After reviewing the increasing cost to run the District, upcoming capital projects, and income. The 2025 projected budget is $1,718,319 with $1 in expensive. Giving the District a net profit of $153,369 for reserves and future capital projects.

This budget includes using $500,000 for the wastewater screw press project out of wastewater reserves, leaving the District with approximately $250,000 in Wastewater reserves at the end of 2025. The budget also includes a water capital project to recoat the inside of the elevated water tank for approximately $275,000; leaving the District with approximately $1 in the Water reserves fund at the end of 2025. No capital projects plan for Fire or Lighting in 2025. Staff would hope to spend the park grant monies and complete the greenway in 2025.

This is the time of year for the Board to decide to keep the fire tax as is or increase it by 1-3%. Fire Tax invoices will go out before the next board meeting. If the Board votes for a 1% increase in Fire Tax per parcel this would increase the Fire Department reserves by approximately $651.00: 2% $1 ,302.00 and 3% $1,953. This is a separate item to vote on to keep the Fire tax the same or an increase at what amount. 1% is $1.33 per parcel; 2% is $2.65 per parcel; 3% is $3.98 per parcel.

COLA is always included in the budget each year. This year a 3.04% COLA has been included in the payroll expenses. According to HPUD policy the Board can except a COLA from the Historical Consumer Price Index from Urban consumers which is 3.04% or use the Federal COLA, which this year will be 2.4%. Since this Board has all been Federal employees and receive your COLA in January and if the Board is deciding on what COLA to use for the budget; should not the District COLA also start in January and not rehash this again in May? Staff would request the Board approve a COLA that will take affect January 1, 2025 for HPUD Staff.

At the December Board meeting a rate study will be presented for the Board to review and possibly accept. The next step will be to do prop 218 letting the community know about any possible rate increases, conducting a hearing and putting rates in place. Staff would suggest revising the 2025 budget after any rate increases are approved and any known expensive increases, for example attorney's annual COLA per contract, software cost increases, or insurance increases for 2025-2026 increase.