Thank you all for being here. Welcome to the West Face Municipal Auditistic Special Board meeting, June 6, 2025. It is now 2-10.
Call this meeting to order. Let's do it in a minute if you do. We have a quorum.
Roll call. Director Tommy Favante. Director Desi Alvarez here.
Director Scott Houston here.
Director Dawn Geer here.
President Gloria Gray here.
Thank you very much.
Item 4 presentations are being
increased in patients.
Staff has no presentations today.
Item 5, I can count.
You did skip over public comment.
I'm so sorry.
I'm sorry. Let's go to item 3, public comment.
Do we have anyone from the public
who wishes to speak?
Madam President, we have not received any requests
for public comment, though this meeting is
being held both in person and virtually.
If there is any member of the public
that would like to speak, please indicate so by raising your virtual hand.
And I do not seem to
regret it. I thank you all for in the meeting virtually. Thank you very much for being online.
And we will go back to action to calendar for agenda item five action calendar. Any action
calendar? We have no action items. Item six, information calendar. I think we're going to
Go out of order. We're changing the board of the agenda.
So, rather than 6A, we're going to take item 7 closed session.
Is that in agreement with the board? Is there a consensus to do closed session?
Yes.
Do you have consensus? So, at this time, we will be going into closed session.
Yes. Thank you very much, Madam President.
Just to note, item 7A is conference with the legal counsel.
This relates to the initiation of litigation.
Initiation of litigation pursuant to paragraph 4 of subdivision D,
second 549-569, for one matter.
Thank you. We will be convened shortly.
Thank you. We have returned from closed session. Mr. General Manager, is there a report from closed
session? Yes, thank you very much, Madam President. We did meet under closed session with the media,
with our attorney. There is no reportable action in the Brown Act. Thank you very much. We will go
Go back to item 6A, Mr. General Manager, please reset that item.
Yes, Madam President, this is the reason we are here today. We do have one information item. It is our fourth budget workshop for you.
Again, this is our last scheduled board workshop. However, the direction from the board of directors is to schedule a new one. We are happy to do so.
but we hope to kind of tie up any and all loosens, answer any of those questions that
you've been asking, you know, in previous meetings, and hopefully we have all the information
available for you here today.
So with that, can we go to the next slide?
Oh, my.
My eyesight is still on.
One of these.
So we are here for the board workshop.
You can see that we'll be going through the fiscal year 2526 proposed operating expenses.
We'll note that there is no change from the previous meeting.
Our fiscal year 2025, 2026 proposed operating revenues.
There are some slight adjustments there, so we'll walk you through that.
Our debt payment schedule, as I mentioned before, we internally we are keeping our eye on the prize.
We know that in 2030 the standby charge will be dropping off.
And so keeping this constant look at our current debt load and the revenue that we're generating
from the standby charge is important. Fiscal year 2526 CIP budget, we covered that in workshop
three, but we're ready to discuss that because we want to talk about how to pay for that.
Then of course, our challenges and opportunities. Then we'll touch on the fiscal year 2526 proposed
reliability service charge for more recycled water rates. This obviously is the biggest
component of the change this year and of talking about what that rate would look like in the
next fiscal year. And then our cash reserves, we want to have a conversation about that.
And lastly, the fiscal year 2526 budget and CFG funding scenarios.
I don't have it on my computer for whatever reason. It usually is on the screen. But
So anyways, we hope to have everything for you here today, a little bit of everything at least.
And then hopefully we get some direction from all of you as far as moving forward on potential budget adoption.
Next slide.
This is just our schedule keeping to that again.
It is June 6, but we do plan to have our regularly scheduled board meeting on June 23.
And again, if we need a special board meeting, we can add that.
Next slide.
And so, with that, I'm going to hand it off to our Chief Financial Officer,
Wendy O. Kelly.
Good morning, Mr. Director and President. On page nine, the next slide, I'm sorry. Since
our last budget workshop, number three, the proposed operating expenses, they remain
at $66.7 million. So there's no change in the operating expenses. And then our
next slide for other memberships and for district overhead.
DJ, did you want to do that one?
Yes, please. For the district overhead and other memberships, the proposal for this year,
for the annual budget for 2526 is remaining at $186,000, $86,000 and $70.
And then the next
Next slide is for the Chamber of Commerce and what you can see here is there is a division
within the service area.
That proposed budget for 2526 is $12,440 and then outside of the West Basin service area
is one location and that dollar amount is $470 for 2526.
Wendy if I could just touch on this.
So we did research on all those chambers just to make sure that they do.
So the San Pedro Chamber actually does cover a portion of the service area, the only one
that doesn't is Santa Monica, but they are back actively engaged in the west side cog
and west side cities, which includes large portions of our service area, but obviously
the city of Santa Monica is not.
These slides were created with the intention of answering any questions that Director
Alvarez raised during Budget Workshop 2. And again, we're just seeking consensus of the board
if any changes are desired.
Actually, I want to go back to the memberships.
You know, we do have an awful lot of memberships and some of them are very pertinent to what we
do and some of them, a lot less pertinent. And I question any more why we're participating
or in the CalD cell, TASA, although TASA itself is one of the smaller numbers, and the California
Special District Association, and we really need to be a member of that, also with the
the other county business federation.
So those are some of my concerns,
but in particular, CalDESAL and CASA
doesn't seem like they're really wanted.
Why respond to that, Mike?
CalDESAL is a legacy organization
that was actually created here
at West Basin Municipal Water Group.
One note that the West Basin does not have
an active ocean water desalination program.
CalDESAL does a lot of great work outside of that.
Obviously, brine management as well as brackish desalination,
which covers a large portion of the service area when you look at the same
bloom in the West Coast basin and impacting
several of our customer agencies that pump groundwater.
So there is some value. It's obviously, it's
$5,000, it's not that much as far as the membership.
CASA, that is an organization that West Basin has participated in for some time.
They do have conferences, but I think more so.
CASA does a pretty good job of advocacy within the water industry,
especially in partnership with water reuse.
And what was the other organization?
Well, the other two are less critical. Those of the two have actually left one out up there in terms of why are we members.
I don't think we're an active participant.
And that's the California Municipal Utilities Association.
Within the industry, CMUA is just very active.
Again, I think West Basin's participation in every organization changes over time.
CMUA, again from an advocacy perspective, is very actively engaged on issues of
Sacramento. So they're not always aligned with necessarily aligned with our
issues and I personally do not see them. And I chime in. A couple of things. One
One is, you know, Calvysel, first of all, it's not a lot of money, quite frankly, but
also I understand watching Calvysel that they have pivoted quite a bit to, you know, inland
groundwater, brackish, so on and so forth, because obviously there's not a lot of ocean
water salination, you know, potential projects happening.
So I've seen them focus much more on that.
I know that we don't really have a board member, I don't think at this time, who
does much with them or serves because it used to be Director Williams but I think
we should stay the course with them. I don't know right now where they're out
as far as reorganizing and so on and so forth but you know me that's a smaller
issue.
I will just say personally Special District Association I think is
excellent. I used to go to the conferences when I had time as did
Director Williams. I still get the magazine. I still get some of their
newsletters, you know, daily. They have a great government relations team. I think
EJ can attest to this, too. And so, you know, I can't see not being a part of them.
