[1:42] Let's go, children, get late

[1:51] for a call reading.

[1:55] I'm actually, uh, Stephanie, I'm going to be the clerk for this committee and a call is shadowing me teaching me to fly.

[2:01] Welcome, Stephanie. Thank you.

[2:04] So it is 11.01.

[2:07] I'll do the roll call.

[2:10] I did call the meeting. Oh, I'm sorry, apologies. I'm sorry.

[2:13] All right, no problem. I welcome everybody. Good morning, everybody. I'm chair Richard Santos.

[2:18] And if you're at the water supply, the man management committee meeting, you're at the right place.

[2:23] If it came to the dial for dollars, you're making a wrong mistake.

[2:26] So with that, we're going to call the dean to order.

[2:28] Rook, please.

[2:30] Director Shivan.

[2:32] Here.

[2:32] Director Kigan.

[2:35] Here.

[2:35] And Director Santos.

[2:36] Here. Thank you.

[2:37] Thank you.

[2:38] Time up and for public comment on any item, not on the agenda.

[2:42] So if you have, please,

[2:44] That's Stephanie and Nicole low and we got three minutes. We glad to hear from you. Raise your hand. Let us know

[2:51] So next item will be approval of the minutes. Do I have emotions?

[2:56] There's a motion by Director Keegan the second mind. Director Nye. All in favor

[3:00] Opposed. Thank you. That carries

[3:03] You know

[3:07] This is the very huge package today. So we go to item four point one

[3:13] it says subject review potential water conservation targets for inclusion in the 2050 water supply

[3:20] master plan and recommend to the Santa Clara Valley Water Agency board that 126,000 acre feet

[3:27] year option B water conservation goal by 2050 for inclusion in the water supply master plan.

[3:35] Who do we have? Good morning committee. I'm here to serve assistant officer for the water supply

[3:40] division at the January Water Conservation

[3:43] Demand Management Committee meeting.

[3:47] The committee noted a support for Option B

[3:50] about one additional information.

[3:51] So that is what we're providing today

[3:53] and I'll turn it over to Meet Drive.

[3:55] Yeah, before I do any public comment,

[3:56] anybody want to public speak on this?

[3:59] We have a couple of people here.

[4:00] Okay, with that, Meet Drive. Good morning.

[4:06] Manager of the Water Supply Planning Conservation unit.

[4:09] Thanks. Good morning, Chair Santos and committee members.

[4:12] Today, we are bringing our recommendation on the water conservation goals for inclusion in the water supply master plan at the December 2023 and January 2024 meeting staff presented three options for the 2050 potential goals and the associated water conservation programs evaluated under those options, including the program implementation rates, costs, and staffing that would be required to achieve each 2050 potential.

[4:43] Our recommendation is option B and I will explain this further in the presentation.

[4:52] The water supply master plan is valley waters guiding document for long-term water supply investments

[4:58] to ensure water supply relief.

[5:02] The Board's current Water Conservation goal of 99,000 acre feet a year, and the

[5:16] Board's current

[5:29] water conservation goals of 99,000 acre feet a year, and 110,000 acre feet a year by 2030, and 2040.

[5:37] respectively are being guided by the implementation of the 2021 water conservation strategic

[5:44] plant. Valley water is currently developing its 2050 water supply master plan and seeks to

[5:51] identify water conservation goals for potential inclusion in the plant. The water conservation

[5:57] goals will provide options to maintain or achieve additional savings beyond Valley water's current

[6:03] plan conservation activities. As you will see in the upcoming slides, staff recommended

[6:10] achieving additional savings beyond its current activities.

[6:17] To meet our existing goals, we have a diverse suite of over 20 different conservation

[6:22] programs that reach all sectors of our community and provide cost-effective approaches

[6:27] to water saving activities. We also provide community education to ensure that water smart

[6:36] habits are built and maintained in Santa Clara County, ensuring that we have a water conservation

[6:43] as a way of life. Our current program cost is approximately $600 nacre foot. However, if we

[6:56] would be needed.

[7:08] To develop potential 2050 water conservation goals for valley water to

[7:14] consider valley water did a review of its current program and pure agency programs

[7:19] evaluating potential program expansion options and implementability. And as well as considering

[7:27] community interests, costs and regulations based on these findings valley water developed three

[7:34] potential goals. The 2050 goals would be fulfilled by leaning into Valley Waters existing programs,

[7:41] while still providing flexibility to enhance existing programs and add new programs.

[7:47] It assumes the implementation of Valley Waters existing mix of programs by 2040 as described

[7:54] in the 2021 strategic plan.

[7:59] Valley Waters existing program is on par or exceeds the programs

[8:03] offered by its pure agencies, but we are beginning a benchmark study to do a more thorough review

[8:09] of other agencies both in California and nationally. Despite a strong existing program,

[8:18] further savings could be obtained by leaning into our existing programs and by providing flexibility

[8:24] to enhance or add new programs.

[8:32] This graphic summarizes the estimated active and passive savings within

[8:37] valley water service area for the three potential saving goals through

[8:42] 2050. Passive savings are due to water savings that are associated

[8:47] with plumbing and building code and market driven forces, whereas active

[8:53] savings refer to savings generated by the 20 plus water conservation programs currently funded by

[8:59] Valley Water. Option A assumes recent average rates of implementation resulting in an additional

[9:06] 7,000 acre feet a year by 2050. Option B assumes recent drought rates of implementation

[9:14] achieving an additional 14,000 acre feet a year by 2050. Option C assumes achieving an

[9:22] additional 25% reduction in outdoor water use as compared to 2020, achieving an additional

[9:29] 22,000 acre feet a year by 2050.

[9:35] As mentioned before, to leverage the past and current

[9:38] valley water investments in the conservation program, the 2050 goals aim to leverage the

[9:45] existing programs while still providing flexibility to enhance and add new programs.

[9:51] 10 conservation measures were selected for further analysis in developing the three options,

[9:57] and each goal had a different concept.

[10:00] Combination of 46 conservation measures from the list of 10. This is a subset of our ongoing conservation programs that were determined to have data available on potential savings and focused on outdoor and CI, where the most savings are available into the future.

[10:19] The conservation tracking model was used to determine the cost to achieve each 2050 goal as shown at the bottom of each bar on the graph.

[10:29] The cost per acre foot of savings for each goal is a function of the assumed annual savings, the useful life of conservation measures,

[10:37] implementation rates and valley waters cost for implementing including the additional staff.

[10:45] The cost per unit of water savings from 241 through 2050 in 2023 dollars is approximately

[10:53] 1,230 for option A, 1,338 for option B and 1,690 for option C.

[11:05] It is important to note that achieving option B and C 2050 potential goals requires the implementation of more expensive conservation measures, such as the whole house greywater reuse.

[11:20] As a result, the costs to achieve each additional unit of water savings is progressively more expensive.

[11:27] Additionally, these 2050 potential goals are not an all-inclusive cost to run valley water's conservation program.

[11:36] Valley water will continue to offer less cost-effective programs such as the landscape rebate low income direct install program,

[11:45] or providing educational resources such as webinars and hosting the landscape summit which are not reflected in this unit cost.

[12:04] When determining which option to recommend, Valley Water Considered Implementability, cost,

[12:12] staffing, gallons per capita, gallons per capita per day, also known as GPCD, and regulations and policies.

[12:22] Valley Water's Conservation Tracking Model was used to assess the implementation rates that would be required from

[12:29] 241 through 2050 for the 10 selected conservation measures to achieve each potential goal.

[12:38] Based on this analysis, option A would require scaling the annual implementation rates for the eight selected existing measures by 86%.

[12:49] Option B would require scaling the annual implementation rates for the eight existing measures by

[12:56] 100 and 92% and adding a leak assistance program. Option C would require scaling the annual

[13:04] implementation rates for the eight existing measures by 290% and adding both the leak assistance

[13:12] program and a whole house free water reuse program. Successful implementation of the conservation

[13:18] portfolios requires dedicated staff and resources too. Among other things, they provide program

[13:24] administration, market, the programs, conduct stakeholder engagement, and monitor program implementation.

[13:33] The 2021 strategic plan identified the water conservation team needs to grow to 10 full-time

[13:42] staff to achieve the board's 2030 and 2040 long-term water conservation goals.

[13:49] It is assumed that option A could be implemented with those 10 full-time staff members.

[13:55] However, the implementation of option B or option C will not be feasible without additional

[14:02] staffing and resources. For options B and C staffing assumptions or scaled up consistent with

[14:09] measure implementation rates. Valley water would almost need to double staff levels to implement

[14:17] option B and almost triple staff levels to implement option C.

[14:26] Valley water is currently 20% more

[14:29] efficient than the state of California on average. With the GPCD between 71 and 74 and it

[14:38] is one of the top 10 most efficient counties in the state. Therefore, valley water will need

[14:46] to make extra effort to achieve more aggressive conservation goals. Of note, many of

[14:52] water's retailers already meet SB 1157 indoor water use targets for 20.

[15:00] 30. Staff believe the conservation goals will ensure our county continues to meet or exceed existing and future

[15:08] water-use regulations the state may enact.

[15:16] I miss that slide. Staff is recommending option B for the

[15:21] 2050 water conservation goal. Option B is a more aggressive goal that balances the cost.

[15:33] We'll balance the cost of the programs with the benefits.

[15:38] It will require us to lean into our existing programs,

[15:42] including possibly expanding.

[15:46] However, staff evaluation found sufficient,

[15:49] feasible program expansion options that would likely

[16:00] which in part will be done through larger rebates and increased staffing. Staff think that option

[16:07] be compliments the state and the boards making water conservation a way of life strategy

[16:13] with the expected indoor residential water used to be less than 30 GPCD. This far exceeds the

[16:21] requirement in SB 1157 despite the aggressiveness of option B staff believe it will maintain sufficient

[16:29] elasticity in the demands for our county to meet drought calls of up to 20% water use reduction.

