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2026-04-22 Vader Water - City of Vader presentationCity of Vader, 2026 It’s Been a Long Road City of Vader Accomplishments, Learning, Growth The Story of Change 1 City of Vader, 2025 Lewis County Lodging Tax Grant Presentation2 Purpose 2 City of Vader, 2026 It’s Been a Long Road Purpose ●Share the path that lead to the loss of the Water System ●Describe the changes that took place to correct the failure ●Give evidence that the changes were successful ●Show that the city continues to make improvements ●Show that the city is in and will continue a growth stage ●Show competent leadership ●Show readiness and meeting requirements for ownership of the water system ●Overall Dispel Misconceptions about Vader City of Vader, 2025 Lewis County Lodging Tax Grant Presentation3 Purpose 3 City of Vader, 2026 It’s Been a Long Road WHEREAS, as consideration given in the proposed Transfer Agreement, the County agrees to retransfer the Future Water System to the City upon fulfillment of the Conditions of Return outlined in the Transfer Agreement, including but not limited to the requirement that the City establishes that it has the financial, technical and managerial capacity to operate the Water System in the best interests of the utility customers; and, DONE IN OPEN SESSION this 28th day of October, 2013 Lewis County Resolution No. 13-504 City of Vader, 2025 Lewis County Lodging Tax Grant Presentation4 Boomtown 4 City of Vader, 2026 It’s Been a Long Road In the late 1800’s, the area known as Kraft had a population of 3000 to 5000 and was the largest population center between Portland and Tacoma. (local reporting) In 1906, the City of Little Falls was incorporated. City of Vader, 2025 Lewis County Lodging Tax Grant Presentation5 Boomtown 5 City of Vader, 2026 It’s Been a Long Road 1893 - Looking east from the factory. Clay pipe in the foreground. City of Vader, 2025 Lewis County Lodging Tax Grant Presentation6 Boomtown 6 City of Vader, 2026 It’s Been a Long Road City of Vader, 2025 Lewis County Lodging Tax Grant Presentation7 Boomtown 7 City of Vader, 2026 It’s Been a Long Road City of Vader, 2025 Lewis County Lodging Tax Grant Presentation8 Name Change 8 City of Vader, 2026 It’s Been a Long Road 1913, March: Little Falls renamed to Vader Martin Vader 1846-1935 Private Vader served with Co K of the Union Army's 9th NY Cavalry during the Civil War. He was an early settler of Little Falls. City of Vader, 2025 Lewis County Lodging Tax Grant Presentation9 The Decline 9 City of Vader, 2026 It’s Been a Long Road 1913 and 1914: Industry Collapes Little Falls Fire Clay - Burns to the GroundStillwater Logging and Lumber Company - Closed City of Vader, 2025 Lewis County Lodging Tax Grant Presentation10 The Decline 10 City of Vader, 2026 It’s Been a Long Road 1971 City of Vader, 2025 Lewis County Lodging Tax Grant Presentation11 The Final Straw 11 City of Vader, 2026 It’s Been a Long Road 2007 - Vader School District Closes, becomes part of Castle Rock SD.2008 - Lawsuits Regarding Wrongful Termination/Contract Disputes, Records Handling2009 - State Audit Discovers Budget Deficits, Debt, Incomplete Records2009 - Resident Movement to Disincorporate the City2010 - Vader Water System Ownership Transfers to Lewis County City of Vader, 2025 Lewis County Lodging Tax Grant Presentation12 Recovery 12 City of Vader, 2026 It’s Been a Long Road 2010 - Strict bare-bones budget to enable rapid debt repayment 2010 - Extensive staff training to prevent financial & administrative issues 2011 - Continued focus on budget, debt repayment, stabilizing Sewer Utility 2012 - Work to become compliant with state requirements, be grant eligible 2013 - DEBT FREE! $700,000 CDBG funds for Sewer Utility upgrade 2014 - Lewis County Water Receivership Agreement, Surplus Budget Funds! City of Vader, 2025 Lewis County Lodging Tax Grant Presentation13 Exceeding Expectations 13 City of Vader, 2026 It’s Been a Long Road 2013 - Passing Accountability Audit 2014 - Passing Financial & Federal Audit2014-15 - Passing Accountability Audit 2016-18 - Passing Accountability Audit2018 - Passing Financial Audit 2019-21 - Passing Accountability Audit 2022 - Passing Financial & Federal Audit2022-24 - Passing Accountability Audit PASSING Every Washington State Audit since 2013 City of Vader, 2025 Lewis County Lodging Tax Grant Presentation14 Exceeding Expectations 14 City of Vader, 2026 It’s Been a Long Road 2012 - Shoreline Managemnt Act Grant 2013 - CDBG fuding for I&I (Inflow and Infiltration) reduction (sewer manhole repair and side-sewer