I actually would wish that we would do better in participation. And EJ, maybe
you can help us on that with whoever that regional rep is. We haven't seen
them in a while down here. But they do a good job, in my opinion. And I'll
just speak up for BizFed, you know. I'm actually, you all appoint me to be
the Rep for BizFed and I'm on their board and there are a few other water districts as well and actually co-chair the water committee.
But I think BizFed does an excellent job as an advocacy organization in this whole region on many issues.
But water has been taking up a larger part of that.
So, you know, I just want to, I would be here to defend them quite frankly.
I don't know what exactly is the water efficiency partnership.
I really don't even know what that is, to be honest with you.
So maybe you can tell us about that.
But otherwise, I'm pretty okay with this list.
I don't know how much more we've been trending or anything.
But what about that one, EJ?
Which one did you refer to?
All of the morning, a water efficiency partnership.
That's CalWeb.
Yes, so Gus Mesa is very active with this organization.
It's within our water policy and resources development.
They offer several tools that we actually utilize to help our customer agents.
So really kind of plotting and planning new opportunities for water use efficiency and conservation.
You know, it's an organization that helps share ideas,
but also cultivates whenever the California gets involved with regulating water demand and water usage.
CalWeb assists as far as how they do that.
Let me just ask a quick question on the Chambers of Commerce.
If that's okay?
You know, all these chambers are pretty active in their own ways,
and I actually tried to go to the majority of things when I personally can.
But I would like to know the Gardena Valley Chamber of Commerce.
I really haven't seen them active in quite a long time, and I'm just wondering, do they
do anything?
Yes.
What chamber is this?
Gargina?
Gargina Valley.
So, I'm trying to remember the name of their executive director.
What's Wanda Love?
Wanda Love.
Right.
I don't know.
So, as you know, she serves on the state of council, but I know that they have been active. They've toured ECL. They've held their meetings at ECL in the past.
Before COVID, I would, these are all small numbers, quite frankly, but, you know, all these chambers are all very active at that chamber. I've not heard it peep from yours, quite frankly.
So if there's one to look at, you know, if they are still running and doing anything or not, I think we should check on that.
Thank you.
You know, I think we, you know, fairness, I think we should probably check on all chambers.
You know, that's a perspective from Brett Houston. I don't know what they do. And I don't know what any of them do if they have it.
I don't know what we expect them to do, so maybe that's the question.
Well, what I mean, actually, what I expect them to do, so.
If I can, the only reason is because, you know, most of them, they'll have their luncheons.
They'll have the state of the city.
They'll have, you know, some sort of gathering or a board installation.
Most of them have something.
But, you know, and Harvard City and Harvard Gateway, the same story.
I mean, I know it's only $175, but I'm not familiar with them.
You know, we all know that the Hawthorne Chamber of Commerce, you know, Hermosa, Inglewood,
there's many that actually do stuff, right?
I'll stop right there out of the witty window.
Okay, all right.
Okay.
You don't have to say it, right?
You don't have to say it.
No, I think they all have something.
Let me, you know, let me, let me finish that on one finish.
But that would be, you know, I just, I don't know what that particular one's been
doing for quite a while, so, you know, is it still in operation or not?
The other ones, you know, that I'm aware of, they're all doing things.
And usually I try to go to the ones that are in my area and even some of the other areas, you know, just because.
They're good agents, they're good organizations.
So that would be my only thought.
I'm not here to nick one, dying about it.
You know, my comment really is, what do we, what are our implications?
I know that some of them do have state of the city.
Is that what it's called?
Mm-hmm.
And it does happen.
I don't know when the lives turn good.
I'll get an email from one of the laws to invite me to something, but it's not as frequent
as some of the others that I get hard to.
I get author-oriented from others, but we probably should figure out what do we expect
them to do.
I mean, we have membership in all of these organizations, and we look at them, and we
try to figure out what's the benefit to the community.
That's my perspective.
How does this, if we are a member of them,
how does it benefit the community in terms of what we do
as what's based in board directors and so forth?
So maybe we should figure out what do we expect them to do.
Do we want to be notified, let me get to you now.
Do we want to be notified
of when they have to stay at the union?
Do we want to be in the program?
Do we want to be a board member?
Do we want to whatever?
It would not just the chambers of any of these artists.
Even though we know Agua, we're very active.
very active with some of the others, but some I think are just industry related and I think
having our names supporting them is important because they use this stuff as the board to the
industry, right? You know, so that's kind of my perspective in terms of supporting them,
but I know Director Alvarez and Director Thrier have some comments for me.
with respect to the chimps.
Bureau of Commerce, Director Houston's right, a couple of these chambers you never hear from.
Most of the other chambers are active, but they're not anything that really serves West
Basin. And yes, they have stayed in the city. They are geared for the, most of these are
smaller chambers. They're not regional chambers of commerce. They are geared to working with
their city government we're not really represented in those chambers and if we
wanted to be represented we needed to become much more active individually as
board members and get on those chamber boards etc. I personally think that the
chambers are great for what they do but they don't serve us very much purpose
So, I would pick one or two chambers of commerce that are more regional in nature, and that
would be it.
I always look at the list and it's like, well, we're paid to be in all of these chambers,
but at the end of the day, I don't think most of us participate in chamber activities.
I think Director Houston is the most active, but I know I'm not active and, you know,
or better or worse, and I believe the rest of the board members aren't all that active either,
let them speak for themselves.
And that doesn't speak for themselves, Anthony.
So why are we involved in a lot of, you know, as many money, if any one of us wanted to go
to any chamber activity, any chamber, or any one type of thing, we just pay as a non-member
It would be a lot less expensive than all of this, and I don't believe that we're going
to participate on that much.
So I would pick one or two, maybe three or four, that are more regional in nature, and
that would be instead of this whole litany of chambers that in reality we do not participate
in and don't do much for us.
I think it would do us good to know the reason in the beginning why we joined these chambers.
How did it, how did it start?
When I came aboard, it was quite a long time ago.
We were already in all these chambers, both of them.
And I don't really have the background as to why it was recommended and decided by the then board to join those chambers.
What we did, if anything.
Now, these chambers can take a lot of your time, and they walk the other organizations.
We ought to have a way of reviewing our membership there, too, on kind of a regular basis.
And also, so how we're being served by that organization is the money we're spending on it at various funds.
I like to have kind of a regular review of the membership for these organizations.
Well, that's why I said, you know, we really need to do-
I'm present.
Oh, you want to go first?
Oh, sorry.
Go on.
Well, I don't have an issue of being a member of all these, and I don't know how it got
to there.
I'm actually glad that the district is, because in the big picture, they're bare.
I mean, I'm shocked at how little it is to be a member of a Chamber of Commerce.
I mean, I really am.
And in the whole, it's very inexpensive.
actually it's also funny to see one of them and their price went down instead of up which I'm kind
of amazed too but um but that I know right I was like what I mean price a very good up but
by the way I don't see the Lomita Chamber of Commerce on here which I thought we remember
of and maybe it just got missed or not I don't know but all that to be said I personally would like
like to stay members of these, you know, because every board member, if you're prerogative
to decide what you want to go to or not, I don't have time to serve on these boards
of those chambers.