[16:41] The next steps include bringing the committee's recommendation to the board for adoption

[16:45] and incorporating the information into the water supply master plan.

[16:54] The master plan analysis

[16:55] today has demonstrated that water conservation alone will not solve the long-term water supply

[17:01] reliability needs of value water. Options B and C are ambitious, requiring scaling implementation rates

[17:08] by approximately 200 and 300 percent with commesurate staffing and funding resource increases.

[17:17] Furthermore, the analysis has demonstrated that the higher saving targets requires the implementation

[17:22] of more expensive and less cost-effective conservation measures. As a result, the cost to achieve

[17:29] each additional unit of water savings is progressively more expensive.

[17:35] Option V was found to be feasible, balanced costs and benefits,

[17:40] compliments making water conservation a way of life, exceeds SB 1157 water use

[17:45] limitations and maintains demand elasticity to support drought response.

[17:50] It is for these reasons staff recommends the committee recommend option B, 126,000 acre

[17:57] year as the 2050 water conservation goal to the board for adoption. We have discussed our analysis

[18:04] with the independent expert who concur as with staff's recommendation. And that concludes

[18:09] kind of presentation. Thank you, Major. Very clear, very good. Something like a compromise. Actually,

[18:17] are you all for this? Okay. But that we're going to have the comments from the committee. We

[18:23] go to the public and we'll come back for a recommendation.

[18:27] You're welcome, shoot.

[18:29] Thank you, Chair.

[18:31] Thank you, me, Charles, for the presentation.

[18:35] I have a question on this chart.

[18:42] I'm going to have a casual saving target.

[18:43] Those bar charts.

[18:47] Let me get to that.

[18:49] So I'm just, pay just six.

[18:52] Yeah, yeah, yeah, this, this way, so I just want to make sure I'm reading this correctly, so the passive savings, it's primarily due to the rules and laws changes.

[19:12] Yeah, so it stays with the community for it. For example, for forever. Right, so for example toilets, right toilets have become more efficient.

[19:21] That's an example of that.

[19:23] So the 54 that numbers states the same.

[19:35] So my question is that if we're successful,

[19:39] if we're successful in getting support

[19:45] from municipalities within our county on this.

[19:54] the mother ordnance that for major remodeling.

[20:00] I'll just say the model ordinance that for major remodeling and beauty, new homes. Well, the second of 54 be increased? No. No. So those are that is a no regrets project, right?

[20:24] Package is one of the no regrets projects under that package and so that's actually included in your report.

[20:29] already. Yeah. Okay. Okay. Okay. So then the SB 1157, that potential saving, even though

[20:38] we're Santa Clara County's already doing a very good compared to other county, but that's already included.

[20:46] Yeah. Okay. So okay. That's what I want to figure out. And the second question is that, what's the

[20:56] board up proofs this 2050 conservation go this the implementation

[21:02] stocks immediately? No. Well we're still actively trying to write

[21:08] implement the 2030 and the 2040 goals. Right? We provide updates on

[21:13] as my effect at the next meeting. Yeah. Providing it on that. So I mean, I

[21:17] think we would probably focus on that and then probably further down the

[21:21] line. Again, because most of these programs are existing

[21:25] programs, right versus like no regrets. That was a lot of new programs, right? So our hope is that since it's already existing programs that we can during that time frame, right?

[21:38] Build up to what we need to achieve the 2050 goal. Okay. Yeah, but we're not going to need 20 staff next year. No. And I think that's an important point for the full board, because we are all very passionate about conservation.

[21:54] we're going to say that God and higher 20 more people next week, something like that, and so, and so that's that's I think it's important to explain to the board and I definitely support the host F's recommendation.

[22:09] Thank you, and thank you for the presentation we try and, you know, it's consistent with previous presentations that director Shwai and I have seen, and I do agree with staff that option B is probably the best option, you know, given the constraints that we're operating under. A couple of questions.

[22:39] How sensitive to this, or is there any connection between if the state were to identify

[22:53] future conservation goals that get adopted statewide that are greater than what they currently

[23:02] have. I mean, to me, that would seem like it would lower the price of imported water to

[23:09] some extent, right, because the demand would be less if people had to save more. So have we

[23:15] given any real thought to that kind of analysis or is it just too difficult to tease out those

[23:22] connections? You know, I need to start the beginning piece. I missed the beginning piece,

[23:30] So we are achieving more in terms of reduction compared to state, and so what I'm saying is what if the state sort of closed that gap, I got what would that mean in terms of the costs.

[23:47] So, it depends on what the state chooses to pass, right, most likely they'll end up passing

[23:53] something that's towards passive savings, right? Then we would go ahead and update, right,

[24:00] our model is in our fact, we need to, we are waiting for the state to finalize some of their

[24:07] regulations for this conservation away of life. And once we have those numbers, we plan on updating the

[24:13] model and that information will then be included as part of the passive savings. So that's an

[24:17] example, director's way where in the future that 54 number could increase if for some reason

[24:23] there are some additional laws that get implemented before that is true. Yes. That's good news

[24:30] to hear because that gives us the ability to adjust, get on change circumstances. And then my other

[24:37] question is maybe this isn't the place to answer it because it's more of a political question but I'll

[24:44] throw it out because, you know, I throw it out about questions, because we're achieving savings

[24:51] greater than the state requires. Have we pursued anything legislatively like where we might get

[25:00] A benefit in terms of getting funding for our projects or things like that, like, you know, if everyone else is a sea and we're

[25:10] a sea, is there an opportunity for us to try and get some credit in some way. And I'm seeing a skeptical look on Mr. Baker's face.

[25:18] But, you know, I always believe in asking and trying, we're doing more. We're spending our taxpayers and residents money to

[25:28] to be good citizens, and it would be great

[25:31] if we could get some positive benefit from that.

[25:33] But maybe I'll just let that question percolate

[25:35] and you guys can think about it and see whether

[25:37] there's any opportunities.

[25:39] No, I like that, Barbara, because when we get

[25:43] some important water, I mean, they can reduce the cost,

[25:46] based on not just getting a four star,

[25:48] but like you said, we're saving money.

[25:51] If I can add to that, I also think that's a good question.

[25:54] And it takes money for us and actually it's not our money, it's the people's money to achieve these goals.

[26:07] Yeah, we're doing good because we're investing our people are investing in this area.

[26:13] So it's not like what a conservation is free, right?

[26:16] Yeah, so we think of the box before we make a motion. Is there any public comments?

[26:25] Yes, so now get a microphone. Get away from us and have a microphone and identify yourself.

[26:32] And we'll be glad to hear from

[26:37] you. Dr. White. So on this chart, the first question is for the

[26:46] 2,000 40 gold, the blue barred. That costs for water is about $600 dollars per acre foot.

[26:57] Well, that, that would be the bread. I think that's the no regrets project. I would have to

[27:04] get back to you on what the exact dollar figure that we gave. Okay, because here it says $600

[27:11] for a foot, and that's why it asks, because it's a big jump from $600 to $1230 for a

[27:17] foot, and if you're just just increasing by less than 10% the amount of water available

[27:23] and you're more than doubling the cost, that doesn't the map doesn't work. And then a question

[27:31] on the, the, this would be the active savings bars, uh, from the 2004 gold to option A,

[27:42] to actually enter all the other options. Actually, you actually decrease the amount of water you're

[27:46] generating with these options, which seems odd. And also on the active savings bar, the top

[27:54] 11, it goes from 11 to 7, which also decreases, and I'm confused as to why it would decrease

[28:02] with a savings action. So that's, that's actually a function of our water conservation model. So

[28:09] as I mentioned, it takes into consideration the program savings, the time, all of that information,

[28:17] and it ends up spinning out a number. We'd be more than happy if you want to meet and talk

[28:21] more about it off the offline pressure. We try if I could just add, it just gets harder to reach

[28:27] the people that we haven't reached yet, right? We have done the low hanging fruit and that is why

[28:33] it gets more expensive as, you know, the program expands and as we have to implement new projects.

[28:40] And, you know, we're also talking about future dollars. So, you know, things like that. Right.

[28:45] That I understand. And then the final question is, so the, this, this 1,000 to 1,

[28:55] 30 versus 13, 88 percent, this cost break or foot, is that the cost for the additional water

[29:05] saved and there was going from 299 to 219, you'll look at that, you know, a teenager, so 1,000 acre feet

[29:12] Or is that the costs for all the water in that water class?

[29:16] Because that's a big difference, those two ideas.

[29:19] Right, so that number basically is representing like,

[29:24] for option A, the seven, right?

[29:27] It's the active programs that value water generates.

[29:31] It includes not only the cost of the programs,

[29:34] the cost of the rebates and staffing.

[29:38] Right, but again,

[29:40] is the cost, it would be really nice to have the cost of the water in the first column.

[29:46] The 2004 to go, so you could directly compare it because right now nobody knows what you're doing.

[29:52] But if you had that cost there, is that that cost is, let's say, let's say it's $600 for some.

[30:00] We're going to work with that $600 per acre foot for all the water in that class, right? So here I'm looking at the option a 1230, is that the cost of water for each acre foot in that column or just the additional.

[30:19] does the additional because again, the past, there's some savings that we have and we get to maintain, right, and then there's our programs, which, again, we maintain and then there's we go above and beyond so this is the above and beyond our maintenance, that's what that $1,200 approximate fee is.

[30:40] So just to illustrate that, when someone replaces their lawn, you know, that lives for a while, those savings, so they count.

[30:50] And we actually have an item about how we do that a little later on.

[30:55] All right, so thank you.

[30:57] Yeah, you're welcome.

[30:59] Turn that microphone off there.

