[3:14] I'd like to call to order the special meeting uh work session.

[3:18] » This meeting is being transcribed and summarized

[3:21] » for the electric and solid waste rate review February 12th. Would you please

[3:27] call the vote? >> Hake here. Goose

[3:30] » yes. >> Montani here.

[3:31] » Bradbury here. Gas >> here.

[3:33] » Finnegan here. >> Z

[3:35] » here. Please rise forgiance

[3:40] to the flag of the United States of America and to the republic for which it

[3:45] stands. One nation under God, indivisible with liberty and justice for

[3:51] all. >> Thank [clears throat] you.

[3:55] The Ketchan city council would like to respectfully acknowledge the traditional

[3:58] first people of this land of Ketchan, the Thomas people.

[4:03] Moves us on to item three, which is person to be heard. Do we have anybody

[4:06] to speak to the council tonight? >> No, your honor.

[4:10] » Bring us item four, new business request for a work session to receive a

[4:15] presentation on solid waste and KPU electrical climate plan strategies and

[4:20] rate study services from Rap. Do I have a motion? I move that city council

[4:26] recess into work session for the purpose of receiving a presentation on solid

[4:31] waste and KPU electric financial planning strategies and rate study

[4:35] services from Afgh and to provide feedback and direction on the presented

[4:41] information. Do

[4:43] » I have a second? Second. >> It has been moved and second. Lacy

[4:47] » uh your honor and members of the council. Uh tonight we have uh

[4:52] representatives from Ref Telis Inc. which is the firm that staff has been

[4:57] working with over the last several months um pursuant to council direction

[5:01] to do some financial planning for the QP electric division and the solid waste um

[5:07] division of public works. Um we started this process back in the fall. Uh it's

[5:13] it's been a long time in the making. We were um a little way laid with the

[5:17] budget process, but we have been working with Reptelis um to provide them lots

[5:22] and lots of information, historic information on our budgets, on our

[5:26] rates, on our future needs, our capital planning so that they can do um a nice

[5:30] dive into the financial needs of both of those utilities. Um so tonight we have

[5:36] Bart Kreps who is our the executive vice president of Raf Telus and also Sarah

[5:40] Neely um the um senior vice consultant or senior consultant for Rafelis.

[5:46] They've kind of been the principal team that we've been working with um for both

[5:49] electric and solid waste planning. Um they did provide a highle summary

[5:54] document to the council which hopefully you've had a moment to digest. But

[5:58] tonight they'll be going into further detail um on on what they have found and

[6:02] and looking at both of those utilities, what the outlook is financially for both

[6:06] of you those utilities and ways to address some of the financial shortfalls

[6:10] as we look ahead to both operational and capital needs. So with that, I will turn

[6:15] it over to to Bart and Sarah. Thank you for being here. into work session.

[6:21] » Okay. So, we'll uh vote on going into work session.

[6:25] Madam press >> Bradberry.

[6:28] » Yes. >> Gage,

[6:29] » yes. >> Absent. Cous.

[6:32] » Yes. >> Matani

[6:34] » here. >> Gas.

[6:35] » Yes. >> And finan.

[6:36] » Yes. >> Thank you.

[6:38] » Thanks. Yes. Continue. >> Sorry. Uh your honor, just um before I

[6:44] pass it over to um Bart and Sarah, I just wanted to add as the council will

[6:48] recall when staff first identified Rafelis,

[6:52] um they were they were affirmed that the finance director had identified um as

[6:56] one that really specializes in this type of work, especially for municipalities

[7:00] and looking at different utilities and their long-term financial needs and

[7:04] planning. Um they've done this work for municipalities all over the nation,

[7:08] including Alaska. So, um, looking at an electric division or solid waste is is

[7:13] nothing new to them. Um, I think they recognize now some of the unique

[7:17] challenges that Ketchacan has. Um, as we look ahead to capital, not only in terms

[7:22] of what our our challenges are as utilities, but what some of those bigger

[7:26] hiccups are being on an islanded community in Southeast Alaska. So, I

[7:31] think they're I think they've been responsive to that and are really trying

[7:34] to present um a good overview of these two utilities going forward and also

[7:40] some solutions on how to to stabilize and get those into a more positive

[7:44] financial position. And with that, I'll turn it to B.

[7:47] » Excellent. Thank you so much and thanks to all of you for having us here. It's

[7:52] it's wonderful to to be here in person and get to visit with you. Um so, we

[7:57] have a lot of material that we're going to walk through. Um, so kind of bear

[8:01] with us. Um, but, uh, really happy to visit with you and kind of talk you

[8:06] through our analysis and share some of our filmer mirror results and really

[8:09] kind of get your feedback and certainly ask questions along the way. Wouldn't it

[8:13] have be a dialogue? Um, with that we'll kind of get moving. Um, in terms of an

[8:20] agenda, so we're kind of breaking this into two

[8:24] pieces. you know, this [clears throat] study looked at, you know, both the

[8:27] electric system and the solid system. And so, um, within both of those, we're

[8:33] going to kind of cover two main elements. We're going to talk about kind

[8:36] of the financial planning elements, which kind of gets into kind of the

[8:41] forecast of our revenues and expenses and things like that. Um, and then we're

[8:46] also going to talk about some options around rate design that gets into kind

[8:51] of how we price our services. We have a current rate structure that we use now

[8:56] and then some options to think about um potentially going forward. So I'm going

[9:01] to kind of shepherd us through the electric system and then my colleague

[9:04] Sarah is going to talk about solid waste. Um that's kind of how we'll set

[9:08] things up.

[9:12] So um just kind of before we get going um you

[9:18] know one of the sort of basic tenants that we use when we do a study like

[9:22] this. So um you know the electric system kind of falls under um Ketchan public

[9:28] utilities solid is on the umbrella of the city but we look at them both as

[9:33] utilities and effectively as enterprise funds because they're funded with user

[9:37] charges. So it's different. They're not funded with taxes. are funded what user

[9:40] charges. So we really look at that through the lens of kind of like a

[9:44] business. In business you have costs and you have revenues and you got to recover

[9:48] those costs. So that's kind of through which the lens that we look at things

[9:52] because we want to make sure that these utilities have the cost structure in

[9:56] place and the revenues in place to make sure we can continue to provide safe and

[10:00] reliable services. That's what we ultimately want to do.

[10:05] So [clears throat] dive a little bit layer deeper into the kind of two main

[10:08] pieces. Um when you look at the um financial planning elements more broadly

[10:13] really what we're we're doing is kind of assessing the sufficiency of the revenue

[10:18] stream. So it's not looking at not only where we are today but where we're going

[10:22] into the future and what the current rates look like and how those compare

[10:26] against costs see the sufficiency of the revenue stream to see if we need to

[10:30] actually raise revenues to be able to address those costs. Um, when it comes

[10:34] to the rate design elements that we'll talk about, we're going to be focusing

[10:38] on the same level of revenue, sort of how you get the revenue, it's a little

[10:42] bit different when it comes to your pricing structure. And what we're trying

[10:45] to do there is to offer some suggestions to maybe optimize that to try to align

[10:50] with some of your objectives and some of the things that we heard kind of early

[10:53] in the process that would be um important to you.

[10:58] Okay. So [clears throat] unpacking that a little bit more for the

[11:02] electric system. Um when we look at the electric system financial planning, you

[11:07] know, one of the big drivers that we notice right away because one of the

[11:10] pieces of information that we ask for and quite frankly one of the big drivers

[11:14] of rates typically is capital capital investment. So the electric system has a

[11:19] capital improvement plan. A lot of costs associated with that. So part of the

[11:23] role that we have is kind of looking at that. how are you going to finance those

[11:27] improvements that you need to the system and that really is a big driver of

[11:31] rates. Um and we look at that um we also think about more broadly what kind of

[11:37] financial policies that we should have with things like what reserves do we

[11:41] need if we need to borrow money things like debt service coverage becomes

[11:46] really important. So we'll talk about more of that later, but we kind of look

[11:49] at um solid sound financial policies that should go along with funding that

[11:53] capital program. Um for the electric system on the raid design side, again,

[11:58] you know, focusing on the same financial sufficiency, but also some of the

[12:03] feedback we had heard was really trying to think about affordability service as

[12:07] best we can with some emphasis on the residential customers in particular to

[12:12] see what we could offer in terms of um options around grade design. um to try

[12:17] and address some of those objectives.

[12:22] Okay. So, we're going to get into the financial planning elements first. And

[12:26] um this is a nice graph. I'll kind of break

[12:31] it down to you a nice table, but what it basically says, the financial plan,

[12:35] think of it as kind of the road map. So it's basically coming in taking a look

[12:39] at where we are today as a utility from a financial perspective and then laying

[12:45] out that projection of where we're going to go. So that means we have to think

[12:48] about revenues, how those revenues would change. That looks at kind of our

[12:53] account some information. Then we look at our costs. We look at our operating

[12:59] expenses. We look at our capital expenses.

[13:03] How we're going to finance those capital expenses. And remember I mentioned those

[13:07] financial policies. So when it comes to how much money we keep in the bank, debt

[13:12] service covered as I mentioned, that's kind of the glue that holds the

[13:15] financial plan together at the end of the day. So we have to think about all

[13:18] these different elements when we're doing a forecast because we're really

[13:22] big on planning and looking at what's to come. Not just where we are, but what's

[13:26] to come. That's really kind of a basic tenant of how we look at things.

[13:31] So I'm going to go a little bit deeper into the financial plan. kind of talk to

[13:35] you about how we did the forecasting. So in terms of our operating expenses um

[13:42] so what we're using as kind of a baseline for operating expenses is the

[13:46] 26 budget numbers that we received from staff. Um so we have made some

[13:51] assumptions about um escalation of those costs going forward. It's about we've

[13:56] assumed about 3% on most of the categorical costs. Um there is a big

[14:01] component of our operating expenses that's related to purchase power. So in

[14:06] the electric system we generate basically about 45% of our power roughly

[14:12] and we purchase about 55% of the power from SEIPA and we have a contract with

[14:16] SEA. It's kind of a complicated contract but effectively it kind of breaks down

[14:21] as um we generally pay based on kind of an a rate per kilowatt hour based on a

[14:27] firm commitment with them. Um so we've assumed that that rate actually gets set

[14:32] annually but we have assumed that that would increase at about 3% going forward

[14:36] for planning purposes. So and we've assumed the same sort of composition of

[14:40] what we generate versus what we purchased in the basically looking at a

[14:44] five-year forecast period. So that's operations at a high level. Um

[14:50] so capital when I say capital costs and this is kind of things that I'm

[14:54] referring to. So, we have debt service. We have existing debt on the books right

[14:59] now. We have um one piece of debt on the electric system. It's effectively a

[15:03] revenue bond. Um that debt actually rolls off in 2032. So, the not too

[15:09] distant future, but a little bit beyond the window we're looking at, but it is

[15:12] something to think about in the future. It's about a million dollars in

[15:15] principal interest payments we make on that. That does roll off. But based on

[15:19] the size of the capital program that I'm going to walk through, we are looking at

[15:23] potentially to borrow to fund some of those projects. So again, we would also

[15:27] be looking at layering on additional debt to be able to address those needs.

[15:31] Um, as we look at the capital program, you know, on the electric system, we're

[15:35] looking at about $115 million over the next five years in capital. There's kind

[15:41] of a myriad of projects that go into that. you a really large project that's

[15:45] replacement of the diesel generator that's um quite old and needs

[15:48] replacement. We have replacement of substations that are in there as well

[15:52] and then just ongoing kind of reinvestment in the electric

[15:55] distribution system. So um pretty sizable capital improvement plan that we

[16:00] have to address for the next five years.

[16:06] » Yeah. So talking about that larger diesel generator and the rebuilding of

[16:11] the substations, those are extremely large costly project

[16:17] that's going to take some planning and we don't have any funding scenario in

[16:21] place for those and those won't come to fruition until

[16:26] we get some revenues uh sources whether it's going to be borrowing or you know

[16:31] whatever it's going to be a long kind of for

[16:37] I think it's unfair that it it affects the overall budget. I know it's a

[16:41] project that we have to do, but it's an outlier

[16:45] as it's a larger capital budget. It's not a maintenance budget. It's not a

[16:50] minor replacement budget. And so, I know it has to be funded at some point. We

[16:55] have no idea what that's going to cost us.

[16:58] So, how do you factor that in when you're thinking about putting in a rate

[17:03] structure to fund something that we have no idea going to be that far enough?

[17:08] » Well, with the capital brewing plan, you know, we have to go with what we know

[17:11] today and there's estimates of what those costs would be. And then in terms

[17:15] of the financing plan of that, you know, what we'll walk through is sort of

[17:20] thinking about what options are available to fund those needs. And

[17:24] there's, you know, certainly generating funds internally through rates is one

[17:29] option as well as borrowing. Way we like to look at that depends on the type of

[17:34] asset that it is. If it's a longer lived asset,

[17:39] advertising that cost over time through borrowing is is a typical way that it's

[17:43] done. Um, so we think about that on the financing side. Um, and and what that

[17:49] looks like and try to sort of marry those two things up. But you're right,

[17:51] you need to have the revenue to be able to cover those needs, particularly if

[17:55] you go out and borrow, but it has to be kind of factored in the entire package.

