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I'd like to call to order the special
meeting uh work session.

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» This meeting is being transcribed and
summarized

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» for the electric and solid waste rate
review February 12th. Would you please

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call the vote?
>> Hake here. Goose

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» yes.
>> Montani here.

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» Bradbury here. Gas
>> here.

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» Finnegan here.
>> Z

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» here. Please rise forgiance

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to the flag of the United States of
America and to the republic for which it

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stands. One nation under God,
indivisible with liberty and justice for

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all.
>> Thank [clears throat] you.

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The Ketchan city council would like to
respectfully acknowledge the traditional

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first people of this land of Ketchan,
the Thomas people.

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Moves us on to item three, which is
person to be heard. Do we have anybody

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to speak to the council tonight?
>> No, your honor.

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» Bring us item four, new business request
for a work session to receive a

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presentation on solid waste and KPU
electrical climate plan strategies and

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rate study services from Rap. Do I have
a motion? I move that city council

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recess into work session for the purpose
of receiving a presentation on solid

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waste and KPU electric financial
planning strategies and rate study

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services from Afgh and to provide
feedback and direction on the presented

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information.
Do

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» I have a second? Second.
>> It has been moved and second. Lacy

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» uh your honor and members of the
council. Uh tonight we have uh

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representatives from Ref Telis Inc.
which is the firm that staff has been

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working with over the last several
months um pursuant to council direction

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to do some financial planning for the QP
electric division and the solid waste um

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division of public works. Um we started
this process back in the fall. Uh it's

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it's been a long time in the making. We
were um a little way laid with the

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budget process, but we have been working
with Reptelis um to provide them lots

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and lots of information, historic
information on our budgets, on our

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rates, on our future needs, our capital
planning so that they can do um a nice

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dive into the financial needs of both of
those utilities. Um so tonight we have

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Bart Kreps who is our the executive vice
president of Raf Telus and also Sarah

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Neely um the um senior vice consultant
or senior consultant for Rafelis.

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They've kind of been the principal team
that we've been working with um for both

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electric and solid waste planning. Um
they did provide a highle summary

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document to the council which hopefully
you've had a moment to digest. But

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tonight they'll be going into further
detail um on on what they have found and

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and looking at both of those utilities,
what the outlook is financially for both

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of you those utilities and ways to
address some of the financial shortfalls

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as we look ahead to both operational and
capital needs. So with that, I will turn

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it over to to Bart and Sarah. Thank you
for being here. into work session.

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» Okay. So, we'll uh vote on going into
work session.

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Madam press
>> Bradberry.

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» Yes.
>> Gage,

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» yes.
>> Absent. Cous.

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» Yes.
>> Matani

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» here.
>> Gas.

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» Yes.
>> And finan.

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» Yes.
>> Thank you.

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» Thanks. Yes. Continue.
>> Sorry. Uh your honor, just um before I

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pass it over to um Bart and Sarah, I
just wanted to add as the council will

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recall when staff first identified
Rafelis,

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um they were they were affirmed that the
finance director had identified um as

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one that really specializes in this type
of work, especially for municipalities

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and looking at different utilities and
their long-term financial needs and

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planning. Um they've done this work for
municipalities all over the nation,

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including Alaska. So, um, looking at an
electric division or solid waste is is

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nothing new to them. Um, I think they
recognize now some of the unique

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challenges that Ketchacan has. Um, as we
look ahead to capital, not only in terms

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of what our our challenges are as
utilities, but what some of those bigger

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hiccups are being on an islanded
community in Southeast Alaska. So, I

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think they're I think they've been
responsive to that and are really trying

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to present um a good overview of these
two utilities going forward and also

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some solutions on how to to stabilize
and get those into a more positive

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financial position. And with that, I'll
turn it to B.

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» Excellent. Thank you so much and thanks
to all of you for having us here. It's

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it's wonderful to to be here in person
and get to visit with you. Um so, we

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have a lot of material that we're going
to walk through. Um, so kind of bear

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with us. Um, but, uh, really happy to
visit with you and kind of talk you

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through our analysis and share some of
our filmer mirror results and really

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kind of get your feedback and certainly
ask questions along the way. Wouldn't it

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

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agenda,
so we're kind of breaking this into two

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

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electric system and the solid system.
And so, um, within both of those, we're

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going to kind of cover two main
elements. We're going to talk about kind

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of the financial planning elements,
which kind of gets into kind of the

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forecast of our revenues and expenses
and things like that. Um, and then we're

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also going to talk about some options
around rate design that gets into kind

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of how we price our services. We have a
current rate structure that we use now

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and then some options to think about um
potentially going forward. So I'm going

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to kind of shepherd us through the
electric system and then my colleague

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Sarah is going to talk about solid
waste. Um that's kind of how we'll set

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things up.

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So um
just kind of before we get going um you

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know one of the sort of basic tenants
that we use when we do a study like

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this. So um you know the electric system
kind of falls under um Ketchan public

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utilities solid is on the umbrella of
the city but we look at them both as

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utilities and effectively as enterprise
funds because they're funded with user

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charges. So it's different. They're not
funded with taxes. are funded what user

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charges. So we really look at that
through the lens of kind of like a

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business. In business you have costs and
you have revenues and you got to recover

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those costs. So that's kind of through
which the lens that we look at things

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because we want to make sure that these
utilities have the cost structure in

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place and the revenues in place to make
sure we can continue to provide safe and

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reliable services. That's what we
ultimately want to do.

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

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pieces. Um when you look at the um
financial planning elements more broadly

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really what we're we're doing is kind of
assessing the sufficiency of the revenue

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stream. So it's not looking at not only
where we are today but where we're going

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into the future and what the current
rates look like and how those compare

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against costs see the sufficiency of the
revenue stream to see if we need to

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actually raise revenues to be able to
address those costs. Um, when it comes

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to the rate design elements that we'll
talk about, we're going to be focusing

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on the same level of revenue, sort of
how you get the revenue, it's a little

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bit different when it comes to your
pricing structure. And what we're trying

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to do there is to offer some suggestions
to maybe optimize that to try to align

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with some of your objectives and some of
the things that we heard kind of early

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in the process that would be um
important to you.

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

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electric system. Um when we look at the
electric system financial planning, you

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know, one of the big drivers that we
notice right away because one of the

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pieces of information that we ask for
and quite frankly one of the big drivers

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of rates typically is capital capital
investment. So the electric system has a

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capital improvement plan. A lot of costs
associated with that. So part of the

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role that we have is kind of looking at
that. how are you going to finance those

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improvements that you need to the system
and that really is a big driver of

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rates. Um and we look at that um we also
think about more broadly what kind of

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financial policies that we should have
with things like what reserves do we

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need if we need to borrow money things
like debt service coverage becomes

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really important. So we'll talk about
more of that later, but we kind of look

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at um solid sound financial policies
that should go along with funding that

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capital program. Um for the electric
system on the raid design side, again,

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you know, focusing on the same financial
sufficiency, but also some of the

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feedback we had heard was really trying
to think about affordability service as

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best we can with some emphasis on the
residential customers in particular to

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

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and address some of those objectives.

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Okay. So, we're going to get into the
financial planning elements first. And

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um
this is a nice graph. I'll kind of break

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it down to you a nice table, but what it
basically says, the financial plan,

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think of it as kind of the road map. So
it's basically coming in taking a look

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at where we are today as a utility from
a financial perspective and then laying

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out that projection of where we're going
to go. So that means we have to think

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about revenues, how those revenues would
change. That looks at kind of our

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account some information. Then we look
at our costs. We look at our operating

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expenses. We look at our capital
expenses.

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How we're going to finance those capital
expenses. And remember I mentioned those

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financial policies. So when it comes to
how much money we keep in the bank, debt

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service covered as I mentioned, that's
kind of the glue that holds the

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financial plan together at the end of
the day. So we have to think about all

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these different elements when we're
doing a forecast because we're really

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big on planning and looking at what's to
come. Not just where we are, but what's

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to come. That's really kind of a basic
tenant of how we look at things.

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So I'm going to go a little bit deeper
into the financial plan. kind of talk to

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you about how we did the forecasting.
So in terms of our operating expenses um

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so what we're using as kind of a
baseline for operating expenses is the

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26 budget numbers that we received from
staff. Um so we have made some

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assumptions about um escalation of those
costs going forward. It's about we've

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assumed about 3% on most of the
categorical costs. Um there is a big

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component of our operating expenses
that's related to purchase power. So in

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the electric system we generate
basically about 45% of our power roughly

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and we purchase about 55% of the power
from SEIPA and we have a contract with

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SEA. It's kind of a complicated contract
but effectively it kind of breaks down

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as um we generally pay based on kind of
an a rate per kilowatt hour based on a

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firm commitment with them. Um so we've
assumed that that rate actually gets set

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annually but we have assumed that that
would increase at about 3% going forward

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for planning purposes. So and we've
assumed the same sort of composition of

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what we generate versus what we
purchased in the basically looking at a

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five-year forecast period.
So that's operations at a high level. Um

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so capital when I say capital costs and
this is kind of things that I'm

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referring to. So, we have debt service.
We have existing debt on the books right

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now. We have um one piece of debt on the
electric system. It's effectively a

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revenue bond. Um that debt actually
rolls off in 2032. So, the not too

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distant future, but a little bit beyond
the window we're looking at, but it is

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something to think about in the future.
It's about a million dollars in

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principal interest payments we make on
that. That does roll off. But based on

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the size of the capital program that I'm
going to walk through, we are looking at

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potentially to borrow to fund some of
those projects. So again, we would also

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be looking at layering on additional
debt to be able to address those needs.

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Um, as we look at the capital program,
you know, on the electric system, we're

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looking at about $115 million over the
next five years in capital. There's kind

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of a myriad of projects that go into
that. you a really large project that's

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replacement of the diesel generator
that's um quite old and needs

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replacement. We have replacement of
substations that are in there as well

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and then just ongoing kind of
reinvestment in the electric

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distribution system. So um pretty
sizable capital improvement plan that we

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have to address for the next five years.

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» Yeah. So talking about that larger
diesel generator and the rebuilding of

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the substations,
those are extremely large costly project

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that's going to take some planning and
we don't have any funding scenario in

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place for those
and those won't come to fruition until

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we get some revenues uh sources whether
it's going to be borrowing or you know

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whatever it's going to be a long kind
of for

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I think it's unfair that it it affects
the overall budget. I know it's a

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project that we have to do, but it's an
outlier

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as it's a larger capital budget. It's
not a maintenance budget. It's not a

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minor replacement budget. And so, I know
it has to be funded at some point. We

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have no idea what that's going to cost
us.

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So, how do you factor that in when
you're thinking about putting in a rate

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structure to fund something that we have
no idea going to be that far enough?

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» Well, with the capital brewing plan, you
know, we have to go with what we know

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today and there's estimates of what
those costs would be. And then in terms

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of the financing plan of that, you know,
what we'll walk through is sort of

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thinking about what options are
available to fund those needs. And

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there's, you know, certainly generating
funds internally through rates is one

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option as well as borrowing. Way we like
to look at that depends on the type of

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asset that it is.
If it's a longer lived asset,

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advertising that cost over time through
borrowing is is a typical way that it's

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done. Um, so we think about that on the
financing side. Um, and and what that

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looks like and try to sort of marry
those two things up. But you're right,

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you need to have the revenue to be able
to cover those needs, particularly if

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you go out and borrow, but it has to be
kind of factored in the entire package.

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The fact that costs in the CIP change,
you're absolutely right. It's been

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really hard to to peg those costs
because they do change and inflation has

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really hit things quite hard and a lot
of the work that we've been doing, CIPs

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keep growing. They don't go the other
way. So, they're getting more expensive

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rather than less expensive. So um the
challenge is you know we have these

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needs we need to address. You don't
address them the costs tend to go up

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down the road. So you know capital
planning is is tough to do but you know

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you have to go based on your your best
judgment and staff's come up with a

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capital improvement plan. So that's
what's kind of feeding into our models

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

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40 million, $45 million, $50 million at
that project, I think we really need to

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do a needs assessment so we understand
that size. They're just guesstimating

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what we're going to need in the future.
I think uh the size, the the type of

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generation, whether it could be a
turbine or a diesel or whatever it may

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be. Um
and you know, again, sea moving out some

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infrastructure. did that lay that
project because they're they're looking

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at other alternative energy sources. I I
don't know how that pencil in regards to

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only
there just a question I had in regards

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to how we how we plan for that and not
over budget and stick a rate in early to

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help do that at the I guess the
detrimental public's paying that rate.

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Yeah, I mean it's definitely a fair
question. I think relying on staff to

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kind of look at the plan and develop the
needed projects and um to try to vet

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that is is really what you know we need
to do.

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» Thank you.
>> Um

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so just want to want to talk a little
bit about just kind of the the baseline

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on the revenue side and some of our
assumptions about um you know

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forecasting revenue. Um so we tend to
try to be conservative on the

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forecasting of revenue. Again our models
look at um of account information and

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consumption information. Um you know
catch again we don't really have the

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benefit of a tailwind of of growth. Um
so we were very cautious about that. We

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pretty much assume kind of flat growth
in the forecast going forward. Um so

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that's sort of embedded. Um and then
some of the other ancillary revenues

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that we have um for lighting and things
like that, we've also seen kind of just

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no growth. So just wanted to point that
out.

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00:20:37,964 --> 00:20:42,799
[clears throat]
>> Okay. So this is a really important

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graphic that I want to walk through
because it it really kind ofes the

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00:20:45,919 --> 00:20:58,320
financial plan.
So um kind of step through this.

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00:20:53,600 --> 00:21:03,039
So the the bar parts of this chart. So
looking at the colors that we have. I

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00:21:00,480 --> 00:21:08,000
know it's the colors coming across up
there, but just bear with me. So there's

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00:21:05,039 --> 00:21:15,120
the the bottom of the bar chart is is
our onm expenses. Um and so that's kind

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00:21:11,679 --> 00:21:19,120
of the darker part of the bar there. The
yellow part of the bar that's our

247
00:21:17,120 --> 00:21:24,240
purpose power costs. So these are all of
our costs kind of stacking them on

248
00:21:21,360 --> 00:21:31,039
another. Um the the blue there
represents our debt service.

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00:21:28,000 --> 00:21:35,840
The green represents our what's called
cash finance capital. So we call that

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00:21:33,039 --> 00:21:41,039
payo. Um basically pay as you go
capital. So it's effectively using your

251
00:21:38,400 --> 00:21:45,520
internal cash to fund capital
improvements. And then that small little

252
00:21:43,600 --> 00:21:51,760
sliver on the top that's the the pilot
payment that the electric fund makes

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00:21:47,919 --> 00:21:56,080
back to the city. So the red line there
that represents basically the revenue

254
00:21:54,159 --> 00:22:02,080
that we can generate based on our
current rates. So you notice at 25 it's

255
00:21:59,440 --> 00:22:06,240
it's just south of about $25 million is
what we generate in electric revenues.

256
00:22:04,480 --> 00:22:10,000
And you notice that the bar is a little
bit higher than that right now. So that

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00:22:08,080 --> 00:22:16,000
means anytime the bar is higher than
that red line, that means you have to

258
00:22:12,159 --> 00:22:19,919
eat into your reserves to fund it. So if
you look at over time, you can see those

259
00:22:17,760 --> 00:22:23,919
bars are going up because again I'd
mentioned the assumptions and the

260
00:22:21,520 --> 00:22:26,960
forecasts assume that $150 million
capital improvement plan. I I'll go

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00:22:25,440 --> 00:22:33,120
through the details of how that's
assumed to be financed. Um but you can

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00:22:29,760 --> 00:22:38,080
see those costs increase out over time.
the rate line again based on the current

263
00:22:35,600 --> 00:22:43,440
structure basically stays flat because
again we don't really have a

264
00:22:40,640 --> 00:22:48,320
basically means that it's not a really
tenable forecast there to leave the

265
00:22:46,559 --> 00:22:52,960
revenues where they are because we
couldn't fund that kind of program. So

266
00:22:50,159 --> 00:22:57,760
we have to sort of look at um additional
revenues to be able to do this.

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00:22:55,919 --> 00:23:01,200
So
with that being said, the way we sort of

268
00:22:59,600 --> 00:23:05,760
looked at this is we thought we would
frame it around some various capital

269
00:23:03,600 --> 00:23:13,000
planning scenarios to kind of help you
sort of understand um what that might

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00:23:08,799 --> 00:23:13,000
look like. Um

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00:23:13,440 --> 00:23:16,440
so

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00:23:17,679 --> 00:23:25,360
so the first scenario that we looked at
we're going to call this kind of the

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00:23:22,400 --> 00:23:30,159
capital scenario one basically as
planned. So you know staff provided us

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00:23:28,159 --> 00:23:38,080
the current capital improvement and
their current assumptions on funding.

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00:23:33,840 --> 00:23:42,640
So right now if you look at the chart
there on the left so the there's there's

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00:23:40,799 --> 00:23:48,400
two colored bars. There's a darker color
and a lighter color. The darker color

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00:23:45,039 --> 00:23:53,600
bar represents um the cash finance or
the pigo capital that's being assumed in

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00:23:51,039 --> 00:23:58,320
each year to fund those projects. And
over the five-year period it's about

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00:23:56,000 --> 00:24:05,280
28.8 8 million that's programmed in the
CIP right now um to fund a portion of

280
00:24:01,840 --> 00:24:11,600
the 115 million and then the balance is
being funded um by debt. It's about $86

281
00:24:09,120 --> 00:24:17,279
million in debt. Couple different pieces
of debt being issued primarily in 28

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00:24:14,799 --> 00:24:21,679
2020 and 2029.
Again, that's for those larger projects

283
00:24:19,679 --> 00:24:27,520
we talked about the generator and the
the substation replacements. Um

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00:24:24,799 --> 00:24:33,679
so one thing you'll you'll note on the
PGO side is that you know we would call

285
00:24:30,000 --> 00:24:39,200
this kind of a front-loaded PGO um
financing plan. You can see that the PGO

286
00:24:35,840 --> 00:24:43,919
in 2026 and 2027
you know inches up over $10 million or

287
00:24:41,520 --> 00:24:48,799
that's just how the current CIP is is
sort of sequenced. So again a first pass

288
00:24:46,640 --> 00:24:55,679
was just looking at it as as planned and
what does that mean? Um, and so this is,

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00:24:53,440 --> 00:25:02,799
you know,
well, before I get to that piece, so if

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00:24:58,720 --> 00:25:07,520
you go back to this slide,
I talked about the financial plan and

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00:25:04,320 --> 00:25:12,559
these bars being kind of above the line.
The challenge is if you do that, you

292
00:25:09,440 --> 00:25:16,360
have to draw down on reserves um to be
able to meet that plan.

293
00:25:16,960 --> 00:25:24,400
So what the left chart then represents,
so currently there's about roughly $8

294
00:25:22,480 --> 00:25:28,000
and a half million projected and
reserved in the electric fund at the end

295
00:25:26,159 --> 00:25:34,640
of 2025.
Um the red line that we show on that

296
00:25:31,440 --> 00:25:39,600
left chart basically is a minimum target
that we have for reserve which is set at

297
00:25:37,039 --> 00:25:43,279
90 days of our operating expenses,
operating and maintenance expenses. So

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00:25:41,279 --> 00:25:47,200
that's three months effectively of
working capital which is pretty bare

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00:25:45,600 --> 00:25:51,120
bones. We would not recommend going
anything below that. But for the

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00:25:48,880 --> 00:25:54,960
purposes of what we forecasted that's,
you know, kind of what we're showing as

301
00:25:52,400 --> 00:25:59,520
that red line. So you'll notice if we
don't do anything on rates, so not

302
00:25:57,039 --> 00:26:03,200
assuming we raise rates, we basically
would run out of reserves in about two

303
00:26:01,039 --> 00:26:10,720
years. Um so that's not a situation that
we could be in. Um the other metric that

304
00:26:06,720 --> 00:26:15,679
we monitor is debt service coverage. So
what debt service coverage means is the

305
00:26:13,919 --> 00:26:19,760
revenue comes in, the first thing we got
to pay is our operating expenses and

306
00:26:17,919 --> 00:26:24,159
then what's left is kind of the net
revenues after that. And so when you

307
00:26:22,080 --> 00:26:29,039
borrow money from creditors, they want
to make sure you got enough of a cushion

308
00:26:26,240 --> 00:26:34,320
to pay them back. So there's a minimum
requirements for coverage that we have

309
00:26:30,880 --> 00:26:38,720
like on our current revenue bond. Um,
from a policy standpoint, we like to

310
00:26:36,400 --> 00:26:43,760
target coverage of at least 1.5. So
that's what that red line is on on the

311
00:26:40,799 --> 00:26:48,400
debt service coverage chart. You can see
if we were to go out and borrow the $86

312
00:26:46,080 --> 00:26:51,919
million that we had program debt and we
didn't change our rates, our coverage

313
00:26:49,919 --> 00:26:56,039
would deteriorate very quickly. Again,
this is not a tenable situation.

