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Good morning, everybody. It's 9 o'clock, we will get started.

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Let's see, I don't.

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Let's see, for the pledge of allegiance, I think. Let's see, how about Brian, lead us in the pledge of allegiance, please. Thank you.

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You know, your heart is ready to hear.

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I play the speech in a student lab of the United States of America.

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And it will be publicly for which it stands.

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One nation.

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I'm going to grow up in the invisible world.

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Thank you so much.

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And Susan, could you call the role?

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Director Levine.

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Director Burns.

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Yeah.

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Director Poland.

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Yeah.

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Director Louis.

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Yeah.

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Director Cordesky.

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here. I'll present. Thank you so much. And item number two, approval of the agenda.

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Ask the general manager whether there are any changes to the agenda. No,

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proposed changes. Thank you. Fantastic. Ask the board for motion in the second to approve

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the agenda.

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Would somebody on the board like to approve the agenda? I'll make them,

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I'll make the motion now. Fantastic. Do we have a second?

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All right. I'd love to hear it. All right. Let's have a vote. All those in favor say,

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I all those against say nay any abstentions seeing none moving on item three public

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content public comments members of the public may now address the board of directors on matters not

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appearing on the agenda but within the jurisdiction of the board no action shall be taken on any

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matter not appearing on the agenda Susan are there any public comment cards submitted no comments

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That's it this time.

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No comments, thank you.

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Item number four, consent calendar.

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Does anybody on the board want to pull an item

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from the consent calendar?

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Seeing none.

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Can I get a motion and a second to approve

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the consent calendar?

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We have a second.

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Let's get, we can now vote.

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All those in favor say aye.

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All those opposed say no.

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Are there any abstentions?

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Seeing none.

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Item number five, illustrative

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of End of Verbal Presentation Agenda Items, Item 5A, MWD Representative Report, Director

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Louis. Could you prove rather report?

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Yes, thank you, Mr. President. I was at the MWD Committee meetings all day and then

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the board meeting last week. And in my report, I've stated before I want to just give you

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the highlights. In every board meeting, they have a different eight member agency of the

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26 come and give report. And this is what time it was West Basin and EJ Caldwell gave a really

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great report. And he's the West Basin General Manager, which is one of our neighbors.

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I spoke to him about Malibu briefly actually before the meeting. He said he's going to get

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together with our General Manager to talk about his thoughts for Malibu. And then as well as

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he spoke about how reliant and how dependent he is on Matt and how important Matt is.

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And it was

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how supportive he was. And Matt has a rule, seemed like the meeting, I, I, everyone's got a really good attitude and really good, everyone's really happy now.

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I don't know what happened. I know you've all heard that we let our general manager go, Dale Hasch-Galio. And I don't know if that's, that's why or not.

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But everyone's really like congenial and gets along and metropolitan promoted Devon Apate, the interim general manager to be general manager.

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And so far, he's done a great job and hopefully he continues.

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And at the March 11th meeting, Devon is going to give a report of his goals for his job.

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And he mentioned he wants to stabilize met internally, which is really important.

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I think there's a lot of issues with the unions and with this employees.

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And he's wants to work on the climate action, water sustainability, infrastructure,

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which I think of Sepulveda feeder, which he's going to keep hearing a lot from me,

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and Dave's going to hear a lot from me about our Sepulveda feeder project.

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And also, his other project he wants to work on is third one is long term financial stability.

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And so I thought of a, you know, I thought of a good tagline.

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I should probably tell him, help Met, help California.

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But the one thing he didn't mention is one of his three goals was internal structure of his staff.

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staff so hopefully that'll be included in his talk on March 11th because I think it's a real another important bullet point.

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Adon also came out with his commit. The dawn, the chair of the board has a lot of power at metropolitan. The chair has a lot of power. I'm like no offense, but the chair has less

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business. And he gets to pick the committee chairs. He also picks who's on the committee.

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So he told us we have until March 5th to tell him what committees we want to be on. And

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I'm working on that now with our consultant, Jim Green and Dave. I sent Jim Green a note

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that I have to come up with my committee assignments and he wrote me the most amazing complete analysis

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of which ones I should be on and why and taking his advice. And I have until March 4th to

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to tell a dawn, a dawn did announce that I would be chair of the legislative and communications

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committee. So thank you, Chair. It's good for Jeremy, so Jeremy's happy. So the board

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did not have any objections to the slate, but March 11th, our board will vote on all the

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committee assignments. And hopefully, if no one objects, I'll be the chair of the legislative

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of communications committee and for sure on the communications committee I want to work

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on the tours.

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I think the tours are so valuable to understanding California water and I think it needs some

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more money and some more robust tours and that effects I'll be working on that as well

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as speaking of tours I spoke to director Levine and we are talking about we get a date trip.

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So what we want to do is we want to I'm planning a trip now I think the date will be mentioned

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is mainly for our staff and our board, but also we maybe open it up, we have room to

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some of the elected officials, city council people and mayors of our local cities and

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other that would like to join. But what we want to do is basically follow the water from

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Jensen to here. So I'm envisioning and we're going to have a stop in the Sepulveda feeder to see

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the tank in the Sepulveda pass and to understand that and then go to Jensen and literally follow the

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bus back from Jensen to here so we can understand how the water gets from Jensen to our homes.

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We saw how the piece how it goes from Orville, at least to the big break.

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We missed the part from Big Break to Jensen because we flew out of Oakland instead of driving

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back down.

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But we will at least see Jensen to here and that trip will be in the next couple of months.

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And the last piece I want to mention is we, Metropolitan has a lot of water right now and

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they don't have a lot of money, so they've elected to have a policy where they're going

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to if they have extra water allowed the general manager to sell water and everyone was pretty

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much in favor of it. It's kind of a, but I met with the general manager, David Peterson,

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who's at the meetings help announced. I made a friendly amendment to add that the has to be based

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on when water is accepted. If the state water dependent areas have access, don't have access.

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need, need water, they won't sell it, it's not just met in general, but also making sure that the state water

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dependent areas have access to that water before we sell it. And they added that to the amendment, which I think is,

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I think is really important for us. And I guess that's my report. Any questions? Any comments?

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Okay, seeing no comments, I just have a comment. I, Jay, I think you're doing a great job there. And I appreciate your hard work.

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thank you so much. All right, moving on to item 5B, legislative and regulatory updates.

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I believe I see Jeremy Wolfe in the building.

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Sorry for the delay in getting up here.

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I was just listening to a council of governments meeting talking about the debris removal and where

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some of that material is going to go. I'm not going to report on that today because it's an ever-involved

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evolving issue and could change by this afternoon. So but a lot of contention in the community.

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Okay, so I want to start off with some really, really exciting news.

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We hear announcing that Senator Ben Allen will be carrying our bill on hydrant theft.

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So we found that out last Thursday and this is really exciting news since he's both our

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senator and a leader in environmental space.

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And as of Friday, the bill got a number, so it's SB 394.

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So we're going to be tracking that really closely.

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So 394, remember that.

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You're going to be hearing that a lot these next few months.

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And just a really quick refresher on the bill and why we're doing this.

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And as you guys know, water theft takes many forms

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and the most egregious being water theft from fire hydrants.

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Illegal actors have been documented connecting

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to and filling water trucks from hydrants

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without the proper use of hydrant meters

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to avoid paying for this water.

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These water trucks can hold up to 6,000 gallons of water,

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resulting in significant loss for water agencies.

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And the stolen water is usually used or sold for profit for commercial purposes.

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And some examples of this include company use it for construction companies using it for

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construction sites, dust mitigation, landscaping, and water trucks actually selling this water for

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profit.

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And we've documented all this at loss virginess.

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So in some cases, stolen water is even transported outside the water service area.

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And the really egregious thing is that these activities are premeditated with the tool.

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You have to have a special tool to open up a hydrant.

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And this type of water theft can also cause costly damage to the fire hydrant and the system itself.

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So the integrity of the hydrant system becomes compromised for when it's needed.

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Now the problem is current fine amounts are not strong enough to deter the theft

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and may instead be seen as the cost of doing business.

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Why not just do this, if I get caught what's the worst that's going to happen?

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I'm going to get $250 fine.

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So the current penalties are insufficient to deter and prevent criminal activity from

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occurring.

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So our bill recognizes and addresses these inefficiencies and existing penalties by authorizing local

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agencies that provide water service to adopt an ordinance with enhanced penalties specifically

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from water theft from hydrants.

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So, under our bill, so it's lost virginess and aqua is the sponsor,

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fines for water theft for a hydrant would be punishable as follows.

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For the first violation would be $2,500, $5,000 for the second violation,

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and $10,000 for the third, and then each additional violation would be $10,000 after the third threshold.

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Lastly, this bill will help agencies recover damage as a result of water theft

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from the fire hydrant by authorizing utility to bring civil action for damages against any

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person who without authorization tampers with or diverts water from a hydrant.

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So this has been a, I'm really proud that we got Senator Ben Allen.

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It's a big, it's a big win and he's going to really tie this into fire prevention as well

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to make sure that our fire infrastructure is ready for the next natural disaster in our region.

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So speaking of legislation, we're currently tracking 27 bills of importance to the district,

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but within this week, that's likely to double.

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State legislators have until the 21st or this Friday to introduce bills.

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This is the first major deadline of the 25-26 legislative session.

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So while some bills have already been introduced, hundreds more are expected to be introduced over

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the final days leading up to the deadline.

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And many of these bills are what's called a spot bill and spot bills are place folders that can be amended into full bills later on.

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So if you missed the deadline, you can then introduce a spot bill.

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So some an author introduced us something, they said, actually, I don't want to do that.

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They take out all the language and then put in something new and that's called a spot bill.

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So while the deadline for introduction is Friday, there's still ways around it.

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But I'm glad that we got our bill in before the deadline.

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Also, legislative leaders announced in December that they would reduce the number of bills that assembly members and senate members could introduce during each two year session.

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So typically, an assembly member could introduce 50 bills in a two year session, but now they put that down to 35.

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And in the senate, it used to be 40, but now it's 35.

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So they're trying to limit the amount of legislation introduced, which I think is needed.

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So one issue that I want to highlight that's popped up again is and it's really controversial and we're going to hear a lot about it is water rights.

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So as a quick reminder, California water rights govern how water is allocated and used in the state based on a complex system of laws that include riparian rights which are for landowners adjacent to the water source and appropriative rights based on historical use often requiring permits.

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So, this system also considers ground water rights in environmental protection.

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So, it's a complex set of regulations and just a brief history.

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So, these water rights actually date back to the mid-19th century and are rooted in gold rush

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era. So, we're still operating off laws from the gold rush era. Miners established the first

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appropriative rights following the first in time, first in right principle. When California became a

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state in 1850, it adopted English common law which include riparian rights for land owners

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near water sources. Over time, state and federal laws, court rulings and regulatory agencies

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were fined the system, leading to today's complex water rights. So why am I talking to you guys

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about this? Laws versions doesn't have any water rights, but MWD where we get our water certainly

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does, and they have water rights on the Colorado River and the State Water Project where senior

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their rights holders, such as agriculture users have priority during shortages.

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This can limit the supply that MWD has, especially during droughts.

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So there's two bills that have already been introduced.

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And one of them deals with emergency permitting in aqueous-

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We've already done an opposed position. And then the other bill, which is really interesting, is regarding tribal water uses. And it's a really sensitive issue, but complex and has impacts for us in Las Vegas. And so we're likely to see more water rights bills, and I'll be tracking that, because, like I mentioned, it does have direct impacts on our system.

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On 31st of last month, Newsom issued an executive order that ease storm water capture and storage. And so this made it easier to divert.

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and store excess water from the latest round of winter storms.

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Newsom also did this in 22 and 23, and this facilitated the diversion of storm water use

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to help to recharge groundwater supplies.

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And what it does is it directs the Department of Water Resources and other state agencies

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to take action to maximize diversion of excess flows to boost the state's water storage

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in mostly northern California, but this includes the San Luis Reservoir and the Delta.

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The order streamlines water right approval for diverting and storing flood water, reducing

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bureaucratic delays, water agencies and districts can temporarily bypass certain environmental

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and procedural hurdles accelerating the implementation of storage.

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So this is good news for us and Newsom has done this last few years, but I think it will

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lead to a little bit more water availability.

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A really quick update on the advanced clean fleet regulation.

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If you guys remember the ACF, advanced clean fleets, I'm not putting a dollar in there.

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It was adopted by the California Air Resources Board, CARB, and requires a phase transition

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to zero emission vehicles from medium and heavy duty fleets, including publicly owned utilities.

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That means that our water tenders, all our construction trucks would have to become zero

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road mission electric vehicles, and that's a problem because the technology is not quite

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there.

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So, California Municipal Utilities Agency is working, I attended the regulatory committee

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last week, and their staff is working with the California Air Resources Board to come

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up with some sort of resolution because it's not tenable the position that we're in right

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now.

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So, during the meeting many concerns were expressed, and as a result, CMUA staff were directed

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to engage with CARB staff and executive leadership to ask for additional changes for publicly

217
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owned utility fleets. So I will keep everyone posted on that. And my last item is that

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in federal news, there is a bipartisan bill introduced by Senator Padilla and Senator

219
00:17:38,900 --> 00:17:46,460
Murkowski that aims to, it's going to create an atmospheric river forecasting program.

220
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And it's really interesting the bill supported by Aqua, and it requires the National Oceanic

221
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Atmospheric Administration NOAA to establish a forecast improvement program within the National

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Weather Service.

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And why does this matter for us?

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Because it's going to enhance forecasting that will help water managers, emergency responders

225
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and local governments prepare for potential flooding.

226
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Advanced forecasting will also assist in water agencies in optimizing reservoir operations

227
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to balance flood control and water conservation.

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And it may lead to the investment of water banking and recharge projects to help store excess storm water for future use, so I think it's really positive. I'm going to be focusing on that.

229
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So with that, that concludes my report. Are there any questions or concerns?

230
00:18:31,360 --> 00:18:33,240
Any questions or concerns for Jeremy?

231
00:18:34,580 --> 00:18:36,760
A question and a concern, please.

232
00:18:36,760 --> 00:18:43,360
The question in a comment, the question is who came up with the amounts on 394 for the chip 255,000 and 10,000?

233
00:18:44,100 --> 00:18:53,140
Aqua, along with Dave and Dawn and Joe and Ursula, it was a pretty, yeah, we came up with that as a way to deter.

234
00:18:53,140 --> 00:19:05,240
Yeah, and we, but it is subject to amendments and changes, so it also reflects penalties that we had originally intended in our code

235
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that were sensed ruled by Keith to not be enforceable.

236
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So it's interesting that less versions has come up with these basically, with Vaco.

237
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And then my other comment is, and it's just a, I don't know if it's a good idea or a bad idea, but on the fire hydrants, there could any talk about it.

238
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Some type of tag or sign that says, you know, stealing this water is a punishable by theft and a fine.

239
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and also could impair our fire department

240
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from putting out fires in this neighborhood.

241
00:19:38,380 --> 00:19:39,820
So people can kind of,

242
00:19:39,920 --> 00:19:42,200
because people walk by fire hydrants all the time, right?

243
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A lot of them, and they could see this sign,

244
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and because I don't think people know

245
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that there's theft, it's cost anything.

246
00:19:49,100 --> 00:19:50,760
You know, they might think it's just there for them to take,

247
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but now they have a sign, like a warning.

248
00:19:52,700 --> 00:19:55,060
I don't know if it's practical, but it's just a thought.

249
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Like a way in on that, I don't know.

250
00:19:57,400 --> 00:20:00,480
And this is before I pass the baton on to Don, his group.

251
00:20:00,480 --> 00:20:07,980
But what started our pursuit of this bill was we were getting ready to launch a campaign,

252
00:20:08,240 --> 00:20:12,560
see something, say something. And so what you just mentioned I think was going to be a part of

253
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that and that's when we discovered that we had the ceiling on the fines in the state statute.

254
00:20:20,100 --> 00:20:26,440
So kind of let us down in this path but I think that's something that staff was considering.

255
00:20:26,440 --> 00:20:30,760
Yeah, so is it practical to put a sign on each fire hydrant?

256
00:20:31,560 --> 00:20:35,540
Um, not necessarily, it doesn't necessarily need to be a sign.

257
00:20:35,700 --> 00:20:38,020
I mean, there's, there might be several ways to do that.

258
00:20:38,040 --> 00:20:43,800
It could be a sticker or some kind of a pencil or something, but just, uh, it's going to be

259
00:20:43,800 --> 00:20:44,640
more than just that.

260
00:20:44,760 --> 00:20:49,980
I think it's going to be kind of a, uh, uh, public service announcement.

261
00:20:50,220 --> 00:20:50,440
Yeah.

262
00:20:50,560 --> 00:20:51,560
See something say something.

263
00:20:51,700 --> 00:20:54,780
I think everyone should know that if you steal water, that there's, he's fines.

264
00:20:55,460 --> 00:20:58,580
and it's also harming, and maybe they can't lie,

265
00:20:58,740 --> 00:21:00,980
I wonder if they have liability for a fire,

266
00:21:01,120 --> 00:21:02,240
or two if they stole a fire,

267
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if they stole water and the fire hydrogen stopped working well,

268
00:21:05,320 --> 00:21:08,180
then their fire came up and they couldn't use that fire hydrogen

269
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because of that, they could be liability in it.

270
00:21:10,060 --> 00:21:10,860
Is that in the bill at all?

271
00:21:11,620 --> 00:21:13,100
No, but I mean, that is interesting

272
00:21:13,100 --> 00:21:15,240
because we do include in it that you can,

273
00:21:15,600 --> 00:21:17,360
I just want to get the exact language,

274
00:21:17,520 --> 00:21:20,240
was that we can recover costs from the damage

275
00:21:20,240 --> 00:21:22,220
that was done, and that previously hadn't been in there.

276
00:21:22,520 --> 00:21:24,720
So maybe there's a way to wrap that in there.

277
00:21:24,720 --> 00:21:30,980
And the other thing though, one example that we got from this was that in San Jose, I believe

278
00:21:30,980 --> 00:21:36,240
a San Jose where they have to put special equipment to lock the hydrant because they're

279
00:21:36,240 --> 00:21:37,220
dealing with so much theft.

280
00:21:37,780 --> 00:21:39,500
And that's what we don't want to happen.

281
00:21:40,780 --> 00:21:47,740
And there was signage on it too, was that from East Bay mud, or was it Northern California?

282
00:21:48,060 --> 00:21:52,780
LA County waterworks did that in the yellow balance while they put these locking devices on

283
00:21:52,780 --> 00:21:58,580
the hydrant, it's not great, the fire department really does not like them. They break them off if they

284
00:21:58,580 --> 00:22:04,460
need to but in the event of a fire you really want to access the fire hydrant quickly but I do recall

285
00:22:04,460 --> 00:22:10,820
there was a little tag that was attached to it and it did have a message about that. We can certainly

286
00:22:10,820 --> 00:22:17,540
look at that. It may not be practical to put them on every hydrant but there's hydrants that are

287
00:22:17,540 --> 00:22:21,220
sort of more likely to experience theft from,

288
00:22:21,460 --> 00:22:24,040
probably we could put some kind of message on that.

289
00:22:24,040 --> 00:22:25,960
Yeah, even the stickers are good idea.

290
00:22:26,320 --> 00:22:28,400
Yeah, the ones that are more likely is that

291
00:22:28,400 --> 00:22:31,620
because they're in more of an area where they aren't seen.

292
00:22:31,900 --> 00:22:33,600
Yeah, they're more in a remote area.

293
00:22:34,100 --> 00:22:35,940
And those are sort of higher risk

294
00:22:35,940 --> 00:22:40,000
because people see things and they will report it.

295
00:22:40,400 --> 00:22:41,740
I just wanted to ask if you're done.

296
00:22:42,080 --> 00:22:42,160
Yeah.

297
00:22:43,080 --> 00:22:45,340
How have we estimated how much water?

298
00:22:45,340 --> 00:22:51,100
remember I reported two trucks that I saw but how if we estimated how this is

299
00:22:51,100 --> 00:22:55,480
happening and how do we get that knowledge to certainly the legitimate water

300
00:22:55,480 --> 00:22:59,100
companies they're not going to be the ones doing this how do we get this

301
00:22:59,100 --> 00:23:03,280
information it's almost impossible to estimate with accuracy how much water is

302
00:23:03,280 --> 00:23:10,620
stolen what we do know is we have we have unaccounted for water loss of

303
00:23:10,620 --> 00:23:14,320
revenue so this is we know how much water we bring into the system we know much

304
00:23:14,320 --> 00:23:19,620
how much water our customers are using based on their meter usage and so is that difference.

305
00:23:20,180 --> 00:23:26,380
So what we did is we estimated that somewhere between 10 and 20 percent of that non-revenue

306
00:23:26,380 --> 00:23:31,100
water could be from water theft.

307
00:23:31,980 --> 00:23:33,740
And who issues the summons?

308
00:23:35,080 --> 00:23:36,280
Who actually?

309
00:23:36,520 --> 00:23:38,800
I mean, did the sheriff go and stop some?