[17:59] The fact that costs in the CIP change, you're absolutely right. It's been

[18:03] really hard to to peg those costs because they do change and inflation has

[18:07] really hit things quite hard and a lot of the work that we've been doing, CIPs

[18:12] keep growing. They don't go the other way. So, they're getting more expensive

[18:16] rather than less expensive. So um the challenge is you know we have these

[18:21] needs we need to address. You don't address them the costs tend to go up

[18:26] down the road. So you know capital planning is is tough to do but you know

[18:30] you have to go based on your your best judgment and staff's come up with a

[18:33] capital improvement plan. So that's what's kind of feeding into our models

[18:36] right now. So, kind of what I'm getting at here, before we throw a large number,

[18:40] 40 million, $45 million, $50 million at that project, I think we really need to

[18:45] do a needs assessment so we understand that size. They're just guesstimating

[18:51] what we're going to need in the future. I think uh the size, the the type of

[18:56] generation, whether it could be a turbine or a diesel or whatever it may

[18:59] be. Um and you know, again, sea moving out some

[19:05] infrastructure. did that lay that project because they're they're looking

[19:10] at other alternative energy sources. I I don't know how that pencil in regards to

[19:16] only there just a question I had in regards

[19:19] to how we how we plan for that and not over budget and stick a rate in early to

[19:26] help do that at the I guess the detrimental public's paying that rate.

[19:33] Yeah, I mean it's definitely a fair question. I think relying on staff to

[19:38] kind of look at the plan and develop the needed projects and um to try to vet

[19:43] that is is really what you know we need to do.

[19:46] » Thank you. >> Um

[19:50] so just want to want to talk a little bit about just kind of the the baseline

[19:54] on the revenue side and some of our assumptions about um you know

[19:57] forecasting revenue. Um so we tend to try to be conservative on the

[20:03] forecasting of revenue. Again our models look at um of account information and

[20:08] consumption information. Um you know catch again we don't really have the

[20:13] benefit of a tailwind of of growth. Um so we were very cautious about that. We

[20:18] pretty much assume kind of flat growth in the forecast going forward. Um so

[20:24] that's sort of embedded. Um and then some of the other ancillary revenues

[20:28] that we have um for lighting and things like that, we've also seen kind of just

[20:33] no growth. So just wanted to point that out.

[20:37] [clears throat] >> Okay. So this is a really important

[20:40] graphic that I want to walk through because it it really kind ofes the

[20:45] financial plan. So um kind of step through this.

[20:53] So the the bar parts of this chart. So looking at the colors that we have. I

[21:00] know it's the colors coming across up there, but just bear with me. So there's

[21:05] the the bottom of the bar chart is is our onm expenses. Um and so that's kind

[21:11] of the darker part of the bar there. The yellow part of the bar that's our

[21:17] purpose power costs. So these are all of our costs kind of stacking them on

[21:21] another. Um the the blue there represents our debt service.

[21:28] The green represents our what's called cash finance capital. So we call that

[21:33] payo. Um basically pay as you go capital. So it's effectively using your

[21:38] internal cash to fund capital improvements. And then that small little

[21:43] sliver on the top that's the the pilot payment that the electric fund makes

[21:47] back to the city. So the red line there that represents basically the revenue

[21:54] that we can generate based on our current rates. So you notice at 25 it's

[21:59] it's just south of about $25 million is what we generate in electric revenues.

[22:04] And you notice that the bar is a little bit higher than that right now. So that

[22:08] means anytime the bar is higher than that red line, that means you have to

[22:12] eat into your reserves to fund it. So if you look at over time, you can see those

[22:17] bars are going up because again I'd mentioned the assumptions and the

[22:21] forecasts assume that $150 million capital improvement plan. I I'll go

[22:25] through the details of how that's assumed to be financed. Um but you can

[22:29] see those costs increase out over time. the rate line again based on the current

[22:35] structure basically stays flat because again we don't really have a

[22:40] basically means that it's not a really tenable forecast there to leave the

[22:46] revenues where they are because we couldn't fund that kind of program. So

[22:50] we have to sort of look at um additional revenues to be able to do this.

[22:55] So with that being said, the way we sort of

[22:59] looked at this is we thought we would frame it around some various capital

[23:03] planning scenarios to kind of help you sort of understand um what that might

[23:08] look like. Um

[23:13] so

[23:17] so the first scenario that we looked at we're going to call this kind of the

[23:22] capital scenario one basically as planned. So you know staff provided us

[23:28] the current capital improvement and their current assumptions on funding.

[23:33] So right now if you look at the chart there on the left so the there's there's

[23:40] two colored bars. There's a darker color and a lighter color. The darker color

[23:45] bar represents um the cash finance or the pigo capital that's being assumed in

[23:51] each year to fund those projects. And over the five-year period it's about

[23:56] 28.8 8 million that's programmed in the CIP right now um to fund a portion of

[24:01] the 115 million and then the balance is being funded um by debt. It's about $86

[24:09] million in debt. Couple different pieces of debt being issued primarily in 28

[24:14] 2020 and 2029. Again, that's for those larger projects

[24:19] we talked about the generator and the the substation replacements. Um

[24:24] so one thing you'll you'll note on the PGO side is that you know we would call

[24:30] this kind of a front-loaded PGO um financing plan. You can see that the PGO

[24:35] in 2026 and 2027 you know inches up over $10 million or

[24:41] that's just how the current CIP is is sort of sequenced. So again a first pass

[24:46] was just looking at it as as planned and what does that mean? Um, and so this is,

[24:53] you know, well, before I get to that piece, so if

[24:58] you go back to this slide, I talked about the financial plan and

[25:04] these bars being kind of above the line. The challenge is if you do that, you

[25:09] have to draw down on reserves um to be able to meet that plan.

[25:16] So what the left chart then represents, so currently there's about roughly $8

[25:22] and a half million projected and reserved in the electric fund at the end

[25:26] of 2025. Um the red line that we show on that

[25:31] left chart basically is a minimum target that we have for reserve which is set at

[25:37] 90 days of our operating expenses, operating and maintenance expenses. So

[25:41] that's three months effectively of working capital which is pretty bare

[25:45] bones. We would not recommend going anything below that. But for the

[25:48] purposes of what we forecasted that's, you know, kind of what we're showing as

[25:52] that red line. So you'll notice if we don't do anything on rates, so not

[25:57] assuming we raise rates, we basically would run out of reserves in about two

[26:01] years. Um so that's not a situation that we could be in. Um the other metric that

[26:06] we monitor is debt service coverage. So what debt service coverage means is the

[26:13] revenue comes in, the first thing we got to pay is our operating expenses and

[26:17] then what's left is kind of the net revenues after that. And so when you

[26:22] borrow money from creditors, they want to make sure you got enough of a cushion

[26:26] to pay them back. So there's a minimum requirements for coverage that we have

[26:30] like on our current revenue bond. Um, from a policy standpoint, we like to

[26:36] target coverage of at least 1.5. So that's what that red line is on on the

[26:40] debt service coverage chart. You can see if we were to go out and borrow the $86

[26:46] million that we had program debt and we didn't change our rates, our coverage

[26:49] would deteriorate very quickly. Again, this is not a tenable situation.

[26:56] So what would that mean as planned? Well, if we wanted to fund things as

[27:01] planned, this is a little bit of a shocking

[27:06] scenario. [clears throat] we'd have to raise rates but

[27:10] rather than the band-aid approach. Um and that would allow us to basically the

[27:17] red line there shows the um the revenue based on with the rate increase assumed.

[27:23] So it' be a front-loaded large rate increase um and that would cover our

[27:28] costs. It would allow our reserve balances to stay above our minimum

[27:31] target. And you look down at the chart to the right, we basically put, you

[27:36] know, forecasted to keep covered about um at that 1.5 level. That's when

[27:41] everything from the $86 million would be kind of baked in the cake. So again,

[27:46] that's a lot. That's a very front-loaded structure. Um but again, based on the

[27:51] way the CIP is is laid out, that's what we would need.

[27:56] So with that being said, we said, okay, what if we sort of relook at things? Um

[28:03] and so we did a kind of a se second capital planning scenario that we'll

[28:07] call the sort of phased in scenario. So the phased in scenario looks at the same

[28:14] level of spending in the capital improvement plan which is 115 million.

[28:19] But what we did is we effectively kind of resequenced the PGO piece in

[28:24] particular to kind of smooth it out over the five-year period. So, we're still

[28:30] funding uh 28.8 billion in PIGO, but it's spread more evenly over the next

[28:35] five years. Um, and then on the debt financing piece, we're still effectively

[28:40] borrowing the same amount. We've kind of shifted the timing of that a little bit

[28:44] to 2027. So, it's more of a phased in approach.

[28:48] Um, same general concept, but you know, kind of require rep prioritizing some of

[28:54] the projects over the next five years. So that scenario um

[29:02] basically allows us to sort of spread the increases out over the next five

[29:06] years at about 12 and a half% per year. Um so that's the sort of the red line

[29:12] then kind of hitting the top of the the bar chart. So basically be covering our

[29:16] costs. Our reserve balances would then stay

[29:20] above our minimum target that period of time. we deliver the full 115 million in

[29:26] capital and our debt service coverage is constantly above.

[29:30] So that's kind of the the phased in scenario. So it's taking kind of the

[29:34] current plan but sort of resequencing the plan over five year period.

[29:39] » Does that make sense? Stop for a second. >> Any question?

[29:49] » Okay. Um the third scenario that we ran because I

[29:55] know that there's been some discussion you know at the council level about um

[30:01] kind of an 8% increase scenario that has been discussed. And so

[30:07] the way we wanted to look at that was to say, okay, if if that was the level of

[30:11] increase that we did, well, something has to give um we can't fully fund 115

[30:17] million, but what could we fund for that level of increases? Um, and so what

[30:22] we've done there is basically kind of adjusted the CIP [clears throat]

[30:27] from a monetary standpoint down to what we could afford if we did 8% increases,

[30:31] and that's about 78 79 million. Um the way that's laid out is it's it's sort of

[30:38] a similar proportionality between PIGO, which is that cash financing piece, and

[30:42] then the debt piece. So the PGO is lower. It's about 13.7 million over the

[30:47] 5year period. Again, it's distributed relatively e evenly, so it's not

[30:51] frontloaded, and it's about $65 million in debt. So again, the idea you'd still

[30:57] fund the large projects, but we probably have to rep prioritize exactly what we

[31:01] would fund. Um, so it's a smaller capital program, but that's what we

[31:05] could cover with the 8% increases. Another way to think about that would be

[31:11] if the current plan CIP is 115 million, at the 8% it's about 68% of that CIP. So

[31:18] it's about roughly 70% execution rate sometimes we refer to it as, but there's

[31:23] a delta about 36 million that we would find.

[31:27] » So this is all based off a five-year capital fun. So we just have probably

[31:32] more like a 10-year uh planning stage in order to stay at

[31:38] that 8% rate that we're

[31:41] » this looks at five years and it would cover basically 78 million over the

[31:45] 5year period based on that funding mix. >> But 115 million we just project that

[31:50] out. >> Well, those I mean the thing is those

[31:51] projects don't go away. They just go further out.

[32:01] And so again, this last graph, it just sort of illustrates the the 8% scenario,

[32:06] the reserves and the coverage levels. Um, you know, based on that level of of

[32:11] funding.

[32:14] Okay. Um, I'm going to stop for a second.

[32:18] Questions on that? I'm going to shift and talk a little bit more about rate

[32:21] design, but any questions on what I've gone over so far?

[32:26] So I do have >> Yeah, go ahead.

[32:29] » So with these rate um the 8% annually um over five 10 years

[32:37] um does that also increase the um our um reserves?

[32:44] It basically keeps your reserves roughly at the 90-day mark because okay, it's

[32:49] based on, you know, what that line is there that you're seeing is so three

[32:54] months of our own expenses. Now, the on expenses are growing some. So, the

[32:57] reserve balance go up a little bit, but they're largely about the same as as

[33:00] what they are today. >> So, basically, we're just we're raising

[33:05] rates in order to cover the capital. >> Okay.

[33:11] Anybody else?

[33:19] » Um, so I want to talk a little bit that's

[33:23] sort of thinking about things just you know across the board and you know one

[33:28] of the other elements of our study was looking at the actual race structure and

[33:32] some you know what could we do there potentially

[33:35] try to mitigate you know some of the impacts on customers. Um

[33:41] so just a little bit of background about the current electric rate structure. Um

[33:45] so right now we have four classes of customer. We have residential, harbor,

[33:51] commercial, industrial, um residential, commercial, kind of the bulk of the

[33:55] customers. Um each of the customer classes have a

[34:00] fixed monthly charge um which is um discharge per month. uh a usage charge

[34:06] which is based on volume and it's a per kilowatt hour charge and then our

[34:11] commercial industrial customers that are larger and actually have demand meters

[34:15] also have a demand charge which is a dollar per kilowatt. Um so what we did

[34:22] here is we used um kind of the capital planning scenario three which is the 8%

[34:29] increase of that level of revenue um and looked at a couple of options on on rate

[34:34] design.

[34:38] So the objectives that we we tried to keep in focus with the right design was

[34:44] you know to do um reasonable adjustments that you know

[34:49] achieved the financial sufficiency goals tried to look at it through a lens

[34:55] trying to mitigate some effects on the lower volume [clears throat]

[34:59] and typical to some extent residential customers. Um so that was one of the

[35:03] lenses we looked at. Um we were looking at kind of the balance of the fixed

[35:07] versus the volutric rev recovery um and just really looking at options to um not

[35:14] overly complicate the structure because I think that um sort of not the the

[35:20] sense that we wanted to get increasingly complicated but um to try to optimize it

[35:27] um preserve the simplicity and to some extent you know balance where we could

[35:32] but recognizing there's not a silver bullet here. when you have to raise

[35:35] additional revenue, there's certain things we can do. Um, but um there's

[35:41] still the need to to create the same amount of revenue.