[31:01] Sorry.

[31:02] Thank you, Dr. White.

[31:04] Okay.

[31:04] Hopefully you get more comments from the public.

[31:07] There are no hands raised online, and I have no cards.

[31:11] Okay, so let's maintain the California water controversial way of life, entertain a motion.

[31:18] Motion to submit this option B to the full board for the board to consider.

[31:30] Okay, there's a second.

[31:31] Director Kagan, there's the motion.

[31:33] my director view of all the favor. All the pose.

[31:37] That carries. Thank you, Metro. Very good. Thank you.

[31:41] Let's go now to 4.2.

[31:45] That's states.

[31:47] Receive information on the creation of a demonstration

[31:51] gardener featuring the Santa Clara Valley Water District's

[31:53] landscape and rebate program.

[31:55] And we hope this is going okay, because I've been doing

[31:58] half that by 24 years, so.

[32:00] In a long time, but go ahead, who's up?

[32:02] Yeah, I will be turning this over to Ashley.

[32:06] All right.

[32:08] Hello, I'm Ashley Chan, Senior Warner Conservation Specialist with Valley Waters and Waters

[32:12] by the Planning Conservation Unit.

[32:14] Thank you, Chair Santos and the committee members for having me.

[32:18] So today I want to provide some information on our proposal to create a demonstration garden here

[32:25] at Valley Waters headquarters building.

[32:27] So valuable, we intend to install a demonstration garden located at the southeast corner of our headquarters building, which is located here on an expressway.

[32:39] The garden would highlight a watershed approach to landscaping and service of beautiful functional garden and community gathering space.

[32:48] Specifically, the garden would showcase valley waters landscape rebate programs, serving as a tangible example for the public to see to engage with and to learn from.

[32:57] While our participants often inquire about visiting our campus here to find inspiration for their landscape projects,

[33:05] we find that at this time we're having to redirect them to other gardens installed and maintained by other organizations and agencies throughout the county.

[33:15] But having a garden here would allow us the opportunity to really exemplify leadership in conservation and sustainable landscaping in our county.

[33:25] The garden would convert approximately 22,000 square feet of existing landscape, existing struggling landscape,

[33:34] to low water use, space-friendly landscape, and would also include the creation of low impact development features.

[33:41] These features would include vegetated swells and rain gardens within the main demonstration garden area,

[33:48] as well as renovation of the existing bioretension areas that are in our parking lot,

[33:53] I mean parking lot areas to infiltrate and street storm water.

[34:02] High efficiency irrigation, technology and rainwater harvesting, demonstration systems

[34:07] are planned as well for the garden, and this project would include a public gathering

[34:13] area permeable hard scape and educational signage.

[34:17] Due to the publication of this project, multiple internal and external stakeholders will

[34:22] included in the design and process to ensure that the garden achieves its full potential.

[34:28] The garden, which is easily accessible to the public, will reflect garden design elements

[34:33] that can be applied to both residential properties and commercial properties, all of which

[34:39] are eligible to participate in our rebate program.

[34:46] We plan value our plans to release a request

[34:48] for proposal for the design services later this year and we hope to begin construction in

[34:54] fiscal year 2026. The estimated the rough, you'll rough a person.

[35:00] We have a very estimate of the garden design and construction for the demonstration garden area itself.

[35:05] We'll be about 1.4 million.

[35:08] And we do have safe clean water funding that we'll be used in addition to potential grants and other

[35:13] Rebellion water funding for this project.

[35:17] We did present the same topic recently at the April meeting to the environmental and water resources committee.

[35:24] And we will be moving forward to work with our other committees and stakeholders as well.

[35:30] And so with that, I open it up for.

[35:33] I'll close that.

[35:35] Didn't mean to.

[35:35] For questions.

[35:37] Well, thank you very much.

[35:40] And this is very exciting news.

[35:41] And actually, it's some.

[35:44] But incidentally, our colleague director, Bell, just the other day,

[35:48] mentioned in that he would like to see more native plants and in more diversity in terms

[35:55] of our landscaping. So one time I heard from a landscape architect, the concept of landscaping,

[36:08] being like decorating a house, right? You know that you have different zones or just like in a

[36:15] you have different rooms in an interesting garden you have different zones and so I would really

[36:22] encourage us to kind of think with that in mind because different people have different preferences

[36:30] in terms of what their style of garden might look like. Some people have you know traditional Victorian

[36:36] homes, some people like myself, we have Spanish colonial revival, some people have very modern homes.

[36:46] And so I think if we are able to break up some examples of different types of treatments as part

[36:53] of what we're doing, I think that would make it be of interest, but I would defer to the professional

[36:58] landscapers on that. But I know for myself, when we were thinking about, well, what do we we're

[37:03] We're going to take our lawn out, what do we want to do?

[37:07] We didn't really know.

[37:09] And unfortunately, we had a neighbor who is a landscapeer,

[37:14] and she sketched out something on a sheet of paper,

[37:18] and we went ahead and did it.

[37:20] But not everyone has that opportunity that those kinds of resources.

[37:23] So I think it would be great if we have something

[37:26] that sort of showcases some different styles.

[37:29] And that way, because it's a demonstration garden, I think we want to demonstrate different modes, if you will. So those are my thoughts, but again, I would defer to the professionals and certainly I think it's very important to get input into how this design moves forward. But again, very exciting. Thank you.

[37:53] No questions, I'm just exciting project, maybe that so my question is more like,

[38:03] so we have to stop now, it's not budget it.

[38:09] But it's, you know, the work that you need to do in bringing this edge way to have a

[38:20] hours, but the actual implementation of this project, I don't think it's in the budget or I

[38:28] decided to pay attention if it does.

[38:34] So actually we actually plan on using safe clean water grant funding

[38:39] for this project.

[38:43] So then if that saved me what?

[38:46] Because that's the, that's for A2.

[38:49] Water constant.

[38:50] If A2 is not enough for this project,

[38:53] and then we're relying on potential grants.

[38:57] And so when we say potential grants,

[39:00] that means yes or no, right?

[39:03] It's, the risk of massing the questions.

[39:05] It's exciting project.

[39:06] Well, I want to see it happen.

[39:08] So if there's any obstacle in the way, just so that we can help removing those obstacles for this project,

[39:18] I'd just like to send to a set that we talked about this for 24 years already.

[39:24] So we're part of the reason why we're trying to kick this off right now is to ensure that we have plenty of time for the Safe Clean Water Funding.

[39:33] Yeah. So that the entire project could be included in that. Okay. Yeah. Okay. We do not plan on, um, you know,

[39:40] needing additional funding outside of the safely water. Okay. Thank you. If I could just add something,

[39:47] perhaps we might look at opportunities for public private partnership. You know, if we have a

[39:51] sponsor, they get to put a little placard there. There's a lot of creative ways other than just

[39:58] spending our own money and I could see.

[40:00] Okay, peeing or things of that nature wanting to make an in-kind contribution. So I'm, you know, I think it'd be great to explore that. Thank you.

[40:08] We have done that in the past, but it's a good to look at that today. Maybe that would be a sponsorship in somebody. I know this would be complementary to the landscape in committee.

[40:18] And in a show case that right here. Back that I walked out a couple of days ago, there's too many weeds in there. We need to get removed. So with that before I go to the public, I want to make sure you know I've been working on this.

[40:30] That can 2001 when Ron Kahnemoto was there and some others I can't think of

[40:35] We were going to go to Columbus Park and then we looked at a plan in San Diego that was millions of dollars and next thing

[40:42] I know some out and fell to the great vine. So I'm really excited and

[40:46] Director Shu and Director Kagan is because we can showcase it here in our

[40:52] place of business

[40:53] And it would be great.

[40:55] And they public comments before directors give some kind of input to go forward.

[41:00] This is going to get the microphone up yourself.

[41:08] So, in trying to do this far on home, I ended up spending quite a bit of time on the internet,

[41:16] going to various nurseries, going to San Jose State, there are gardens, and information is actually difficult to find.

[41:24] So, what I think, I, what highly suggest is a component of this project is that you,

[41:32] you consider some way to provide this information to the community, you know, at large at any

[41:40] time, whether that's a website that you set up with all the different plants that you've got

[41:45] and these are the soil conditions that they need. So, you know, we did that, but I don't think anybody

[41:52] has the time that I had. So if you figure that into that project, it'll make it a lot more useful.

[42:01] Yes, thank you. We do plan on having educational components via a huge part of the garden.

[42:09] So, you know, interactive, interpretive signage, you know, making back to everything.

[42:13] We know now with the use of QR codes, it's easy to link to say, like a plant list, things like that.

[42:18] information online. We have kind of modeled our initial project after one that was completed

[42:25] by the city of Santa Rosa and they have been a great example of putting all that information

[42:29] online and the designs, the rendering spids. Kind of all of that is open to the public and so

[42:36] yes we do our real goal is to use this as an educational opportunity so as much as we can do to

[42:44] you know provide plan, let's et cetera. Thank you. Well, thank you for that good

[42:48] presentation and what it says is receive and provide the input. What's the pleasure

[42:53] of the committee? Just go forward. Yeah, we don't need a motion. That's what we'll do. So with that,

[42:59] we thank you because that's again, very complimentary to the landscape of the committee and

[43:04] all the people before me and after done a great job. Yeah. Thank you.

[43:11] Go to 4.3, and that's it.

[43:16] Subject is to receive information on a water use,

[43:19] projections, water demand,

[43:21] elasticity, and customer affordability study.

[43:24] Provide feedback and direction to staff as a necessary.

[43:27] And they have a recommendations as you see the information.

[43:32] Review the scope and provide feedback and recommendations to staff.

[43:36] All right. Good morning, committee members,

[43:40] Darren Taylor, chief financial officer.

[43:41] Talking about water race of karma's here.

