The City of Norfolk will now commence. Mr. Mayor Thomas, Councilman Clanton will be participating remotely in today's meeting. Mr. Clerk, please read the resolutions approving the remote participation for Mr. Thomas and Mr. Clanton. The resolution approving participation through electronic communication means by Councilman Martin A. Thomas Junior and the North City council meeting on July 15, 2025 from a remote location in North Carolina due to the personal matter of being out of town for a vacation. Adopt the resolution. Mrs. Mrs. Johnson. Mr. McGee, Mr. Page. And Doctor Alexander. I have a resolution approving participation through electronic means by Councilman Carlos J. Clapton in the Norfolk City Council meeting on July 15, 2025 from a remote location due to the personal matter of attending a work conference. Adopt the resolution, Mrs. Doyle, Mrs. Johnson, Mr. McGee, Mr. Page. All right, Doctor Alexander, right, you're able to vote Mr. Roberts, the floor is yours. Thank you, Mayor, vice mayor, members of the city council. At this time I'd like to provide a brief overview of the proposed agenda for this afternoon's work session meeting. The first couple of presentations are informational and they pertain to some upcoming projects that will take place over the next several months, as well as some pending decisions that council has uh towards the end of the year. In the first presentation, that's dealing with automated meter initiative with our public utilities. Department that presentation will be provided by Mr. Michael Retuo, a professional engineer and project manager with the Arcadis Engineering firm working with the city's utilities department. The second presentation will, uh, pertain to the Southeastern Public Service Authority, or SIPSA. Uh, Dennis Bagley, the executive director of SIPSA, we're here to talk about next steps on some major contracts that they're contemplating over the next several months, as well as some pending decisions relative to the city's relationship with SIPSA between now and the end of the year. That will be followed by our annual audit presentation. Sherry Amos, principal with Clifton Larson Allen, the city's external auditor. is here to provide an overview of the FYI 2025 annual audit. We also have a couple of matters that require consideration closed session motion. So without objection or amendments, we would like to call up the first speaker, Mr. Michael Rutuo with the Arcadist firm to give us an overview of the automated meter initiative. welcome sir. Thank you. Can you hear me OK? Yes. OK. Good afternoon, Mr. Mayor, uh, members of council, uh, members of the administration. I'm here to present an overview of an upcoming, uh, utility project, Advanced metering infrastructure. Our agenda for today, I will cover quickly what is AMI, talk a little bit about the impact that that will have on the meter reading, uh, operation of the city, and then go through some slides where we'll talk about the current status and upcoming next steps for the project. So firstly, what is advanced metering infrastructure? So I tend to think of it in these four areas that are depicted in this illustration. Starting on the very left, you have the water meters themselves. They're a critical part of the system. They're responsible for accurately measuring um water usage at each customer. Um, household and business, those water meters in an AMI system are outfitted with electronics and a small antenna. That antenna transmits the water meter reading and related information wirelessly. Using radio frequency, um, telecommunications. AMI hardware is then installed throughout the water distribution system to gather that information and aggregate the reads from all the various meters. It then sends that information to a suite of software components that are used to both monitor and administer the AMI system as well as to provide the water usage information to utility staff to use to service the customers as well as make that information available to the other um city information systems, most importantly, the city's utility billing system, which needs the water usage information to generate the monthly um water utility bills. And then lastly we have the people and the processes that they execute to use the system to effectively um produce water bills and then service the um city's customers. So all these pieces together comprise an effective advanced metering infrastructure system. Currently, the city has approximately 70,000 water meters. The vast majority of them are located outdoors in meter boxes which are located near the public right of way. Uh, the current meters are all mechanical style water meters, whereby water flows through a chamber and turns a gearing apparatus which then in turn translates into the measurement of the water usage. Currently, meters are read um via a contract and the contractor goes and reads each meter one time per month visually by opening the meter box and recording the digits from the meter onto a handheld device. In the future, the city will deploy an AMI provided by Neptune Technology Group. Neptune is one of the leading providers of metering and AMI technology. The city does have a long history using um other Neptune water metering products. The system will include um small mechanical meters similar to those that you use currently, and for