But to go, you know, as a member, I think we are part of the regional community and
a lot of other agencies do the same thing.
So I have no issue with that.
You know, sometimes usually these bigger ones, the other memberships, the industry-related
ones that cost a lot more money, those are the ones I think we always have to
look at and see what is the value in that, what are we getting out of it, which
we also know staff is highly engaged in a lot of those, you know, and I think
that's really important. You know, from staff's perspective, obviously
members of the board have been the ones to request membership with specific
chambers. Yes, this list has grown. From my perspective, every dollar that we spend at West Basin,
I want to maximize the value out of it. So when the board makes the decision to join a chamber,
I'm going to do everything I can to maximize the value. We promote our business, our commercial,
industrial, and institutional conservation programs whenever we can within those chambers.
that includes a grass rebates. We promote water recycling in several of these chambers.
If you think about going to the El Segundo chamber is one example. When you're at that
meeting, you have Mattel there who's a customer of West Basin. You have Chevron who's a customer
of West Basin and you're talking about what it is we're doing and possibly identifying new
customers that are in there and so this is the decision obviously for the Board
of Directors as far as where you want to have those memberships but just know
that from staff's perspective when we make that decision to be a member we're
going to do everything we can to maximize the value.
Injured you're right I do recall that board members would
suggest recommend that we join a chamber you recall it's got you in here
and done too. And that's how the list has grown. I mean, I don't know how it started, which is done
to the list. But, you know, my perspective is, really, what are our expectations? I mean, you know,
how's the Gondo Chamber? Scott goes there. You guys make a presentation. Does that mean that
you go to all these chambers of those in our service area and make a presentation about
whatever and so the communities don't find. I mean I think that's the kind of
stuff that makes sense in terms of justifying in any organization, right?
Our involvement of what our expectations are not just, you know, they're, they're
listed as we're a member. Does that appear, are we listed in the new, do they do a
newsletter? Are we listed there? I don't know. I mean so again I'm suggesting
that we really figure out what are our expectations because I agree with Scott.
I mean, I don't think we just watched it, you know, completely. I mean, just list
without figuring out what it was. Why did we need them? You know, there's a
chamber in Incawood. Do we need to be make sure they're aware of what we do?
What space did we go make sure staff goes there every year to make a
presentation or that we're in the newsletter that we can put an
article in the newsletter. So, I think it's the expectations of any organization where
we're giving, we're funding them through public funds. What do we get out of it? So, what are
our benefits?
I just wanted to follow up on this, Director Deere. I've been on the board for five years
now. And in that five years, I don't think we've added chambers of commerce. But we've
had this list since, and Director Dears, the longest-serving member on this, and he says
they're all here pretty much, so when Dirt was clean, the Chamber of Honours, we're
on the right list.
So, at some point it's like, you know, and President Gray's point, what purpose do they
serve?
If we're not actively involved, I would support, you know, let's find the ones, El Segundo,
because if you do have the refineries, you have Metall, you have other industries
that we serve. But you have some of these chambers. There really is no industry. There's
no one we serve and we're not attending. I agree that it's not an awful lot of money,
but at the same token, it's like, I might even have them on the list.
Yeah.
They have voters there and they have members, they have constituents of the board members.
I feel good when I know that my city is represented on these events, but is it really just a vulnerable
one?
That's a good question.
Yeah.
And again, it kind of goes back to how do we interact with them, right?
No.
That's key.
I'm pressing.
Well, here's an idea.
The one thing with a lot of these chambers, they have usually a lot of them that they're
pretty organized, have a government affairs committee.
They do.
Usually a smaller group, it meets monthly on its own.
Like myself, I might happen to sometimes go or not.
I don't have all that time, but you know what, I think if we're members of these, what would
be great would be staff, I assume you're getting probably the emails or invitations to things
and how do you parlay that to the board.
And I know it's a lot, but I think it would be good if somehow the staff would
let us know of things, you know, that are coming down the pipe, right? Like, hey, you
know, these chambers having X, Y, and Z this month, if they want to go or whatever, because
it's a lot to keep track of. But the other thing is some of those key committees or maybe
even a staff member from West Basin could look at being a board member at a chamber
on our behalf. That might be an idea. But for sure, the Government Relations Committee
or whomever.
It's good to keep pulse of these, because, for example, in El Segundo, and we've done
this over the years, is when we've attended and we have presented or we had a topic we
wanted to make sure that that core group was aware of, and we would go, or we would go
to some key chamber that had an issue.
So to me, it's more like, you know, they're always going to be doing what they do.
But how do we engage with them and bring the value on our side, too?
I'm knowing that we all have limited time you know but I also think it's great
because if a staff member was interested in doing something or maybe if they live
in that town they can be there and do it it's not always just the director but
anyway I would say we keep the list you know I don't advocate at all you know
going away with it and maybe this is a topic for down the road but you know
I want to piggyback on something that Director Houston said, and that is, how much are we aware of what these chambers do?
And we're going to speak for just division three.
In division three, what members are the most?
of all those chambers. I get regular e-mail from the Manhattan Beach Chamber of Commerce.
I'd never get any emails from Pardondo Beach or Mosa Beach, Torns, Lomita, Carson.
I have no idea what they mean.
I have no idea what they do.
Nothing.
Manhattan Beach probably is two or three or four months in terms of emails notifying
me about chamber mixer, chamber activities, they are maybe this is something we ought
to do. The Manhattan Beach, I think they almost sent it out weekly. They profile
businesses. We've never been profiled that I remember seeing, but they do send out
an email profiling the business of the month or the business of the week,
whatever they call it. I've never seen one for West Basin, if you remember, but
that might be something to consider. But all these other ones, they're all in the
I have no idea when they make what they do or anything else.
But we do start.
Yeah.
It's not here, but I believe we'll remember.
The one thing I would add is that I do receive all of the medals from those.
And if it's the direction of the board, I could certainly send them all to you.
But there's a lot.
We do have Darryl Robles young here, obviously as the manager of our communications department.
His role, really, along with Matt Bay, a manager of water policy, are to engage in organizations like this.
And so, Darrell, throw it over to you.
Thank you, EJ. And I would say that I am the Ricky communications manager, asking the same questions you are,
because I have not seen or understand the communication strategies if some of these changes are still active or not.
So as part with the new fiscal year upon us, my intent was to assign the task of one of our staff people to an audit of all these chambers to figure out how active they are, what their communication strategies are, a lot maybe.
So we can work together with our water policy team to determine our strategies for communication with these stakeholders because as you know those chambers are more active.
Oh, they have a wealth network that could easily get the word out for us and therefore reduce our potential advertising costs.
So, I could please the board.
We will be answering those questions.
And if you'd like this to bring back a summary we have found, it would be more than happy to do that.
Yeah, I think what you've heard is that we would like you to do that.
And also, as part of that audit, you know, what are we getting from membership?
I would think that when you ask anybody to join anything, there's something that you're
getting for it.
Right.
And if they have not met that obligation, then no, all right.
So, but again, I would think, so please do that and bring the report back to the board.
If you have a fuller discussion, make a decision.
Is that okay, board members?
Can we move on?
And may I, I'll just add one last thing, because I don't know if you're going
to get this done before the end of the month.
then I don't I don't
So what I'd like to do is we just kind of keep moving forward on this, but I will say this.