[43:44] That's right.

[43:47] Yeah.

[43:49] So item 4.3 provides information on a consultant study that

[43:55] we're just in the process of kicking off.

[43:58] The study will look at our water use projections,

[44:01] as well as do a water demand elasticity and customer affordability study.

[44:06] The study will be conducted by Raftelos Financial Consultants with the help of Hayson and Sawyer.

[44:12] And so we have brought those consultants here today to talk with the committee about the study, the objectives, the assumptions, the timeline,

[44:23] and so that we can get this committee's feedback as we proceed forward.

[44:27] And so with that, I'm going to turn it over to Kevin Costjek from Raftelos Financial Consultants for brief presentation.

[44:35] Thank you.

[44:36] Thank you.

[44:37] Thank you, Darren.

[44:38] Good morning.

[44:39] Good morning, committee.

[44:40] Kevin Costa from Raptalists.

[44:41] Good to be with you for the first time.

[44:43] Next slide please.

[44:45] So here's our roadmap for the day.

[45:00] We want to be able to, your feedback today and any comments and questions.

[45:07] So, again, my name is Kevin

[45:08] Costa from Apptellis. I'm down in Santa Barbara. I've been with Reptellis for 10 years, working

[45:13] on all things utility in the state of California, with Reptellis for the last 10 years.

[45:18] Elaine Conti, who you may know well in historic, great setting with Valley Water, is back.

[45:26] I'll be supported with one in Harrelson, who's joining us today as well as Brian Kirch.

[45:32] And then as Darren mentioned, the Hayes and team, including Jack and Luke, who have developed

[45:36] the recent demand forecast model in who will be participating heavily in our scope and our project.

[45:43] We've also got support from Joe Kreea on our reptiles team.

[45:48] Joe's a resident expert on all things affordability. He's joining us today as well.

[45:53] and then access to ample other subject matter experts along the way.

[45:59] Next slide.

[46:01] So analyze and understand the interrelationships of price elasticity,

[46:05] affordability and water demand.

[46:07] That's really our charge with the project.

[46:10] We've got three primary discrete tasks at hand.

[46:14] The first being a water demand analysis,

[46:16] again relying on the existing water demand model,

[46:19] as well as the rate model, second being an elasticity of demand analysis, which hazelnut

[46:27] take the lead on, and then a water rate affordability analysis, which reptiles will take the lead on.

[46:33] Next slide. So our project goals trying to create a visual here, really the goal is how do we

[46:41] sensor, your rate impact of affordability and elasticity across the region.

[46:49] So three of your retailers, two end users, and ultimately back to valley water.

[46:54] So in the chart there, you see how your rates have many components and factors to derive

[47:00] the end rates that you've charged your retailers, your retailers themselves, many factors

[47:04] that flow into their rates, some of which includes your rates to a greater or less

[47:10] should agree depending on the retailer.

[47:13] That translates into an end user's bill.

[47:15] So again, the idea here is to try and understand

[47:18] how value waters rates affect retailers,

[47:20] affecting end users, and ultimately,

[47:22] in long-term sense affecting your planning

[47:25] and your future rates.

[47:29] So as I mentioned in the prior slide,

[47:31] really what we're trying to do here

[47:32] is connect factors that affect the short-term,

[47:36] like our rates, like demand variability,

[47:39] with long-term factors, like affordability of service,

[47:42] like the pricing of regional water use and your long-term capital planning and operating budgets.

[47:52] So our team has been engaged in developing the long-term demand model, as I mentioned,

[47:57] that includes baseline demands looking at cost of water shortage, drought response planning.

[48:04] And then again, what we're trying to do is use these long-term forecasting models to link with the short-term rate setting of rise.

[48:15] So when we talk about estimating price elasticity or elasticity of demand, there's technical

[48:21] choices.

[48:22] We're going to work with staff to try and understand and implement those choices as part

[48:26] of the study.

[48:27] Some of the questions are going to be elements related to what elements of price to consider,

[48:35] whether we're focusing on certain segments of demand and ultimately different statistical methods

[48:41] of choosing to estimate price elasticity.

[48:46] Turning the affordability front, affordability has many approaches.

[48:51] It's not a formulaic approach.

[48:54] This slide is really to indicate that we have kind of a higher level macro scale versus

[49:00] a micro scale that macro scale kind of thinking utility-wide or service level wide and

[49:06] measuring the ability to pay for certain capital investments or cost

[49:11] projected in the future versus household affordability, the micro level where we're trying to

[49:17] home in on individual user's ability to pay for water services. So again, a high level

[49:24] and a micro level.

[49:28] And we do have a framework, a framework that's grown out of 25 or 30 years

[49:32] of evolution starting with the EPA back in the mid to late 90s. You see different approaches and

[49:41] indicators for assessing affordability from community type characteristics, residential type

[49:47] characteristics, and then utility-wide financial characteristics as well. We're going to focus,

[49:52] we think we're going to focus to a large degree on the box there that says AR20 under the

[49:58] potential bills. That's it.

[50:00] The CPUC, your largest retailer, subject to the California PUC, so there's a nice connection there.

[50:10] So, just a couple examples of some of the higher-level indicators and metrics that we'll be looking at.

[50:18] Household income, lowest quart, quintile income, median household income, et cetera, for different parts of the service area, different retailers within your service area.

[50:32] And again, some additional affordability metrics looking at the cost of water for a typical

[50:40] user in a certain retailer's service area, and what that bill looks like is a function

[50:46] of household income generally in that region.

[50:53] So talking about study assumptions, we're going to leverage all of our available data that

[50:57] includes the 2019 demand model and access to all valley water data sources that we'll need within this study.

[51:08] We hope to have some willing participation from retailers to be able to acquire some detailed billing data,

[51:17] greater than just aggregated data kind of at the retailer level.

[51:21] And then defining our study scope that boxing us in to exactly what we want to do and look

[51:27] at going forward so that we can help inform the upcoming rate setting cycle.

[51:34] As far as challenges and limitations we might face availability of data and reliability of data

[51:39] always concerns the level of effort to acquire data, to model it both now into the future.

[51:46] Also, questions on how we define affordability can be less than objective, a little bit of an eye of the

[51:51] holder on how we define a affordability of water service. And then defining the drivers

[51:58] for demand elasticity or elasticity of demand of water use, and you see the various influencers

[52:03] there. And then limitations really limits on how granular we can go in this elasticity approach.

[52:12] So what we don't envision on the elasticity approach is going to the say account level or parcel level

[52:18] estimation with all of your retailers.

[52:24] If we can skip one ahead, I'd like to come back and

[52:26] end on this one. So, talk about study schedule. As Darren mentioned, we've begun our kickoff

[52:35] our data acquisition and moving forward here in 2024. That first box project management is really

[52:45] all of our meetings with staff along the way, but also with your committee and potentially

[52:49] an award through the course of the study, then we have our three discrete tasks again focusing

[52:55] first and foremost on the water use projections, because we understand that that is a big

[53:01] driver and influencer for our near-term rate setting, then getting into our other two primary tasks,

[53:07] the demand of elasticity analysis, and the affordability analysis. And then once we complete

[53:12] all of our tasks will have draft and final reports and be presenting those to the end of the

[53:17] study horizon. So now if we can go back one, I wanted to end here because this kind of

[53:23] describes some of the discussions we'll have to have with you with staff with the project team

[53:29] on kind of how we move forward and what scale dimension granularity we really want to consider

[53:37] are focused on and so we develop this visual just to get ourselves thinking, where it says

[53:44] county there, that's really the highest level, that's your service area. So we're thinking

[53:48] at the service area level, we're thinking about individual discrete retailers, we're talking

[53:52] about sectors, think residential versus commercial versus agriculture. Or so some combination

[53:58] of those. So some considerations there and further discussions needed.

[54:07] So I will leave it

[54:08] this slide to try and get if we could leave it on that slide to get the discussion going, but with that,

[54:14] that's the end of my presentation. Again, we've got most of our team here today, happy to answer

[55:00] And also acknowledge that our colleague, director Eisenberg, actually I think was the first to really promote this idea of demand elasticity.

[55:11] And so I think it's a great thing to study and I appreciate staff taking that extra step to make this happen. The consultant seems to have excellent experience.

[55:20] And I'm particularly interested in, you know, the experience with affordability assessments as well as an affordability right design, but also racial and socioeconomic equity.

[55:37] You know, we live in a county where we have many people who are extremely wealthy and then we have a number of people who are just struggling to pay their regular bills.

[55:45] And so I think getting the results that help us to better understand that as we go through

[55:52] our rate setting process is going to be very helpful.

[55:56] So I do have a question for the consultant and I guess I would just like to ask what in addition

[56:07] just to rate setting, what is the value of going through this exercise because I do believe

[56:13] there is a value, but are there sort of ancillary benefits that a public agency can see by going through this type of analysis?

[56:27] That's directed to the consultant.

[56:31] Yeah.

[56:32] Elaine came off mute, and I'll let her talk about one.

[56:36] Thank you all here.

[56:38] Yes.

[56:39] I mean, I think with this type of study with this really linking the long-term planning to the short-term planning,

[56:46] is really beneficial because it doesn't form the short-term planning from the affordability

[56:54] perspective.

[56:56] I think it will show you over time how even some of these previous presentations that we

[57:03] heard of, how it may impact rates going forward, it gives you a baseline as a gauge.

[57:11] So I think that may be something that you can consider in some of the other initiatives that

[57:16] have, whether it's capital projects or have you, it's something that you could factor

[57:20] in there.

[57:20] So that's one of the other, I think, benefits of this study and I'll see if any of my other

[57:27] colleagues have anything they'd like to add.