[35:47] So, one of the things that we did in this in the study was really develop

[35:54] consumption profile for residential customers. So, bear with me on this. And

[35:58] this is kind of a lot to unpack, but so what what this chart is, and it it looks

[36:03] like a lot, but it's really not. Um it's relatively simple at the end of the day.

[36:09] It's basically a histogram. So it's looking at we call it a bill frequency.

[36:14] So on the x axis that basically is levels of consumption. So and it's in

[36:20] kilowatt hours. So it starts at 100 kilowatt hours, 200 kilowatt. I think

[36:24] about monthly consumption. um and kind of goes all the way up to, you know,

[36:29] north of 2,000 kilowatt hours. Um the y ais are the number of bills that fall in

[36:36] those different units of consumption. So it kind of tells you how customers are

[36:41] using power, how much power they're using on a monthly basis. So some of the

[36:46] important things that we look at on here because it helps in inform rate design

[36:50] for us. So the two red bars that are highlighted, those are basically at the

[36:56] median. So the midpoint. So a typical residential customer at the 50% mark,

[37:01] these are about 850 kilwatt hours per month um on average. Um and that's sort

[37:08] of the midpoint. Um if you look to so everything to the left, that's going to

[37:13] be lower. everything to the right and you kind of have a long tail out there

[37:17] to the right because you get a you know some customers use quite a bit more than

[37:20] that but it gets less frequent as you go out. Does that that make sense? This is

[37:24] always kind of a hard chart but it's something that we do look at in the in

[37:28] the rate design world because it helps inform things. Um, and one of the things

[37:33] it really helps inform and one of the opportunities we potentially see here,

[37:39] um, is is looking at some tiering potentially with with residential

[37:43] customers. So this first rate design option we looked

[37:47] at um there's a couple different elements kind of walk you through it but

[37:52] um basically what we're trying to kind of focus on here is

[37:58] the one for residential is kind of when we look at the customer charge that's

[38:02] the fixed charge first it's currently set at 8.95 you could keep it at 8.95 so

[38:08] it would change the fixed charge residential

[38:11] however we would increase the fixed charges is for harbor, commercial,

[38:15] industrial. Quite frankly, all of the fixed charges here are pretty low.

[38:19] They're lower than we normally see, you know, even residential. Um, if you look

[38:24] at kind of cost of service, um, rates with residential, you usually have a

[38:28] fixed rate between 20 and $30 typically. So, our fixed charges are low, but I

[38:32] think that's more of an intentional to try to keep the impacts down in

[38:36] residential as much as possible. So um you know not recommending we change that

[38:41] increasing the harbor industrial sum but the bigger change here is um so right

[38:47] now the residential it's a what we call a uniform um energy charge. So it's the

[38:53] same unit cost per kilowatt hour. What we'd introduce here is a tier. So we

[38:58] have basically a two-tier structure and the the tiers would be set remember I

[39:04] showed you the chart the median was about 850 kilwatt hours per month. So we

[39:09] would set tier one at between usage between zero and 850 kilwatt hours and

[39:14] that would actually have a lower rate associated with it and then the rate

[39:18] would be higher above 850 kilowatt hours. Does that make sense? So it's a

[39:23] two-tiered volutric incline block structure is what it is. Um and then for

[39:29] kind of the non-residential classes, we largely um have increases basically a

[39:35] little bit north of the average or around 8% a little bit more. The focus

[39:39] is really more on residential and trying to have some segmentation into the the

[39:43] volumetric rate. So

[39:48] what does that do? So you know when you when you just raise rates across the

[39:53] board, everybody gets the same percentage increase. When you change the

[39:57] structure, you impact customers differently based on how they use the

[40:01] system. So you have to kind of look at the impacts a little different way. So

[40:07] you sort of break your residential impacts down. We're showing three

[40:10] different types of residential customers. So you have a kind of a low

[40:14] volume residential customer and that's we're showing at 350 kilowatt hours.

[40:18] That's basically when we look at our bill frequency that's about the 20%

[40:22] mark. about 20% of the bills less or 350 or less. Um, a typical user we're

[40:30] showing at 850 and then a high volume user we're showing at 2,000. That's

[40:35] about the 90% mark on the bill frequency. So, let's kind of walk

[40:39] through this and look to the sort of the right. Um, so a low volume scenario

[40:45] currently pays for that 350 kilowatt hours $66 per month. Um, well, that

[40:52] would only go up to $57.16 under this scenario, which is about

[40:57] a$110 increase per month or about less than 2%.

[41:02] Um, the typical customer right now pays using 850 kilwatt hours pays $123.36

[41:11] that would go up 267 scenario, which is about a little bit

[41:14] north of 2% up to 1260. Remember, we have to generate the same

[41:20] amount of money. So that means the higher volume residential customer is

[41:24] going to pay more because they'd be getting into the second tier. So again,

[41:28] showing a 2,000 kilowatt hour customer, which is at the 90% mark on our bill

[41:33] frequency. Um well, their bill would go up. They're paying 27815 right now. It

[41:38] would go up to 305.88, which is just shy of about less than

[41:43] 10%. Um whereas the other customer classes um it's a little bit more than

[41:48] average about 8 and a half versus 8%. Does that make sense in terms of what

[41:54] the tiering would do there? I understand what tiered system is

[41:59] doing. Um so let's put it in the context of gas.

[42:06] The saving to the customer as regard to usage is whether he buys a economy car,

[42:12] he buys a huge pick and not necessarily in the price per gallon for gas

[42:20] because you still have to cover your cost associated with that. So, um I'm

[42:27] not sure that I understand the intent here, but I don't know if that's in the

[42:32] best interest. uh [clears throat] so that the the standard

[42:39] residential customer >> is going to pay the extra cost for the

[42:44] person that gives you the best power. So there's pros and cons clearly to

[42:51] doing this and you've kind of you know peed on one of the cons is that you know

[42:55] again a lot of these costs are fixed. Um and while we do have a uniform rate

[43:02] right now so if someone uses less they do pay less but it's not a different

[43:07] unit cost. This would be introducing a different unit cost. So it's more of an

[43:11] incentive to be really efficient um because there is a lower unit cost if

[43:16] they use less. So, you're right. There's pros and cons. You have to weigh, but

[43:19] the pro is that you're keeping the even for a typical customer, they'll be

[43:24] paying kind of a below average increase. You're

[43:28] picking up that from a person that uses more. But yeah, it's pros and cons.

[43:32] Correct.

[43:35] » Not necessarily a question, but just kind of a thought on that. Another thing

[43:40] I it seems it almost seems a little counterintuitive because it's almost

[43:44] like you're as you just said you're incentivizing the customer to use less

[43:49] power when from the business point you want them to

[43:53] use more power. So I don't know I I don't envy your job here. I know there's

[43:58] no easy answer but >> it just seems a little backwards in that

[44:03] sense. >> Yeah, it's um you're right. It it is in

[44:08] that way. Um and it kind of sometimes efficiencies again you think

[44:15] in places that are really capacity constrained. I mean if you're more

[44:18] efficient then you kind of push off the need to h add more capacity which can

[44:22] have some economic benefits. Um but it sometimes takes longer to see the

[44:28] immediate you're right you're having someone incentivize you use less your

[44:31] product. Um so it's it's a it's a balancing act. So the savings sometimes

[44:35] are longer term with not having to have as much capacity in your system because

[44:39] people are using the service more efficiently.

[44:44] » Do these rate studies talk about like a diesel charge and like like how does if

[44:50] we have to run a generator, how does that

[44:52] » So we have we have a diesel search charge right now that's already in the

[44:56] ordinance um that can be used. I don't know if staff knows the last time we

[45:00] actually used it, but it is in the ordinance if we have to run that.

[45:04] » I think it's been >> 1819.

[45:09] » Yeah. So that does exist. I didn't point it out because it but it is actually in

[45:13] the race structure. So if that happens, there is a mechanism to to recover that

[45:17] cost.

[45:20] » So this rate structure is kind of based on the fact that we have

[45:26] limited low growth. So, as we look at what the state of

[45:30] Alaska is doing in regards to providing funds for heat pumps, we may have more

[45:36] people jumping off of oil and going to heat pump

[45:40] » if the rate doesn't go too high. [clears throat]

[45:42] » Um, and plus we can attract bigger is going to be doing more and more work and

[45:47] moving more and more power >> to that system. And plus, there's

[45:51] » been talk about data centers and and other

[45:54] » it's no longer bigger >> or Jags. [laughter]

[45:57] as big as the French government.

[46:01] » You're right. We we haven't assumed a lot of low growth. So, if that were to

[46:05] happen, obviously that helps. Yeah. >> Um certainly that changes the calculus,

[46:09] but um we just we >> our projections we try to be reasonably

[46:15] conservative is what I unless we know of something specifically then, you know,

[46:19] certainly could be factored in. I mean, if this is a 5-year forecast, things can

[46:23] change. Certainly, if something shifts and there is additional demand coming,

[46:27] well, yeah, we want to factor that in because that would help. Um, but we

[46:31] haven't assumed into that. >> Yeah.

[46:34] » Yeah.

[46:38] » I'm wondering why we why the residential high volume user percentage increase

[46:45] would be higher than per say the rest of it and not more in line with it. I

[46:49] understand we're offsetting the cost, but um is is there a particular reason

[46:56] why you leave that higher and have the other increases lower? Is there kind of

[47:01] back information? >> Yeah, it's sort of a a byproduct of the

[47:05] inclining block structure. So, you're kind of pushing more of that cost

[47:09] recovery on to the higher volume user. So, that unit cost when you trip over

[47:14] into the next tier is higher. So someone that's in this example that's using, you

[47:19] know, 2,000 kilowatt hours a month, which is, you know, more than double the

[47:23] median, they pay more and it's a higher unit cost. So that's why it's above

[47:28] average increase. Um, so it's it's just part of the structure. Um, again, it's

[47:34] also part of that um incentive mechanism to more efficient. If you're in the

[47:39] first tier, you're going to pay less. But but that's the terms of the math.

[47:43] It's just a much higher unit cost. get above that level. So that's why it's not

[47:49] because again this whole is all revenue neutral. So effectively what we're doing

[47:55] here it's looking at kind of the residential class as a whole and we're

[47:58] making intraclass changes. So in this scenario kind of a lower volume and a

[48:04] typical benefit but the higher volume pays more because you got to get the

[48:09] same amount of money. So it's just that's the difference in

[48:13] just doing something uh proc and Jack

[48:18] » um I'm figuring that the incentive of getting people to be more conservative

[48:24] is not putting taxing the system which then is where why we're where we're at

[48:30] now in the need of fixing and upgrading and cost of adding.

[48:38] » Yeah. I mean I think >> you're gonna have to do it anyway.

[48:41] » Yeah. you know, it's um I think it's when I think about the conservation, I

[48:45] think it's more of like capacity and being able to push that off. I mean, the

[48:50] fact is the system needs a lot of repair placement. It's

[48:54] not going to change. >> But down the road, if it's um still in

[48:58] place and you have replaced those items, then you're looking at um keeping the

[49:04] loads down or you know taxing the system to the point where you're back where you

[49:10] were. Yeah, I mean I think if we're more

[49:13] efficient then again it's just it's staving off the next increments of

[49:17] capacity and having that t that's the biggest benefit

[49:21] but there's [clears throat] always going to be repair and replacement of assets.

[49:27] » Jack, >> thanks your honor. I was just curious

[49:29] about um the distinction for the harbor. Just I I understand and appreciate the

[49:35] » the types of users within the residential, but it's you I'm sure

[49:39] you've been made aware of the fact that within the harbor there are a number of

[49:42] folks that are on the boards and you know they consider themselves

[49:45] residential in that respect. >> So I just wonder why that distinction

[49:48] was made. >> So the harbor is a current we didn't it

[49:52] already exists. So it's a current class of customers. So, um, whether or not

[49:56] that could be folded into residential, I suppose, is an option. It's always been

[50:00] kind of, um, broken out and they do actually pay a little bit higher rate if

[50:04] you look at their average cost. Um, uh, you know, again, if someone was

[50:09] living there full-time, I think they could look more like a residential

[50:13] customer possibly. Um, I think it's probably a mix, I would imagine, in

[50:16] terms of how people use, you know, so I think that's why it was designated as

[50:20] its own class because it's a little bit probably for a mix. being there kind of

[50:25] being full-time versus just having kind of hooking up and just having you know

[50:30] they're both there. So um we didn't that already existed so we didn't establish

[50:35] the Harvard class we just were looking at at the current class.

[50:39] » Thanks. >> Yeah. Yeah. chair just

[50:45] you know we are a seasonal town so the harbor commercial industrial has

[50:51] they something been taken into account where they could be adjusted higher

[50:55] during the summer and lower during the winter seasons

[50:59] » a seasonal rate um it's something that can be done and

[51:05] looked at um it's sort of interesting um when you look at how those customers use

[51:14] the system. So like the residential customers um we're winter peaking

[51:19] utility is electric heat load. So the system really peaks in winter um versus

[51:26] a lot of the industrial customers actually peak more

[51:30] August

[51:33] and are really running. Um you potentially could look at a seasonal

[51:38] structure there. um it may be something we could look into. Um you don't see it

[51:43] as often with electric system, but in seasonal communities is possible. Um so

[51:48] it might shift the calculus a little bit. Um but but overall that class like

[51:53] the industrial class um there's not that many customers in it. Um they're larger

[51:58] customers, but like from the total amount of revenue that we generate, the

[52:02] biggest the bulk of the revenue comes from residential and commercial. So um

[52:07] you know the biggest seasonality in terms of using is in that industrial in

[52:12] terms of how they use the service but it's not a huge class and but it's

[52:16] something we could take a look at. >> Yeah.

