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HomeMy Public PortalAbout2023.12.01 Special Meeting MinutesMINUTES McCall City Council Special Meeting McCall City Hall -- Legion Hall VIA TEAMS Virtual December 1, 2023 Call to Order and Roll Call Work Session Adjournment CALL TO ORDER AND ROLL CALL 1 Mayor Giles called the Special meeting of the McCall City Council to order at 9:00 a.m. Mayor Giles, Council Member Maciaszek, Council Member Nelson, and Council Member Nielsen all answered roll call. Council Member Thrower was absent. City staff members present were Linda Stokes, City Treasurer; Sarah Porter, Deputy Clerk; Erin Greaves, Communications Manager; Nathan Stewart, Public Works Director; Sean Reilly, Network Administrator; Sabrina Sims, Water Systems Manager; Rachel Santiago-Govier, Permit Technician; Brian Parker, City Planner; Meredith Todd, Assistant City Planner, Sean Solis, Water Operator, Levi Duke, Water Systems Operator; Duane, Water Department; Emily, Airport Manager. Also, in attendance were Michael Keith, Municipal Advisor from Zion's Bank; John McDevitt, Bond Council Skinner Fawcett; Nate Weisenburger, AE2S Consultant; Ross Hanson, AE2S Consultant; Eric Landsberg, Clear Solutions; Greg Loscher, Bowen Collins Consultant and Keith Larson, Bowen Collins Consultant. WORK SESSION AB 23-230 Water Treatment Plant and Water Storage Expansion — Proiect Overview Discussion and Direction to Staff Public Works Director Nathan Stewart introduced the consultants and staff in attendance and gave a brief overview of the project. The McCall Water System's current 5 to10-year capital improvement plan (CIP) stipulates the need to complete major capacity upgrades to both the system's water treatment plant (WTP) as well as additional system storage. Specifically, there are two major project elements: 1. 2 -million -gallon water storage tank 2. Water Treatment Plant (WTP) capacity expansion Both projects were identified in the Department of Environmental Quality (DEQ) approved 2018 Water Master Plan and need to be implemented in the next 5 years to ensure the City's system MCCALL CITY COUNCIL December 1, 2023 Special Meeting Page 1 of 4 maintains DEQ's permit requirements to operate the system. Since 2021, staff has developed a project consulting team including AE2S (lead project engineer), Clear Solutions (supporting engineer), and Bowen Collins (water system and rate modeling engineer) to commence conceptual and preliminary engineering designs. The project consultant team has established the preferred storage tank location, the necessary filtration and associated WTP expansion components for both projects. Staff presented the overall project implementation schedule and estimate costs as well as the projected impact on water rates. Eric Landsberg, principal engineer with Clear Solutions, presented to the City Council. Mr. Landberg reviewed the current McCall Water System and noted that the system has a replacement value of over 200 million dollars. Additionally, the City has a very high rating for fire suppression capacity and in turn that helps reduce homeowner insurance rates. Mr. Landsberg also gave a history of the current 2018 water master plan noting that growth and increased water use create challenges in direct filtration, disinfectant contact time and water system storage. Nate Weisenburger with AE2S reviewed improvement alternatives for the water system and storage. Options included adding additional filtration capacity with two additional gravity filters, submerged membranes, adding additional contact time with increased Clearwell volume, and adding additional storage volume. Mr. Weisenburger also reviewed additional storage property options noting coordination with the Nokes Property and developers working towards the Pine Creek Ranch Development concept. Council Member Nelson asked about how the new storage and upgrades to the plant would handle an influx in population if the state 80 land was developed for local housing in the future. Director Stewart noted that the location of the tank was chosen to use the gravity of the location to save cost on pumping the water where it needs to go and with the tank size there would not be any concern about future development in the City. Additionally, Council Member Nelson asked about long-term operations cost and maintenance for submerged membranes. Mr. Weisenburger noted that the cost of membrane operation requires additional energy costs as well as time for a more robust cleaning cycle. Membranes also need to be replaced anywhere from 5 to 10 years depending on the water quality. Mr. Weisenburger reviewed filtration capacity expansion needs to add additional filter capacity and redundancy by putting an addition onto the current plant to mirror the current filter footprint and allow for 4 total filters as well as electrical upgrades, a roof replacement, and a storage facility. Director Stewart noted that there is currently zero covered storage for equipment and vehicles which can hinder emergency response time in the winter. There are also compliance requirements for some equipment to be stored outside of the treatment facility. Mr. Weisenburger also reviewed increased Clearwell volume which provides more contact time required by the DEQ as well as the added benefit of flexibility for cleaning and maintenance of the Clearwell, project cost, implementation schedule, and capital expense schedule. Mayor Giles expressed appreciation for the detailed presentation and suggested a 5 -minute break. The City Council took a 5 -minute break at 9:50 a.m. and returned at 9:55 a.m. MCCALL CITY COUNCIL Page 2 of 4 December 1, 2023 Special Meeting Kieth Larson and Greg Loscher presented to the City Council regarding the cost and funding of the water treatment plant upgrades and the additional storage tank construction. Mr. Loscher reviewed the three different funding options for water system upgrades including adjusting the timing of projects, bonding and adopting new water rates. The water rates adopted in 2018 and updated in 2022 have put the City on track and in good shape to have a steady and reliable funding source overall. The issue at hand is the funding of the two large upcoming projects. There is a lot of work to be done