[57:30] Yeah, I think all, you know, I'll put Joe, if he's here on the spot on this question, in

[57:38] some of his work that he's done elsewhere in the country on affordability and these concerns

[57:42] around certain demographics, certain neighborhoods,

[57:47] and kind of different approaches and indicators and identifying.

[57:52] Yeah, absolutely. Everybody can hear me, right? Yeah. Great grace to be with you today.

[57:59] Certainly, it's an important issue and what you mentioned, the idea is about maintaining equity

[58:04] and promoting equity or critical. Those are things that we have kind of studied with work that

[58:09] done with the city of Seattle. Equity is very important to them. They've got a lot of focus on that.

[58:15] And there are some kind of statistical and analytical ways that we can evaluate equity within

[58:22] the full service area. And I think that's part of it. The other thing I would kind of add to what

[58:27] what Elaine already said is that we're talking about short-term demands, which we may have some

[58:33] certainty around. But when you think about long-term water demand forecasting and even the affordability

[58:39] component, you know, all of those, the analysis that comes with all of that is a little

[58:45] bit, you know, there's a substance that layer into that, right? So we don't know exactly

[58:50] what's going to happen. But, you know, there's a lot of information out there and a lot of

[58:55] data we can use and leverage to provide some clarity and some insight into where we're, where we're

[59:00] headed. And the decisions we make today, like we talked about, we all talked about earlier on

[59:05] different conservation targets. Those are going to impact downstream, you know, where we spend money,

[59:11] what our rates look like, what the affordability looks like for our customers. All of those things

[59:16] kind of come together. And it's really hard to get us, you know, maybe impossible to get the answer

[59:21] for what's going to happen. But it's important to kind of understand what are the different possibilities

[59:26] and where we headed and how's that going to affect our customers, because all these things are

[59:30] related, but I just think the overall value is to know more so that you can make more informed decisions

[59:37] as a board as a committee. Thank you very much and I just have one suggestion to staff

[59:43] but you may already be thinking about this. I don't know that what we're doing is unique to us as a

[59:50] public agency in the state of California. However, it does seem to me that this might make something

[59:56] interesting to present at aqua as we go through this process.

[1:00:00] Thank you. Thank you chair. Well, thank you for this presentation. It's helpful. And I do need to admit that I'm definitely not an expert or a had experience in this area. I have some very high level general understanding.

[1:00:31] any of elasticity of demand and the water rate.

[1:00:38] So, I'm not sure that I can provide any meaningful feedback

[1:00:44] to staff and the project team at this point.

[1:00:48] I can only promise that as we move forward,

[1:00:52] as stated in your agenda memo,

[1:00:54] you're going to provide material update to this committee.

[1:00:58] so my problem is that I would definitely engage in those stages and build up my own understanding

[1:01:10] of this thing. At the beginning, I do have this general question. I think it's similar to

[1:01:20] direct kick against question.

[1:01:25] It's more like, once we complete these studies, I mean, there's

[1:01:31] like three separate studies that we're focusing on. How does it help staff and how does it help

[1:01:42] board, I think the consultant provided some answers in that area, but it's just a question

[1:01:50] on my mind. I don't need the solid answer. I think it's something that is we move forward.

[1:01:57] I will learn more and then some of these questions, the question will become more clear.

[1:02:07] So, that's that's that's all I have at this point. Yeah, so thank you. Thank you, thank you,

[1:02:12] Garmin, anything else? There it is. Yes, thank you. I, you know,

[1:02:19] wanted to get this committee's advice as far as whether or not we should do the same

[1:02:23] presentation for the full board or do we just leave it here and march forward.

[1:02:27] Well, here's what we're going to do. We're going to hear from Nick, is it caught you up there?

[1:02:32] It is.

[1:02:33] Go right ahead, please.

[1:02:38] I got you.

[1:02:38] Hello.

[1:02:39] Good afternoon.

[1:02:40] Chair Santa's directors and staff.

[1:02:43] I just have a few quick thoughts about the assumptions and the schedule for this study.

[1:02:50] One is that using the urban water management plan to man forecast versus more recent demand forecast, which staff has presented.

[1:03:03] Since the urban water management plant was completed, so I just was put out there why not use

[1:03:13] the most recent demand forecasts rather than urban water management plan, so that's one.

[1:03:19] And then also I was wondering, looking at water or affordability versus affordability

[1:03:26] of all utilities combined, I'm wondering if total utility costs would be a more meaningful measure

[1:03:33] of the cost burden. I don't know this that it just seemed like something to consider.

[1:03:40] And then lastly, I wanted to note that the schedule for this study with the first analysis

[1:03:46] do out in the second quarter of 2025. This would not be in time to inform the fiscal year 25.

[1:03:58] I guess that would be fiscal year 26. You call it that the 2526 rate setting cycle

[1:04:05] because that's usually pretty far along by March. So I just wanted to put that out there. Thank you.

[1:04:12] Yeah, thank you, Kutcher. Here's what staffs and staff recommends material study updates be presented

[1:04:17] to the water supply and the man management committee periodically with the final study results

[1:04:23] presented to the full board. Is that the other one? Darren just asked the committee the question

[1:04:30] that I should this will be helpful for this exact presentation to be made to the full board.

[1:04:39] Yeah, so I think you have a, and I have a, I have a personal opinion.

[1:04:47] Sure,

[1:04:51] um, and looking at this water or photo bill, like first of all, my name is Jim Coel.

[1:04:57] And I've looked at the water or photo billet.

[1:05:00] And I have a couple of observations that could profoundly impact your study.

[1:05:07] The first one, as an example, if we suddenly cut our water consumption in half, your water bill would not go down.

[1:05:19] In vision, you have a bucket of water that we're all consuming.

[1:05:25] On top of that bucket, San Jose Water Company is loading all their costs, operating costs,

[1:05:34] etc., they're asset, amortization, recovery, on and on and on, their profits.

[1:05:40] You suddenly drop that water in half, that formula doesn't change.

[1:05:46] So your water bill doesn't change at all.

[1:05:48] That stays the same. They have to recover all those costs and make their money.

[1:05:57] The second observation is today, we all realize that about 40-50% of our landscaping is consuming

[1:06:06] the water here in the valley. If you suddenly reduced all the landscaping costs through water conservation,

[1:06:15] going back to that bucket. Your cost isn't going to change. The third observation is, if you

[1:06:25] suddenly, what's going on today because of the drive to improve water consumption or reduce it,

[1:06:35] because of the water conservation objectives, San Jose water charges much higher rates for

[1:06:42] acre foot consumed as you consume more water. The end effect of that is today.

[1:06:51] Landowners with landscaping are actually compensating the people who are living in condominiums

[1:07:00] and apartments who have no landscaping. Their water bill is actually lower than it would be

[1:07:08] because of this compensation effect from landscaping water costs. So when you get into water or

[1:07:16] affordability, it's much more complex than you're kind of portraying. You have to look at the

[1:07:24] entire picture. And I don't think I got that perspective from the way you were discussing this.

[1:07:31] That's right. Thank you.

[1:07:36] Now I want your direction.

[1:07:39] Well, this was that. That's what this is.

[1:07:41] Do we want to put more information?

[1:07:43] I have a personal opinion that we'll hear from director Keegan.

[1:07:48] I think that maybe a reporting the non agenda member to the board,

[1:07:55] that about this thing is starting.

[1:07:56] And then when we have a little bit more concrete information and do a presentation to the

[1:08:03] football world, we'll get more and more a comment in directions from the football world.

[1:08:09] That's just my personal opinion.

[1:08:14] Thank you.

[1:08:15] So I actually have a slightly different perspective.

[1:08:19] I don't know that presenting it to the board at this point would be so much for soliciting

[1:08:26] questions and information. I think it would be more informative and informative to the board

[1:08:31] into the public because we've been doing things for a very long way, long time in a certain

[1:08:36] way. And now we're basically saying, hey, maybe there's a different way to look at things, you know,

[1:08:42] a more analytical kind of way. And I personally think that it would be exciting to the board as a whole

[1:08:51] as well as to the public and I don't think the public reads

[1:08:54] are non-agenda memos and I think we can see we don't have

[1:08:58] many members of the public, you know, participating here.

[1:09:02] So I just like, as you can tell from my comment about maybe we could

[1:09:06] do something at Aqua about what we're doing.

[1:09:09] I would love to publicize this and have that same sense of excitement

[1:09:14] with the full board and the larger community that I think we have here.

[1:09:20] So, do we want to have some more information to us before we find the final studies of them?

[1:09:26] I believe Director Keegan is indicating that it will be informative to the board.

[1:09:35] That is the exact same presentation to the board.

[1:09:38] More information for the board's information.

[1:09:41] I'm fine with that.

[1:09:43] Good question.

[1:09:44] It's going to appear in the microphone, shut yours off, shut yours off.

[1:10:00] I have this is partly to echo the observations that were just made.

[1:10:08] The idea of looking at household

[1:10:11] income, number one, you know, breaking it down to median 40th percentile, 20th percentile, and so on.

[1:10:19] I think under estimates, the difficulty you will have in being able to predict affordability

[1:10:27] based upon that income. As an example, to very close friends of ours,

[1:10:34] basically stopped using any water other than what came out of the tap in their house.

[1:10:42] And everything in their yard died. They were both elderly, and they were both

[1:10:48] even though they were professionals, and their income was reasonable. Both had cancer,

[1:10:55] both were basically tapped out financially for the cost of that. There's a lot of hidden bills

[1:11:04] that are not really obvious when you're looking at a median income or an income or the certain

[1:11:10] percentile, especially in this valley. So that's, I'd like you to figure that in when you look at,

[1:11:19] you know, what is the affordability here given their income? The other idea is that, again,

[1:11:25] to echo the previous comments, you're going to see more and more people just opting out of

[1:11:32] watering their yards. I mean, I already see it in my neighborhood. There are just people who just

[1:11:36] don't and you're going to see more and more of that and what that means is the price for everyone

[1:11:43] is going to go up because the input costs are always the same. So that's eventually going to reach

[1:11:51] a tipping point where people are just not going to accept it. So I'd like you to consider

[1:11:59] that there are amplifications, the consequences of just not changing the cost structure

[1:12:06] because you've got this many input bills and doesn't matter how much water people use they're

[1:12:11] going to, their bill is going to go up and up and up. That's an issue. So I just want to make that

[1:12:19] We have an Arthur Miller killer,

[1:12:24] go right ahead. Arthur Miller.