replacement) $716,787 2016 - TIB Small City Preservation Program (chipseal) $28,934 2018 - TIB Small City Preservation Program (rebuilding “A Street”, sidewalks, lighting) $552,323 2019 - CDBG Further wastewater treatment facility improvements $750,000 2019 - Water Quality Program Grant & Loan for wastewater treatment facility rebuild $4.8 million 2020 - Employee Policy Update $4,700 2020 - Washington Wildlife and Recreation Program (WWRP) Grant $283,143 2021 - Urban Design Standards Update $20,000 2021 - BNSF Werden Park $5,000 2021 - Ben Cheney Foundation $15,000 2021 - Transalta Economic & Community Development $30,000 2021 - State WWTP $1.85 million 2022 - WWTP Outfall Diffuser Engineering $94,075 2024 - Washington Wildlife and Recreation Program (WWRP) Grant $443,045 2024 - TIB Small City Preservation Program (chipseal) $171,904 2025 - Fourth of July Fireworks $5,000 2026 - Fourth of July Fireworks $5,000 2026 - TIB Small City Preservation Program (rebuilding streets) $256,000 $10 Mill i o n + GRANTS Competitive & Application Based Only - No ARPA - No State Comp/Planning City of Vader, 2025 Lewis County Lodging Tax Grant Presentation15 Exceeding Expectations 15 City of Vader, 2026 It’s Been a Long Road Finances ●Balanced budget every year ●Two months general expenses held in reserve every year ●Sewer reserve fund at nearly a year of operating expenses ●Sewer utility loans less than $40,000/yr in payments ●Council approves property tax levy increases ●Council approves sewer rate increases City of Vader, 2025 Lewis County Lodging Tax Grant Presentation16 Exceeding Expectations 16 City of Vader, 2026 It’s Been a Long Road City of Vader - The only city in Lewis County current with GMA Updates City of Vader, 2025 Lewis County Lodging Tax Grant Presentation17 Recovery and Beyond 17 City of Vader, 2026 It’s Been a Long Road Catching Up for Lost Time What The City Has Done, And Continues to Do City of Vader, 2025 Lewis County Lodging Tax Grant Presentation18 City Improvements - Streets 18 City of Vader, 2026 It’s Been a Long Road STREETS: Nearly everything resurfaced or rebuilt City of Vader, 2025 Lewis County Lodging Tax Grant Presentation19 City Improvements - Parks 19 City of Vader, 2026 It’s Been a Long Road PARKS: Upgrades and New Properties Purchased City of Vader, 2025 Lewis County Lodging Tax Grant Presentation20 City Improvements - Parks 20 City of Vader, 2026 It’s Been a Long Road McMurphy Park: Outdoor Concert Venue City of Vader, 2025 Lewis County Lodging Tax Grant Presentation21 City Improvements - Utilities 21 City of Vader, 2026 It’s Been a Long Road Waste Water Facility: Completely New City of Vader, 2025 Lewis County Lodging Tax Grant Presentation22 City Improvements - Public Works 22 City of Vader, 2026 It’s Been a Long Road Equipment: Upgraded and Expanded City of Vader, 2025 Lewis County Lodging Tax Grant Presentation23 City Improvements - Community 23 City of Vader, 2026 It’s Been a Long Road City of Vader, 2025 Lewis County Lodging Tax Grant Presentation24 City Improvements - Events 24 City of Vader, 2026 It’s Been a Long Road City of Vader, 2025 Lewis County Lodging Tax Grant Presentation25 Growth - Business 25 City of Vader, 2026 It’s Been a Long Road ●Bar & Grill ●Coffee Shop ●Themed AirBNB ●Grocery Store City of Vader, 2025 Lewis County Lodging Tax Grant Presentation26 Growth - Population 26 City of Vader, 2026 It’s Been a Long Road June 27, 2025 Report City of Vader, 2025 Lewis County Lodging Tax Grant Presentation27 Growth - New Residential 27 City of Vader, 2026 It’s Been a Long Road New Construction: Much More to Come City of Vader, 2025 Lewis County Lodging Tax Grant Presentation28 Growth - Future 28 City of Vader, 2026 It’s Been a Long Road Possible Future Developments Discussions, Early Plans ResidentialCommercialIndustrial City of Vader, 2025 Lewis County Lodging Tax Grant Presentation29 Growth - City Area 29 City of Vader, 2026 It’s Been a Long Road EXPANSION: PROPOSED ANNEXATION AREA City of Vader, 2025 Lewis County Lodging Tax Grant Presentation30 Council & Boards 30 City of Vader, 2026 It’s Been a Long Road Decision Makers - Elected & Appointed City CouncilJason Dailey Business OwnerNicole Hansen Business OwnerJohn Hurt Business OwnerSheri McKernan-Kindell Business OwnerMike Parsons Business Owner Planning CommitteeScott Gross Business OwnerVictoria Parsons Business OwnerTom Pries Business OwnerVacant Vacant Park BoardKen JoslinKelly Schey Parks & Rec AdminAnson Service Doctor Clin.Psy, LMHCAngela Service Business OwnerVacant City of Vader, 2025 Lewis County Lodging Tax