310
00:23:38,900 --> 00:23:39,780
How do we know?

311
00:23:39,780 --> 00:23:41,340
Now, so there's no summons.

312
00:23:41,820 --> 00:23:45,520
So it is a criminal, it can be a criminal offense.

313
00:23:45,940 --> 00:23:48,100
The problem is that no district attorney

314
00:23:48,100 --> 00:23:50,520
will prosecute a fire hydrant theft.

315
00:23:50,840 --> 00:23:52,460
And there's been a lot of examples of that.

316
00:23:53,200 --> 00:23:55,700
And that's the reason for making this fine

317
00:23:55,700 --> 00:23:58,780
is to increase the administrative penalties.

318
00:24:00,440 --> 00:24:01,040
Okay.

319
00:24:02,440 --> 00:24:04,620
So I too have reported in the past,

320
00:24:04,620 --> 00:24:06,100
I know a spot with a,

321
00:24:07,600 --> 00:24:10,080
I've seen water tank is still in water.

322
00:24:11,700 --> 00:24:14,340
It's in Kaisa up in Hidden Valley.

323
00:24:14,840 --> 00:24:15,320
So,

324
00:24:17,910 --> 00:24:20,210
how do you, how do you find?

325
00:24:21,090 --> 00:24:21,830
You got it.

326
00:24:21,830 --> 00:24:23,510
It's almost going to catch up in the act.

327
00:24:23,710 --> 00:24:24,450
How is he going to do it?

328
00:24:25,130 --> 00:24:25,610
Yeah.

329
00:24:25,690 --> 00:24:28,150
And in fact, the incident that you're referencing,

330
00:24:28,150 --> 00:24:34,490
I think was some years back during the drought of 2012 to 2016.

331
00:24:34,490 --> 00:24:43,850
I mean, we actually jointly funded an investigation with Cahegas, and we actually had a private

332
00:24:43,850 --> 00:24:52,130
detective photographed these water trotchants, recorded their license plates and prepared

333
00:24:52,130 --> 00:24:54,990
a report, and it was quite an active operation.

334
00:24:55,330 --> 00:24:59,410
So that is an option that's not probably what we're envisioning initially.

335
00:24:59,410 --> 00:25:05,790
I think probably having customers reported and educating people about when you do see

336
00:25:05,790 --> 00:25:10,870
a water truck filling from a hydrant, if you see that without a meter, that's an indication

337
00:25:10,870 --> 00:25:12,550
that it's probably not authorized.

338
00:25:13,210 --> 00:25:18,370
There are a couple exceptions in the event of fire, the fire department, they do fill and

339
00:25:18,370 --> 00:25:23,850
they are authorized to do that without a hydrant meter, but for the most part it should have

340
00:25:23,850 --> 00:25:24,130
a meter.

341
00:25:24,550 --> 00:25:28,410
In direct allude, I thought your idea was good, I'd add, maybe we put a QR code on it.

342
00:25:28,410 --> 00:25:43,270
So if there is a customer who sees it, they scan that QR code and if they did take a picture or at least it tells them a little bit more of the story of why so that if it's around the different cities, people might look at it in New York City right now.

343
00:25:43,270 --> 00:25:50,310
There's a big problem with people. They're so little space with bicycles and all this. I don't know if you've heard this, but because of the snow and everything there.

344
00:25:50,310 --> 00:25:55,650
people have been parking by the hydrants and the fire department has not been able to get two fires

345
00:25:55,650 --> 00:26:01,250
quick enough than in the news twice in the last week, two weeks. So I have a question about

346
00:26:01,250 --> 00:26:06,510
spot bill. You mentioned that last year. So my question is how many spot bills actually turn into

347
00:26:06,510 --> 00:26:20,290
a real bill that really gets passed that becomes something valuable? Yeah, absolutely. I don't have

348
00:26:20,290 --> 00:26:25,410
issue that wasn't an issue in the legislative deadline, but then becomes an issue.

349
00:26:27,030 --> 00:26:31,670
I don't have a statistic, but a good amount, start off as one thing and then

350
00:26:31,670 --> 00:26:37,090
introduces a spot bill and then gut and amended, changed all the language and then come back.

351
00:26:37,450 --> 00:26:41,130
And a lot of times for some controversial stuff, that's how they'll sneak it into.

352
00:26:41,350 --> 00:26:46,410
They'll wait a little bit as long as they can, change all the language and put something new in.

353
00:26:46,410 --> 00:26:52,950
But I'll work to get more information on that so I can better articulate that I do want to ask you as you started off

354
00:26:52,950 --> 00:26:55,990
What is the latest from the cogs? What was the latest you heard?

355
00:26:56,210 --> 00:27:02,270
I think it's important for all of us. First off, the Calabas is dumb is literally out our door. We can see it. Yeah

356
00:27:02,270 --> 00:27:10,050
So anything that is put there will blow over right into this building and our employees in ourselves and the whole

357
00:27:10,050 --> 00:27:17,210
from when I understand it could go to at least the fires where a hundred mile radius of the material in the air.

358
00:27:17,650 --> 00:27:20,710
So what was the latest because I wanted to ask one question that you'll know better.

359
00:27:21,130 --> 00:27:24,170
I noticed that the supervisor's pulled the item from the agenda.

360
00:27:24,170 --> 00:27:26,050
So how does that work and why did that happen?

361
00:27:26,270 --> 00:27:30,110
And just for clarity, the item that was on the Board of Supervisors for this morning.

362
00:27:30,710 --> 00:27:36,030
The only authority that the Board of Supervisors has over that is the timing and the tonnage.

363
00:27:36,030 --> 00:27:41,710
So, not if the materials can come at all, that's, it's a really complex web between

364
00:27:41,710 --> 00:27:44,110
Army Corps of Engineers, California Recycle.

365
00:27:47,130 --> 00:27:50,650
We were just listening, there's a lot of failure to communicate.

366
00:27:50,850 --> 00:27:56,630
I do want to note that during Wolsey Fire, a lot of materials were put in the landfill and

367
00:27:56,630 --> 00:28:01,770
there is a process to do it, but the lack of communication to the community seems to be

368
00:28:01,770 --> 00:28:03,030
the big sticking point.

369
00:28:04,670 --> 00:28:06,630
Again, it's so fluid and changing.

370
00:28:06,810 --> 00:28:13,010
I don't know what, maybe I can do an update and schedule it for another meeting or

371
00:28:13,010 --> 00:28:17,030
Dave, is there anything you want to add on this because you're right, it's a big issue,

372
00:28:17,150 --> 00:28:19,190
but I don't even know where to begin and I don't want to capitalize on it.

373
00:28:19,190 --> 00:28:21,110
You know what they're still taking the buses down today?

374
00:28:21,370 --> 00:28:28,890
No, they've canceled the buses and I can't tell you a certainty that no fire debris has been sent to the

375
00:28:30,270 --> 00:28:47,030
The only debris that has been sent to the Calabasis landfill is mudslide materials from PCH and just to clarify those buses were going to were being authorized by the city of Calabasks taking homeowners down there to demonstrate and to speak at the board.

376
00:28:48,110 --> 00:28:49,110
All right, very good.

377
00:28:49,590 --> 00:28:50,770
Anything else for Jeremy?

378
00:28:50,770 --> 00:28:53,470
All right. Fantastic. Jeremy, thank you so much.

379
00:28:53,470 --> 00:28:53,850
Thank you.

380
00:28:54,130 --> 00:28:54,270
Appreciate it.

381
00:28:54,350 --> 00:28:55,090
All right.

382
00:28:55,730 --> 00:29:01,730
And now moving on to item six, our Treasury Report, Director Levine, could you please

383
00:29:01,730 --> 00:29:02,410
provide a report?

384
00:29:02,870 --> 00:29:03,170
Okay.

385
00:29:03,970 --> 00:29:12,270
The only item of any unusuality, if that's a word, is we had about $6 million going to

386
00:29:12,270 --> 00:29:21,990
The MWD, which about 4.1 million was related to our taking them up on our ability to purchase water from them.

387
00:29:22,750 --> 00:29:34,510
And so, as you know, they had a program that they offered all the member agencies about, being Brian told me 10, was it about 10 agencies, plus or minus, took advantage of the program.

388
00:29:34,510 --> 00:29:51,530
So essentially, we paid, in this check run, about $4.1 million, and we will have water delivered to us at MWD's option over the next five years at the current rates, which is the key, right, as we know water rates are going up.

389
00:29:51,530 --> 00:29:59,690
So we determined this would be a good use for funds, so we bought about 32.

390
00:30:00,000 --> 00:30:29,980
200 acre feet of water, which we'll get over the next five years. So that's pretty much why the check run was so high to MWD. The only other thing I would add is that this money came out of our rate stabilization reserve, so which had about $8 million. I think if I get that right, so we still have about $4 million left there. So that is the scoop on why that check run was so high to me.

391
00:30:30,760 --> 00:30:32,700
Great. Any questions for R&S?

392
00:30:33,180 --> 00:30:34,920
I have a question for Director Lewis.

393
00:30:35,540 --> 00:30:38,080
How would you know, or maybe don't,

394
00:30:38,260 --> 00:30:40,620
how much was the total that Metropolitan pulled in

395
00:30:40,620 --> 00:30:43,420
from all these 10 agencies that purchased ahead of time?

396
00:30:45,260 --> 00:30:51,040
It was a total of 100,000 acre feet that Metropolitan pre-sold.

397
00:30:51,560 --> 00:30:55,200
So they had received authorization from the board

398
00:30:55,200 --> 00:30:56,600
for it to be a two-year program.

399
00:30:56,600 --> 00:31:04,480
The original intent was 50,000 acre feet in 2025, 50,000 acre feet in 2026.

400
00:31:05,220 --> 00:31:11,620
The demand was so high that orders came in in excess of 100,000 acre feet immediately,

401
00:31:12,080 --> 00:31:16,020
and they proportioned it out to the number agencies.

402
00:31:16,340 --> 00:31:23,560
So our proportion was 3,274 acre feet, and that was based primarily on historical purchases.

403
00:31:23,560 --> 00:31:33,480
So they sold all 100,000 acre feet, so if you want to figure out the revenue, is it looking

404
00:31:33,480 --> 00:31:38,400
at the full services, is it just $332 or is there a system access, power and treatment

405
00:31:38,400 --> 00:31:40,260
surcharge? Is it all those get added together?

406
00:31:40,840 --> 00:31:48,640
Yes, so it would be $1,256 and acre foot times $125 million.

407
00:31:48,640 --> 00:31:58,500
dollars. It's quite a large influx of cash. Okay, I actually don't really know what 125 million

408
00:31:58,500 --> 00:32:04,100
means to them considering the numbers. I see 92 million dollars paid for this and that, and

409
00:32:04,100 --> 00:32:09,000
I don't really, did it help directly? Yeah, it helps a lot because we have a budget deficit, so

410
00:32:09,600 --> 00:32:13,920
we have the water. I mean, it's a great short-term decision for Met because they get the money,

411
00:32:13,920 --> 00:32:18,440
but long-term, it could be, you know, five years will be paying for this, you know, and I know,

412
00:32:18,540 --> 00:32:22,620
usually about less time work. So, and yeah, I mean, if you are really interested in this and

413
00:32:22,620 --> 00:32:27,520
in the budget and finance committee meeting last week, this was all laid out in graphs. I don't

414
00:32:27,520 --> 00:32:32,360
remember the numbers off the top of my head, but it's all budgets and finance and how much came in

415
00:32:32,360 --> 00:32:37,380
from this particular program. It's all laid out. Okay. And then another question is considering where

416
00:32:38,380 --> 00:32:43,620
Director Levine said it came from. That money was not supposed to be doing this. That money I remember,

417
00:32:43,620 --> 00:32:51,680
we were supposed to be segregated for very specific items in our budget or process,

418
00:32:52,020 --> 00:32:54,480
so will it be replaced in some days?

419
00:32:54,480 --> 00:32:56,280
So that's having a reserve.

420
00:32:56,760 --> 00:33:02,420
That reserve fund is intended for rate stabilization, and so we felt like there's an excess here,

421
00:33:02,520 --> 00:33:11,280
because this serves to achieve that goal by setting the rates and buying the water now at

422
00:33:11,280 --> 00:33:16,560
today's prices and avoiding the increase in costs later and it will be replenished.

423
00:33:16,780 --> 00:33:20,800
So we've done this in the past when we draw from that reserve fund that we replenish those funds.

424
00:33:21,520 --> 00:33:25,780
And so Dawn outlined a plan. Did you want to describe that how to replenish it?

425
00:33:26,200 --> 00:33:33,560
Sure. So over the course of the next five years as we receive water that we pre-purchased,

426
00:33:33,720 --> 00:33:37,460
since we won't be paying for the water that time, that's the time that we'll replenish the

427
00:33:37,460 --> 00:33:38,920
that rate stabilization fund.

428
00:33:39,540 --> 00:33:41,160
So I'll be replying slowly.

429
00:33:44,670 --> 00:33:45,330
Thank you.

430
00:33:45,570 --> 00:33:45,770
Fantastic.

431
00:33:46,050 --> 00:33:46,390
Thank you.

432
00:33:46,870 --> 00:33:48,810
And moving on to item number seven,

433
00:33:49,590 --> 00:33:53,090
General Manager, 7a, Climate Action and Adaption Plan.

434
00:33:53,930 --> 00:33:55,790
Does the General Manager have a report?

435
00:33:56,070 --> 00:33:57,950
So Joe will give the report on this item.

436
00:33:57,950 --> 00:34:01,370
It's been something that Joe has led for us.

437
00:34:01,850 --> 00:34:03,150
And what he'll be talking about

438
00:34:03,150 --> 00:34:06,810
is the first year annual update on the plan's implementation.

439
00:34:07,910 --> 00:34:10,430
Good morning, President Cordesque, board members.

440
00:34:10,750 --> 00:34:12,710
So let's just get the acronym out of the way.

441
00:34:13,330 --> 00:34:21,130
Climate action and adaptation plan is also CAP, C-A-A-P so that I don't have to keep putting

442
00:34:21,130 --> 00:34:22,630
dollar bills in the acronym jar.

443
00:34:24,250 --> 00:34:26,650
So let me just a little background first.

444
00:34:26,970 --> 00:34:30,890
So the state of California, as you probably were, enacted legislation over the past several

445
00:34:30,890 --> 00:34:31,410
years.

446
00:34:32,830 --> 00:34:36,050
That's really aimed to reduce greenhouse gas emissions and

447
00:34:36,050 --> 00:34:38,130
mitigate the effects of climate change.

448
00:34:39,450 --> 00:34:44,410
Future legislation and regulations may also set mandates on water and waste water

449
00:34:44,410 --> 00:34:48,530
utilities such as ourselves because the conveyance, pumping, and all that stuff.

450
00:34:48,590 --> 00:34:52,470
It accounts for about 20% of the overall electricity usage in the state of California.

451
00:34:52,470 --> 00:34:53,670
So it's pretty substantial.

452
00:34:55,330 --> 00:34:58,250
Additionally, I just want to emphasize that most grant and

453
00:34:58,250 --> 00:35:08,130
even though interest loan programs, so we think of SRF, the State Revolving Fund that we've pursued for pure water has a requirement.

454
00:35:08,990 --> 00:35:26,770
Well, to be competitive for these certain loans and grants, we have to have an adopted cap which if I could remind you that was adopted by both the JPA and the LVMWD Board in October of 2023.

455
00:35:26,770 --> 00:35:33,510
So we did, we did do that and we were successful in pursuing the CSORF loan.

456
00:35:36,170 --> 00:35:39,830
The, so the development and active, active implementations.

457
00:35:39,930 --> 00:35:40,990
So that's what we're talking about here.

458
00:35:41,070 --> 00:35:47,130
We can't just produce a cap study, a report, and then stick it on a shelf somewhere and

459
00:35:47,130 --> 00:35:47,730
not do anything.

460
00:35:47,730 --> 00:35:51,090
We have to actively implement for it to really be valid.

461
00:35:56,980 --> 00:35:58,820
We've been primarily doing this.

462
00:35:59,160 --> 00:36:05,080
The really the impetus was for the Pure Water Project, again, SRF funding, but I would

463
00:36:05,080 --> 00:36:11,980
also like to mention that the cap was necessary to renew the NPDES, that's the national

464
00:36:11,980 --> 00:36:15,960
pollutant discharge elimination system permit, our discharge permit for TAPIA.

465
00:36:16,260 --> 00:36:21,520
We had to have a cap for that as well, for the discharges to Malibu Creek, which will continue

466
00:36:21,520 --> 00:36:26,800
you do until November, well, until sure water is built, but up to November of 2030.

467
00:36:28,260 --> 00:36:33,740
On October 3rd of 2023, the board was presented with a final cap at which time resolution

468
00:36:33,740 --> 00:36:38,140
number 267 adopting the 2023 cap was approved.

469
00:36:38,640 --> 00:36:44,160
The JPA took a similar action, the night previous to that action.

470
00:36:45,000 --> 00:36:48,900
The plan requires that progress reports be provided to the board of directors for both

471
00:36:48,900 --> 00:36:56,120
the LVMWD and the JPA on an annual basis, so that's why we're here today, giving you this report.

472
00:36:56,820 --> 00:37:02,160
A copy of the cap and the matrix that provides the status of the various implementation measures

473
00:37:03,020 --> 00:37:12,680
and actions are attached in your report. The intent at this point is with the JPA, we intend to

474
00:37:12,680 --> 00:37:17,220
provide basically the same report as an information-only item at the March meeting.

475
00:37:18,040 --> 00:37:29,940
The matrix includes a list of 22 different measures or categories in 107 distinct actions that fall within the measures which were identified in the cap.

476
00:37:30,940 --> 00:37:37,380
Included is a brief description of each action along with the status, schedule start, schedule completion, assigned lead person.

477
00:37:37,380 --> 00:37:51,080
I think that Jim Quarkis wins the prize on having the most, taken the lead on most actions that fall, interestingly fall within the facility's maintenance category.

478
00:37:52,200 --> 00:38:01,300
So Jim, I told Jim he has job security for some time, and there's some notes for each of those actions.

479
00:38:01,540 --> 00:38:06,520
This is all as an attachment in the report that's provided to you.

480
00:38:06,520 --> 00:38:16,460
To date, 49 actions of the 107 have been started or substantially completed, three were completed, and 53 have not been started yet.

481
00:38:17,360 --> 00:38:24,860
Two items have been deemed impractical or infeasible to pursue, and therefore not being further considered for implementation.

482
00:38:25,960 --> 00:38:30,960
I want to point out in the resolution that was adopted a little over a year ago.

483
00:38:30,960 --> 00:38:38,040
So, there's a lot of things in this cap, a lot of actions, but anything of any substantial

484
00:38:38,040 --> 00:38:43,560
dollar amount, a lot of the studies or assessments we do could be kind of back of the napkin,

485
00:38:43,900 --> 00:38:46,980
not requiring hiring a consultant, that sort of thing.

486
00:38:47,600 --> 00:38:52,860
Jim's already done some of these efforts, but anything substantial, it needs to come to

487
00:38:52,860 --> 00:38:55,480
the board for approval before we pursue it.

488
00:38:55,920 --> 00:38:59,120
Bottom line is something's not feasible, it's not going to be pursued.

489
00:38:59,120 --> 00:39:05,720
because we do want to, it is important for us to have competitive rates for our customers.

490
00:39:07,780 --> 00:39:13,740
So just real quick, completed items, I just want to highlight include the following action.

491
00:39:14,660 --> 00:39:21,420
I-9.4 establish procedures to regularly conduct maintenance of the SCADA.

492
00:39:21,560 --> 00:39:27,820
That's a supervisory control and data acquisition systems to identify potential improvements in operational efficiencies.

493
00:39:27,820 --> 00:39:38,200
I know Ivo has been taken to lead on that, action in R-4.6, develop a schedule and monitor

494
00:39:38,200 --> 00:39:44,480
vegetative management efforts in defensible space relative to critical assets at risk and

495
00:39:44,480 --> 00:39:50,200
then create our resource conservation manager, Craig Jones has been taken to lead on that.

496
00:39:50,200 --> 00:40:03,920
Action, O-6.2, develop internal protocols for employees working under extreme heat conditions and air quality emergencies and alignment with Cal, OSHA, heat illness and prevention guidance.

497
00:40:05,480 --> 00:40:13,080
In the report, there's a list of several items that have started and worthy of highlighting.

498
00:40:13,260 --> 00:40:19,660
I won't go through each of these in the interest of time, but I just want to mention what I've highlighted in the report.

499
00:40:19,660 --> 00:40:22,700
or are primarily items related to water conservation,

500
00:40:23,580 --> 00:40:26,500
which we've been doing a very good job with,

501
00:40:26,800 --> 00:40:30,060
both on the portable water side and the recycle water side.

502
00:40:32,200 --> 00:40:35,200
The other items relate to pure water,

503
00:40:35,320 --> 00:40:37,740
a pure water project and water supply in general.