[1:12:27] Thank you very much for your presentation.

[1:12:30] One thing is that the input costs are dependent on how much water we bring in to the county

[1:12:35] through various means and sometimes there are more expensive ways to bring in more water to the county

[1:12:41] and if you choose to bring in more water, that can be very expensive.

[1:12:46] So therefore, incarceration could reduce

[1:12:49] about a water we need to bring in the law and cost overall.

[1:12:54] Thank you.

[1:12:56] So with something like what we're going to do is

[1:12:57] you have a public meeting within the boards.

[1:12:59] So I'll be a public meeting at the same time,

[1:13:02] give Aqua, Regent Fibes, director of Rela.

[1:13:08] We can make sure that Aqua gets that information.

[1:13:10] Can I?

[1:13:11] Can I ask you something else?

[1:13:12] Yeah, thank you, Chair.

[1:13:14] I do think that both Gentleman's own comment makes sense.

[1:13:22] I'm hoping that it can be studied in this study, and which generated another question

[1:13:33] on my mind related to your comment that the water is made by users, it's set up this

[1:13:43] California and that has most of the implications and kind of are related to this gentleman's

[1:13:51] comments and so the and many water agents including us the water charges is we used this

[1:14:02] volumetric methodology to calculate the unicorns. So in theory said the the last

[1:14:08] whether we sell the more expensive the unit cost is going to be.

[1:14:15] So I don't have any solution, but I'm hoping that these issues

[1:14:23] can be studied in this consultant contract.

[1:14:29] And then just give us some perspective and future board

[1:14:33] to make decisions.

[1:14:35] all right. But that's the rest. Here we go. We're going to go to 4.4.

[1:14:44] Receive update. Discuss water conservation program savings. Number of the year.

[1:14:50] Twenty twenty three recommendation. Receive update. Discuss water conservation program savings.

[1:14:55] Number four, fiscal year 2023.

[1:14:59] Here we go.

[1:15:00] Some Berks senior wire conservation specialist. Today you receive an overview on some program highlights, our long-term savings, progress to date through June 30, 2023. Also information on how we monitor and track our long-term savings, information on what programs drive those savings trends and a little bit on policy and next steps.

[1:15:28] Valley Water Offers over 20 water conservation programs. We offer something for every

[1:15:34] every person, single family home, multifamily, low or high density, business, school,

[1:15:40] or government facility. Our programs include combinations of rebate funding, direct

[1:15:46] insulation services, technical assistance, and education. And it's a lot, but I would reference

[1:15:53] attachment to on page 107 of your packet where you'll see our public facing

[1:15:58] water conservation program flyer.

[1:16:03] But a simpler way to look at our program options is this really cool

[1:16:07] conservation infographic that's available at waterstattings.org.

[1:16:11] We want to use technology in how we can communicate our programs

[1:16:15] holistically and as options from the public.

[1:16:18] So, just like Director Keegan and mentioned people like they have different styles, they have different needs and maybe have different goals.

[1:16:29] So, landscape transformation for a lot of people may mean converting your turf to water-wise plants,

[1:16:34] but it also means upgrading your irrigation equipment or installing rainwater capture or graywater abuse.

[1:16:40] And this interactive tool helps you poke around this model, model home and understand what kinds of programs we have

[1:16:47] that you can participate in and many of these programs of

[1:16:50] us majority of them noted in the

[1:16:51] demographic contribute to our long term savings.

[1:17:00] By 2030, we need to save 99,000 acre feet per year.

[1:17:05] And by 2024, that goes up to 110,000

[1:17:08] acre feet per year, as you heard in the earlier presentation.

[1:17:11] Today, we are saving 83,174 acre feet per year, which I'll

[1:17:18] dive into towards the end of the presentation.

[1:17:22] But how do we know how much we're saving and where that savings coming from?

[1:17:27] We know it through our our country, it's in savings model.

[1:17:30] We also know that three quarters of our savings to date has been the residential sector.

[1:17:35] Over 84% of our savings to date has been plumbing related.

[1:17:40] Toilet retrofits, shower head distribution, bosset earwaters.

[1:17:45] So how are we going to hit these long term targets?

[1:17:48] 83,000 acre feet is pretty close to 99,000, but seven years we're going to go by very quickly.

[1:17:55] So our conservation savings model is a quick plug that we had a more thorough item on this discussion on this topic.

[1:18:03] Back in the March 2023 water conservation demand management committee.

[1:18:08] But effectively it's a customized version of a national model developed by the Alliance for water efficiency.

[1:18:14] It helps us track and monitor our programs over time, including cost effectiveness, what

[1:18:21] certain programs save compared to others, how long that savings gets sustained.

[1:18:27] And it was a primary tool using developing our water contraptions strategic plan.

[1:18:33] That's strategic plan is a public document available at water savings org and that plan gave us

[1:18:38] the blueprint for our success by 2030.

[1:18:41] And that blueprint identified really three core recommendations, sustaining drought level

[1:18:48] purpose of patient and non-drow years, leaning more into outdoor conservation.

[1:18:53] And again, 84% of our savings today has been indoor, really that the amount of juice

[1:18:58] left that we can get from showerhead distributions and other short-term changes, it's getting

[1:19:04] less and less.

[1:19:05] And it becomes more and more critical for us to leverage more outdoor conservation programs.

[1:19:09] The third component of strategic plan is about increasing participation in the commercial, industrial, institutional and multi-family sectors.

[1:19:19] These sectors are notoriously challenging to generate participation from.

[1:19:26] They require relationship building, stakeholder engagement.

[1:19:30] But on the flip side, you can get immense amount of savings from a single applicant that would take probably dozens or more applications

[1:19:38] from a single family home just to get the same level of savings.

[1:19:42] And lastly, on this strategic plan, it's not just a report on a shelf,

[1:19:46] though it is on the shelf and my cubicle, we did develop an internal staff tool to help use

[1:19:52] that strategic plan's data as a decision support tool.

[1:19:56] And what that means is that in that document, we have...

[1:20:00] We have, we have analyses for certain priority programs of high participation areas and low participation areas, and this interactive tools available to staff to help us test out different ways of marketing and leaning into successful approaches and some areas and leaning into new approaches and other areas.

[1:20:20] And I'm really proud of that continual improvement collaboration that we've developed with multiple units of Elliott water.

[1:20:26] So, the model, what goes into the model?

[1:20:29] It's a 1992 baseline.

[1:20:31] That was the first year we offered conservation programs.

[1:20:33] It looks at population and building types,

[1:20:36] because different buildings are going to use water different ways.

[1:20:39] Someone in a single family home,

[1:20:43] they're going to flush their toilet differently,

[1:20:45] then a stadium would.

[1:20:48] Savings get flushed a ton,

[1:20:51] you know, compared to a single family.

[1:20:52] So a lot of those factors go in to play as inputs.

[1:20:55] And we also use a lot of objectives, savings data, and studies.

[1:20:59] So there's a residential end use, study done, a number of years ago,

[1:21:03] that helped us understand what are the fixer saturation rates

[1:21:06] in the nationally, as well as that we could apply locally.

[1:21:10] What are the costs that we give for our programs?

[1:21:14] And then not only how much water do they save,

[1:21:18] how long will that savings last?

[1:21:21] Messaging savings, like from wire use reports, you can generate a lot of savings by notifying someone about a leak.

[1:21:30] But you probably won't remember what that report said years after the fact, right?

[1:21:35] I definitely wouldn't remember it five years ago into that future.

[1:21:39] But we also, as another example on the flip side, when you install irrigation equipment hardware,

[1:21:46] those pieces of equipment are going to be in place in generating savings for years,

[1:21:52] typically 10 years or longer. And so the model takes into these different

[1:21:57] interplays between how much does a program save, how long is it going to generate that savings for,

[1:22:04] and basically it creates an algorithm that ratchets our savings upward, ideally. And typically,

[1:22:11] Yes, it does. And for the outputs, we understand how our efficiency fixtures change over time.

[1:22:18] We know that over 90% of the shower heads in this county are already efficient.

[1:22:24] We know that only about 2% of parcels or less have participated in our landscape rebate programs.

[1:22:32] Even though we've converted millions of square feet, there is so much potential in outdoor conservation for us to meet our long term targets.

[1:22:40] And then it also outputs cost per acre foot and and other breakdowns that help us understand what types of strategies do we need to lean into to get the most benefit for this investment that we that we provide to our two million customers.

[1:23:00] Oh, and also noting, it also helps us understand that breakdown of active versus passive

[1:23:05] savings.

[1:23:06] And just touching on that comment from earlier, passive savings is co-related, toilets.

[1:23:12] You can only buy efficient toilets in California.

[1:23:16] That's passive savings.

[1:23:17] Active savings helps bend the curve of our progress towards a more reliable and sustainable

[1:23:24] community.

[1:23:28] 83,174 acre feet per year saved as of June 30 of last year. Well, that means is if we

[1:23:35] stopped all of our programs and regulations got rolled back and there have been conversations

[1:23:40] about rolling back regulations, we would have to import another 83,000 acre foot per year just

[1:23:46] to be in the same spot that we are today. So, continual investment and continual expansion of

[1:23:52] how we invest from our programs is gonna be

[1:23:55] increasingly critical for it to hit our long-term targets.