Grant Presentation31 Professionals 31 City of Vader, 2026 It’s Been a Long Road Professional Staff & Consultants City StaffClerk/Treasurer Kristyn MillerBilling Clerk Marlene WetchBld. & Permitting Darren HuttonPublic Works Jon FlattUtility Operator Bill Wilson, WWTO II Contract ConsultantsPlanning Director SBN PlanningEngineer Jerome Morrissette & AssociatesEngineer Fuller DesignsBuilding Official Townzen & AssociatesAttorneyJennifer Robertson, Inslee BestLaw Enforcement Lewis County Sherrif’s Office City of Vader, 2025 Lewis County Lodging Tax Grant Presentation32 Purpose 32 City of Vader, 2026 It’s Been a Long Road WHEREAS, as consideration given in the proposed Transfer Agreement, the County agrees to retransfer the Future Water System to the City upon fulfillment of the Conditions of Return outlined in the Transfer Agreement, including but not limited to the requirement that the City establishes that it has the financial, technical and managerial capacity to operate the Water System in the best interests of the utility customers; and, DONE IN OPEN SESSION this 28th day of October, 2013 Lewis County Resolution No. 13-504 City of Vader, 2025 Lewis County Lodging Tax Grant Presentation33 Vader-Enchanted Valley Water System 33 City of Vader, 2026 It’s Been a Long Road AGREEMENT OF PURCHASE AND SALE OF WATER ASSETS by and between CITY OF VADER and LEWIS COUNTY, WASHINGTON - Dec 3, 2013 Section 16.2 If following conditions met County will convey the water system to the City A.Two most recent state audits must be clean and complete B.City has/will promptly obtain approvals for operation of the system C.Develop a Vader Water Utility Action Plan D.City assumption of all debt related to the water system City of Vader, 2025 Lewis County Lodging Tax Grant Presentation34 Vader-Enchanted Valley Water System 34 City of Vader, 2026 It’s Been a Long Road Water System - Why Vader Wants It Sewer Utility Financial Stability ●Ability to turn off water for unpaid utilities ●No longer needs to pay for county water meter reads ●Spreading out admin costs between utilities ●Employee cross training, sharing tasks and roles Water Utility ●Local control and representation of decisions ●Vader residents setting their own costs ●Likely lower increases to future utility rates ●Correcting past mistakes, being made whole again City of Vader, 2025 Lewis County Lodging Tax Grant Presentation35 Vader-Enchanted Valley Water System 35 City of Vader, 2026 It’s Been a Long Road 2026 Vader-Enchanted Valley Water System Budget ●Revenue $663k ($476k rates, $187k transfer in) ●Expenses $691k, a $27k deficit ●$27k deficit overall ●$215k deficit without the transfer in Previous Budgets without Grants or Funds Transfered In ●2023 $28k ●2024 $9k negative ●2025 $292k negative ●2026 $215k negative City of Vader, 2025 Lewis County Lodging Tax Grant Presentation36 Vader-Enchanted Valley Water System 36 City of Vader, 2026 It’s Been a Long Road City Goal - Operate on System Revenue Only Key PointsWithout a transfer, Vader revenue and County revenue would be similar City of Vader, 2025 Lewis County Lodging Tax Grant Presentation37 Vader-Enchanted Valley Water System 37 City of Vader, 2026 It’s Been a Long Road City Goal - Operate on System Revenue Only Key PointsEliminating county overhead, union contracts, and interfund expenses is a savings of $153,000. Vader still has $50k deficit. City of Vader, 2025 Lewis County Lodging Tax Grant Presentation38 Vader-Enchanted Valley Water System 38 City of Vader, 2026 It’s Been a Long Road City Goal - Operate on System Revenue Only Eliminate $50K DeficitIncrease of 4% to base & usage rates Increase of $6/month to Capital Contributions (about $9 a month to an average customer) Comparison Even with the increases, county would still be $168k negative after their Transfer In City of Vader, 2025 Lewis County Lodging Tax Grant Presentation39 Vader-Enchanted Valley Water System 39 City of Vader, 2026 It’s Been a Long Road City Goal - Operate on System Revenue Only Impacts to RatepayersWater Utility Balanced budget with a $9/month increaseSewer Utility Cost savings from shared city resources, enforcing late payments City of Vader, 2025 Lewis County Lodging Tax Grant Presentation40 Conclusion 40 City of Vader, 2026 It’s Been a Long Road WHEREAS, as consideration given in the proposed Transfer Agreement, the County agrees to retransfer the Future Water System to the City upon fulfillment of the Conditions of Return outlined in the Transfer Agreement, including but not limited to the requirement that the City establishes that it has the financial, technical and managerial capacity to operate the Water System in the best interests of the utility customers; and, DONE IN OPEN SESSION this 28th day of October, 2013 Lewis County Resolution No. 13-504 Thank You! 41 For your time and consideration City of Vader, 2026 It’s Been a Long Road 1. 