314
00:26:56,720 --> 00:27:03,360
So what would that mean as planned?
Well, if we wanted to fund things as

315
00:27:01,760 --> 00:27:07,279
planned,
this is a little bit of a shocking

316
00:27:06,159 --> 00:27:14,559
scenario. [clears throat]
we'd have to raise rates but

317
00:27:10,799 --> 00:27:20,799
rather than the band-aid approach. Um
and that would allow us to basically the

318
00:27:17,200 --> 00:27:25,520
red line there shows the um the revenue
based on with the rate increase assumed.

319
00:27:23,760 --> 00:27:30,159
So it' be a front-loaded large rate
increase um and that would cover our

320
00:27:28,320 --> 00:27:34,559
costs. It would allow our reserve
balances to stay above our minimum

321
00:27:31,840 --> 00:27:39,039
target. And you look down at the chart
to the right, we basically put, you

322
00:27:36,799 --> 00:27:44,000
know, forecasted to keep covered about
um at that 1.5 level. That's when

323
00:27:41,760 --> 00:27:48,640
everything from the $86 million would be
kind of baked in the cake. So again,

324
00:27:46,880 --> 00:27:53,600
that's a lot. That's a very front-loaded
structure. Um but again, based on the

325
00:27:51,360 --> 00:27:59,200
way the CIP is is laid out, that's what
we would need.

326
00:27:56,399 --> 00:28:05,919
So with that being said, we said, okay,
what if we sort of relook at things? Um

327
00:28:03,760 --> 00:28:11,600
and so we did a kind of a se second
capital planning scenario that we'll

328
00:28:07,840 --> 00:28:16,880
call the sort of phased in scenario. So
the phased in scenario looks at the same

329
00:28:14,640 --> 00:28:21,840
level of spending in the capital
improvement plan which is 115 million.

330
00:28:19,760 --> 00:28:26,640
But what we did is we effectively kind
of resequenced the PGO piece in

331
00:28:24,480 --> 00:28:33,039
particular to kind of smooth it out over
the five-year period. So, we're still

332
00:28:30,080 --> 00:28:38,799
funding uh 28.8 billion in PIGO, but
it's spread more evenly over the next

333
00:28:35,360 --> 00:28:42,559
five years. Um, and then on the debt
financing piece, we're still effectively

334
00:28:40,799 --> 00:28:46,320
borrowing the same amount. We've kind of
shifted the timing of that a little bit

335
00:28:44,080 --> 00:28:52,240
to 2027.
So, it's more of a phased in approach.

336
00:28:48,960 --> 00:28:58,159
Um, same general concept, but you know,
kind of require rep prioritizing some of

337
00:28:54,000 --> 00:29:04,240
the projects over the next five years.
So that scenario um

338
00:29:02,399 --> 00:29:09,520
basically allows us to sort of spread
the increases out over the next five

339
00:29:06,000 --> 00:29:14,640
years at about 12 and a half% per year.
Um so that's the sort of the red line

340
00:29:12,240 --> 00:29:18,320
then kind of hitting the top of the the
bar chart. So basically be covering our

341
00:29:16,799 --> 00:29:23,440
costs.
Our reserve balances would then stay

342
00:29:20,640 --> 00:29:28,320
above our minimum target that period of
time. we deliver the full 115 million in

343
00:29:26,000 --> 00:29:32,960
capital and our debt service coverage is
constantly above.

344
00:29:30,799 --> 00:29:36,480
So that's kind of the the phased in
scenario. So it's taking kind of the

345
00:29:34,480 --> 00:29:42,480
current plan but sort of resequencing
the plan over five year period.

346
00:29:39,440 --> 00:29:45,799
» Does that make sense? Stop for a second.
>> Any question?

347
00:29:49,360 --> 00:29:57,520
» Okay. Um
the third scenario that we ran because I

348
00:29:55,039 --> 00:30:05,039
know that there's been some discussion
you know at the council level about um

349
00:30:01,919 --> 00:30:09,679
kind of an 8% increase scenario that has
been discussed. And so

350
00:30:07,919 --> 00:30:14,000
the way we wanted to look at that was to
say, okay, if if that was the level of

351
00:30:11,679 --> 00:30:19,840
increase that we did, well, something
has to give um we can't fully fund 115

352
00:30:17,760 --> 00:30:24,880
million, but what could we fund for that
level of increases? Um, and so what

353
00:30:22,799 --> 00:30:29,360
we've done there is basically kind of
adjusted the CIP [clears throat]

354
00:30:27,360 --> 00:30:35,760
from a monetary standpoint down to what
we could afford if we did 8% increases,

355
00:30:31,600 --> 00:30:40,559
and that's about 78 79 million. Um the
way that's laid out is it's it's sort of

356
00:30:38,000 --> 00:30:45,039
a similar proportionality between PIGO,
which is that cash financing piece, and

357
00:30:42,480 --> 00:30:49,760
then the debt piece. So the PGO is
lower. It's about 13.7 million over the

358
00:30:47,440 --> 00:30:54,880
5year period. Again, it's distributed
relatively e evenly, so it's not

359
00:30:51,679 --> 00:30:59,520
frontloaded, and it's about $65 million
in debt. So again, the idea you'd still

360
00:30:57,760 --> 00:31:04,159
fund the large projects, but we probably
have to rep prioritize exactly what we

361
00:31:01,200 --> 00:31:09,600
would fund. Um, so it's a smaller
capital program, but that's what we

362
00:31:05,840 --> 00:31:14,799
could cover with the 8% increases.
Another way to think about that would be

363
00:31:11,440 --> 00:31:21,679
if the current plan CIP is 115 million,
at the 8% it's about 68% of that CIP. So

364
00:31:18,640 --> 00:31:25,840
it's about roughly 70% execution rate
sometimes we refer to it as, but there's

365
00:31:23,520 --> 00:31:30,240
a delta about 36 million that we would
find.

366
00:31:27,919 --> 00:31:35,919
» So this is all based off a five-year
capital fun. So we just have probably

367
00:31:32,880 --> 00:31:40,720
more like a 10-year
uh planning stage in order to stay at

368
00:31:38,960 --> 00:31:43,200
that 8%
rate that we're

369
00:31:41,360 --> 00:31:47,760
» this looks at five years and it would
cover basically 78 million over the

370
00:31:45,279 --> 00:31:50,399
5year period based on that funding mix.
>> But 115 million we just project that

371
00:31:50,080 --> 00:31:54,960
out.
>> Well, those I mean the thing is those

372
00:31:51,760 --> 00:31:58,360
projects don't go away. They just go
further out.

373
00:32:01,919 --> 00:32:08,960
And so again, this last graph, it just
sort of illustrates the the 8% scenario,

374
00:32:06,960 --> 00:32:14,360
the reserves and the coverage levels.
Um, you know, based on that level of of

375
00:32:11,360 --> 00:32:14,360
funding.

376
00:32:14,480 --> 00:32:20,240
Okay. Um, I'm going to stop for a
second.

377
00:32:18,720 --> 00:32:24,480
Questions on that? I'm going to shift
and talk a little bit more about rate

378
00:32:21,840 --> 00:32:28,080
design, but any questions on what I've
gone over so far?

379
00:32:26,799 --> 00:32:34,960
So I do have
>> Yeah, go ahead.

380
00:32:29,200 --> 00:32:42,480
» So with these rate um the 8% annually
um over five 10 years

381
00:32:37,919 --> 00:32:46,320
um does that also increase the um our um
reserves?

382
00:32:44,080 --> 00:32:51,440
It basically keeps your reserves roughly
at the 90-day mark because okay, it's

383
00:32:49,039 --> 00:32:56,320
based on, you know, what that line is
there that you're seeing is so three

384
00:32:54,320 --> 00:32:59,200
months of our own expenses. Now, the on
expenses are growing some. So, the

385
00:32:57,679 --> 00:33:02,399
reserve balance go up a little bit, but
they're largely about the same as as

386
00:33:00,960 --> 00:33:09,120
what they are today.
>> So, basically, we're just we're raising

387
00:33:05,679 --> 00:33:13,200
rates in order to cover the capital.
>> Okay.

388
00:33:11,039 --> 00:33:16,200
Anybody
else?

389
00:33:19,679 --> 00:33:25,440
» Um,
so I want to talk a little bit that's

390
00:33:23,200 --> 00:33:29,600
sort of thinking about things just you
know across the board and you know one

391
00:33:28,159 --> 00:33:34,080
of the other elements of our study was
looking at the actual race structure and

392
00:33:32,000 --> 00:33:37,519
some you know what could we do there
potentially

393
00:33:35,600 --> 00:33:42,640
try to mitigate you know some of the
impacts on customers. Um

394
00:33:41,200 --> 00:33:48,559
so just a little bit of background about
the current electric rate structure. Um

395
00:33:45,360 --> 00:33:54,240
so right now we have four classes of
customer. We have residential, harbor,

396
00:33:51,279 --> 00:33:58,720
commercial, industrial, um residential,
commercial, kind of the bulk of the

397
00:33:55,600 --> 00:34:03,840
customers. Um
each of the customer classes have a

398
00:34:00,480 --> 00:34:09,280
fixed monthly charge um which is um
discharge per month. uh a usage charge

399
00:34:06,880 --> 00:34:14,000
which is based on volume and it's a per
kilowatt hour charge and then our

400
00:34:11,679 --> 00:34:17,520
commercial industrial customers that are
larger and actually have demand meters

401
00:34:15,760 --> 00:34:26,320
also have a demand charge which is a
dollar per kilowatt. Um so what we did

402
00:34:22,000 --> 00:34:32,399
here is we used um kind of the capital
planning scenario three which is the 8%

403
00:34:29,200 --> 00:34:37,879
increase of that level of revenue um and
looked at a couple of options on on rate

404
00:34:34,879 --> 00:34:37,879
design.

405
00:34:38,560 --> 00:34:47,200
So the objectives that we we tried to
keep in focus with the right design was

406
00:34:44,000 --> 00:34:52,800
you know to do um
reasonable adjustments that you know

407
00:34:49,679 --> 00:34:57,920
achieved the financial sufficiency goals
tried to look at it through a lens

408
00:34:55,760 --> 00:35:01,680
trying to mitigate some effects on the
lower volume [clears throat]

409
00:34:59,839 --> 00:35:05,920
and typical to some extent residential
customers. Um so that was one of the

410
00:35:03,920 --> 00:35:11,440
lenses we looked at. Um we were looking
at kind of the balance of the fixed

411
00:35:07,680 --> 00:35:16,960
versus the volutric rev recovery um and
just really looking at options to um not

412
00:35:14,960 --> 00:35:23,119
overly complicate the structure because
I think that um sort of not the the

413
00:35:20,240 --> 00:35:29,359
sense that we wanted to get increasingly
complicated but um to try to optimize it

414
00:35:27,040 --> 00:35:33,680
um preserve the simplicity and to some
extent you know balance where we could

415
00:35:32,000 --> 00:35:37,359
but recognizing there's not a silver
bullet here. when you have to raise

416
00:35:35,520 --> 00:35:43,119
additional revenue, there's certain
things we can do. Um, but um there's

417
00:35:41,119 --> 00:35:46,440
still the need to to create the same
amount of revenue.

418
00:35:47,760 --> 00:35:56,560
So, one of the things that we did in
this in the study was really develop

419
00:35:54,320 --> 00:36:01,599
consumption profile for residential
customers. So, bear with me on this. And

420
00:35:58,320 --> 00:36:06,240
this is kind of a lot to unpack, but so
what what this chart is, and it it looks

421
00:36:03,920 --> 00:36:11,920
like a lot, but it's really not. Um it's
relatively simple at the end of the day.

422
00:36:09,200 --> 00:36:18,160
It's basically a histogram. So it's
looking at we call it a bill frequency.

423
00:36:14,800 --> 00:36:22,880
So on the x axis that basically is
levels of consumption. So and it's in

424
00:36:20,720 --> 00:36:27,440
kilowatt hours. So it starts at 100
kilowatt hours, 200 kilowatt. I think

425
00:36:24,720 --> 00:36:33,599
about monthly consumption. um and kind
of goes all the way up to, you know,

426
00:36:29,359 --> 00:36:38,800
north of 2,000 kilowatt hours. Um the y
ais are the number of bills that fall in

427
00:36:36,960 --> 00:36:43,359
those different units of consumption. So
it kind of tells you how customers are

428
00:36:41,119 --> 00:36:48,079
using power, how much power they're
using on a monthly basis. So some of the

429
00:36:46,480 --> 00:36:53,440
important things that we look at on here
because it helps in inform rate design

430
00:36:50,240 --> 00:36:59,680
for us. So the two red bars that are
highlighted, those are basically at the

431
00:36:56,079 --> 00:37:04,240
median. So the midpoint. So a typical
residential customer at the 50% mark,

432
00:37:01,920 --> 00:37:11,920
these are about 850 kilwatt hours per
month um on average. Um and that's sort

433
00:37:08,160 --> 00:37:15,440
of the midpoint. Um if you look to so
everything to the left, that's going to

434
00:37:13,200 --> 00:37:19,119
be lower. everything to the right and
you kind of have a long tail out there

435
00:37:17,359 --> 00:37:22,880
to the right because you get a you know
some customers use quite a bit more than

436
00:37:20,560 --> 00:37:27,200
that but it gets less frequent as you go
out. Does that that make sense? This is

437
00:37:24,880 --> 00:37:30,320
always kind of a hard chart but it's
something that we do look at in the in

438
00:37:28,800 --> 00:37:36,160
the rate design world because it helps
inform things. Um, and one of the things

439
00:37:33,920 --> 00:37:42,000
it really helps inform and one of the
opportunities we potentially see here,

440
00:37:39,040 --> 00:37:45,760
um, is is looking at some tiering
potentially with with residential

441
00:37:43,680 --> 00:37:49,920
customers. So
this first rate design option we looked

442
00:37:47,440 --> 00:37:55,680
at um there's a couple different
elements kind of walk you through it but

443
00:37:52,960 --> 00:38:00,800
um basically what we're trying to kind
of focus on here is

444
00:37:58,400 --> 00:38:04,800
the one for residential is kind of when
we look at the customer charge that's

445
00:38:02,640 --> 00:38:09,760
the fixed charge first it's currently
set at 8.95 you could keep it at 8.95 so

446
00:38:08,000 --> 00:38:13,200
it would change the fixed charge
residential

447
00:38:11,520 --> 00:38:17,839
however we would increase the fixed
charges is for harbor, commercial,

448
00:38:15,599 --> 00:38:21,839
industrial. Quite frankly, all of the
fixed charges here are pretty low.

449
00:38:19,599 --> 00:38:27,040
They're lower than we normally see, you
know, even residential. Um, if you look

450
00:38:24,240 --> 00:38:30,240
at kind of cost of service, um, rates
with residential, you usually have a

451
00:38:28,079 --> 00:38:34,560
fixed rate between 20 and $30 typically.
So, our fixed charges are low, but I

452
00:38:32,480 --> 00:38:39,280
think that's more of an intentional to
try to keep the impacts down in

453
00:38:36,000 --> 00:38:44,480
residential as much as possible. So um
you know not recommending we change that

454
00:38:41,200 --> 00:38:50,079
increasing the harbor industrial sum but
the bigger change here is um so right

455
00:38:47,920 --> 00:38:55,920
now the residential it's a what we call
a uniform um energy charge. So it's the

456
00:38:53,200 --> 00:39:01,920
same unit cost per kilowatt hour. What
we'd introduce here is a tier. So we

457
00:38:58,480 --> 00:39:05,839
have basically a two-tier structure and
the the tiers would be set remember I

458
00:39:04,320 --> 00:39:11,839
showed you the chart the median was
about 850 kilwatt hours per month. So we

459
00:39:09,359 --> 00:39:16,000
would set tier one at between usage
between zero and 850 kilwatt hours and

460
00:39:14,079 --> 00:39:20,800
that would actually have a lower rate
associated with it and then the rate

461
00:39:18,240 --> 00:39:26,240
would be higher above 850 kilowatt
hours. Does that make sense? So it's a

462
00:39:23,680 --> 00:39:32,000
two-tiered volutric incline block
structure is what it is. Um and then for

463
00:39:29,599 --> 00:39:37,119
kind of the non-residential classes, we
largely um have increases basically a

464
00:39:35,599 --> 00:39:41,599
little bit north of the average or
around 8% a little bit more. The focus

465
00:39:39,760 --> 00:39:46,240
is really more on residential and trying
to have some segmentation into the the

466
00:39:43,520 --> 00:39:51,280
volumetric rate.
So

467
00:39:48,079 --> 00:39:55,200
what does that do? So you know when you
when you just raise rates across the

468
00:39:53,200 --> 00:39:59,599
board, everybody gets the same
percentage increase. When you change the

469
00:39:57,119 --> 00:40:04,880
structure, you impact customers
differently based on how they use the

470
00:40:01,920 --> 00:40:08,960
system. So you have to kind of look at
the impacts a little different way. So

471
00:40:07,440 --> 00:40:12,160
you sort of break your residential
impacts down. We're showing three

472
00:40:10,640 --> 00:40:16,400
different types of residential
customers. So you have a kind of a low

473
00:40:14,480 --> 00:40:20,880
volume residential customer and that's
we're showing at 350 kilowatt hours.

474
00:40:18,880 --> 00:40:26,240
That's basically when we look at our
bill frequency that's about the 20%

475
00:40:22,960 --> 00:40:32,800
mark. about 20% of the bills less or 350
or less. Um, a typical user we're

476
00:40:30,000 --> 00:40:37,520
showing at 850 and then a high volume
user we're showing at 2,000. That's

477
00:40:35,680 --> 00:40:41,760
about the 90% mark on the bill
frequency. So, let's kind of walk

478
00:40:39,839 --> 00:40:48,240
through this and look to the sort of the
right. Um, so a low volume scenario

479
00:40:45,839 --> 00:40:55,920
currently pays for that 350 kilowatt
hours $66 per month. Um, well, that

480
00:40:52,960 --> 00:41:00,720
would only go up to $57.16
under this scenario, which is about

481
00:40:57,599 --> 00:41:06,240
a$110 increase per month or about less
than 2%.

482
00:41:02,960 --> 00:41:13,359
Um, the typical customer right now pays
using 850 kilwatt hours pays $123.36

483
00:41:11,040 --> 00:41:19,440
that would go up 267
scenario, which is about a little bit

484
00:41:14,960 --> 00:41:22,720
north of 2% up to 1260.
Remember, we have to generate the same

485
00:41:20,960 --> 00:41:26,000
amount of money. So that means the
higher volume residential customer is

486
00:41:24,400 --> 00:41:31,680
going to pay more because they'd be
getting into the second tier. So again,

487
00:41:28,640 --> 00:41:36,160
showing a 2,000 kilowatt hour customer,
which is at the 90% mark on our bill

488
00:41:33,920 --> 00:41:41,040
frequency. Um well, their bill would go
up. They're paying 27815 right now. It

489
00:41:38,640 --> 00:41:46,160
would go up to 305.88,
which is just shy of about less than

490
00:41:43,200 --> 00:41:52,720
10%. Um whereas the other customer
classes um it's a little bit more than

491
00:41:48,480 --> 00:41:57,440
average about 8 and a half versus 8%.
Does that make sense in terms of what

492
00:41:54,640 --> 00:42:03,359
the tiering would do there?
I understand what tiered system is

493
00:41:59,760 --> 00:42:10,160
doing. Um
so let's put it in the context of gas.

