City Council — May 26, 2026

Good evening and welcome to the closed session of City Council of Solvang. Closed session for May 26, 2026. Roll call please. 630 We're at 5.30, starting our meeting.

Thank

you.

you. Okay,

would you We have public communications for the closed session item reference or conference with legal counsel for anticipated litigation. Is there any one here or on Zoom that would like to speak up? Okay, I will close then to close the public communications to a closed session and Madam Clerk would you read that into record please?

Thank you. Conference with legal counsel anticipated litigation, initiation of litigation pursuant to government code section 54956.9 D4 one potential case.

Thank you we are now adjourned for closed session We're back from our closed session. Madam Attorney, any reportable action?

Thank you Mayor yes there was direction given to initiate legal action and the defendants and other particulars of that action once formally commenced will be disclosed to any person upon request

thank you We are adjourned from closed session at 6.06 and we'll get back at 6.30. Let's begin the open session. Thank you. Good evening everyone. I'm going to call the meeting to order for the Solvang City Council at 630. A little housekeeping, please turn off your phones or silence them and I'll ask our illustrious clerk to take roll call

The consultant is having trouble logging on so if we could

Okay technical difficulties mean we're going to

Yeah a couple inches higher there. Yeah, hello. Yes I'm here to talk about the Alisaw Commons Glenway project proposed four three-story apartment units one two-story apartment unit for low income 88 apartments 138 car parking spaces. I realize a decision was finalized on March 25th, 2024. I was here for that. I just wanted to show you one of my souvenirs was the sign that was on the lots that notified the neighborhood of this March 25th meeting.

And the green color I thought was sort of interesting, but that was all we saw. Anyway, I and other neighbors that I've spoken to were not against housing solutions I mean, I have three kids. One of them's a house sitter, one has a condo, one has a house that needs a lot of work. These buildings with their parking lots in our opinion are oversized for our neighborhood and inappropriate for an area that's basically all single family homes And I would say there's too much hardscape. I was looking at the drawing today and thinking, wow, there's all these buildings and then there's all this asphalt with the lines on it for the cars.

Basically, there's almost no land left. There's traffic issues, general traffic issues in the neighborhood but then if there's a fire or something like that, this whole complex is right where the bridge comes across from all the people up on the other side in the hills there and our neighborhood, all piling up. Who knows? Maybe they're going the other direction but it is right there at the knot of the whole road system.

Then there's the traffic congestion which already exists when you're going up the hill, up to Oak Street and then up to Mission et cetera and it's already pretty bad There's nothing smooth about it, but I mean we understand that Solvang and there's pedestrians and there's cars and stuff like that. But another concern for me, and I do a lot of walking down in the basin there. And I've noticed over the years there's less insects, less frogs, less birds. Okay that's sort of sign of the times but it is a fragile environment and this whole you know 88 apartments are going to be right near that, and it's just going to push more people. Of course it's good to do.

I'll try to move on here. You've exhausted your time, I'm sorry. Can I have a few more minutes? Or a minute? I'll go

quickly. One more minute please, not more.

There's no stores for basic shopping nearby these apartments. There's no public transportation nearby these apartments, and they cannot And they should not be used for short-term rentals either, which is a very disruptive thing. It would be better to have fewer smaller lower profile buildings and possibly the whole project near public transportation and public shopping.

And I don't think it's too late to correct this error, and I would like you to please keep the Fjord and Juniper Street neighborhood which is who we are more or less informed in the process. That's it. Thank you very much. Okay, thank you very much.

Ms. Alameen?

Hello my name is Denise Alameen. I'm here to talk about The water bills. I sent a complaint through the system because I'm being told that I should be going online and making my complaints online, so I tried. I went online and I looked all over trying to find just a basic complaint form, and they all said code or something different. So I used one of the codes and made a complaint about my December 25th water bill.

