All Council Members present. Vice Mayor Ed Gaw virtual.
COUNCIL BUSINESS
1. City Council review and acceptance of the 2026 Rate Study for Water, Wastewater and Reclaimed Water. Scott Schultz
Interim City Manager Mike Null opened the presentation by explaining that the purpose of the session was for City Council to consider approval of the 2026 Rate Study for Water, Wastewater and Reclaimed Water and to provide directions in future discussions on potential utility rates resulting from the study. He noted that the FY25 audited budget figures will be presented in April, along with the proposed FY27 budget, and emphasized that no final rate recommendations will be made until that information is reviewed. He also clarified that Capacity Connection Fees are strictly reserved for building system capacity within the Water and Wastewater Department, while customer rates fund daily operations.
Water Utilities Director Scott Schultz provided an educational overview of the Water and Wastewater Department which included drinking water sources, the City’s water and wastewater treatment processes, effluent disposal, reclaimed water, and future departmental planning.
During Council discussion, Council Member Cheri Starnes asked how the value of reclaimed water is determined. Director Schultz explained that potable water charges would be moved to a reclaimed water fund. Council also asked about the current discussion happening with Clay County Utility Authority (CCUA) for reclaimed water interconnection. Schultz noted that any interconnection would require approval from both the CCUA Board and the City Council. He added that the City already provides water and wastewater service to the Rookery development, which is a benefit to the negotiations.
Jason Schepler of CPH Consulting then presented an overview of the 2026 Rate Study for Water, Wastewater and Reclaimed Water. Schultz added that the study covers Water and Wastewater Department expenses while maintaining a 25 percent reserve.
City Attorney Jim Arnold provided an overview of water and electric territorial agreements.
Following discussion, Council unanimously voted to accept the 2026 Rate Study for Water, Wastewater, and Reclaimed Water by a 5-0 vote.
2. City Council approval of, and authorization for the mayor to execute, Amendment 2 to the City’s State Revolving Fund Loan Agreement DW100440 adjusting project cost and lowering the semiannual loan payment. Scott Schultz
Schultz explained that once a project reaches final construction closeout, all construction, loan, and administrative costs are reconciled. As a result, this amendment reduces the projected semiannual loan payment from $124,043.00 to $123,029.26.
Motion approved 5-0.
3. City Council discussion regarding Electric Utility.
Interim City Manager Mike Null explained that this item was intended to provide City Council and the public with an opportunity to ask questions about the Electric Department and to offer input on topics they would like added to future presentations.
No questions or comments were raised.
4. City Council discussion regarding Stormwater Utility.
Interim City Manager Mike Null explained that this item was intended to provide City Council and the public with an opportunity to ask questions about the Stormwater Department and to offer input on topics they would like added to future presentations.
City Attorney Jim Arnold provided an update on the Huntley property lawsuit, noting that additional funds may be required as legal costs are reaching the current allocation of $10,000 for response and defense efforts.
Mayor Matt Johnson asked whether a settlement or negotiations were possible. Attorney Arnold responded that while settlement could be considered, it is not appropriate at this stage of the case. Interim City Manager Mike Null added that Staff are continuing to conduct an extensive review of the City’s stormwater fees and expects to present the findings, along with Staff recommendation related to the lawsuit, on March 31, 2026.
Council Member Darren Stutts stated that he is not in favor of allocating additional funds to the lawsuit and expressed a preference for settlement. Attorney Arnold outlined the year-to-date legal expenses and noted that additional legal actions will likely be required prior to March 31, 2026. Council Member Stutts indicated he would meet with Interim City Manager Null to obtain further information.
Council also discussed the potential ramifications of a settlement.
5. City Council discussion regarding Solid Waste Department.
Interim City Manager Mike Null explained that this item was intended to provide City Council and the public with an opportunity to ask questions about the Solid Waste Department and to offer input on topics they would like added to future presentations.
Council Member Darren Stutts asked for an update on the garbage truck with a blown engine. Public Works Interim Director Greg Bauer reported that the estimated cost to repair the truck exceeds $80,000. Council Member Stutts stated he would contact the mechanic to explore this finding.
Bauer also noted that the City is in the process of selling the recycling truck. The vehicle has been listed on an auction site for the past two days with a reserve price of $20,000, and the City anticipates receiving at least $40,000 from the sale.