494
00:42:06,640 --> 00:42:17,040
The saving to the customer as regard to
usage is whether he buys a economy car,

495
00:42:12,880 --> 00:42:22,720
he buys a huge pick and not necessarily
in the price per gallon for gas

496
00:42:20,880 --> 00:42:30,000
because you still have to cover your
cost associated with that. So, um I'm

497
00:42:27,119 --> 00:42:36,494
not sure that I understand the intent
here, but I don't know if that's in the

498
00:42:32,480 --> 00:42:41,680
best interest. uh
[clears throat] so that the the standard

499
00:42:39,440 --> 00:42:48,880
residential customer
>> is going to pay the extra cost for the

500
00:42:44,000 --> 00:42:53,200
person that gives you the best power.
So there's pros and cons clearly to

501
00:42:51,280 --> 00:42:59,520
doing this and you've kind of you know
peed on one of the cons is that you know

502
00:42:55,359 --> 00:43:04,960
again a lot of these costs are fixed. Um
and while we do have a uniform rate

503
00:43:02,800 --> 00:43:09,680
right now so if someone uses less they
do pay less but it's not a different

504
00:43:07,280 --> 00:43:14,160
unit cost. This would be introducing a
different unit cost. So it's more of an

505
00:43:11,119 --> 00:43:17,359
incentive to be really efficient um
because there is a lower unit cost if

506
00:43:16,000 --> 00:43:22,319
they use less. So, you're right. There's
pros and cons. You have to weigh, but

507
00:43:19,520 --> 00:43:25,839
the pro is that you're keeping the even
for a typical customer, they'll be

508
00:43:24,240 --> 00:43:30,400
paying
kind of a below average increase. You're

509
00:43:28,079 --> 00:43:35,240
picking up that from a person that uses
more. But yeah, it's pros and cons.

510
00:43:32,240 --> 00:43:35,240
Correct.

511
00:43:35,359 --> 00:43:43,119
» Not necessarily a question, but just
kind of a thought on that. Another thing

512
00:43:40,319 --> 00:43:46,240
I it seems it almost seems a little
counterintuitive because it's almost

513
00:43:44,560 --> 00:43:51,520
like you're as you just said you're
incentivizing the customer to use less

514
00:43:49,280 --> 00:43:56,319
power when
from the business point you want them to

515
00:43:53,920 --> 00:44:00,880
use more power. So I don't know I I
don't envy your job here. I know there's

516
00:43:58,480 --> 00:44:05,119
no easy answer but
>> it just seems a little backwards in that

517
00:44:03,920 --> 00:44:11,520
sense.
>> Yeah, it's um you're right. It it is in

518
00:44:08,079 --> 00:44:17,359
that way. Um and it kind of sometimes
efficiencies again you think

519
00:44:15,599 --> 00:44:20,560
in places that are really capacity
constrained. I mean if you're more

520
00:44:18,720 --> 00:44:25,359
efficient then you kind of push off the
need to h add more capacity which can

521
00:44:22,800 --> 00:44:29,599
have some economic benefits. Um but it
sometimes takes longer to see the

522
00:44:28,160 --> 00:44:33,280
immediate you're right you're having
someone incentivize you use less your

523
00:44:31,359 --> 00:44:37,839
product. Um so it's it's a it's a
balancing act. So the savings sometimes

524
00:44:35,119 --> 00:44:41,119
are longer term with not having to have
as much capacity in your system because

525
00:44:39,440 --> 00:44:44,119
people are using the service more
efficiently.

526
00:44:44,560 --> 00:44:51,599
» Do these rate studies talk about like a
diesel charge and like like how does if

527
00:44:50,240 --> 00:44:54,400
we have to run a generator, how does
that

528
00:44:52,319 --> 00:44:58,960
» So we have we have a diesel search
charge right now that's already in the

529
00:44:56,079 --> 00:45:02,400
ordinance um that can be used. I don't
know if staff knows the last time we

530
00:45:00,800 --> 00:45:05,920
actually used it, but it is in the
ordinance if we have to run that.

531
00:45:04,640 --> 00:45:08,920
» I think it's been
>> 1819.

532
00:45:09,119 --> 00:45:15,599
» Yeah. So that does exist. I didn't point
it out because it but it is actually in

533
00:45:13,440 --> 00:45:20,920
the race structure. So if that happens,
there is a mechanism to to recover that

534
00:45:17,920 --> 00:45:20,920
cost.

535
00:45:20,960 --> 00:45:28,480
» So this rate structure is kind of based
on the fact that we have

536
00:45:26,319 --> 00:45:32,880
limited low growth.
So, as we look at what the state of

537
00:45:30,400 --> 00:45:39,040
Alaska is doing in regards to providing
funds for heat pumps, we may have more

538
00:45:36,560 --> 00:45:41,861
people jumping off of oil and going to
heat pump

539
00:45:40,079 --> 00:45:45,280
» if the rate doesn't go too high.
[clears throat]

540
00:45:42,400 --> 00:45:49,040
» Um, and plus we can attract bigger is
going to be doing more and more work and

541
00:45:47,440 --> 00:45:54,000
moving more and more power
>> to that system. And plus, there's

542
00:45:51,599 --> 00:45:55,839
» been talk about data centers and and
other

543
00:45:54,800 --> 00:46:01,400
» it's no longer bigger
>> or Jags. [laughter]

544
00:45:57,520 --> 00:46:01,400
as big as the French government.

545
00:46:01,839 --> 00:46:07,520
» You're right. We we haven't assumed a
lot of low growth. So, if that were to

546
00:46:05,520 --> 00:46:12,400
happen, obviously that helps. Yeah.
>> Um certainly that changes the calculus,

547
00:46:09,760 --> 00:46:17,920
but um we just we
>> our projections we try to be reasonably

548
00:46:15,440 --> 00:46:21,440
conservative is what I unless we know of
something specifically then, you know,

549
00:46:19,839 --> 00:46:25,440
certainly could be factored in. I mean,
if this is a 5-year forecast, things can

550
00:46:23,680 --> 00:46:28,560
change. Certainly, if something shifts
and there is additional demand coming,

551
00:46:27,200 --> 00:46:32,480
well, yeah, we want to factor that in
because that would help. Um, but we

552
00:46:31,359 --> 00:46:37,560
haven't assumed into that.
>> Yeah.

553
00:46:34,560 --> 00:46:37,560
» Yeah.

554
00:46:38,319 --> 00:46:48,079
» I'm wondering why we why the residential
high volume user percentage increase

555
00:46:45,760 --> 00:46:51,280
would be higher than per say the rest of
it and not more in line with it. I

556
00:46:49,839 --> 00:46:59,119
understand we're offsetting the cost,
but um is is there a particular reason

557
00:46:56,160 --> 00:47:02,720
why you leave that higher and have the
other increases lower? Is there kind of

558
00:47:01,599 --> 00:47:07,920
back information?
>> Yeah, it's sort of a a byproduct of the

559
00:47:05,440 --> 00:47:11,839
inclining block structure. So, you're
kind of pushing more of that cost

560
00:47:09,599 --> 00:47:17,040
recovery on to the higher volume user.
So, that unit cost when you trip over

561
00:47:14,000 --> 00:47:21,520
into the next tier is higher. So someone
that's in this example that's using, you

562
00:47:19,760 --> 00:47:26,400
know, 2,000 kilowatt hours a month,
which is, you know, more than double the

563
00:47:23,440 --> 00:47:32,400
median, they pay more and it's a higher
unit cost. So that's why it's above

564
00:47:28,560 --> 00:47:37,440
average increase. Um, so it's it's just
part of the structure. Um, again, it's

565
00:47:34,640 --> 00:47:41,599
also part of that um incentive mechanism
to more efficient. If you're in the

566
00:47:39,680 --> 00:47:46,000
first tier, you're going to pay less.
But but that's the terms of the math.

567
00:47:43,599 --> 00:47:52,079
It's just a much higher unit cost. get
above that level. So that's why it's not

568
00:47:49,680 --> 00:47:56,480
because again this whole is all revenue
neutral. So effectively what we're doing

569
00:47:55,040 --> 00:48:02,240
here it's looking at kind of the
residential class as a whole and we're

570
00:47:58,720 --> 00:48:07,760
making intraclass changes. So in this
scenario kind of a lower volume and a

571
00:48:04,400 --> 00:48:11,839
typical benefit but the higher volume
pays more because you got to get the

572
00:48:09,359 --> 00:48:17,200
same amount of money.
So it's just that's the difference in

573
00:48:13,760 --> 00:48:22,640
just doing something uh proc
and Jack

574
00:48:18,720 --> 00:48:27,520
» um I'm figuring that the incentive of
getting people to be more conservative

575
00:48:24,400 --> 00:48:33,520
is not putting taxing the system which
then is where why we're where we're at

576
00:48:30,240 --> 00:48:38,200
now in the need of fixing and upgrading
and cost of adding.

577
00:48:38,240 --> 00:48:43,359
» Yeah. I mean I think
>> you're gonna have to do it anyway.

578
00:48:41,040 --> 00:48:47,680
» Yeah. you know, it's um I think it's
when I think about the conservation, I

579
00:48:45,520 --> 00:48:52,319
think it's more of like capacity and
being able to push that off. I mean, the

580
00:48:50,000 --> 00:48:55,760
fact is the system needs a lot of repair
placement. It's

581
00:48:54,559 --> 00:49:01,440
not going to change.
>> But down the road, if it's um still in

582
00:48:58,559 --> 00:49:08,400
place and you have replaced those items,
then you're looking at um keeping the

583
00:49:04,960 --> 00:49:11,599
loads down or you know taxing the system
to the point where you're back where you

584
00:49:10,079 --> 00:49:15,119
were.
Yeah, I mean I think if we're more

585
00:49:13,599 --> 00:49:19,200
efficient then again it's just it's
staving off the next increments of

586
00:49:17,200 --> 00:49:22,480
capacity and having that t that's the
biggest benefit

587
00:49:21,200 --> 00:49:26,920
but there's [clears throat] always going
to be repair and replacement of assets.

588
00:49:27,359 --> 00:49:32,640
» Jack,
>> thanks your honor. I was just curious

589
00:49:29,839 --> 00:49:37,119
about um the distinction for the harbor.
Just I I understand and appreciate the

590
00:49:35,440 --> 00:49:40,400
» the types of users within the
residential, but it's you I'm sure

591
00:49:39,040 --> 00:49:44,000
you've been made aware of the fact that
within the harbor there are a number of

592
00:49:42,240 --> 00:49:46,960
folks that are on the boards and you
know they consider themselves

593
00:49:45,200 --> 00:49:49,440
residential in that respect.
>> So I just wonder why that distinction

594
00:49:48,240 --> 00:49:53,920
was made.
>> So the harbor is a current we didn't it

595
00:49:52,480 --> 00:49:59,119
already exists. So it's a current class
of customers. So, um, whether or not

596
00:49:56,960 --> 00:50:02,720
that could be folded into residential, I
suppose, is an option. It's always been

597
00:50:00,720 --> 00:50:07,839
kind of, um, broken out and they do
actually pay a little bit higher rate if

598
00:50:04,559 --> 00:50:11,760
you look at their average cost. Um,
uh, you know, again, if someone was

599
00:50:09,440 --> 00:50:15,119
living there full-time, I think they
could look more like a residential

600
00:50:13,119 --> 00:50:19,280
customer possibly. Um, I think it's
probably a mix, I would imagine, in

601
00:50:16,880 --> 00:50:22,880
terms of how people use, you know, so I
think that's why it was designated as

602
00:50:20,880 --> 00:50:27,760
its own class because it's a little bit
probably for a mix. being there kind of

603
00:50:25,760 --> 00:50:33,680
being full-time versus just having kind
of hooking up and just having you know

604
00:50:30,400 --> 00:50:37,280
they're both there. So um we didn't that
already existed so we didn't establish

605
00:50:35,680 --> 00:50:40,960
the Harvard class we just were looking
at at the current class.

606
00:50:39,359 --> 00:50:48,000
» Thanks.
>> Yeah. Yeah. chair just

607
00:50:45,200 --> 00:50:53,839
you know we are a seasonal town
so the harbor commercial industrial has

608
00:50:51,440 --> 00:50:58,000
they something been taken into account
where they could be adjusted higher

609
00:50:55,359 --> 00:51:03,280
during the summer and lower during the
winter seasons

610
00:50:59,599 --> 00:51:11,520
» a seasonal rate um
it's something that can be done and

611
00:51:05,920 --> 00:51:16,720
looked at um it's sort of interesting um
when you look at how those customers use

612
00:51:14,160 --> 00:51:22,960
the system. So like the residential
customers um we're winter peaking

613
00:51:19,920 --> 00:51:28,319
utility is electric heat load. So the
system really peaks in winter um versus

614
00:51:26,559 --> 00:51:33,640
a lot of the industrial customers
actually peak more

615
00:51:30,640 --> 00:51:33,640
August

616
00:51:33,680 --> 00:51:41,119
and are really running. Um you
potentially could look at a seasonal

617
00:51:38,160 --> 00:51:45,920
structure there. um it may be something
we could look into. Um you don't see it

618
00:51:43,760 --> 00:51:50,400
as often with electric system, but in
seasonal communities is possible. Um so

619
00:51:48,960 --> 00:51:56,160
it might shift the calculus a little
bit. Um but but overall that class like

620
00:51:53,599 --> 00:52:01,200
the industrial class um there's not that
many customers in it. Um they're larger

621
00:51:58,480 --> 00:52:04,559
customers, but like from the total
amount of revenue that we generate, the

622
00:52:02,880 --> 00:52:10,079
biggest the bulk of the revenue comes
from residential and commercial. So um

623
00:52:07,599 --> 00:52:14,079
you know the biggest seasonality in
terms of using is in that industrial in

624
00:52:12,079 --> 00:52:18,400
terms of how they use the service but
it's not a huge class and but it's

625
00:52:16,880 --> 00:52:20,319
something we could take a look at.
>> Yeah.

626
00:52:19,520 --> 00:52:24,880
» Yeah.
>> I mean my thinking here I think

627
00:52:22,559 --> 00:52:30,319
everybody's thinking is I mean the
burden should be more on the industrial

628
00:52:27,440 --> 00:52:33,839
commercial and harbor rather than
residential. I really just made a

629
00:52:31,920 --> 00:52:40,400
statement that most of the revenue comes
from the residential class. I don't know

630
00:52:37,520 --> 00:52:47,839
we need to look at this adjustment here.
>> Yeah. So the challenge is there um

631
00:52:45,599 --> 00:52:52,000
when you look at kind of cost of service
and again we're the data we had

632
00:52:50,000 --> 00:52:56,160
available we couldn't take a extremely
deep dive into it but but we we do know

633
00:52:54,559 --> 00:53:03,440
that
um the residential customer class peaks

634
00:53:01,040 --> 00:53:08,559
the system more so we call that load
factor because they have heating load

635
00:53:05,920 --> 00:53:13,920
and so in the winter their residential
customers are actually more inefficient

636
00:53:11,200 --> 00:53:20,480
user of the service because they peak
because he load most say the commercial

637
00:53:17,920 --> 00:53:25,760
industrial class it's not as much so the
reality is um residential customers are

638
00:53:23,920 --> 00:53:31,280
subsidized to some extent from other
classes so I think it's a balancing act

639
00:53:28,880 --> 00:53:34,800
um you know I think you have to be be
careful about how much cost you

640
00:53:33,040 --> 00:53:39,119
necessarily push on some of those
customers um and again some of the

641
00:53:36,960 --> 00:53:43,359
industries are are big there's economic
development considerations I think as

642
00:53:40,880 --> 00:53:48,640
well. Um but from a cost of service
standpoint um again residential

643
00:53:46,640 --> 00:53:51,599
and it's pretty common in public systems
tends to be subsidized. So we're trying

644
00:53:50,160 --> 00:53:56,640
to balance that. That's why we didn't
show an option where it was you know a

645
00:53:53,599 --> 00:54:02,000
lot higher increases there.
>> Okay. Thank you.

646
00:53:58,960 --> 00:54:09,200
» So I see that we got an industrial rate
structure.

647
00:54:04,000 --> 00:54:14,800
You got a a standard energy cost of.1291
and then the demand and charge. So up to

648
00:54:12,480 --> 00:54:17,800
25 kilowatt I guess that's saying
that.1291

649
00:54:17,839 --> 00:54:24,640
is that the rate for that and then if
they go over the 25 kilowatt it goes to

650
00:54:23,200 --> 00:54:27,232
$441.
>> Mhm. [clears throat]

651
00:54:28,160 --> 00:54:32,480
» Yeah. That's the current demand charge.
Yeah.

652
00:54:30,160 --> 00:54:37,680
» That's the current demand charge. Um
well it did we did show an increase to

653
00:54:34,559 --> 00:54:42,720
it of about 8%. Um but for those
customers that have demand meters that

654
00:54:40,240 --> 00:54:48,400
pay yeah they have
>> so and is that in a in a month or so if

655
00:54:45,760 --> 00:54:53,400
they go over 25 kilowatts in a month and
demand charge kicks in for the rest of

656
00:54:50,240 --> 00:54:53,400
the month

657
00:54:55,760 --> 00:55:02,800
and that 25 kilowatt you know if that's
high or low or standard

658
00:55:01,440 --> 00:55:07,440
man rate
>> um for commercial pretty standard for

659
00:55:05,920 --> 00:55:10,559
industrial is probably pretty low, but
that to have demand charges for the very

660
00:55:09,119 --> 00:55:13,040
customers is pretty common.
>> Okay.

661
00:55:10,960 --> 00:55:20,160
» Um and the reason that you do that is
because um typically commercial and

662
00:55:16,720 --> 00:55:25,040
industrial customers,
particularly industrial, they're using

663
00:55:21,920 --> 00:55:30,160
power for process um and and they're
different. So um whereas like

664
00:55:28,160 --> 00:55:33,520
residential customers, they tend to we
call it more homogeneous. they sort of

665
00:55:31,599 --> 00:55:40,880
use power similarly here particularly
because a lot of the peak load is from

666
00:55:35,520 --> 00:55:45,599
heating. So demand charges just a way to
distribute kind of capacity related

667
00:55:43,200 --> 00:55:52,000
costs more individually based on the
customer's actual heat demand. Um so you

668
00:55:50,079 --> 00:55:56,720
they're pretty common for bigger
customers. Now some systems are you know

669
00:55:54,880 --> 00:56:00,319
moving towards having demand meters on
the residential. we don't have that

670
00:55:58,240 --> 00:56:05,359
capability right now, but that's when
you start seeing some of the more unique

671
00:56:02,880 --> 00:56:09,760
structures that are coming out um
related to electric vehicles and things

672
00:56:08,160 --> 00:56:15,253
like that where you know you want to
have more precise information about um

673
00:56:12,400 --> 00:56:17,920
peak demand but um but really
[clears throat]

674
00:56:16,240 --> 00:56:21,760
generally right now it's do larger
customers have

675
00:56:18,640 --> 00:56:29,280
» Yeah, we've had that conversation and
people turned over to electric and heat.

676
00:56:25,040 --> 00:56:34,880
» Sure. And it shows that
the usage in an individual resident went

677
00:56:32,160 --> 00:56:39,119
up dramatically when they did that
>> and and it raised to a point where we

678
00:56:37,520 --> 00:56:43,280
actually had a conversation whether
there should be a demand rate after a

679
00:56:41,760 --> 00:56:45,760
certain
usage.

