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SPECIAL WORK SESSION AGENDA

CITY COUNCIL SPECIAL WORK SESSION
THURSDAY
MAY 16, 2024

COUNCIL CHAMBERS
211 WEST ASPEN AVENUE
3:00 P.M.

All City Council Meetings are live streamed on the city's website
(https://www.flagstaffaz.gov/1461/Streaming-City-Council-Meetings)

***PUBLIC COMMENT***

Verbal public comments related to items appearing on the posted agenda may be given in person or online and will be taken at the time the item is discussed.

To provide online verbal comment on an item that appears on the posted agenda, use the link below.

ONLINE VERBAL PUBLIC COMMENT

Written comments may be submitted to publiccomment@flagstaffaz.gov. All comments submitted via email will be considered written comments and will be documented in the record as such.

Call to Order

NOTICE OF OPTION TO RECESS INTO EXECUTIVE SESSION

Pursuant to A.R.S. §38-431.02, notice is hereby given to the members of the City Council and to the general public that, at this work session, the City Council may vote to go into executive session, which will not be open to the public, for discussion and consultation with the City's attorneys for legal advice on any item listed on the following agenda, pursuant to A.R.S. §38-431.03(A)(3).

Roll Call

NOTE: One or more Councilmembers may be in attendance through other technological means.

MAYOR DAGGETT
VICE MAYOR ASLAN
COUNCILMEMBER HARRIS
COUNCILMEMBER HOUSE

COUNCILMEMBER MATTHEWS
COUNCILMEMBER MCCARTHY
COUNCILMEMBER SWEET

Pledge of Allegiance, Mission Statement, and Land Acknowledgement

MISSION STATEMENT

The mission of the City of Flagstaff is to protect and enhance the quality of life for all.

LAND ACKNOWLEDGEMENT

The Flagstaff City Council humbly acknowledges the ancestral homelands of this area's Indigenous nations and original stewards. These lands, still inhabited by Native descendants, border mountains sacred to Indigenous peoples. We honor them, their legacies, their traditions, and their continued contributions. We celebrate their past, present, and future generations who will forever know this place as home.

Water, Sewer, and Reclaimed Water Rates and Fees Study Special Work Session

City staff and the City's Consultant, Stantec, are addressing questions from the City Council related to the assumptions used in the rate model. City staff and Stantec will facilitate a discussion on financial planning scenarios and how those might influence the outcome of the proposed rates for water, sewer, and reclaimed water rates and fees. The desired outcome is for the Council to provide their direction on the financial planning scenarios.

Adjournment

CERTIFICATE OF POSTING OF NOTICE

The undersigned hereby certifies that a copy of the foregoing notice was duly posted at Flagstaff City Hall on                , at                    a.m./p.m. in accordance with the statement filed by the City Council with the City Clerk.

Dated this                   day of                                          , 2024.

__________________________________________
Stacy Saltzburg, MMC, City Clerk

THE CITY OF FLAGSTAFF ENDEAVORS TO MAKE ALL PUBLIC MEETINGS ACCESSIBLE TO PERSONS WITH DISABILITIES. With 48-hour advance notice, reasonable accommodations will be made upon request for persons with disabilities or non-English speaking residents. Please call the City Clerk (928) 213-2076 or email at stacy.saltzburg@flagstaffaz.gov to request an accommodation to participate in this public meeting.

NOTICE TO PARENTS AND LEGAL GUARDIANS: Parents and legal guardians have the right to consent before the City of Flagstaff makes a video or voice recording of a minor child, pursuant to A.R.S. § 1-602(A)(9). The Flagstaff City Council meetings are live-streamed and recorded and may be viewed on the City of Flagstaff's website. If you permit your child to attend/participate in a televised Council meeting, a recording will be made. You may exercise your right not to consent by not allowing your child to attend/participate in the meeting.

CITY OF FLAGSTAFF

STAFF SUMMARY REPORT

To:

The Honorable Mayor and Council

From:

Shannon Anderson, Senior Deputy City Manager

Co-Submitter:

Erin Young, Water Services Manager, and Shannon Jones, Water Services Division Director

Date:

05/09/2024

Meeting Date:

05/16/2024

TITLE:

Water, Sewer, and Reclaimed Water Rates and Fees Study Special Work Session

DESIRED OUTCOME:

Executive Summary:

City staff and Stantec have been discussing the rate study components with the Water Commission and City Council since September 2023. There have been discussions about financial planning; capacity fees; rate design priorities; water, sewer, and reclaimed water rates; and miscellaneous fees. During today's presentation, City staff will provide an update to Council on the most recent outreach efforts that continue to provide awareness to the community about the rate study and the proposed rates. City staff will share information about the water services division, operations and maintenance, capital improvements, and the impacts of the proposed rates. This conversation will lead us to the four financial planning scenarios for Council consideration.

Information:

City Council and the Water Commission have committed a significant amount of time learning about the rate study process, policy strategies, financial planning, cost-of-service details, and potential rate designs to create the proposed water, sewer, and reclaimed rates. All of this information is available on the cleanwaterflagstaff.com website. The team of Stantec and City staff members have worked to build a rate calculator that is available on this website, so community members and businesses are able to see what their water and sewer bills may look like for the upcoming five years based on the proposed rates. The group has invested in radio, print, social media, and digital advertising to provide outreach and educational opportunities. In this presentation the team will share some of the outcomes of this outreach and what efforts will continue over the next few months.

During the last several months of meetings, there have been discussions about revenue needs and the opportunities available to meet those financial needs. City staff will spend time during today's presentation providing the operational details behind these numbers. Sharing how these revenues are used to maintain service and what happens when there are shortages or unexpected challenges. The capital improvement plan makes up a large portion of the water services revenue needs and City staff will provide an explanation of the approved, informed, and unfunded capital project lists and how this looks across the community. These future revenue needs are built upon assumptions and staff will provide background on how the assumptions in the rate model were derived based on today's experiences. Given altering these assumptions can result in different outputs, Stantec has created four financial planning scenarios to demonstrate how changing assumptions on growth, cost escalation, debt or CIP execution can alter the resulting proposed rates.

*Please note the attached financial planning scenarios presentation still includes drafts of updated rate projections and bill impacts. These will be finalized following the completion of Stantec's quality control review process.

Attachments:

Water, Sewer, and Reclaimed Water Rate Study

Financial Planning Scenarios