504
00:40:38,060 --> 00:40:38,680
So for instance,

505
00:40:41,180 --> 00:40:44,960
Director Lewitt mentioned efforts with met,

506
00:40:45,180 --> 00:40:46,700
with support of the past, the feeder.

507
00:40:47,520 --> 00:40:48,500
That's all in the cap.

508
00:40:48,500 --> 00:40:53,200
Yeah, so working in collaboration with Metropolitan and other member agencies,

509
00:40:53,960 --> 00:40:59,440
Caiagas, et cetera, we have in the works our water supply and diversification study,

510
00:40:59,760 --> 00:41:02,740
for which we'll have a stakeholder workshop beginning a March.

511
00:41:03,880 --> 00:41:08,540
So these are all things that I've highlighted and the other thing that I want to mention is

512
00:41:08,540 --> 00:41:13,220
there's a handful of items in their associated with hardening for wildfires.

513
00:41:14,000 --> 00:41:16,800
So that's something that's been in the works and continues to be in the works.

514
00:41:16,800 --> 00:41:25,320
In fact, we plan on this year getting a consultant on board to help us really assess each of our facilities

515
00:41:27,200 --> 00:41:33,580
and help us put a plan together to really lock down the hardening efforts that need to happen.

516
00:41:34,980 --> 00:41:39,180
Actions deemed impractical or infeasible and to be eliminated from further consideration.

517
00:41:39,700 --> 00:41:43,580
I'll just mention the one. There's two in the report. I'll mention this first one.

518
00:41:44,980 --> 00:41:47,660
That's action in our dash 4.5.

519
00:41:48,100 --> 00:41:53,520
When retrofits and upgrades are not adequate or feasible, develop plans to relocate critical

520
00:41:53,520 --> 00:41:59,680
assets outside of Cal Fire High and very high fire hazard, severity zones to the extent

521
00:41:59,680 --> 00:42:00,200
practical.

522
00:42:01,220 --> 00:42:04,780
So this has to do with wildfire hardening again.

523
00:42:05,920 --> 00:42:12,820
In collaboration with staff, conversations basically we decided that all of our facilities

524
00:42:12,820 --> 00:42:24,080
These are within hellfire high and very high fire zones and that just there's really no option to relocate them anywhere else.

525
00:42:24,740 --> 00:42:27,740
So therefore that was deemed not feasible and practical.

526
00:42:28,300 --> 00:42:32,080
I'll mention that the consultant that helped put this cap, really put this cap together.

527
00:42:32,220 --> 00:42:36,840
They're working off of a template, kind of an industry standard model of actions.

528
00:42:37,340 --> 00:42:42,220
And this is one that we probably would have said, yeah, we're just not going to include that in the first place.

529
00:42:42,220 --> 00:42:45,460
but they got in there and we looked at it and we said that's not going to be practical.

530
00:42:46,100 --> 00:42:51,060
So our efforts are going to be to hardener facilities. And so that's a lot of different things.

531
00:42:51,180 --> 00:42:56,080
It's things like making sure we don't have any vegetation in that first five feet

532
00:42:56,800 --> 00:43:00,240
on the outside perimeter of any kind of building or facility.

533
00:43:01,000 --> 00:43:07,900
It means a lot of things. It means amber resistant ventilation screens and for attic spaces and

534
00:43:07,900 --> 00:43:11,120
and lots of other things, so I wanted to just mention that.

535
00:43:11,620 --> 00:43:16,940
Most actions that have not been started are slated to commence in the coming year or within the next few years.

536
00:43:17,040 --> 00:43:20,520
The timing is based on prioritizing individual actions,

537
00:43:21,380 --> 00:43:25,600
completing prerequisite actions, or the availability of staff and

538
00:43:25,600 --> 00:43:26,760
our financial resources.

539
00:43:27,700 --> 00:43:32,040
The matrix reflects a collaborative effort with the CAP committee members,

540
00:43:32,680 --> 00:43:36,200
which consists of LVMWD staff from various departments and

541
00:43:36,200 --> 00:43:38,960
and divisions that play a role in the implementation of the cap.

542
00:43:39,400 --> 00:43:43,920
When you look at the who's taking the lead on various action items in the matrix,

543
00:43:44,360 --> 00:43:46,860
they'll give you an idea who's sits on this cap committee.

544
00:43:50,300 --> 00:43:55,380
So as far as financial impact, there is no financial impact associated with the recommended action,

545
00:43:55,600 --> 00:44:01,900
and that action tonight, or this morning, is to receive and file the climate action and adaptation plan.

546
00:44:02,440 --> 00:44:05,120
And you'll update, and that concludes my report.

547
00:44:05,120 --> 00:44:08,940
Thank you, Joe. That was a comprehensive update.

548
00:44:11,190 --> 00:44:16,110
There is no vote on this item, and so I guess we don't really need to have.

549
00:44:17,310 --> 00:44:18,010
I guess we can.

550
00:44:19,390 --> 00:44:33,570
The reason I bring this to that. I attended. It's a grey zone. I attended a outside meeting with Region 8 board to discuss the impacts of the paradise fire and so many of the

551
00:44:33,570 --> 00:44:40,650
the items that we discussed were immediately appropriate and it needed to be addressed

552
00:44:40,650 --> 00:44:41,130
by us.

553
00:44:41,310 --> 00:44:42,990
And I see some of them addressed in the cap.

554
00:44:45,750 --> 00:44:51,050
And so in the cap, you're talking about protecting the pump stations.

555
00:44:51,190 --> 00:44:53,770
We didn't obviously see the pump stations when I went into order to do it.

556
00:44:53,770 --> 00:44:57,450
And I was shocked at how surrounded by vegetation they were.

557
00:44:58,090 --> 00:44:59,870
And the fact that you had to bring

558
00:45:00,000 --> 00:45:29,980
And fuel up there. What happens if it is, what happens if the worst thing happens and there's a fire and you can't get the pump station. Are you need power? Is that addressed in the cap or is that how? It's actually, I was going to talk about in comments, but I think that now is the appropriate time. So that's a great question. So fire hardening in general is addressed by the cap. So it is something that we are, especially in the wake of the policy as fire. It's definitely something we're taking.

559
00:45:29,980 --> 00:45:37,700
very serious. I've gotten direction from a general manager to get a professional on board.

560
00:45:37,800 --> 00:45:41,960
That'll help us look at every single one of our facilities and make sure that it's as

561
00:45:41,960 --> 00:45:49,000
fire hard and as possible. And that could very well mean cutting down trees, removing vegetation

562
00:45:50,800 --> 00:45:58,760
How do you maintain fuel if you have, you need generators, a huge impact.

563
00:45:59,040 --> 00:45:59,160
Yes.

564
00:45:59,560 --> 00:45:59,760
Huge.

565
00:46:01,440 --> 00:46:01,780
Okay.

566
00:46:02,240 --> 00:46:03,620
I will go on the board.

567
00:46:03,760 --> 00:46:07,100
This is directly appropriate for this, but it's so much else I'll bring it on the board cover.

568
00:46:07,360 --> 00:46:07,640
Thank you.

569
00:46:07,660 --> 00:46:09,260
Are there any other questions or comments?

570
00:46:11,080 --> 00:46:14,040
I have one, but it's very small in terms of this.

571
00:46:14,040 --> 00:46:29,140
But who knows how all this is going to affect things on page 12 is a type of might want to visit it's in the upper right corner where it says increase greenhouse gases mean less eat escapes the space. I think you meant to have a page there.

572
00:46:32,700 --> 00:46:42,760
I appreciate that and I also I also appreciate the staff's focus on fire hardening our facilities.

573
00:46:43,140 --> 00:46:48,540
And I wait. There was more. Oh, okay. It was just about even at the mountain fire.

574
00:46:49,040 --> 00:46:56,020
There are pumping stations burned up immediately. So I think it's it's really incumbent on us to make sure that not only.

575
00:46:56,020 --> 00:47:01,060
me, and I'm trying to work with Edison. I've been making some attempts at seeing how

576
00:47:01,060 --> 00:47:07,600
we can become critical infrastructure and not be shut off or have special wiring placed

577
00:47:07,600 --> 00:47:12,800
in to us so that, and I don't know if we replace it here, at least we wouldn't lose power

578
00:47:12,800 --> 00:47:17,180
in our main area, but I don't know about going to the pumping station, but if we couldn't

579
00:47:17,180 --> 00:47:21,760
get to them with the diesel, then we might not be able to actually get them to function.

580
00:47:21,760 --> 00:47:29,420
So it seemed crazy what happened in the Palisades fire and how hard everybody had to work when he for hours a day for for weeks.

581
00:47:30,260 --> 00:47:37,540
It would seem that we could do as much as possible to harden those facilities so that we can get to them and not have them go offline.

582
00:47:38,840 --> 00:47:40,040
Fantastic, any other comments?

583
00:47:41,220 --> 00:47:41,680
Seeing none.

584
00:47:42,360 --> 00:47:44,780
Moving on, item eight, engineering and facilities.

585
00:47:44,780 --> 00:47:51,920
Now, the Palisade's fire response and recovery grant are in leaf to specify customers to support

586
00:47:51,920 --> 00:47:54,820
rebuilding of destroyed homes.

587
00:47:55,440 --> 00:47:58,140
I believe this is Eric Schlaggators.

588
00:47:59,280 --> 00:48:01,200
Yeah, we're going to tag team this one.

589
00:48:02,260 --> 00:48:08,500
I did want to just do a brief intro to the item before I hand it over to Chris to present

590
00:48:08,500 --> 00:48:09,400
the staff report.

591
00:48:11,340 --> 00:48:21,040
I think three of the five board members were not here following the Woolsey fire, so I thought it was important that we just touched on the history a little bit.

592
00:48:22,080 --> 00:48:34,700
So this concept of relief really originated following the Woolsey fire and the item being brought to the board this morning is consistent with that same approach of the resolution that was previously approved.

593
00:48:35,780 --> 00:48:42,160
The district has always taken proactive steps in lessening the impacts to our customers.

594
00:48:42,420 --> 00:48:47,500
And a good example of that, which we did during following Woolsey Fire as well as following

595
00:48:47,500 --> 00:48:52,360
this incident, was Chris in the technical services staff.

596
00:48:52,360 --> 00:48:58,380
We've already filled out Fireflow forms for our customers that have been submitted to the

597
00:48:58,380 --> 00:49:00,400
Fire Department and the permitting agencies.

598
00:49:00,400 --> 00:49:05,780
So essentially those are ready to go for any of our customers that are going to be applying for building permits.

599
00:49:06,140 --> 00:49:14,480
So anyway, we can lessen those permitting schedules because as we all know, it's quite a lengthy process to get those approved.

600
00:49:15,460 --> 00:49:19,720
That's a necessary step that we've taken to help our customers.

601
00:49:21,200 --> 00:49:26,840
And then in regards to financial relief, generally older homes typically are not sprinklers.

602
00:49:26,840 --> 00:49:32,060
they don't have fire sprinklers within those homes, and due to code changes,

603
00:49:33,060 --> 00:49:37,640
anytime a new structure is rebuilt, it will require fire sprinklers.

604
00:49:38,680 --> 00:49:43,860
And in order to meet those fire sprinkler flow demands, it typically would require a larger meter

605
00:49:43,860 --> 00:49:52,080
to be installed for customers at their property. And as part of the capacity fee and the process

606
00:49:52,080 --> 00:49:58,000
of installation of a larger meter, it can come at a significant expense to customers and a lot of

607
00:49:58,000 --> 00:50:06,780
times it's not planned for. I think on average it can be approximately $10,000 more. And so

608
00:50:07,580 --> 00:50:14,380
we feel that this relief, as mentioned that was previously approved and it is consistent with what

609
00:50:14,380 --> 00:50:22,380
that we've offered from other incentives is important and so the district is recommending

610
00:50:22,380 --> 00:50:29,800
waving the capacity fees for those properties and it's once again tied solely to fire protection.

611
00:50:30,440 --> 00:50:36,920
So there's really not an expense that the district is taking by waving this fee because the

612
00:50:36,920 --> 00:50:41,960
actual capacity used by these homes, as long as they meet the requirements of this resolution,

613
00:50:41,960 --> 00:50:49,660
there will not be an exceedance of the capacity for these homes because these are like-sized homes.

614
00:50:50,180 --> 00:50:55,320
They're going to see the same demands that they once saw. The only increasing capacity is solely

615
00:50:55,320 --> 00:51:01,520
related to the fire sprinkling of those homes. So one of the other things I wanted to remind the

616
00:51:01,520 --> 00:51:08,420
board that is really important is this relief is really solely for those customers that are truly

617
00:51:08,420 --> 00:51:14,460
having a hardship to rebuild. It is not for all customers rebuilding homes. We recognize the

618
00:51:14,980 --> 00:51:19,700
impact of the community, but for many customers, this is an opportunity where they could

619
00:51:20,340 --> 00:51:25,640
build larger. They have the means to build larger and are likely fully insured for

620
00:51:26,260 --> 00:51:29,860
their recovery efforts. So I just wanted to highlight that.

621
00:51:31,100 --> 00:51:35,160
So with that, I'm going to go ahead and hand it over to Christy and dive more into the details of

622
00:51:35,160 --> 00:51:42,160
item. Thank you Eric. More and more. Pretty much took my whole presentation so I'll try to make it a little bit faster. I have to

623
00:51:42,160 --> 00:51:50,100
give me some of the boring parts. So as Eric was pointing out, this is, you know, people who are affected most, most of the homes have three

624
00:51:50,100 --> 00:51:57,160
quarter inch meters and to meet new fire regulations are going to need to upgrade to one inch meters. So at the current subdivision rates without any

625
00:51:57,160 --> 00:52:05,780
relief upgrade would cost each homeowner $11,303 with no pressure regulator and $11,549

626
00:52:05,780 --> 00:52:12,300
with a pressure regulator. Under the current capacity fee schedule, if the relief is granted,

627
00:52:12,980 --> 00:52:21,760
it would be $756 for a 1-inch meter upgrade with no regulator and $1,002 with a regulator.

628
00:52:21,760 --> 00:52:30,480
So it's a through the proposed resolution customers would say $10,547 in the case for a 1-inch meter upgrade.

629
00:52:30,760 --> 00:52:32,620
So a significant savings to those customers.

630
00:52:34,660 --> 00:52:37,780
Eric already touched on some of the things staff is already doing with the fire flows.

631
00:52:38,220 --> 00:52:40,180
So that we've already provided those to the fighter prime minister.

632
00:52:40,180 --> 00:52:42,740
It's just an extra step that they're not going to have to do to come into us.

633
00:52:43,220 --> 00:52:47,200
So those have already been and those are for a two year, they're good for two years.

634
00:52:47,400 --> 00:52:51,100
So after those two years, we have a list going and then we'll upgrade those if they haven't come in.

635
00:52:55,220 --> 00:53:00,140
To ensure the proposed relief goes to homeowners who truly need the assistance, staff proposes

636
00:53:00,140 --> 00:53:04,960
the series of conditions for the relief to avoid an overly broad application.

637
00:53:05,220 --> 00:53:10,100
At the same time, staff seeks to recommend conditions that are not too strict for eligible

638
00:53:10,100 --> 00:53:13,020
homeowners to qualify in support of the rebuilding process.

639
00:53:13,860 --> 00:53:18,100
In the resolution itself, sorry, this is going to be the technical stuff a little bit more

640
00:53:18,100 --> 00:53:18,420
boring.

641
00:53:18,420 --> 00:53:21,200
but number one is to authorize the

642
00:53:21,200 --> 00:53:22,520
general manager to provide customers

643
00:53:22,520 --> 00:53:24,620
with a credit for existing three-quarter-inch meter.

644
00:53:26,060 --> 00:53:28,980
And then at the then-current rates for a one-inch meter

645
00:53:28,980 --> 00:53:31,560
and offset the cost of the apical construction fee

646
00:53:31,560 --> 00:53:35,260
and water conservation fees and then the stipulations

647
00:53:35,260 --> 00:53:35,840
there as follows.

648
00:53:36,240 --> 00:53:40,380
A, the credit applies to only one or two family dwellings

649
00:53:40,380 --> 00:53:42,960
or townhomes that were destroyed or rendered uninhabitable

650
00:53:42,960 --> 00:53:44,100
by the Palisades fire.

651
00:53:44,780 --> 00:53:48,280
B, the replacement dwelling is no more than 5% larger

652
00:53:48,280 --> 00:53:54,280
or lesser in size as measured by square footage and without the addition of accessory units

653
00:53:54,280 --> 00:54:00,080
or outside buildings, see the customer provides evidence to the satisfaction of the general

654
00:54:00,080 --> 00:54:05,440
manager that his or her insurance will not or is insufficient to cover the costs of

655
00:54:05,440 --> 00:54:06,360
the subject fees.

656
00:54:06,940 --> 00:54:13,620
D, the customer pays the applicable meter administration installation charges pursuant

657
00:54:13,620 --> 00:54:23,140
to section 3-2.205 of the last version of municipal water district code, e, the fees for any subsequent

658
00:54:23,140 --> 00:54:27,220
upgrade to the meter shall be figured with credit provided for the three-quarters meter rather

659
00:54:27,220 --> 00:54:33,240
than the larger one-inch meter. F, the credit shall be available upon request by any eligible

660
00:54:33,240 --> 00:54:40,480
customer through December 31st of 2032. G, the property could not have been sold since the time of

661
00:54:40,480 --> 00:54:49,500
in order to be eligible, H, in the event the meter upgrades are necessary that exceed one

662
00:54:49,500 --> 00:54:54,160
inch in size, customers will need to provide documentation that the need for the increase

663
00:54:54,160 --> 00:55:00,760
is directly tied to increased fire protection to receive the waiver of fees within the resolution.

664
00:55:01,300 --> 00:55:07,580
If the increase in meter size requires upgrade of the service line to the main, the owner

665
00:55:07,580 --> 00:55:10,680
will be required to pay for the construction of the larger service line.

666
00:55:13,670 --> 00:55:14,670
So that's the stipulations.

667
00:55:15,090 --> 00:55:17,890
And then one of the other things I know was discussed in a previous board meeting that

668
00:55:17,890 --> 00:55:22,490
staff's looking into is additionally staff is evaluating the opportunities to require remotely

669
00:55:22,490 --> 00:55:27,370
actuated valves to be installed on the customer service lines that would allow the district staff

670
00:55:27,370 --> 00:55:32,590
to turn off services remotely when homes are lost due to the fires to minimize water loss

671
00:55:33,150 --> 00:55:35,290
and assist in maintaining the system integrity.

672
00:55:35,950 --> 00:55:41,390
The requirement would be considered for rebuilt homes lost in the fire as well as for

673
00:55:41,390 --> 00:55:45,830
new service installations, for new developments as part of the permitting and approval process

674
00:55:45,830 --> 00:55:50,290
pursuant to the district standards, now as well.

675
00:55:51,410 --> 00:55:57,810
So the recommendation is to pass an approved and adopt proposed resolution number 2648, granting

676
00:55:57,810 --> 00:56:03,350
relief to specified customers to support rebuilding of homes destroyed by the Palisades fire, and

677
00:56:03,350 --> 00:56:04,530
that concludes my report.

678
00:56:05,030 --> 00:56:05,370
Awesome.

679
00:56:05,370 --> 00:56:06,790
Thank you, Chris. Thank you, Eric.

680
00:56:07,810 --> 00:56:09,750
Do we have a motion and a second?

681
00:56:10,530 --> 00:56:14,410
I'll make the motion to approve the second item as published.

682
00:56:14,930 --> 00:56:16,910
That's classic. Do we have any questions or comments?

683
00:56:17,790 --> 00:56:17,930
Yeah.

684
00:56:18,630 --> 00:56:24,350
So why don't we require retrofitting the safety device

685
00:56:24,350 --> 00:56:28,030
onto existing houses because there's more than 100 houses up there.

686
00:56:28,770 --> 00:56:30,830
I don't know, 20,000 houses.

687
00:56:30,830 --> 00:56:38,490
I mean, it's, it's a, it's an issue as we discovered that the policy is fire, that

688
00:56:39,230 --> 00:56:41,150
they had no control over the water running out.

689
00:56:41,810 --> 00:56:46,930
Correct. So we've been looking into it, and currently there's not many technologies available

690
00:56:46,930 --> 00:56:52,370
currently that provide what we need. There is some work with I know Mueller has a couple of

691
00:56:52,370 --> 00:57:00,270
valves that they're working on. I think census and a couple of other meters are looking into it,

692
00:57:00,270 --> 00:57:10,170
And the way it was born is that I've understood some of the reps I've talked to thus far is it was born out of being able to turn people's like more East Coast people were your water meter is inside your home.

693
00:57:10,470 --> 00:57:14,110
So the water, you know, we don't have to go in your house to turn your water off.

694
00:57:14,870 --> 00:57:21,390
So they're trying to figure out ways so that they can remotely shut people's water off. That was kind of what it was born. That's what the main reason.

695
00:57:21,390 --> 00:57:28,130
So it's getting there it's quite it's not quite there and one of the other tricky parts is is you know

696
00:57:28,130 --> 00:57:33,670
It's a remote actuator valve inner meter box. Is it gonna fit in the meter box? Is it you know the size requirements?