But they're not eliminated. Oh, no, no, that's what I mean. But I actually, as I was sitting
here and I did that, like on the fly, but I do encourage, like, if it makes sense where
staff could engage in some of these on their own, working through, you know, the right
channels, because actually think about, you know, Charles Gale, works for Metropolitan.
He's a member of a lot of the chambers and he's actually been on words and he's been in leadership.
So obviously he represents Metropolitan and almost everybody thinks that we work for him or he works for us, by the way.
But that being said, you know, if we had anybody on our staff that wanted to engage in these, I think that that would be a great opportunity too.
So just, you know, putting that out there to staff.
We have, you know, through the chambers, a lot of them have leadership classes.
So, we've had staff engaged with the leadership classes.
We have all the leadership classes that we're aware of, tour the facility, and we do briefings.
So there's a little bit of that, but we're very open to it as well.
I'd like the report back to you, and then the board can decide how we want to interact.
Okay.
All right.
Thank you.
Let's move on.
So, let's move on to the next issue.
Next slide is the district sponsorships.
And so here you'll see the sponsorships for 24-25, but the budget for 25-26 remains the
same.
$55,000.
So just to make sure that that's clear, we don't extend our sponsorships year after
year.
We bring them individually to the board and directors.
So in this case, we're just utilizing the approved sponsorships from 24-25 just
to highlight some of the things that we do, but we're maintaining the budget at 55,000.
This is the one where directors just recommend sponsorship of events at any one of these
organizations.
This would be our district-wide sponsorships, but brought forward by board members.
So, um, you know, I personally, and I've argued this and you know, I voted in the past, I don't see why if we're members of all of these organizations already and pay membership to, and then we then move forward and also sponsor events.
And I've never been supportive of that.
So I do think from time to time there are going to be events that we should probably sponsor
and they should be considered on their own and that we would then appropriate some money.
But in general, I don't like the idea of sponsoring events and organizations that we already paid the members of.
I, yeah, I know that this is not specifying any one organization because it is just a budget for moving forward, but this is my thought.
Is this the general policy in the industry, the organizations, the district's joint organizations, and then go on to do additional plans for special events?
It's fairly typical.
If you attend a conference, just AQUA having just happened, each of the functionalities of the conference are sponsored by different agencies.
And so you'll see the different agencies' names.
There are firms that do it as well, but I would say it's fairly common.
Some agencies more so than others. They like to see their names out there. There are agencies that you don't ever see sponsoring.
And I would argue that really the intent of sponsorships is more for firms to get out there and do their marketing.
And it's kind of morphed into getting the organizations that are already members of the,
and these associations to then contribute more money for their annual budgets if I can be
so good.
And I'm looking at the last, some of them we may be members of an organization and they're
having an event and we're providing a sponsorship, I don't think that's unusual, that happens
with most organizations, they have an event and they request sponsors.
I look at the taste of soul where there's no membership involvement there that's just
the event that we support.
So again, I just look at these as a separate event, but I understand the point you're making
about those where we have membership.
But again, I just view it as an event that they're having to probably write your death.
Those where we have membership that does kind of lessen their budget this way, they're
asking for sponsorship. And they may need sponsorship to, again, support the event.
So it's a better event, I don't know. But most events, I mean, people do ask for
sponsorship. Or I'd say you can do ask for sponsorship. So I think we just need to be
diligent in what we do when the request comes here, which is what we do.
We discussed it, and we looked at the merit of the request to make a decision.
That's my view of this list. Do you have any comments?
I agree. At the end of the day, it's just a pot of money that we have that –
and these are district-sponsored events, and usually, by the way,
a lot of these come straight in the staff who brings it to the board.
These are – you know, sometimes it might come to a director's attention
And it gets pushed in as that way like moonlight on the marsh because we all have it's in a stone. So it's district
But yet it's an at-large thing same with taste of soul
But all that to be said I think just having a pot available that we've been
Looking at these one-on-one every year. I'm fine with that and we've been very very diplomatic about it. So
We get rid of the WRD sponsorship and they can get rid of ours because all we're doing
is trading checks.
Why would we want to do that though?
No, we get to be at their event and they get to be at our event, but why should we write
them a check for $6,000 and they write us a check for $3,000.
How are you going to have that discussion, Buck?
I can discuss that with WRD, but again,
I mean, they just think about it.
If they did that, I don't know that I would change that.
No, I understand that.
I'm just saying.
Well, I can just discuss that.
Because it gets to the point of, it's kind of ludicrous.
They sponsor our water harvest.
We sponsor theirs.
We're trading checkers.
I
think that's very good, though.
You're aware of your partners there.
You're involved in their events.
We can make that awareness achieved other ways.
I mean, we actually recognize them at the event and they recognize us.
Anyway.
That's because of sponsors.
We move on.
Next.
We decided you're going to have a discussion about the WR&A and we're moving out.
Okay.
Thank you.
Page 13 is our proposed revenue for 25-26 fiscal year.
And those are estimated between the 0% and the 8% scenario, first it starts in the first
column, $103.5 million, with a zero point scenario, all the way over to $105.7 million
at the 8% rate scenario.
Essentially, if you look at this layout and the range, it's basically with every 1%
increase, it proposes an additional $277,000 in revenue.
And then on the next slide, page 14, that's our debt service payment.
Again, we're just showing you that for the next fiscal year.
You see approximately for FY26, we have $22 million in debt service payment.
Here, broken out, you can see the four different categories,
with three of them being our refunding revenue bonds,
And then also the low interest loan that we have from California State Water Resources Control Board.
And in our last column is that standby revenue that we are continuing to monitor that EJ brought up earlier.
Those effects, that standby revenue will happen once it discontinues after 2030.
But then, if you look at 2031, that's our first reduction in the debt service payment.
That reduces by 3.4 million.
There's still a shortfall there of $3.2 million as these numbers stand today.
Just on that point, though, in 2031, the standby charge revenue drops off and the debt service
payment drops off.
The debt service payment service drops off by about $3.5 million a year.
The revenue drops off by $7.5 million.
Right.
And the delta between the two is the 3.2.
I didn't realize you said that.
Thank you.
On the next slide, page 15.
Last workshop, these were the proposed capital improvement program budget that we proposed to you at $26.3 million.
Staff identified about $7.5 million that will be funded by grants or refinery fixed payments.
And then the remaining, which is the PAYGO, which is based on our net revenues, those would be the remaining funds coming from our CIP portion.
Okay, good question.
When we're looking at that, that's not for next year.
This is fiscal year 2526, yes.
These are the ones that have already been approved. Most of this money then is for the solid family.
Director, if you recall, between the two big projects that the board has approved, the
Soliton handling upgrade and the DCS update, those total, I think, approximately $14 million
of the total $26 million for CFP next year.
But what you see before you is all of the projects that there are some other projects
that Wes Basin has already contracted with or anticipates contract.
Okay,
but maybe I need a further breakdown of the projects.
I'm thinking we've approved the two big ones, the biggest one we got is the solid sampling
and then the DCS, and then there's a series of smaller projects and most of them when
they were approved, we pretty much understood how they were to be financed.
Yes, Dr. Columbus has essential projects.
Those are ones that the board has weighed in and approved.