[1:23:58] I want to to that point, I'd like to point out

[1:24:01] around like 2019, you see this little dip in this chart.

[1:24:06] And this is related to a couple of factors.

[1:24:10] We had just ended the 2014, 16 drought,

[1:24:14] been a couple years after the fact.

[1:24:17] So typically our drought level participation gets sustained

[1:24:20] for maybe a year or so after the drought,

[1:24:22] but it started dipping and then we had historic rainfall and our participation fell further.

[1:24:28] So instead of being a continual upper trend, we need to figure out how we can work collaboratively

[1:24:34] in sustaining drought level participation to not only continue upward but to accelerate this

[1:24:40] pace as cost effectively and using best practices that we can. Taking a step under the hood,

[1:24:49] what programs or driving these increases to our long-term programs.

[1:24:53] The Large Landscape Program provides site-specific water budgets to over 4,000 profit.

[1:25:00] Currently 4,000 properties in Santa Clara County. These are for CII, the commercial industrial and institutional properties in multi-family.

[1:25:09] What a water budget is, as you understand, like, you look at the microclimate, the landscaping, the size of the landscaping, you get a range of how much water you should be using.

[1:25:19] And then you get that compare to your actual wire use.

[1:25:25] And that budgeting tool includes a portal

[1:25:28] where different properties stakeholders can come together

[1:25:31] and look objectively at how effectively they're irrigating

[1:25:34] their very large landscapes.

[1:25:36] And if they're over budget, we pre-approved them

[1:25:38] to get an outdoor survey from us.

[1:25:41] And the outdoor surveys are really effective consulting services

[1:25:44] where we can get help them feed into our other programs.

[1:25:49] Effectively, and help them figure out what's going to make the most sense for them to maintain their property or upgrade their equipment to be as cost effective and water efficient as possible.

[1:26:00] Next is advanced metering infrastructure and water use reports.

[1:26:03] We provide funding to water companies to help advance advanced metering infrastructure and water use reports throughout the county.

[1:26:10] And what that means is it helps provide people near real-time

[1:26:14] leek alert notion.

[1:26:15] And also helps us understand how we can target messaging

[1:26:19] two different types of customers.

[1:26:21] We do have to work really closely with retailers to do this

[1:26:24] because they have the customer data.

[1:26:26] But we want to make sure that we're promoting programs

[1:26:30] are relevant and of interest that are going to sustain

[1:26:34] long-term conservation.

[1:26:36] And then the two other points I want to make on the slide

[1:26:38] landscape rebe program is divided into its three components,

[1:26:43] turf replacement, irrigation equipment, and rainwater capture.

[1:26:46] Together, the second largest driver of our long term savings,

[1:26:52] and the wet program, the water efficient technology program,

[1:26:56] that used to be a cornerstone program for generating CI-I savings,

[1:27:00] but it's challenging.

[1:27:03] It's challenging because it's a very flexible program.

[1:27:05] And like I mentioned at the start, these stakeholders require networking and relationship

[1:27:11] building in addition to us tweaking certain programs so that we can really communicate

[1:27:17] these options as options.

[1:27:20] It's not just one all beyond.

[1:27:22] We need full engagement across these programs as relevant as they can without overloading

[1:27:28] people of information.

[1:27:29] because then how do we transform that energy into action and that interest in action?

[1:27:38] And let's take a step back. So we talked a lot about programs that help programs or driving

[1:27:43] our positive increases and our long term savings. There's policy changes at the local

[1:27:50] value water level as well as the state level. The water waste prohibitions that the board

[1:27:56] past last year includes common sense prohibitions,

[1:28:00] as well as no irrigating non-functional turf

[1:28:04] during active drought calls.

[1:28:06] The state has also passed the ban on irrigating non-functional turf.

[1:28:12] Our rules are stricter,

[1:28:14] and the state also has a ramp up period.

[1:28:17] And then the last column is existing programs

[1:28:19] that support those policies.

[1:28:21] So the large landscape program I mentioned earlier

[1:28:24] that can help understand like the budgets and where they can make where a site can make investments

[1:28:29] to be in compliance with those rules. The waterways program can be used to inform and report on

[1:28:35] people who are not following that policy in the landscape rebe program provides that funding to

[1:28:39] help them make that change today. And then the conservation guiding principles provides connections

[1:28:48] to our Conservation Strategic Plan and in parallel the Conservation Framework establishes these urban

[1:28:56] worries objectives that our water retailers will need to comply with. So they will have

[1:29:00] service area budgets that are based on indoor and outdoor worries efficiency, as well as

[1:29:06] CIi performance metrics. And so the good news is our existing suite of programs support these policies.

[1:29:14] And if we can leverage them strategically and effectively we can leverage

[1:29:17] participation more into these programs and help us accelerate our progress towards our 2030 targets.

[1:29:29] And as a reminder, some of our milestones from the last route we converted over 3 million

[1:29:33] square feet of turf in just a couple years. That's incredibly impressive. We actually run some of

[1:29:39] that most conservation programs and we have some of the highest participation rates as our peers.

[1:29:46] as Metra had mentioned, we are undergoing a study to really refine and look under the hood at

[1:29:51] at how strong of leaders we are in this realm and where we can pivot to really showcase our work

[1:29:57] even more effectively. But the question that comes...

[1:30:00] How do we keep this momentum going?

[1:30:04] Our program support long-term conservation. These savings numbers

[1:30:07] don't reflect short-term changes like if someone left their lawn, go brown for a year. They can just

[1:30:13] start a year again. Those savings go away. We want them to participate in our programs and transform

[1:30:18] how they use water and really transform our community to be more reliable and sustainable. So how do

[1:30:25] make these milestones year to year regardless of how dry or wet it might be.

[1:30:33] And then I didn't mention the model water efficient new development ordinance, but that is

[1:30:37] another policy that could help us hit our long-term targets cost effectively.

[1:30:43] And as we look at our next steps, the savings we want to achieve every year is around 2400

[1:30:55] Our five year average is only around 2000 acre feet per year, but it's, this is a good update because we increase savings over 3000 acre feet per year.

[1:31:05] Now the question is how do we leverage this momentum that we're out of a drought and, and we don't want to see what happened after the prior drought.

[1:31:13] We want to keep this momentum going and part of that's also looking at our programs.

[1:31:17] we our team runs at least one pilot every year and typically several in ways of testing these

[1:31:26] different approaches more effectively and the benchmark studies again are going to help us

[1:31:30] evaluate not only our program offerings and resource allocations but also the incentive levels

[1:31:35] compared to our peers and we'll continue to look at how we can further leverage local and

[1:31:40] statewide policies to really answer this million-dollar question because this is a question for water

[1:31:45] conservation professionals throughout California and throughout the United States is how do

[1:31:49] we get participation in the CIi multi-family sector. And I look really look forward to working

[1:31:55] collaboratively with in Valley Water in moving these next steps forward. I'm happy to open

[1:32:01] with for any questions. Thank you, Justin. Bye. No questions, just kind of. Thank you for this report.

[1:32:07] We do this on a yearly basis to monitor the, yeah, result. Yeah. Thank you. Thank you. Good job.

[1:32:15] Thank you. Any public comments?

[1:32:19] There are no hands raised electronically, and I have no card.

[1:32:22] Oh, no, no, no, no.

[1:32:25] You might as well sit at the table, doctor.

[1:32:37] I appreciate this diagram or this this page that kind of lists some

[1:32:44] opportunities that the puddle populates has to partake of some of these programs.

[1:32:52] But when I looked at them, I haven't found them as effective as I hoped they would be.

[1:33:00] And so I would like to encourage you guys to develop models, a number of different models

[1:33:06] for, say, a gray water system.

[1:33:10] You could pick a number of different houses and you could go commercial if you wanted, but

[1:33:15] especially houses people I talk to who want who are considering a gray water system, but have no idea what's involved in it.

[1:33:22] And when they go to the site like this, they see something, but they don't really have enough information.

[1:33:27] So if you had a model, you know, like two or three or four or five examples.

[1:33:32] So this is exactly what's done. These are the components. This is what it costs.

[1:33:36] That would be tremendously useful, more than I've encountered here.

[1:33:41] The same is too probably with a groundwater capture system although I haven't looked at that site actually.

[1:33:49] And then the final thing is one thing I've seen is landscape rebate program.

[1:33:56] But are you guys working with, say, our city forest or other organizations that are trying to plant trees and neighborhoods to cool them down so use less water.

[1:34:08] And so, you know, are you doing that, is it something you're thinking about or you do it or what?

[1:34:15] Yes, yes, yes, yes.

[1:34:22] Okay.

[1:34:23] Currently, we have a contract with our city for us to administer our long-busters program,

[1:34:28] which is a direct installation program for low income.

[1:34:31] So they were moving lines and they were busy with low water use plants.

[1:34:36] We are in the process of enhancing that program.

[1:34:39] And so we have a request for proposal that was out.

[1:34:42] in the process of negotiating a contract for that, it's an enhanced program, part of that

[1:34:49] will be including tree planting within it so within those sites. And then, yeah, just

[1:34:56] within our rebate program as well. You know, we do require a certain number of plants.

[1:35:00] Okay. I participated actually on part of our city forest. And so I go out there long, busting myself. But yeah, I didn't I didn't know that you guys actually were working with them.

[1:35:15] Thank you, Dr.

[1:35:16] Thank you, Justin.

[1:35:18] We're going to have we have another meeting come up here. What I thought that's going to be coming up soon here. So move on. Thank you very much. Appreciate it.

[1:35:26] to go to 4.5. Recommendation to receive an informational update on the cost associated with

[1:35:32] Pacheco Reservoir Expansion Project.

[1:35:38] Mr. Pacheco, go right ahead.