larger meters, ultrasonic style water meters, which is a newer electronic technology which provide a number of advantages uh to the city. Every meter will be installed with an AMI endpoint or a small antenna, um, that will be read by the Neptune Fixed Network AMI um using LA, which is a telecommunication protocol. Um, some hard to reach areas will utilize a cellular connection. Um, all of that will work seamlessly though with the software to deliver meter reads back to the city staff. Project status is currently, um, well, the contract was signed, I believe, uh, two weeks ago that contract signature culminates um a number of years' worth of work to plan and then competitively procure the system. Um, Cor in Maine was selected as the prime contractor. Corres in Maine is a, um, one of the leading national water supply companies. And also a leading Neptune um manufacturing distributor, the city has done other successful projects with uh Cor in Maine on other water, um, infrastructure efforts. So a number of benefits will result from the project. So firstly, it will eliminate the need to maintain a water meter reading contract, so that will eliminate that cost and also the need to have that contract. Those contracts are becoming more difficult to obtain as manual reading is becoming less prevalent within the water industry. The project will improve meter reading accuracy, so new meters that are installed will come from the factory warranted at AWWA new water meter accuracy standards. Additionally, the AMI system will more consistently deliver reads on a more timely basis and eliminate or greatly reduce things like misreads. Thirdly, the city will be able to obtain move in and move out reads. Those are like the final and start reads when someone changes the property. They'll be able to obtain those reads um remotely. Currently, someone needs to actually drive to the meter, send the trip out, so there's a big efficiency by by being able to get those reeds remotely. And then lastly, the system will greatly enhance the um water consumption data. So currently, the city only gets 1 m read per month, which shows 1 month's worth of water usage. The new AMI system will deliver hourly reads, and those will be delivered approximately 4 times per day, so it's significantly more information about the water usage that the city can use to, you know, help customers troubleshoot issues, identify issues, and just generally monitor the performance of the water distribution system. Yes, does this also allow the technology to identify? It does it does provide the technology to proactively identify leaks at the customer's premise, yes, and then we'll also then identify errand bills that are wildly out of whack. If it's even not a leak for whatever reason. It will give you the data to identify errant bills and importantly to identify them much more quickly because you can see the data coming in, you know, day by day instead of having to only get that singular read once every month. OK, so the project is planning a robust customer outreach plan. So naturally, um, the installation company will need to go to every, um, customer's property to do work on the meter. So customer outreach is important, so a number of things are being planned a city website, um, that will provide project information. Mailers will be sent to all customers in advance of their installation. Door hangers will be placed at each property um, a few days before each installation. As part of the installation procedure, the installers will be instructed to do a door knock to just inform anyone that's home that the water service will be temporarily shut off while the meter work is being performed. And then there will also be an after work door hanger left. The city is also evaluating, participating in various task force or city league meetings as necessary to, um, you know, describe the project so people understand um what will be coming. This is an example of uh Project Bulletin, so this is, uh, you know, mockup, but these are the types of informational pieces as an example that will be um distributed as part of the project. So currently, um, as I mentioned, the contract was signed recently and we're working toward a project notice to proceed, um, this quarter tentatively, um, beginning of September. In the first year, um, a number of things will be accomplished. So firstly, the network, the fixed network will be installed and tested. The installer will perform a survey of every meter location to identify any um challenging installations and also to identify any meter boxes that are at end of useful life and require replacement. The software components will be deployed and tested. And then there will be an initial deployment of approximately 1000 m put in place to confirm that the network is performing and that the software is performing. Once that initial deployment is accepted, the project will do a retrofit of 38,000 water meters. A retrofit is where an existing water meter has not reached the end of its useful life. The AMI components can be added on to the existing water meter. In the future years of the project, um, the remaining approximately 30,000 small water meters will be replaced. Um, there are approximately 2000 large meters that were replaced and connected to the AMI. And then any meter boxes that were identified as at end of life