So in addition to the two large projects that Eric mentioned, other smaller projects like
the FIRE system project, the filter rehab project, the elevator, so on and so forth.
So yes, they also include the small one in addition to budget for capital expenditures
for small assets, membranes, so on and so forth.
all that in using that first column under the $17.8 million.
The projects that are still up for debate and for board approval, we put that in that second
column called projects for consideration.
So those are projects that are in planning level that have not yet necessarily been approved
by the board that will be coming in and showing you examples of that would be, for
For example, the fencing around TCL.
We're putting together an item with some options,
comes to the board to see what do we want to do with that.
I'd like to clarify, Director, that the statement you said,
I believe you suggested that we have already identified
how those projects would be paid for.
And what I might suggest is the budget presentation
here today will really be the identification
of how we intend to pay for those projects.
So as Wendy progresses this presentation,
you'll see the various rate options.
And of course, we have the option of using
that line of commercial paper of Pago
and all of those decisions will really be influenced
by the ports decision for the rate increase this year.
And so I don't think it's accurate
that we have a source of funding
already perfectly identified for the projects that the board has already
approved. So I missed the comment.
On that point I thought when we had those
discussions that in general we identified a whole series of funding
sources and including that we would just pay for out of existing revenues
that we come in.
And that was the basis to move forward with the projects
that we've approved today that we actually have under contract such as the solid attainment facility.
So I'm a little bit personally because that's been my understanding that we pretty much have these
under control and a little bit taken aback by your comments.
But I don't mean to suggest that we don't have the money to pay for them.
What I mean to suggest is that through this budget workshop and rate setting process,
we will be identifying what our pay go balance and revenue might look like,
because it is just a budget estimate, but would look like under the rate adoption this year.
And when we balance those contracts that we've already, that the board has already approved against those projects that are still necessary,
certainly those are going to have the priority. As we see, as we see those PAYGO amounts in later slides, that PAYGO amount in many cases will cover the projects that you're referring to.
So, another point here that I know I brought up in the past and they're in the repair replacement
chatting room.
The one thing that we know we're going to have to do periodically, and we can pretty
much say it's going to be every three years or five years, depending on which system we're
looking at, is membrane replacement.
And that's very predictable.
So we should be setting aside, and I've brought this up in the past, we should be setting aside
a fund to say in two years we're going to have to replace whatever membranes wherever
and that's going to cost us a million dollars.
So we should be saving or setting aside money annually so that in two years when
we have to purchase of membranes, the money is there. Very predictable. I don't think we've
done that. I'd like to see us really establish these funds that are identified for specific
type of projects that we know we have to refer.
And that's at some point, Director Roures. And I would just say that we are extremely
fortunate to have Wendy O'Kelly join us here at West Basin because I think she
shares a lot of your thoughts. We've talked about some of these different
aspects of how we budget and how we dedicate funds. You know that our
refinery partners do fund specific projects, including Chevron pays for
some of those those membranes as the others do too. And so we've talked about
what we could be doing and should be doing in the future and I think that
given some time when these will end with us for a few months, we'll be
working towards getting there. But I think that you're already seeing that. I also want to just
step back because when you were talking about the projects, you mentioned that you felt that the funding
was identified. And I just want to remind you that when we did approve that item, and I don't want
to quote it, but within the fiscal impact, it stated that the way we would be paying for
these projects would be to first use pago, second reserves, and then if necessary utilize
our line of commercial data.
And so we wanted to, we added that to those memos to make sure it was very clear as to
how we would plan to pay for that.
And then decisions that we made for our budget for next year will really define what we're
paying for with our pago reserve and potential commercial paper.
And that's of course in this presentation.
Okay, but to your point about setting aside reserve funds for very predictable
priorities and something that probably would have helped a lot in negotiating
with the defineries since they are paying for certain things and they're paying to
those priorities is having specific reserve account where the money goes
for that. I think he's going to win my checkboxes. I know I've raised
this point last year and the year before and the year before, and I always use this as an example
because it's an easy one, is the filters. We have membrane filters and we know we're going to be
placed. We know with predictability what they're going to be and it's why aren't we sending the
money aside and saying okay it's time to do it and it's in fund XYZ. Director, something
that the four of us have been begun discussing is just that, that each one of our refinery
customers have a volumetric revenue that they receive as well as that fixed payment.
And by setting aside or creating a reserve or a fund where just the funds from that
refinery goes into and just the costs of that refinery facility comes out of, we're
intending to manage each refinery, each treatment stream in such a fashion.
The cost of service study that came before the board I think back in January has really
helped us appreciate the need for that to understand not just what the costs of each
facility are but what the revenue is going through.
So as E.J. mentioned this coming year, Wendy's job is not to stop or slow down with the
adoption of this budget process because we do have some changes we're looking to
incorporate over the next coming months.
I think some of your comments will be addressed in the PowerPoint as we move through it.
And I do know that we have two directors that have limited time.
And so I want to make most of this quorum while we have it.
I think we'll still have a quorum until 4 o'clock.
on the next slide it does address some of those restricted funds and also the
reserves that you were talking about Dr. Alvarez. So I will try to be mindful of
time on page 16. There's a few circumstances that are outside of our
control and so we're going to monitor these financial impacts and they
begin with the two previous, the 223, 223, 224 we had some revenue shortfalls
that caused us to draw down more funds than anticipated from our cash reserves.
Another challenge is the impending unknowing tariffs and the fiscal impact
that they're going to have on our future pricing. And then also the investment
revenue that is because of the market volatility we're seeing that we're
looking at less returns, fewer returns on our investments. And then talk about
the standby charge or standby charge excuse me that's sunsetting in 23 and
then inflation as well that remains flat but it's still prices are still high
and some of our larger expenses related to our aging recycled water
infrastructure but on the other hand there are some opportunities that are
on the horizon for this fiscal year which includes some savings that we
anticipate from our new operation operator contract and then also because of
certain cost savings we're looking at the ability to replenish cash reserves and
then also build that CIP reserve account that we have been talking about as a
team here. By building that CIP reserve and also taking those refinery funds
and restricting them it helps us avoid the use of commercial paper.
So those
Those are some, like Daryl mentioned, he has some assignments to do for 2526.
These are some of my tasks for 2526 as well.
And then the next slide on page 17.
I do have to lead, so who is the director?
Who is the next, who is the vice president?
Oh, that would be Director Deere.
Director Deere.
I have to lead, so you're in charge.
I'm sorry.
Thank you all for your presentation today.
Oh, we're gonna perform right now.
Thank you.
Then page 17, if I may continue, is the RSE and POTA whole tier one rates with the five different scenarios.
So, this slide here is a combination of MWD's rates for calendar year 25 and 26.
Then also, in appropriating the west-facing for both RSE rate scenarios for our fiscal
year 25-26, which is why you see the two different breakouts, and each column represents
those five different rate scenarios.
So, here, the difference between is about for every 1% rate increase equates to $3
dollars per acre feet.
That is going to be on page 17.
So at the bottom you can see the
overall RSE revenue proposal is highlighted there and that begins with 24.7 million based
on 80,000 acre feet of potable water.
On the next slide, next page is 18.
Before you move on, I just want to make a comment with editorial nature. But if
If we look at our tier one rate for January of 26, we're looking at $2,000 in acre foot
water.