[52:19] » Yeah. >> I mean my thinking here I think

[52:22] everybody's thinking is I mean the burden should be more on the industrial

[52:27] commercial and harbor rather than residential. I really just made a

[52:31] statement that most of the revenue comes from the residential class. I don't know

[52:37] we need to look at this adjustment here. >> Yeah. So the challenge is there um

[52:45] when you look at kind of cost of service and again we're the data we had

[52:50] available we couldn't take a extremely deep dive into it but but we we do know

[52:54] that um the residential customer class peaks

[53:01] the system more so we call that load factor because they have heating load

[53:05] and so in the winter their residential customers are actually more inefficient

[53:11] user of the service because they peak because he load most say the commercial

[53:17] industrial class it's not as much so the reality is um residential customers are

[53:23] subsidized to some extent from other classes so I think it's a balancing act

[53:28] um you know I think you have to be be careful about how much cost you

[53:33] necessarily push on some of those customers um and again some of the

[53:36] industries are are big there's economic development considerations I think as

[53:40] well. Um but from a cost of service standpoint um again residential

[53:46] and it's pretty common in public systems tends to be subsidized. So we're trying

[53:50] to balance that. That's why we didn't show an option where it was you know a

[53:53] lot higher increases there. >> Okay. Thank you.

[53:58] » So I see that we got an industrial rate structure.

[54:04] You got a a standard energy cost of.1291 and then the demand and charge. So up to

[54:12] 25 kilowatt I guess that's saying that.1291

[54:17] is that the rate for that and then if they go over the 25 kilowatt it goes to

[54:23] $441. >> Mhm. [clears throat]

[54:28] » Yeah. That's the current demand charge. Yeah.

[54:30] » That's the current demand charge. Um well it did we did show an increase to

[54:34] it of about 8%. Um but for those customers that have demand meters that

[54:40] pay yeah they have >> so and is that in a in a month or so if

[54:45] they go over 25 kilowatts in a month and demand charge kicks in for the rest of

[54:50] the month

[54:55] and that 25 kilowatt you know if that's high or low or standard

[55:01] man rate >> um for commercial pretty standard for

[55:05] industrial is probably pretty low, but that to have demand charges for the very

[55:09] customers is pretty common. >> Okay.

[55:10] » Um and the reason that you do that is because um typically commercial and

[55:16] industrial customers, particularly industrial, they're using

[55:21] power for process um and and they're different. So um whereas like

[55:28] residential customers, they tend to we call it more homogeneous. they sort of

[55:31] use power similarly here particularly because a lot of the peak load is from

[55:35] heating. So demand charges just a way to distribute kind of capacity related

[55:43] costs more individually based on the customer's actual heat demand. Um so you

[55:50] they're pretty common for bigger customers. Now some systems are you know

[55:54] moving towards having demand meters on the residential. we don't have that

[55:58] capability right now, but that's when you start seeing some of the more unique

[56:02] structures that are coming out um related to electric vehicles and things

[56:08] like that where you know you want to have more precise information about um

[56:12] peak demand but um but really [clears throat]

[56:16] generally right now it's do larger customers have

[56:18] » Yeah, we've had that conversation and people turned over to electric and heat.

[56:25] » Sure. And it shows that the usage in an individual resident went

[56:32] up dramatically when they did that >> and and it raised to a point where we

[56:37] actually had a conversation whether there should be a demand rate after a

[56:41] certain usage.

[56:44] » It may be something we eventually could get to when we have the metering

[56:47] capability at that level. We just don't have it right now.

[56:51] » Okay. and and just just a small item, but that

[56:57] 8.95 uh monthly charge on it is really for the lease and rent of the meter. I

[57:02] would imag >> Yeah. I mean, basically it's, you know,

[57:07] kind of basic customer service billing and some of the metering costs in there.

[57:12] That's really all >> and it's not going to make a big

[57:17] different budgetary wise, but I'm seeing that that cost is more realistically

[57:22] around $10 or more in regards to service we're providing because we've gone from

[57:28] anog to digital only. >> Yeah, the fixed charges here are pretty

[57:32] low. >> They're real low. Yeah.

[57:34] » So, we need to adjust those as we go through the more real.

[57:37] » I think going forward that would be one thing I would probably think about.

[57:41] Again, I think the rate design options we were looking at right now really

[57:46] mitigate residential impact. So the more you raise that

[57:50] resilience, so it becomes a greater portion of their bill. Um but again cost

[57:55] of service for a fix is it's usually between about 20 30 bucks

[58:01] or really low. >> Again, it's just it's sort of a

[58:05] philosophical, you know, do you want to kind of do that? And there's pros and

[58:10] cons. So, what I'm reading in here a little

[58:13] bit in regards to your presentation, and I hear you with the council meeting,

[58:17] we've had a a concern about the impact of rates on low income, seniors, that

[58:24] type of stuff. And so, I would imagine the tier rate was set into place so

[58:29] those individuals could have a lesser rate structure to support their

[58:36] lower incomes, other fixed income type. That was great.

[58:41] » Yeah, definitely one. Thanks for thinking about

[58:43] » Thank you. >> Yeah, Charlie,

[58:46] » uh just one question. So, uh was there consideration to the possibility of a

[58:53] like how you talk about the two-tier residential system when you hit certain

[58:57] amount then it goes up more. Was that I guess I'm curious how come that exact uh

[59:04] strategy wasn't considered on the on the commercial industrial?

[59:08] » Yeah. So the challenge with doing that on commercial industrial goes back to um

[59:13] so residential customers like we did that nice build frequency and you can

[59:17] kind of see how they're using commercial they're all over the place. So setting

[59:23] tiers is really difficult. Um and that's honestly why sometimes you use demand

[59:29] charges because demand charges are kind of doing the same thing at least for a

[59:33] piece of the the bill because that's more individualized. So it

[59:38] there's all different types of commercial customers. So setting the

[59:40] tier and you could you could get really you could be really wrong if you did

[59:44] that incorrectly. So that's why you just don't see it on commercial but you see

[59:48] demand charges because that's a way to kind of get at the same thing if that

[59:53] makes sense. Um it's just a different way of doing it.

[59:57] » Gota

[1:00:03] Okay. Um >> [clears throat]

[1:00:06] » So there was another option that we we did

[1:00:10] look at as well and again it's it's very similar to

[1:00:16] but it does put a little bit more emphasis um Mr. what you just said about

[1:00:21] the really low low volume sensitivity to that and this is

[1:00:27] essentially a three- tier structure here where uh we added and almost call this

[1:00:32] kind of like a of a lifeline concept where we put in a tier at the 350 KW

[1:00:39] level which is a 20% mark and that carry a lower and we have 350 to 850 and above

[1:00:46] 850 so it's in three tier to everything else pretty much hold

[1:00:51] changes we recommended. The difference in this one would be more

[1:00:57] sensitivity to the really low volume customer. So you can see in this

[1:01:01] situation that bill actually goes down for 350

[1:01:07] user but the typical would come up some. It's

[1:01:10] still below the average 8%. It's about 4.6%. Um but the higher volume user

[1:01:17] would would be higher about 14%. So it's just one more layer deeper three tiers I

[1:01:23] think. Um you know a lot of our clients you two and three tier are pretty

[1:01:28] common. Um not really we don't see but we just kind of put that in as another

[1:01:33] option for consideration.

[1:01:39] And then kind of on this last slide here, I kind of see them next to each

[1:01:46] other. Sometimes it's easy to see stuff better.

[1:01:51] This kind of shows you the the current bill and what it would look like across

[1:01:55] the board, what it would look like under those two options.

[1:02:12] » [laughter] >> Go ahead. Yeah.

[1:02:15] » Um, kind of to piggyback on your senior

[1:02:21] citizens and, you know, low income, you know, they typically I'm what I'm

[1:02:25] concerned about with the grades of like the high volume versus the low volume is

[1:02:30] it's based on their house. Like is it insulated? Is it not? Is it old? Is it

[1:02:34] not? Can they afford new windows? Can they not? If it's a senior, have they

[1:02:38] lived in the home for, you know, 72 years of their life? And it's been

[1:02:43] probably built a hundred years ago. And so really,

[1:02:48] I I worry that um as the older homes get more inefficient and tends to house the

[1:02:54] senior in it versus the newer home, we're kind of then punishing

[1:02:59] them for heating their home. And I I just worry about what that is because as

[1:03:03] we all know, I mean, houses aren't the best

[1:03:08] around here. And I So I worry about that with low income and and fixed income

[1:03:13] seniors and and things like that. with the rate structures that I'm seeing. I

[1:03:18] guess my my hope through this rate study was to

[1:03:23] see um relief for all residential

[1:03:28] um and more put that on the commercial industrial side because they can pass it

[1:03:33] along to their customers where residents can't. And I understand the residents

[1:03:37] are using more, but they're also putting up with a lot of commercial business

[1:03:41] here um as giving up the town for the seasonal um businesses to come in. And

[1:03:46] so I guess I guess my hope was to kind of see a little bit more of a shift off

[1:03:50] the back of the residentials in general, not just the low volume user options

[1:03:56] here. Um and kind of have it on somebody who could pass it on versus not being

[1:04:02] able to pass it on.

[1:04:06] Lacy, do you know if since we've went to a rural status whether low income

[1:04:13] household or uh if PCE is available to them? It is

[1:04:21] so they can apply if they if they're a low income family to get helpful break.

[1:04:26] That's correct. >> Yeah. So there are things in place to

[1:04:29] lower their actual cost through PC. I can elaborate a little bit

[1:04:34] » if you would. >> So the tribe actually um has a energy

[1:04:39] efficiency program between Clinket and Hina and KIC. Um a lot of the houses are

[1:04:46] being brought up to be um depending on the um home and um the income home. Um

[1:04:54] they just need to apply. I know of several that have been done recently. I

[1:04:59] know that um uh for other outside non-native uh groups throughout the I

[1:05:06] think in the last 20 years because uh my grandmother's house was done I want to

[1:05:11] say in 200 one they replaced all the windows. Um,

[1:05:18] we're talking about 101 year old house that's been um, they sprayed in

[1:05:24] insulation. Um, windows replaced.

[1:05:29] I mean, granted, I just replaced the front windows on it myself, but um, for

[1:05:34] the most part, a lot of the those programs are still available. Um, state

[1:05:39] programs um, and then tribal programs that are

[1:05:43] doing it. And then they're also um implementing a heat pump program to put

[1:05:48] in heat pumps. Um from personal experience, I put mine in um which is I

[1:05:55] put it in in August. It got in um that one cold snap. I just finally got the

[1:06:01] bill on that and it was um it was about 346 I paid in electric heat versus

[1:06:12] what I would have paid in oil heat which would have been close to $600.

[1:06:18] So I cut my costs in half and the house still isn't I mean it's 101y old house.

[1:06:25] Um it's it's a lot more insulated with new but there are a lot there's a lot of

[1:06:29] programs still out there. >> Yeah. When we talk about low income it's

[1:06:32] a cost of energy that includes [clears throat] heating.

[1:06:35] » Yeah. >> Yeah.

[1:06:37] » And then there's also the energy assistance like people apply.

[1:06:41] » So there are options for >> Yes.

[1:06:45] » Uh is this kind of a time to brainstorm or

[1:06:50] am I jumping the gun? I mean to Okay. Well, what Abby said kind of segueed

[1:06:56] into something I was thinking about earlier and it's funny when Jay asked

[1:06:59] about a seasonal rate because uh and as you said, I think that's probably not

[1:07:04] something you see too often, but given our unique extreme seasonal nature. Uh

[1:07:11] it got me thinking a little even on the residential side. I mean,

[1:07:17] everyone knows I we don't want to raise rates at all, but obviously we've got to

[1:07:21] do something. So, I'm just wondering even on the residential side if we did a

[1:07:27] seasonal increase [clears throat] in the summer, which I understand is not the

[1:07:31] peak season for electric use residentially, but I'm curious how many

[1:07:36] more uh you know, if you think about all the bunk houses that have gone up with

[1:07:42] that are empty in the winter, full in the summer. I mean, I think there could

[1:07:46] be a somewhat significant uh opportunity there maybe to and granted it's going to

[1:07:52] be just like what people tell us about Madison. You go down to Madison and the

[1:07:55] locals pay it too. The locals are going to have to pay it too, but it's just

[1:07:59] something that I think maybe we ought to look into a little. And I'm curious too

[1:08:03] if obviously no one has this on hand, but how many more uh residential

[1:08:08] meters are up during the summer [clears throat] when all those seasonal

[1:08:12] people are here? because I think there'd be some some

[1:08:16] money to have there. >> Yeah. U on on Riley's thought there, uh

[1:08:22] I forget the term you used. Was it a was it a use charge for industrial? It was

[1:08:26] the charge that was used to kind of counter since a tiered structure isn't

[1:08:29] really [clears throat] demand charge. So I wonder if something like something

[1:08:33] like the bunk houses in particular, which are associated with industry,

[1:08:36] that's where the demand charge might come in really handy because the demand

[1:08:39] is really going to be placed in the summertime. So you know if that demand

[1:08:42] charge is in place when that bunk house is you know unoccupied in the winter

[1:08:45] obviously it's not consuming that power summertime when it's occupied again that

[1:08:49] demand charges in place and we recoup some of the revenue in that way just

[1:08:53] thought >> on that note who then pays for the

[1:08:57] demand meters to go in that we don't have currently so are we increasing our

[1:09:02] costs of maintenance and and things or is that passed on

[1:09:07] you know to the customer I don't know this first time I'm hearing about the

[1:09:10] demand thing. So, I'm truly don't know. >> Go ahead. Go ahead,

[1:09:13] » your honor. And I'm I'm gonna rely on Raph Talis and maybe even our electric

[1:09:17] division manager. So, as Bart mentioned, we don't have the capabilities to do

[1:09:21] demand metering right now. So, I don't if we're looking at something on the

[1:09:25] residential side or commercial side, I don't think we're going to have the

[1:09:29] metering capability. I think you'd have to put a fee structure in place like the

[1:09:34] demand charge that we have for industrial and commercial. It would

[1:09:37] obviously be a much lesser threshold, not 25 kilowatts, it would be a thousand

[1:09:42] or something something much lower to essentially achieve the same thing if

[1:09:46] you're wanting to target um residents or businesses that really seem to have more

[1:09:52] activity um in the summer season because they're associated with industry. I

[1:09:57] think that's might be how you >> Yeah, I think honestly the seasonal

[1:10:02] option as far as what we could actually feasibly do because again not every

[1:10:06] customer has so that probably something we could look at see how that might

[1:10:10] shift things a little bit um because we have the monthly data to be able to look

[1:10:14] at that but the demands you catch up with technology to be able to do it just

[1:10:18] don't have that >> and and I'm not too thrilled about doing

[1:10:24] increased seating charge I think we want to be business business friendly. We're

[1:10:28] going to get more revenue because the plates are occupied and our use power

[1:10:33] and I think that is the general intent of what we wanted to do. Um

[1:10:41] and quite frankly some of the guys if we rate it too high we're going to force

[1:10:44] them into efficiencies and we'll probably get less bucks.