680
00:56:44,160 --> 00:56:49,280
» It may be something we eventually could
get to when we have the metering

681
00:56:47,599 --> 00:56:54,240
capability at that level. We just don't
have it right now.

682
00:56:51,680 --> 00:57:00,400
» Okay.
and and just just a small item, but that

683
00:56:57,359 --> 00:57:04,000
8.95 uh monthly charge on it is really
for the lease and rent of the meter. I

684
00:57:02,400 --> 00:57:09,520
would imag
>> Yeah. I mean, basically it's, you know,

685
00:57:07,119 --> 00:57:14,880
kind of basic customer service billing
and some of the metering costs in there.

686
00:57:12,880 --> 00:57:20,240
That's really all
>> and it's not going to make a big

687
00:57:17,040 --> 00:57:26,640
different budgetary wise, but I'm seeing
that that cost is more realistically

688
00:57:22,720 --> 00:57:30,000
around $10 or more in regards to service
we're providing because we've gone from

689
00:57:28,319 --> 00:57:33,040
anog to digital only.
>> Yeah, the fixed charges here are pretty

690
00:57:32,559 --> 00:57:36,079
low.
>> They're real low. Yeah.

691
00:57:34,400 --> 00:57:39,359
» So, we need to adjust those as we go
through the more real.

692
00:57:37,359 --> 00:57:44,319
» I think going forward that would be one
thing I would probably think about.

693
00:57:41,680 --> 00:57:48,000
Again, I think the rate design options
we were looking at right now really

694
00:57:46,079 --> 00:57:52,799
mitigate residential impact. So the more
you raise that

695
00:57:50,400 --> 00:57:58,400
resilience, so it becomes a greater
portion of their bill. Um but again cost

696
00:57:55,760 --> 00:58:04,079
of service for a fix is it's usually
between about 20 30 bucks

697
00:58:01,200 --> 00:58:07,520
or really low.
>> Again, it's just it's sort of a

698
00:58:05,119 --> 00:58:11,680
philosophical, you know, do you want to
kind of do that? And there's pros and

699
00:58:10,319 --> 00:58:15,520
cons.
So, what I'm reading in here a little

700
00:58:13,359 --> 00:58:21,040
bit in regards to your presentation, and
I hear you with the council meeting,

701
00:58:17,359 --> 00:58:27,200
we've had a a concern about the impact
of rates on low income, seniors, that

702
00:58:24,400 --> 00:58:33,520
type of stuff. And so, I would imagine
the tier rate was set into place so

703
00:58:29,520 --> 00:58:40,480
those individuals could have
a lesser rate structure to support their

704
00:58:36,400 --> 00:58:42,559
lower incomes, other fixed income type.
That was great.

705
00:58:41,280 --> 00:58:44,720
» Yeah, definitely one. Thanks for
thinking about

706
00:58:43,839 --> 00:58:50,000
» Thank you.
>> Yeah, Charlie,

707
00:58:46,160 --> 00:58:55,200
» uh just one question. So, uh was there
consideration to the possibility of a

708
00:58:53,359 --> 00:59:01,359
like how you talk about the two-tier
residential system when you hit certain

709
00:58:57,440 --> 00:59:06,640
amount then it goes up more. Was that I
guess I'm curious how come that exact uh

710
00:59:04,079 --> 00:59:10,319
strategy wasn't considered on the on the
commercial industrial?

711
00:59:08,000 --> 00:59:15,680
» Yeah. So the challenge with doing that
on commercial industrial goes back to um

712
00:59:13,839 --> 00:59:20,400
so residential customers like we did
that nice build frequency and you can

713
00:59:17,680 --> 00:59:27,680
kind of see how they're using commercial
they're all over the place. So setting

714
00:59:23,440 --> 00:59:31,200
tiers is really difficult. Um and that's
honestly why sometimes you use demand

715
00:59:29,440 --> 00:59:35,440
charges because demand charges are kind
of doing the same thing at least for a

716
00:59:33,200 --> 00:59:39,440
piece of the the bill because that's
more individualized. So it

717
00:59:38,559 --> 00:59:42,559
there's all different types of
commercial customers. So setting the

718
00:59:40,880 --> 00:59:46,640
tier and you could you could get really
you could be really wrong if you did

719
00:59:44,000 --> 00:59:51,680
that incorrectly. So that's why you just
don't see it on commercial but you see

720
00:59:48,799 --> 00:59:55,920
demand charges because that's a way to
kind of get at the same thing if that

721
00:59:53,520 --> 01:00:00,440
makes sense. Um it's just a different
way of doing it.

722
00:59:57,440 --> 01:00:00,440
» Gota

723
01:00:03,520 --> 01:00:08,160
Okay. Um
>> [clears throat]

724
01:00:06,480 --> 01:00:13,760
» So
there was another option that we we did

725
01:00:10,400 --> 01:00:18,640
look at as well and again it's it's very
similar to

726
01:00:16,720 --> 01:00:24,960
but it does put a little bit more
emphasis um Mr. what you just said about

727
01:00:21,680 --> 01:00:29,040
the really low low volume
sensitivity to that and this is

728
01:00:27,200 --> 01:00:35,599
essentially a three- tier structure here
where uh we added and almost call this

729
01:00:32,079 --> 01:00:42,480
kind of like a of a lifeline concept
where we put in a tier at the 350 KW

730
01:00:39,359 --> 01:00:49,520
level which is a 20% mark and that carry
a lower and we have 350 to 850 and above

731
01:00:46,960 --> 01:00:54,559
850 so it's in three tier
to everything else pretty much hold

732
01:00:51,839 --> 01:00:59,440
changes we recommended.
The difference in this one would be more

733
01:00:57,440 --> 01:01:04,559
sensitivity to the really low volume
customer. So you can see in this

734
01:01:01,839 --> 01:01:08,960
situation that bill actually goes down
for 350

735
01:01:07,040 --> 01:01:14,079
user
but the typical would come up some. It's

736
01:01:10,960 --> 01:01:20,720
still below the average 8%. It's about
4.6%. Um but the higher volume user

737
01:01:17,040 --> 01:01:26,160
would would be higher about 14%. So it's
just one more layer deeper three tiers I

738
01:01:23,200 --> 01:01:31,760
think. Um you know a lot of our clients
you two and three tier are pretty

739
01:01:28,400 --> 01:01:35,599
common. Um not really we don't see but
we just kind of put that in as another

740
01:01:33,599 --> 01:01:38,920
option
for consideration.

741
01:01:39,440 --> 01:01:48,319
And then kind of on this last slide
here, I kind of see them next to each

742
01:01:46,079 --> 01:01:51,319
other. Sometimes it's easy to see stuff
better.

743
01:01:51,359 --> 01:01:58,000
This kind of shows you the the current
bill and what it would look like across

744
01:01:55,760 --> 01:02:02,200
the board, what it would look like under
those two options.

745
01:02:12,888 --> 01:02:18,079
» [laughter]
>> Go ahead. Yeah.

746
01:02:15,520 --> 01:02:23,680
» Um,
kind of to piggyback on your senior

747
01:02:21,040 --> 01:02:27,200
citizens and, you know, low income, you
know, they typically I'm what I'm

748
01:02:25,599 --> 01:02:33,040
concerned about with the grades of like
the high volume versus the low volume is

749
01:02:30,240 --> 01:02:36,720
it's based on their house. Like is it
insulated? Is it not? Is it old? Is it

750
01:02:34,880 --> 01:02:41,119
not? Can they afford new windows? Can
they not? If it's a senior, have they

751
01:02:38,799 --> 01:02:45,599
lived in the home for, you know, 72
years of their life? And it's been

752
01:02:43,760 --> 01:02:52,319
probably built a hundred years ago. And
so really,

753
01:02:48,160 --> 01:02:57,200
I I worry that um as the older homes get
more inefficient and tends to house the

754
01:02:54,880 --> 01:03:02,079
senior in it versus the newer home,
we're kind of then punishing

755
01:02:59,520 --> 01:03:06,400
them for heating their home. And I I
just worry about what that is because as

756
01:03:03,920 --> 01:03:10,559
we all know, I mean, houses aren't the
best

757
01:03:08,000 --> 01:03:16,160
around here. And I So I worry about that
with low income and and fixed income

758
01:03:13,520 --> 01:03:20,559
seniors and and things like that. with
the rate structures that I'm seeing. I

759
01:03:18,400 --> 01:03:24,799
guess my
my hope through this rate study was to

760
01:03:23,280 --> 01:03:31,200
see
um relief for all residential

761
01:03:28,240 --> 01:03:35,280
um and more put that on the commercial
industrial side because they can pass it

762
01:03:33,280 --> 01:03:39,760
along to their customers where residents
can't. And I understand the residents

763
01:03:37,839 --> 01:03:43,760
are using more, but they're also putting
up with a lot of commercial business

764
01:03:41,359 --> 01:03:48,960
here um as giving up the town for the
seasonal um businesses to come in. And

765
01:03:46,000 --> 01:03:53,839
so I guess I guess my hope was to kind
of see a little bit more of a shift off

766
01:03:50,960 --> 01:03:59,280
the back of the residentials in general,
not just the low volume user options

767
01:03:56,240 --> 01:04:06,119
here. Um and kind of have it on somebody
who could pass it on versus not being

768
01:04:02,400 --> 01:04:06,119
able to pass it on.

769
01:04:06,480 --> 01:04:16,559
Lacy, do you know if since we've went to
a rural status whether low income

770
01:04:13,520 --> 01:04:23,920
household or uh
if PCE is available to them? It is

771
01:04:21,359 --> 01:04:27,520
so they can apply if they if they're a
low income family to get helpful break.

772
01:04:26,640 --> 01:04:33,119
That's correct.
>> Yeah. So there are things in place to

773
01:04:29,359 --> 01:04:35,520
lower their actual cost through PC. I
can elaborate a little bit

774
01:04:34,720 --> 01:04:42,559
» if you would.
>> So the tribe actually um has a energy

775
01:04:39,599 --> 01:04:49,200
efficiency program between Clinket and
Hina and KIC. Um a lot of the houses are

776
01:04:46,559 --> 01:04:56,799
being brought up to be um depending on
the um home and um the income home. Um

777
01:04:54,880 --> 01:05:03,280
they just need to apply. I know of
several that have been done recently. I

778
01:04:59,359 --> 01:05:09,359
know that um uh for other outside
non-native uh groups throughout the I

779
01:05:06,000 --> 01:05:15,440
think in the last 20 years because uh my
grandmother's house was done I want to

780
01:05:11,920 --> 01:05:22,240
say in 200
one they replaced all the windows. Um,

781
01:05:18,640 --> 01:05:26,559
we're talking about 101 year old house
that's been um, they sprayed in

782
01:05:24,720 --> 01:05:31,599
insulation.
Um, windows replaced.

783
01:05:29,760 --> 01:05:37,200
I mean, granted, I just replaced the
front windows on it myself, but um, for

784
01:05:34,640 --> 01:05:41,359
the most part, a lot of the those
programs are still available. Um, state

785
01:05:39,839 --> 01:05:45,599
programs
um, and then tribal programs that are

786
01:05:43,119 --> 01:05:50,640
doing it. And then they're also um
implementing a heat pump program to put

787
01:05:48,079 --> 01:05:59,200
in heat pumps. Um from personal
experience, I put mine in um which is I

788
01:05:55,440 --> 01:06:06,720
put it in in August. It got in um that
one cold snap. I just finally got the

789
01:06:01,760 --> 01:06:15,200
bill on that and it was um it was
about 346 I paid in electric heat versus

790
01:06:12,400 --> 01:06:21,280
what I would have paid in oil heat which
would have been close to $600.

791
01:06:18,079 --> 01:06:27,599
So I cut my costs in half and the house
still isn't I mean it's 101y old house.

792
01:06:25,520 --> 01:06:31,119
Um it's it's a lot more insulated with
new but there are a lot there's a lot of

793
01:06:29,839 --> 01:06:34,890
programs still out there.
>> Yeah. When we talk about low income it's

794
01:06:32,799 --> 01:06:36,319
a cost of energy that includes
[clears throat] heating.

795
01:06:35,760 --> 01:06:38,640
» Yeah.
>> Yeah.

796
01:06:37,039 --> 01:06:44,240
» And then there's also the energy
assistance like people apply.

797
01:06:41,920 --> 01:06:47,200
» So there are options for
>> Yes.

798
01:06:45,359 --> 01:06:53,359
» Uh
is this kind of a time to brainstorm or

799
01:06:50,480 --> 01:06:57,440
am I jumping the gun? I mean to Okay.
Well, what Abby said kind of segueed

800
01:06:56,400 --> 01:07:03,039
into something I was thinking about
earlier and it's funny when Jay asked

801
01:06:59,599 --> 01:07:06,559
about a seasonal rate because uh and as
you said, I think that's probably not

802
01:07:04,400 --> 01:07:14,559
something you see too often, but given
our unique extreme seasonal nature. Uh

803
01:07:11,839 --> 01:07:19,039
it got me thinking a little
even on the residential side. I mean,

804
01:07:17,200 --> 01:07:24,319
everyone knows I we don't want to raise
rates at all, but obviously we've got to

805
01:07:21,359 --> 01:07:29,119
do something. So, I'm just wondering
even on the residential side if we did a

806
01:07:27,039 --> 01:07:34,319
seasonal increase [clears throat] in the
summer, which I understand is not the

807
01:07:31,200 --> 01:07:40,079
peak season for electric use
residentially, but I'm curious how many

808
01:07:36,720 --> 01:07:44,640
more uh you know, if you think about all
the bunk houses that have gone up with

809
01:07:42,000 --> 01:07:49,440
that are empty in the winter, full in
the summer. I mean, I think there could

810
01:07:46,480 --> 01:07:54,000
be a somewhat significant uh opportunity
there maybe to and granted it's going to

811
01:07:52,160 --> 01:07:57,440
be just like what people tell us about
Madison. You go down to Madison and the

812
01:07:55,839 --> 01:08:00,559
locals pay it too. The locals are going
to have to pay it too, but it's just

813
01:07:59,280 --> 01:08:05,039
something that I think maybe we ought to
look into a little. And I'm curious too

814
01:08:03,200 --> 01:08:11,177
if obviously no one has this on hand,
but how many more uh residential

815
01:08:08,880 --> 01:08:14,640
meters are up during the summer
[clears throat] when all those seasonal

816
01:08:12,480 --> 01:08:18,480
people are here?
because I think there'd be some some

817
01:08:16,640 --> 01:08:23,759
money to have there.
>> Yeah. U on on Riley's thought there, uh

818
01:08:22,159 --> 01:08:28,319
I forget the term you used. Was it a was
it a use charge for industrial? It was

819
01:08:26,560 --> 01:08:32,080
the charge that was used to kind of
counter since a tiered structure isn't

820
01:08:29,759 --> 01:08:34,560
really [clears throat] demand charge. So
I wonder if something like something

821
01:08:33,120 --> 01:08:37,839
like the bunk houses in particular,
which are associated with industry,

822
01:08:36,560 --> 01:08:40,400
that's where the demand charge might
come in really handy because the demand

823
01:08:39,199 --> 01:08:43,759
is really going to be placed in the
summertime. So you know if that demand

824
01:08:42,239 --> 01:08:47,679
charge is in place when that bunk house
is you know unoccupied in the winter

825
01:08:45,520 --> 01:08:51,040
obviously it's not consuming that power
summertime when it's occupied again that

826
01:08:49,359 --> 01:08:55,199
demand charges in place and we recoup
some of the revenue in that way just

827
01:08:53,679 --> 01:09:00,239
thought
>> on that note who then pays for the

828
01:08:57,679 --> 01:09:04,960
demand meters to go in that we don't
have currently so are we increasing our

829
01:09:02,319 --> 01:09:08,960
costs of maintenance and and things or
is that passed on

830
01:09:07,199 --> 01:09:12,799
you know to the customer I don't know
this first time I'm hearing about the

831
01:09:10,159 --> 01:09:15,520
demand thing. So, I'm truly don't know.
>> Go ahead. Go ahead,

832
01:09:13,600 --> 01:09:19,440
» your honor. And I'm I'm gonna rely on
Raph Talis and maybe even our electric

833
01:09:17,279 --> 01:09:23,600
division manager. So, as Bart mentioned,
we don't have the capabilities to do

834
01:09:21,199 --> 01:09:27,920
demand metering right now. So, I don't
if we're looking at something on the

835
01:09:25,120 --> 01:09:30,960
residential side or commercial side, I
don't think we're going to have the

836
01:09:29,359 --> 01:09:35,520
metering capability. I think you'd have
to put a fee structure in place like the

837
01:09:34,319 --> 01:09:39,359
demand charge that we have for
industrial and commercial. It would

838
01:09:37,359 --> 01:09:45,279
obviously be a much lesser threshold,
not 25 kilowatts, it would be a thousand

839
01:09:42,880 --> 01:09:50,080
or something something much lower to
essentially achieve the same thing if

840
01:09:46,640 --> 01:09:55,040
you're wanting to target um residents or
businesses that really seem to have more

841
01:09:52,400 --> 01:09:59,280
activity um in the summer season because
they're associated with industry. I

842
01:09:57,760 --> 01:10:04,400
think that's might be how you
>> Yeah, I think honestly the seasonal

843
01:10:02,000 --> 01:10:08,480
option as far as what we could actually
feasibly do because again not every

844
01:10:06,000 --> 01:10:12,960
customer has so that probably something
we could look at see how that might

845
01:10:10,400 --> 01:10:16,400
shift things a little bit um because we
have the monthly data to be able to look

846
01:10:14,239 --> 01:10:21,840
at that but the demands you catch up
with technology to be able to do it just

847
01:10:18,719 --> 01:10:26,239
don't have that
>> and and I'm not too thrilled about doing

848
01:10:24,560 --> 01:10:30,159
increased seating charge I think we want
to be business business friendly. We're

849
01:10:28,320 --> 01:10:35,760
going to get more revenue because the
plates are occupied and our use power

850
01:10:33,440 --> 01:10:41,000
and I think that is the general intent
of what we wanted to do. Um

851
01:10:41,120 --> 01:10:46,080
and quite frankly some of the guys if we
rate it too high we're going to force

852
01:10:44,719 --> 01:10:50,880
them into efficiencies and we'll
probably get less bucks.

853
01:10:47,840 --> 01:10:54,880
» That's the again it's power and bigger
customers. It's a balancing act. You

854
01:10:53,280 --> 01:11:01,760
know, you have to be a little bit
careful there, I think, because

855
01:10:58,560 --> 01:11:06,400
» I know when some of the canries had
diesel generation, if we had raised our

856
01:11:04,560 --> 01:11:08,640
power to an extent to where it probably
cheaper for them to their own power,

857
01:11:08,159 --> 01:11:14,760
they'd kill off
>> horses. That's right.

858
01:11:10,719 --> 01:11:14,760
» Abby, did you have a question?

859
01:11:16,080 --> 01:11:22,400
» Not um trying to figure out the best way
to

860
01:11:20,640 --> 01:11:25,640
give me a moment. I just want to phrase
that correctly.

861
01:11:26,560 --> 01:11:33,040
» All right.
>> Um Okay. Well, I guess um the sake of

862
01:11:30,480 --> 01:11:36,000
time, maybe we'll keep the train moving.
That's okay.

863
01:11:33,679 --> 01:11:40,239
» Yeah, that's good.
>> All right. So, we're going to shift

864
01:11:37,679 --> 01:11:42,960
gears and and talk solid ways now. That
looks okay. Yep.

865
01:11:42,800 --> 01:11:48,760
Can
>> we take a small for?

866
01:11:44,719 --> 01:11:48,760
» Sure. Yeah.

867
01:18:42,000 --> 01:18:46,760
Everybody back? We are.
>> Oh, no.

