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05-07-24 City Council Budget Work Session MinutesCITY COUNCIL KCITY OF BUDGET ALISPELL WORK SESSION MINUTES TUESDAY, MAY 7, 2024, at 6:00 p.m. City Hall Council Chambers, 201 First Avenue East Video of this meeting with time stamped minutes can be found at: https://www.kalispell.com/480/Meetinit-Videos. A. CALL TO ORDER MAY 7, MEETING Mayor Johnson called the meeting to order at 7:04 p.m. B. ROLL CALL Mayor - Mark Johnson: Present Council Member - Kari Gabriel: Absent Council Member - Sandy Carlson: Present Council Member - Sam Nunnallv: Present Council Chair - Chad Graham: Absent Council Member - Jed Fisher: Absent Council Member - Sid Daoud: Present Council Member - Jessica Dahlman: Present Council Member - Ryan Hunter: Present Staff present included City Manager Doug Russell, Deputy City Clerk Judi Funk, Finance Director Aimee Cooke, Assistant Finance Director Julie Hawes, Public Works Director Susie Turner, Public Works Budget Resource Manager Terri Loudermilk, Information Technology Director Erika Billiet, Development Services Director Jarod Nygren. C. DISCUSSION 1. Fiscal Year 2024-2025 Budget Review i link to bud_et) a. General Fund Administrative Departments b. Development Services Department c. Public Works d. Information Technology 00:00:35 City Manager Doug Russell began the staff presentation with a general overview showing a 10-year forecast graph. 00:04:03 Council Member Hunter began questions related to cash carry over. 00:06:14 Mayor Johnson clarified information on the graph. City Manager Russell continued with an overview of the preliminary budget. Page 1 of 9 Kalispell City Council Minutes, May 8, 2024 00:09:34 Council Member Dahlman asked about overtime rates within the Police and Fire Departments and how passage of the levy may affect that. 00:1 1:14 General Fund Revenue and Expenditures Manager Russell continued the presentation with an overview of changes within the general fund revenue and expenditures. Manager Russell explained the state allowed tax inflation rate that is half the rate of inflation. 00:14:37 Manager Russell continued explaining revenues and answering questions from Council. 00:15:20 Manager Russell overviewed expenditures in the general fund focusing on major changes. 00:16:19 Manager Russell explained workers compensation issues. 00:18:38 Councilor Daoud asked a question on a line -item detail. 00:20:44 Manager Russell went over the City Manager budget. 00:23:04 Manager Russell reviewed the Human Resources budget explaining increased expenditures related to background checks, recruitment costs and city-wide training. 00:27:04 Manager Russell reviewed the Mayor/Council budget. 00:28:48 Council Member Nunnally asked questions about expenditures for the Montana League of Cities and Towns. 00:30:44 Mayor Johnson asked questions about the permissive levy for health benefits. 00:31:44 Manager Russell reviewed the City Clerk budget. 00:32:16 Council Member Daoud asked questions related to programming and application use, costs and maintenance. 00:35:08 Manager Russell reviewed the Finance Department budget. 00:35:33 Contract Services Finance Director Aimee Cooke and Manager Russell answered questions and spoke in detail regarding costs related to software purchasing to automate some of the financial tasks and reporting requirements. 00:39:38 Attorney's Office Manager Russell spoke to the costs related to software purchasing. Information Technology Director Billiet spoke regarding the needs and reasoning behind budgeting for software costs. Page 2 of 9 Kalispell City Council Minutes, May 8, 2024 00:41:36 Mayor Johnson asked about health care costs. 00:42:01 Manager Russell spoke to permissive levy details. 00:42:21 Municipal Court Manager Russell spoke on the municipal court fund. Development Services Manager Russell spoke regarding the addition of an Assistant Director in the personnel costs for this department, and the potential for a Pro -Housing Grant that could assist with costs if received. 00-44:36 Community Development Manager Russell explained personnel allocation. 00:45:1 9 Planning Department 00:45:56 Building Department Manager Russell explained the building department budget. 00:46:31 Development Services Director Jarod Nygren explained a state legislative change related to allowing three years of Building Department cash reserves instead of two. 00:47:40 Development Services Director Jarod Nygren explained the online permitting process that has been implemented. 00:50:33 Special Revenue Funds Manager Russell talked about funds that have been transferred and managed by Flathead County Economic Development Authority and Montana West Economic Development and explained clean up items in these funds. 00:52:44 Council Member Carlson confirmed the sale of all the Old School Station lots. 00:53:37 Renewal Resource, MCEP, WIN, and CDBG Pass Through Grants Manager Russell explained pass -through grants managed by NeighborWorks that must be accounted for in the budget but are not managed by or spent by the City. Mayor Johnson clarified that roughly 2.5 million dollars shown in these funds in the budget is passed through the City as the grant recipient but is not spent or managed by the City. 00:55:40 EPA Brownfields Assessment Development Services Director Nygren spoke about the Brownsfields Program. 00:57:24 Airport MDOT Grant Manager Russell explained this is another pass -through grant related to the Airport Users Association. 