overall including water line improvements. Short term cash flow is needed for treatment and storage deficiencies. A revenue bond is needed to ensure short-term cash flow revenue is not in danger. Selecting the appropriate bond amount is selecting an adequate amount to fund projects which can be challenging because construction costs have not been consistent. Bond debt is serviced from water rate revenue and not property taxes. The alternative is to fund the projects with a substantial increase in rates for three years. If the City goes to bond, then rate payers will see rates similar to what the current rates are now with slight adjustments over the next decade to pay for the projects and pay off the bond but without the bond, the rate payers will see a 100% increase in rates over three years. Mayor Giles asked about the length of the bond term and Mr. Loscher noted that the model presented to the City Council is for 20 years. Council Member Nielsen expressed concerns over raising rates since the City Council felt confident in 2018 that a conservative decision was made on the direction the City was going with funding projects. Director Stewart noted that back in 2018 there were significant rate increases proposed to play catch up from years of no increases to rates. In 2021 staff came back to council with a request to increase rates and possibly bond because the rate increases of 3% a year were not keeping up with inflation and the need to expand the plant and storage for DEQ requirements. Mr. Larson explained the timeline update for projects to come online sooner than originally thought in 2018 and the impact construction inflation has had on the cost of the projects needed. Michael Keith noted that there are record debts being issued to public agencies because of the large growth spurts and the need to make infrastructure improvements. It is a common theme to consider bonding as a funding source to play catch up and get ahead of the growth. Mayor Giles noted that it is a challenge to stay ahead of growth, and the City maintains a solid credit rating and prefers not to take on debt to complete capital projects. Council Member Nelson noted that the public will ask the City about the frequency of rate increases and it seems like the water treatment plant upgrade is based on the current population but not on the current growth projected. Mayor Giles noted that if the City goes to bond, then current and future rate payers will be paying for the improvements but if the City chooses to increase rates for three years instead, then the current rate payers will be paying for the improvements needed for future growth. Director Stewart noted that the existing facility is at its limits and if improvements are not made, the water system will not be in compliance with DEQ regulations. The new tank is not specifically suited for any development or region in the community and will provide water for 90% of the community. Council Member Nielsen asked if the time frame for the storage facility has been moved up from the original timeframe in the 2018 model and if there are any options to do the water treatment plant upgrades overtime instead of all at once. Mr. Loscher noted that the project timeline has been pushed up due to growth. Mr. Weisenburger noted that the current facility has two filters and that is not standard practice. There is typically a minimum of three filters which gives the water operators more MCCALL CITY COUNCIL Page 3 of 4 December 1, 2023 Special Meeting flexibility to meet demands. The filter additions are critical to the water treatment upgrade. The Clearwell capacity upgrade is regulation driven and the storage increase is a DEQ requirement. Additionally, there are current hydraulic problems with the distribution system. The improvements are solving near -term challenges as well as preparing the system for future growth. AB 23-231 Water System Expansion - Water Revenue Bond Financing Discussion and Direction to Staff Michael Keith, Municipal Advisor with Zion's Bank and John McDevitt, Bond Council with Skinner Fawcett presented to the City Council. 2024 is a presidential election year and may bring higher voter turnout but also includes a lot more information for voters to consume for the election. Mr. Keith reviewed the timelines for funds to be available with both the May and November election dates as well as the difference between a revenue bond and a general obligation bond, and municipal interest rates over a 10 -year period including current rates. Council Member Nelson questioned if the election timeline is better in May or November and Mayor Giles asked if Bond Council or staff can help the City Council make that decision in January or if it needs to be made today. Mr. Keith noted that there are factors that may become clearer by January including other local entities also making decisions about bonds in the next year. Director Stewart noted that the timeline of the improvements needed to stay in compliance with DEQ should be a driving factor when considering when to bond. Mr. Landsberg again reviewed the timeline for the projects noting that in 2018 it was projected that the City would run out of water storage in 2026 but the most recent update projected that water storage will run out in 2027 and be out of compliance with DEQ. Additionally, the construction duration and bidding process is roughly a 2 - to -3 -year process from start to finish and the deadline to complete the improvements is fast approaching. Council Member Nielsen asked if the City meets all the criteria for judicial confirmation for a bond. Director Stewart noted that the time frame to get through judicial confirmation can be six months to one year and there are more unknowns than going to the ratepayers for bond approval. The City Council agreed that City staff and consultants are on the right track and expects to see more information in January 2024. Tour the New Library The Mayor stated that after the library tour is completed the City Council will be adjourned. ADJOURNMENT Without further business, Mayor Giles adjourned the meeting at 11:30 a.m. ATTEST: `,Ss � O F Il.f -*:° � r Rbbert S. Giles, Mayor e o .z D A H O MCCALL CITY COUNCIL December 1, 2023 Special Meeting Page 4 of 4