will also be replaced. That's my presentation. I'm happy to entertain any questions. Mr. Spiegel and Ms. Johnson, um, well this also fits the billing cycle so that, um, we don't get these irregular bill. I didn't, I might have, you might have said it before I walked in, but I just wanna make sure. So right now that there could be 4 or 5 days extra in a billing cycle and the our bill appears high, uh, and then the next one is 28 days in it because of people getting to read them. So can we go on a consistent month or 30 day cycle with this. So I'll say that the system gives a lot more data to control your cycles because you don't have to read, which is, uh, you know, takes days and, and so on, so it can do that. I am unsure if there's plans to reevaluate the cycles, but I can certainly, um, take that back and we can seek clarification on that. We have today of not having enough to read. That's the cause of the delay. So as long as HRSD and the city didn't change the cycle, this. This automated step would help to ensure that there's not an unanticipated delay on the site. And the second question is, and I'm sorry to say it this way, unfortunately, like the Dominion Energy light replacements. Are we gonna start this and you go into a neighborhood and somebody says, oh, these transmit cancer rays to people, we don't want them installed in our neighborhood, and then we delay it. Um, if that's the case, you can start it on the other side of the city where you don't get any complaints, but I, I'm, I'm serious because if we move forward with this, then we need to be committed to it and we're doing it. It's not, this neighborhood doesn't want it done. And so now we got to pause and stop it. Once we get this out there, then we're telling the citizens of Norfolk, we're doing this and we're moving forward. It, it's a fair point. I think on this installation, I can't envision. Anything that the residents would find um they will find sensitive or be apprehensive about it we will, we are committed to the schedule again we would, we would defer to counsel if any. Public reaction would cause us to delay, but I've seen this implemented successfully in other localities where there was, there was widespread acceptance to it. Thank you, Mr. Spiegel, Ms. Johnson, um. The citizens, thank you, um, Mr. Manger for explaining that, um, as Councilman Smegle, um, mentioned, um, we're either in or or we're not, and the, the citizens need to, to understand that because theminion power now is a huge issue. We pay 6 million. Hopefully that yes ma'am. To uh better our lighting system and then we have outside entities to, to come into our communities and, and say, well, it can cause cancer and it can cause this and and it it comes back to, to council so thank you for letting us know we can uh reach out to you and your your staff. Um, if you could go back, um, Ms. Markowski, to, um, Where it said to the community as needed. You're, you're gonna go task force me go one ahead, Ms. Markowski, thank you. Task force meetings and civic presentation as needed. What does that mean? We're, we're starting something new in the city. So what does it mean when you say You're gonna go to the task force and specifically um to do presentations as needed. All of our citizens need to know that this is is going to happen, and I would like to know how are we going to get this out to our citizens other than the website. Let me ask the utilities director uh Bob Carters, I would anticipate that we would have staff and consultants available to visit all of the various civic leagues or provide that information directly through the neighborhood staff, and I think the as needed references, if people have follow-up questions, if we need to visit with groups to build engagement, we're willing to do so over the term of the installation. Everyone uh additional any other request and you will both housesbubu in 30 days I have 35. And um lastly, um just so that the staff knows you can get 567 civic leads together via a task force versus having to go to every single city. So thank you Mr. Manager. Thank you, Mr. Mayor Johnson, Mr. Page, and then Mr. McGee. presentation. How secure is this digital, correct? Uh, good Yes, very secure. It's encrypted from the meter all the way through the software. So there's no way to go in and adjust the bills, make someone's higher, transfers over. No, it's encrypted and the data that is sent is there's no personal information in it either. It's just strings of numbers that the system needs to, you know, decrypt. OK, and how much time? Uh, does each one take to be individually installed? A residential meter takes approximately 20 minutes to install. Some of the, you know, larger installations would take longer. They're, they're more case by case, but a typical residential installation is about twenty-ish minutes. And you don't need anything uh from the citizens like they don't have to be home, uh, water doesn't have to be turned off, some water dripping somewhere would it impact you being able to put it in. No, the water will get um shut off at the meter momentarily, um, hence why there's that there will be the procedure to notify anybody that is home that there will be a, a small disruption, but there's no actions needed by the customer. Thank you. Thank you, Mr. Page, Mr. McGee. Thank you for the presentation. Uh, I've