December 25 fell on a Thursday last year 2025 And for some reason the city of Solvang chose to give the employees and take the next day off. It was not a federal holiday, it was one that you guys decided to do. When I came in to pay my bill on the next business day which would have been the 29th as a Monday, I was told by Wendy that I was charged a late fee because I didn't make my payment on the 25th And I explained to her, I couldn't make it on the 25th nor the 26th and the next business day was Monday the 29th when I did make my full payment. I just want to read to you and I don't know why Randy answered he told me don't ask him any more questions but for some reason Randy answered my complaint and he says, thank you for your comments. I'm sorry that you were dissatisfied with our utility payment process in the month of December.

I have spoken with our Utility Billing Department and they provided me with a background regarding your account. I was told that you made 13 payments to your account that month, not including the final one on the 29th. The vast majority in the amount of only a few dollars. I also learned that when the due date falls on a weekend or a holiday our standard practice is to extend it to the next business day so your concern about Memorial Day holidays are unfounded. I further learned that we have eight payment options, and he noted them.

My question on the computer system only asks why was I charged a late payment charge in December 25th? I have no idea why this paid employee had to go into other things. He just needed to answer my question before... I'd like a minute, if you don't mind. We just received... In our water bill, April is dated April 2026. And this explains that the payments are due on the 25th and if it falls on a weekend or holiday, the late payments will not be applied until the next business day.

But the 25th of December 2025, the late payments were applied on that Friday and it was not a business and you guys weren't at work. So that was my question and it was not answered. And I would appreciate since I have to come to meetings to have my questions answered that one of you guys could take this issue and answer for me. Thank you.

Is there anyone else in the audience or online that has a question or wants to make a comment? Okay, he's on. So we will close the public communications item three and revert back to item two for our presentation. Staff report please.

Good evening Mayor, Councilmembers, members of the public. I'm Jose Acosta, the Utility Director here with the City of Solvang. This evening's staff and NHA financial consultants will be giving the council a presentation on some of the financial considerations for the Wastewater Treatment Plant Upgrades Project. They will be presenting several financing options including private bank placement loans, publicly issued revenue bonds and the potential USDA loan.

Staff is nearing the application process for the USDA loan it was a rather lengthy process and required quite a few studies and investment on staff time and some funding as well so that'll be discussed as well this evening. Staff is not Making any recommendations this evening or asking that we make a final decision on any of the financial financing options.

We wanted to present these to give Council some opportunities to think about the potential financing options and staff will be returning at a later date with these options and seeking further clarification and direction from Council on which they feel is the best option for financing the treatment plant. At this time, I'm going to turn it over to Mr. Eric Scriven who's online from NHA Advisors and he'll walk us through the presentation and at the end, he, I or Randy can answer any questions council may have.

Thank you.

Good evening. Am I coming through okay?

Yes.

Great. Good evening Mayor and members of the City Council. I've got about 14 pages of content here that It goes through the background and some of the definitions, and also some of the options. To highlight the key criteria from which City Council may want to think about the funding of this treatment plant project later on when those decisions really come to a head. But right now, we just do the background several approaches some definitions and And please ask questions if you care to throughout the presentation as well.

So, as we all know, the city is compelled to address its wastewater treatment plant. There's some deficiencies with respect to treatment and so that the project has been ongoing for a number of years. The current It's currently under design, I understand at 50% design. The analysis that we were using for this presentation has a project cost of $18.5 million. That may change as design is finalized. I understand you're going to get to 90% design later this year.

The city has been in discussions with USDA since 2022 to secure a very low-cost loan And they have longer terms that are also helpful. I put here grant was unavailable, but it is my understanding that there is a $1 million grant that is part of the package so that will be shown in one of the options that's related to the USDA. The 2022 cost-of-service study assumed a $19 million loan using a 4.5% rate and a $ 1.5 million annual payment And that was the reason why the council approved those rates in 2022. I believe you have July 1 of 2026 increase, correct me if I'm wrong Jose, I think you have one more increase July 1 of 2027 if I'm not mistaken?

