08-14-25 City Council Workshop Packet

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are paid around $200-250 per hour for this type of work. Tammy Omdahl stated that their normal report would cost approximately $15,000 - $20,000, depending on how many funds we wanted to review. The additional written strategy that we will be requesting would add substantially to that project. And having the outside consultants would not eliminate the need for staff involvement, as we would still be providing all of the data and reviewing it when it was complete. (The 2022 Long-Term Financial Plan created by Ehlers can be referenced here as an example of their product; 02 Long Range Financial Management Plan.pdf) At this time, Finance staff has determined we would be able to achieve a more comprehensive plan if we produce it in-house. Much of the work to create the financial models has already been completed over the past couple of years by Finance staff and could be pulled together and expanded into a larger model internally. We have a number of systems we use for financial management and planning; spreadsheets (for debt, tax history, budgets, fixed assets, etc.), current financial software (Springbrook), future financial software (BS&A), and PlanIt CIP software. We would like to ensure that the data from these systems will flow efficiently into our Strategic Financial Plan so that it can be updated on an annual basis. The textual portions of the report, as well as the layout, would be a time-consuming portion of the work. And these narratives are often what are missing from reports from outside consulting firms. Staff has been researching existing financial plans, software, as well as the possibility of AI-assisted writing tools to pull together the narrative portions of the report. We believe we have both the skill set and the capacity to produce a report in-house within the coming year. All of the consultants we spoke with were willing to do reviews and provide advice on an hourly basis, as needed. We have tentatively budgeted $50,000 for this plan for 2026 and would be able to decrease that to $10,000 if we keep the work largely in-house as proposed above. Water & Sewer Availability Charges The Water & Sewer Fees associated with development have not been changed in at least 10 years. As part of the utility study this winter, staff suggested we review those in depth. After speaking with City Engineer Stanley, staff provides the following for discussion; An initial review would include an inventory of water and sewer assets, a review of the replacement schedule, and rough replacement cost. (This inventory will be helpful for inputting clean fixed asset data into our new financial software, as well.) Using this inventory, staff will model how various WAC/SAC levels might fund replacement. In addition, we would work with our financial partners to get information regarding these fees at other cities and discuss with Council and Engineering whether our fee structure should be a flat fee or something more complicated. A secondary review could then be completed after the Comprehensive Planning process when there is more information regarding future buildouts of our utilities. Mr. Stanley estimates that the initial review and asset inventory will cost around $18,000. We would add another $5000 for other consultants, as needed. We would set the goal of having the initial review and modeling done by December, so that the asset list can be incorporated in the new software, and the new WAC/SAC fees can be adopted for 2026. We had initially tentatively budgeted for $50,000 for a study, split between water and sewer, but if Council is supportive of the work as proposed above, we would decrease that to $ 25,000. Street Light Fees As part of our overall financial strategy and diversification of revenue, Council has directed staff to contemplate a Street Light Utility Fund. This project is less pressing, as the majority of replacements are still a number of years out. Again, we feel we will be able to do this review in-house and provide recommendations in mid-2026.