[1:10:47] » That's the again it's power and bigger customers. It's a balancing act. You

[1:10:53] know, you have to be a little bit careful there, I think, because

[1:10:58] » I know when some of the canries had diesel generation, if we had raised our

[1:11:04] power to an extent to where it probably cheaper for them to their own power,

[1:11:08] they'd kill off >> horses. That's right.

[1:11:10] » Abby, did you have a question?

[1:11:16] » Not um trying to figure out the best way to

[1:11:20] give me a moment. I just want to phrase that correctly.

[1:11:26] » All right. >> Um Okay. Well, I guess um the sake of

[1:11:30] time, maybe we'll keep the train moving. That's okay.

[1:11:33] » Yeah, that's good. >> All right. So, we're going to shift

[1:11:37] gears and and talk solid ways now. That looks okay. Yep.

[1:11:42] Can >> we take a small for?

[1:11:44] » Sure. Yeah.

[1:18:42] Everybody back? We are. >> Oh, no.

[1:18:47] [laughter]

[1:18:50] » We'll come back to work and we're going to continue on with the discussion in

[1:18:53] regard to [clears throat] thank you guys for your big

[1:18:58] Yeah, good. To get on to the solid weight side of things, want to start

[1:19:02] with kind of giving a service overview. Um, we know you probably are familiar

[1:19:08] with the system, but there's really three key components to the solid waste

[1:19:13] structure. We had the reser mic a little bit.

[1:19:17] [laughter] >> Is this better?

[1:19:19] » You can bring it closer to you. >> Thank you.

[1:19:22] » Sorry, my seat's really high. [laughter] >> So, we have three key components. So we

[1:19:27] have the residential collection. We have commercial collection which includes um

[1:19:32] rental dumpsters. We have our disposal operations which is really our landfill

[1:19:37] which only with the engineering report because we have about 25 lers of

[1:19:43] remaining life left and we only accept non-putressful waste at this landfill.

[1:19:48] Everything else is sent via our long haul contract um down to the state of

[1:19:54] Washington. So overall, the solid waste stemmed pet does offer a really high

[1:19:59] level of service to your customers throughout the year.

[1:20:04] And with that being said, so this also breaks down slide breaks down what our

[1:20:08] existing rate structure is. So we have our residential rates which are really

[1:20:13] driven by the collection rate per month as well as our area wide disposal fees.

[1:20:19] The solid waste credit has to do with our multif family customers which backs

[1:20:23] off of which backs off their residential um bill. Then we have our business

[1:20:28] collection services which has is for our commercial customers. There's a flat

[1:20:34] rate minimum charge in monthly container rentals but otherwise the fee is charged

[1:20:40] by the amount of waste generated at the curb. Um and then on the disposal side

[1:20:46] we have our tipping fees. Um and then for both our we admit some minimum

[1:20:51] charges suffered household hazard displaced. Um but it's a pretty robust

[1:20:57] offering and um and the rate structure that follows

[1:21:04] with that with that rate structure and with the background of our high level of

[1:21:07] service. It's important to note that we've all heard that inflation has been

[1:21:11] increasing at rapid rates and we we keep hearing that every time we turn this but

[1:21:17] it's important to note that CPI while it has increased so much the consumer price

[1:21:23] index the garbage and trash collection index which is a component of CPI which

[1:21:28] measures what our what the garbage and trash bills are doing across the United

[1:21:33] States which components in components in this include are driving it are what are

[1:21:38] our labor costs doing to service our garbage and trash like with our with our

[1:21:42] drivers um with like the CDL licenses with the vehicle cost um kind of driven

[1:21:48] by the NR index this the garbage and trash collection index is actually go is

[1:21:55] actually higher um and increasing at a higher rate than what CPI is. So the

[1:22:00] chart on the left hand side of the screen or on your sheet uh breaks that

[1:22:05] down. So the blue line is that CPI that I was talking about, but the red line is

[1:22:10] showing where the garbage how the garbage dispatch index is is averaging

[1:22:14] about 12% higher. And you can see that that's really driven back from really

[1:22:18] starts to separate from 2018 and it's only continuing to grow now that we're

[1:22:23] in 2025 2026. And historically, we've seen that that

[1:22:28] CPI is normally about a year year or two ahead of where the garbage and trash

[1:22:33] collection is because it's a it's a comp it's really a circular effect. But so

[1:22:39] where we're starting to hear like news saying like, okay, inflation might be

[1:22:42] slowing, the garbage to trash index is still a couple years behind that. So

[1:22:46] we're going to see that tren that red line, it's going to continue to trend

[1:22:50] upwards before it starts to even out. like we can see, okay, the blue line

[1:22:56] starts to even starts to kind of like take a little bit of a curve. That

[1:23:00] garbage and trash index is really projected to continue that um that

[1:23:04] incline for at least a couple more years before we might see it flat out. And so

[1:23:10] why is that important? So if you look at the right hand side and it's we're

[1:23:14] showing a historical specifically residential customer collection bill um

[1:23:20] in comparison to if what has been adopted in comparison to what if we

[1:23:26] adopt what if we had increased our rates by inflation. And so we started this um

[1:23:32] back in 2020, there was an increase between um 22 and 23. Um but heading

[1:23:39] into 2026 that $1160, we're really about $3 behind where we

[1:23:45] would be if we've been increasing our rates by inflation. And so and that's

[1:23:51] really important because our cost of services continue to grow. And we're

[1:23:55] going to get into that a little bit more as I talk about the financial plan.

[1:24:01] And so looking at our financial plan in the elements kind of like Bart talked

[1:24:05] about um they had the the road map on electric side. Um this is just another

[1:24:10] way to look at it is our our whole process of building this model. It's a

[1:24:14] very data driven process. So your staff was really helpful in working with us to

[1:24:19] get all this data. We're very grateful to them. We went through the process of

[1:24:22] looking at historical building statistics and different historical

[1:24:26] financial data. They looked at your current budget and financial plan, your

[1:24:30] capital improvement plan, and what those cycles looks like, all with the goal of

[1:24:34] reaching revenue sufficiency. And so I'll talk about that as we continue on,

[1:24:39] but the goal is really to kind of keep our balance be balanced, right? So we

[1:24:44] have our green we have our green blocks which is our revenues and for the solid

[1:24:50] waste system that's purely driven by our collection charges and our t and our

[1:24:55] really our disposal or tipping fees and we have some um small portion of

[1:25:00] miscellaneous fees. Really our two key charges are going to be the collection

[1:25:03] and the disposal uh tipping fees. And then on the opposite side with our red

[1:25:09] boxes we're looking at what our revenue requirements are. What do our what do

[1:25:13] our green boxes need to do to balance out the red? And so on the red on the

[1:25:17] red bars, we have our operating expenses. We have our capital

[1:25:20] improvement, which includes our our equipment, our um our vehicles, and then

[1:25:27] we also have our reserves and our landfill closure. Like I mentioned

[1:25:31] previously, there's only about estimated about 25 years of your landfills

[1:25:38] remaining capac life remaining capacity left. And so it's important to kind of

[1:25:42] look at okay outside of what our reserve policies are or making sure that we have

[1:25:48] enough to cover our operations and maintenance expenses in like in any kind

[1:25:52] of rain day activities that we also have enough money set aside for our landfill

[1:25:57] closure because eventually we won't be able to accept anything at the landfill

[1:26:01] and there will be no source of revenue to come in um that will be able to help

[1:26:05] offset those costs because even when we close the landfill there's still a cost

[1:26:09] of of maintaining that property and and continuing the closure um closure method

[1:26:17] as far as what the DBQ uh requires. So with that in mind with our getting

[1:26:25] into our red boxes on our on and m the operating expenses. So, we used a

[1:26:29] combination of the 2025 and 2026 budget as our baseline for the model. And we

[1:26:36] talked about costs increasing with the garbage uh the garbage trash mix and

[1:26:40] CPI. Well, for the 2025 budget, that was a 12% increase over our 2024 cost. And

[1:26:48] so, the chart on the right hand side shows you a bit of a breakdown of what

[1:26:52] the operating expenses are for uh for the solid waste fund. And the largest

[1:26:57] component is your contractual services. And it's about 37% about 37% of that is

[1:27:05] of the entire budget is related to the contract services. And that is mainly

[1:27:10] driven by your longhaul contract sending the waste down and out of state. This is

[1:27:16] now followed by labor at 32%. So our and then our inner fund transfers which is

[1:27:22] like which is our billing which is like our financial admin really like our o

[1:27:26] some of overhead costs and then some minor capital outlay. And so for the

[1:27:32] forecast period what we did was we took the budget and when we were working we

[1:27:37] modeled our contract and contractual services based off of our projection of

[1:27:42] tonnages that were coming in as well as the contract rates that are um that are

[1:27:47] currently in effect. But then we used a range of escalation factors um for the

[1:27:54] for the majority between three to five percent um based off of different CPI

[1:27:59] indices looking at on a line item detail looking at what what our costs can be.

[1:28:04] It is important to note for later we do know that there is a cola increase that

[1:28:08] has been um budgeted that this um our plan does include that. So that's a

[1:28:14] little bit um it's a little bit higher than the our the range of the 3 to 5%.

[1:28:19] Um but overall our growth is projected about 4.7%

[1:28:24] and our operating expenses from um from this year across to 2030.

[1:28:32] Continuing on like with our red bars, um the next thing that we were looking at

[1:28:38] on our revenue requirements was our capital improvement. We keep talking

[1:28:43] about hook costs have gone up. The construction cost and that's the same

[1:28:46] thing since 2020. Um the industy has gone up about 21%. And you've seen that

[1:28:52] on the electric side. We're seeing it in water. We're also seeing it in solid

[1:28:56] waste. And so the solid waste capital improvement plan is really made up of

[1:29:02] our transfer station equipment replacements. We have some vehicles um

[1:29:06] that are getting that need to be replaced. It's about over the forecast

[1:29:11] period it's a little over $4 million um is what we're looking at um over the

[1:29:16] next couple years as on the aggregate which averages about about $725,000

[1:29:24] per year. And it's important to note that all of these projects are assumed

[1:29:28] to be cash funded or as we talked on the electric side that pay go that pay as

[1:29:32] you go capital. So everything on solid waste we assume to be cash funded and

[1:29:37] there's no outstanding debt on the solid waste side. Um so we so we did not look

[1:29:41] at any [clears throat] coverage requirements as far as when we're once

[1:29:45] we get into the reserves we're talking about those red revenue requirements.

[1:29:54] And so looking at so now we've talked about a little bit of on the at least

[1:29:58] the first couple of boxes on our red side for our balance means the revenue

[1:30:02] requirements. Now we're looking at what our existing revenue are and looking at

[1:30:06] how are we going to balance this all out. And so what we did was um to

[1:30:12] project what our existing revenues were. We took our billings the billing

[1:30:16] statistics um from our landfill tonnage reports um the the tonnage reports that

[1:30:21] go that where the waste is getting now hauled um down south. And then we looked

[1:30:26] at like our customer billing monthly reports and we calculated what your

[1:30:31] existing revenues are and then it was a combination between that as well as what

[1:30:36] your financial statements are. And so what you can see on the right hand side

[1:30:42] in that financial plan, it breaks down what the what the bar what what the

[1:30:47] system looks like if we didn't raise any increase didn't raise our rates and if

[1:30:52] we just let things let things lie. And so the bars the dark navy greenish bars

[1:30:58] I should say um represent our on& and m expenses. So, we talked about how there

[1:31:03] was a pretty big increase between 24 and 25 that that's averaging growth about

[1:31:08] 4.7%. Um, is those dark navy bars. The blue

[1:31:12] bar, the like those bright kind of electric blue bars is our pay cut. So,

[1:31:16] that was the pay as you go capital. That's the capital we just talked about

[1:31:20] averaging about $700,000 um per year over $4 million over the

[1:31:26] forecast. And then we have those gray bars which is our transfer um or

[1:31:31] transfers to reserves. So that goes into um that goes into our reserves to make

[1:31:36] sure that we are keeping a 180 180day reserve um OM reserve and then also um

[1:31:43] making deposits for our landfill closure um liability where we're target we're

[1:31:48] trying to make sure that we have enough cash balances set aside to target what

[1:31:52] that our ending closure and postclosure care liabilities are. And so from that

[1:31:58] you can see that our existing revenues do not cover the uh the need for the

[1:32:04] capital and transfers throughout the forecast period. And overall that

[1:32:08] shortfall average is about $500,000 a year. And it's also important to note

[1:32:12] similar on the electric side, we do not assume any um any customer growth to be

[1:32:17] conservative for the system.