Twenty years ago, that rate, we've been talking, oh, that's desal rates.
So just how things have changed.
And we put that number down and we're I think a little bit casual about it, but
that's a lot of money for water. And that's happened in a very short period of
time. For water rates to move that much in the past, we've taken much longer than
what we've seen the increments showing up. I say that because I do want to
address the fact that we're going to be taking an action on water rates today.
And we need to think about the very near-term future.
Metropolitan, which is our social water, whatever we raise our rates, it's going to be on top of the
MET rates. And the MET rate is a big driver in that number right there. And then we add to it.
The MET rate is going to have to go up.
I don't know how much.
Obviously, it's going up between now and January of 26th by about 11%, and that's beyond our control.
But MET will be raising rates.
It needs to do that because of all of the same challenges that we face and more.
they're looking at having to invest in, I don't know where things will land, but if they
invest in all of the projects that are facing them, the rates will go up substantially.
And we're not talking 10%, we're talking a lot more than that.
So, when we raise rates this year, next year, et cetera, the keep in mind of affordability
is beyond what we raise, we have to pass on other rates, and they're going to be going
up quite a bit.
Question.
Director Alvarez, actually, can you, because it's hard to hear over here, and so can you
just repeat the beginning, because I think that was actually really good, you had mentioned
which one were you talking about, the 2004-5, was that the number?
Whether it's 2045 or 2069, the fact that it became over $2,000 an acre foot for water
today, you know, 20 years ago when I was talking about, and others in the industry were talking
about water, we were saying $2,000, that was what we were looking at for diesel costs.
As a matter of fact, I think when I got on this board, and this board was looking
and building desalons. It was looking at saying, oh, we can do this for about $2,000 an acre
for it a little bit over that. And it was not my question at the time and etc. So, and that
wasn't that long ago. That was five years ago. So, yeah, water rates are way up. And they're
we're paying right now for things that people in the industry 20 years ago would have not
foreseeing this. I know I didn't and I was sitting around with others talking about rates.
You remember approximately what the price was 20 years ago, give or take or where it was at?
For what? For the treated. I can treat it at that almost less than half of it.
Okay so I mean it's just a very good point you know.
So if you look at inflation and water rates, what rates have you seen as inflation?
much. Thank you for making that point. Appreciate that. And you know I just want to keep in mind
affordability because at the end of the day customers do pay for this. We're in a very
fortunate situation that a lot of our customers can afford to pay but not all of our customers
are so privileged and their incomes don't keep up with inflation
much less was the rates that they're paying for water, and water is one of those things that you can't do without.
I thought it was very interesting too, because, I mean, we were all talking about how much the cost of imported water would eventually crisscross with recycled water and with the salinated water and on and on.
but it's pretty shocking. I've been on the board for 10 years now, but it's shocking when you
think about what the price of water was, if it was 10 years or 15 or 20, when folks were sitting
around a table, and here we are, there are bare minimum. There's over 2,000 acre foot, right?
So anyway, we're all cognizant of that, but it's also something we have to help explain
to our public, too. I mean, the costs are not going down, no way around it. But yes,
how do we do what we've got to do to manage it here and make sure that we can pay for our needs?
So thank you, thank you very much. All right, we're moving on to packet page 18.
So for recycled water, the five scenarios are continue with the proposal for inside,
side, the West Basin Service Area, which is the top section there, and the two-
Excuse me. My 18 is a showbap. It's something different.
Well, it says 14 on the slide deck, I think, but it's 18 on the packet.
We just finished that?
No, that's it right there.
to the side of that one. Good luck, please.
This is the next item.
Okay,
14, slide 14, page 18.
The cross-section is the inside service area for recycled water rates with the five scenarios.
And then the proposal for the five different scenarios were outside our service area.
Now, because this water is not the cost that was shown up on the cost of service days.
So this is less than our cost to produce this water.
Eric, if you could touch on that, because A, this is extensive irrigation water.
It's built upon our potable rate.
If you look at the cost of service study, one of the things that you'll notice is that this water supply is pretty expensive.
And as you would point out, the reason for that is in part due to the cost of delivering
it, the individual purple pipe projects and related debt on those projects.
So the cost theoretically is quite high, but Eric, you can maybe give us a little bit
of...
Sure.
I would start by saying that these rates recover more of our costs than any other
historical time in West Bay's history.
I don't disagree.
As a point out director, this is the only one water.
We also have a number of our recycle waters that are dictated by contract, and as those
contracts expire and are renegotiated, we are looking at negotiating terms that we'll
collect most if not all of the costs associated with that water.
And so the methodology that went into this year's rate increase associated with
recycle water is consistent with what has been done previously, primarily because
we have so many contracts that are under negotiation that as we look at a
holistic philosophy for setting our rates across the board, we're still in the
process of doing it. So we anticipate by this time next year, when the board
is faced with a rate of setting process. It won't be based on this year's methodology,
but rather on a new methodology that is still under development that will seek to capture
as much of the current cost as possible, as well as identify how much, if any, supplement
from the potable side needs to happen. So that's a long way of saying. We certainly
understand and appreciate that this number isn't necessarily the number generated in the cost of
service because you'll recall that that number was even higher than this number. And frankly,
I think it would probably cause people to revert back to protocol.
Thank you for explaining all
that. I just wanted to make sure that we keep the cost of service study as a forefront and as
we move forward. I know that with respect to the refinery agreements, and those are coming
up in the short term, there will be recovery in the cost of that water, at least in most
of them. And that's to the good. But in general, we need to really keep that in the forefront
and thank you for explaining that we're moving in that direction. But at this point,
and we're still subsidizing because of the recycle.
Right, and I would add that one of the things
that we owe the board, if you recall,
the cost of service study that was presented in January
was based on the budgeted numbers for FY25.
Staff has been working on developing an actual
for FY25 as we approach the end of it.
And of course they've also used budgetary numbers
for 26 and put that into the methodology
but the cost of service. So we have, you know, three data points now between the FY20 budget
to the actual, I think we have a mid-year and a projection on 25, and we seek to bring that back
to focus on point of future. So to that point, part of the 25-26 budget, and it's a little bit
of an unknown, so I would appreciate some discussion from you guys on this, is the fact
No, we anticipate, and I think soundly anticipate that we're going to see significant savings
as a result of changing the operations maintenance for our recycle water treatment facilities.
How good a handle is there in the projected numbers that we're going to be adopting
here?
In other words, how much of that savings do you think you're capturing or are the numbers
by the nature of having to budget so that you're not coming up short, so conservative that
we will end up having significantly more money budgeted than we're going to need to
spent. It's a long winter way of saying, you know, do you have a handle on the savings?
Yes, but not much better than what we presented to the board in the contract award for that contract
because the budget for this proposed budget for 2526 is based on those contract values. So they
haven't changed dramatically. But of course, when Jacobs takes over control of the plant
and the new contract is in place as of September 1st, you know, I think what we talked about
previously is the biggest unknown on our overall annual savings is in the area of maintenance
and specifically the unplanned maintenance. As this contract looks to perform more planned
maintenance ideally to reduce the amount of unplanned maintenance that's happened historically.