No, the last one is January, July 1, 2026. So it's 22 through

26 okay very good. The upcoming cost of service will confirm whether this previous increases will be sufficient to support the future loan payments. Also, part of that analysis is to maintain proper reserve levels. Hopefully you can do your other capital needs beyond this treatment plant project through a PAYGO program. And also, as well know operational costs are increasing so that rate study will look at all of those things to develop the rates.

The core objective of any funding plan with respect to the treatment plant is threefold and certainly more actually but we want to create a funding plan that secures the most efficient lowest cost funding and secure favorable terms. Paramount to this process also is to secure and promote the most affordable rates possible for the city's sewer customers, and then also for the enterprise, the wastewater enterprise maintain long-term fiscal sustainability and operational flexibility. Later on we're going to go through three loan options But there may be others you want to discuss, but we wanted to just highlight the differences between several that have been considered. Before we get to the loan options, I want to just talk high level about various ways that projects are funded by public utilities.

Cash funding which is really a pay-as-you-go kind of program is often used to fund the smaller and recurring projects You know, the cash that you generate annually above and beyond operational costs is usually programmed to handle the lower cost types of projects that are needed. There's also alternative funding federal and state grants like USDA which has been investigated State Revolving Fund for clean water That's also a very good program that's offered by the state of California.

There are other grants as well, and those are usually the focused one there had been some federal programs that have been discontinued in the last year but federal what we call free and cheap opportunities is something that should be looked at to offset potential costs of funding. These programs are highly competitive usually and take a bit longer to process with the state or federal jurisdictions that are offering them. And like USDA, oftentimes you'll have to find interim construction funding because these other programs like to fund when the project is complete. And of course then there's the private markets bonds or loans Those are accessible sources.

They're usually higher cost than the alternative free and cheap money sources, but the timing is generally three to four to five months and that's relatively certain timelines. What is a wastewater revenue loan or bond or even a USDA loan? The purpose is to fund these larger projects. The repayment source, and I think this is important because we're going to use the terminology net revenues.

Net revenues is really your gross recurring revenues from rate payers and there are interest income in other sources but that's Your recurring revenues, less your recurring every year types of operating expenses. That equals your net revenues and that is the pledge that the city would make to what whatever your funding sources to repay the loan or bond that you might undertake in the future coverage ratio is another important point. You must maintain sufficient revenues or net revenues to cover debt service. Usually that means that you have excess amount over and above that debt payment, so typical terms are 110% to 125% coverage which means that you have $110 to $125 of net revenues for every hundred dollars of debt service that you're undertaking.

And then key legal covenants that usually are present in all of these types of loans or bonds is the rate covenant, which is maintaining that coverage that we just mentioned as well as an additional bonds test which imposes additional conditions before you're able to So where is the current status of the Wastewater Enterprise Fund? The enterprise fund struggled a bit before you implemented the rate increases, you were negative on your net revenues.

But that five year increase that the City Council approved translated into positive net revenues after 2023. As you can see on the right hand side, current fiscal 25. We don't have fiscal 26 in hand at this moment but fiscal 25, the most recent year of audits, you had a little bit over $1 million of net revenues. If you were to calculate a pledge for a new bond with that $1 million using 125% coverage That would translate to about 10 to $12.5 million of capacity for funding any type of large capital project that falls short of the $18.5 million that we're assuming for this analysis is the project costs. The 2022, just going back to the 2022 cost of service study Next page, projected that in 2026 you'd be about 1.6 million net revenues and 2.1 million of net revenues so once the fiscal 26 figures are tabulated at the end of this fiscal year you'll see where you stand up but there have been large increases in operational costs with respect to energy and power Sometimes labor as well, so it'll be important to see where that is prior to your cost of service study that you're contemplating doing.

That will be your baseline for the go forward look and once you have that in hand, your financing options would be re-evaluated. Your reserve levels are looking good as a percent of annual budget, the city has adequate reserve levels and the trend is good. That cost of service study that you approved in 2022 is having the desired effect notwithstanding that you've used some of your Thank you very much.