868
01:18:47,844 --> 01:18:49,864
[laughter]

869
01:18:50,800 --> 01:18:55,920
» We'll come back to work and we're going
to continue on with the discussion in

870
01:18:53,920 --> 01:19:00,719
regard to [clears throat]
thank you guys for your big

871
01:18:58,640 --> 01:19:05,920
Yeah, good. To get on to the solid
weight side of things, want to start

872
01:19:02,960 --> 01:19:10,960
with kind of giving a service overview.
Um, we know you probably are familiar

873
01:19:08,239 --> 01:19:16,159
with the system, but there's really
three key components to the solid waste

874
01:19:13,199 --> 01:19:18,960
structure. We had the reser mic a little
bit.

875
01:19:17,974 --> 01:19:21,199
[laughter]
>> Is this better?

876
01:19:19,760 --> 01:19:26,159
» You can bring it closer to you.
>> Thank you.

877
01:19:22,239 --> 01:19:29,520
» Sorry, my seat's really high. [laughter]
>> So, we have three key components. So we

878
01:19:27,679 --> 01:19:34,400
have the residential collection. We have
commercial collection which includes um

879
01:19:32,320 --> 01:19:40,320
rental dumpsters. We have our disposal
operations which is really our landfill

880
01:19:37,840 --> 01:19:46,560
which only with the engineering report
because we have about 25 lers of

881
01:19:43,120 --> 01:19:50,960
remaining life left and we only accept
non-putressful waste at this landfill.

882
01:19:48,880 --> 01:19:57,360
Everything else is sent via our long
haul contract um down to the state of

883
01:19:54,560 --> 01:20:01,520
Washington. So overall, the solid waste
stemmed pet does offer a really high

884
01:19:59,440 --> 01:20:06,719
level of service to your customers
throughout the year.

885
01:20:04,159 --> 01:20:10,719
And with that being said, so this also
breaks down slide breaks down what our

886
01:20:08,480 --> 01:20:16,159
existing rate structure is. So we have
our residential rates which are really

887
01:20:13,520 --> 01:20:21,360
driven by the collection rate per month
as well as our area wide disposal fees.

888
01:20:19,120 --> 01:20:27,040
The solid waste credit has to do with
our multif family customers which backs

889
01:20:23,679 --> 01:20:32,320
off of which backs off their residential
um bill. Then we have our business

890
01:20:28,960 --> 01:20:37,199
collection services which has is for our
commercial customers. There's a flat

891
01:20:34,640 --> 01:20:42,719
rate minimum charge in monthly container
rentals but otherwise the fee is charged

892
01:20:40,480 --> 01:20:49,440
by the amount of waste generated at the
curb. Um and then on the disposal side

893
01:20:46,080 --> 01:20:54,400
we have our tipping fees. Um and then
for both our we admit some minimum

894
01:20:51,920 --> 01:21:01,440
charges suffered household hazard
displaced. Um but it's a pretty robust

895
01:20:57,280 --> 01:21:05,760
offering and um and the rate structure
that follows

896
01:21:04,080 --> 01:21:09,360
with that with that rate structure and
with the background of our high level of

897
01:21:07,040 --> 01:21:15,199
service. It's important to note that
we've all heard that inflation has been

898
01:21:11,520 --> 01:21:21,040
increasing at rapid rates and we we keep
hearing that every time we turn this but

899
01:21:17,520 --> 01:21:26,000
it's important to note that CPI while it
has increased so much the consumer price

900
01:21:23,120 --> 01:21:31,040
index the garbage and trash collection
index which is a component of CPI which

901
01:21:28,880 --> 01:21:36,159
measures what our what the garbage and
trash bills are doing across the United

902
01:21:33,679 --> 01:21:40,640
States which components in components in
this include are driving it are what are

903
01:21:38,400 --> 01:21:45,920
our labor costs doing to service our
garbage and trash like with our with our

904
01:21:42,719 --> 01:21:52,639
drivers um with like the CDL licenses
with the vehicle cost um kind of driven

905
01:21:48,719 --> 01:21:58,080
by the NR index this the garbage and
trash collection index is actually go is

906
01:21:55,360 --> 01:22:02,560
actually higher um and increasing at a
higher rate than what CPI is. So the

907
01:22:00,960 --> 01:22:07,760
chart on the left hand side of the
screen or on your sheet uh breaks that

908
01:22:05,040 --> 01:22:11,920
down. So the blue line is that CPI that
I was talking about, but the red line is

909
01:22:10,560 --> 01:22:16,960
showing where the garbage how the
garbage dispatch index is is averaging

910
01:22:14,239 --> 01:22:21,760
about 12% higher. And you can see that
that's really driven back from really

911
01:22:18,960 --> 01:22:26,000
starts to separate from 2018 and it's
only continuing to grow now that we're

912
01:22:23,440 --> 01:22:31,520
in 2025 2026.
And historically, we've seen that that

913
01:22:28,000 --> 01:22:35,520
CPI is normally about a year year or two
ahead of where the garbage and trash

914
01:22:33,280 --> 01:22:40,800
collection is because it's a it's a comp
it's really a circular effect. But so

915
01:22:39,040 --> 01:22:44,800
where we're starting to hear like news
saying like, okay, inflation might be

916
01:22:42,639 --> 01:22:48,719
slowing, the garbage to trash index is
still a couple years behind that. So

917
01:22:46,880 --> 01:22:53,760
we're going to see that tren that red
line, it's going to continue to trend

918
01:22:50,880 --> 01:22:58,000
upwards before it starts to even out.
like we can see, okay, the blue line

919
01:22:56,000 --> 01:23:02,000
starts to even starts to kind of like
take a little bit of a curve. That

920
01:23:00,560 --> 01:23:07,280
garbage and trash index is really
projected to continue that um that

921
01:23:04,639 --> 01:23:12,480
incline for at least a couple more years
before we might see it flat out. And so

922
01:23:10,159 --> 01:23:17,199
why is that important? So if you look at
the right hand side and it's we're

923
01:23:14,800 --> 01:23:23,520
showing a historical specifically
residential customer collection bill um

924
01:23:20,159 --> 01:23:29,199
in comparison to if what has been
adopted in comparison to what if we

925
01:23:26,320 --> 01:23:34,880
adopt what if we had increased our rates
by inflation. And so we started this um

926
01:23:32,719 --> 01:23:43,199
back in 2020, there was an increase
between um 22 and 23. Um but heading

927
01:23:39,760 --> 01:23:48,080
into 2026 that $1160,
we're really about $3 behind where we

928
01:23:45,920 --> 01:23:53,360
would be if we've been increasing our
rates by inflation. And so and that's

929
01:23:51,199 --> 01:23:57,520
really important because our cost of
services continue to grow. And we're

930
01:23:55,679 --> 01:24:03,920
going to get into that a little bit more
as I talk about the financial plan.

931
01:24:01,199 --> 01:24:08,159
And so looking at our financial plan in
the elements kind of like Bart talked

932
01:24:05,600 --> 01:24:12,880
about um they had the the road map on
electric side. Um this is just another

933
01:24:10,320 --> 01:24:16,800
way to look at it is our our whole
process of building this model. It's a

934
01:24:14,880 --> 01:24:20,800
very data driven process. So your staff
was really helpful in working with us to

935
01:24:19,280 --> 01:24:24,159
get all this data. We're very grateful
to them. We went through the process of

936
01:24:22,800 --> 01:24:27,840
looking at historical building
statistics and different historical

937
01:24:26,000 --> 01:24:32,320
financial data. They looked at your
current budget and financial plan, your

938
01:24:30,239 --> 01:24:36,880
capital improvement plan, and what those
cycles looks like, all with the goal of

939
01:24:34,400 --> 01:24:41,440
reaching revenue sufficiency. And so
I'll talk about that as we continue on,

940
01:24:39,120 --> 01:24:47,600
but the goal is really to kind of keep
our balance be balanced, right? So we

941
01:24:44,400 --> 01:24:52,960
have our green we have our green blocks
which is our revenues and for the solid

942
01:24:50,320 --> 01:24:58,159
waste system that's purely driven by our
collection charges and our t and our

943
01:24:55,280 --> 01:25:02,320
really our disposal or tipping fees and
we have some um small portion of

944
01:25:00,239 --> 01:25:07,040
miscellaneous fees. Really our two key
charges are going to be the collection

945
01:25:03,840 --> 01:25:11,600
and the disposal uh tipping fees. And
then on the opposite side with our red

946
01:25:09,760 --> 01:25:15,120
boxes we're looking at what our revenue
requirements are. What do our what do

947
01:25:13,040 --> 01:25:19,440
our green boxes need to do to balance
out the red? And so on the red on the

948
01:25:17,679 --> 01:25:23,120
red bars, we have our operating
expenses. We have our capital

949
01:25:20,880 --> 01:25:29,679
improvement, which includes our our
equipment, our um our vehicles, and then

950
01:25:27,199 --> 01:25:34,159
we also have our reserves and our
landfill closure. Like I mentioned

951
01:25:31,440 --> 01:25:40,400
previously, there's only about estimated
about 25 years of your landfills

952
01:25:38,000 --> 01:25:45,120
remaining capac life remaining capacity
left. And so it's important to kind of

953
01:25:42,880 --> 01:25:49,920
look at okay outside of what our reserve
policies are or making sure that we have

954
01:25:48,000 --> 01:25:55,760
enough to cover our operations and
maintenance expenses in like in any kind

955
01:25:52,719 --> 01:25:59,679
of rain day activities that we also have
enough money set aside for our landfill

956
01:25:57,600 --> 01:26:03,199
closure because eventually we won't be
able to accept anything at the landfill

957
01:26:01,280 --> 01:26:07,840
and there will be no source of revenue
to come in um that will be able to help

958
01:26:05,520 --> 01:26:14,080
offset those costs because even when we
close the landfill there's still a cost

959
01:26:09,760 --> 01:26:22,639
of of maintaining that property and and
continuing the closure um closure method

960
01:26:17,040 --> 01:26:27,679
as far as what the DBQ uh requires.
So with that in mind with our getting

961
01:26:25,360 --> 01:26:32,800
into our red boxes on our on and m the
operating expenses. So, we used a

962
01:26:29,679 --> 01:26:38,000
combination of the 2025 and 2026 budget
as our baseline for the model. And we

963
01:26:36,320 --> 01:26:44,000
talked about costs increasing with the
garbage uh the garbage trash mix and

964
01:26:40,080 --> 01:26:49,840
CPI. Well, for the 2025 budget, that was
a 12% increase over our 2024 cost. And

965
01:26:48,080 --> 01:26:55,600
so, the chart on the right hand side
shows you a bit of a breakdown of what

966
01:26:52,159 --> 01:27:00,239
the operating expenses are for uh for
the solid waste fund. And the largest

967
01:26:57,600 --> 01:27:07,520
component is your contractual services.
And it's about 37% about 37% of that is

968
01:27:05,360 --> 01:27:13,360
of the entire budget is related to the
contract services. And that is mainly

969
01:27:10,880 --> 01:27:21,120
driven by your longhaul contract sending
the waste down and out of state. This is

970
01:27:16,960 --> 01:27:24,560
now followed by labor at 32%. So our and
then our inner fund transfers which is

971
01:27:22,719 --> 01:27:28,880
like which is our billing which is like
our financial admin really like our o

972
01:27:26,960 --> 01:27:34,159
some of overhead costs and then some
minor capital outlay. And so for the

973
01:27:32,159 --> 01:27:39,679
forecast period what we did was we took
the budget and when we were working we

974
01:27:37,120 --> 01:27:44,320
modeled our contract and contractual
services based off of our projection of

975
01:27:42,159 --> 01:27:50,719
tonnages that were coming in as well as
the contract rates that are um that are

976
01:27:47,520 --> 01:27:56,159
currently in effect. But then we used a
range of escalation factors um for the

977
01:27:54,080 --> 01:28:02,719
for the majority between three to five
percent um based off of different CPI

978
01:27:59,360 --> 01:28:06,719
indices looking at on a line item detail
looking at what what our costs can be.

979
01:28:04,800 --> 01:28:12,159
It is important to note for later we do
know that there is a cola increase that

980
01:28:08,960 --> 01:28:16,080
has been um budgeted that this um our
plan does include that. So that's a

981
01:28:14,239 --> 01:28:22,159
little bit um it's a little bit higher
than the our the range of the 3 to 5%.

982
01:28:19,520 --> 01:28:27,520
Um but overall our growth is projected
about 4.7%

983
01:28:24,239 --> 01:28:31,880
and our operating expenses from um from
this year across to 2030.

984
01:28:32,880 --> 01:28:41,440
Continuing on like with our red bars, um
the next thing that we were looking at

985
01:28:38,960 --> 01:28:45,199
on our revenue requirements was our
capital improvement. We keep talking

986
01:28:43,520 --> 01:28:49,920
about hook costs have gone up. The
construction cost and that's the same

987
01:28:46,800 --> 01:28:54,560
thing since 2020. Um the industy has
gone up about 21%. And you've seen that

988
01:28:52,800 --> 01:28:58,800
on the electric side. We're seeing it in
water. We're also seeing it in solid

989
01:28:56,159 --> 01:29:03,920
waste. And so the solid waste capital
improvement plan is really made up of

990
01:29:02,000 --> 01:29:08,880
our transfer station equipment
replacements. We have some vehicles um

991
01:29:06,560 --> 01:29:14,639
that are getting that need to be
replaced. It's about over the forecast

992
01:29:11,520 --> 01:29:19,920
period it's a little over $4 million um
is what we're looking at um over the

993
01:29:16,960 --> 01:29:26,880
next couple years as on the aggregate
which averages about about $725,000

994
01:29:24,080 --> 01:29:31,120
per year. And it's important to note
that all of these projects are assumed

995
01:29:28,639 --> 01:29:34,960
to be cash funded or as we talked on the
electric side that pay go that pay as

996
01:29:32,880 --> 01:29:39,440
you go capital. So everything on solid
waste we assume to be cash funded and

997
01:29:37,120 --> 01:29:42,960
there's no outstanding debt on the solid
waste side. Um so we so we did not look

998
01:29:41,760 --> 01:29:47,520
at any [clears throat] coverage
requirements as far as when we're once

999
01:29:45,840 --> 01:29:52,520
we get into the reserves we're talking
about those red revenue requirements.

1000
01:29:54,400 --> 01:30:00,560
And so looking at so now we've talked
about a little bit of on the at least

1001
01:29:58,719 --> 01:30:03,600
the first couple of boxes on our red
side for our balance means the revenue

1002
01:30:02,000 --> 01:30:08,480
requirements. Now we're looking at what
our existing revenue are and looking at

1003
01:30:06,880 --> 01:30:14,400
how are we going to balance this all
out. And so what we did was um to

1004
01:30:12,159 --> 01:30:19,040
project what our existing revenues were.
We took our billings the billing

1005
01:30:16,239 --> 01:30:23,199
statistics um from our landfill tonnage
reports um the the tonnage reports that

1006
01:30:21,440 --> 01:30:28,639
go that where the waste is getting now
hauled um down south. And then we looked

1007
01:30:26,800 --> 01:30:33,840
at like our customer billing monthly
reports and we calculated what your

1008
01:30:31,440 --> 01:30:39,840
existing revenues are and then it was a
combination between that as well as what

1009
01:30:36,480 --> 01:30:45,199
your financial statements are. And so
what you can see on the right hand side

1010
01:30:42,159 --> 01:30:50,000
in that financial plan, it breaks down
what the what the bar what what the

1011
01:30:47,920 --> 01:30:55,360
system looks like if we didn't raise any
increase didn't raise our rates and if

1012
01:30:52,239 --> 01:31:01,840
we just let things let things lie. And
so the bars the dark navy greenish bars

1013
01:30:58,960 --> 01:31:05,920
I should say um represent our on& and m
expenses. So, we talked about how there

1014
01:31:03,440 --> 01:31:10,080
was a pretty big increase between 24 and
25 that that's averaging growth about

1015
01:31:08,400 --> 01:31:14,719
4.7%.
Um, is those dark navy bars. The blue

1016
01:31:12,639 --> 01:31:18,560
bar, the like those bright kind of
electric blue bars is our pay cut. So,

1017
01:31:16,960 --> 01:31:23,440
that was the pay as you go capital.
That's the capital we just talked about

1018
01:31:20,159 --> 01:31:28,480
averaging about $700,000
um per year over $4 million over the

1019
01:31:26,320 --> 01:31:34,159
forecast. And then we have those gray
bars which is our transfer um or

1020
01:31:31,040 --> 01:31:39,600
transfers to reserves. So that goes into
um that goes into our reserves to make

1021
01:31:36,080 --> 01:31:46,159
sure that we are keeping a 180 180day
reserve um OM reserve and then also um

1022
01:31:43,440 --> 01:31:50,080
making deposits for our landfill closure
um liability where we're target we're

1023
01:31:48,719 --> 01:31:54,960
trying to make sure that we have enough
cash balances set aside to target what

1024
01:31:52,880 --> 01:32:01,440
that our ending closure and postclosure
care liabilities are. And so from that

1025
01:31:58,719 --> 01:32:05,920
you can see that our existing revenues
do not cover the uh the need for the

1026
01:32:04,480 --> 01:32:10,639
capital and transfers throughout the
forecast period. And overall that

1027
01:32:08,239 --> 01:32:14,400
shortfall average is about $500,000 a
year. And it's also important to note

1028
01:32:12,880 --> 01:32:21,320
similar on the electric side, we do not
assume any um any customer growth to be

1029
01:32:17,199 --> 01:32:21,320
conservative for the system.

1030
01:32:21,679 --> 01:32:30,560
And so what does that what do we do with
that? And so we looked at when we're

1031
01:32:27,520 --> 01:32:34,400
talking to to to staff and the routine
talked about we need to make sure that

1032
01:32:33,040 --> 01:32:37,840
we know the existing revenues aren't
going to cover. We talked a little bit

1033
01:32:35,679 --> 01:32:43,440
about how that we need to have financial
policies and targets in place. And so I

1034
01:32:40,560 --> 01:32:47,040
mentioned that 180 days of cash on hand
that that's one of that's the target

1035
01:32:44,960 --> 01:32:52,480
that's one of our targets to make sure
that we have about six months of of cash

1036
01:32:50,080 --> 01:32:56,480
set aside in case there's in case
something happens in case there's issues

1037
01:32:54,159 --> 01:33:00,239
at the transfer station, the landfill,
long haul contracts, something something

1038
01:32:58,480 --> 01:33:04,080
goes wrong, anything like that. We want
to make sure that we're able to have

1039
01:33:01,679 --> 01:33:08,480
that liquidity to cover because there
would be nothing worse than having trash

1040
01:33:06,000 --> 01:33:12,719
on the side of the road in high season
and that would affect not only residents

1041
01:33:10,159 --> 01:33:18,239
but also the the tourists coming into
place. We also then I mentioned the

1042
01:33:16,000 --> 01:33:24,080
closure liability target. we only have
about 25 years left of our landfill um

1043
01:33:21,760 --> 01:33:29,920
of our landfill. And so the closure
liability target is really is the cash

1044
01:33:27,679 --> 01:33:34,800
balance is equal to that calculated
closure and postclosure care liability

1045
01:33:32,400 --> 01:33:39,120
um for the current period. So right now
it's about a million dollars is what it

1046
01:33:37,360 --> 01:33:44,159
would take to if we had to shut down the
landfill tomorrow. Obviously that that

1047
01:33:41,440 --> 01:33:50,080
will grow with inflation over time, but
one of the things we had talked about

1048
01:33:46,400 --> 01:33:56,000
was setting aside a closure liability
fund separate. And so where the Soliv

1049
01:33:52,880 --> 01:34:01,199
Fund would then make deposits to to the
closure uh to the closure liability fund

1050
01:33:58,800 --> 01:34:07,760
and where that that would be restricted
um to make sure that we have enough

1051
01:34:03,679 --> 01:34:11,600
money that's set aside um for for that
impending closure and what what that'll

1052
01:34:10,000 --> 01:34:16,560
look like when there's no revenue coming
into that system anymore. And so those

1053
01:34:14,960 --> 01:34:20,719
were our reserve targets. The revenue
sufficiency again we're trying to hit

1054
01:34:18,800 --> 01:34:24,719
we're trying to hit that balance. We
want to make sure that our revenue is

1055
01:34:22,080 --> 01:34:28,719
sufficient to cover our expenses on an
annualized basis. We talked about what

1056
01:34:26,560 --> 01:34:33,440
the short of a shortfall of about
$500,000 per year over the forecast

1057
01:34:31,679 --> 01:34:38,880
period. So we're we're looking we need
to make sure that we're we're recouping

1058
01:34:35,679 --> 01:34:42,480
those expenses. And then the third
component being we talked about the

1059
01:34:40,400 --> 01:34:48,159
capital um solid waste fund does not
have any existing debt and we and the

1060
01:34:46,239 --> 01:34:54,400
goal was expressed that the that we
should fund everything through um

1061
01:34:50,719 --> 01:34:58,159
through payown for that. And so if we
take all that together and we take the

1062
01:34:55,920 --> 01:35:04,719
balance beam what would it take to get
to a revenue sufficient point targeting

1063
01:35:02,159 --> 01:35:08,080
180 days we get to the financial plan
the reserve balances that are in front

1064
01:35:06,239 --> 01:35:14,000
of you now. So the rate increases are
necessary to meet the financial targets.