[1:32:21] And so what does that what do we do with that? And so we looked at when we're

[1:32:27] talking to to to staff and the routine talked about we need to make sure that

[1:32:33] we know the existing revenues aren't going to cover. We talked a little bit

[1:32:35] about how that we need to have financial policies and targets in place. And so I

[1:32:40] mentioned that 180 days of cash on hand that that's one of that's the target

[1:32:44] that's one of our targets to make sure that we have about six months of of cash

[1:32:50] set aside in case there's in case something happens in case there's issues

[1:32:54] at the transfer station, the landfill, long haul contracts, something something

[1:32:58] goes wrong, anything like that. We want to make sure that we're able to have

[1:33:01] that liquidity to cover because there would be nothing worse than having trash

[1:33:06] on the side of the road in high season and that would affect not only residents

[1:33:10] but also the the tourists coming into place. We also then I mentioned the

[1:33:16] closure liability target. we only have about 25 years left of our landfill um

[1:33:21] of our landfill. And so the closure liability target is really is the cash

[1:33:27] balance is equal to that calculated closure and postclosure care liability

[1:33:32] um for the current period. So right now it's about a million dollars is what it

[1:33:37] would take to if we had to shut down the landfill tomorrow. Obviously that that

[1:33:41] will grow with inflation over time, but one of the things we had talked about

[1:33:46] was setting aside a closure liability fund separate. And so where the Soliv

[1:33:52] Fund would then make deposits to to the closure uh to the closure liability fund

[1:33:58] and where that that would be restricted um to make sure that we have enough

[1:34:03] money that's set aside um for for that impending closure and what what that'll

[1:34:10] look like when there's no revenue coming into that system anymore. And so those

[1:34:14] were our reserve targets. The revenue sufficiency again we're trying to hit

[1:34:18] we're trying to hit that balance. We want to make sure that our revenue is

[1:34:22] sufficient to cover our expenses on an annualized basis. We talked about what

[1:34:26] the short of a shortfall of about $500,000 per year over the forecast

[1:34:31] period. So we're we're looking we need to make sure that we're we're recouping

[1:34:35] those expenses. And then the third component being we talked about the

[1:34:40] capital um solid waste fund does not have any existing debt and we and the

[1:34:46] goal was expressed that the that we should fund everything through um

[1:34:50] through payown for that. And so if we take all that together and we take the

[1:34:55] balance beam what would it take to get to a revenue sufficient point targeting

[1:35:02] 180 days we get to the financial plan the reserve balances that are in front

[1:35:06] of you now. So the rate increases are necessary to meet the financial targets.

[1:35:11] So we'll talk about bills next, but what this means is we would need an increase

[1:35:16] of 5 and a half% on the disposal side year-over-year from um starting April 1

[1:35:23] on 2026 and then following January 1st um a year after through 2030. And then

[1:35:30] for the collection component, we would want to have a nine and a half percent

[1:35:35] increase followed by 3% thereafter. And the nine and a half increase part of

[1:35:40] that is has to do with we know that there was a large disposal a large

[1:35:45] substantial disposal increase that has just occurred fairly recently. Whereas

[1:35:49] the collection um the collection rates have lagged have lagged behind um for

[1:35:56] lack of a better term. we hadn't kept pace with at the same rate as we had for

[1:36:01] the disposal. And so with that plan on the right hand side, you can see that we

[1:36:06] meet our reserve targets in all years of the forecast, which is that 180 days, as

[1:36:12] well as we're meeting our PL our landfill closure liability target.

[1:36:18] And so with the proposed rate increases that I just mentioned, that five and a

[1:36:22] half percent on disposal, that nine and a half followed by 3% on the collection

[1:36:27] side, um it this shows what a sample bill would be. So the first um the first

[1:36:33] section talks about the landfield tipping fee. That would be about a 12 uh

[1:36:37] $12.82 increase um over the next year. Um our

[1:36:43] residential access fee is about $1.50 per month. And then as far as the

[1:36:48] collection rate um increase, it's a$121 um per month with that nine and a half

[1:36:55] percent. And if we take the blended what a typical residential bill would look

[1:36:58] like, which would be our collection rate plus that residential access fee, it

[1:37:03] would it would be about $42.80, which would equate to about a $2.71

[1:37:10] um cent per month increase. So, I've talked talked pretty quickly um

[1:37:18] so far, but I do want to take a quick pause and see if anybody has any

[1:37:22] questions at this point.

[1:37:29] » So, one of the things that wastes do, they also subsidize any type of

[1:37:34] recycling. They don't have any um revenue structures to support

[1:37:41] recycling. And I think that in the upcoming

[1:37:47] fees that we going to probably end up having to start to charge

[1:37:51] something for commercial car should probably take something in

[1:37:56] consideration that the other thing I think that we need to considering rate

[1:38:01] is um

[1:38:06] we have uh customer

[1:38:11] virtual customers especially that need everyday services compared to uh weekly

[1:38:20] service or bi-weekly services. And there should be a rate structure that makes

[1:38:24] for that because in some cases they're using every square footage for

[1:38:29] commercial space and they don't allow enough space to accumulate garbage. So,

[1:38:33] we're having to go to that particular facility every day, which is more

[1:38:38] manpower uh that we're expending than we would for a weekly or bi-weekly

[1:38:44] inspection. Um, so those are some of the concerns

[1:38:48] that I have in regards to what we're doing with the rate structure that we

[1:38:52] have to look at it, make sure that we're charging equitably. I know in a lot of

[1:38:57] places they also have charges for carry out. If you're at a long distance from

[1:39:02] the the truck, then it's add manpower to do that that time and it should be

[1:39:07] compensated for um

[1:39:13] we all know what we had to pay for a new hook truck this year was $325,000

[1:39:18] for a vehicle. Garbage trucks are over 200,000.

[1:39:24] I remember when I used my garbage truck for $65,000.

[1:39:29] So, >> I'd love to tell you it's going down,

[1:39:32] but we were seeing some invoices like close to $4 to $500,000

[1:39:37] in some areas. >> And one of the things I don't see in

[1:39:41] here, I see closure money, but I don't see when we close this landfill, we got

[1:39:46] to replace it. And there's no capital

[1:39:51] fund that we're paying into for the potential of maybe we get away from a

[1:39:56] landfill completely and we ship everything using an ampad compactor

[1:40:01] or we have to relocate the existing landfill so that we could continue to

[1:40:06] dispose of our um you know demolition waste uh

[1:40:13] at a cheaper price than it would cost us of course to send it off island. And by

[1:40:17] that time the technology be may be such that we're incinerating or whatever it

[1:40:23] may be going to be in 25 years or we get into an agreement throughout Southeast

[1:40:29] Alaska that is a combined effort of all the communities for

[1:40:35] soloutheast Alaska that could be a cheaper option.

[1:40:40] But I think that um when this landfill closes out, we're going to have to have

[1:40:46] some funds available to move to the next step, whatever be. And I don't know how

[1:40:52] we structure that inventory rate or what we can estimate that cost at, but it's a

[1:40:57] real cost that's going to come to the city at some point.

[1:41:03] » Yes, Abby. In this proposed rate increase, did I totally miss like the

[1:41:08] commercial side of the increase or are we strictly only looking at

[1:41:13] residential income? >> No, there's commercial in here.

[1:41:16] » It's um we just showed a residential bill impact just um to look at what that

[1:41:22] would look like. Um the commercial bill is varied uh based off of the the waste

[1:41:27] generation. Um so the increase the collection increase would be to across

[1:41:31] the board to all both residential and commercial customers. Um the Timmy fee

[1:41:37] again across the board. Um but just for the purposes of the presentation we just

[1:41:41] showed a sample residential bill but we could calculate um what a commercial

[1:41:46] bill impact would look like. Um so you could see it too

[1:41:49] » to follow up your honor. >> Yes.

[1:41:51] » So just to make sure I'm understanding. So on page 33, all those rates are

[1:41:58] existingly structured. According to your proposed rate increase, the collection

[1:42:04] side of this, you're saying 9.5% increase for every single item that's

[1:42:11] here, right? And then on the disposal side, you're saying

[1:42:15] 5.5% for all the options. Okay. Thank you.

[1:42:26] So we have our contract already has a built-in multiplier for escalating every

[1:42:32] year. Is that correct? >> Yep.

[1:42:34] » And then unlike the lower 48, we put everything on a bargain that

[1:42:42] » which keeps filling up.

[1:42:46] Any

[1:42:49] questions?

[1:42:53] And so you said that we're going to have to do 9 and a half% and we could change

[1:42:58] that to eight. But then how many years out did that project?

[1:43:02] » 9 and a half% to 3%. Uh >> that was on the collection. You said we

[1:43:06] had to start at >> nine and a half. Yes.

[1:43:08] » Yeah. >> That would be the suggestion for the

[1:43:10] first year. >> That would be the suggestion for the

[1:43:12] first year and then we're going to move to eight%. moved to 3%.

[1:43:16] » 3%. Okay. >> Uh 3% um from 2027 to 2030.

[1:43:26] » It's not coming. >> Yes. Abby,

[1:43:28] » did we look again at the, you know, looking at different proposed increases

[1:43:33] on residents versus commercial instead of just one flat rate across everyone,

[1:43:40] every category? Just didn't know the other option. We had options. So, I just

[1:43:45] didn't know >> there are any other options.

[1:43:48] » So, we do have some other options. Um, maybe if I get into the RA design that

[1:43:52] kind of will might address some of the things that came up as far as

[1:43:55] seasonality in some of those commercial versus residential. Um, so some of the

[1:44:02] things that we looked at with the staff was we definitely heard we definitely

[1:44:05] understand that it's very highly seasonal a highly seasonal area and so

[1:44:11] and you're not alone in that. A lot of the municipalities on the coast, whether

[1:44:15] it's in southeast Alaska or whether it's even down in Texas, face those same face

[1:44:20] those same concerns, especially when it comes to waste generation because at the

[1:44:24] end of the day, the tourist leap when you have a lot a good portion of waste

[1:44:28] that's still there. And so something that we talked about was was addressing

[1:44:33] Mr. something that you had said was there

[1:44:37] are businesses in areas where there's a high level of service where where your

[1:44:44] your staff is going out seven days a week and more than that more than going

[1:44:47] out seven days a week they it's a highly manual process and where they can't get

[1:44:52] their trucks in certain areas and they they aren't able to to pick up pick up

[1:44:58] the cans and the trash in the same way that they would do a residential

[1:45:01] customer. And so something that we looked at was a backdoor collection. Um

[1:45:05] a back door collection which would be an additional fee on top of a commercial

[1:45:10] customer's monthly bill. And so that would be [clears throat] something

[1:45:13] that's charged from in from April to October which is designed to recover the

[1:45:20] cost of a service that you're already providing. um but would be a revenue

[1:45:24] generating uh what would turn into a more of a revenue generating um so

[1:45:30] revenue generating fee I should say and so and so that's something that would

[1:45:35] and I'm going to jump ahead just quickly um one slide is just to show you what we

[1:45:41] were calculating with that and so the goal is we're just trying to reflect the

[1:45:46] cost of providing the service that you're already doing like I mentioned

[1:45:50] before you guys are providing a high level of service to all your customers,

[1:45:53] but um but commercial especially especially when it comes time to the

[1:45:56] with the seasonality. And so we need to be able to cover the cost of staffing

[1:46:01] which also includes temporary labor. And so how do we this the overall system has

[1:46:06] to be designed to to maintain this level of service. And so what we did was we

[1:46:12] calculated a backward fee which is on the right hand side um of and we're

[1:46:16] trying to get to a monthly unit cost um for this service. And so what we did was

[1:46:21] we took uh we took a a labor rate which is a combination of a fully burned and

[1:46:26] hourly rate with an overhead allowance and then we were making calculation of

[1:46:31] what's the average time to just service a single cart in this area. And so if

[1:46:37] somebody has to go out and they have to they leave the truck they go out they

[1:46:41] pick up the can and they have to take the truck to the excuse me take the can

[1:46:44] to the truck. We estimated be about 60 about 60 seconds to do this. And so and

[1:46:51] just for just for reference for a regular if you were trying to pick up

[1:46:56] like on average just a residential customer that could take anywhere

[1:47:00] between 3 to 5 seconds to dump a to dump a can. So 60 seconds and is takes a long

[1:47:06] time, right? It's a big difference there and to provide this service. And so we

[1:47:10] were estimating the total cost like per pickup is about 50 cents um per per tip

[1:47:15] of the can. And so what we then did working with staff what we had looked at

[1:47:20] was how many pickups do you have in these in these areas from April to

[1:47:25] October and in your high season where you're having seven days a week service

[1:47:29] because the service will drop off as we get into

[1:47:34] » into the slower months. uh we average about 17 and 3/4 pickups or trips per

[1:47:41] month. And so what that equates to is a monthly unit cost of $9.76.

[1:47:48] And so we were working with staff. We were we would propose that there is this

[1:47:53] alternative collection rate for this backdoor fee service to reflect that

[1:47:58] cost of providing this service in those seasonal months that would be targeted

[1:48:02] at those commercial customers where this service is provided. Um and so that was

[1:48:07] one thing that we did look at um to protect our uh to more accurately

[1:48:16] allocate the cost of providing that high level of service.