seen a couple of updates on the cost of this project, which is not, uh, insignificant. I'm curious what the cost savings will be once fully implemented, like how much will we save from, uh, eliminating the manual meter? Yes, so I don't have the number memorized, but we can certainly, um, provide it. I will just add that part of the planning work um did involve doing a business case evaluation. Uh, on, on the project economics, and uh, if we can take that, that back, we can provide that information. OK, automated meter reading program in our region. How many other cities have it right now? Yes, so AM broadly has really the water industry, um, standard, and it is the best available technology for me reading. I think locally I'm gonna look for some help here locally I believe Portsmouth and Newport News have adopted the technology, and I'm sure there are others that I'm just not, uh, recalling. So we're not too late to the party. The other cities are engaging in it now. They're a little bit behind, but, but other localities are looking at it as well. Thank you. Thank you for your presentation. Thank you, Mr. uh Roberts. Thank you, Mayor. Um, for the next presentation, I would like to call up Dennis Bagley, executive director of, uh, Southeastern Public Service Authority. While he's making his way to the podium, I'll make a couple of introductory comments, um. We are towards the end of a 10-year period of our 10-year use and support agreement. That's the contract agreement we have between Norfolk and SISA. SISA is made up of 8 localities, 6 cities and 2 counties. All of us have the same contract with SIPSA. We are contemplating a longer term agreement that we'll talk about um more intensively throughout the fall and towards the end of the year. Um, so again, this, this presentation day is really informational to tell you some of the major projects that SIPS is working on that may necessitate us considering a longer term agreement as much as 20 years. I'll also point out, um, SIPSA, as you know, is governed by a 16 member. Uh, body, uh, two of those members are here today. Richard Broad, our director of Public Works, is appointed by counsel to serve on SISA. Uh, John Keifer, a longtime former employee of the city, is the governor's appointee representing, um, as a citizen appointee to SIPSA. So both of those gentlemen are here to answer your questions as well. So with that, I'll turn over to Dennis for his presentation. Thank you, Mr. Manager. Uh, Honorable Mayor, vice mayor, and members of council, I appreciate the opportunity to be before you this evening. Um. I came before you in February of 2024 and um when I came to you then, I laid out kind of where SIPSA was just a general update of SIPSA talked about some of the challenges that the region faced in terms of capacity at the regional landfill. And then I laid out some of the steps that SISA was taking to try to mitigate the capacity issues at the regional landfill. Today, the purpose of today's presentation is really to give you an update and share with you some of the things that we've been working on over the last year and a half and talk about some of the next steps and things we're going to be looking to try to do over the next couple of months. So, uh, first of all, I wanna kind of regroup and, and talk about the current use of support programs. I know that there was, uh, at the last meeting, I went through this, but there are some new council members and I just wanted to touch on it because this is a very important topic. First of all, uh, we, the current use of support agreements that we are currently working under with each of the member locales, was initiated in January of 2018, and all eight member communities entered into an identical use and support agreement. Uh, the support agreement is really the, it's just a fundamental way that we're going to operate as a as a, as a um partnership, uh, what SIPs is gonna do and how we're gonna do it. And the initial term of those agreements are set to end in June of 2027. Now, it's kind of tricky because Norfolk has to do absolutely nothing if they want to stay in SIPSA after June of 2027. If any of the member communities wanted to get out of SIPSA. They will be required to notify SIPSA by December 31st of 2025, which is the end of this year that you're planning to get out, and then all of that process would take place. But if you don't say anything, if you just keep the status quo, um, those uses support agreements would renew for an additional 10 years, the second term. And that's important because that's part of the issues that we're dealing with currently. So why would you, why would you want to renew with SIPSA? First of all, we have a proven track record. SIPSA has become the gold standard in waste management uh for, for the state of Virginia. Um, SUSA has had enjoyed a long relationship with the city of Norfolk, many, many years, and I think that your citizens have, will tell you that waste is not an issue that, that, that we need to worry about because it's handled both by the city and by SUSA in a professional manner. Uh, one of the biggest items I wanted to share with you tonight, and one of the things we're really proud of is that SUSA has obtained, um, the regulatory permits that are required to construct cells 89. And what does that mean? We currently have 7 cells