1065
01:35:11,040 --> 01:35:20,400
So we'll talk about bills next, but what
this means is we would need an increase

1066
01:35:16,880 --> 01:35:27,199
of 5 and a half% on the disposal side
year-over-year from um starting April 1

1067
01:35:23,600 --> 01:35:32,480
on 2026 and then following January 1st
um a year after through 2030. And then

1068
01:35:30,239 --> 01:35:38,560
for the collection component, we would
want to have a nine and a half percent

1069
01:35:35,440 --> 01:35:41,840
increase followed by 3% thereafter. And
the nine and a half increase part of

1070
01:35:40,239 --> 01:35:46,960
that is has to do with we know that
there was a large disposal a large

1071
01:35:45,120 --> 01:35:52,639
substantial disposal increase that has
just occurred fairly recently. Whereas

1072
01:35:49,199 --> 01:35:58,560
the collection um the collection rates
have lagged have lagged behind um for

1073
01:35:56,000 --> 01:36:04,400
lack of a better term. we hadn't kept
pace with at the same rate as we had for

1074
01:36:01,440 --> 01:36:09,360
the disposal. And so with that plan on
the right hand side, you can see that we

1075
01:36:06,480 --> 01:36:14,800
meet our reserve targets in all years of
the forecast, which is that 180 days, as

1076
01:36:12,560 --> 01:36:21,280
well as we're meeting our PL our
landfill closure liability target.

1077
01:36:18,719 --> 01:36:25,120
And so with the proposed rate increases
that I just mentioned, that five and a

1078
01:36:22,960 --> 01:36:31,280
half percent on disposal, that nine and
a half followed by 3% on the collection

1079
01:36:27,679 --> 01:36:35,199
side, um it this shows what a sample
bill would be. So the first um the first

1080
01:36:33,920 --> 01:36:39,520
section talks about the landfield
tipping fee. That would be about a 12 uh

1081
01:36:37,920 --> 01:36:45,600
$12.82
increase um over the next year. Um our

1082
01:36:43,040 --> 01:36:52,239
residential access fee is about $1.50
per month. And then as far as the

1083
01:36:48,400 --> 01:36:57,280
collection rate um increase, it's a$121
um per month with that nine and a half

1084
01:36:55,119 --> 01:37:01,119
percent. And if we take the blended what
a typical residential bill would look

1085
01:36:58,960 --> 01:37:07,199
like, which would be our collection rate
plus that residential access fee, it

1086
01:37:03,760 --> 01:37:14,239
would it would be about $42.80,
which would equate to about a $2.71

1087
01:37:10,719 --> 01:37:20,080
um cent per month increase.
So, I've talked talked pretty quickly um

1088
01:37:18,159 --> 01:37:26,280
so far, but I do want to take a quick
pause and see if anybody has any

1089
01:37:22,320 --> 01:37:26,280
questions at this point.

1090
01:37:29,440 --> 01:37:38,080
» So, one of the things that wastes do,
they also subsidize any type of

1091
01:37:34,000 --> 01:37:44,880
recycling. They don't have any
um revenue structures to support

1092
01:37:41,600 --> 01:37:49,119
recycling. And I think that in the
upcoming

1093
01:37:47,280 --> 01:37:55,520
fees that we going to probably end up
having to start to charge

1094
01:37:51,520 --> 01:37:59,840
something for commercial car
should probably take something in

1095
01:37:56,960 --> 01:38:05,960
consideration that the other thing I
think that we need to considering rate

1096
01:38:01,679 --> 01:38:05,960
is um

1097
01:38:06,159 --> 01:38:16,320
we have uh
customer

1098
01:38:11,040 --> 01:38:22,719
virtual customers especially that need
everyday services compared to uh weekly

1099
01:38:20,239 --> 01:38:27,199
service or bi-weekly services. And there
should be a rate structure that makes

1100
01:38:24,239 --> 01:38:30,880
for that because in some cases they're
using every square footage for

1101
01:38:29,199 --> 01:38:35,600
commercial space and they don't allow
enough space to accumulate garbage. So,

1102
01:38:33,840 --> 01:38:42,400
we're having to go to that particular
facility every day, which is more

1103
01:38:38,560 --> 01:38:46,560
manpower uh that we're expending than we
would for a weekly or bi-weekly

1104
01:38:44,800 --> 01:38:50,000
inspection.
Um, so those are some of the concerns

1105
01:38:48,320 --> 01:38:54,320
that I have in regards to what we're
doing with the rate structure that we

1106
01:38:52,239 --> 01:38:59,600
have to look at it, make sure that we're
charging equitably. I know in a lot of

1107
01:38:57,360 --> 01:39:05,440
places they also have charges for carry
out. If you're at a long distance from

1108
01:39:02,000 --> 01:39:10,159
the the truck, then it's add manpower to
do that that time and it should be

1109
01:39:07,760 --> 01:39:13,159
compensated for
um

1110
01:39:13,280 --> 01:39:21,199
we all know what we had to pay for a new
hook truck this year was $325,000

1111
01:39:18,400 --> 01:39:24,199
for a vehicle. Garbage trucks are over
200,000.

1112
01:39:24,639 --> 01:39:30,719
I remember when I used my garbage truck
for $65,000.

1113
01:39:29,040 --> 01:39:34,719
So,
>> I'd love to tell you it's going down,

1114
01:39:32,239 --> 01:39:40,000
but we were seeing some invoices like
close to $4 to $500,000

1115
01:39:37,360 --> 01:39:43,600
in some areas.
>> And one of the things I don't see in

1116
01:39:41,840 --> 01:39:48,800
here, I see closure money, but I don't
see when we close this landfill, we got

1117
01:39:46,639 --> 01:39:53,840
to replace it.
And there's no capital

1118
01:39:51,679 --> 01:39:58,400
fund that we're paying into for the
potential of maybe we get away from a

1119
01:39:56,880 --> 01:40:03,840
landfill completely and we ship
everything using an ampad compactor

1120
01:40:01,760 --> 01:40:10,320
or we have to relocate the existing
landfill so that we could continue to

1121
01:40:06,400 --> 01:40:15,280
dispose of our um you know demolition
waste uh

1122
01:40:13,119 --> 01:40:20,000
at a cheaper price than it would cost us
of course to send it off island. And by

1123
01:40:17,840 --> 01:40:26,800
that time the technology be may be such
that we're incinerating or whatever it

1124
01:40:23,280 --> 01:40:33,040
may be going to be in 25 years or we get
into an agreement throughout Southeast

1125
01:40:29,360 --> 01:40:38,639
Alaska that is a combined effort of all
the communities for

1126
01:40:35,920 --> 01:40:44,719
soloutheast
Alaska that could be a cheaper option.

1127
01:40:40,960 --> 01:40:49,280
But I think that um when this landfill
closes out, we're going to have to have

1128
01:40:46,320 --> 01:40:54,400
some funds available to move to the next
step, whatever be. And I don't know how

1129
01:40:52,159 --> 01:40:59,440
we structure that inventory rate or what
we can estimate that cost at, but it's a

1130
01:40:57,679 --> 01:41:03,159
real cost that's going to come to the
city at some point.

1131
01:41:03,600 --> 01:41:12,159
» Yes, Abby. In this proposed rate
increase, did I totally miss like the

1132
01:41:08,400 --> 01:41:14,560
commercial side of the increase or
are we strictly only looking at

1133
01:41:13,679 --> 01:41:19,440
residential income?
>> No, there's commercial in here.

1134
01:41:16,880 --> 01:41:24,639
» It's um we just showed a residential
bill impact just um to look at what that

1135
01:41:22,719 --> 01:41:29,679
would look like. Um the commercial bill
is varied uh based off of the the waste

1136
01:41:27,119 --> 01:41:34,320
generation. Um so the increase the
collection increase would be to across

1137
01:41:31,760 --> 01:41:39,600
the board to all both residential and
commercial customers. Um the Timmy fee

1138
01:41:37,040 --> 01:41:44,159
again across the board. Um but just for
the purposes of the presentation we just

1139
01:41:41,440 --> 01:41:48,320
showed a sample residential bill but we
could calculate um what a commercial

1140
01:41:46,080 --> 01:41:50,400
bill impact would look like. Um so you
could see it too

1141
01:41:49,119 --> 01:41:52,880
» to follow up your honor.
>> Yes.

1142
01:41:51,119 --> 01:42:00,800
» So just to make sure I'm understanding.
So on page 33, all those rates are

1143
01:41:58,000 --> 01:42:07,840
existingly structured. According to your
proposed rate increase, the collection

1144
01:42:04,639 --> 01:42:13,760
side of this, you're saying 9.5%
increase for every single item that's

1145
01:42:11,280 --> 01:42:18,960
here, right? And then on the disposal
side, you're saying

1146
01:42:15,840 --> 01:42:21,960
5.5% for all the options. Okay. Thank
you.

1147
01:42:26,320 --> 01:42:33,440
So we have our contract already has a
built-in multiplier for escalating every

1148
01:42:32,480 --> 01:42:38,400
year. Is that correct?
>> Yep.

1149
01:42:34,320 --> 01:42:46,119
» And then unlike the lower 48, we put
everything on a bargain that

1150
01:42:42,239 --> 01:42:46,119
» which keeps filling up.

1151
01:42:46,480 --> 01:42:49,480
Any

1152
01:42:49,840 --> 01:42:52,840
questions?

1153
01:42:53,840 --> 01:43:00,480
And so you said that we're going to have
to do 9 and a half% and we could change

1154
01:42:58,080 --> 01:43:04,960
that to eight. But then how many years
out did that project?

1155
01:43:02,400 --> 01:43:07,840
» 9 and a half% to 3%. Uh
>> that was on the collection. You said we

1156
01:43:06,480 --> 01:43:09,440
had to start at
>> nine and a half. Yes.

1157
01:43:08,800 --> 01:43:11,600
» Yeah.
>> That would be the suggestion for the

1158
01:43:10,880 --> 01:43:14,080
first year.
>> That would be the suggestion for the

1159
01:43:12,880 --> 01:43:19,040
first year and then we're going to move
to eight%. moved to 3%.

1160
01:43:16,960 --> 01:43:24,679
» 3%. Okay.
>> Uh 3% um from 2027 to 2030.

1161
01:43:26,320 --> 01:43:30,960
» It's not coming.
>> Yes. Abby,

1162
01:43:28,639 --> 01:43:36,480
» did we look again at the, you know,
looking at different proposed increases

1163
01:43:33,920 --> 01:43:43,600
on residents versus commercial instead
of just one flat rate across everyone,

1164
01:43:40,159 --> 01:43:46,639
every category? Just didn't know the
other option. We had options. So, I just

1165
01:43:45,280 --> 01:43:51,040
didn't know
>> there are any other options.

1166
01:43:48,880 --> 01:43:54,719
» So, we do have some other options. Um,
maybe if I get into the RA design that

1167
01:43:52,639 --> 01:43:57,920
kind of will might address some of the
things that came up as far as

1168
01:43:55,760 --> 01:44:03,679
seasonality in some of those commercial
versus residential. Um, so some of the

1169
01:44:02,159 --> 01:44:08,080
things that we looked at with the staff
was we definitely heard we definitely

1170
01:44:05,600 --> 01:44:13,040
understand that it's very highly
seasonal a highly seasonal area and so

1171
01:44:11,520 --> 01:44:18,080
and you're not alone in that. A lot of
the municipalities on the coast, whether

1172
01:44:15,520 --> 01:44:22,560
it's in southeast Alaska or whether it's
even down in Texas, face those same face

1173
01:44:20,560 --> 01:44:26,719
those same concerns, especially when it
comes to waste generation because at the

1174
01:44:24,159 --> 01:44:30,800
end of the day, the tourist leap when
you have a lot a good portion of waste

1175
01:44:28,719 --> 01:44:34,719
that's still there. And so something
that we talked about was was addressing

1176
01:44:33,920 --> 01:44:40,719
Mr.
something that you had said was there

1177
01:44:37,440 --> 01:44:45,760
are businesses in areas where there's a
high level of service where where your

1178
01:44:44,159 --> 01:44:50,480
your staff is going out seven days a
week and more than that more than going

1179
01:44:47,920 --> 01:44:55,119
out seven days a week they it's a highly
manual process and where they can't get

1180
01:44:52,639 --> 01:45:00,320
their trucks in certain areas and they
they aren't able to to pick up pick up

1181
01:44:58,560 --> 01:45:03,040
the cans and the trash in the same way
that they would do a residential

1182
01:45:01,440 --> 01:45:07,119
customer. And so something that we
looked at was a backdoor collection. Um

1183
01:45:05,520 --> 01:45:13,360
a back door collection which would be an
additional fee on top of a commercial

1184
01:45:10,400 --> 01:45:16,960
customer's monthly bill. And so that
would be [clears throat] something

1185
01:45:13,920 --> 01:45:21,760
that's charged from in from April to
October which is designed to recover the

1186
01:45:20,320 --> 01:45:27,280
cost of a service that you're already
providing. um but would be a revenue

1187
01:45:24,639 --> 01:45:33,199
generating uh what would turn into a
more of a revenue generating um so

1188
01:45:30,960 --> 01:45:39,119
revenue generating fee I should say and
so and so that's something that would

1189
01:45:35,840 --> 01:45:44,880
and I'm going to jump ahead just quickly
um one slide is just to show you what we

1190
01:45:41,600 --> 01:45:48,560
were calculating with that and so the
goal is we're just trying to reflect the

1191
01:45:46,719 --> 01:45:51,760
cost of providing the service that
you're already doing like I mentioned

1192
01:45:50,159 --> 01:45:55,360
before you guys are providing a high
level of service to all your customers,

1193
01:45:53,520 --> 01:45:59,119
but um but commercial especially
especially when it comes time to the

1194
01:45:56,880 --> 01:46:03,679
with the seasonality. And so we need to
be able to cover the cost of staffing

1195
01:46:01,280 --> 01:46:10,080
which also includes temporary labor. And
so how do we this the overall system has

1196
01:46:06,400 --> 01:46:14,000
to be designed to to maintain this level
of service. And so what we did was we

1197
01:46:12,320 --> 01:46:19,040
calculated a backward fee which is on
the right hand side um of and we're

1198
01:46:16,800 --> 01:46:24,080
trying to get to a monthly unit cost um
for this service. And so what we did was

1199
01:46:21,119 --> 01:46:29,119
we took uh we took a a labor rate which
is a combination of a fully burned and

1200
01:46:26,480 --> 01:46:34,639
hourly rate with an overhead allowance
and then we were making calculation of

1201
01:46:31,920 --> 01:46:39,600
what's the average time to just service
a single cart in this area. And so if

1202
01:46:37,679 --> 01:46:42,719
somebody has to go out and they have to
they leave the truck they go out they

1203
01:46:41,440 --> 01:46:48,000
pick up the can and they have to take
the truck to the excuse me take the can

1204
01:46:44,880 --> 01:46:54,159
to the truck. We estimated be about 60
about 60 seconds to do this. And so and

1205
01:46:51,440 --> 01:46:59,040
just for just for reference for a
regular if you were trying to pick up

1206
01:46:56,400 --> 01:47:02,239
like on average just a residential
customer that could take anywhere

1207
01:47:00,320 --> 01:47:08,239
between 3 to 5 seconds to dump a to dump
a can. So 60 seconds and is takes a long

1208
01:47:06,239 --> 01:47:12,000
time, right? It's a big difference there
and to provide this service. And so we

1209
01:47:10,159 --> 01:47:18,639
were estimating the total cost like per
pickup is about 50 cents um per per tip

1210
01:47:15,840 --> 01:47:23,199
of the can. And so what we then did
working with staff what we had looked at

1211
01:47:20,480 --> 01:47:27,679
was how many pickups do you have in
these in these areas from April to

1212
01:47:25,440 --> 01:47:32,320
October and in your high season where
you're having seven days a week service

1213
01:47:29,760 --> 01:47:37,360
because the service will drop off as we
get into

1214
01:47:34,080 --> 01:47:44,880
» into the slower months. uh we average
about 17 and 3/4 pickups or trips per

1215
01:47:41,840 --> 01:47:50,080
month. And so what that equates to is a
monthly unit cost of $9.76.

1216
01:47:48,239 --> 01:47:55,119
And so we were working with staff. We
were we would propose that there is this

1217
01:47:53,679 --> 01:48:00,800
alternative collection rate for this
backdoor fee service to reflect that

1218
01:47:58,159 --> 01:48:04,560
cost of providing this service in those
seasonal months that would be targeted

1219
01:48:02,320 --> 01:48:11,600
at those commercial customers where this
service is provided. Um and so that was

1220
01:48:07,920 --> 01:48:19,280
one thing that we did look at um to
protect our uh to more accurately

1221
01:48:16,239 --> 01:48:22,679
allocate the cost of providing that high
level of service.

1222
01:48:23,119 --> 01:48:30,800
The other thing that you got to realize
too is we have no

1223
01:48:27,840 --> 01:48:37,920
um
volume control uh in the residential

1224
01:48:34,960 --> 01:48:44,320
area. The guy gets the same garbage bill
whether he had one can or four cans

1225
01:48:41,440 --> 01:48:48,880
and there so that the guy that's using
four cans is getting the real deal. The

1226
01:48:46,239 --> 01:48:52,320
guy had one can is paying the standard
range.

1227
01:48:50,480 --> 01:48:57,520
You may want to think about whether or
not we're going to go to a per can

1228
01:48:54,480 --> 01:49:00,520
charge rather than just a per unit
charge.

1229
01:49:01,280 --> 01:49:08,960
» Didn't we used to go didn't we used to
have a unit per unit charge?

1230
01:49:06,800 --> 01:49:13,360
» We have a per can charge for commercial
R not

1231
01:49:10,800 --> 01:49:21,760
» but not local. We don't charge per can
at gas. No, never we never done a can

1232
01:49:18,239 --> 01:49:28,239
» and we use 90 gallon cans I think is
what they are now but the average can

1233
01:49:24,080 --> 01:49:32,320
rate for residential are 32 gallon basis
and that's what the national standards

1234
01:49:29,920 --> 01:49:39,199
they
but u you know we're receiving those

1235
01:49:36,080 --> 01:49:44,480
that waste that's costing us money uh
landfill volume is where it's at. How

1236
01:49:42,400 --> 01:49:48,560
much can you pack into a cubic yard of
land to That's where you make your

1237
01:49:46,960 --> 01:49:54,080
revenue. If you're you waiting your
space and you're only getting 400 lb to

1238
01:49:51,440 --> 01:49:59,199
a cubic yard, you're waiting that
landfill. If you use a compactor and get

1239
01:49:55,920 --> 01:50:03,760
it to 900 to a,000, then you extend a
life to your landfill. You're not going

1240
01:50:00,560 --> 01:50:11,920
to have it. So, the volume coming in
should cover the cost of compacting it

1241
01:50:07,520 --> 01:50:16,480
and extending your life in your land.
Yes. U if we were to go to like a a

1242
01:50:15,040 --> 01:50:19,040
charge by the can, who would be
responsible for collecting and reporting

1243
01:50:17,920 --> 01:50:23,280
that data? Would that be on the
collections team or

1244
01:50:20,639 --> 01:50:28,239
» Yeah. Well, the thing is is that we're
we provide the cans to the house right

1245
01:50:25,600 --> 01:50:32,080
now and they're expensive can you
because we got to ship them up by volume

1246
01:50:29,679 --> 01:50:37,040
and all. So, we pay a lot for cans. So,
we know exactly how many cans are out

1247
01:50:35,040 --> 01:50:41,119
there and they all have serial numbers
and we can know which which can is

1248
01:50:39,040 --> 01:50:44,639
which. But that would be a standard
thing that we'd put in. The collector

1249
01:50:43,040 --> 01:50:49,199
knows exactly how much he's picking up
at the house. And if somebody or another

1250
01:50:47,360 --> 01:50:53,840
can they come city, we put it on their
in their buildings.