[1:48:23] The other thing that you got to realize too is we have no

[1:48:27] um volume control uh in the residential

[1:48:34] area. The guy gets the same garbage bill whether he had one can or four cans

[1:48:41] and there so that the guy that's using four cans is getting the real deal. The

[1:48:46] guy had one can is paying the standard range.

[1:48:50] You may want to think about whether or not we're going to go to a per can

[1:48:54] charge rather than just a per unit charge.

[1:49:01] » Didn't we used to go didn't we used to have a unit per unit charge?

[1:49:06] » We have a per can charge for commercial R not

[1:49:10] » but not local. We don't charge per can at gas. No, never we never done a can

[1:49:18] » and we use 90 gallon cans I think is what they are now but the average can

[1:49:24] rate for residential are 32 gallon basis and that's what the national standards

[1:49:29] they but u you know we're receiving those

[1:49:36] that waste that's costing us money uh landfill volume is where it's at. How

[1:49:42] much can you pack into a cubic yard of land to That's where you make your

[1:49:46] revenue. If you're you waiting your space and you're only getting 400 lb to

[1:49:51] a cubic yard, you're waiting that landfill. If you use a compactor and get

[1:49:55] it to 900 to a,000, then you extend a life to your landfill. You're not going

[1:50:00] to have it. So, the volume coming in should cover the cost of compacting it

[1:50:07] and extending your life in your land. Yes. U if we were to go to like a a

[1:50:15] charge by the can, who would be responsible for collecting and reporting

[1:50:17] that data? Would that be on the collections team or

[1:50:20] » Yeah. Well, the thing is is that we're we provide the cans to the house right

[1:50:25] now and they're expensive can you because we got to ship them up by volume

[1:50:29] and all. So, we pay a lot for cans. So, we know exactly how many cans are out

[1:50:35] there and they all have serial numbers and we can know which which can is

[1:50:39] which. But that would be a standard thing that we'd put in. The collector

[1:50:43] knows exactly how much he's picking up at the house. And if somebody or another

[1:50:47] can they come city, we put it on their in their buildings.

[1:50:51] So as you know, if they only use one can, they only get bill for one can. If

[1:50:55] they got two cans in there and they don't fill one,

[1:50:59] they they shouldn't get a charge for that, right?

[1:51:04] A lot of community, we can't do it here because it's very popular stuff. They go

[1:51:08] to a blue bag. You get a standard can 90 gallon can and any extra garbage filter

[1:51:12] in a blue bag and you get charged by the bag and you pay you pay for the bag up

[1:51:17] front.

[1:51:20] Yeah. I hesitate to even bring this up because I don't want to say something

[1:51:25] that would [laughter] be critical of our charging

[1:51:29] system and I know the whole point of all this is to collect more money. But on

[1:51:34] kind of that same line of thinking and correct me if I'm wrong, but my

[1:51:37] understanding is uh if you are in an efficiency apartment at a complex that

[1:51:43] has say more than 10 units and there's two dumpsters outside

[1:51:49] uh and you're one person in an efficiency apartment presumably using a

[1:51:53] very minimal amount of garbage. Your garbage bill is the same as a household

[1:51:58] full of eight people with three cans outside that are only getting charged

[1:52:03] one. So, >> uh, like I said, I don't want to bring

[1:52:07] up too many gripes here or anything, but there are plenty of areas to improve

[1:52:11] upon. >> Yeah.

[1:52:12] » And I hate to say that cuz the answer is always since the '9s.

[1:52:16] » The [laughter] answer the answer is just like the water rates, it always ends up

[1:52:19] with everybody paying more. So, that's why I hate to even bring it up, but I

[1:52:23] just wanted to throw that in there. >> We used to have a 35gallon can I think

[1:52:27] that they could do something with. No, those are those are two stories, but I

[1:52:32] think like we do something special at the towers because it's a centralized

[1:52:38] collection with a compactor which is different. It might have a different

[1:52:42] rate per unit there, too. So,

[1:52:49] [laughter]

[1:52:52] » just covering your cost. We don't we're not looking to bank a whole bunch of

[1:52:55] money. We just want to cover cost. That's all we need to do. And so and and

[1:53:00] solid weights are pretty fixed. You don't

[1:53:04] no other way to get rid of gar. >> Well, and like you said, we have to also

[1:53:09] consider 25 years is going to come fast. >> It is.

[1:53:13] » And we have to have a plan and we have to have the capital to you don't. So

[1:53:20] [laughter] >> some of us will Jen will be here.

[1:53:25] » I'll be here. [laughter] My family's got longevity.

[1:53:30] » So, u but yeah, these rates are realistic. I I

[1:53:36] » I worked for a land pill for no year understanding

[1:53:41] costs. >> So, I would just say the other other

[1:53:45] things that we did look at was having specific rates for your high usage

[1:53:50] customers um to really target that higher level of waste generation. Um for

[1:53:55] example, like the pork Um so right now um I believe the city it's not just one

[1:54:02] fee for the port it gets charged your commercial rate and so versus and that's

[1:54:08] and so in some areas where they have high level of seasonality or they have

[1:54:12] these large large users like whether like in other like large cruise ship

[1:54:18] terminals um I know that the cruise ships can't can't drop their waste off

[1:54:23] here necess all their waste in the ship necessarily but they generate a lot of

[1:54:26] waste in general. general on on shore and the commercial businesses do. This

[1:54:30] is something that other municipalities have looked at um both in the area as

[1:54:34] well um as in the lower 48 on the coast. Um we we talked about um that with city

[1:54:42] staff. The other thing being on the disposal rate, we would suggest that

[1:54:47] because your fees are so highly connected to your long haul contract

[1:54:51] that at a minimum there should be a pass through provision on your disposal rate.

[1:54:56] um that's tied again at minimum of the increase in your contracted rate. And so

[1:55:02] anything so that would be an automatic pass through and then there um if for

[1:55:07] [clears throat] anything again large increases in overall costs with

[1:55:11] inflation um anything like that on the disposal side that that would be an

[1:55:15] additional rate but at minimum you would have that pass through of what that

[1:55:18] contracted cost is and again as a reminder that's about 40% of your

[1:55:23] overall budget is that long haul contract uh which which encompasses a

[1:55:29] large portion of the overall And then as mentioned again previously,

[1:55:35] we would recommend a separate landfill closure fund um to make sure that your

[1:55:39] cash balances are being set aside to target that calculated closure and

[1:55:43] postclosure care liability to avoid any rate shock for future customers. Um

[1:55:48] that's something that we would recommend having levelized levelized annual

[1:55:53] deposits um over there. We know that in 25 years and in this between now and

[1:55:57] then, you'll be thinking of other possible routes to go down for what to

[1:56:02] do when the landfill closes. But in the meantime, we would recommend having a

[1:56:06] separate landfill closure fund and having those funds restricted. Um that

[1:56:10] way you don't burden future rateayers for assistant that they did not.

[1:56:17] » There are some fees that aren't or services that provide are here. We do

[1:56:22] construction and demolition pickup. And I assume that the rates were applied

[1:56:27] to the cord evil. >> Yep.

[1:56:37] » Yes. And >> I'm in the blind spot tonight. Don't

[1:56:39] worry. Um, can somebody remind me how much it costs to buy one of the bear

[1:56:46] cans?

[1:56:49] » Is it 180? Yeah, >> like a can or

[1:56:53] » new ones are really nice. I finally got [clears throat] one.

[1:56:56] » Good evening. >> Can't remember your report.

[1:56:57] » Honorable mayor and council members, Seth Brachie, public works director and

[1:57:01] engineering manager. Uh, thank you for the question, Council Member Bradberry.

[1:57:05] So, our new uh bear resistant bear resistant cans are um we have 210 of

[1:57:13] them on the way right now and they run about uh $350 a can. Um, we don't sell

[1:57:20] them to the customer. We rent them out uh very similar to how we do uh all of

[1:57:25] our other cans. So, you we have a $10 a month bear can fee and that covers the

[1:57:32] cost. We have a payback period for the can to cover our cost there. So,

[1:57:39] [clears throat] >> so

[1:57:42] if you have a $10, so after three and a half years of having that bare can, then

[1:57:47] that rental fee goes away and it just goes into the regular

[1:57:53] collection fees or will it remain forever?

[1:57:58] » Um, so it's >> because you just said it. Yeah,

[1:58:00] » remember. So, yeah, that's what we we figured it on a three-year return

[1:58:05] period. Um, we need about we have about 3,500

[1:58:10] cans in out in the residential system and we've only bought about 260

[1:58:17] bear can so far. So, um, it's not our anticipation to have every house have a

[1:58:24] bear can. That's not the plan at all. So, but back to the return period. Um,

[1:58:30] you know, I think these we want to see how they last. Um, we anticipate some

[1:58:36] bear bites and some damage that way. Uh, and then we can adjust from there if we

[1:58:42] need to. >> So, you're testing them out in a good

[1:58:45] spot, huh? >> They're in, uh, so far they're going

[1:58:48] right to the hot spots, right in the danger zone. [laughter]

[1:58:52] » Yeah. So, just to follow up on that, maybe I misunderstood. So, it's $10 a

[1:58:57] month rental fee to pay these things off. Is it So, if you're in a if you're

[1:59:02] a problem person whose garbage gets

[1:59:07] into by the bears all the time. You someone from the city contacts them,

[1:59:14] sets this up, says, "We have these new cans. We'd like you to try and their

[1:59:18] bill goes up $10." And I guess the answer I was looking for, I didn't quite

[1:59:22] hear was after the three-year period, does your fee go back down $10 or how?

[1:59:27] Just out of curiosity so I understand how it works.

[1:59:31] » Thank you, Council Member Gas. to clarify, as long as you have a bear can,

[1:59:36] you'll pay the bear can rental fee. >> Okay?

[1:59:39] » So, we have to make sure we cover our cost, have replacement cans

[1:59:44] there. >> So, if you get a new bear can, you're

[1:59:47] going to see $10 a month more than if you have the old can.

[1:59:50] » So, a key component of that is we have a lot of customers that do a good job of

[1:59:56] keeping their garbage taken care of. They either keep the bag inside and

[2:00:01] don't put it out until the morning of their collection or they have a garage

[2:00:06] or they have some sort of enclosure that they've spent money to build. Um, so we

[2:00:12] didn't want to punish those customers because they're doing what the catch can

[2:00:16] municipal code says they're supposed to and that's a good thing.

[2:00:21] But for some folks, they're just they don't have a garage or they don't have a

[2:00:25] place to store it. So, we want to be able to offer this as an option rather

[2:00:31] than just saying, you know, this is uh you know, we're here all the time

[2:00:36] because bears have been hitting your can repeatedly. You know, we want to have an

[2:00:40] option there for customers to go to that was still reasonable for cost.

[2:00:46] » But so, just to ask again, if you have the new can, it's $10 a month more than

[2:00:50] the people who don't. Is that correct? >> Correct.

[2:00:52] » Okay. Thanks. And and the other option is there is an

[2:00:57] ordinance in place where they can be fined for not taking care of the

[2:01:00] garbage. >> I think it's 200 bucks or something like

[2:01:03] that. >> At least you do that. We don't

[2:01:06] » Yeah, we don't >> we still have it, but we can

[2:01:08] » don't find anything. [clears throat] >> Um and then do we have any recovery

[2:01:13] costs associated with our regular cans? >> So that's built into the rate currently.

[2:01:22] Um, you know, one thing, so we we've done a pilot program with these beer

[2:01:26] cans, and uh, our residents have commented they're happy to pay that $10

[2:01:32] fee if it means they're not out picking up the garbage off the street or from

[2:01:37] from the wooded area next to their house. That's one of the worst things

[2:01:40] » Yeah. >> to do. [laughter]

[2:01:42] » If you asked, there'd be some neighbors that'd be willing to pay that $10

[2:01:47] [laughter] >> for them. Yeah.

[2:01:51] Thank you, Seth. Any other questions?

[2:01:57] Any followups? [clears throat]

[2:02:00] » That concludes your presentation. >> Yes, I believe it does.

[2:02:06] Time to wrap up. Thank you so much. I know a lot to get through. Appreciate

[2:02:11] your patience. >> Yeah. And I I think everybody's going to

[2:02:15] do some reading on this and research as we go through this. Um and at some point

[2:02:21] we will be asking the council how beneficial is this because we still have

[2:02:25] water and sewer rates that we have to get through maybe harbor rates and

[2:02:29] whatever other rate structures we're looking at.

[2:02:32] » So your honor on the subject of water water and wastewater rates. Um that's

[2:02:37] something that we won't tackle until probably later in the year if at all. Um

[2:02:42] again because it's highly dependent on getting our commercial water meters

[2:02:46] installed and that up and running and having the data to support a new grade.

[2:02:49] » Yeah. But that's down the road we're going to have to take.

[2:02:51] » It is. Yeah, absolutely. I mean there's we have we have a slew of great needs,

[2:02:54] but we're starting with with electric and solid waste.

[2:02:58] » I appreciate it. >> Yeah. Just one question about where we

[2:03:02] are in this process with Raphelis and I appreciate the presentation that you've

[2:03:05] given and being here in person that really helps a lot just for discussion.

[2:03:08] uh if if we're in a position now where the council is going to discuss some of

[2:03:11] the uh some of the findings that have been presented to us, do we have the

[2:03:16] opportunity to give feedback to Raph Talis and continue the discussion about

[2:03:21] how best to structure these rates or this is sort of what we're working with

[2:03:24] at this point? >> No, I think we relay our concerns and uh

[2:03:28] suggestions to the manager's office, the manager can work with him to get us

[2:03:32] answers back on that. >> Great. Thank you.