Right now, it grew from 1.1 million in 2022 and you're projected to be while you're at 2.5 million at the end of fiscal 25 I'm not sure where the projection will be but indications are that it might decline to 2.1 million So, getting into the four very high-level options just to provide contrast to the USDA loan that the staff has been pursuing for the last number of years. We wanted to show a bank loan which is also called a private placement.

They're usually limited to a shorter term, a 20 year term as standard using up a bond or public offering to investors We're showing a 30-year term and a 35-year term. And we have interest rates that we took a snapshot of earlier this month for the credit rating that we think is conservative for the city of Solvang. And then, of course, we also have the existing terms that we received in the letter of conditions from the USDA. And that has a 40-year term.

So the bank loan is the quickest option to execute. There's no credit rating, there's no investor disclosure that needs to be put together that goes out to the investors to sell the transaction. You have more flexible prepayment options for these bank loans and for the private placement bank loan as well as the public offerings you can bundle your construction financing into your permanent financing so you don't have to do something before the takeout like USDA requires. The cons right now are that the private placement market is showing higher interest rates and also as noted, you have a limitation on your max term of 20 years there are some banks that will go out to 25 not many and they charge a higher rate. So the assumption here is a 20-year loan at 5% rate I can read that the annual payment is about a million seven.

Okay, so public offering we're showing a 30 and 35 year. Currently, it's a lower cost option than USDA that's not usual but that just happens to be the case at this moment in time. Flexibility on the term, you can go up to 30, 35 years. 40 years is possible but it's not typical. Usually you're seeing these long-term financings by selling to investors at a 30 year term.

The cons are it's a longer process than a bank loan. You have to go through a lot more due diligence with respect to getting a credit rating and putting together disclosure for the investors And usually you have a prepayment lockout feature of 10 years that can be negotiated depending on the market. Sometimes you'll have to pay a little bit of interest rate penalty, but the 10-year lockout is typical and this assumption assumed an A plus credit rating which we think is conservative for the City of Solvang's Wastewater Enterprise and was showing 30- and 35-year terms. So, for the 30-year term if I can read that say $1,330,000 let me look at that make sure I'm reading correctly yeah a million three hundred thirty thousand dollar payment for 30 years a million two hundred fifty thousand For the 35 years, contrasting that with the $1.775 million for the direct bank loan placement which is over 20 years.

So USDA this is sort of a collapsed approach we're not we're bundling and trying to show an apples-to-apples comparison Although you do have to do an interim financing before USDA will take out the construction loan, but we bundled both where we're trying to show that there is pre-funded interest in all four of these options. The pros for a USDA is they will give you the longest term. That is the way they work.

For disadvantaged communities, that can be a very strong benefit. Usually they have the very low rate. Currently it's higher than one would expect but there is the opportunity once you lock in the USDA program that you can reset that down if rates go down prior to them funding the loan in a couple of years when you're done with construction. The cons are that it's a very long process, and it takes a lot of staff time and sometimes consultant time.

You do need to do the interim funding. There is no credit rating disclosure needed which I think is a positive. I'm not sure why that's in the cons but you may have to do the credit rating for the interim loan. So the assumptions here are 40 years At four and three quarters interest rate, that is the current quote from USDA. That 40 year program shows the lowest payment of about $1.1 million annually over 40 years, of course.

So we wanted to show all four of these and then stack them up and compare them. I think there's two things that are important to look at which The annual payment, that's what the rate consultant will be looking for and solving rates for when they conduct their analysis. But then also I think it's important to see what the total payments are over that loan term. So you can see we go from $1.7 million for the private placement all the way down to a $1,000,001 for the USDA 40-year But there is approximately $10 million more of interest paid over those extra 20 years that the public agency would be making those payments.