I do believe there's going to be a savings in the long term for the unplanned or emergency
type maintenance that we've had to do on the system of repairs. It's very difficult at this
stage with Jacobs not even on site yet to suggest that what the savings might look like.
But I point you back to the presentation for the contract.
If you recall the one slide we had,
we showed that all things considered are expectation
for those types of services that Jacobs will be now purchasing
under the new contract with a total of about $37 million.
And of course, the contract was structured with $31 million,
dollars I believe in total with that $3 million contingency.
And that $3 million, to getting to your point, that $3 million allows us to address these
uncertainties associated with the savings that we might expect.
And so the things that aren't necessarily contracted that we still will have to pay
for unexpected or unplanned maintenance, we have the ability to do that.
all that to say that we think there's a real savings of $3 million right off the top.
And these are the same numbers that we presented back in March.
But we also think, optimistically, it could be as much as six,
depending on how that first year plays out
and what we actually find once Jacobs is on site and managing the facilities.
And
right now, our budget for the year is within that $3 to $6 million savings, I think, with
the way that we budgeted and assumptions based on our historical unexpected or unplanned maintenance costs.
We've accounted for that in this budget.
So what you'll see in this budget year isn't necessarily a very optimistic $6 million savings,
but it would be that $3 million savings that we're fairly confident.
on
page 19. Next slide. Cash reserves. So today, where are our cash reserves? This is a five-year
look back, a four-year look back, showing 2024-25 proposed projected year-end and then also what
we're proposing for 2025-26 where our cash reserve levels will be. So as I mentioned in the
previous slide, there was a drop in revenue which resulted in a drawdown from our cash
reserves. So the red line suggests we maintain at least two months of reserves in our short-term
investments. And so as you see the red line it fluctuates between about 38 million to down to
or 30 million to 38 million based on our operating cost, where the blue columns represent our cash
reserve levels that we had on hand for the various years. And the last blue bar again is
are proposed reserves for 25, 26, which are coming in a little bit underneath 20 million.
So on this slide, I had a really hard time understanding what this means.
So you're seeing a cash reserve right now of what, 20 million dollars?
Yes.
So when we present to you the investment report, there's two different sections of
that investment report.
And so when we talk about short-term investments for cash reserve, we're looking
at anything that is, we can liquidate in 12 months or less, so underneath one year.
So that number is about $20 million that we have on hand cash ready.
So if I look at our cash, at the monthly, we're running about $62 million that we
have.
So when I think of cash reserves, and it's pretty consistent month-to-month, and you
guys provide that information to the board every month, so I look at the cash reserves
around $62 million. I use the round figure, we have about $60 million. And so I was a little bit,
you know, I still don't understand the reason, the rationale of, so we're like,
when we have $20 million, we run, pretty consistently, cash reserves of about $60
million, which is down from, if I go back three or four years ago, we used to run about $80
million dollars. So I don't I mean we're playing a little bit of a game it's like
well these are invested in long term maturity investments which there's a
whole multiple you have three months investment, six months investment, year
investments and all the way out to four or five months which is a very small
percentage of our portfolio. I'm sorry four or five years which is a very small
percentage of the portfolio. But the fact is, we have $60 million, not $20 million.
So, just to clarify, Director, when we speak about cash reserve and what's on hand, we are
the definition of that would be those investments that the maturity date is
underneath one year. Anything that's over one year are their longer-term investments.
So,
portfolio, you will see the 60 million or 62 million dollars that we have that we report to you guys the board on a monthly and quarterly basis.
I understand that I just disagree with that definition.
Understood.
What a reserve is.
Okay.
I invest money, you know,
three, four, I'm sorry, three, six, one year, two-year maturity, but it's all reserves.
It's just so that it rolls over and you can take advantage of it.
We do it for similar reasons, so we have short-term investments and long-term investments, short-term
investments, in case you access to that money on a shorter-term basis, but you reinvest
every three every four months or every six months or whatever it's not used up
it gets reinvested the money doesn't go away and it consistently shows about
$60 million. So the direction that I have given to Chandler is there's a
certain amount that they are going to reinvest that the terms will be between
three years and underneath three years so we do have a cash on hand and so
that's 62 million or 60 million that we're talking about that if we were
to withdraw immediately and we needed the use of those funds the maturity and as
you know the penalty on that would not be withdrawing 62 million. It would be
37 months less. I get it. So most of the money, 50% of your cash is invested in
short-term securities of four months or less. Just look at the monthly
financial reports you provide. At the end of the day, we can do some
And you can say, well, that's not reserved short term.
To me, it's all reserved, it's all cash that's available.
Yes, if you take out money that's a low-term investment
and you take it out sooner than its maturity date,
it comes to the penalty and you're gonna get
some amount less than that.
I get that, but it's all cash.
It's all cash, and it's part of our investment policy,
if we do choose to change it,
would be making that delineation
between what short-term and what's long-term investments.
So, I'm just reporting based on what the district has reported a short term.
We have $60 million.
Director, in the context of this budget presentation and next year's budget, you know, this graph
represents the cash that we would have immediate access to within that year.
And as we proceed with this presentation and talk about how we pay for all of our
needs, including those capital projects, what we're really talking about is this
$20 million bucket. If we have to dip into reserves this year to pay for anything, it
will be coming out of this.
And that may be because by definition you're saying that's what we're sending inside as
a reserve. The reality is you can look at it that way and that's one way to look at
it. You can also look at it as, I guess $60 million.
it up.
Agreed.
Just like my own.
Oh, it's just a matter of how you want to define reserves.
Correct.
Yeah, just in this context, I just want to be clear that staff
You know, is looking at the cash that we have access to within the next year, should we need to fund
any of those projects or other activities that Westpacin does. But yeah, absolutely, we have
more money in the bank than it suggests here. And the other thing, you know, to everyone's
friend, is that this year, for the first time in about four years, we're actually going to be
having more revenues than anticipated and less expenditures, so we are going to be building up our assets.
That's really good. So congratulations.
We don't have a course. That is correct. I have a question into our attorney. This is an information item. It's not an action.
And so we have in the past continued with information items without a form, but I'm confirming with our return.
Do you want to continue the discussion?
Good, good.
I have a free the entire evening.
We're pretty close to the end.
Let's finish.
You're otherwise.
Do we run along?
Where are we?
All right.
Moving on to packet page 20.
20.
Thank you.
20 of 27. You only have seven more pages, but some of them are just cartoons at the end.
Okay. On the consolidated budget on page 20 consists of our total revenues, minus total operating expenditures, including the debt service pay net.
The net difference of the two is what we consider the PAYGO balance available for CIP funding.
So you'll see that in the middle of that chart.
And the CIT budget, as I mentioned earlier, $2.63 million for proposed fiscal year 2526.
The staff has identified $7.5 million that will be paid by grants, refineries, or other
outside funding sources.
And then thereafter, this is just a consolidated view of the other funding options based
on each scenario, rate scenario.
scenario.
And the next slides I'll go into the details of each race scenario.
So before I go into this slide, I just wanted to kind of highlight off to the right of your
chart here, the next few slides are all going to be fairly similar.
You're just going to see the ability to pay for those capital improvement projects
will change based on the different scenario or the different monies that are available.
So for the first section of that box off to the right, it starts with capital improvement projects.