697
00:57:33,850 --> 00:57:37,310
Do we need an additional meter box the power requirements?

698
00:57:38,170 --> 00:57:42,010
Is it you know battery powered? We have to put a little solar panel next to it

699
00:57:42,510 --> 00:57:45,850
Do we need to require you know as it physically powered by Edison?

700
00:57:46,150 --> 00:57:50,810
You know we have to run a power line to it and that's it's a headache. Oh yeah. Yeah, there's gonna be a lot to figure out

701
00:57:50,810 --> 00:57:56,490
a lot of I know I know it would be a lot of pieces when I brought it up and actually guys if I can jump in so it's

702
00:57:56,490 --> 00:58:03,030
already interrupt and you're probably stealing a lot of the thunder but there is a requested future agenda item that we

703
00:58:03,030 --> 00:58:09,350
will be returning to the board specific to this item and there are a lot of complexities as as Chris touched on but we'll

704
00:58:09,350 --> 00:58:19,330
make sure we address those and that's not one of the common I got from the region meeting was the how the paradise fire we're

705
00:58:19,330 --> 00:58:27,990
burned the whole town down. One of the things they did was to allow speedy recovery was

706
00:58:27,990 --> 00:58:33,630
they put on check valves, so at least they had some way of controlling a benzene coming

707
00:58:33,630 --> 00:58:39,390
back into the system from the fires they had. One of the additional thoughts might be appropriate

708
00:58:39,390 --> 00:58:44,390
at this point of time. We can look into that as well. Awesome. It was an idea that, wow, that's

709
00:58:44,390 --> 00:58:47,770
a good idea. Thank you, Lynn. I think Randy was next.

710
00:58:47,770 --> 00:58:55,050
I have a couple questions. So first of all, I'm curious how many homeowners were impacted in the Woolsey fire that took advantage of this

711
00:58:55,890 --> 00:59:01,250
Thing that we did we had about 30 applications come in some more denied for various reasons

712
00:59:01,250 --> 00:59:05,410
I wasn't here for part of that, but of the 30 that we received I think it was

713
00:59:06,270 --> 00:59:13,330
Seven I think that we're actually took advantage of it so okay, and then what I don't understand is

714
00:59:13,330 --> 00:59:21,710
So we're saying that there's like $11,000 that would cost, that would cost them if we didn't do this.

715
00:59:22,590 --> 00:59:35,090
Currently right now under the capacity fee rules, if somebody comes in and they want to upgrade from a three quarter inch meter to a one inch meter, and that could be further building a bigger house, the remodeling just to meet the new fire standards, that

716
00:59:35,090 --> 00:59:36,370
That incurs a capacity fee.

717
00:59:36,910 --> 00:59:43,010
So the current difference right now on that is the 11,330, I think it is or something like that.

718
00:59:43,690 --> 00:59:44,690
Where does that fee go?

719
00:59:46,990 --> 00:59:51,170
It goes into, so the district is an enterprise-funded district.

720
00:59:51,370 --> 00:59:52,270
We have three enterprises.

721
00:59:53,050 --> 00:59:54,550
One of them is potable water.

722
00:59:55,170 --> 00:59:58,130
Potable water has two funds within it.

723
00:59:58,130 --> 00:59:59,970
One is for replacement and one is for...

724
01:00:00,000 --> 01:00:27,260
Or what's called new construction. So in short, it goes into the new construction fund that is used to fund projects that increase the capacity of the overall water system. So there's a nexus there between the connection fees, which are placing a new demand on the system. And the use of those fees to increase the capacity of the water system. So an example might be if we were working on a pump station,

725
01:00:27,260 --> 01:00:32,100
and that pump station was serving an area that needed more capacity.

726
01:00:32,560 --> 01:00:37,180
The construction funds might be used for the part of the project to add an additional pump

727
01:00:37,180 --> 01:00:40,120
to that pump station.

728
01:00:40,960 --> 01:00:43,280
So you're talking about just waving fees here, is it?

729
01:00:43,920 --> 01:00:44,600
At the end of the day.

730
01:00:45,540 --> 01:00:46,360
Yeah, essentially.

731
01:00:46,760 --> 01:00:47,040
Essentially.

732
01:00:47,240 --> 01:00:50,800
We're going to charge them here, the admin fee and all fee.

733
01:00:50,960 --> 01:00:53,380
So how does it says the item is budgeted?

734
01:00:53,560 --> 01:00:55,460
How does that work in the budget?

735
01:00:55,460 --> 01:01:12,420
So how's it possible to have this budget when it was unknown before we didn't know so we don't budget in the budget we don't include much in the way of revenue for capacity fees or connection fees.

736
01:01:12,800 --> 01:01:16,600
The reason for that is we don't have a lot of development activity in our district.

737
01:01:16,600 --> 01:01:20,980
district. Every district is different. We're for the most part built out. We're seeing

738
01:01:20,980 --> 01:01:25,680
infill development. So we don't count on a lot of revenue coming from connection fees.

739
01:01:25,880 --> 01:01:32,980
And so because of that, waving this would not affect the budget in a substantive way.

740
01:01:33,660 --> 01:01:40,240
The other thing here that's important, and I think Eric or Chris pointed out is that we don't connect,

741
01:01:40,440 --> 01:01:46,180
we don't collect connection fees for fire protection. The connection fees for domestic

742
01:01:46,180 --> 01:02:11,040
So your day to day usage fire protection is like an extraordinary need and it's not something that we charge a fee for and so we see here what we're really doing is actually implementing that policy, which is the reason for upsizing these meters is for fire protection and fire protection only and for that reason we don't feel like really the connection fee is appropriate in the first place.

743
01:02:12,160 --> 01:02:20,480
Okay. And then just comment because we just don't know is I would think that most insurance

744
01:02:20,480 --> 01:02:28,760
policies have this building code upgrade in the policy. So like my comment is I'm not

745
01:02:28,760 --> 01:02:35,260
sure why we take this on as an issue because in fact so few people and then they have to

746
01:02:35,260 --> 01:02:42,180
have our staff review all this, determine hardship and all this, I don't know, not sure

747
01:02:42,180 --> 01:02:42,820
I told you get it.

748
01:02:43,040 --> 01:02:48,960
Yeah, I think there's a lot of home owners who are underinsured and there is generally

749
01:02:48,960 --> 01:02:56,560
in the policy, there's actually a the coverage limit, there's a maximum amount of percentage

750
01:02:56,560 --> 01:03:02,400
that is allowed for what's called code upgrades and it is frequently a problem because there

751
01:03:02,400 --> 01:03:06,360
There are many, many different building code changes that have been implemented.

752
01:03:06,880 --> 01:03:09,060
One example is just seismic.

753
01:03:09,720 --> 01:03:16,520
And so, these homeowners are struggling at times to stay within that amount.

754
01:03:17,180 --> 01:03:19,740
And this relief can help them on that.

755
01:03:20,520 --> 01:03:26,440
And so, if they do sort of find themselves bumping up against that limit, it helps them.

756
01:03:26,440 --> 01:03:32,300
And I'll just add one other thing, what I saw after Wolsey, all the public agencies

757
01:03:32,300 --> 01:03:36,880
commit to doing their best to facilitate the rebuilding process.

758
01:03:37,260 --> 01:03:45,500
But I found it unusual to actually find a clear action where the agency took to really,

759
01:03:45,600 --> 01:03:53,220
truly help the rebuilding process aside from trying to streamline, in quotations, the administrative

760
01:03:53,220 --> 01:03:53,780
process.

761
01:03:53,780 --> 01:04:02,040
So I feel like this is something tangible that we can do a point to, that we actually took an affirmative action to provide this relief.

762
01:04:02,260 --> 01:04:12,960
And I realized it is somewhat of a limited group of people, but in talking with Eric and Chris, I know that it did make a difference after Wolsey for these customers.

763
01:04:13,780 --> 01:04:20,960
If I could also just point out, after the Wolsey fire, I'm actually not sure how many homes burned in that fire.

764
01:04:20,960 --> 01:04:24,360
But at this date, I mean, it's been seven years.

765
01:04:24,420 --> 01:04:26,620
There's only been 40% of the homes

766
01:04:26,620 --> 01:04:30,620
where have not been rebuilt and, you know,

767
01:04:30,720 --> 01:04:34,000
so I feel like rebuilding after these fires

768
01:04:34,000 --> 01:04:38,000
is a struggle for a significant portion

769
01:04:38,000 --> 01:04:39,660
of the population if we can help.

770
01:04:40,120 --> 01:04:42,380
Then I think it's a great idea that we do that.

771
01:04:43,160 --> 01:04:44,320
All right, I think Jay, what's next?

772
01:04:44,520 --> 01:04:45,640
Can I just have a comment?

773
01:04:45,760 --> 01:04:47,700
You know, during, when I was at the EOC,

774
01:04:47,860 --> 01:04:49,660
we took a trip, I think it was day two

775
01:04:49,660 --> 01:04:56,660
of the fire. And we saw the water coming out out of our pipes. Someone said it could be up to

776
01:04:56,660 --> 01:05:01,440
50 gallons a minute. And it really, then you hear everyone talking about that there's a water

777
01:05:02,340 --> 01:05:06,060
supply issue. And I had to say no, there's not a water supply issue. It's a

778
01:05:06,860 --> 01:05:11,280
water pressure issue. And one of the reasons is when the house burns down, everything burns down,

779
01:05:11,360 --> 01:05:15,620
the water keeps going in. So I have that video on my phone. It really bothers me seeing all that

780
01:05:15,620 --> 01:05:18,980
water going out because that water could be going in the fire hydrants. It could be going on the

781
01:05:18,980 --> 01:05:25,660
fire. So I actually, um, and anything you put outside to turn the, if you turn the water off,

782
01:05:26,340 --> 01:05:30,080
then all the homes don't have, including the fire department doesn't have the water to put

783
01:05:30,080 --> 01:05:34,480
the fires out of the existing homes that are still, they're still trying to save. Also, people

784
01:05:34,480 --> 01:05:38,320
could still be in their homes and they, and they won't have water and they could be using their

785
01:05:38,320 --> 01:05:43,280
homes, they could be living in the home even, and I have water. And we can't go shut it off because

786
01:05:43,280 --> 01:05:48,820
it's not safe to go do so. So I showed this to Shane Chapman. I actually showed in my video. He even

787
01:05:48,820 --> 01:05:53,240
said he even wanted me to send him that I sent him a video. I mean, the guy in charge

788
01:05:53,240 --> 01:05:59,220
of every pipe in the metropolitan system wanted my video. And so I said, this is a real

789
01:05:59,220 --> 01:06:03,920
problem. And he said what the technology that they're working on is underground. I didn't

790
01:06:03,920 --> 01:06:08,460
think about this, but it's brilliant. He put the sensor underground. So when we know the

791
01:06:08,460 --> 01:06:13,620
house is burned down, which I don't know how you know that, but maybe through drone or maybe

792
01:06:13,620 --> 01:06:19,760
somehow we figure that out, we can in our corporate office hit a, it's probably not this easy,

793
01:06:19,860 --> 01:06:23,460
but hit a button and then turns the water off to that house because it's getting from the

794
01:06:23,460 --> 01:06:27,000
sensor underground that didn't burn because it was underground. So I just thought when you guys

795
01:06:27,000 --> 01:06:31,980
come back to the future agenda, which I can't wait to hear, that maybe you somehow look into that issue.

796
01:06:32,680 --> 01:06:36,100
Thank you. Fantastic. I like the idea of the drone turning it off.

797
01:06:37,440 --> 01:06:42,380
If because it might be easier wirelessly if the drone knew that and could send a signal

798
01:06:42,380 --> 01:06:49,280
just that one because I don't see how we're going to bring all those wires back for that knowledge, but maybe I'm wrong on that, but I had a different question.

799
01:06:50,080 --> 01:06:53,420
And let me just add that they're especially right now.

800
01:06:53,580 --> 01:07:02,220
Maybe it's only 102 homes. Thank goodness it only was and we're not got 5000 people that are without their homes in which case we might think about this even differently.

801
01:07:02,740 --> 01:07:09,460
But there is a line here that it will also apply to new development as part of the permitting and approval process.

802
01:07:09,460 --> 01:07:15,800
So, why would we put that in there if someone is just building new, not replacing from the fires?

803
01:07:16,240 --> 01:07:17,960
I mean, maybe a misunderstanding.

804
01:07:18,380 --> 01:07:22,040
I think this is in regards to the remote actuated valve consideration.

805
01:07:22,740 --> 01:07:27,180
And I think that was just if we're going to require them on the rebuilds,

806
01:07:27,540 --> 01:07:31,620
we would want to maybe consider other areas that are maybe of higher,

807
01:07:31,780 --> 01:07:38,120
fire risk areas to more proactively place those on those existing services.

808
01:07:38,120 --> 01:07:44,620
It's okay. And why does it cost so much more? I was trying to read the, what is E-R-U?

809
01:07:44,840 --> 01:07:51,320
I mean, besides emergency rescue or something. What is the R-U? Seriously, it's a sewage capacity,

810
01:07:51,480 --> 01:07:59,460
these per E-R-U's. To an equivalent resident unit. Yeah, so it has to do with the number of

811
01:08:00,760 --> 01:08:05,980
individuals living within the home. Oh, okay. But I couldn't figure out, did anyone else try to

812
01:08:05,980 --> 01:08:12,100
figure out how the $10,000 or $11,000 is computed based on, so you don't have to do it.

813
01:08:12,260 --> 01:08:18,320
I just want to know why it's so much more money for each of these pumps or each of these

814
01:08:18,320 --> 01:08:18,640
valves.

815
01:08:18,980 --> 01:08:23,900
I'll just mention that the capacity fees are based on capacity fee study that the border

816
01:08:23,900 --> 01:08:24,860
proves some time ago.

817
01:08:25,360 --> 01:08:29,640
So there's actually a report that shows how they're calculated that I could share with you.

818
01:08:29,640 --> 01:08:36,940
And I will add to you, I think they touched on it, but it's really the system buy-in element.

819
01:08:37,420 --> 01:08:44,600
So the district and over time, we've made the investments for pumping capacity, pipeline

820
01:08:44,600 --> 01:08:49,820
conveyance capacity, water storage, it's the capital investments that have been made.

821
01:08:50,060 --> 01:08:58,320
So this component is the buy-in for these services, buying into that capacity that's been already

822
01:08:58,320 --> 01:09:00,180
are they completed or planning for the future?

823
01:09:00,520 --> 01:09:02,580
As they say in family feud, good answer.

824
01:09:03,040 --> 01:09:04,580
That one, good answer, good answer.

825
01:09:04,820 --> 01:09:06,760
That one makes sense that I couldn't figure out

826
01:09:06,760 --> 01:09:07,840
out of what was here.

827
01:09:09,360 --> 01:09:11,740
And I suppose that that goes forward

828
01:09:11,740 --> 01:09:14,380
to what we've been hearing since the policy fire

829
01:09:14,700 --> 01:09:18,800
that everybody wants to have bigger capacity

830
01:09:18,800 --> 01:09:22,080
and the ability to put piping in the streaks

831
01:09:22,080 --> 01:09:25,940
and even in your own letter, you just can't do that

832
01:09:25,940 --> 01:09:32,780
without expanding these pipes to such as large extent and these kind of fees would would indicate that. Thank you.

833
01:09:32,940 --> 01:09:34,380
Awesome, that was a great discussion.

834
01:09:35,080 --> 01:09:36,640
I think we should bring this to a vote.

835
01:09:37,460 --> 01:09:38,160
Let's see.

836
01:09:38,640 --> 01:09:41,380
Could I guess we're looking for a roll call vote Susan?

837
01:09:42,600 --> 01:09:43,160
Do we?

838
01:09:44,280 --> 01:09:46,620
We don't need a roll call vote if we're oppressed.

839
01:09:46,720 --> 01:09:49,420
Let's just go ahead and all those in favor say aye.

840
01:09:49,800 --> 01:09:51,600
Aye. All those against say nay.

841
01:09:52,580 --> 01:09:54,180
Are there any abstentions?

842
01:09:54,180 --> 01:10:02,980
Great. Moving on. Moving on to item number 9, 9A, Finance and Administration, 2025,

843
01:10:02,980 --> 01:10:08,600
rate and study. Financial analysis and revenue requirements. Is this Brian Richey?

844
01:10:09,020 --> 01:10:14,320
All right. Good morning, President Kordesky and directors. I'm going to share my screen.

845
01:10:16,160 --> 01:10:16,840
All

846
01:10:34,220 --> 01:10:40,740
right, so today we are going to go through a financial analysis and revenue requirements.

847
01:10:40,740 --> 01:10:46,640
firements, PowerPoint that's going to basically be the first step of the rate study process.

848
01:10:47,480 --> 01:10:52,240
So we're going to be setting rates for five years, for 2026 through 2030.

849
01:10:53,000 --> 01:11:01,240
And I'm here today with our rate study consultant, John J. Gower, who we've been working with

850
01:11:01,240 --> 01:11:06,800
him and his team to basically go through all of the costs for the district and to determine

851
01:11:06,800 --> 01:11:10,360
and what is the actual revenues that will need

852
01:11:10,360 --> 01:11:13,460
over the next five years of the study.

853
01:11:16,250 --> 01:11:19,190
So what are the elements of the rate study, briefly?

854
01:11:19,890 --> 01:11:22,090
So in November, we came in,

855
01:11:22,250 --> 01:11:24,590
we discussed some policy principles,

856
01:11:24,590 --> 01:11:26,570
which I'll go over in a couple of slides,

857
01:11:26,570 --> 01:11:29,290
which are essentially goals

858
01:11:29,770 --> 01:11:32,310
that we have for this upcoming rate study.

859
01:11:32,970 --> 01:11:35,270
So today, the next step is we're gonna be going over

860
01:11:35,270 --> 01:11:36,990
the financial plan and analysis,

861
01:11:36,990 --> 01:11:47,190
looking at all of the costs that we have and looking at what we need in terms of revenue to make sure that we can meet those cost obligations over the next five years.

862
01:11:48,230 --> 01:12:03,530
So then after that next step there will be a cost of service analysis where essentially we'll be assigning costs to different classes of customers based on the burden of cost that they share in the revenues that it needs to meet that burden.

863
01:12:03,530 --> 01:12:10,250
But then draft rates will be brought to the board and then eventually there'll be public

864
01:12:10,250 --> 01:12:14,890
workshops for customers to be able to weigh in and give their feedback.

865
01:12:15,490 --> 01:12:21,750
There will be a public hearing to adopt the rates and then this is an important one.

866
01:12:22,230 --> 01:12:25,730
There's an annual confirmation of the rates that occurs.

867
01:12:26,350 --> 01:12:31,690
So essentially when we get to the final rates that are adopted, we're going to be adopting

868
01:12:31,690 --> 01:12:37,050
what's the maximum rates that we can adopt, but every year we can come to the board,

869
01:12:37,230 --> 01:12:42,950
and if we feel that we don't need to raise rates to a certain level, we can actually reduce those

870
01:12:42,950 --> 01:12:48,050
rates. So that's important to keep in mind, it's an annual confirmation process that comes to the

871
01:12:48,050 --> 01:12:53,430
board. So today won't be the actual rates, that'll come at a later time, but it will show the revenue

872
01:12:53,430 --> 01:13:02,540
requirements that we need. So why is it important to do this? So it supports the key district

873
01:13:02,540 --> 01:13:08,180
business values of sound sound financial management sound planning and appropriate investment.

874
01:13:08,480 --> 01:13:15,320
It also supports the debt issuance for the pure water project. So the board has historically

875
01:13:16,580 --> 01:13:23,460
paygoed or paid cash for most of its CIP projects. So what this is showing is that there is

876
01:13:23,460 --> 01:13:29,720
a need to issue debt for the pure water project. And then it provides cost certainty for our

877
01:13:29,720 --> 01:13:34,880
customers as well. It lets them know, okay, over the next five years, you're sort of what I have to

878
01:13:35,500 --> 01:13:39,520
look forward to in terms of what the eventual rate increases will be.

879
01:13:43,570 --> 01:13:46,270
So, as I said, back in November,

880
01:13:46,830 --> 01:13:54,090
we brought to the board policy principles, which are basically goals for the rate study. And so,

881
01:13:54,110 --> 01:13:58,870
I'll go through these really briefly, but the first policy principle was to maintain a rate structure

882
01:13:58,870 --> 01:14:05,810
that is fair and equitable across customer classes and to maintain commercial water budgets

883
01:14:05,810 --> 01:14:10,730
that promote efficient use in a manner that supports business and economic development.

884
01:14:11,810 --> 01:14:18,050
The second one is to maximize revenue stability to navigate variable economic and hydraulic

885
01:14:18,050 --> 01:14:18,910
conditions.

