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06-12-23 City Council Work Session MinutesCITY COUNCIL crn OF WORK SESSION MINUTES KALISPELL June 12, 2023, at 7:00 p.m. City Hall Council Chambers, 201 First Avenue East The public was able to participate in person in the council chambers or via videoconferencing. Please see the bottom of the agenda for instructions to watch the meeting live. Video of this meeting with time stamped minutes can be found at: https://www.kalispell.com/480/Meeting-Videos. A. CALL TO ORDER Mayor Johnson called the meeting to order at 7 p.m. Mayor - Mark Johnson: Present Council Member - Kari Gabriel: Absent Council Member - Sandy Carlson: Absent Council Member - Sam Nunnally: Present Council Chair - Chad Graham: Absent Council Member - Jed Fisher: Present Council Member - Sid Daoud: Present Council Member - Jessica Dahlman: Present Council Member - Ryan Hunter: Present Staff present included City Manager Doug Russell, City Clerk Aimee Brunckhorst, Public Works Director Susie Turner, Budget Resource Manager Terri Loudermilk, Finance Director Aimee Cooke, and Deputy Public Works Director Keith Haskins. B. DISCUSSION 1. Montana Department of Transportation Project Updates Justun Juelfs, Montana Department of Transportation Kalispell area Maintenance Chief provided an overview on the projects MDT is currently constructing in the Kalispell area. • The city of Kalispell urban boundary may be updated based on the last census. Meetings will be scheduled with stakeholders. • Reserve Street/Whitefish Stage — beginning phase. Thankful for the successful federal grant opportunity awarded through the city. Today a meeting took place to go through the process selection for the design/build team. They are exploring creative ways of right-of- way acquisition. • Kalispell Urban Pavement preservation includes a number of projects within the city. He went through the list of roads that will receive mill fills and seal and cover. LHC is the contractor for these projects that will happen over this construction period by September 23rd. • Pedestrian and ADA safety improvements are currently happening at the courthouse couplet on Highway 93. • Kalispell ADA project has been completed. Additional crossings will be upgraded. Page 1 of 5 Kalispell City Council Minutes, June 12, 2023 Highway 93 at Reserve Drive north is under construction for a mill and fill and chip seal. Recently completed with a few punch list items to take care of. • Foys Lake Roundabout — structure over bypass complete. Reclamation in and around Ashley Creek has not been completed yet. Price tag for project was $16 million. • Dern/Springcreek Interchange is mostly complete. • Shared Use Paths in and around the city and within Flathead County: • Received a grant to preserve paths already existing which will mostly entail crack sealing. • Highway 206 has had 9.6 miles of construction to improve the safety of that corridor. Everything is paved out but will still need some final work. 00:09:10 Councilor Hunter asked about the Woodland Avenue and 2°d Street improvements. 00:10:26 Councilor Fisher asked about the shared use path funding source. Mr. Juelfs explained the Transportation Alternative funding source and that all transportation preservation grants were approved. 00:11:32 Councilor Fisher asked about the cost of the Highway 206 project learning it was about 11.1 million dollars with 9.2 million paid out so far. 00:11:58 Councilor Nunnally thanked MDT staff for all they do. He then asked about the Safer Act. He then asked about the intersection of Home Depot and Lowe's and the lack of a protected left. 00:13:31 City Manager Russell spoke regarding issues with right-of-way acquisition from Home Depot for that project. 00:14:21 Mayor Mark Johnson thanked MDT for all the hard work. Mr. Juelfs thanked the Council and staff for their time and talked about the importance of joint communication. 2. Water Fund Budget Review 4:3 PowerPoint Presentation City Manager Doug Russell began the staff report reviewing what has been discussed on this item previously. 00A6 35 Public Works Director Susie Turner continued the report displaying a PowerPoint presentation and showing a budget spreadsheet. She began by explaining the rate adjustment process and the rate structure and increases that have already been adopted. She talked about the rate study review completed in 2019. 00:20:09 Public Works Director Turner displayed and explained a budget projection worksheet for fiscal year 2024-2027. She explained the increases they have projected in various items related to keeping up with the market. She explained debt service payments. The financial policy adopted by the previous rate study is not enough to cover the increased cost of capital projects and materials. Director Turner explained in detail why and said a new rate study will need to be Page 2 of 5 Kalispell City Council Minutes, June 12, 2023 completed. She spoke about the bonded projects and the progression of cost increases since estimates were first projected. She explained the need for a 90-day operational fund, what is needed to meet debt coverage and how the calculation is made. 00:33:13 Director Turner spoke regarding Water System Impact Fees. She then spoke regarding the payments for the tower and wells project. Director Turner displayed what would need to happen to make the fund sustainable. She explained the timing of when rates would be increased if adopted and how much the rates would need to be increased. She spoke regarding the need for a deep dive rate study. 