Glad to answer any questions on that slide, if there are any right now or we can answer them at the end.

I have a question in particular on that slide.

OK.

So the million dollar other contribution was only applied to the USDA option? Why is that? That's grant money that the city enjoys, why wouldn't we apply it to any other

debt

scenario?

That is my mistake. I just found out, I thought it was tied to the USDA application where they were giving The loan at $17,500 and a one million dollar grant. That's sometimes how they'll offer the package to a public agency but I understand that is an earmark through your congressperson so that should be applied to all the other three as well. And of course that will lower those other threes annual payment

I need to jump in here because the information we received from our contact at USDA suggests that it is a grant specifically for USDA, not an earmark which is what I understood it to be. I have not had a chance yet to get this clarified But the way it was presented in the letter that we received from USDA last week, the example was given. Right now we've got it published at 18 and a half million dollars is what the estimate is for construction but if the project actually cost less they would still loan us 17 and a half million and then the money, the difference would be taken out of the grant which indicates to me that it is not in earmark And I have not had a chance to reach out to USDA yet. So, the answer to the question more specifically is it should be applied to all of the different loan options or borrowing mechanics that are presented here, but based on what I received from my contact at USDA.

My understanding of what he wrote was that it is specific to the USDA and not... Sorry, Randy,

but I thought, are we talking about the same money that we got from Carbohal's? Yes, Carbohal's $1

million

earmarked. That's what confused me. Why is it only USDA entitled to it?

I don't have that answer. I was not able to reach out to Al and find out, but I got that information late last week

Let's get that clarified. Are

there options

to prepay those?

Yes. The USDA, I think maybe I didn't say it on the previous page but USDA you can pay down your loan at the public agency's option without penalty at any time.

Thank you.

So they prepay and rate adjust in the middle if there is an eligible rate adjustment?

You can adjust lower prior to the funding, which would be after construction is complete but before at the time they fund it so at that point you lock it in. So we're all hoping the rates do start coming down and they seem abnormally high for USDA right now. As an example, two or three years ago we locked in for another project at 3.625 for the 40 years. So that's something we're working hard to keep on that other project because that's a low rate in the current market especially for 40 years.

Thank

you. We wanted to insert this slide because the term of the loan You know, impacts the total interest costs you pay over the term as well as your annual payment that the rate consultant is going to solve for when they do their study. And, you know, the shorter the term, the higher the amount to fund the same annual amount to fund the same cost. So there are pros and cons. You lower your interest but there is something what we call generational equity in some City Council thinks it's important, some less so. They want to pay things down earlier but we think it's important to note that the treatment plant project, that's a long-lasting asset and usually folks are looking to fund long lasting assets with a longer term funding term So that you're gaining the generational equity, which means that the folks.

That are paying that payment for that asset and that improvement project that you took on debt are gaining the benefit of that asset so as an example 20 year loan term for the direct bank loan. After you have a higher payment during those first 20 years, but the next 20 or 30 years that that asset is still providing benefit for the ratepayers. Those ratepayers after year 21 are getting essentially no having to pay no payment on that so that's the thinking the statement on generational equity. You try to match up your loan term With, with the useful life of that asset where it's providing benefit to the customer.

You know, to the extent that you have the ability to pre pay without a penalty that loan which you do. On all of the loans that we're talking about, some are more flexible than others. You certainly can program that in if that's important and of interest to the City Council and staff down the road. Glad to answer questions on this though.

I am curious about one thing, the assumption that the useful life of the asset is greater than 40 years. How long has our wastewater treatment plant been in existence now?

The treatment plant's been in existence since the 60s. The last upgrade was done in early 90s so we're already approaching a 40-year mark on that treatment plant upgrades.

Is any of that attributable to the state requirements, or is it strictly the functional part of the wastewater treatment

plant? It's a combination of both. But the state requirement for nitrification was one of the major players about five years ago to start the phased approach to the wastewater treatment plan upgrades.