886
01:14:19,490 --> 01:14:25,550
So essentially what that means is there's certain fixed costs that the district has no matter

887
01:14:25,550 --> 01:14:30,630
it, you know, if it's every precipitation, no matter what happens with our supply, from

888
01:14:30,630 --> 01:14:36,250
MWD, there are certain fixed costs that the district incurs, and we want to try to ensure

889
01:14:36,250 --> 01:14:39,270
that there's fixed revenues meet those fixed costs.

890
01:14:39,790 --> 01:14:43,310
So one of the things that's happened over the course of great studies in the past is we've

891
01:14:43,310 --> 01:14:48,010
been trying to make sure that as these fixed costs continue to increase, that we're meeting

892
01:14:48,010 --> 01:14:49,910
them with fixed revenues as well.

893
01:14:50,530 --> 01:14:52,810
So that's part of that second principle.

894
01:14:52,810 --> 01:14:59,490
The third one provide a strong price signal to drive an efficiency ethic and minimize rate impacts.

895
01:15:00,900 --> 01:15:29,040
So we want to ensure that customers that are efficient with their water usage aren't incurring the cost burden of inefficient users. So we want to make sure that that's that's fair. So that's what that third principle is is for the fourth one is to ensure the rates are compliant with California law. So there's a proposition to 18 process that we're going to go through and we want to make sure that everything can be justified and defensible.

896
01:15:29,040 --> 01:15:36,220
and that the eventual rates are in line with California law and then the fifth one is a new one

897
01:15:36,220 --> 01:15:42,400
that we added for this rate study and it's related to debt issuances. So we wanted to ensure that

898
01:15:42,400 --> 01:15:50,120
we meet a minimum debt service coverage ratio of 1.5.0. We work with our financial analyst PFM

899
01:15:50,120 --> 01:15:58,960
to determine that this is a number that allows us to receive a better rating than we normally would

900
01:15:58,960 --> 01:16:02,940
but if it's lower, if it's lower than 1.50.

901
01:16:03,300 --> 01:16:05,660
So that was sort of the genesis of adding

902
01:16:05,660 --> 01:16:09,160
this additional policy principle for this time.

903
01:16:11,670 --> 01:16:13,450
So there are certain assumptions

904
01:16:13,910 --> 01:16:17,910
that along with WRE, water resources economics,

905
01:16:18,150 --> 01:16:19,290
we worked with their team

906
01:16:19,290 --> 01:16:21,910
and came up with certain, in general,

907
01:16:22,130 --> 01:16:26,110
assumptions to have in the model that was forecasted.

908
01:16:26,650 --> 01:16:29,690
So there's no right or wrong answer to this.

909
01:16:29,690 --> 01:16:34,570
essentially how we look at these assumptions as we look at historical information, we look at

910
01:16:34,570 --> 01:16:42,210
our budget, we look at inflationary conditions, and then we come up with a best estimate that we

911
01:16:42,210 --> 01:16:50,630
feel can be defended and that we can justify within the financial analysis. So we have our operating

912
01:16:50,630 --> 01:16:59,050
expense assumptions. One that I wanted to highlight on there was MWD water purchases. So MWD water

913
01:16:59,050 --> 01:17:06,530
purchases are pretty much a third of the costs that we have at the district and those costs are

914
01:17:06,530 --> 01:17:13,410
what we call passed on to the customers. So as rates increase with MWD, those costs then are

915
01:17:13,410 --> 01:17:19,370
also increased and passed on to our customers. So in the analysis that we have today,

916
01:17:19,370 --> 01:17:27,130
we already know what the rate is for MWD for 2026. So that's essentially baked in already. And then

917
01:17:27,130 --> 01:17:34,510
for 2027 going forward, we're assuming that those costs are essentially netted off by increased

918
01:17:34,510 --> 01:17:42,310
revenues that we pass through on the customer bill. We have capital expenses in the analysis,

919
01:17:42,690 --> 01:17:49,850
so we got an approved 10-year infrastructure improvement plan from the board in November,

920
01:17:50,350 --> 01:17:57,070
and so that is included in the analysis, but it's smoothed over the 10-year. So what that means is

921
01:17:57,130 --> 01:18:04,670
We wanted to make sure that the revenue needs that we're bringing to the board had some fluidity to them.

922
01:18:05,330 --> 01:18:14,650
And so the IIP is basically budgeted to be even over the 10-year process, but it's a full complete IIP that was brought to the board.

923
01:18:15,630 --> 01:18:25,350
The reserves are fully funded in the analysis, so we have our 25% of operating budget included three years of current appreciation expense for the policies.

924
01:18:25,350 --> 01:18:30,410
And finally, we have our debt service projections also included.

925
01:18:31,070 --> 01:18:35,150
So the first one, pure water allocation, 11% of the debt service,

926
01:18:35,690 --> 01:18:40,930
potable water, 35% to recycled water, 54% to sanitation.

927
01:18:41,490 --> 01:18:43,030
Those percentages, why the percentages?

928
01:18:43,390 --> 01:18:49,430
There's a nexus that we've come up with that essentially assigns the cost to the pure water

929
01:18:49,430 --> 01:18:53,690
project to these enterprises based on the estimates that we've had.

930
01:18:53,690 --> 01:18:57,990
So, for example, running in related costs would go to recycled water,

931
01:18:58,990 --> 01:19:05,150
cost related to advanced water purification facility would go to sanitation, etc. So,

932
01:19:05,190 --> 01:19:12,990
that's sort of the background for those percentages. The other non-pure water projects would continue

933
01:19:12,990 --> 01:19:19,530
to be pay-go as has been done in the past where we will pay cash for those. We also included debt

934
01:19:19,530 --> 01:19:28,190
service through 2029 for the advanced meter water infrastructure project and so that's typically

935
01:19:28,190 --> 01:19:33,750
around I think we have about five million left on the project and so that'll be done in 2029

936
01:19:33,750 --> 01:19:42,310
and that's also included in the analysis and finally we have our estimated pure water project

937
01:19:42,310 --> 01:19:48,050
get service and I put based on the current rate environment which is fluctuating so today

938
01:19:48,770 --> 01:19:56,930
We base the some of the loans such as the WIFI alone is based off of a 30-year treasury bond or closely to that.

939
01:19:57,670 --> 01:20:02,950
And so you'll see some percentages today regarding that debt service today.

940
01:20:03,150 --> 01:20:05,070
I think the interest rate was at 4.7.

941
01:20:05,430 --> 01:20:07,930
In our current model, we have it at 5.2.

942
01:20:08,150 --> 01:20:12,430
So there's a little bit of contingency baked into there just to be conservative.

943
01:20:12,430 --> 01:20:22,410
But we are obviously analyzing that and you'll see in one of the slides coming up that there's actually well let me just go to the slide so you can see it.

944
01:20:23,150 --> 01:20:25,390
So in the next slide there's actually a comparative.

945
01:20:26,670 --> 01:20:32,310
So if you look in the first and I hope everybody can see that I'm looking at it now hopefully you can see that on your screen.

946
01:20:32,770 --> 01:20:40,230
But in the first sort of box area here there's a prior projection that we brought to the board in September 2024.

947
01:20:40,230 --> 01:20:47,050
And what this essentially was was our internal look at where we felt the revenue needs would

948
01:20:47,050 --> 01:20:52,570
be for the next 10 years based on the current information that we had in September.

949
01:20:53,310 --> 01:21:03,010
So in September, the interest rate was lower and we were assuming at that time a 4.4% interest

950
01:21:03,010 --> 01:21:04,270
rate for our WIFI alone.

951
01:21:04,270 --> 01:21:10,650
And we are also under the assumptions of a prior tenure IIP.

952
01:21:11,650 --> 01:21:14,950
So since that time, the interest rate has gone up.

953
01:21:15,830 --> 01:21:20,950
So it's about an 80 basis point increase since we last rejected it.

954
01:21:21,010 --> 01:21:23,370
So it's up to 5.20 now in our model.

955
01:21:23,950 --> 01:21:25,750
And there's also been an updated IIP.

956
01:21:26,150 --> 01:21:29,170
So we're using the latest and greatest of our capital projects.

957
01:21:29,290 --> 01:21:32,490
And that added some additional costs on there.

958
01:21:32,490 --> 01:21:44,230
But the key thing that I want the board to look at really with this slide, because this is sort of the meeting potatoes of what we're looking to present and I should say today's presentation nothing has to be approved.

959
01:21:45,010 --> 01:21:51,490
This is all just for your review and feedback for us as we move forward in the process.

960
01:21:53,650 --> 01:22:01,130
So, the one thing that I want the focus to be though is the last column in here.

961
01:22:01,830 --> 01:22:06,490
So, if you look at the very last column and you look at the prior projection,

962
01:22:06,830 --> 01:22:12,670
we're estimating about a 4.2% increase in our revenue needs over 10 years,

963
01:22:13,010 --> 01:22:18,890
which factors to about $8 annually on the monthly bill,

964
01:22:18,890 --> 01:22:21,270
So, excuse me, that it would increase.

965
01:22:22,030 --> 01:22:28,510
In the current projection, we're estimating about 5%, so it's gone up about a little under

966
01:22:28,510 --> 01:22:32,690
a percent since the last time that we brought it to the board, and we're estimating that

967
01:22:32,690 --> 01:22:38,390
the average bill increase would be about $10 to $11 for the customer.

968
01:22:38,850 --> 01:22:48,450
So I wanted to start there because there is going to be some numbers that you're going

969
01:22:48,450 --> 01:22:53,170
to see in the different enterprises, but this is looking at the combined view of the water

970
01:22:53,170 --> 01:22:58,850
and wastewater customer. So essentially if you're looking in that 2030 column, you can see

971
01:22:58,850 --> 01:23:07,070
that it looks like that the projection will be around 284 versus where it was before it was at 278.

972
01:23:07,270 --> 01:23:13,150
So it was about a $6 difference from the previous view that was brought to the board.

973
01:23:13,150 --> 01:23:27,430
So just wanted to highlight that there and then now I'm going to turn it over to Sanjay because Sanjay's going to go into a little bit more detail of what the analysis entailed and then we'll both be here for any questions that you may have.

974
01:23:27,830 --> 01:23:29,310
Just want to point out one thing.

975
01:23:30,230 --> 01:23:37,390
A point 0.08, a point 8 change is almost 25% even though it's only 1% more.

976
01:23:38,150 --> 01:23:38,730
That's true.

977
01:23:39,070 --> 01:23:40,990
That is true when you look at it like that's a good point.

978
01:23:42,730 --> 01:23:43,170
Jack.

979
01:23:43,450 --> 01:23:44,090
I have a question.

980
01:23:44,090 --> 01:23:51,950
Brian, when you say average bill, $10 to $11, and then you say 278 to 234 in the year 2030?

981
01:23:52,590 --> 01:23:52,730
Yes.

982
01:23:54,030 --> 01:23:57,830
You might have said it, I might have missed it, but that's based on how much is your average

983
01:23:57,830 --> 01:23:58,170
bill?

984
01:23:58,170 --> 01:24:00,350
Like who, what do we, what type of customer is that?

985
01:24:00,790 --> 01:24:05,390
Yeah, so the average bill is based on, there's a couple of assumptions, so it's a residential

986
01:24:05,390 --> 01:24:05,830
bill.

987
01:24:05,830 --> 01:24:14,430
We're assuming that it's 20, 100 cubic feet usage a month, and we're, the average bill

988
01:24:14,430 --> 01:24:22,090
we're looking at is the first column for 2025 is $215 for that average customer at 20

989
01:24:22,690 --> 01:24:23,250
HCF.

990
01:24:23,250 --> 01:24:33,890
Are we saying that's the, like, we add up all of our customers, and that's the average bill is so half of them are below 215, half of them are above 215.

991
01:24:34,250 --> 01:24:38,090
So this would be, and I believe it's an efficient, I'm looking over at Joe.

992
01:24:38,290 --> 01:24:41,410
I believe it's an efficient customer that we're looking at.

993
01:24:42,230 --> 01:24:43,890
An efficient average customer?

994
01:24:44,310 --> 01:24:44,670
Yes.

995
01:24:44,670 --> 01:24:51,370
Yes, as I recall it, we'd have to pull up the last rate comparison study.

996
01:24:53,670 --> 01:25:08,150
And the 20 HCF is what I recall was, that was pretty much in line with an efficient customer, so that stayed within budget.

997
01:25:08,150 --> 01:25:18,010
So if your bill is 100, it'll be 104, that's that your bill is double the average then instead of going up six bucks maybe goes up 14 bucks, correct.

998
01:25:18,330 --> 01:25:26,890
I think it's important to point out that at this point, we've analyzed the revenue needs and the next step in this process is the rate structure development.

999
01:25:27,310 --> 01:25:35,830
And within the rate structure development has been the policy of the board to try to minimize the impact on efficient customers and.

1000
01:25:35,830 --> 01:25:42,590
And I'll leave it at that because the way I was the way I was like to analyze it is

1001
01:25:42,590 --> 01:25:46,410
what how much will your how much will your someone says to me what will my bill go

1002
01:25:46,410 --> 01:25:46,850
up to.

1003
01:25:47,470 --> 01:25:54,230
So I want to, you know, eight bucks, if you're paying 100 now in 2030 it'll be 105 or if

1004
01:25:54,230 --> 01:25:59,390
you're paying 300 it'll be 320 whatever that just so that that's really important like that's

1005
01:25:59,390 --> 01:26:03,150
what people I think care about is going to be $10 more a month, $20 more a month for

1006
01:26:03,150 --> 01:26:03,950
the same service.

1007
01:26:03,950 --> 01:26:09,050
Let me just mention the, the, this isn't mediums, which is half above half below.

1008
01:26:09,050 --> 01:26:15,610
This is mean or average and what I recall we did in the last, last time we did a rate increase

1009
01:26:15,610 --> 01:26:22,710
in 2020, the study, we put a calculator on the website so people could see their individual situation.

1010
01:26:23,710 --> 01:26:25,870
And that's, Dawn says that's what he was going to say.

1011
01:26:26,190 --> 01:26:31,910
But can we clarify that this is just the impact of the increase in rate and interest rate, right?

1012
01:26:31,910 --> 01:26:57,970
is that in terms of the change between the prior view to the last view. Yeah, that's primarily what's driving it. It's the increased interest rate. It's the increased capital projects and there's also a requirement that I don't want to steal some days. Thunder, but there's actually a requirement of the state revolving fund loan that we're looking to receive from California.

1013
01:26:57,970 --> 01:27:05,150
There's a maximum, what's called a maximum annual debt service requirement that essentially

1014
01:27:05,150 --> 01:27:12,490
what it does is it takes, it looks at your five-year debt service, so from 2026 to 3030.

1015
01:27:12,890 --> 01:27:18,290
And instead of applying the debt service coverage based on the actual debt that you have in each

1016
01:27:18,290 --> 01:27:20,590
year, it looks at what year is the highest.

1017
01:27:21,210 --> 01:27:26,390
So for us, for our case, it would be 2030 is when we would have the highest debt because

1018
01:27:26,390 --> 01:27:29,790
is the debt's going to be ramping up as we get the project going.

1019
01:27:30,430 --> 01:27:33,230
Well, in terms of looking at the coverage for that loan,

1020
01:27:33,910 --> 01:27:36,970
it says you can't take the coverage from 2026

1021
01:27:36,970 --> 01:27:39,550
and apply that or 2027 in that year.

1022
01:27:39,830 --> 01:27:42,110
You have to take the highest from 2030

1023
01:27:42,560 --> 01:27:45,370
and apply that back to the preceding years.

1024
01:27:45,970 --> 01:27:48,330
So what that does then is that makes it

1025
01:27:48,330 --> 01:27:51,810
a tougher coverage ratio to meet.

1026
01:27:52,270 --> 01:27:53,910
And then that in turn makes it

1027
01:27:53,910 --> 01:27:59,310
and so that we have to have a higher revenue needs to meet that coverage.

1028
01:27:59,770 --> 01:28:05,490
But I should say that the benefit of that is without using that loan,

1029
01:28:06,250 --> 01:28:14,330
we would not say we're saving essentially $25 million projected over the life of the loan

1030
01:28:14,330 --> 01:28:19,830
by going with SRF as opposed to if we were to issue bonds, for example.

1031
01:28:19,830 --> 01:28:29,690
So there is a benefit for that, but in terms of the coverage ratio that needs to be made met that that has actually increased that so that's part of it as well.

1032
01:28:30,090 --> 01:28:32,850
Those are really the three things that are driving it from the last.

1033
01:28:33,250 --> 01:28:36,810
And if infinite rates go down over the next few years, will it go?

1034
01:28:37,170 --> 01:28:40,810
Well, that's that's the thing like when I, you know, one of the first slides.

1035
01:28:40,810 --> 01:28:46,610
I talked about when we eventually get to the rate setting process and we're established

1036
01:28:46,610 --> 01:28:51,610
the adopted rates, we're setting them at the highest that we can set them.

1037
01:28:52,130 --> 01:28:57,250
But if things work out better for us and we end up saying like, hey, we don't need to

1038
01:28:57,250 --> 01:29:03,670
charge our customers this rate, we can lower the rates because we've adopted up to a certain

1039
01:29:03,670 --> 01:29:03,850
amount.

1040
01:29:04,250 --> 01:29:08,750
So that's what the annual confirmation part is about where we come to the board and say,

1041
01:29:08,750 --> 01:29:12,070
Hey, we're still good to proceed ahead with these rates.

1042
01:29:12,330 --> 01:29:13,670
So this is a case scenario.

1043
01:29:14,050 --> 01:29:15,630
To elaborate a little bit on that.

1044
01:29:15,670 --> 01:29:17,330
So under the prop to 18 process,

1045
01:29:18,850 --> 01:29:21,330
the board will eventually adopt rates

1046
01:29:21,330 --> 01:29:22,530
for the next five years.

1047
01:29:23,010 --> 01:29:27,170
And then what we've done for at least the last 10 years,

1048
01:29:27,450 --> 01:29:28,570
so I guess Dave and I have been here,

1049
01:29:28,770 --> 01:29:31,970
is we come back every year and we confirm the rates.

1050
01:29:32,530 --> 01:29:36,090
For the most part, we've been pretty accurate

1051
01:29:36,090 --> 01:29:37,930
in our auction, not pretty accurate.

1052
01:29:37,930 --> 01:29:45,070
We've been the accurate in our projections and nine times out 10, we've confirmed the rates that were previously adopted.

1053
01:29:45,630 --> 01:29:51,330
There was a time in the past where we saw the sanitation, revenue, and

1054
01:29:51,330 --> 01:29:54,090
reserve balances were exceeding our targets.

1055
01:29:54,530 --> 01:29:59,810
So our recommendation to the board at that time, which was adopted by the board, was to not have-

1056
01:29:59,810 --> 01:29:59,970
.

1057
01:30:00,000 --> 01:30:06,680
I'm a rate increase in sanitation one year. So we do go through that process. And in talking

1058
01:30:06,680 --> 01:30:11,600
to, you know, there's a lot of uncertainty in the interest rate direction right now.

1059
01:30:12,160 --> 01:30:19,280
And the recommendation from PFM was to use the 5.2 assumed interest rate for WIFIET. But

1060
01:30:19,280 --> 01:30:24,920
as Brian mentioned, you know, if that interest rate whenever we close the loan ends up less than

1061
01:30:24,920 --> 01:30:30,860
that, which hopefully it does, then we would be able to recalculate each year and determine

1062
01:30:30,860 --> 01:30:35,980
whether or not we needed to move forward with the full rate increase as projected.

1063
01:30:36,540 --> 01:30:40,660
And that primarily is going to affect sanitation, compared to the other two enterprises.

1064
01:30:41,380 --> 01:30:48,340
And just one more clarification, what's the average size family this applies to for parents

1065
01:30:48,340 --> 01:30:49,160
and two children?

1066
01:30:49,440 --> 01:30:52,460
Three, which is the average household size in the district.

1067
01:30:52,460 --> 01:31:07,410
Oh, okay, and we know that that only takes up what 30% of the cost of the water is the external use that's 70 percent correct. So the assumption is three people per household, which is primarily for the basis of sewer.

1068
01:31:08,270 --> 01:31:20,490
The sanitation so for the inside use, it still assumes the three people at 55 gallons per person per day under the current rules, which is going down.

1069
01:31:21,390 --> 01:31:28,030
and it assumed I forget the size of the outdoor lot but the average outdoor lot in the

1070
01:31:28,030 --> 01:31:28,450
district.

1071
01:31:30,170 --> 01:31:37,010
So, I'm a little confused on debt coverage ratio, just a thumbnail sketch, if I have $100

1072
01:31:37,010 --> 01:31:42,410
in debt, what does VCR apply to this project?

1073
01:31:42,730 --> 01:31:44,890
What exactly are we talking about?

1074
01:31:44,890 --> 01:31:50,730
Yeah, so let's say you have, let's say your net revenues are a hundred and twenty dollars.

1075
01:31:50,890 --> 01:31:55,250
So after you subtract your expenses from your revenues, you have a hundred and twenty dollars.

1076
01:31:55,730 --> 01:31:57,050
And your debt is a hundred.

1077
01:31:57,490 --> 01:32:02,750
Then your DC, DSE would be that service coverage would be one point two.