1251
01:50:51,280 --> 01:50:57,040
So as you know, if they only use one
can, they only get bill for one can. If

1252
01:50:55,760 --> 01:51:01,040
they got two cans in there and they
don't fill one,

1253
01:50:59,600 --> 01:51:04,360
they they shouldn't get a charge for
that, right?

1254
01:51:04,400 --> 01:51:10,239
A lot of community, we can't do it here
because it's very popular stuff. They go

1255
01:51:08,080 --> 01:51:14,320
to a blue bag. You get a standard can 90
gallon can and any extra garbage filter

1256
01:51:12,800 --> 01:51:20,600
in a blue bag and you get charged by the
bag and you pay you pay for the bag up

1257
01:51:17,600 --> 01:51:20,600
front.

1258
01:51:20,880 --> 01:51:26,971
Yeah. I hesitate to even bring this up
because I don't want to say something

1259
01:51:25,040 --> 01:51:32,080
that would
[laughter] be critical of our charging

1260
01:51:29,040 --> 01:51:36,560
system and I know the whole point of all
this is to collect more money. But on

1261
01:51:34,800 --> 01:51:40,960
kind of that same line of thinking and
correct me if I'm wrong, but my

1262
01:51:37,760 --> 01:51:46,560
understanding is uh if you are in an
efficiency apartment at a complex that

1263
01:51:43,679 --> 01:51:51,520
has say more than 10 units and there's
two dumpsters outside

1264
01:51:49,520 --> 01:51:56,080
uh and you're one person in an
efficiency apartment presumably using a

1265
01:51:53,679 --> 01:52:01,360
very minimal amount of garbage. Your
garbage bill is the same as a household

1266
01:51:58,560 --> 01:52:04,800
full of eight people with three cans
outside that are only getting charged

1267
01:52:03,280 --> 01:52:09,679
one. So,
>> uh, like I said, I don't want to bring

1268
01:52:07,119 --> 01:52:12,080
up too many gripes here or anything, but
there are plenty of areas to improve

1269
01:52:11,520 --> 01:52:14,239
upon.
>> Yeah.

1270
01:52:12,639 --> 01:52:18,000
» And I hate to say that cuz the answer is
always since the '9s.

1271
01:52:16,000 --> 01:52:21,199
» The [laughter] answer the answer is just
like the water rates, it always ends up

1272
01:52:19,679 --> 01:52:25,119
with everybody paying more. So, that's
why I hate to even bring it up, but I

1273
01:52:23,760 --> 01:52:30,239
just wanted to throw that in there.
>> We used to have a 35gallon can I think

1274
01:52:27,520 --> 01:52:35,920
that they could do something with. No,
those are those are two stories, but I

1275
01:52:32,960 --> 01:52:40,800
think like we do something special at
the towers because it's a centralized

1276
01:52:38,719 --> 01:52:47,159
collection with a compactor which is
different. It might have a different

1277
01:52:42,000 --> 01:52:47,159
rate per unit there, too. So,

1278
01:52:49,503 --> 01:52:51,523
[laughter]

1279
01:52:52,560 --> 01:52:57,760
» just covering your cost. We don't we're
not looking to bank a whole bunch of

1280
01:52:55,599 --> 01:53:02,480
money. We just want to cover cost.
That's all we need to do. And so and and

1281
01:53:00,719 --> 01:53:06,880
solid weights are pretty fixed. You
don't

1282
01:53:04,239 --> 01:53:12,880
no other way to get rid of gar.
>> Well, and like you said, we have to also

1283
01:53:09,840 --> 01:53:16,239
consider 25 years is going to come fast.
>> It is.

1284
01:53:13,440 --> 01:53:21,520
» And we have to have a plan and we have
to have the capital to you don't. So

1285
01:53:20,288 --> 01:53:28,159
[laughter]
>> some of us will Jen will be here.

1286
01:53:25,599 --> 01:53:33,440
» I'll be here. [laughter]
My family's got longevity.

1287
01:53:30,960 --> 01:53:39,520
» So, u but yeah, these rates are
realistic. I I

1288
01:53:36,239 --> 01:53:43,440
» I worked for a land pill for no year
understanding

1289
01:53:41,280 --> 01:53:48,400
costs.
>> So, I would just say the other other

1290
01:53:45,520 --> 01:53:53,040
things that we did look at was having
specific rates for your high usage

1291
01:53:50,239 --> 01:53:59,760
customers um to really target that
higher level of waste generation. Um for

1292
01:53:55,760 --> 01:54:04,960
example, like the pork Um so right now
um I believe the city it's not just one

1293
01:54:02,880 --> 01:54:10,800
fee for the port it gets charged your
commercial rate and so versus and that's

1294
01:54:08,560 --> 01:54:16,400
and so in some areas where they have
high level of seasonality or they have

1295
01:54:12,800 --> 01:54:20,080
these large large users like whether
like in other like large cruise ship

1296
01:54:18,239 --> 01:54:24,800
terminals um I know that the cruise
ships can't can't drop their waste off

1297
01:54:23,199 --> 01:54:28,480
here necess all their waste in the ship
necessarily but they generate a lot of

1298
01:54:26,560 --> 01:54:31,840
waste in general. general on on shore
and the commercial businesses do. This

1299
01:54:30,239 --> 01:54:38,719
is something that other municipalities
have looked at um both in the area as

1300
01:54:34,960 --> 01:54:44,960
well um as in the lower 48 on the coast.
Um we we talked about um that with city

1301
01:54:42,400 --> 01:54:49,520
staff. The other thing being on the
disposal rate, we would suggest that

1302
01:54:47,280 --> 01:54:54,080
because your fees are so highly
connected to your long haul contract

1303
01:54:51,679 --> 01:54:59,599
that at a minimum there should be a pass
through provision on your disposal rate.

1304
01:54:56,800 --> 01:55:04,560
um that's tied again at minimum of the
increase in your contracted rate. And so

1305
01:55:02,639 --> 01:55:09,360
anything so that would be an automatic
pass through and then there um if for

1306
01:55:07,054 --> 01:55:13,360
[clears throat] anything again large
increases in overall costs with

1307
01:55:11,119 --> 01:55:16,960
inflation um anything like that on the
disposal side that that would be an

1308
01:55:15,199 --> 01:55:20,960
additional rate but at minimum you would
have that pass through of what that

1309
01:55:18,880 --> 01:55:25,920
contracted cost is and again as a
reminder that's about 40% of your

1310
01:55:23,679 --> 01:55:32,800
overall budget is that long haul
contract uh which which encompasses a

1311
01:55:29,360 --> 01:55:36,800
large portion of the overall
And then as mentioned again previously,

1312
01:55:35,199 --> 01:55:41,599
we would recommend a separate landfill
closure fund um to make sure that your

1313
01:55:39,440 --> 01:55:46,000
cash balances are being set aside to
target that calculated closure and

1314
01:55:43,679 --> 01:55:50,719
postclosure care liability to avoid any
rate shock for future customers. Um

1315
01:55:48,960 --> 01:55:55,679
that's something that we would recommend
having levelized levelized annual

1316
01:55:53,199 --> 01:55:59,360
deposits um over there. We know that in
25 years and in this between now and

1317
01:55:57,840 --> 01:56:04,560
then, you'll be thinking of other
possible routes to go down for what to

1318
01:56:02,719 --> 01:56:08,320
do when the landfill closes. But in the
meantime, we would recommend having a

1319
01:56:06,560 --> 01:56:13,679
separate landfill closure fund and
having those funds restricted. Um that

1320
01:56:10,800 --> 01:56:19,440
way you don't burden future rateayers
for assistant that they did not.

1321
01:56:17,520 --> 01:56:25,679
» There are some fees that aren't or
services that provide are here. We do

1322
01:56:22,239 --> 01:56:30,159
construction and demolition pickup.
And I assume that the rates were applied

1323
01:56:27,760 --> 01:56:33,159
to the cord evil.
>> Yep.

1324
01:56:37,119 --> 01:56:43,199
» Yes. And
>> I'm in the blind spot tonight. Don't

1325
01:56:39,760 --> 01:56:49,239
worry. Um, can somebody remind me how
much it costs to buy one of the bear

1326
01:56:46,239 --> 01:56:49,239
cans?

1327
01:56:49,679 --> 01:56:55,785
» Is it 180? Yeah,
>> like a can or

1328
01:56:53,760 --> 01:56:56,800
» new ones are really nice. I finally got
[clears throat] one.

1329
01:56:56,159 --> 01:56:59,440
» Good evening.
>> Can't remember your report.

1330
01:56:57,920 --> 01:57:03,520
» Honorable mayor and council members,
Seth Brachie, public works director and

1331
01:57:01,360 --> 01:57:08,560
engineering manager. Uh, thank you for
the question, Council Member Bradberry.

1332
01:57:05,679 --> 01:57:15,520
So, our new uh bear resistant bear
resistant cans are um we have 210 of

1333
01:57:13,520 --> 01:57:23,199
them on the way right now and they run
about uh $350 a can. Um, we don't sell

1334
01:57:20,560 --> 01:57:29,119
them to the customer. We rent them out
uh very similar to how we do uh all of

1335
01:57:25,520 --> 01:57:36,080
our other cans. So, you we have a $10 a
month bear can fee and that covers the

1336
01:57:32,719 --> 01:57:40,800
cost. We have a payback period for the
can to cover our cost there. So,

1337
01:57:39,671 --> 01:57:45,199
[clears throat]
>> so

1338
01:57:42,480 --> 01:57:50,480
if you have a $10, so after three and a
half years of having that bare can, then

1339
01:57:47,840 --> 01:57:56,480
that rental fee goes away and it just
goes into the regular

1340
01:57:53,679 --> 01:57:59,360
collection fees or will it remain
forever?

1341
01:57:58,480 --> 01:58:03,119
» Um, so it's
>> because you just said it. Yeah,

1342
01:58:00,880 --> 01:58:08,719
» remember. So, yeah, that's what we we
figured it on a three-year return

1343
01:58:05,040 --> 01:58:13,760
period. Um, we need about we have about
3,500

1344
01:58:10,239 --> 01:58:21,679
cans in out in the residential system
and we've only bought about 260

1345
01:58:17,440 --> 01:58:26,800
bear can so far. So, um, it's not our
anticipation to have every house have a

1346
01:58:24,239 --> 01:58:32,800
bear can. That's not the plan at all.
So, but back to the return period. Um,

1347
01:58:30,719 --> 01:58:40,239
you know, I think these we want to see
how they last. Um, we anticipate some

1348
01:58:36,719 --> 01:58:44,080
bear bites and some damage that way. Uh,
and then we can adjust from there if we

1349
01:58:42,159 --> 01:58:46,719
need to.
>> So, you're testing them out in a good

1350
01:58:45,760 --> 01:58:50,400
spot, huh?
>> They're in, uh, so far they're going

1351
01:58:48,719 --> 01:58:54,960
right to the hot spots, right in the
danger zone. [laughter]

1352
01:58:52,560 --> 01:58:59,840
» Yeah. So, just to follow up on that,
maybe I misunderstood. So, it's $10 a

1353
01:58:57,679 --> 01:59:04,239
month rental fee to pay these things
off. Is it So, if you're in a if you're

1354
01:59:02,320 --> 01:59:11,679
a problem
person whose garbage gets

1355
01:59:07,520 --> 01:59:16,480
into by the bears all the time.
You someone from the city contacts them,

1356
01:59:14,560 --> 01:59:20,560
sets this up, says, "We have these new
cans. We'd like you to try and their

1357
01:59:18,000 --> 01:59:24,639
bill goes up $10." And I guess the
answer I was looking for, I didn't quite

1358
01:59:22,159 --> 01:59:29,520
hear was after the three-year period,
does your fee go back down $10 or how?

1359
01:59:27,679 --> 01:59:32,800
Just out of curiosity so I understand
how it works.

1360
01:59:31,040 --> 01:59:38,639
» Thank you, Council Member Gas. to
clarify, as long as you have a bear can,

1361
01:59:36,159 --> 01:59:41,360
you'll pay the bear can rental fee.
>> Okay?

1362
01:59:39,440 --> 01:59:45,520
» So, we have to make sure we cover our
cost, have replacement cans

1363
01:59:44,639 --> 01:59:49,360
there.
>> So, if you get a new bear can, you're

1364
01:59:47,360 --> 01:59:54,159
going to see $10 a month more than if
you have the old can.

1365
01:59:50,800 --> 01:59:59,119
» So, a key component of that is we have a
lot of customers that do a good job of

1366
01:59:56,320 --> 02:00:04,000
keeping their garbage taken care of.
They either keep the bag inside and

1367
02:00:01,679 --> 02:00:08,719
don't put it out until the morning of
their collection or they have a garage

1368
02:00:06,320 --> 02:00:14,639
or they have some sort of enclosure that
they've spent money to build. Um, so we

1369
02:00:12,400 --> 02:00:19,360
didn't want to punish those customers
because they're doing what the catch can

1370
02:00:16,800 --> 02:00:23,760
municipal code says they're supposed to
and that's a good thing.

1371
02:00:21,679 --> 02:00:27,840
But for some folks, they're just they
don't have a garage or they don't have a

1372
02:00:25,679 --> 02:00:35,520
place to store it. So, we want to be
able to offer this as an option rather

1373
02:00:31,199 --> 02:00:38,880
than just saying, you know, this is uh
you know, we're here all the time

1374
02:00:36,800 --> 02:00:43,360
because bears have been hitting your can
repeatedly. You know, we want to have an

1375
02:00:40,719 --> 02:00:48,320
option there for customers to go to that
was still reasonable for cost.

1376
02:00:46,159 --> 02:00:52,239
» But so, just to ask again, if you have
the new can, it's $10 a month more than

1377
02:00:50,560 --> 02:00:54,159
the people who don't. Is that correct?
>> Correct.

1378
02:00:52,719 --> 02:00:58,719
» Okay. Thanks.
And and the other option is there is an

1379
02:00:57,199 --> 02:01:01,760
ordinance in place where they can be
fined for not taking care of the

1380
02:01:00,560 --> 02:01:05,119
garbage.
>> I think it's 200 bucks or something like

1381
02:01:03,440 --> 02:01:06,960
that.
>> At least you do that. We don't

1382
02:01:06,400 --> 02:01:09,440
» Yeah, we don't
>> we still have it, but we can

1383
02:01:08,400 --> 02:01:18,320
» don't find anything. [clears throat]
>> Um and then do we have any recovery

1384
02:01:13,360 --> 02:01:24,719
costs associated with our regular cans?
>> So that's built into the rate currently.

1385
02:01:22,000 --> 02:01:29,920
Um, you know, one thing, so we we've
done a pilot program with these beer

1386
02:01:26,719 --> 02:01:34,400
cans, and uh, our residents have
commented they're happy to pay that $10

1387
02:01:32,639 --> 02:01:38,719
fee if it means they're not out picking
up the garbage off the street or from

1388
02:01:37,040 --> 02:01:41,280
from the wooded area next to their
house. That's one of the worst things

1389
02:01:40,960 --> 02:01:44,159
» Yeah.
>> to do. [laughter]

1390
02:01:42,719 --> 02:01:48,560
» If you asked, there'd be some neighbors
that'd be willing to pay that $10

1391
02:01:47,264 --> 02:01:56,440
[laughter]
>> for them. Yeah.

1392
02:01:51,520 --> 02:01:56,440
Thank you, Seth. Any other questions?

1393
02:01:57,360 --> 02:02:04,400
Any followups?
[clears throat]

1394
02:02:00,880 --> 02:02:08,960
» That concludes your presentation.
>> Yes, I believe it does.

1395
02:02:06,880 --> 02:02:14,159
Time to wrap up. Thank you so much. I
know a lot to get through. Appreciate

1396
02:02:11,520 --> 02:02:17,679
your patience.
>> Yeah. And I I think everybody's going to

1397
02:02:15,840 --> 02:02:23,360
do some reading on this and research as
we go through this. Um and at some point

1398
02:02:21,520 --> 02:02:27,599
we will be asking the council how
beneficial is this because we still have

1399
02:02:25,840 --> 02:02:30,960
water and sewer rates that we have to
get through maybe harbor rates and

1400
02:02:29,360 --> 02:02:34,960
whatever other rate structures we're
looking at.

1401
02:02:32,960 --> 02:02:39,599
» So your honor on the subject of water
water and wastewater rates. Um that's

1402
02:02:37,360 --> 02:02:44,239
something that we won't tackle until
probably later in the year if at all. Um

1403
02:02:42,480 --> 02:02:48,000
again because it's highly dependent on
getting our commercial water meters

1404
02:02:46,400 --> 02:02:50,960
installed and that up and running and
having the data to support a new grade.

1405
02:02:49,920 --> 02:02:52,719
» Yeah. But that's down the road we're
going to have to take.

1406
02:02:51,520 --> 02:02:57,280
» It is. Yeah, absolutely. I mean there's
we have we have a slew of great needs,

1407
02:02:54,960 --> 02:03:00,400
but we're starting with with electric
and solid waste.

1408
02:02:58,400 --> 02:03:04,080
» I appreciate it.
>> Yeah. Just one question about where we

1409
02:03:02,000 --> 02:03:06,719
are in this process with Raphelis and I
appreciate the presentation that you've

1410
02:03:05,280 --> 02:03:10,239
given and being here in person that
really helps a lot just for discussion.

1411
02:03:08,960 --> 02:03:14,880
uh if if we're in a position now where
the council is going to discuss some of

1412
02:03:11,520 --> 02:03:19,679
the uh some of the findings that have
been presented to us, do we have the

1413
02:03:16,960 --> 02:03:22,719
opportunity to give feedback to Raph
Talis and continue the discussion about

1414
02:03:21,199 --> 02:03:25,280
how best to structure these rates or
this is sort of what we're working with

1415
02:03:24,639 --> 02:03:30,560
at this point?
>> No, I think we relay our concerns and uh

1416
02:03:28,400 --> 02:03:33,119
suggestions to the manager's office, the
manager can work with him to get us

1417
02:03:32,080 --> 02:03:39,119
answers back on that.
>> Great. Thank you.

1418
02:03:36,400 --> 02:03:45,000
» Anything else? I appreciate it. This is
really good information and I appreciate

1419
02:03:41,119 --> 02:03:45,000
the breakdown. Thank you.

1420
02:03:46,159 --> 02:03:54,320
» So with that, do I have a motion to come
out of uh the work that regular session?

1421
02:03:52,239 --> 02:03:56,880
» I move the city council reconvene into a
special meeting.

1422
02:03:55,840 --> 02:04:01,199
» Second.
>> Been seconded. Madam clerk, would you

1423
02:03:59,360 --> 02:04:04,000
please call the role?
>> Yes.

1424
02:04:02,960 --> 02:04:05,360
» Yes.
>> Binigan.

1425
02:04:04,719 --> 02:04:07,440
» Yes.
>> Bradbury.