00:58:26 Safe Streets 4 All Grant Development Services Director Nygren explained the Safe Streets 4 All Grant and what it is Page 3 of 9 Kalispell City Council Minutes, May 8, 2024 being used for. He announced an open house on the Main Street Safety Action Plan May 15, 2024, related to this plan. After the planning process, potential adoption of the plan will be brought before Council. He further explained what could happen after that. 0 1 :03:266 Council Member Hunter asked related questions. Development Services Director Nygren continued explaining the focus of the grant. 1:04:05 EECBG Energy Grant Manager Russell explained this fund. 01:04:36 Tax Increment Districts Manager Russell went over the Downtown Tax Increment District projected revenue and expenditure details including ongoing debt service and review of specific projects and anticipated future project requests. 01:08:41 Mayor Johnson asked questions related to bond details. 01:09:39 Staff clarified funding related to sidewalks within this fund for the 3rd Avenue and 3rd Street projects. Staff spoke regarding Urban Renewal Plans and potential future projects. 01:12:07 Mayor Johnson spoke regarding the benefits of being able to use tax increment funds. 01:12:37 Council Member Hunter provided discussion about wanting to place sidewalks and bike lanes on the ballot and then place money for public education in the budget. 01:14:30 Council Member Dahlman provided further discussion in favor of a potential sidewalk and bike lane levy vote. 01:14:57 Council and staff discussed having a further work session on a potential trails district. 01:17:04 Westside Tax Increment District Manager Russell reviewed the increment and expenditure details for this fund including funds set aside for future redevelopment projects and street fund projects identified. Staff provided further details about the projects listed. 01:20:55 Council Member Hunter asked about the possibility of County improvements on Two Mile Drive beyond the City portion being improved. Staff and Council spoke further regarding the projects planned. 01:23:04 Meridian North Drainage Basin Staff explained this project responding to questions from Council Member Nunnally. 01:28:18 Old School Station Page 4 of 9 Kalispell City Council Minutes, May 8, 2024 01:28:37 Glacier Rail Park TEDD Manager Russell briefly reviewed this fund. Council and staff took a 5 Minute Break. 01:29:48 Mayor Johnson reconvened the meeting after a break. 01:30:27 Public Works - Administration Manager Russell and Public Works Director Susie Turner reviewed changes since last year's budget. 01:31:22 Light Maintenance Manager Russell explained this fund had no changes in the assessment. Staff explained a line item within expenditures related to luminaires to be installed and struggles in finding contractors for this work. 01:34:44 Council Member Hunter asked about possible energy savings. Public Works Director Turner explained the management of lights. 01:35:39 Council Member Daoud asked about subdivisions that came into the city with non- standard lighting. 01:37:24 Gas Tax Manager Russell spoke regarding expenditures planned using these funds. 01:38:45 Director Turner responded to questions from Council Member Daoud about deicer and road oil costs. 01:40:12 BaRSAA Manager Russell spoke regarding a legislative change. 01:41:09 Special Street Maintenance Fund Public Works Director Turner explained that the preliminary budget presented for this item includes the increase that will be voted upon at a later council meeting. If the increase does not pass, this budget would be adjusted. 01:41:55 Special Street Maintenance Fund Expenditures Manager Russell pointed out an additional operator and machinery and equipment additions. Staff explained these items further and how they would be utilized. O1:45:22 Public Works Director spoke regarding monies allocated within Traffic, Signs and Signals for intersection detection expenses on Three Mile Drive. 01:47:01 Staff responded to questions about 243, speed feedback signs to install on Oregon Street. Page 5 of 9 Kalispell City Council Minutes, May 8, 2024 01:49:21 Montana Air & Congestion Grant Staff explained that the City was informed there will be no funds distributed. 01:49:37 2 Mile Drive Improvement Project City staff explained they received the first notice from HUD for the appropriation, and plans for an in-house design on this project. 01:50:52 Enterprise Funds Water Manager Russell explained a 15% increase that has been passed. He then talked about additional personnel needs related to emerging contaminants. 01:52:07 Director Turner talked about needs for additional staff to support maintaining compliance with utility mandates and regulations. 01:53:28 Director Turner responded to a question from Council Member Daoud related to the Lead / Copper Rule. 01:55:04 Water Operations Director Turner spoke regarding replacement needs for the main central Computer hub. She then talked about increases in chlorination, electricity and other costs related to new wells. Sampling costs also increased related to PFAS. Director Turner spoke regarding costs to update the facility master plan, and related impact fees. She reviewed further increases in costs. Staff spoke regarding water meter, and hosting fee costs and advantages based on Council Member questions. 02:01:31 Capital Projects Director Turner explained that the North Main Well project is on schedule and will hopefully be online in July. 02:02:40 Director Turner further explained upcoming well and reservoir projects. 0105:03 Emerging Contaminant Response Director Turner explained several grants have been applied for in response to emerging contaminants. A work session will occur on June 10, 2024, to begin to move forward with an action plan. 02:06:26 Council Member Hunter asked for additional information released about the work session as it approaches. 