That's what I thought. So it could change again and reduce the- we'd have to start this again less than 40 years.

If we get our permit settled with the Regional Water Quality Control Board for the foreseeable future, and I don't know how long that is because we all know state regulations could change in 10-15 years but we should be good until the next requirements come down the pipe. But yes, that is true.

It's just simple and it makes a point. The question I have is, you know bank loans commonly most people are familiar with mortgage loans are commonly 30 to 35 years why is the loan option capped at 20 years? It doesn't match the useful life of the asset. Are there options for different terms of loans from banks

I mean, I've been creative on some bank loan programs where they don't want to take on for public agency debt loans that are longer than 20. I do see some that are 25 but there can be the ability to structure something where you have an amortization that's longer but you still won't be able to exceed the 15 or term that the banks underwrite at. That's just where they're at on public agency loans, that's the programs that they offer. You know if you get exotic as I'm speaking then you do take on interest rate risk but you know that's something that can be investigated down the road if that's council's pleasure

I had a question from your beginning, you said PRAGO? PAGO. PAGO, thank you. I didn't know what that acronym was.

Yeah, PAGO is just using your excess cash annually from your net revenues over and above your payment to take care of those other

projects. Thank you, I just hadn't heard that acronym. Okay, any other questions?

I have some comments, okay. First of all really good summary and a good assessment for us so appreciate the data. I think like baselining where we are at it's important to know that we the current wastewater treatment plant needs this rebuild to meet new state requirements on the water that we release from the plant We have There's two key concepts in this presentation that I want to emphasize. The first is that the USDA option maps closest to the useful life of the asset and the generational equity point means that Current ratepayers today are not overly penalized to finance the asset. We would spread the cost over generations of ratepayers, so today's payers don't pay an artificially high rate because at their moment of time they have to incur the rebuild of this asset.

So it's more fair to spread it over as much time as we can possibly look at The second thing is the USDA terms, not just time or length of term but the fact that we can enjoy a rate adjustment if rates go down and we have the flexibility to prepay gives us the flexibility and the note that things could change. And we know that things will change, right? We know that for sure. We can take on...we're already taking on San Yanez as a potential 20% contributor and we need to figure out that math and we could also take on Los Olivos should they vote that way and that could change significantly the math on how we affect our own rate payers so I mean to me that gives us conditions that are most favorable for the USDA option.

So on that point, We should probably consider another round of math, and I know we're going to do some work groups on a breakout committee. But another round of math that the team, the council can look at that considers the million-dollar grant and how it should be appropriately applied so we do a fair compare. That we look at what does it mean when we factor in San Ynez and potentially Los Olivos? And then we should probably look at Policy that says, can we onboard another consumer of substance in 10 to 20% capacity? So it positions us as a regional wastewater treatment plant. And that policy would say you can buy in And there might be a construct for a buy-in fee, and then your contribution of the rate for your percentage of consumption is X.

And we write that as a policy so someone knows how to negotiate their way in And most importantly, it gives somebody like Los Olivos a construct, a predicted model to say yes or no to should we vote to come on board to Solvang's wastewater treatment plant without that they have no framework. It gives them a little more understanding of what they're signing up for.

Reasons to object, yeah. One of the other things that I would go along with that with is of course here shortly in a couple days we're going to have the Urban Growth Boundary Advisement Committee looking at the potential of bringing in more homes, more buildings If all of that happens, this is back to capacity which is what Ms. Arrona was referring to so can we how much more can we handle for ourselves as well as bringing in Los Olivos?

To address you know what Councilwoman Arrona was just saying, we have had that conversation with Los Olivos. We've talked to our consultants our engineers and and determined what the buy-in would be. So not only would they be buying approximately 10% of our capacity, and consequently or directly consequent to that would be the 10% of our operations cost There's a cost, I don't remember the exact number of it was four or five million dollars I think of buy-in that they would have to give us or possibly arrange to make payments to get it paid in so that we would have that ability.