permitted. Cell 7 will be out of capacity in the year 2036. So by getting the permits to expand the regional landfill in cells 8 and 9. We give you capacity through the year 2060 and that was no small feat because all of cells 8 and 9 are located in wetlands. This is a 5 year process that we went through. We just got both a 401 and 404 required permits last week finalized. So we're really proud of that, and it was a long effort, took a lot of uh consistent work to make that happen. But remember, 2060, that's what cells 8 and 9 give you, capacity through 2060. So future uh disposal capacity is important for a lot of reasons, but the most obvious reason is it gives you a dedicated place where you know your waste can go for some given period of time. And currently, as I said, that's 2060. But also, if you are looking at other ways to dispose of your waste, having a landfill in your back pocket when you sit down in a company to begin to negotiate a deal. Having landfill space, you can walk away anytime. If you don't have that, you're at the mercy of the third party, the, the private landfills, uh, they can pretty much charge you whatever they want to charge you to get rid of your waste. So it's always important to maintain that, that airspace. One of the challenges that we face, one of those is that the remainder of the regional landfill is in wetlands, and we just finished the 5 year process of permitting cells 8 and 9, and I can almost assure you that there will never be another expansion at the regional landfill. It's just, uh, it just will not happen. Uh, it was a long arduous process that um we had to give up a lot to get the cells 8 and 9, and we also in the process did an survey of all of the land in our service region, and there was no other facility in our region that we could build another landfill except for one that was located in Southampton County and Southampton County immediately passed a resolution stating that there would never be a landfill built in Southampton County, so it eliminated the one place that we could have built. So this is important. This 2060 is important. So, what do we got to do? We've got to find some way to have a a solution to try to not put as much waste in our like regional landfill and extend the life of that for a much longer period of time. Uh, in 20, um, I'm I'm gonna talk about this in a minute, but, uh, one of the things that we've done is put out an RFP, uh, for alternative waste disposal and, um, by doing that, we are trying, what our attempt was to do was to try to find some other place to uh to reuse our waste so that the landfill space would last longer. Now after 2060, uh, waste would have to be hauled out to to outside of the region to a private landfill and that's costly, um. And with that, I'm going to tell you that currently in 2036 when we went through the process of permitting cells 8 and 9, we had to do an evaluation of what it would cost to haul our waste to a third party landfill in 2036. The rate that the third party consultant gave us was a minimum $125 a ton. You currently enjoy a $65 a ton. Um, tip fee. So, uh, that's a huge difference if we do nothing. So The only way to assure capacity at the regional landfill is to reduce the waste volume that we are currently disposing. So with that, uh, the SISA board offered or directed me in, in February of last year to issue an RFP for an alternative waste disposal. Uh, SISA is currently going through that process. It's been a year process and Mr. Broad was a member of the RFP committee. It was an exhaustive, um, process that we went through. We went to many, many sites. Uh, we, we had financial advisors look at, um, Proposals to make sure that they made sense. We had a third party consultant on our team working with us. We visited at least 8 different sites throughout the year looking at these facilities and we is finalizing negotiations with Commonwealth Sotation LLC. It's a company that's out of Colorado. To create a mixed waste sorting facility and what it does is it uses um AI and robotics and other advanced uh sorting technologies to sort recyclables and uh organics out of mixed waste. So your garbage then becomes sorted and the recyclables will poured out of the garbage. Um, under this contract, uh, the contractor guarantees, um, with penalties if they don't achieve it. 20% of the waste would be recycled, meaning plastic, uh, aluminum, um. Both not ferrous and non-ferrous metals and 30% of the waste, which is organics would be, uh, go through a paralysis process and create biochar, and biochar has many, many uses. One of the most prevalent is to use it in concrete to mix with concrete, and it creates carbon credits because the pyrolysis process is nothing more than um applying heat. In the absence of oxygen and it kind of melts down to nothing So all you have left is carbon, and that carbon then is mixed but carbon. in with cement, it's filtering materials. There's a lot of things that they can do with that and it's sold on the market along with the environmental attributes that go with it. Alternative waste disposal if we enter into this contract, if the SISA board approves this contract. It would reduce what we're putting in the landfill guaranteed, and I want to be because people say you can't do this, but this is a guarantee it will. It, it's guaranteed that we will reduce