1078
01:32:02,990 --> 01:32:04,390
So we need one point five.

1079
01:32:04,630 --> 01:32:05,550
We need one point five.

1080
01:32:05,810 --> 01:32:07,730
Which means we have to have a hundred and fifty net.

1081
01:32:08,070 --> 01:32:08,270
Correct.

1082
01:32:08,690 --> 01:32:09,010
Okay.

1083
01:32:09,010 --> 01:32:18,050
Right. 1.5, we have that discussion with the adoption of the policy principles. So 1.5,

1084
01:32:19,650 --> 01:32:25,230
we are significantly more likely to have a favorable credit rating, which in turn reduces

1085
01:32:25,230 --> 01:32:28,230
your debt payments.

1086
01:32:28,410 --> 01:32:29,710
The payments are okay, right?

1087
01:32:30,190 --> 01:32:30,290
Right.

1088
01:32:30,510 --> 01:32:30,730
All right.

1089
01:32:30,990 --> 01:32:36,430
So we could achieve a lower-age at the cost of-

1090
01:32:36,430 --> 01:32:36,870
At the cost?

1091
01:32:36,890 --> 01:32:38,990
At the cost of-

1092
01:32:38,990 --> 01:32:42,570
an interest rate. Correct. So we're trying to balance all that and that's

1093
01:32:42,570 --> 01:32:49,830
revenue needs. Okay. It's a lot of balance and a lot of power. Yeah. I'll turn

1094
01:32:49,830 --> 01:32:57,450
it over to now. Oh. Since you made this presentation, you mentioned that we

1095
01:32:57,450 --> 01:33:00,610
could still do pay go even though we have this project going on.

1096
01:33:02,910 --> 01:33:03,710
Please explain

1097
01:33:03,710 --> 01:33:09,130
that because we're going to be paying millions and millions of dollars. So we're

1098
01:33:09,130 --> 01:33:15,310
have a cash pocket that we can do pay who is at the idea. That's correct yes so over the so

1099
01:33:15,310 --> 01:33:21,650
basically what we did is we looked at the tenure infrastructure improvement program and looked

1100
01:33:21,650 --> 01:33:29,070
at what the capital needs are for that program taking out pure water projects and based on what we

1101
01:33:29,070 --> 01:33:33,530
have in here for the revenue needs that would still meet the obligations for those projects by a

1102
01:33:33,530 --> 01:33:38,110
paying cash. Okay thank you. Thank

1103
01:33:41,790 --> 01:33:45,190
you Brian, president, board member, staff, publics,

1104
01:33:45,250 --> 01:33:50,590
my pleasure to be here to present this presentation associated with the financial plan for these

1105
01:33:50,590 --> 01:33:56,010
three enterprises and how to fund pure water. So we'll go to the next slide. So I want to talk a

1106
01:33:56,010 --> 01:34:01,370
little bit about the rate study process. How do we do a rate study then go into the pure water

1107
01:34:01,370 --> 01:34:06,730
assumptions both for the rate study and for the pure water. Then we'll go into the financial

1108
01:34:06,730 --> 01:34:13,490
plan, associated with each of these enterprises, that's portable, recycle, sanitation, during

1109
01:34:13,490 --> 01:34:17,810
my presentation if you have any questions, please interrupt me, I want to make sure you're

1110
01:34:17,810 --> 01:34:22,870
on par with me, you know, we don't have anything misunderstood and then talk about next steps.

1111
01:34:24,190 --> 01:34:25,570
So how do you do a rate study?

1112
01:34:26,210 --> 01:34:27,190
First, the goal of the study.

1113
01:34:27,330 --> 01:34:30,230
So the goal of the study is to develop a 10-year financial model.

1114
01:34:30,590 --> 01:34:35,250
We've developed a model in Excel's non proprietary staff, has a copy, Brian, has a copy of

1115
01:34:35,250 --> 01:34:35,710
the model.

1116
01:34:35,710 --> 01:34:38,610
So, we're looking at different risk.

1117
01:34:39,090 --> 01:34:43,810
We can evaluate different financial risk, look at different indicators.

1118
01:34:44,290 --> 01:34:49,110
But the key here is to ask ourselves how much revenue we need on an annual basis to meet

1119
01:34:49,110 --> 01:34:53,130
our coverage ratio requirement, as mentioned, that's a big indicator reserve target.

1120
01:34:53,650 --> 01:34:55,470
Then we do what we call cost of service.

1121
01:34:55,930 --> 01:35:01,910
Cost of service is looking at the cost of providing that service, looking at your customers that

1122
01:35:01,910 --> 01:35:05,030
demand those services and connecting them, developing that nexus.

1123
01:35:05,030 --> 01:35:09,190
throughout use this word nexus a lot in this board meeting, that's great.

1124
01:35:09,590 --> 01:35:12,410
So that's what we want to do, we want to connect the dots between the cost of

1125
01:35:12,410 --> 01:35:17,450
providing service and nexus. Then we go into capacity fees, that's the one-time

1126
01:35:17,450 --> 01:35:22,050
fee for development to occur, to join the system. There's infrastructure we built

1127
01:35:22,050 --> 01:35:26,290
as mentioned, and they're just basically paying their part to join the system.

1128
01:35:26,650 --> 01:35:30,110
There's also something called miscellaneous fees, those are one-time fees for

1129
01:35:30,110 --> 01:35:34,850
people, not one-time fee voluntary fees that people pay to turn on and off

1130
01:35:34,850 --> 01:35:39,610
their meter, for instance, that could be a miscellaneous fee. Then we developed the proposed

1131
01:35:39,610 --> 01:35:47,850
five-year schedule. That schedule will be for all three enterprises. We will be performing

1132
01:35:47,850 --> 01:35:54,330
your customers about the need of these increases, why are these increases occurring, what's changing,

1133
01:35:55,310 --> 01:36:01,910
public outreach. In this step, it's really about promoting the value of our service, right?

1134
01:36:01,910 --> 01:36:07,830
It's about what you've done, your accomplishment, and how you're going to meet the future challenges

1135
01:36:07,830 --> 01:36:12,030
like you're talking about now with the buyers and stuff like that, really informing the customers

1136
01:36:12,030 --> 01:36:14,670
and letting them know the leadership that you're taking.

1137
01:36:15,050 --> 01:36:17,670
Then we go through the Prop-2-18 process.

1138
01:36:18,150 --> 01:36:23,090
Prop-2-18 process besides the administrative record and the report that we developed, there's

1139
01:36:23,090 --> 01:36:27,590
also a procedural requirement, there's some new code and play that we want to take advantage

1140
01:36:27,590 --> 01:36:28,830
of, the limits liability.

1141
01:36:28,830 --> 01:36:39,890
So we're going to be taking to that onto account. So basically typically we say 45 days. We're going to use 60 days now for the noticing. We send that notice to all your property owners.

1142
01:36:39,890 --> 01:36:43,150
They have an opportunity to provide comments.

1143
01:36:43,590 --> 01:36:46,750
We'll respond to those comments and then we'll have a public hearing. Yes.

1144
01:36:46,750 --> 01:36:51,950
Yeah, I think I think it's important if you can describe I explained the prop to 18 to San Juan

1145
01:36:52,410 --> 01:37:00,910
court case so everyone knows what that means. Yeah. So we have a close session on so we have a

1146
01:37:00,910 --> 01:37:07,370
closed session discussion that that we'll get into some of the court cases related to rate studies today.

1147
01:37:07,590 --> 01:37:13,610
Yeah, but just in general with profit to 18 San Juan, just so yeah, obviously. So I mean,

1148
01:37:13,610 --> 01:37:19,410
The thing is is that so first the voters approve prop to 18 when the voters approved for

1149
01:37:19,410 --> 01:37:24,170
water and wastewater was not considered property related and then through series of court cases

1150
01:37:25,190 --> 01:37:31,570
the legal framework for designing rates has changed. So the big one was big horn where water and

1151
01:37:31,570 --> 01:37:36,870
wastewater is considered property related then we have the San Juan Capastrano which basically stated

1152
01:37:36,870 --> 01:37:41,750
that you need to have a nexus and a logic with your rate structure and it needs to be documented.

1153
01:37:41,750 --> 01:37:43,510
There needs to be an administrator for record.

1154
01:37:44,890 --> 01:37:46,590
And so that's what we've been doing through this process,

1155
01:37:46,630 --> 01:37:49,010
and there's more court cases out there that have occurred.

1156
01:37:49,810 --> 01:37:52,090
It's just providing, unfortunately,

1157
01:37:52,330 --> 01:37:54,770
it's more and more burden on the agencies

1158
01:37:54,770 --> 01:37:57,350
and making sure there's a logic and rationality.

1159
01:37:57,830 --> 01:37:59,550
So that's what we've been going through this whole process.

1160
01:37:59,970 --> 01:38:01,710
That we're limited and how much we can charge

1161
01:38:01,710 --> 01:38:03,110
based on how much our cost is.

1162
01:38:03,350 --> 01:38:03,590
Exactly.

1163
01:38:04,570 --> 01:38:05,990
That's exactly what it is.

1164
01:38:06,190 --> 01:38:08,590
And the way I like to look at it from a non,

1165
01:38:08,590 --> 01:38:09,990
I'm not a lawyer, I'm an economist,

1166
01:38:09,990 --> 01:38:13,370
is if you look at it from what a tax,

1167
01:38:13,490 --> 01:38:15,850
a general bet, a tax and a fee for service,

1168
01:38:16,030 --> 01:38:18,510
a tax, it's distribution, it's general benefit.

1169
01:38:18,970 --> 01:38:22,730
This is a specific benefit to the property owner.

1170
01:38:22,910 --> 01:38:23,930
So it's a fee for service.

1171
01:38:24,710 --> 01:38:27,510
And because it's a fee for service, we need to show that.

1172
01:38:27,690 --> 01:38:30,210
We can't have one person paying another person

1173
01:38:30,210 --> 01:38:31,430
benefiting from it.

1174
01:38:31,530 --> 01:38:32,810
We can't subsidize customers.

1175
01:38:33,390 --> 01:38:34,890
Everyone has to pay their fair share.

1176
01:38:35,790 --> 01:38:36,530
So that's the nexus.

1177
01:38:36,530 --> 01:38:55,920
So we go to rate study process as mentioned Brian talked about the policy framework we want to have goals and objectives stated out front explicitly so we know what we want to accomplish so we know what success is that identified at the 1.5 for instance is a goal and objective coverage ratio.

1178
01:38:55,920 --> 01:38:57,740
then we develop the financial plan.

1179
01:38:58,000 --> 01:39:00,940
Financial plan is basically, again, that revenue needs,

1180
01:39:01,320 --> 01:39:03,040
how much revenue on an annual basis,

1181
01:39:03,480 --> 01:39:06,240
and it's really answers to question about debt.

1182
01:39:06,800 --> 01:39:07,540
Should we issue debt?

1183
01:39:08,040 --> 01:39:09,180
How much debt should we issue?

1184
01:39:09,480 --> 01:39:10,500
What's the coverage ratio?

1185
01:39:10,660 --> 01:39:11,680
What's the reserve targets?

1186
01:39:12,040 --> 01:39:13,200
It's the financial condition.

1187
01:39:13,860 --> 01:39:15,540
Then we get into cost of service,

1188
01:39:15,820 --> 01:39:17,560
and that's now the allocation of the cost.

1189
01:39:18,060 --> 01:39:19,560
Let's looking at the business model

1190
01:39:19,560 --> 01:39:22,240
of providing service, allocating costs,

1191
01:39:22,640 --> 01:39:23,720
and to the customers.

1192
01:39:23,720 --> 01:39:28,500
In this step of the cost of service and rate design, we start asking ourselves about

1193
01:39:28,500 --> 01:39:33,720
like fix and variable revenues, how much of those do we want to cover, what's the appropriate

1194
01:39:33,720 --> 01:39:38,020
rate structure for our community still needs to reflect the cost of providing service,

1195
01:39:38,500 --> 01:39:42,540
but we can start looking at these other secondary issues.

1196
01:39:42,980 --> 01:39:44,240
Then we get into documentation.

1197
01:39:45,340 --> 01:39:49,020
Documentation is a key deliverable of this study because that's your defense.

1198
01:39:49,020 --> 01:39:57,600
it is lengthy. I suspect it's going to be over 150 pages with the three enterprises together and it has all the tables.

1199
01:39:58,420 --> 01:40:03,560
So, one of the things about San Juan was that the consultant at that, I didn't do that study.

1200
01:40:04,060 --> 01:40:09,520
The consultant had an Excel model and the judge said, no, you can't just give me an Excel model. I want it all documented.

1201
01:40:10,260 --> 01:40:16,440
So that's what we do now. We translate the Excel model into a report and we have all the tables and there's no black box.

1202
01:40:16,440 --> 01:40:22,160
So you can actually get a pending calculator and start doing the math and follow along.

1203
01:40:22,680 --> 01:40:26,480
And usually everyone in a community has one person that does that.

1204
01:40:26,640 --> 01:40:27,660
So that's what we anticipate.

1205
01:40:28,140 --> 01:40:31,280
So you have maybe one person in your community that will actually follow the math and they

1206
01:40:31,280 --> 01:40:33,420
can see how everything's derived and there's no black box.

1207
01:40:35,760 --> 01:40:36,760
So financial plan.

1208
01:40:37,320 --> 01:40:42,920
What we do is we start looking at projecting out revenues and expenses, we look at vegetarian

1209
01:40:42,920 --> 01:40:47,880
information, historical, we work with staff and ask ourselves whether we think is appropriate

1210
01:40:47,880 --> 01:40:53,320
for the future. Brian showed those percentages that we're using. The second one is determining

1211
01:40:53,320 --> 01:40:58,500
the capital improvement funding, and that's really about how much cash and debt do we want to

1212
01:40:58,500 --> 01:41:04,140
issue. We, PFM, by the way, a lot of great information that we incorporate in our model.

1213
01:41:04,660 --> 01:41:09,580
We also look at the reserve targets. We evaluate that. We know recommendations reserve look great,

1214
01:41:09,700 --> 01:41:14,440
we're not recommending any changes there, and then the debt covenant. And then based on all of these

1215
01:41:14,440 --> 01:41:17,360
information we can arrive at the financial needs of the

1216
01:41:17,860 --> 01:41:21,740
agencies at the enterprise. So what are some of the key

1217
01:41:21,740 --> 01:41:24,560
assumptions? As mentioned, you're pretty much a built-out

1218
01:41:24,560 --> 01:41:26,980
community, so you're just having some infills here and there,

1219
01:41:27,440 --> 01:41:30,740
so we're assuming no growth being conservative there

1220
01:41:31,320 --> 01:41:34,760
with sales, we're assuming no growth in sales in 2025.

1221
01:41:35,480 --> 01:41:38,160
You know, one of the challenges with water sales is that

1222
01:41:38,760 --> 01:41:41,240
it's very unpredictable as we've all experienced.

1223
01:41:41,820 --> 01:41:43,920
Some of you who've been here for a while, you know that,

1224
01:41:43,920 --> 01:41:47,880
you see it all over the map. And so that's one of the things we want to do is be the big conservative.

1225
01:41:48,500 --> 01:41:53,740
As I mentioned, reserves were really, I like these reserve targets that we have, 25% operating,

1226
01:41:53,920 --> 01:42:00,960
three years of depreciation of capital replacement reserves. And then we also have the pure water.

1227
01:42:01,520 --> 01:42:10,040
That will be mostly all the capital with the IIP will be funded by Pego. And then pure water

1228
01:42:10,040 --> 01:42:11,580
will be mainly funded by debt.

1229
01:42:12,560 --> 01:42:14,020
And I'm going to talk a little bit more about that.

1230
01:42:14,420 --> 01:42:17,080
And then we have the required coverage of 120,

1231
01:42:17,340 --> 01:42:18,740
but the desire 150.

1232
01:42:21,550 --> 01:42:23,310
So let's talk about pure water assumption.

1233
01:42:23,910 --> 01:42:26,510
So we are using the debt assumption allocation

1234
01:42:27,610 --> 01:42:29,550
percentages that PFM has.

1235
01:42:29,770 --> 01:42:31,250
We've taken to that into account.

1236
01:42:31,710 --> 01:42:34,930
And we are incorporating some pay go associated

1237
01:42:36,010 --> 01:42:37,530
to fund pure water.

1238
01:42:38,290 --> 01:42:40,890
Specifically, we're using $15 million from Potable,

1239
01:42:40,890 --> 01:42:45,310
$10 million dollars for recycling and $10 million dollars from sanitation.

1240
01:42:46,090 --> 01:42:47,550
We are issuing debt.

1241
01:42:48,310 --> 01:42:54,190
We are anticipating $466 million dollars as the project with SRF loan and WIFIA.

1242
01:42:54,590 --> 01:43:00,750
Now the SRF loan is sort of one of the main drivers of the study, as Brian mentioned.

1243
01:43:01,190 --> 01:43:04,750
And that's because of that five year maximum annual debt service requirement.

1244
01:43:05,490 --> 01:43:09,850
As Brian mentioned, we have to look at the debt typically when we do these studies, we

1245
01:43:09,850 --> 01:43:14,590
just look at this year's debt service and we calculate the coverage. Now we have to go out five

1246
01:43:14,590 --> 01:43:20,650
years and see what the highest is of those five years and use that to determine the coverage ratio

1247
01:43:20,650 --> 01:43:27,330
requirements. So that does, and what year is it 5.2 now? That's where we're, no, with years lower,

1248
01:43:27,610 --> 01:43:35,170
as Brian mentioned, it's at 4.7 tied to the Treasury, but where the challenge is uncertainty,

1249
01:43:36,470 --> 01:43:39,770
The PFM is recommending that we use 5.2 for this entity.

1250
01:43:40,190 --> 01:43:43,090
We're hoping that it's not 5.2.

1251
01:43:43,570 --> 01:43:44,570
So what

1252
01:43:47,550 --> 01:43:47,950
is it?

1253
01:43:48,950 --> 01:43:50,590
Is there any vehicle that?

1254
01:43:51,130 --> 01:43:57,510
Once it's frozen is it frozen in places at 5.2 for the last next 10 years or 15 years or is it?

1255
01:43:57,570 --> 01:43:59,150
Can it vary depending on the interest rate?

1256
01:43:59,510 --> 01:44:03,390
The actual business interest rate, which means it could go higher and could go lower?

1257
01:44:04,290 --> 01:44:05,730
I think Don's going to ask that question.

1258
01:44:05,930 --> 01:44:10,570
So, WIFIA's interest rate is locked in when you draw on the loan for the first time.

1259
01:44:13,450 --> 01:44:19,210
So the interest rate, so once you lock it in, then that's the interest rate for 35 years.

1260
01:44:19,770 --> 01:44:26,230
Unless if you, but of course if interest rate environments change significantly, with WIFIA,

1261
01:44:26,410 --> 01:44:29,410
you could refinance it by issuing your own debt and paying off WIFIA.

1262
01:44:29,410 --> 01:44:36,190
So there's a strategic element here which we will employ, we will be smart about when we

1263
01:44:36,190 --> 01:44:41,630
draw on the loan first to try to achieve the lowest rate for the district and for the

1264
01:44:41,630 --> 01:44:42,110
rate payers.

1265
01:44:42,270 --> 01:44:49,030
So, even though it says 5.2, that's not what we hope to do better than that, but we also

1266
01:44:49,350 --> 01:44:55,990
are relying on our financial advisor to plan for 5.2 as being the worst case scenario.

1267
01:44:55,990 --> 01:44:59,850
And really, in rate setting, we can set rates lower.

1268
01:45:00,000 --> 01:45:29,640
But we cannot set rates higher than what we go through in the rate setting process. So that's kind of what's guiding us. Our hope is we will achieve a better rate than that. And we will be smart about when we drawn those funds because we realized that that will lock that rate permanently. And it is a fixed rate. It's not a variable rate loan. So the terminology we like to use is there's adopted and there's implemented. So we're going to.

1269
01:45:29,640 --> 01:45:35,200
a adopt, eventually something the board can consider the adopting rates, I should say.

1270
01:45:36,580 --> 01:45:42,260
And if the board does adopt those rates, then as Don mentioned, each year staff comes

1271
01:45:42,260 --> 01:45:46,800
back and evaluates whether we need to implement that or implement something lower.

1272
01:45:48,600 --> 01:45:52,240
That's great that you do that, and then you have a historical track worker where you have

1273
01:45:52,240 --> 01:45:52,620
done that.

1274
01:45:54,180 --> 01:46:00,360
So, I do have a question. So, depending on, I guess it didn't fit right in here. I see we're

1275
01:46:00,360 --> 01:46:10,840
funding the project with a range of sources, right? So, we have ratepayers, money. We have debt

1276
01:46:13,360 --> 01:46:22,460
and we have grants. And so, is any of that money at risk with a new and

1277
01:46:22,460 --> 01:46:33,860
administration. I don't know. Is there any of this? Is VG Board? How much money are we

1278
01:46:33,860 --> 01:46:38,300
getting from the federal government? Is that backing the WIFI alone? The WIFI alone is federally

1279
01:46:38,300 --> 01:46:48,360
funded, yes. So Jeremy might have some opinion on this. The current thinking, I'll say, is

1280
01:46:48,360 --> 01:46:50,920
is that the WIFI alone is probably the least at risk

1281
01:46:50,920 --> 01:46:53,020
because it's a loan program as payback.