02:07:17 City Manager Russell emphasized the ability for the public to sign up for notification emails related to agendas, press releases, etc. 02:07:59 Director Turner spoke with updates on the Tank and Tower Projects. 02:09:16 Lead Service Line Director Turner explained the city has applied for funding for lead service line replacement related to the rule. She explained the rule and subsequent requirements. She spoke further related to struggles completing the service line inventory and deadlines. She provided further Page 6 of 9 Kalispell City Council Minutes, May 8, 2024 information on the inventory that has been completed, and funding and a loan available for replacement. 02:14:22 Council Member Hunter asked about notification processes and provided discussion. 02:15:38 Director Turner explained that replacement of the lead service line is a requirement, and a decision on who will pay for that replacement will need to be made. 02:16:24 Council Member Carlson asked questions about the replacement process. Director Turner spoke regarding possibilities related to the process. Further discussions with Council are coming in the future. 0118:50 Sewer Staff explained a previously approved rate increase. Director Turner spoke regarding increased costs associated with aging infrastructure. 02:21:37 Director Turner spoke regarding capital improvements previously planned including a project in the Wedge Wood area to replace aging infrastructure. 02:22:36 Council Member Daoud asked about facility plan consultant costs and what that will entail. Staff explained the benefits of the plans and answered further related questions. Staff spoke regarding a grant that if received would help cover some of the costs for facility plans. Council Member Daoud provided discussion about his tenure on the Impact Fee Committee. Manager Russell spoke regarding prior impact fee reviews and subsequent Council discussions. 02:31:00 Mayor and Council spoke regarding impact fee laws. 02:31.42 Lift Station 36 Staff spoke regarding this significant project partially funded with impact fees that would help support the growth in the north part of town explaining they are working on the design and hope to get it bid after August. 02:33:04 Bluestone Upsize Staff explained this project replaces 8" main with 12" main and will be partially funded with impact fees. 02:34:31 Sewer Main Slip Lining Director Turner spoke regarding slip lining over a mile of old sewer main. She explained this is trenchless technology that saves funds. Page 7 of 9 Kalispell City Council Minutes, May 8, 2024 02:35:52 Wastewater Treatment Plant Director Turner reviewed an adjustment related to installing a new server, switch, and cabinet for electronic operations. She then spoke regarding costs related to the fermenter rehabilitation, and the lack of bids received for the project. She continued with increased inflationary costs to materials and electricity. 02:37:46 Director Turner spoke regarding a tipping fee increase expected with Glacier Gold. 02:39:41 Line Item 356 Director Turner explained a study needed to change the site -specific water quality criteria for Ashley Creek which affects our affluent permit. 02:41:39 Director Turner responded to a question from Council Member Daoud about funds allocated for electrician consultants. 02:43:02 Equipment Maintenance Director Turner explained increases to the general maintenance line item for the year. 02:44:09 Fermenter Director Turner explained why this project is needed, and what will need to be accomplished. She explained the lack of bids received for this project. She talked about funding including an ARPA deadline that must be met. She spoke regarding the possibility of, and details related to, an alternative delivery system for managing the process. This will come before Council shortly. 02:48:27 Machinery and Equipment Director Turner spoke regarding equipment that needs to be replaced and carry-over and new projects. 02:50:22 Bio Solids Facility Director Turner spoke regarding the history of this item and the need for a bio solids treatment process. She explained that Glacier Gold is transitioning to shut down and takes the majority of City bio solids. She further spoke regarding next steps. 02:53:39 Council Member Daoud asked about sizing of the facility. Staff answered related questions from Council. 02:56:03 Laboratory Operations Director Turner spoke regarding increases within pre-treatment costs. 02:57:21 City Manager Russell asked whether Council would like to continue budget review during the meeting tomorrow. The decision was made to continue tomorrow. D. PUBLIC COMMENT No public was present. E. CITY MANAGER, COUNCIL, AND MAYOR REPORTS Page 8 of 9 Kalispell City Council Minutes, May 8, 2024 There were not any reports. F. ADJOURNMENT Mayor Johnson adjourned the meeting at 9:00 p.m. Budget work session discussions continued on Wednesday, May 8, 2024, at 6:00 p.m. Aimee Brunckhorst, CMC City Clerk Minutes approved on June 3, 2024 UPCOMING SCHEDULE Next Work Session Meeting — May 13, 2024, at 7:00 p.m. — Council Chambers Next Regular Meeting — May 20, 2024, at 7:00 p.m. — Council Chambers PARTICIPATION Watch City Council sessions live with the agenda and supporting documents or later with documents and time stamped minutes at: https: 'xkr",w.kalispell.corr,. 480'Meeting -Videos. Watch City Council sessions live or later on Charter Cable Ch. 190 or via the City YouTube page at: httl2s:llwww.youtube.coml@`vofkalispellmontana9632'streams. The City does not discriminate on the basis of disability in its programs, services, activities, and employment practices. Auxiliary aids are available. For questions about disability accommodation please contact the City Clerk at 406-758-7756. Page 9 of 9