the wage stream by 50% and there's some pretty extensive penalties if they don't meet that. And I can tell you, uh, we've seen this uh systems work and, and it will do that. We've seen it actually do it. So some of the other benefits, uh, Commonwealth sortation would be investing more than $100 million in the region, and that's a, that's a big number for from an economic development standpoint. The recycling rate would increase from what you currently have about a 7% recycling rate, 7% of the total volume of waste that you have in the city gets recycled, 7%, and that's along national averages. If you look at it, that's a fair number. Um, This contract would contractually guarantee a 20% recycling rate. So your recycling rate would increase by 13%. Uh, land landfill diversion rates. would go from 7%, which is the amount you're currently pulling out, the remainder of your waste goes to the landfill, would, would increase from 7% to a contractually guaranteed 50%. And the number is really 60%, but they've given themselves a buffer uh since they've got such a stringent guarantee, um, so they've narrowed it down to 50%, but we really are looking for more like 60%. So what are the next steps? Uh, we're going to ask each member community to execute an amendment to their current use of support agreements prior to uh the renewal in December, prior to your deadline for renewal in in December. And the reason for that is this company is investing $100 million or more than $100 million into this project, and they have to to uh. Finance that money, so they want some guarantee that we're going to continue to do business with them for the next 2 years so they can pay that off. Without that, none of the vendors that we talked with were willing to move forward without some type of 20 year agreement because of the amount of investment they were going to have to make. So we're asking each of the member communities to extend or amend their current use of support agreements to 20 years, but what we're saying is that That would only take effect if SISA enters into a contract with a third party to process our waste by December 1st, and that December 1st date is reflective of the fact that it would give you 31 days after that to still let Simpson know, Hey, we don't want to be a part of SIPS anymore. So it gives there's some buffer there to give you an opportunity to make another decision if that's what you choose to do. Uh, one of the things that has to happen is the SISA board has to approve the contract by 75% supermajority. 75% supermajority would require 12 of the members to vote yes in order to approve the contract. If that doesn't happen, uh, the amended use support agreement that we're asking, Norfolk and every other member of the community to sign would be null and void. It would not take place. After the new youth support agreements, uh, amendments are executed by each of the member communities. Sips the board would vote. On whether to approve and execute a contract with Commonwealth Sortation. If they choose to do that, then the amended use of support agreements would go into effect. If they elected not to do that, then the the use of support agreements would be again null and void. And again, a super majority would be required to do that. Um, we, we're pretty comfortable at this point. The board is uh ready to move forward. Uh, we have a few things that we need to try to, to work through, but they're not uh showstoppers. So I think we have support on the steps of board, but, um, the, the board would have to vote on that and um we would not know for certain until after that takes place. There would be a phased ramp up processing capabilities through 2028. The company currently recently purchased recycled disposal solutions in Portsmouth, and they've installed their equipment in that building. They're able to process 120,000 tons of municipal solid waste per year now, but we will be under contract for over 450,000 tons, so there would be additional capacity that would have to be built. Excuse me, and that, that would take place over the next 3 years. And that's important because uh some of, uh, there are some issues with some of the member communities and when they recycling contracts end and and that sort of thing. So uh that's why the ramp up piece is important. And with that, I'll be glad to answer any questions anyone might have on any of the presentations. Thank you for your presentation very quickly, um. $65 today. Possibly $125 and In 20,160. That Well, I want to be clear about that. $125 that said it would cost in 2036 if we didn't do anything if we did not have capacity in 2036 in 2060, now we have additional airspace that's recently been added to that inventory, so that takes us through 2060. So that number would be higher than that after 2060, but that would be the number in 2036 to haul our waste to a landscape. To us to consider Uh, an extension If we did nothing, it would extend for 10 years, but you're asking for an amendment. And that amendment would take the contract of 20 years. And again in 2060, I, I just want to make sure I understand that we, we, we're gonna be out of landfill space in the region. Maybe possibly. In 2016, we still got, we still have to make some councils will make some decisions in 20,160. Well, our, our hope is that's not the case. What we've done in 2016 is