1282
01:46:54,420 --> 01:46:58,200
The Bureau of Reclamation grants are widely used

1283
01:46:58,200 --> 01:47:00,560
in both Republican and Democratic areas.

1284
01:47:02,140 --> 01:47:06,120
I think there's some other grants that are more at risk

1285
01:47:06,120 --> 01:47:09,880
but are not directly related to this project,

1286
01:47:10,040 --> 01:47:10,760
the Peerwater Project.

1287
01:47:11,940 --> 01:47:14,060
So in a roundabout way that's to say

1288
01:47:14,060 --> 01:47:15,580
that's our current thinking,

1289
01:47:15,580 --> 01:47:17,920
But, you know, we don't know for sure.

1290
01:47:18,340 --> 01:47:19,440
As close as you can get, I think.

1291
01:47:19,440 --> 01:47:23,560
Yeah, I'll just add, there was a memo to a memo,

1292
01:47:23,800 --> 01:47:27,240
a federal memo related to the specific programs

1293
01:47:27,240 --> 01:47:29,320
that were on the cutting block.

1294
01:47:29,800 --> 01:47:33,300
Bureau of Reclamation Funding for this purpose was not among them.

1295
01:47:34,060 --> 01:47:35,600
The other thing is I think you really need to look

1296
01:47:35,600 --> 01:47:38,840
at the enacting legislation to see

1297
01:47:38,840 --> 01:47:40,520
if it was bipartisan or not.

1298
01:47:40,940 --> 01:47:43,820
And Title 16 funding, which is what we're receiving,

1299
01:47:43,820 --> 01:47:46,860
being always has been a bipartisan proposal.

1300
01:47:47,140 --> 01:47:51,140
So I think of all things, it's least likely

1301
01:47:51,140 --> 01:47:53,360
to be eliminated.

1302
01:47:53,600 --> 01:47:55,460
So I feel like we're in pretty good shape.

1303
01:47:55,700 --> 01:47:58,800
There's a lot of funding that will potentially

1304
01:47:58,800 --> 01:48:00,060
be eliminated before this.

1305
01:48:01,080 --> 01:48:02,420
That's good to hear, I appreciate that.

1306
01:48:03,900 --> 01:48:06,660
And the last thing on this slide is the operating expense,

1307
01:48:07,040 --> 01:48:10,820
which we'll start planning on fiscal year 2029,

1308
01:48:11,140 --> 01:48:12,500
will be funded by potable water.

1309
01:48:12,500 --> 01:48:26,840
So this slide shows a couple of things first to show yes, please in a previous slide, one of the first slides we talked about 35% of the income will be coming from recycled water.

1310
01:48:27,380 --> 01:48:29,060
So is that considered part of a water?

1311
01:48:30,580 --> 01:48:34,060
Yeah, so that was for the debt service payments.

1312
01:48:34,060 --> 01:48:46,820
So the debt service payments are allocated for the construction of the project, but this last bullet is for the ongoing operating expenses of pure water project will be funded by potable water utility.

1313
01:48:47,340 --> 01:48:53,740
So it's separating the construction will have the allocation and then the full operating will go to potable water.

1314
01:48:54,500 --> 01:49:01,020
And potable is just considered anything that comes out of the lake or from that.

1315
01:49:02,020 --> 01:49:07,160
So potable water, the potable water enterprise is basically all the water that goes to your

1316
01:49:07,160 --> 01:49:08,660
home from the potable water system.

1317
01:49:09,440 --> 01:49:15,320
So going back to the framework for the funding and financing for the pure water project, there's

1318
01:49:15,320 --> 01:49:16,580
two distinct phases of it.

1319
01:49:16,720 --> 01:49:20,180
There's the construction phase and there's the ongoing operation and maintenance of it.

1320
01:49:20,180 --> 01:49:32,980
During the construction phase, we allocate a cost based on the nexus that Brian briefly described where basically sanitation is paying for the advanced fire treatment plant because that's the

1321
01:49:33,760 --> 01:49:40,560
Elimit that's necessary for the regulatory compliance of the sanitation system. The portable water system is paying for

1322
01:49:41,260 --> 01:49:44,320
improvements related to the project from

1323
01:49:44,320 --> 01:49:54,020
basically the point that the molecules come out of the plant into the reservoir and then out and eventually into the distribution system.

1324
01:49:54,900 --> 01:50:04,460
The recycle water has a nexus to the brine line because it decreases salinity in the groundwater in the basin.

1325
01:50:04,460 --> 01:50:11,060
So, we have a nexus to the recycle system from the brine line.

1326
01:50:11,580 --> 01:50:14,860
And that's how we allocated the cost for that to the brine line.

1327
01:50:15,280 --> 01:50:20,740
And then once it transitions to the operations, then that treatment becomes an asset.

1328
01:50:21,400 --> 01:50:27,100
So, the portable water system is purchasing that asset from the sanitation system.

1329
01:50:27,100 --> 01:50:35,080
that asset purchase is going to pay for the treatment necessary to create that asset.

1330
01:50:35,440 --> 01:50:41,940
So it's one way to look at it is it's basically the advance bar treatment plant becomes your

1331
01:50:41,940 --> 01:50:47,840
treatment plant that Matt currently uses before we buy the water from Matt,

1332
01:50:48,080 --> 01:50:52,160
although we're buying it from ourselves and the advance bar treatment plant.

1333
01:51:01,770 --> 01:51:05,150
I understand everything you said, but it's a lot of the price.

1334
01:51:05,310 --> 01:51:06,710
I know it was kind of constant.

1335
01:51:06,990 --> 01:51:12,750
I'll just add, we did talk about this topic in our annual

1336
01:51:12,750 --> 01:51:14,250
strategic planning meetings.

1337
01:51:14,550 --> 01:51:19,310
And we had a flow chart that illustrated what Don explained.

1338
01:51:19,610 --> 01:51:21,810
And it might be helpful if we send that to you again.

1339
01:51:22,110 --> 01:51:28,010
And essentially, the flow chart shows how we propose to allocate the

1340
01:51:28,010 --> 01:51:33,930
cost to the different enterprises and what the logic behind that was, and so we can share that

1341
01:51:33,930 --> 01:51:36,930
with you and I think it will help to explain that.

1342
01:51:40,290 --> 01:51:44,830
So this slide shows that that associated with

1343
01:51:44,830 --> 01:51:49,570
pure water and it shows a couple of things first. It shows how it's allocated among the different

1344
01:51:49,570 --> 01:51:56,910
enterprises as Brian mentioned. It also shows the total each year and that the big number for us from

1345
01:51:56,910 --> 01:52:04,990
financial perspective is 2030 where you see that $14.4 million basically of debt service payment.

1346
01:52:05,730 --> 01:52:13,930
And then that number in 2030 is what's going to drive the rate increase in 2026. So that's the

1347
01:52:13,930 --> 01:52:21,610
this is legal under 218. Yeah well this is a requirement of the SRF loan.

1348
01:52:22,810 --> 01:52:33,450
Yeah, so SRS stated and sometimes and this is a relatively new phenomenon SRF didn't have this before and so this is a newer one.

1349
01:52:33,770 --> 01:52:38,830
I've seen this before back like 15 years ago.

1350
01:52:39,250 --> 01:52:43,530
I used to see this stuff but not I did it now I'm seeing it again and this you're not the only client.

1351
01:52:43,710 --> 01:52:50,610
I've seen other agencies now that are having this issue with SRF where we're looking at the maximum over the five years.

1352
01:52:50,610 --> 01:52:57,750
So that 2030 numbers is sort of it is pushing the rate increase in 2026.

1353
01:53:06,650 --> 01:53:10,410
$270 million out of the standing.

1354
01:53:12,370 --> 01:53:13,750
You added up.

1355
01:53:15,190 --> 01:53:16,670
49% more and less.

1356
01:53:16,670 --> 01:53:34,350
Yeah. Is the 14 million is the is the interest cost? No, the debt service. That's that's that's interest plus payment principle that plus interest. So a fully amortized payment. Yeah, that's what yeah, that's your.

1357
01:53:34,350 --> 01:53:34,650
Yeah,

1358
01:53:37,780 --> 01:53:54,840
and I know you're your background. So the the WIFI is a 35-year loan versus a typical bond would be an SRF would be a 30-year loan. So in the PFM financial model, it takes in the count of different

1359
01:54:01,040 --> 01:54:14,740
So the two financial indicators I mentioned is the coverage ratio requirement. And it's really that five year maximum that we're looking at annual debt service and then making sure we meeting the ending balances in the out years.

1360
01:54:14,740 --> 01:54:19,280
So it's interesting from a financial perspective, modeling.

1361
01:54:19,740 --> 01:54:23,680
The first challenge we have is meeting the five years, and the second challenge is that

1362
01:54:23,680 --> 01:54:28,220
year is making sure we have enough money to meet the cash needs to fund the infrastructure

1363
01:54:28,220 --> 01:54:29,300
program, the IIT.

1364
01:54:31,600 --> 01:54:35,980
So talking about IIP, we did look at different scenarios associated with IIT.

1365
01:54:36,120 --> 01:54:37,700
The top one is the current IIP.

1366
01:54:38,300 --> 01:54:42,300
We were a little concerned about how the ending balances were affected.

1367
01:54:42,840 --> 01:54:43,720
We talked with staff.

1368
01:54:43,720 --> 01:54:47,800
we did a lot of webinars and came up with an approach that we feel much more comfortable,

1369
01:54:48,220 --> 01:54:53,120
which is basically averaging out the IEP. So you're still spending the same amount of money over

1370
01:54:53,120 --> 01:54:57,620
10 years. I'm only showing you five years, so if you add up to five years, it's not going to

1371
01:54:57,620 --> 01:55:01,860
go to 10 years, but we're just showing you the five year expenditure, but the 10 years are the same.

1372
01:55:02,160 --> 01:55:09,620
We're just smoothing it out. So we are recommending the use to proposed IEP and produces the same results.

1373
01:55:13,160 --> 01:55:20,720
As mentioned, with MWD, we are taking to account the 9.5% increase and the 11.9% increase

1374
01:55:20,720 --> 01:55:21,500
that are occurring.

1375
01:55:22,780 --> 01:55:28,300
We are anticipating to pass through those costs in the future that's been the policy of

1376
01:55:28,300 --> 01:55:32,620
the district in the past that MWD increases its rates.

1377
01:55:32,620 --> 01:55:36,000
You just do an automatic pass through on to the customers.

1378
01:55:36,440 --> 01:55:39,240
There's a lot of uncertainty about MWD as you may know.

1379
01:55:39,900 --> 01:55:42,580
and so that helps us with that risk.

1380
01:55:45,420 --> 01:55:49,540
And given that information, then these are the proposed increase in revenues.

1381
01:55:50,960 --> 01:55:53,240
First, I want to just show potable water.

1382
01:55:53,420 --> 01:55:55,480
That shows 9% than 3% each year.

1383
01:55:55,840 --> 01:55:59,760
And then an MWD pass that will be on top for 2027 and above.

1384
01:56:00,660 --> 01:56:05,040
Sanitation is 15%, then 8%, then fall last year by 5.

1385
01:56:05,480 --> 01:56:08,180
Recycle is 1212 and then 1515.

1386
01:56:08,180 --> 01:56:15,180
The reason why recycling is at 15-15 years is more to deal with the infrastructure, the

1387
01:56:15,180 --> 01:56:17,320
pay-go capital, I mean the reserve targets.

1388
01:56:18,020 --> 01:56:22,720
And then if we look at the revenues that are collected from potable and sanitation and

1389
01:56:22,720 --> 01:56:27,580
looked at those two and the percent increase, we have that weighted percent increase right

1390
01:56:27,580 --> 01:56:28,300
there at the top.

1391
01:56:28,760 --> 01:56:32,360
It shows 10.96 and 4.69 and et cetera.

1392
01:56:36,220 --> 01:56:40,740
So our next step is, you know, we definitely want to receive directs here from you if you

1393
01:56:40,740 --> 01:56:45,100
any comments or concerns about where we're going because these are touch points throughout the study,

1394
01:56:45,620 --> 01:56:51,960
is then do what we call cost of service. That's what COS stands for. Then we calculate the rates.

1395
01:56:52,400 --> 01:56:56,140
And the rates, when we calculate the rates, we're going to actually show you the impacts of your

1396
01:56:56,140 --> 01:57:02,300
customers. We'll show you different consumption profiles, low end users, the high end users,

1397
01:57:03,780 --> 01:57:09,080
inefficient customers, be able to present that information to you. This is also an opportunity

1398
01:57:09,080 --> 01:57:12,540
where we can develop that calculator that you mentioned and we can do what if scenarios.

1399
01:57:13,600 --> 01:57:17,400
Present the five-year schedule to the board to receive comments that's a workshop.

1400
01:57:18,060 --> 01:57:22,080
We will write a report and we want that to be also received by the board.

1401
01:57:22,760 --> 01:57:28,060
We're also second part of the study through the capacity fees and miscellaneous fees.

1402
01:57:28,060 --> 01:57:31,600
As I mentioned, administrative record and then conduct the public hearing.

1403
01:57:34,820 --> 01:57:38,360
But I think that's it for my presentation. Is there any questions?

1404
01:57:38,360 --> 01:57:43,680
questions? Any questions from the ward? Jay? I have a couple of questions. One is when

1405
01:57:43,680 --> 01:57:49,100
we do the rate study for sanitation, how is JPA involved or are they involved, like our

1406
01:57:49,100 --> 01:57:55,500
triumphal partners? Yes, so we are also working for triumphal. We're doing a rate study for

1407
01:57:55,500 --> 01:57:59,920
them concurrently. That was how this was arranged. I'm actually going to be there on Thursday

1408
01:57:59,920 --> 01:58:06,380
virtually to present the results there. We are looking at the JPA cost increases associated

1409
01:58:06,380 --> 01:58:11,340
with the sanitation and allocation of that and we've been working with both agencies.

1410
01:58:11,740 --> 01:58:15,360
So you'll give us our sanitation and then you'll give them their sanitation separately.

1411
01:58:15,920 --> 01:58:22,700
And then you mentioned that the San Juan 218 case, we can't certain ratepayers can't subsidize

1412
01:58:22,700 --> 01:58:27,440
other ratepayers. But I know in the city, and I always confuse about this, in the city of LA,

1413
01:58:27,640 --> 01:58:33,020
they have four million ratepayers, but two million are in rate assistance. So that means the four

1414
01:58:33,020 --> 01:58:39,740
2 million that are not on rate assistance are subsidizing the 2 million but they're allowed to because they're not a water district

1415
01:58:39,740 --> 01:58:49,040
or how are they allowed to but we're not how do we so agencies can use other sources of revenues that are non-rate revenue to find a low

1416
01:58:49,040 --> 01:58:55,620
system program I believe the district does that for city takes out

1417
01:58:56,220 --> 01:59:05,780
Yeah, so they can use the general fund, yes, but we don't have that option, correct, we're not allowed to.

1418
01:59:07,360 --> 01:59:13,520
I have one comment in the slides that Brian showed there were three requirements.

1419
01:59:14,500 --> 01:59:21,080
One was the values, one was that the supporting the dead influence and the last one was cost certainty for the customers.

1420
01:59:21,080 --> 01:59:30,680
So I know we're going to have maybe town halls or whatever, so just something to think through is if that's one of the basic premises of cost certainty.

1421
01:59:31,440 --> 01:59:38,580
And the biggest unknown is the met cost which flows through. It seems to me a little bit of a disconnect.

1422
01:59:39,640 --> 01:59:44,080
So I know how we convey that in a way that's not going to frustrate people.

1423
01:59:44,080 --> 01:59:50,700
We're saying we're going to have great certainty, but we can't really give that with the pass

1424
01:59:50,700 --> 01:59:50,940
through.

1425
01:59:51,800 --> 01:59:51,940
Yeah.

1426
01:59:52,580 --> 01:59:54,420
And I mean, David mentioned this before.

1427
01:59:54,580 --> 01:59:58,940
We do have some a little bit of certainty for the next, you know, upcoming year or so,

1428
01:59:59,060 --> 01:59:59,980
but there's also a project.

1429
02:00:00,000 --> 02:00:29,480
Section, I believe, that met has, you know, a 10-year projection that sort of gives it more of an outlook of what it will be. But from our standpoint, we can't put firm numbers in place until we actually have those rates. So you're here. Yeah. Yeah. Just two dots on that. One is we do know the 2026 rate because it has been adopted by met. And so it's incorporated as you're one of the five year rate studies. So that gives you a pretty good idea of what to expect.

1430
02:00:29,480 --> 02:00:35,720
We will make that point to be clear that yours two through five do not include that.

1431
02:00:36,220 --> 02:00:42,000
The other thing at Metropolitan that I do, Director Lewett and actually all the member agencies

1432
02:00:42,000 --> 02:00:47,400
is we carry this message to Metropolitan and we tell them about this challenge and the

1433
02:00:47,400 --> 02:00:53,120
fact that we need predictability in their rates to pass it on to our customers and so that

1434
02:00:53,120 --> 02:00:58,220
if they have really large and extraordinary rate increases, it affects us at the retail

1435
02:00:58,220 --> 02:00:58,600
level.

1436
02:00:58,600 --> 02:01:04,140
So we also carry that message to them, they're aware of it and they are sensitive to that topic.

1437
02:01:05,240 --> 02:01:10,840
Yeah and just in just a comment on my point I think we're kind of our rates are being really driven

1438
02:01:10,840 --> 02:01:15,560
two big drivers right now one versus the pure water project which is something

1439
02:01:15,560 --> 02:01:20,520
which we really have no choice in doing. It's the federal government really demanding that

1440
02:01:20,520 --> 02:01:26,080
this be done and so we have no choice and the other thing we have no choice in is the rates that

1441
02:01:26,080 --> 02:01:26,740
that come from metropolitan.

1442
02:01:28,340 --> 02:01:30,460
And to be honest, I don't think they have any choices

1443
02:01:30,460 --> 02:01:31,600
in raising their rates.

1444
02:01:31,860 --> 02:01:34,960
And so I mean, it's unfortunate that both of these

1445
02:01:34,960 --> 02:01:36,360
have come together at the same time.

1446
02:01:36,620 --> 02:01:38,880
But, you know, and I appreciate the work

1447
02:01:38,880 --> 02:01:42,340
that you guys have done to flatten out the rates

1448
02:01:42,340 --> 02:01:46,460
and make them as reasonable, I guess as is possible

1449
02:01:46,460 --> 02:01:47,800
under the given circumstances.

1450
02:01:52,420 --> 02:01:54,120
Any other questions or comments?

1451
02:01:55,920 --> 02:01:56,580
Seeing none.

1452
02:01:57,100 --> 02:01:57,800
Thank you for your feedback.

1453
02:01:58,020 --> 02:01:58,260
Thank you.

1454
02:01:58,260 --> 02:02:00,520
That was a fantastic presentation. Thank you.

1455
02:02:01,520 --> 02:02:06,160
Moving on to item 10, non-action items,

1456
02:02:07,320 --> 02:02:09,420
general managers report, general business,

1457
02:02:10,180 --> 02:02:12,480
Dave, do you have a report on general business?

1458
02:02:12,960 --> 02:02:14,520
Thank you, President Cordesky.

1459
02:02:15,000 --> 02:02:16,700
A couple items I wanted to note today

1460
02:02:17,200 --> 02:02:20,580
is actually the start of a multi-day tracer study

1461
02:02:20,580 --> 02:02:21,900
at Los Virginess Reservoir.

1462
02:02:22,220 --> 02:02:24,660
We've shared our plans with you,

1463
02:02:24,780 --> 02:02:25,960
and in fact the board approved.

1464
02:02:25,960 --> 02:02:40,680
doing this tracer study where essentially we're looking at the flow dynamics in the reservoir and that will support the permitting for the pure water project and so that's beginning today and we'll take a couple days to complete.

1465
02:02:41,680 --> 02:02:52,360
Also related to the reservoir, the ocean well, this big splash event, we've slated for March 21st, that's Friday.

1466
02:02:52,360 --> 02:02:57,980
Today, the reason for that scheduling, we're trying to get that back on calendar as quickly

1467
02:02:57,980 --> 02:03:06,160
as possible, also looking at a week when Congress is in recess, and that happens to be that

1468
02:03:06,160 --> 02:03:06,420
week.

1469
02:03:07,160 --> 02:03:11,720
There is during that week the water reuse conference that is the national conference

1470
02:03:11,720 --> 02:03:18,240
in Tampa, Florida, but that conference will have ended and the ideas we come back and be

1471
02:03:18,240 --> 02:03:20,620
able to attend this event on Friday.

1472
02:03:21,400 --> 02:03:23,440
And the plan is to do it also in the morning

1473
02:03:23,440 --> 02:03:26,580
as was previously planned.