2. The purpose of this presentation is to share the path that lead to the loss of the Water System, Describe the changes that took place to correct the failure, Give evidence that the changes were successful, Show that the city continues to make improvements, Show that the city is in and will continue a growth stage, Show competent leadership, Show readiness and meeting requirements for ownership of the water system, and Overall Dispel Misconceptions about Vader 3. This is a portion of the 2013 Lewis County Resolution that the then commissioners approved. The highlighted section says that the county agrees to transfer the water system to the City of Vader if the city establishes that it has the financial, technical, and managerial capacity to operate the water system. As we move through this presentation, remember those three points. 4. In the late 1800’s, the area known as Kraft had a population of 3000 to 5000 and was the largest population center between Portland and Tacoma. In 1906, the City of Little Falls was incorporated. Besides the timber industry, the unique clay deposits in the area enabled a massive mining industry and provided resources for the Little Falls Fire Clay Company. At its peak, it had an output of 100,000 bricks a day and the site spanned the size of three football fields. Clay pipe was a major export. 5. This is a view from the elevated mining car track rail that ended at the factory. The train depot, hotels, stores, and residences are visible. 6. The area attracted financially well off people, with many victorian style homes built. An opera house for performances and an ornate school were present at the time. 7. Community events and engagement were everywhere. A movie house, sports teams, drill teams, city band, saloons, Red Cross groups, and more. 8. Around 1913, things started to change for the city. The railroad forced a name change, as Little Falls already existed on the line, and it created confusion. The residents chose to honor a long time resident and early setter of the area, Martin Vader. Martin was a Civil War veteran, having served with the Union Army in a cavalry unit. 9. Later that year, disaster struck, and industry in the area started to collapse. The brick factory burned to the ground. Shortly there after, the Stillwater Logging and Lumber Company closed. 10. The city didn’t recover from those losses. The population steadily declined to a low of 380 during the 1960 census. Many more homes and buildings were lost. In 1971, Vader was featured in a book titled “ghost towns of the west”. By 1990, the population was still only a little over 400. 11. While the city did have some successes over the years, it largely floundered and was stagnant. In 2007, the neglect and falling behind the times really hit home. While not specifically the city’s fault, poor decision making by the residents led to the Vader School District closing and merging with Castle Rock. In 2008, Lawsuits Regarding Wrongful Termination, Contract Disputes, and Records Handling plague the city. In 2009, a State Audit Discovered Budget Deficits, Debt, and Incomplete city Records. Some of the residents started a movement to disincorporate the city. And finally in 2010, water system mismanagement by the city caused the transfer of ownership of the water system to Lewis County. This was truly the rock bottom moment for the city. Change needed to happen, and fast, otherwise there wouldn’t be a city left. 12. In 2010, under the leadership of then recently elected Mayor Ken Smith, that much needed change began. The next three years were transformative. A bare bones budget enabled rapid debt repayment. Extensive staff training was instituted to prevent future financial and administrative failures. After the loss of the water system, much focus was placed on stabilizing the sewer utility, both financially and regarding DOE discharge requirements. By the end of 2013, the city was debt free and had acquired its first grant for sewer utility upgrades. The following year, the water system receivership agreement with Lewis County was approved that would later allow the city to acquire the water system back. Also in 2014, the city had surplus general funds for the first time in years. 