the number if we continue at the same volume that we're putting in the regional landfill now, if we decrease that by 50%, implement this, uh, sorting contract, then we project that it would go through the end of the century to 2100. OK, that's what you need to say, right, that's what I need to do. All right, with these best practices reducing waste, recycling, sorting, you can get us some, we won't be here, but. 2100. Tommy will be here. All right, so that's what, that's what you, that's what that was missing your presentation. Thank you for the clarification. OK, all right. What's the annual financial impact of this new capabilities? It cost us more or less um. Yeah, I I I don't want to give a number because I know that you all are negotiating with a somewhere in the mid 80s, uh, mid 80 $85 range, um. would be the, the all-in cost um tipping fee to the member localities. That's a number that's still being refined. What's interesting, and I don't want to get ahead of myself, but right now, we have the expense that we pay to SISA, but we also have the expense that we pay to tidewater fiber to dispose of everything that goes in the blue can. What Dennis has pointed out, which is very interesting, we have a couple of years to consider this, is this solution that's being put on the table may take both of those services and combine it into one, and that would present the potential for a considerable savings to the city. So don't want to put any money on the table, but this is really worth exploring and pursuing and this was Again, more of an introductory informational presentation. We'll have a lot more conversation about the potential to have environmental impact would also save us some money. That was the question I was gonna ask because you mentioned that it's 20% of the waste would be recycled. So it we're actually paying for 2 recycling if that's the case. So this is information only. Thank you. Any questions for Dennis before he Thank you, Dennis. Thank you. OK. Thank you, sir. Our next presentation, I'll call up uh Ms. Sherry Amos, principal with Clifton Larson Allen to provide the audit presentation. Good afternoon and thank you for your time um to discuss um the FY 2025 audit, um, of the city, um. First, to go over the scope of services, our scope of services for the annual audit has not changed from the past several years. Uh, we'll be taking a look at the city, uh, the school system, the Economic Development Authority, the retirement system. We will also do, uh, performance called the Single audit that is an audit of your federal grant awards that you receive, um, each year. And then, um, as part of the Commonwealth order of public accounts um requirements we do some agreed upon procedures and examinations, um, in order to adhere to the compliance to the Commonwealth, um, requirements as well. um, pleased to tell. all that all this work is underway right now. We've been working on the 25 audit for the past several months. Um, we went straight from 24 and 25 with very little break or breather, um, so we've got a really good start on all of these areas, um, with only being in July at this point. So I wanna quickly just um delineate um for you all what is the responsibility of CLA as your auditor and then what is the responsibility of management when it comes to the annual audit under audience standards um CLA is responsible for providing an opinion on the financial state. Uh, we do not prepare or take responsibility for those financial statements. We're auditing them and providing, um, a 3 to 4 page opinion at the end to indicate, um, that they are hopefully not materially misstated, um, in accordance with, um, accounting principles. We have to plan and perform our audit in accordance with um generally accepted auditing um principles um in addition because you are a local government, we also um are under government auditing standards as well, which is a little bit higher level of scrutiny that's placed over, um, um, local governments, um, a little bit greater than just general auditing standards and then, uh, we have to gain an understanding of your internal control system. Um, and then also we'll look at um the procedures and design audit procedures to evaluate internal controls, but we do not give an opinion on the effectiveness of your internal control structure, um, during our review of internal controls, if we do find any deficiencies or anything, um, that's noteworthy, we will provide at the end uh either a management letter comment, um, or a portable finding on that if if we were to come across anything that we thought was noteworthy. And then at the end, um, as in prior years I will be back, um, hopefully in December to provide the audit results to um you as counsel as part of, um, the, the closing requirements under standards, um, to communicate any significant events or uh matters that occurred, um, and also, um, to, uh, communicate all the things required under standards. So, um, we're looking at a December time frame to issue the financial statements and report back to you on the audit results. Um, for management they, as I said, they are required to prepare the financial statements, um, making sure that they're selecting the appropriate accounting principles in accordance with US GAP. Um, they're also required to make sure all transactions within the city are properly