[2:03:36] » Anything else? I appreciate it. This is really good information and I appreciate

[2:03:41] the breakdown. Thank you.

[2:03:46] » So with that, do I have a motion to come out of uh the work that regular session?

[2:03:52] » I move the city council reconvene into a special meeting.

[2:03:55] » Second. >> Been seconded. Madam clerk, would you

[2:03:59] please call the role? >> Yes.

[2:04:02] » Yes. >> Binigan.

[2:04:04] » Yes. >> Bradbury.

[2:04:06] » Yes. Gage, >> yes.

[2:04:08] » Cuz >> yes.

[2:04:09] » Matani, >> yes.

[2:04:10] » All right. >> All right. Is there any other business

[2:04:13] before us? Any comment, question? >> Yes.

[2:04:19] » What do you have? I'm sorry. I don't know. Uh I didn't quite realize we were

[2:04:24] jumping out of things. Uh so we have these recommendations, these

[2:04:30] various plans. uh given that this was a lot of input or

[2:04:35] a lot of energy that went into this and everything. I mean I guess I'm asking

[2:04:41] you what what what is our next step? I mean but we got to discuss which

[2:04:46] scenarios we want to look at doing. >> This meeting is being transcribed and

[2:04:50] summarized. >> I guess I don't want to just I don't

[2:04:53] want to just break and call it a day and then forget about this. So what's kind

[2:04:57] of our way forward here? Well, I think what we were going to want to do is have

[2:05:01] staff boil this down and bring it back to us with a rate structure for the next

[2:05:04] five to 10 years that we can look at and then the council will have to decide

[2:05:08] what action they want to take to move forward with that. That be appropriately

[2:05:13] » we can do that. I mean I I think your honor um there was some good things that

[2:05:17] were mentioned tonight that I think staff would like to talk with with refus

[2:05:22] to see if there's yet even more possibilities. There always are. Um, so

[2:05:27] it might warrant a future discussion and presentation. I mean, the the end goal

[2:05:32] here, of course, is to come up with a rate structure that we can memorialize

[2:05:35] in an ordinance, and we're not there yet. Um, I don't think there's consensus

[2:05:39] on what that rate structure looks like to achieve the the revenue increases

[2:05:44] that we need for both of those utilities. So, I I for me, I think we'd

[2:05:48] like to talk more with Raph Telus and do a little bit more brainstorming based on

[2:05:51] some of the things that we heard tonight. I think if there's additional

[2:05:55] thoughts or considerations that council members have, you can relay those to

[2:05:59] myself or Sean and we can continue to have dialogue with Rafelis.

[2:06:03] » I would like to have further conversations on how we manage the big

[2:06:07] electrical project and how they fit into our capital plan because I don't want to

[2:06:10] overbudget. I don't want to overrate in regards to not knowing what the exact

[2:06:15] need assessment is on that. So >> maybe the action would be before we put

[2:06:19] them into capital program, we do a needs assessment. Oh, absolutely. Yeah. Yeah,

[2:06:24] there's definitely some preliminary work, but I think for the purposes of um

[2:06:29] you know, the capital improvement program that we have, which is a

[2:06:31] five-year horizon, which is what we gave Raphelis, so they're just working off of

[2:06:36] that. But I I totally agree and now that we have a new electric division manager

[2:06:40] to reassess those priorities and shift things around. Um, but again, even

[2:06:46] though we come up with maybe a five-year horizon,

[2:06:50] perhaps we're only doing those rate increases year-over-year. So, it gives

[2:06:53] us time to recalibrate as the big capital improvement programs shift.

[2:06:58] » I'm sure that our new utility manager as he gets his feet on the ground is going

[2:07:02] to have other suggestions in regards to capital investment and how we do those.

[2:07:08] So, I appreciate all that. Yes, Abby.

[2:07:12] » I briefly mentioned it earlier about the electric, but uh or to the mayor of

[2:07:18] electric. Um I guess for me and any of the rates

[2:07:23] increases that we're doing is we have an opportunity to provide relief to our

[2:07:30] residents. Um even though we need to have a gain, we're asking a lot of our

[2:07:35] citizens. We hear it. You know, they've come to the podium and talked about all

[2:07:39] the concerns and the costs. We're increasing sales tax, increasing the

[2:07:43] cap, increase, you know, property tax, mail rates, you know, all these things

[2:07:47] are starting to add up and just the cost of living here. And I really want us to

[2:07:53] consider that. And this now that we're actually planning long term instead of

[2:07:57] just putting out a fire today. I'm really looking at how can we positively

[2:08:03] impact our residents even though they're the bigger biggest users. Totally

[2:08:06] understand that both solid waste and this. How can we positively impact them

[2:08:12] as a way of giving like you know a thank you for allowing us to continue to make

[2:08:17] as much revenue as we do off of, you know, technically their front front

[2:08:22] door. And so I really would like to to hopefully see something more

[2:08:28] even or more in favor of the resident side. I understand commercial we need to

[2:08:33] support economic growth and things like that, but we're also hearing our

[2:08:38] citizens say enough is enough. Um so commercial growth maybe doesn't go

[2:08:42] handinhand with what our citizens are wanting. But also you mentioned the

[2:08:47] average rate for electricity you know is 17 cents and you know under these

[2:08:54] proposed rates you know they're at 12 cents when our citizens are at 16 14 or

[2:08:59] 16 depending on what tier you know maybe we need to look at flipping that um

[2:09:06] to really incentivize you know our citizens you this is a great place to

[2:09:10] stay keep our resident number instead of downfall trajectory that we're in for

[2:09:15] customers. But that's just something that in all the rate studies that we do

[2:09:20] in the future and whatnot, I really would like to look at that opportunity

[2:09:23] because we do have it here in front of us as we're planning in the long term.

[2:09:28] » Thank you. Any other comments?

[2:09:32] We'll move on to mayor and council comments.

[2:09:35] Abby, >> none.

[2:09:38] » Jan Lee. Yeah, I just have I really appreciate

[2:09:42] this. This gives more clarity to a few things. I think um one of the things I'd

[2:09:47] like to see uh in the future and I think council um we all need to consider the

[2:09:54] next we have to think nine generations up

[2:09:58] in the back of our minds. we have to consider the people, the generations

[2:10:03] that'll be here in the future and um having a plan in place and I mean and

[2:10:11] making sure that the community also understands that you know that

[2:10:17] as much as I wish things would go back to what they were in the 80s and 70s and

[2:10:21] 60s um cost of everything is it will continue to go up. It's there's no um

[2:10:29] going backwards in a lot of ways. Um, but I I was I found this to be very even

[2:10:37] with that 5% increase, I thought, you know, I was like, I could do a dollar,

[2:10:43] you know. I mean there's I mean there's some things that I think um

[2:10:49] can happen and flip the script when it comes to our um commercial and and um

[2:10:56] even our seasonal commercials that come here that do impact our our

[2:11:01] infrastructures um and they put a lot of attacks our systems majorly and and how

[2:11:08] do we capitalize on that because that's the only way we're going to um even out

[2:11:13] the um cost on the if those of us who live here, you are out. Thank you.

[2:11:21] Appreciate it. >> Yeah.

[2:11:24] Got two comments. One, thanks folks for coming. And second, uh

[2:11:31] the uh the landfill 25 years that's tomorrow.

[2:11:36] » Yeah. And we can sit here and talk about it. But if we don't start thinking now,

[2:11:41] there may not be a place. And you might even some of you may remember Tom Coin's

[2:11:46] place on Gina. I don't know whether it's viable or not, but he had a place. But

[2:11:51] if we don't start thinking now, any land that's available isn't going to be

[2:11:54] available. >> So maybe not this year, we'll let Lacy

[2:11:59] get gone for a couple years, [laughter] but keep it in the back of your mind.

[2:12:04] Um, the other one is on the electrical. Um, rates are going to be rates. And

[2:12:12] like I said earlier, I don't want this town going out of power. I've lived here

[2:12:17] long enough that I know when the power goes out, it can be gone for three or

[2:12:21] four days. And if we stick our head in the sand and

[2:12:24] we don't appropriately look at the generator and the transformer that we're

[2:12:30] talking about at the right time, they'll go out on us

[2:12:35] and I'll guarantee you how many years it takes to replace one. You could order it

[2:12:40] and have the money and it's going to take you three two years to get one. So,

[2:12:44] as we do rates, keep in mind that's got to be there at some point in time.

[2:12:50] That's all. Thank you Jay.

[2:12:54] » Thank you your honor. Thank you for your presentation. It opens up a lot of

[2:12:58] possibilities and opens up a area where we can protect our residents. I mean I

[2:13:04] still believe that the commercial, the harbor and the industrial need to pay

[2:13:09] more so that we have relief for our long-term and yearround residents.

[2:13:15] Away from this uh we had the ports and harbors meeting yesterday. There was a

[2:13:21] resolution that is forthcoming but however that's at a

[2:13:26] meeting when we come back from AML in Juno.

[2:13:30] The resolution is and was that we approach our

[2:13:35] state representatives uh Senator Steedman and Representative Binham.

[2:13:41] Talk to them about the fish tax that is going into to the state that needs to

[2:13:48] find its way back. They've given us the harbors. However, they has have not

[2:13:52] given us any maintenance uh subsidies. They want us to bring that uh to our

[2:13:58] representatives and see what we can do about it and also bring

[2:14:04] through the corporate relations committee to the bureau to see why the

[2:14:08] bureau is getting 280,000. We we are getting 219,000.

[2:14:14] That was not the case up to two years ago. So we want to find out whether it

[2:14:17] is a bookkeeping mistake or what happened there so that we get enough of

[2:14:21] our tax revenue because all our commercial fishing all our fishermanmen

[2:14:25] all our process processes are in the city. That's all I got. Thank you.

[2:14:29] » Thank you Jay Jack. >> Thank you your honor. I'm going to echo

[2:14:32] a couple of things that council member Cous uh mentioned and just um add one

[2:14:36] additional thought there. First is again I appreciate the presentation. I don't

[2:14:40] think we'd ever have been able to develop these kind of nuanced findings

[2:14:43] on our own. So, uh, really appreciate that work and seeing a couple of

[2:14:46] different options for each of these funds. Second, on the notion of the

[2:14:50] landfill, u, Mr. C spoke to the question of where we might put an additional

[2:14:54] landfill in the need of one, and the mayor spoke earlier about the fact that

[2:14:57] we don't really have any funds set up in that regard. So, I think that's

[2:15:00] something that's going to be just as important if we think about where we

[2:15:03] might put a future landfill. We're going to have to start saving for that now.

[2:15:06] whether it's a you know a penny on the dollar that putting [clears throat]

[2:15:09] aside going forward that's uh it's not going to be a small uh expenditure and

[2:15:15] the sooner we start saving for that the better and I don't know if that's

[2:15:17] something that can be factored into the great considerations that you're making

[2:15:21] uh but I would certainly be keeping that in mind. Thank you.

[2:15:25] » Thank you. I think uh the presentation is worthwhile. I think it

[2:15:32] we've we've been working on this for years and trying to figure out how to

[2:15:36] make it equitable and beneficial and not create great shock and yet cover the

[2:15:42] needed costs that we have with the operations and capital budgets that are

[2:15:48] our our our [clears throat] finance division and

[2:15:52] managers have talked to us over a long period of time about how we do this and

[2:15:58] uh we up and catch up to June, but incremental raises I think are the way

[2:16:02] to do it rather than all solid

[2:16:10] and I but the information that they ret like said there's some items that they

[2:16:18] want to flush out before they bring it back to us in regards to how we move

[2:16:22] forward

[2:16:26] change or structure and how we're going to do that and Ley, if you could kind of

[2:16:30] give us a an idea how this process should move forward in a timely manner

[2:16:36] because there are some steps we need to do before we get there. I appreciate

[2:16:39] that. >> I guess right

[2:16:45] [laughter] last uh I echo what everybody said. I

[2:16:50] appreciate the time. Also appreciate that you guys came here in person. That

[2:16:54] I think says a lot. So thank you for that. be interesting to see what we end

[2:16:59] up coming up with. It's good to have some options. So, so, uh, yeah, it'll be

[2:17:05] interesting going forward. Uh, on a slightly different topic, but Dick

[2:17:10] mentioned the possibility of, uh, a landfill like Ravina someday. So, that's

[2:17:15] how I'm going to tie this in. Uh my understanding is on the uh contest for

[2:17:20] the tunnel proposal that's been made by Assemblyman Dial uh that it's been

[2:17:27] brought to my attention that it would be helpful to have as many uh letters of

[2:17:32] support to that group from presumably members of the community and such. Uh,

[2:17:38] so I was going to follow up with you, mayor, to make sure that it's

[2:17:41] appropriate if if we do it, not, you know, as long as we state that we're

[2:17:45] just a citizen or whatever. But, uh, I would encourage anybody who maybe would

[2:17:51] be interested in some better access to Gina to submit your letters. I think I

[2:17:55] saw we have till the 23rd. So, um I think it'd be pretty cool if a whole lot

[2:18:00] of people did that and really shined a bright light on us cuz uh my

[2:18:05] understanding is it would be a free thing that uh this company is doing as

[2:18:09] an advertisement type thing and it could really open things up for more

[2:18:13] development over there. So, anyway, with your permission, I'd like to submit a

[2:18:18] letter and absolutely encourage others to do the same.

[2:18:24] » Sounds good. Anything else? Ajourn

[2:18:31] hearing

Regular City Council Meeting

Transcript