13. The dramatic and necessary changes worked. The city of vader has passed every single state audit since 2013. That’s eight audits for finances and or accountability. The city took every audit seriously, knowing that passing audits was one of the key receivership agreement requirements that would enable the city to get the water system back. 14. Passing audits and being in compliance with state required updates has other advantages. Grant funds. Since 2012, the city has acquired over $10 million in grants for a variety of projects. That does not include grants from ARPA or state comp and planning updates that were handouts. The city is actively pursuing grants on a regular basis, and being successful. 15. Since 2014, the city has had a balanced budget every year. Part of making the state financial auditors pleased, is having at least two months of expenses held in reserve each year, which we do. At this point, the sewer utility reserve fund could run the utility for nearly a year without additional revenue. The city council does the unpopular, but responsible decision to raise property tax levy rates and utility rates regularly to attempt to keep up with inflation. 16. The city takes state requirements seriously. Vader is the only city in Lewis County to be fully compliant with the Department of Commerce on this growth management progress report. This includes Comprehensive Plan updates and the Critical Areas Ordinance Updates. Vader is also current with its Shoreline management plan, and its Transportation Improvement Plan 17. The city didn’t complete the bare minimum since 2010, we’ve gone above and beyond. That grant money and surplus funds was put to good use. 18. Streets. Nearly everything is resurfaced or rebuilt. This summer, funds have been secured for the last sections of streets that haven’t been improved. The city can move from a reactive street maintenance program, to proactive. 19. Parks. Vader is a city of parks. The city now has five different park properties, but not all are developed yet. Two were purchased by the city within the last five years to preserve community space in the center of the city as development has taken hold. Werden Park was upgraded with amazing playground equipment, shelter, and walking paths. The historic jail has a new foundation and roof. McMurphy park has funds secured for a $600,000 update to include bathrooms, showers, park host spaces, and utilities. 20. The city has a long range plan to develop McMurphy Park into much more than an open green space. The before mentioned bathroom project is just phase one of the upgrades. Phase two includes more bathrooms, a large covered pavilion for wedding and other events, and a small playground. Phase 3 includes a large amphitheater to transform the park into a regional outdoor concert venue bringing tourist revenue into the area and spurring development. Residents of the city were so excited about the amphitheater project, they formed a non-profit called Friends of Little Falls. They’ve been hosting concerts at the park since 2024 to raise funds for the facility, and have already secured much of what is needed. It's likely that Phase 3 will happen before Phase 2 because of this dedicated group. 21. The Waste Water Treatment Facility. From the start, the city knew that demonstrating responsible and successful operation and upgrades to the sewer utility would be key to proving our ability to own and operate the water system again. An entire treatment facility was rebuilt. It now includes a dedicated lab and control building, as well as a chlorine generation facility. The city navigated both state and federal grant requirements and successfully built this $6 million facility with ZERO loans and no debt. Department of Ecology is thrilled with the city, and has referred other cities and public systems that are in distress to contact Vader to learn our methods. 22. We’ve updated our public works fleet with new equipment. 23. The community pride is back, with those old Victorian homes being renovated. New signs, murals, and remodeled downtown buildings all showcase a thriving community. 24. While the May Day festival is in its 74th year this year, new events are being held. The 4th of July event causes a traffic jam in the city. Local non-profits are bringing other festivals as well. 25. In just the last few years, the city can point to a variety of growth in business. The Tracks bar and Grill, the Little Falls Coffee Company that's about to open, a western themed AirBNB that's always full, and a grocery store. 