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CC WS 2021 06 14CHANHASSEN CITY COUNCIL WORK SESSION MINUTES JUNE 14, 2021 Mayor Ryan called the meeting to order at 5:30 p.m. MEMBERS PRESENT: Mayor Ryan, Councilwoman Rehm, Councilwoman Schubert, and Councilman McDonald. COUNCIL MEMBERS ABSENT: Councilman Campion. STAFF PRESENT: Laurie Hokkanen, City Manager; Charlie Howley, Public Works Director/City Engineer; Jake Foster, Assistant City Manager; Kelly Strey, Finance Director. PUBLIC PRESENT: None. DISCUSS MONTHLY UTILITY BILLING, LOCKBOX, AND BILL PRINT CONCEPTS • Asking the Council to increase the service level from quarterly to monthly utility billing. • Kelly gave an overview of the history of utility billing . • Noted big difference is the access to data that we have – no longer have to go out and physically read meters. • Have about 9,000 accounts . • Commercial accounts are already read monthly. • We do offer some residential accounts a monthly billing option, requires ACH payment. • We do bill each month – but only 1/3 of accounts each month. Therefore, not everyone is on the same quarter. We read in the middle of the month. • As an example, a toilet leaks in February – the resident gets the bill for that as late as May or June. Kelly shared an anecdote of a resident calling and asking what is the city’s plan to share the data we have in a timelier manner. • Monthly utility billing is a more proactive approach – allows people to find problems and adjust behavior based on their bill if they so choose. • About 40% of our comparable cities offer monthly billing. • Current finance staffing levels are below all other comp cities by at least 1.0 FTE. • Advantages from customer perspective – more predictable bill, fairness of new rates being implemented at the same time, sewer charge being calculated on same months for every account. • Advantages from a city perspective – tie back to our values and priorities. Protect environmental resources, prolong life of infrastructure, improves cash flow and internal controls. • Strey reviewed list of “what we would need” to move to monthly billing. • Staff would be able to be more proactive – for example, contact residents about possible leaks or high usage. • We would move from in-house bill printing to a bill printing service. Those companies get better rates on postage, so there is some volume savings. City Council Work Session Minutes – June 14, 2021 2 • A lockbox cash receipt system would have customers mail their payments to a bank that would process. Staff is also examining an on-site high speed scanner for bill processing. • Councilmember Schubert inquired about the percent of accounts still paying by check. Staff estimated it is about 50% of people using auto-bill pay. The most efficient payment is by ACH. • Strey reviewed the estimated cost of moving to monthly billing – approximately $2/month per account. The actual utility increase would be set through the budget process. • Mayor Ryan inquired about the proposal to move the utility rate study in house. Strey responded that we have the expertise to do the annual review in house and the new fund accountant would provide additional bandwidth. Strey spoke with Ehlers and they said every 2-5 years has become the average. The city would still plan to utilize Ehlers every five years. • Mayor Ryan noted that she appreciated including the use of consultants in the appropriate ways as part of the overall evaluation. • Strey explained in more detail how bill pay and lockbox services work. • Strey reviewed the implementation timeline. The soonest possible implementation would be Q1 of 2022. This date will also depend on the actual schedule of the water meter replacement project authorized at the last Council meeting. • Mayor Ryan thanked Strey for the presentation and opened the floor to questions. • Councilmember Rehm thanked Strey for tying presentation to Strategic Plan goals. She expressed not liking to charge residents more, but appreciated the enhancements of the proposal. She thought residents would appreciate not getting large, unexpected bills after the fact. • Councilmember McDonald appreciated the improvement in cash flow and asked more information on the proposed FTE. Strey replied that if hired in 2021, the FTE would be funded by fund balance. Rates would not increase until 2022. Strey shared that the fund balance is adequate if Council chooses to proceed. Councilman McDonald asked how long it would take to fill the positon. Strey replied at least six weeks. McDonald said he was generally in favor of moving forward with the proposal. He noted he has general concerns about staffing levels for the city overall. • Strey noted that the general fund currently supports overhead expenses for the water and sewer fund. Staff will be bringing more information about allocating expenses to the appropriate funds during the budget process. • Councilmember Schubert noted that she was in favor of monthly billing, but asked when Strey would request additional FTE if we did not elect to move to monthly billing. Strey responded that the need for the FTE exists regardless of this proposal, particularly to bolster internal controls, and review functions. Councilmember Shubert requested that all aspects of need for FTE be conveyed to residents if we make this move. • Council asked additional questions about other needs and priorities and asked Strey to confirm moving forward with this proposal is the best priority project right now. • Mayor Ryan clarified that we would still plan the annual increase proposed in the rate study. Strey confirmed yes, but the additional increase would only occur in one year. • Councilmember Rehm asked for more details on how leak detection occurs and noted that it would be a good added service to residents/accounts. • Mayor Ryan asked for an update on the timeline for the meter replacement. Howley shared that we are working on final project and schedule details. We do not have a completion date set at this time. City Council Work Session Minutes – June 14, 2021 3 • The Council expressed unanimous support for moving forward with the project. ROUNDTABLE • Mayor Ryan noted that the roundtable is a new concept, designed for council to be able to talk about ideas that Interim City Manager Johnston suggested. • Mayor Ryan requested that in the future items be submitted to the City Manager ahead of time if possible to give other members time to consider and review as well as to plan the amount of time needed. • Councilmember Rehm shared an idea to develop a proclamation schedule similar to the City of Roseville. She noted that she liked the idea of setting a schedule and communicating around the themes. Hokkanen shared an overview of current practice – using proclamations narrowly for city events/people. Mayor Ryan shared her preference that proclamation use be kept narrow and avoid partisan issues. Councilmember Rehm and discussed best ways to bring awareness and attention to issues and to be able to plan ahead. Councilmember McDonald shared the desire to keep current practices. • Councilmember Rehm also shared an idea of doing a cultural and historical study of the city every twenty years. The goal would be to be aware of and preserve the history of our town. Identifying places of cultural and historical significance would build community. Would be good to know the history of our land. Mayor Ryan noted that the City recently leased the Old Village Hall to the Historical Society and suggested them as a possible partner to take on such work. Councilmember McDonald was supportive of the Historical Society being involved and hoped that now that they have their own space, they will be able to take on new projects. • Councilmember Rehm also asked when we will discuss the ARPA funds. Strey responded that we are building into the budget process, also we have until 2024 to expend the funds so it is not the same pressure situation as CARES. Strey shared that our funding is about $2.7M, compared to the original estimate of $3M. Hokkanen committed that we will make sure dollars are all used in Chanhassen by the deadline. • Councilmember Schubert asked if we can do an update to residents about the impact of franchise fees on road projects. Staff noted that this the first year franchise years have been utilized, but committed to sharing that info with Council and the public. The meeting adjourned at 6:57 p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen