those have to be recovered in the in the rate base, so um yeah, so philosophically I I, hope, we've touched on the reasons. I believe there's a real. There are real strong legal reasons as well, so.

N

The law says you have to collect the full cost from the users of the system.

K

I'm not even going to try and quote it for you, but we can follow up with some of that.

N

This is the philosophy this is the question. I have even from the previous discussion we had about rates. Why are we continuing to do this when on? If, if there is another option, unless it's required by law, the state says you have to do it this way, so we have to do.

K

This well, you are responsible for meeting all regulatory requirements.

N

K

In many cases like, for example, storm water, when, um when the npdes requirements came out in the 90s phase, one- and this is not going- this is just a sort of corollary- okay, an example phase. One cities, not only were they and Bothell is not a phase. One city bothell's a phase two City, but the phase one um cities were required not only to set up storm water programs but to set up funding um for their storm water program. And that's when we saw many many rates for storm water emerge.

K

They had to set up separate funding for their storm water management programs, I'm pretty certain. There's a statute like that for water and wastewater, and that's what we'll provide for you.

J

Yeah and we can- we can look at this more but I mean we have Municipal Code policies to keep the reserves. We have to keep that and then then we could just not have staff or do projects and there's no expense, but that's that won't work very far, so I'm not trying to be flipping or whatever the word is. It really is as if we're looking out to see what we need to do to stay in compliance, because if we don't stay in compliance with health, we can't do water.

N

I'm sorry, this is not my point. My point: there's costs I get. There's regulations I get it I'm, just saying. Why is the burden on the users of the system not on the city which is supposed to be providing the service? Oh.

J

And I think that gets and I understand what you're saying. I really think it gets back to it's the regulatory part and the fact that they are defined as Enterprise funds. And that really is it and.

E

I think we can do some follow-up too in terms of providing a little bit more analysis. The important thing to remember, though, too, is that no matter which fund something comes from if it's collected by the city is that the public is paying for it. So even after the general.

N

I know it's different when you pay it monthly versus like every six months or.

E

Whatever I I totally totally but I, think we can do something right now, I'll do it now and then what is informed historically these decisions and where in the room where it where and if there's rooms,.

N

This is a question: if you tell come back, can you.

E

N

Me, you know what Ram you're full of whatever I will not I will not uh I.

E

Don't know if you've met Boyd.

J

Benson but I, don't think no! No! No! It's it's! Maybe maybe there's some funds out there. Boy.

A

Did that that would be like the best council meeting ever I just want to say.

N

It like anyway, I I I could go on and on on that one um I agree with everything else that my fellow council members said so I'm not gonna go the communications plan. Can we do it uh earlier and more frequently, so that people will not because I saw in your cycle, it was towards the end of the uh uh you know. The.

J

Whole, uh it's already in process yeah.

N

Awesome so uh because I you know, we don't want to catch the folks who who will get the most burdened by surprise. So that's that's all.

N

That's it. Thank you.

D

J

National pollution discharge, elimination system. Thank you. It's uh it's EPA down to ecology, National.

A

I just want to jump in really really fast um to um kind of add on to what councilman, Neil started and councilman Mankey said. I think we all kind of like the idea of a lower base rate and then make it up in usage just to make sure that people are paying for what they're actually using, because I think the main concern that I would have is people in smaller units paying that you know higher base rate and then not using it all it's kind of like.

A

If you go to the dump and you don't have the minimum weight you feel like you didn't get a didn't, get a good deal transfer station baby, um one other um one. Other thing you know we have um and we will over the next few years, have deed, restricted, affordable housing. Is there a way we can apply the automatic discount to that property.

J

Yeah I think councilman Resorts uh brought that up and I think that's pretty darn cool.

D

To tack on to that, too, I think um the idea I liked what you said about. If someone is getting a property tax exemption, let's not make them prove all over again that they have needs and I think about programs like free and reduced lunch. um There are different. You know, people who qualify for different forms of Medicare or Medicaid like just let's not have people have to reinvent the real every time that they're struggling. So, however, it's up to you to figure out how but yeah.

A

That's a good idea too I didn't mean to not credit. You I'm, sorry, okay,.

J

I just want to say thank and I wasn't saying you didn't credit her I just I, just that was a new one and it's like. Oh, this makes really good sense. If we can do this because they can prove that they have low income or disabled if it's affordable housing is restricted. Why not that's a policy decision, but why not? Why 25 discount apply, which I think is outstanding? Yep.

A

No, no I was not annoyed with you. Thank you for pointing that out. I like to give credit where credit is due, and somebody says something first, so.

M

So can you clarify that one more time for me so tied to the unit it's tied to the need just want to make sure I'm clear, because if somebody, if we tie it to a unit- and it has all these there's.

J

Both ways to look at this things.

M

And then somebody goes in there that doesn't need that then they're they're receiving that benefit. So.

J

I just want to make sure no, no, this is, and once again this is way more time than and I'm probably gonna talk into later on. This is way more time than we anticipated, but this is really valuable because the next time we come forward, it's gonna be with a bunch of numbers and if we present a bunch of numbers and don't talk about this, this is where we get in trouble. So I see this two ways: there's the burden.

J

Does one home have the same burden as 480 use? Probably not do four does 180 have the same burden as one home, probably not, irrespective of the of what we're talking about then there's the senior, low-income, disabled and now there's an affordability. Those are all policy. It's really hard to demonstrate that a senior you know, low-income person is going to use less water. Those are all policy decisions. That's why the municipal code, through the council, charges 75 instead of 100.

J

So when you said well, if it's deed restricted and they get an extra unit because it's deed restricted, affordable housing, can we tie it to that? It's like yeah! That's that's awesome because they'll have to the the users of that, since it's deed, restricted must have that. You know situation so I think that's neat.

A

All right, thank you, guys appreciate it thanks for the time all right. Next up, we have Council conversations.

A

Seeing none! Oh oh.

F

I'm ticking something.

A

Better be quicker on the draw.

F

Because it's I know: oh okay,.

F

I'd, like a moment of silence tonight, the sun sets at nine o'clock. I know that means from here tomorrow. It'll be what 8 59 yeah.

C

F

On that slippery slope so enjoy nine o'clock sunset.

A

All right, I gotta jump in before Ben starts talking I.

A

um Council is going to adjourn to Executive sessions pursuant to RCW 4231 10 1 G, to review the performance of a Public Employee for one hour with no Action Council will adjourn the meeting from there at 8 49 pm.

B

Recording stopped.

A

N