recorded in those statements for the correct fiscal year. um, the financial statements do, um, require estimates. These estimates, um, typically revolve around your pension. Uh, liabilities or other post employment liabilities, things of that nature, um, and are consistent with priors management's responsible for, um, determining that they're reasonable. We as your auditors will come in, um, after that and review those, um, in accordance with standards as well and then management's responsible for compliance with laws, regulations, contracts, grant agreements, grant awards, um, and all of those, all those great things. Uh, management is responsible for designing, implementing, and maintaining effective internal controls, um, including, um, controls to prevent and detect fraud, um, and then also providing us as auditors access with the information we need, um, documents, inquiries, access to people throughout the city, um, to be able to complete our audit procedures and get the information we need to make, um, our opinion at the end of the audit. Audit standards do require that we brainstorm and consider significant risk within an audit, um, and then design our audit procedures around those risks to minimize them, um, as much as possible. Um, I want to be very clear we do have two significant risks for the audit. There's nothing within the city that we deem these are higher um than any other locality. um, these two significant risks are pretty much dictated by auditing. Standards that we um that we um identify and perform our procedures around management override of controls um even in the best internal control environment if management is overriding those controls there could be a weakness and we have to look at those areas and design our procedures accordingly. And then revenue recognition is another one that is extremely common in local governments um the potential that management could manipulate revenue in order to make the financials look maybe um a little bit brighter than they actually are, um, again we don't have any indication that that's occurring at the city we're just making sure that these are the two common areas that we're making sure that we're getting our arms around as part of the audit process. Well, I love my accounting profession, I do, um, uh, will say that new accounting standards, I think, are not the most exciting, so I'll just give you the high level cliff notes of the two new accounting standards that, um, the city will be implementing for fiscal year 25. Um, the first one is GAB 101, um, compensated absences. Uh, compensated absences is where, um, you have employees that have earned time. Um, whether it be vacation time, sick leave, um, those types of, of, uh, benefits, but they weren't paid out or used as of June 30th, and that creates a liability for the city, um, the accounting standards revised the guidance related to these compensate absences, um, and provided a little bit more, um, consistency for local governments to apply. Um, so we're comparing apples to apples, um, between, um, different jurisdictions, uh, management, I know, is still evaluating, um, the standard and working through, um, it's a, it's a lot of data that has to be looked at for the standard, um, so they're still working through that to determine what the impact will be on the city's financial statements. And then 102 certain risk disclosures this is the disclosure only um standard um the standard discusses whether or not um local government such as yourself would have significant concentrations um where you're getting revenue or expenditure. or constraints and then if you do have any of those areas under the accounting standard they have to be disclosed in the financial statements in a note so really no impact on the numbers of the financial statements themselves it's just more alerting the reader of things that are out there to be aware of. And I think that's my presentation. But with that I'll take any questions. Don't know if you have any questions. I know you'll be back in December, but uh. You engaging us on your scope of work and how you're gonna proceed and all. Federal and state standards and accounting principles as you uh undertake this work um and I understand that it's the city is the housing authority, it's a school board and then you have the single uh audit of our grants and our awards and. I think that uh we'll just double check that it has not revenue. This, this override, this management override. Talk more about that on this anywhere in the city, so we will confirm that assessment. All right, Mr. 15, 2025 at 4:51. Yeah City Hall building of the City of Norfolk for the purposes which were set out in clauses 29 and 29. Subsection A of Section 2.2-3711 of the Virginia FreedomWA Reformation Act. Clause 29 is discussion on the award of a public contract on property in Ward 2 area involving the expenditure of public funds where discussion in an open session would adversely affect the negotiating strategy of the public body and clause 29 discussion of the public contract on property in Ward 2 downtown involving the expenses of the. Public funds where discussion and an open session would adversely affect the negotiating strategy of the public body. Mr. Clanton. Mrs. Doyle, Mrs. Johnson, Mr. McGee, Mr. Page, Mr. Smeagle, Mr. Thomas, Doctor Alexander, we're in closer.