26. Since 1990, the city's population continues to grow. In the most recent OFM report, Vader is listed in the top 25 cities for percentage population change. And this time, it's in an upward direction. 27. That’s not that surprising, as there is new housing everywhere. There are subdivision applications both approved and in the approval stages. After changing city codes to be more attractive to developers, small pockets of new homes have been inserted all over the city, and many more are planned. It's not hard to miss the new construction on both sides of Highway 506 as you drive into the city. 28. But that's just the development that's already in the works. Industrial, commercial, and residential projects are in the early discussion stages all over the city. If the industrial project comes to fruition, which is likely, upwards of 200 good paying jobs could be created. 29. The city is well underway to annexing in a large portion of its UGA. A lot of work behind the scenes with the Lewis County Planning department has already happened. Quite likely, both the city and the county could be holding public hearings on this next month. This project will expand the city's revenue with additional property taxes, sales tax, and open up new land for denser development and further strengthening the cities financial position. 30. I’ve been informed that there are those that worry that so much of this upward momentum in the city is due to me, the mayor. And that without me, the city would again fall into disarray. I appreciate that compliment, but its not true. Former Mayor ’s Ken Smith and Lois Wilson held this seat before me, and laid a lot of the groundwork for success. Something that I try to remember is that a good leader is always looking for the next good leader. A succession plan. Take a look at this slide. The council, planning committee, and parks board. It’s loaded with business owners and professionals. These are the people making decisions for Vader, and one of these is likely the next Mayor of Vader. Restaurant owners, manufacturing and sales, mortgage brokers, entertainment, even someone that makes a living working with private industry to interface them with government contracts. The city is in good hands. And yes, those folks couldn’t be here today because they are running their businesses. And yes, there are vacancies because we are picky. 31. The city has a knowledgeable and experienced staff. Since 2010, the city has expanded its staff to include a full time building and permitting lead. Taking over the building and permitting from Lewis County is something that the city has also done since 2010. We continue to send our staff to training. One needed to attend training in Leavenworth just last week. The city relies heavily on its contract consultants, and has experts at the ready. 32. The city establishes that it has the financial, technical and managerial capacity to operate the Water System in the best interests of the utility customers. If you need more convincing that the City of Vader can do those things or has done those things, I’ll make more slides and give another presentation to you at a later date. 33. The 2013 agreement for the transfer of the water system to lewis county said the following: If following conditions met County WILL convey the water system to the City. Two most recent state audits must be clean and complete…. City has or will promptly obtain approvals for operation of the system……Develop a Vader Water Utility Action Plan….. City assumption of all debt related to the water system. We’ve got those done, or will have them done at the proper time. Two most recent state audits? We’ve had eight since this agreement was signed. Approvals for operation of the water system? We’re already in talks with Department of Health. A vader water utility action plan? Thats done and in the county hands already. Assumption of all debt related to the water system? I’ll talk about that in these last few slides. 