1426
02:04:06,239 --> 02:04:08,719
» Yes. Gage,
>> yes.

1427
02:04:08,159 --> 02:04:10,000
» Cuz
>> yes.

1428
02:04:09,280 --> 02:04:11,679
» Matani,
>> yes.

1429
02:04:10,639 --> 02:04:18,000
» All right.
>> All right. Is there any other business

1430
02:04:13,679 --> 02:04:21,840
before us? Any comment, question?
>> Yes.

1431
02:04:19,440 --> 02:04:28,159
» What do you have? I'm sorry. I don't
know. Uh I didn't quite realize we were

1432
02:04:24,000 --> 02:04:33,119
jumping out of things. Uh so
we have these recommendations, these

1433
02:04:30,719 --> 02:04:38,400
various plans.
uh given that this was a lot of input or

1434
02:04:35,599 --> 02:04:43,760
a lot of energy that went into this and
everything. I mean I guess I'm asking

1435
02:04:41,119 --> 02:04:48,960
you what what what is our next step? I
mean but we got to discuss which

1436
02:04:46,080 --> 02:04:51,840
scenarios we want to look at doing.
>> This meeting is being transcribed and

1437
02:04:50,800 --> 02:04:55,679
summarized.
>> I guess I don't want to just I don't

1438
02:04:53,440 --> 02:05:00,080
want to just break and call it a day and
then forget about this. So what's kind

1439
02:04:57,679 --> 02:05:03,199
of our way forward here? Well, I think
what we were going to want to do is have

1440
02:05:01,679 --> 02:05:06,800
staff boil this down and bring it back
to us with a rate structure for the next

1441
02:05:04,880 --> 02:05:10,719
five to 10 years that we can look at and
then the council will have to decide

1442
02:05:08,960 --> 02:05:15,440
what action they want to take to move
forward with that. That be appropriately

1443
02:05:13,840 --> 02:05:19,599
» we can do that. I mean I I think your
honor um there was some good things that

1444
02:05:17,920 --> 02:05:24,400
were mentioned tonight that I think
staff would like to talk with with refus

1445
02:05:22,480 --> 02:05:30,159
to see if there's yet even more
possibilities. There always are. Um, so

1446
02:05:27,199 --> 02:05:33,840
it might warrant a future discussion and
presentation. I mean, the the end goal

1447
02:05:32,480 --> 02:05:37,119
here, of course, is to come up with a
rate structure that we can memorialize

1448
02:05:35,599 --> 02:05:41,840
in an ordinance, and we're not there
yet. Um, I don't think there's consensus

1449
02:05:39,840 --> 02:05:45,599
on what that rate structure looks like
to achieve the the revenue increases

1450
02:05:44,239 --> 02:05:50,480
that we need for both of those
utilities. So, I I for me, I think we'd

1451
02:05:48,560 --> 02:05:53,040
like to talk more with Raph Telus and do
a little bit more brainstorming based on

1452
02:05:51,920 --> 02:05:57,199
some of the things that we heard
tonight. I think if there's additional

1453
02:05:55,440 --> 02:06:01,760
thoughts or considerations that council
members have, you can relay those to

1454
02:05:59,199 --> 02:06:04,560
myself or Sean and we can continue to
have dialogue with Rafelis.

1455
02:06:03,520 --> 02:06:08,880
» I would like to have further
conversations on how we manage the big

1456
02:06:07,040 --> 02:06:13,040
electrical project and how they fit into
our capital plan because I don't want to

1457
02:06:10,960 --> 02:06:18,080
overbudget. I don't want to overrate in
regards to not knowing what the exact

1458
02:06:15,599 --> 02:06:21,760
need assessment is on that. So
>> maybe the action would be before we put

1459
02:06:19,760 --> 02:06:26,000
them into capital program, we do a needs
assessment. Oh, absolutely. Yeah. Yeah,

1460
02:06:24,639 --> 02:06:30,320
there's definitely some preliminary
work, but I think for the purposes of um

1461
02:06:29,199 --> 02:06:33,599
you know, the capital improvement
program that we have, which is a

1462
02:06:31,599 --> 02:06:38,719
five-year horizon, which is what we gave
Raphelis, so they're just working off of

1463
02:06:36,560 --> 02:06:43,760
that. But I I totally agree and now that
we have a new electric division manager

1464
02:06:40,400 --> 02:06:48,239
to reassess those priorities and shift
things around. Um, but again, even

1465
02:06:46,480 --> 02:06:51,679
though we come up with maybe a five-year
horizon,

1466
02:06:50,000 --> 02:06:56,719
perhaps we're only doing those rate
increases year-over-year. So, it gives

1467
02:06:53,840 --> 02:07:01,119
us time to recalibrate as the big
capital improvement programs shift.

1468
02:06:58,880 --> 02:07:05,760
» I'm sure that our new utility manager as
he gets his feet on the ground is going

1469
02:07:02,560 --> 02:07:11,760
to have other suggestions in regards to
capital investment and how we do those.

1470
02:07:08,000 --> 02:07:14,880
So, I appreciate all that.
Yes, Abby.

1471
02:07:12,639 --> 02:07:20,800
» I briefly mentioned it earlier about the
electric, but uh or to the mayor of

1472
02:07:18,000 --> 02:07:26,960
electric. Um
I guess for me and any of the rates

1473
02:07:23,599 --> 02:07:33,280
increases that we're doing is we have an
opportunity to provide relief to our

1474
02:07:30,320 --> 02:07:38,159
residents. Um even though we need to
have a gain, we're asking a lot of our

1475
02:07:35,920 --> 02:07:41,520
citizens. We hear it. You know, they've
come to the podium and talked about all

1476
02:07:39,679 --> 02:07:45,520
the concerns and the costs. We're
increasing sales tax, increasing the

1477
02:07:43,360 --> 02:07:49,520
cap, increase, you know, property tax,
mail rates, you know, all these things

1478
02:07:47,520 --> 02:07:55,040
are starting to add up and just the cost
of living here. And I really want us to

1479
02:07:53,040 --> 02:07:59,760
consider that. And this now that we're
actually planning long term instead of

1480
02:07:57,360 --> 02:08:04,960
just putting out a fire today. I'm
really looking at how can we positively

1481
02:08:03,199 --> 02:08:08,239
impact our residents even though they're
the bigger biggest users. Totally

1482
02:08:06,639 --> 02:08:14,960
understand that both solid waste and
this. How can we positively impact them

1483
02:08:12,480 --> 02:08:20,560
as a way of giving like you know a thank
you for allowing us to continue to make

1484
02:08:17,040 --> 02:08:25,599
as much revenue as we do off of, you
know, technically their front front

1485
02:08:22,639 --> 02:08:31,280
door. And so I really would like to to
hopefully see something more

1486
02:08:28,400 --> 02:08:35,119
even or more in favor of the resident
side. I understand commercial we need to

1487
02:08:33,520 --> 02:08:40,719
support economic growth and things like
that, but we're also hearing our

1488
02:08:38,079 --> 02:08:44,320
citizens say enough is enough. Um so
commercial growth maybe doesn't go

1489
02:08:42,560 --> 02:08:50,400
handinhand with what our citizens are
wanting. But also you mentioned the

1490
02:08:47,040 --> 02:08:56,560
average rate for electricity you know is
17 cents and you know under these

1491
02:08:54,159 --> 02:09:02,320
proposed rates you know they're at 12
cents when our citizens are at 16 14 or

1492
02:08:59,920 --> 02:09:08,560
16 depending on what tier you know maybe
we need to look at flipping that um

1493
02:09:06,239 --> 02:09:11,920
to really incentivize you know our
citizens you this is a great place to

1494
02:09:10,239 --> 02:09:18,079
stay keep our resident number instead of
downfall trajectory that we're in for

1495
02:09:15,760 --> 02:09:21,920
customers. But that's just something
that in all the rate studies that we do

1496
02:09:20,320 --> 02:09:25,119
in the future and whatnot, I really
would like to look at that opportunity

1497
02:09:23,440 --> 02:09:30,000
because we do have it here in front of
us as we're planning in the long term.

1498
02:09:28,079 --> 02:09:34,239
» Thank you.
Any other comments?

1499
02:09:32,719 --> 02:09:37,199
We'll move on to mayor and council
comments.

1500
02:09:35,920 --> 02:09:40,000
Abby,
>> none.

1501
02:09:38,159 --> 02:09:45,199
» Jan Lee.
Yeah, I just have I really appreciate

1502
02:09:42,639 --> 02:09:50,639
this. This gives more clarity to a few
things. I think um one of the things I'd

1503
02:09:47,840 --> 02:09:56,719
like to see uh in the future and I think
council um we all need to consider the

1504
02:09:54,159 --> 02:10:00,320
next we have to think nine generations
up

1505
02:09:58,560 --> 02:10:08,239
in the back of our minds. we have to
consider the people, the generations

1506
02:10:03,360 --> 02:10:13,679
that'll be here in the future and um
having a plan in place and I mean and

1507
02:10:11,840 --> 02:10:18,960
making sure that the community also
understands that you know that

1508
02:10:17,119 --> 02:10:26,400
as much as I wish things would go back
to what they were in the 80s and 70s and

1509
02:10:21,520 --> 02:10:33,440
60s um cost of everything is it will
continue to go up. It's there's no um

1510
02:10:29,840 --> 02:10:40,480
going backwards in a lot of ways. Um,
but I I was I found this to be very even

1511
02:10:37,520 --> 02:10:45,599
with that 5% increase, I thought, you
know, I was like, I could do a dollar,

1512
02:10:43,440 --> 02:10:52,079
you know. I mean there's I mean there's
some things that I think um

1513
02:10:49,520 --> 02:10:58,239
can happen and flip the script when it
comes to our um commercial and and um

1514
02:10:56,000 --> 02:11:04,719
even our seasonal commercials that come
here that do impact our our

1515
02:11:01,199 --> 02:11:11,040
infrastructures um and they put a lot of
attacks our systems majorly and and how

1516
02:11:08,320 --> 02:11:18,239
do we capitalize on that because that's
the only way we're going to um even out

1517
02:11:13,679 --> 02:11:22,719
the um cost on the if those of us who
live here, you are out. Thank you.

1518
02:11:21,040 --> 02:11:27,199
Appreciate it.
>> Yeah.

1519
02:11:24,239 --> 02:11:35,520
Got two comments. One, thanks folks for
coming. And second, uh

1520
02:11:31,280 --> 02:11:38,480
the uh the landfill 25 years that's
tomorrow.

1521
02:11:36,480 --> 02:11:44,079
» Yeah. And we can sit here and talk about
it. But if we don't start thinking now,

1522
02:11:41,040 --> 02:11:48,400
there may not be a place. And you might
even some of you may remember Tom Coin's

1523
02:11:46,719 --> 02:11:52,960
place on Gina. I don't know whether it's
viable or not, but he had a place. But

1524
02:11:51,119 --> 02:11:56,159
if we don't start thinking now, any land
that's available isn't going to be

1525
02:11:54,400 --> 02:12:02,320
available.
>> So maybe not this year, we'll let Lacy

1526
02:11:59,199 --> 02:12:08,880
get gone for a couple years, [laughter]
but keep it in the back of your mind.

1527
02:12:04,880 --> 02:12:14,800
Um, the other one is on the electrical.
Um, rates are going to be rates. And

1528
02:12:12,000 --> 02:12:19,199
like I said earlier, I don't want this
town going out of power. I've lived here

1529
02:12:17,440 --> 02:12:22,800
long enough that I know when the power
goes out, it can be gone for three or

1530
02:12:21,040 --> 02:12:27,360
four days.
And if we stick our head in the sand and

1531
02:12:24,880 --> 02:12:33,440
we don't appropriately look at the
generator and the transformer that we're

1532
02:12:30,000 --> 02:12:37,599
talking about at the right time,
they'll go out on us

1533
02:12:35,840 --> 02:12:41,679
and I'll guarantee you how many years it
takes to replace one. You could order it

1534
02:12:40,239 --> 02:12:48,480
and have the money and it's going to
take you three two years to get one. So,

1535
02:12:44,800 --> 02:12:52,400
as we do rates, keep in mind that's got
to be there at some point in time.

1536
02:12:50,800 --> 02:12:55,760
That's all.
Thank you Jay.

1537
02:12:54,239 --> 02:13:02,079
» Thank you your honor. Thank you for your
presentation. It opens up a lot of

1538
02:12:58,639 --> 02:13:07,280
possibilities and opens up a area where
we can protect our residents. I mean I

1539
02:13:04,480 --> 02:13:10,800
still believe that the commercial, the
harbor and the industrial need to pay

1540
02:13:09,199 --> 02:13:18,159
more so that we have relief for our
long-term and yearround residents.

1541
02:13:15,760 --> 02:13:23,599
Away from this uh we had the ports and
harbors meeting yesterday. There was a

1542
02:13:21,360 --> 02:13:28,719
resolution that
is forthcoming but however that's at a

1543
02:13:26,880 --> 02:13:33,119
meeting when we come back from AML in
Juno.

1544
02:13:30,239 --> 02:13:38,159
The resolution is and was that we
approach our

1545
02:13:35,440 --> 02:13:44,079
state representatives uh Senator
Steedman and Representative Binham.

1546
02:13:41,280 --> 02:13:50,719
Talk to them about the fish tax that is
going into to the state that needs to

1547
02:13:48,239 --> 02:13:56,480
find its way back. They've given us the
harbors. However, they has have not

1548
02:13:52,960 --> 02:14:00,320
given us any maintenance uh subsidies.
They want us to bring that uh to our

1549
02:13:58,480 --> 02:14:05,679
representatives and see what we can do
about it and also bring

1550
02:14:04,239 --> 02:14:12,159
through the corporate relations
committee to the bureau to see why the

1551
02:14:08,400 --> 02:14:16,079
bureau is getting 280,000. We we are
getting 219,000.

1552
02:14:14,400 --> 02:14:19,119
That was not the case up to two years
ago. So we want to find out whether it

1553
02:14:17,679 --> 02:14:22,880
is a bookkeeping mistake or what
happened there so that we get enough of

1554
02:14:21,199 --> 02:14:27,760
our tax revenue because all our
commercial fishing all our fishermanmen

1555
02:14:25,440 --> 02:14:31,199
all our process processes are in the
city. That's all I got. Thank you.

1556
02:14:29,920 --> 02:14:34,079
» Thank you Jay Jack.
>> Thank you your honor. I'm going to echo

1557
02:14:32,719 --> 02:14:39,119
a couple of things that council member
Cous uh mentioned and just um add one

1558
02:14:36,880 --> 02:14:41,599
additional thought there. First is again
I appreciate the presentation. I don't

1559
02:14:40,560 --> 02:14:45,360
think we'd ever have been able to
develop these kind of nuanced findings

1560
02:14:43,119 --> 02:14:47,920
on our own. So, uh, really appreciate
that work and seeing a couple of

1561
02:14:46,639 --> 02:14:52,239
different options for each of these
funds. Second, on the notion of the

1562
02:14:50,079 --> 02:14:56,239
landfill, u, Mr. C spoke to the question
of where we might put an additional

1563
02:14:54,400 --> 02:14:59,280
landfill in the need of one, and the
mayor spoke earlier about the fact that

1564
02:14:57,840 --> 02:15:02,239
we don't really have any funds set up in
that regard. So, I think that's

1565
02:15:00,880 --> 02:15:05,360
something that's going to be just as
important if we think about where we

1566
02:15:03,599 --> 02:15:08,960
might put a future landfill. We're going
to have to start saving for that now.

1567
02:15:06,960 --> 02:15:12,639
whether it's a you know a penny on the
dollar that putting [clears throat]

1568
02:15:09,679 --> 02:15:16,639
aside going forward that's uh it's not
going to be a small uh expenditure and

1569
02:15:15,119 --> 02:15:19,920
the sooner we start saving for that the
better and I don't know if that's

1570
02:15:17,840 --> 02:15:22,800
something that can be factored into the
great considerations that you're making

1571
02:15:21,599 --> 02:15:27,760
uh but I would certainly be keeping that
in mind. Thank you.

1572
02:15:25,199 --> 02:15:34,400
» Thank you. I think uh the presentation
is worthwhile. I think it

1573
02:15:32,000 --> 02:15:39,440
we've we've been working on this for
years and trying to figure out how to

1574
02:15:36,320 --> 02:15:45,280
make it equitable and beneficial and not
create great shock and yet cover the

1575
02:15:42,400 --> 02:15:50,913
needed costs that we have with the
operations and capital budgets that are

1576
02:15:48,400 --> 02:15:56,079
our our our
[clears throat] finance division and

1577
02:15:52,639 --> 02:16:00,480
managers have talked to us over a long
period of time about how we do this and

1578
02:15:58,719 --> 02:16:07,960
uh we up and catch up to June, but
incremental raises I think are the way

1579
02:16:02,560 --> 02:16:07,960
to do it rather than all solid

1580
02:16:10,480 --> 02:16:20,800
and I but the information that they ret
like said there's some items that they

1581
02:16:18,000 --> 02:16:25,719
want to flush out before they bring it
back to us in regards to how we move

1582
02:16:22,719 --> 02:16:25,719
forward

1583
02:16:26,079 --> 02:16:33,519
change or structure and how we're going
to do that and Ley, if you could kind of

1584
02:16:30,480 --> 02:16:38,080
give us a an idea how this process
should move forward in a timely manner

1585
02:16:36,399 --> 02:16:42,080
because there are some steps we need to
do before we get there. I appreciate

1586
02:16:39,920 --> 02:16:47,280
that.
>> I guess right

1587
02:16:45,279 --> 02:16:52,160
[laughter]
last uh I echo what everybody said. I

1588
02:16:50,000 --> 02:16:56,240
appreciate the time. Also appreciate
that you guys came here in person. That

1589
02:16:54,080 --> 02:17:02,639
I think says a lot. So thank you for
that. be interesting to see what we end

1590
02:16:59,439 --> 02:17:08,000
up coming up with. It's good to have
some options. So, so, uh, yeah, it'll be

1591
02:17:05,679 --> 02:17:13,120
interesting going forward. Uh, on a
slightly different topic, but Dick

1592
02:17:10,080 --> 02:17:17,599
mentioned the possibility of, uh, a
landfill like Ravina someday. So, that's

1593
02:17:15,439 --> 02:17:23,519
how I'm going to tie this in. Uh my
understanding is on the uh contest for

1594
02:17:20,639 --> 02:17:29,280
the tunnel proposal that's been made by
Assemblyman Dial uh that it's been

1595
02:17:27,439 --> 02:17:36,719
brought to my attention that it would be
helpful to have as many uh letters of

1596
02:17:32,960 --> 02:17:40,080
support to that group from presumably
members of the community and such. Uh,

1597
02:17:38,880 --> 02:17:44,240
so I was going to follow up with you,
mayor, to make sure that it's

1598
02:17:41,359 --> 02:17:48,240
appropriate if if we do it, not, you
know, as long as we state that we're

1599
02:17:45,760 --> 02:17:53,200
just a citizen or whatever. But, uh, I
would encourage anybody who maybe would

1600
02:17:51,040 --> 02:17:58,960
be interested in some better access to
Gina to submit your letters. I think I

1601
02:17:55,599 --> 02:18:02,319
saw we have till the 23rd. So, um I
think it'd be pretty cool if a whole lot

1602
02:18:00,399 --> 02:18:06,639
of people did that and really shined a
bright light on us cuz uh my

1603
02:18:05,120 --> 02:18:11,200
understanding is it would be a free
thing that uh this company is doing as

1604
02:18:09,359 --> 02:18:15,679
an advertisement type thing and it could
really open things up for more

1605
02:18:13,120 --> 02:18:20,000
development over there. So, anyway, with
your permission, I'd like to submit a

1606
02:18:18,319 --> 02:18:23,479
letter and absolutely encourage others
to do the same.

1607
02:18:24,000 --> 02:18:31,080
» Sounds good. Anything else?
Ajourn

1608
02:18:31,200 --> 02:18:33,519
hearing