1474
02:03:28,980 --> 02:03:34,060
Compost is back at Las Virgines Composting Facility.

1475
02:03:34,580 --> 02:03:38,240
In fact, we had on Saturday our first giveaway event.

1476
02:03:38,240 --> 02:03:41,120
And so we're resuming giveaways at the beginning.

1477
02:03:41,120 --> 02:03:44,760
We're being a little cautious in terms of commercial pickups.

1478
02:03:45,120 --> 02:03:47,040
But we actually are back in business

1479
02:03:47,040 --> 02:03:48,720
and have compost available.

1480
02:03:49,800 --> 02:03:57,240
Also I want to mention that with the policy fire and the eaten fire, as with all major

1481
02:03:57,240 --> 02:04:04,440
disasters and events, there is an after-action process, or I should say processes, those

1482
02:04:04,440 --> 02:04:06,380
are beginning to start.

1483
02:04:07,200 --> 02:04:13,940
And the county under Supervisor Lindsay Horvath has established an independent blue ribbon commission,

1484
02:04:13,940 --> 02:04:21,180
and it's been coordinated and managed through UCLA and the Luskin Center, Matt Peterson,

1485
02:04:21,520 --> 02:04:27,680
who's a Metropolitan Director representing Los Angeles, will be co-chairing that commission

1486
02:04:27,680 --> 02:04:33,940
along with Fran Pavley. In fact, Fran contacted me and she's coming in this afternoon and Jeremy

1487
02:04:33,940 --> 02:04:39,780
and I plan to talk with her and share some of our ideas and observations during the fire.

1488
02:04:41,320 --> 02:04:48,040
And then last I want to mention, tomorrow morning, we're going to be having an employee breakfast

1489
02:04:48,040 --> 02:04:53,960
where we're going to be cooking breakfast for employees to recognize their response to

1490
02:04:53,960 --> 02:04:59,100
the fire. So we'll be doing that in the morning. Most of the managers, I think, are going to be

1491
02:04:59,660 --> 02:05:04,840
at the grill and first thing when the employees come in will have breakfast for them.

1492
02:05:06,080 --> 02:05:09,240
And then you're welcome to join us if you would like.

1493
02:05:10,220 --> 02:05:13,800
I do have a couple follow-up items if I can move on to that.

1494
02:05:14,260 --> 02:05:17,220
So follow-up items under 10 AB.

1495
02:05:18,000 --> 02:05:22,140
We have two items at the first being a report on the fire hardening that we're doing.

1496
02:05:22,260 --> 02:05:27,320
Joe mentioned earlier that we are issuing a comprehensive RFP to look at every site.

1497
02:05:27,520 --> 02:05:30,720
So we'll bring back a report on that and what we're planning to do.

1498
02:05:30,720 --> 02:05:38,940
So, the second item relates to the shut off valve and what we're proposing to do is approach this in a stepwise way.

1499
02:05:39,240 --> 02:05:45,240
First, look at what types of devices are available and what are some of the pros and cons of implementing them.

1500
02:05:45,420 --> 02:05:46,640
We'll bring a report to you.

1501
02:05:46,980 --> 02:05:52,640
We can go over that and then we can talk about next steps in terms of incorporating these devices in our system.

1502
02:05:53,420 --> 02:05:54,380
That concludes my report.

1503
02:05:54,380 --> 02:06:01,180
Fantastic. Thank you. Just one question about this after-action process. Is that the one

1504
02:06:01,180 --> 02:06:08,480
where you were asked by the governor to be part of a review of the hydrants having

1505
02:06:08,480 --> 02:06:12,980
those pressure and things? I remember you talked about that. So I believe that topic is likely

1506
02:06:12,980 --> 02:06:21,100
to come up, but I think that effort is probably going to be a separate one. It was specifically focused

1507
02:06:21,100 --> 02:06:27,020
focused on LA County Public Works and LADWP, so I think that is likely to run a separate

1508
02:06:27,020 --> 02:06:27,360
course.

1509
02:06:28,240 --> 02:06:30,940
And I'll also add, there will probably be a variety of these efforts.

1510
02:06:31,720 --> 02:06:36,200
There's going to be a number of different organizations that are likely to be looking

1511
02:06:36,200 --> 02:06:42,940
at these after-action reports, and so to the extent that we are able will be participating

1512
02:06:42,940 --> 02:06:46,780
and I'll share some of the lessons learned from them.

1513
02:06:47,440 --> 02:07:01,860
one other thing I'll share is we are suggesting to the state division of drinking water that they organize in after action discussion to talk about some of the water quality orders that were issued following the fire and how they were implemented.

1514
02:07:03,240 --> 02:07:10,740
Where they satisfied with what we did finally or they just made up their own rules about how they forced a little ball.

1515
02:07:28,920 --> 02:07:34,740
I just want to kind of want to see if it's happening at a specific time or there are specific

1516
02:07:34,740 --> 02:07:37,320
events happening that we might be able to mitigate.

1517
02:07:38,560 --> 02:07:43,420
Can I suggest that perhaps we put that in our monthly activity report to the board?

1518
02:07:43,740 --> 02:07:44,380
Yeah, that's what I was thinking.

1519
02:07:44,380 --> 02:07:45,000
Yeah, we could do that.

1520
02:07:45,100 --> 02:07:47,020
Although I was going to ask if you would clarify it.

1521
02:07:47,200 --> 02:07:52,000
When you say taken down, I mean, where cars have crashed into Moverburg and we've got cars

1522
02:07:52,000 --> 02:07:52,960
hitting our hydrants.

1523
02:07:53,060 --> 02:07:53,200
Yes.

1524
02:07:53,360 --> 02:07:55,280
Or whatever is happening to you.

1525
02:07:55,340 --> 02:07:55,500
Yeah.

1526
02:07:55,580 --> 02:07:55,860
I'm down.

1527
02:07:56,120 --> 02:07:56,840
Yeah, we can do that.

1528
02:07:57,040 --> 02:07:58,600
So damages to fire hydrants.

1529
02:07:59,080 --> 02:07:59,240
Sure.

1530
02:08:00,820 --> 02:08:01,300
You know what?

1531
02:08:01,380 --> 02:08:03,780
We might as well move on to, oh, can I have a quick one?

1532
02:08:04,020 --> 02:08:11,800
Your follow-up items on the fire piece, you mentioned our facilities, but I think I think was my

1533
02:08:12,420 --> 02:08:18,280
item that I want on a future agenda was not just our facilities, but our service area.

1534
02:08:18,700 --> 02:08:23,600
I know we're having some workshops, but whatever we're doing like just

1535
02:08:23,600 --> 02:08:29,480
politically to harden our area, but not just our facilities, but good clarification. So

1536
02:08:29,480 --> 02:08:33,520
So focusing more broadly, not only on the car.

1537
02:08:34,200 --> 02:08:37,620
And before the fire, what we're doing, during the fire,

1538
02:08:37,840 --> 02:08:41,080
what we're doing after the fire, and after the fire piece

1539
02:08:41,080 --> 02:08:45,080
comes in with the trash dump.

1540
02:08:45,500 --> 02:08:48,500
Because when they say watershed, if hazardous materials

1541
02:08:48,500 --> 02:08:51,040
goes into that trash, and then it rains,

1542
02:08:51,360 --> 02:08:53,060
that goes into our watershed, I assume.

1543
02:08:53,340 --> 02:08:54,840
And do we have a role in that?

1544
02:08:54,940 --> 02:08:57,080
Are we involved with that, you know, what's our role?

1545
02:08:58,940 --> 02:09:02,700
So where do they use to cover the dirt or the dust?

1546
02:09:03,140 --> 02:09:04,300
That's not coming from us.

1547
02:09:04,400 --> 02:09:05,240
That's coming from the city.

1548
02:09:05,580 --> 02:09:07,040
I'm not sure since they're so close.

1549
02:09:07,700 --> 02:09:16,140
So landfills they all have what they call daily cover requirements that they spread the trash.

1550
02:09:16,540 --> 02:09:18,740
And then they put a cover on it.

1551
02:09:18,860 --> 02:09:23,220
It's usually like some kind of soil or other material that prevents dust and debris.

1552
02:09:23,920 --> 02:09:25,880
I don't know the source of that material.

1553
02:09:25,880 --> 02:09:29,360
but it's something they do. It's a routine part of their operation.

1554
02:09:30,880 --> 02:09:36,640
The water, but then they water it, right? That's our recycled water.

1555
02:09:36,660 --> 02:09:42,760
They do use water. They use recycled water to basically for dust control. So they went down

1556
02:09:42,760 --> 02:09:47,560
the material to prevent dust. But what I was question is, is it our water or is it

1557
02:09:47,560 --> 02:09:53,660
it is? It's water. In fact, the landfill is one of our largest recycled water customers.

1558
02:09:54,900 --> 02:09:55,300
Okay.

1559
02:09:57,320 --> 02:10:05,920
Fantastic. Okay, so let's go ahead and move on then. Although we kind of started it to it to 10B, which is director's comments and reports on outside meetings.

1560
02:10:06,700 --> 02:10:09,680
Gary, since you start the ball, do you have any more comments or questions?

1561
02:10:11,320 --> 02:10:20,240
No, that's fine. The only thing I would like to mention is that obviously this Thursday for anyone that would like to attend either by a Zoom or later.

1562
02:10:20,920 --> 02:10:32,040
The just Scott Kalaski will be here speaking and I've spoken to him and he has said that the AI that he is going to introduce will be like nothing you have ever heard about before it's going to turn you on your head.

1563
02:10:32,840 --> 02:10:37,320
So it's going to come from a completely different direction hopefully the way he explained to me that's correct.

1564
02:10:38,080 --> 02:10:47,200
And please invite anybody that you think would be interested I've been inviting lots and lots of people I know it's the last minute but they certainly can stream in as well.

1565
02:10:47,200 --> 02:10:48,580
That sounds fascinating.

1566
02:10:49,240 --> 02:10:50,860
Randy, do you have any comments or questions?

1567
02:10:51,800 --> 02:10:52,160
Okay, great.

1568
02:10:52,840 --> 02:10:53,920
I do have a couple of comments.

1569
02:10:54,080 --> 02:10:57,620
The first is our report, I guess, on an outside meeting last week.

1570
02:10:58,460 --> 02:11:05,060
Myself, our general manager, Darryl and Jeremy met with Jackie Irwin and her group.

1571
02:11:05,880 --> 02:11:08,880
Just on a post-fire sort of roundup.

1572
02:11:09,560 --> 02:11:13,700
And we expressed to them, we told them about our operations and how we,

1573
02:11:14,540 --> 02:11:19,300
and how we succeeded. And we're very successful in our operations during the fires.

1574
02:11:20,260 --> 02:11:30,500
We talked to her about inter-connectivity with District 29 and topics on that. On those topics,

1575
02:11:30,620 --> 02:11:38,460
and we also talked about our need for more generators, more and bigger generators to keep

1576
02:11:38,460 --> 02:11:41,720
the water flowing during power outages, and that sort of thing.

1577
02:11:42,720 --> 02:11:43,420
Jackie was great.

1578
02:11:43,840 --> 02:11:54,620
I mean, she's been to, she has been to, to the fire station up in the 6th of, Bravo 69

1579
02:11:54,620 --> 02:11:55,120
before.

1580
02:11:55,280 --> 02:12:00,420
So she was familiar with the area, she was familiar with how rugged it is, and how steep

1581
02:12:00,420 --> 02:12:03,380
it is, and she supports us.

1582
02:12:03,680 --> 02:12:05,960
We didn't have a specific ask, per se.

1583
02:12:05,960 --> 02:12:13,940
but we did just explain to us how we did going on in our district and discussed a little bit of the way in the future.

1584
02:12:15,280 --> 02:12:19,280
In addition to that, there is a meet.

1585
02:12:19,740 --> 02:12:28,960
So Charlie Casperi has for many, many years given reports on the Santa Monica Bay Restoration Committee meetings.

1586
02:12:30,220 --> 02:12:43,120
And one, our first meeting, I am now, of course, representative for that organization and their first meeting is right here at the district on the 21st, which is next next Thursday at 9.30 AM.

1587
02:12:43,660 --> 02:12:48,820
If anybody is interested in firsthand experience with this committee.

1588
02:12:50,680 --> 02:12:56,400
Friday, sorry, go ahead and come on down and we'll be here and I think that covers everything

1589
02:12:56,400 --> 02:13:05,800
I needed to say. Jake, do you have anything? I have a report on the Region 8 board which I'm

1590
02:13:05,800 --> 02:13:14,200
on board member and we have a meeting to discuss the Los Angeles wildfire impacts and response and one

1591
02:13:14,200 --> 02:13:21,920
One of the comments was, one of the many comments, the, it was thought that the LA fires should

1592
02:13:21,920 --> 02:13:26,900
not affect JPI insurance rates, which I thought was an interesting thing to pass back.

1593
02:13:30,480 --> 02:13:38,340
The, let's see, we've covered the other things, temporary water to existing lots coordinate.

1594
02:13:38,340 --> 02:13:47,340
Do we have any, we're not responsible for roads, do we have any piping that was damaged

1595
02:13:47,340 --> 02:13:52,380
in the, I always say it's fired, not that I'm aware of, but I'm aware of, no.

1596
02:13:52,800 --> 02:13:56,820
We just had some appartances, air vacks, blowoffs and a few hiders.

1597
02:13:59,050 --> 02:14:03,430
And they also recommended in this meeting, there was a discussion of the helicopter, which

1598
02:14:03,430 --> 02:14:05,070
I know carries very interested in.

1599
02:14:08,050 --> 02:14:11,270
And about COVID-19, we've talked about medication with the

1600
02:14:11,270 --> 02:14:12,390
gardening, with the cap.

1601
02:14:13,670 --> 02:14:15,990
One of the other interesting things I ran into this week

1602
02:14:15,990 --> 02:14:20,090
was the fact that I watched a video about the discarded

1603
02:14:20,090 --> 02:14:25,210
boats in the Bay Delta, which are a significant problem.

1604
02:14:25,350 --> 02:14:27,870
The Controcostal County Sheriff is running around,

1605
02:14:28,030 --> 02:14:30,150
he's taken over 3,000 boats out.

1606
02:14:30,710 --> 02:14:33,030
Most of them are fiberglass, there are some bigger boats,

1607
02:14:33,030 --> 02:14:37,370
And there has it that there are mess and never that's a real problem.

1608
02:14:37,370 --> 02:14:44,650
I was surprised, but to my mind says, hey, we should build the pipes and have to worry

1609
02:14:44,650 --> 02:14:49,190
about the degradation of the water that occurs from the boat burns, it puts all this toxins

1610
02:14:49,190 --> 02:14:49,830
in the water.

1611
02:14:50,350 --> 02:14:51,410
There were all kinds of issues.

1612
02:14:52,910 --> 02:14:59,960
Well, last one, last one, at least, question or comment was, it's our...

1613
02:15:00,000 --> 02:15:29,900
So, the system protected for, it's out there with grass on the, does it burn? What do we do about fire mitigation? And we keep the, we keep the weeds and the grass trimmed, pretty, pretty closely. In fact, that's part of the contract that the solar, the owner is required to do. That's OK. It's part of that. So it's a purchase pile purchase agreement. So last but not least, I missed it in talking about it.

1614
02:15:29,900 --> 02:15:34,260
the cap, we're interested in putting another megawatt in. Where are we going to do this?

1615
02:15:34,800 --> 02:15:41,100
So we're actually under construction right now for a solar and battery project at the

1616
02:15:41,100 --> 02:15:46,900
composting facility. So it's actually the board approved that project.

1617
02:15:47,340 --> 02:15:54,260
We're going to go to six megawatts so we can get five. So we're at five right here in the north

1618
02:15:55,060 --> 02:15:58,200
that will be an additional one, so it makes six total.

1619
02:15:59,100 --> 02:16:02,020
Ah, so we're on the construction right now,

1620
02:16:02,160 --> 02:16:03,040
and where the battery's going.

1621
02:16:03,680 --> 02:16:05,600
I think the battery's in the same facility.

1622
02:16:07,200 --> 02:16:10,240
I don't know, do you want to share what type of battery they are?

1623
02:16:10,560 --> 02:16:11,180
Hello, Darryl.

1624
02:16:11,320 --> 02:16:11,600
Or Darryl.

1625
02:16:13,020 --> 02:16:15,000
It's going to be a smaller battery

1626
02:16:15,000 --> 02:16:20,100
within the substation at Rancho, so next to the maintenance shop,

1627
02:16:20,340 --> 02:16:23,920
it'll be in there, it'll kind of like be an offset backup.

1628
02:16:23,920 --> 02:16:29,840
But mainly it's going to be the solar panels that are in the north west section of that field.

1629
02:16:30,200 --> 02:16:34,840
So if you were to drive up the road into Rancho, you'll see it kind of back off to the right.

1630
02:16:35,080 --> 02:16:41,080
It's kind of in a depression for a catch basin, but they're above the elevation of it.

1631
02:16:42,040 --> 02:16:47,720
It's on the smaller scale, kind of like our research on Omega-1, the other person's six.

1632
02:16:48,240 --> 02:16:48,360
Yeah.

1633
02:16:48,800 --> 02:16:49,480
So I'm going to ask it.

1634
02:16:49,620 --> 02:16:50,620
Where will it be to?

1635
02:16:50,620 --> 02:16:55,500
So excuse me, where will that power feed that that will directly power Rancho?

1636
02:16:56,960 --> 02:17:03,340
One of the he we got together with Tera Verde who's our advisor on all of our solar and energy

1637
02:17:03,340 --> 02:17:09,880
at gosh I think it was a Catholic conference and the CEO Ali told us that our

1638
02:17:10,720 --> 02:17:14,720
the race that we locked on that project are among the very best in the whole state.

1639
02:17:17,040 --> 02:17:22,360
Yeah, that's fantastic, Director Poland, I have a question, why won't the insurance rates

1640
02:17:22,360 --> 02:17:23,500
go up on JPI?

1641
02:17:23,800 --> 02:17:27,640
Didn't say it was one of my, I didn't think about asking that question on the board

1642
02:17:27,640 --> 02:17:27,920
meeting.

1643
02:17:28,240 --> 02:17:33,300
Okay, and then I, it was a comment was made by somebody who was from Paradise and then it

1644
02:17:33,300 --> 02:17:39,860
was passed on to all the people, it's related to the market sector and so that the damage

1645
02:17:40,340 --> 02:17:45,520
from the fires was primarily in the residential sector and in the insurance markets there's

1646
02:17:45,520 --> 02:17:52,040
a difference and the commercial market is really where we are ensuring an AquaJPIA.

1647
02:17:52,260 --> 02:17:56,180
So it's really the difference between the residential market and the commercial market.

1648
02:17:56,900 --> 02:18:01,380
You know, I played Rugby back in college and the umpires on the sidelines are

1649
02:18:01,380 --> 02:18:07,500
around with these yellow flags and I see a yellow flag with our

1650
02:18:11,660 --> 02:18:16,440
and then one other question you said you would look into whether there's a recording of that meeting.

1651
02:18:16,440 --> 02:18:22,400
Yeah, I will. I'll find out that's really good. All right. So assuming that all our

1652
02:18:22,400 --> 02:18:28,080
comments are completed, moving on to item 12 public comments. Susan, are there any members

1653
02:18:28,080 --> 02:18:31,780
of the public may now address the Board of Directors on matters not appearing on the agenda?

1654
02:18:32,360 --> 02:18:36,780
But within this jurisdiction of the Board, no action shall be taken on any matters not appearing

1655
02:18:36,780 --> 02:18:42,360
on the agenda. Are there any public comment cards? No comment. There are none. Okay. At this point,

1656
02:18:42,360 --> 02:18:44,240
Item 13 is a closed session.

1657
02:18:44,800 --> 02:18:47,240
I'm told by Susan that she needs only five minutes

1658
02:18:47,240 --> 02:18:48,900
to prepare for this closed session.

1659
02:18:49,140 --> 02:18:51,420
So I'm starting to now to her right now on my phone.

1660
02:18:51,620 --> 02:18:52,700
We'll meet back in five minutes.

1661
02:18:53,640 --> 02:18:53,980
Thank you, sir.

1662
02:18:54,140 --> 02:18:54,400
I'm ready.

1663
02:18:54,760 --> 02:18:55,520
Let's reconvene.

1664
02:18:56,220 --> 02:18:59,220
Board met in closed session to discuss the item identified

1665
02:18:59,220 --> 02:19:02,380
on the agenda as a potential on disclosed litigation.

1666
02:19:03,440 --> 02:19:05,720
Board received a report from District Council,

1667
02:19:05,980 --> 02:19:07,440
no reportable action took place.

1668
02:19:07,780 --> 02:19:09,160
Mr. President, that includes a report.

1669
02:19:09,740 --> 02:19:10,260
Thank you, Council.

1670
02:19:10,260 --> 02:19:13,360
I would love it to adjourn this meeting at 1154.

1671
02:19:14,040 --> 02:19:14,480
Somebody.