So that they're buying in, they have equity or skin in the game. The other thing I wanted to point out just real quick math Eric pointed out a minute ago as he was going through the comparison rates there's roughly $600,000 difference in the annual payment shorter term would be $600,000 more And if you do the quick math, we've got about 2,000... a little more than that but 2,00 connections in the City of Solvang. Two thousand...

six hundred thousand divided by two thousand is three hundred dollars a year which again $25 a

month

increase just to provide and again that's paid by the rate payers now if we went with a shorter term So of course that means 20 years from now, the rates could potentially go down. But that's not an equitable balance in the way those payments would be applied.

One more thing on Los Olivos, one step further would be to allow them to make a reservation for capacity. So we could actually draft up an MOU it's not binding but again it sort of keeps the door open or allows Los Olivos community to understand What's the framework? But that they have a you know, they literally just have a reservation. So should they proceed Some terms are already understood again it gives them structure for them to say yes more easily and To promote this this is you know a regional solution That will guarantee meeting state standards

Now, I do wonder how long is this all going to take? Because we've been talking about redoing the waterways treatment plant since 2019-2020. And I think the cost for building while we've been going through this process has gone up just like everything else. Is there anything that we can do to secure And what you fairly soon so that we can plan for this because at this point the difference between.

500, 600 connections more or less makes a difference on how much you pay on all of this. Just alone on the kind of loan that we get, we're talking a difference between $70 and $40 a month. So I'm just wondering how much longer this is going to take because it costs the longer that it takes you to negotiate. It also cost of construction goes up significantly

Before Jose jumps in there, I just want to remind Council that this is a presentation and there's no action or direction to staff being given. We're definitely listening to all the questions and comments but just wanted to clarify that.

So the current timeline for construction to commence is second quarter of next year. We'll release RFP early first quarter, next Kentucky calendar year and completion of construction in mid-2029. At that time is when the consideration would be given to Los Olivos hopefully they have their design build out and they're ready to connect at that point in time. Randy and I are staying abreast and keeping in contact with the Los Olivos general manager we are attending a public forum that they are having June 3rd in the evening as well, that they're doing a customer resident outreach program is there as well. So we'll be there listening to questions and answering and giving them responses. Again, we've given on preliminary numbers and so they're comfortable with those or presenting those to their community as well of what the buy-in which is basically a connection fee to the city and so that would be fees that they would pay up front.

And if we could I'd like to allow Eric to finish his presentation

Okay, the takeaways I think and everyone's sort of expressed discussion items that makes me understand you all got it which makes me feel like I'm doing my job here. There's been a lot of time spent on the plant but also the funding option, the preferred option with USDA You're looking for and I think you have within your reach options that meet all of the objectives with low cost, affordable annual payment which is the lowest possible impact on the rate payers.

You're looking for generational equity I think that's for City Council and staff to determine what term you want USDA does show that provides the most and creates more flexibility financial flexibility. Getting the results from 2026 and having a better handle on 2027 projections will clarify the viability of supporting the $18.5 million project, which obviously it can change as design gets firmed up. That could be a bigger number. We don't know. But the rate consultant who's going to do the cost-of-service study, that'll be extremely important information to have in hand Along with comments from staff and City Council on the best approach for some of these things you're talking about that would go in with, you know, potential partners that you're talking about.

Those all would go into that rate study to create the lowest impact on the customers possible to pay for this project. With that I think I'm done there's some other pages but we don't need to go through those

Thank you very much. Is there anything else? Any other questions? Okay, thank you for these options and your presentation. My pleasure. We've completed item 3 public communications. Thanks Eric. We'll go to City Manager's report please

Yes, thank you Mr. Mayor, Council. Just a couple of things. Those of you who have subscribed to our newsletter already know this and those of you who don't shame on you but we have an announcement in the most recent newsletter that the city is going to be awarding three different awards for the... pardon me for butchering the Danish language, Den Gulden Have Water Golden Garden.