34. Why does Vader want the water system back? Usually, water and sewer utilities are jointly managed by one entity. There is one utility bill for the customer. When a customer fails to pay their water/sewer utility bill, water is shut off. The city and county bill for services separately now. There are customers that do not pay their sewer bill to Vader, and the city has nothing to “turn off” to encourage repayment. The utility has tens of thousands of dollars in past bills, and little leverage to get repayment. Yes we file leans on properties, and yes we have a very aggressive collection agency that attempts to get payments and legal judgements on our behalf. This is not the way to run a utility. It is not sustainable, and it causes higher utility rates for all. Since 2010, our sewer utility has operated on its own without co-mingled public works staff, admin staff, and other shared resources. Integrating them together will add stability to the sewer system and allow shared resources between the sewer and water to lower costs. The county has continued to say that substantial water rate increases are needed to balance the budget, and Vader ownership would likely lower potential increases in the future. There are also arguments to be made about local representation and control, and correcting past mistakes and making the city whole again. 35. The county budget for the water system. For 2026, the county approved a budget that leaves the system with a $27,000 deficit. However, the county needs to transfer in $187,000 from other sources just to still be in the negative. Without that transfer in, the system is operating at a $215,000 deficit. Without grants or transfers in, 2023 was slightly above zero, 2024 was $9000 negative, and 2025 was $292,000 negative. 36. These last three slides are mostly likely a bit of an eye chart on a big screen, and even if they aren’t it's a lot to digest in a presentation. Displaying them is to primarily show that we’ve done our homework. The city’s goal will be to operate the water system on system revenue sources only. We already do this with the sewer system. Vader breaks down its budget items in a more detailed manner than Lewis County, so a one to one comparison isn’t readily available. We’ve done our best to do that here. On the left, Vader ’s budget. On the right, Lewis County. In the middle is the difference between Vader and County on the different line items. At the bottom in green are two totals. One is an overall total. The other is a total without the $187,000 county transfer in. The key point, is that without the transfer in, Vader and county revenue are very similar. Vader has a slight advantage, as water related building permits and certain connection costs would be routed back into the system. 37. The expenditures are even more of an eye chart. We’ve grouped similar county and city expenses together to get a good picture on relatable items. We’ve changed just some expenses to be less than the county currently spends for the following reasons. The city does not have union employees or contracts to maintain. It does not have interfund transfers to other county departments that are related to shared expenses such as administrative costs, IT support, extra liability insurance, and more. This Vader budget matches 100% of the maintenance items in the county budget, along with professional services, utilities and more. It still pays two full time water system operators $45/hour, plus overtime, and the same benefits as county offers. It’s a savings of $153,000 over the county expenses. However, for Vader, it’s still in the negative by $50,000. This STILL doesn’t take into account cost savings from operating alongside our sewer system. Lets ignore that, and see how Vader can compensate for that negative $50,000 without the sewer system. 38. County sources have been telling us for a while that a large rate increase was imminent. Not surprising given the $200,000 deficits the system has. To compensate for that $50,000 deficit previously described, Vader would need a small increase to rates. A 4% base rate & usage rate increase, along with a $6 month increase to the capital contribution line item. To an average bill, that would be about a $9 a month increase. This is similar to the sewer rate annual increase the city already does. These two items balance the Vader budget. Assuming county did the same increases, the county budget would still be $168,000 negative after their transfer in. 39. Overall, the water utility would see a $9 a month increase to most monthly bills, and the sewer would have cost savings from shared city resources and finally being able to enforce late payments 40. Back in 2013, Commissioners Bill Schulte, Lee Gross, and Edna Fund believed in Vader enough to sign this document. They believed the city should have a second chance. If the City established that it has the financial, technical and managerial capacity, the county would retransfer the water system back to the city. The City of Vader does deserve that chance, and hopefully all of our efforts, over all of these years, demonstrates that we’ve learned from our mistakes, are stronger than ever, and are ready to take ownership of the water system.