00:38:14 Councilor Nunnally began questions asking about how our water rates compare to other municipalities and asked whether these costs have been affected by growth versus inflationary measures. City Manager Russell and Director Turner talked about inflationary costs and the variable market for large capital projects. She talked further about the rate study process and the issues keeping up with the actual inflationary costs. 00:40:55 Councilor Fisher asked questions about the value of a rate study. 00:41:29 City Manager Doug Russell explained the importance of a water rate study. 00:42:56 Councilor Fisher provided discussion and asked questions about the cost differences between 2019 and 2023. He confirmed the rate increase needed is about 53% within the next five years. He then asked about contingencies for capital emergencies. 00:44:22 Director Turner explained the amount within the budget for capital and emergency reserves. She also talked about the importance of ending cash as a safety fund. 00:45:28 Councilor Hunter provided discussion and asked about how the reduction in impact fee rates bares on proposed rate adjustments. 00:47:14 Councilor Daoud provided discussion about how impact fees can be spent and how he views how impact fees affect the housing market. 00:49:14 Councilor Hunter provided further discussion about impact fee rates and the housing market. 00:50:37 Mayor Mark Johnson provided discussion about impact fees and the housing market. 00:53:57 Councilor Fisher provided discussion saying he is thankful that staff is evaluating the safety of the system and evaluating needs and long-term planning. 00:55:33 Councilor Daoud asked about timing of the start and completion of projects as it relates to debt coverage. 00:57:15 Councilor Fisher provided discussion that he feels their should be additional reserves for emergencies. Page 3 of 5 Kalispell City Council Minutes, June 12, 2023 00:57:54 Director Turner talked about how a rate study would inform staff and Council. 00:5:40 Councilor Hunter provided discussion about demand pricing and then spoke regarding messaging to the public. C. 01:01:47 PUBLIC COMMENT Mayor Johnson opened public comment. 01:01:55 Kathy Folden, Public Comment Ms. Folden spoke regarding an FDIC interview she said she saw on Fox news that they are planning on confiscating money out of bank accounts. She urged the city to check with the bank to ensure funds are safe. Seeing no further public comment, Mayor Johnson closed public comment. 01:04-03 Director Turner continued the water fund budget review presentation showing rate comparisons and projected rates needed. 01:06:12 Director Turner talked about how Kalispell compares with other municipalities related to water rates. She explained that rate increases are happening across the state for the same del :08- 05 Mayor Johnson asked questions about details on Evergreen water rates. Director Turner talked about the process that the city would go through to propose and potentially pass a water rate increase and the related council meeting dates. 01:10:16 Councilor Dahlman asked questions about the water meters. 01:10:29 Director Turner talked about the ongoing meter change capital improvement project to cellular meters and how the new meters are very valuable for detecting leaks and monitoring water use. 01:12:08 Mayor Johnson asked questions about maintenance material wait times. 01:14:27 Mayor Johnson provided discussion about increases in subdivision development bond amounts. 01:15:05 City Manager Russell explained the next action would be a resolution of intent on the next regular council meeting. 01:15:47 Councilor Fisher asked about the notice that will go to the public and how that will be presented. 01:17:51 Councilor Daoud asked about the possibility of a QRU code for the public notice. Page 4 of 5 Kalispell City Council Minutes, June 12, 2023 01:18:50 Councilor Nunnally provided further discussion about the importance of messaging. D. CITY MANAGER, COUNCIL, AND MAYOR REPORTS City Manager Doug Russell explained that a discussion on the outcome of Police and Fire CPSM (Center for Public Safety Management) reports and a trail district as potential levies is scheduled for the July 10 work session. 01-19-31 E. ADJOURNMENT Mayor Johnson adjourned the meeting at 8:19 p.m. - �•`� •p��� Ai -lee Brunckhorst, CMC �=•�ON SEAL��• m = City Clerk U 1892 rr� = Minutes approved on June 19, 2023 UPCOMING SCHEDULE / FOR YOUR INFORMATION Next Regular Meeting — June 19, 2023, at 7:00 p.m. — Council Chambers Next Work Session — June 26, 2023, at 7:00 p.m. — Council Chambers Page 5 of 5