What we mean there is – or what we're – the question that we're asking is, does a scenario contribute to CIP?
And so in this scenario, by checking the box, it's answering yes it does.
And then the next one is debt coverage of one and a half times more or better.
And in this scenario as well, as you can see at the bottom of your slide, the answer comes back yes as well.
And then the question is, is there no use or no need to use commercial paper for this
particular scenario?
This is unchecked because there is a proposal of using $1.1 million in commercial paper.
The reason is to protect those cash flows and also those cash reserves that are under
one year.
To save you some time, Wendy, if the director do go along with this, I think we can
focus on slide 16 which is page 20.
There's four slides, five slides are all very similar.
And we're really talking about what rate increase are we going to be comfortable with. If you
look at scenario two, which is the five percent, which is the one you've had up
there, people are rudely interrupted. It is one that shows that we do not need to
borrow any money, so we do not need to take on any debt, and allows us to basically
proceed with all of the items that we need to proceed with. And in looking
just a rate increases. This is where I'm headed. I came in having looked at all this and said that
I could support a 5% rate increase. I don't want to see us have more than a 5% rate increase this
year. We're going to have to raise rates again next year for the reasons I talked about earlier
and a year after that, a year after that. So if we look at just projections, you know,
cost of living, whatever you need to call it. The inflation so far, I am surprised. I
anticipate it's going to be greater once this administration's machinations with our economy
are done that we're going to see greater inflation than we're seeing, but it's holding at 2.8%.
Yet our rate increases are going to be more in the 5% to 6% range. I think we ought to
target 5% as a reasonable rate increase. The rest of the board is in here, so at this point you're
just listening to my opinion, Director Dears. Just listening, I haven't got a lot to say.
He decides why a friend of rate increase is he supports, but I would support about 5% and I
don't think we should go beyond that for all of the reasons that we've discussed.
Support
to 5% also.
Any else? If we could turn to that scenario where we just have 5%, I'd like
to just highlight those things that 5% does accomplish, including, as you've already pointed
out, Director, our ability to avoid these commercial paper. I would just point out
to the sake of the full discussion that, you know, the 5% does not necessarily allow
us to begin putting money aside for those reserves or restricted funds that
we're talking about to cover future payments. But understand your
perspective and that's something that the board will need to consider.
But to that point too I do think that next year if you do a really job as you
did this year which I'm sure you will of bringing in our expenditures
and lower than budgeted and that our revenues are going to do well that we
will probably be able to absorb that draft in the cash and we'll be doing
okay and I trust in you guys too you did a very very good job this year of
bringing in the budget, under the budgeted amount,
if we'll do that next year.
And I think kind of our revenues
will probably be a little bit greater than anticipated.
That appreciates the vote of confidence, director.
Yeah, it's important to note,
so as you know, director Tommy Favai
was not able to be here with us today.
I do have a call scheduled with him
at six p.m. this evening.
I'll be meeting with several of the directors
individually, one-on-one,
so we can talk about this. Obviously, I appreciate your comments and I appreciate your support
for 5%. I'll discuss that with them and in our individual conversations, making sure
not to avoid or not to reach the Brown Act. I don't want to do that, but I will share
your thoughts and support for 5%.
And then Director Nielsen said that he's been quite signing about all of this.
Yeah, there are a multitude of percentages. I haven't decided on one as the one I'm for.
I'm not opposed to anything particularly, although all of our ones are nicer.
After all, we aren't.
Representing a large constituency will be taxed because of our decisions.
They'll look at it lightly.
Who in the long world are we?
Well we prepared beautiful slides the other options including you know we
focused in on the 8% last time I highlighted kind of why we did that so
we have those scenarios if they're in the packet please review we don't want to
take any more of your time and we'll utilize this PowerPoint presentation
in our individual conversation because I know that two directors had to leave
a little bit early before we got to this point. And then, of course, Director for
God wants to discuss this as well. So I'll do my best to share with them
your thoughts. And again, I appreciate everybody's time today on a Friday. I
appreciate our staff time. I appreciate everybody online that joined us. It is
worth noting that we've held our customer workshop yesterday and gave
staff gave an excellent presentation there, too. We did not receive much feedback from
our customers, but we'll be doing some individual outreach to them as well.
If I may ask, who was at the customer workshop?
We had representatives.
We had nine customers. We're all nine there.
We don't have nine customers, technically.
WRD was not there. They are a customer of ours.
We did have some stakeholders, so not retail agencies.
We had LA County, oh, do you have the list?
Yes, we had LA County, Water Works, El Segundo,
Golden State Water, Lumida, and Torrance.
The water wasn't there, and Calamum was not there,
and the Zadhat Beach was not there,
and Inglewood was not there.
Inglewood was there.
Oh, you mentioned Inglewood.
I'm tired.
Interesting that we'll reach out to them in the
that we'll make sure that we test base.
There is so
little interest in our stakeholders on rates
and that they'll have to deal with it.
It's possible they feel their input will not make a big difference.
And that's a shame.
Yeah.
With that, do you have any other questions for us to answer?
No.
Okay.
Or we have just, hang on.
Was our agenda for today?
Disclosed is not our agenda.
You can see the, we don't have any additional workshops scheduled.
Our next board meeting is June 23rd.
We are required to adopt our fiscal year budget by the end of this month.
Staff will be preparing a board memo with that in mind,
but unless I get an individual request and a consensus from the board
for another workshop, we would plan on presenting the budget.
it at that time.
I do have a request, and I think you can put it on the agenda for the 23rd.
We talked a little bit about the O&M changeover for treatment facilities, and it was mentioned
that Jaycups will not be on board until September.
Part of the reason for extending the Viola contract was that there would be some overlap.
We have a signed contract with Jaycups, so you may come back with a presentation or at
least a board item that discusses what we are on the transition, because I would think
that right now Viola should have started staffing and that they're taking over the responsibility
over there and that we're not waiting until September for Viola to leave and here comes
the start. The whole idea was there was to be a transition and that there would be handing things
off and Jacob's procedure going would be in place from September and they're not going to
start and so we've had a discussion of that for our next board meeting.
Happy to bring something back director and I can I can just tell you that as of
this morning we had a another transition meeting that included both
the OAA and Jacobs and so transition is progressing as we would hope and it
will not just happen that Jacobs will start but they will start their
responsibility for the O&M on September 1st? At that point, it's a clear break, but yeah,
if you can just bring back an item that discusses how this transition is happening,
because I'm assuming that starting now, you're seeing Jacobs staffing up and taking over
responsibility and passing stuff along. I believe that was our intent to meet it.
extended their contract.
Yeah, we can come back with an in-depth presentation
of what's going to happen in the coming months,
but I can tell you right now
that we've already begun the engagement
with the on-site staff,
and Jacobs has been developing job descriptions
and job postings will be made for the current staff
to apply to within the next two weeks.
We were supposed to, I can recommend,
this committee was supposed to make a recommendation
on the budget, but you can do that
along two of those years.
No, I think we've got a direction. We'll definitely include that request as one of the options with the adoption of the motion.
Is there any further business?
And we're for the committee.
Thank you, staff very much for staying late on Friday and it's in the weekend, but I know you like stating bus.
Thank you very much.
Thank you, everyone.