[1:35:54] Okay, there we go. The Centos check there. Okay. Good afternoon, committee. I'm Ryan McCarty,

[1:35:59] the deputy operating officer of the dam safety and capital delivery division. Here to give an update

[1:36:05] on the Pacheco Reservoir Expansion Project. And this is focused on the cost and financing. So

[1:36:10] Back last year, we took an item to the board to break out a series of presentations on Pacheco,

[1:36:17] to get into a little bit more detail on a decided list of topics, and this is our second

[1:36:24] in that series. And this one's on the cost and financing, so I'll be focusing on the total project

[1:36:29] costs, how we came up with that, our expenditures to date, and then I'll get into the financing

[1:36:34] of the project as well. So I only have about seven slides with content, not a whole lot,

[1:36:39] And so we're really looking for input from the committee and the public on what we could add to the presentation to bring to the full board, hopefully next month.

[1:36:48] So feel free once I get through to reference the slide numbers, we can go back and take some notes and add what you need to.

[1:36:55] We already received some input from the public, appreciate that. I think that's great to to get questions and interest added to it.

[1:37:05] So

[1:37:06] Okay, so the total project cost, so here we start with this gray rectangle on the left with our 30% design construction cost estimates, this is how we break up the project and all the different work activities from the design features that we've we've come up with for the the dam spillway pipeline power roadways all the different kind of attributes and pieces of the project.

[1:37:31] So we do a bottom up cost estimate survey of all those quantities and looking at the prices for that type of work at the time.

[1:37:40] So this was done in April 2022.

[1:37:42] Came up with about 1.8 billion was our construction cost estimate.

[1:37:48] That includes about a 35% contingency.

[1:37:51] So 18% of that contingency is applied to how that cost estimate could increase before we get to construction.

[1:37:57] And then we have a 15% construction cost contingencies and once we come up with that number we had another 15% for what could happen during construction. So that gets us to about 1.8 billion and then we have our construction management services and design services during construction that brings us to about 2 billion for our construction base. So that's where we get that first rectangle.

[1:38:19] Moving to the next bubble there, the five year CIP total project costs without inflation.

[1:38:25] So this is adding in our design services, and I'll get to the breakdown of that this $200 million change on the next slide.

[1:38:33] And that's broken down between planning design, environmental real estate right away, all that kind of stuff.

[1:38:39] So this is still uninflated, we're at $2.2 billion that's the raw cost in today's dollars.

[1:38:46] The next bubble here is where we add this information into the 5-year CIP and we include

[1:38:54] this total project costs and it automatically calculates the inflation because we dice up

[1:38:58] all these costs throughout the years of design and construction and what we think our schedule

[1:39:03] is and this applies a different interest or inflation rate for each of those years. So you can

[1:39:10] there's a discrepancy here between the FY2428 and the FY2529. That's because the interest rates were

[1:39:18] re-adjusted for those years and they did an analysis and it was somewhere around 5% each year

[1:39:22] and they moved them up and actually the cost went down with this inflation because they had more

[1:39:28] inflation in the coming years and current years and lower inflation in the out years. So that's just

[1:39:34] from the model that they came up with.

[1:39:36] So that's why you see that discrepancy there.

[1:39:40] So then we get into the next two bubbles.

[1:39:41] And these are our financed costs.

[1:39:44] So this is kind of the whole point of getting into this detail

[1:39:46] because we have a lot of confusion on finance costs

[1:39:50] and with the total project cost is.

[1:39:52] Usually we just talk about things that's

[1:39:53] the total project costs in our CIP for all of our other projects.

[1:39:56] That's how we develop our budgets year over year to know.

[1:40:00] How much money will need to fund these products. So, talking about financing now. So, this is with the 35% partnership.

[1:40:07] We'll get into this a little bit later. And so, our total finance cost with partnerships would be 3.2 billion. At the end,

[1:40:15] and there's a slide that goes through all the calculations later on. We'll get into this more detail.

[1:40:20] And then, finally, without partnerships, this, this largest bubble is $5.5 billion.

[1:40:25] in the FY2428, and then FY2529, it's about 5.3.

[1:40:30] So again, that discrepancy on how the interest changes

[1:40:33] throughout those years in the future.

[1:40:36] So that's the discrepancy there.

[1:40:42] OK, so this is a breakdown of that total project costs

[1:40:45] that includes the $2 billion for the construction phase.

[1:40:50] And this is dollars are in thousands on the slide.

[1:40:53] So just add a comma and $30 of all these numbers.

[1:40:57] So you can see that the uninflated cost there, the full ring is $2.2 billion on the right.

[1:41:02] You can see the box is breaking down the planning design, environmental right away is includes real estate.

[1:41:09] And then the construction there, close out and then the task zero zero zero zero is a miscellaneous things that don't fall in these categories.

[1:41:16] So this is the breakdown where some of these things up into our total project cost, then it goes into the CIP model and takes our inflated cost up to about 2.7 million.

[1:41:26] $5 billion. Also want to note between real state and our construction costs, that's where we have

[1:41:32] $50 million in mitigation costs in our budget. That's a common question to get as well. So there

[1:41:37] is some budget there for that. And we haven't spent any of that yet.

[1:41:45] Okay, moving to expenditures

[1:41:47] to date. So this bar graph on the top shows that we've spent about $80.5 million to date. This is

[1:41:54] to March 29th. So I think we've done about another million or two since then. And then this has

[1:42:01] compared to the total project cost in the CIP inflated at 2.75 billion. So you can see we're

[1:42:07] right here, then the box is below, breakdown, the expenditures by phase and type. So you can see the

[1:42:14] first column there is Valley Water Labor. So that's what we have spent on our own staff internally

[1:42:19] on the project for each of these categories.

[1:42:22] And then the next column, the services and supplies.

[1:42:25] These are our consultants and an outside contractors

[1:42:28] that assist us with the project.

[1:42:30] So you can see about 15 million spent on value water labor

[1:42:34] and 65 million spent on the services and supplies.

[1:42:37] They're a total of 80.5.

[1:42:39] And then the chart on the right shows the breakdown

[1:42:43] on the different services and supplies.

[1:42:46] See most of it is to our consultants.

[1:42:48] about 50 million of that 61.6 million is to our main contract with AECOM that includes about 14 other consultants on that contract, but that's about 50 million of that 61 million.

[1:43:00] So that's not listed on here, but just to throw that in.

[1:43:04] In case there's a question and then going through the rest of the items there, much smaller, the biggest cost on the public agency category is our $1.8 million we've paid to DSOD for our permit fee and that allows them to review our project.

[1:43:18] and work with us, but that's how the permit works.

[1:43:20] That's a partial payment of what the full permit fee will be for the project.

[1:43:25] And you can see the list of the other costs there listed below.

[1:43:33] Okay, so getting into the project funding, just want to know this is not a pie chart showing

[1:43:38] shares.

[1:43:38] This is just showing four different sources of funding in a nice graphic way.

[1:43:43] So starting at the top right, the value water rate pair.

[1:43:46] So this is the main point of funding for the project, the water utility fund.

[1:43:51] See 84% from North County zone W2 and 16% from South County zones W5 7 and 8 so we've talked about that in detail in the next slide. We'll show that the breakdown on the on a table.

[1:44:06] See our with the alone for $1.4 billion. It's about half of the project total project costs that we did close on that in October of 2023.

[1:44:15] And we're expecting a series of loans over the construction period, taking out what we need at the time.

[1:44:22] And that's a matching about 49% on each one.

[1:44:27] And you can see our $92 million or for planning design.

[1:44:30] We're hoping to move into that in 2032.

[1:44:34] Moving around to the WISIP grants is the CWC funding.

[1:44:38] We've got a conditional award of $504 million back in 2018.

[1:44:42] actually it was less the time I think it was 487 and they've since increased it to

[1:44:46] to 504 along with the other wizard projects.

[1:44:51] So we did get a reimbursement through early funding and actually this is a typo.26

[1:44:56] million is 24 million on our early funding agreement.

[1:45:00] I think we've received most of that except for the 10% retention and then the remainder of that conditional award will be available once the project is in construction. We have to get all of our approvals and permits in place in order to be eligible to receive the rest of the funding. So that will all happen during construction as well.

[1:45:21] And then moving around to the top left, the value water partners, so we did have a target participation of 35% from board direction back in April 2021.

[1:45:30] We presented a slide showing a range from zero to 35% in the board urged us to attempt to get the highest maximum participation that we could at 35%.

[1:45:43] But I just want to note that there's no participation required for the CWC and the Water Commission that was just a board direction back in 2021.

[1:45:56] Okay, so I'll do my best to articulate CFO Taylor here.

[1:45:59] It's really good to go into this stuff, but going through this table we've shared this before.

[1:46:04] We added a couple little notes to highlight here, but this is going through the payments and the financing in five year increments.

[1:46:11] So you can see them, the left most column there, the five-year increments through our fiscal

[1:46:16] years all the way through FY67, and in column B, you'll see the capital costs that we expect

[1:46:22] that are built into our CIP model, each of those years.

[1:46:27] Column C has our with-zip or prop one grant.

[1:46:29] I just described for 504 million, and how we anticipate that will be drawn down, and then the

[1:46:41] through our revenue bond financing through water utility.

[1:46:46] And then we have what our payments back would be

[1:46:48] that are not in parentheses for a wifida debt service

[1:46:50] through all of those years.

[1:46:52] And then also the bond debt service payments and column G.

[1:46:56] And then column H, those in will are 35% partner payments

[1:47:00] would be, so just taking a 35% share

[1:47:02] what value water is paying and applying that

[1:47:05] towards the project cost as well.

[1:47:06] And you can see our net cash flow, column I.

[1:47:09] And it gets you to our 3.2 bill

[1:47:11] finance costs with partners and then if you just take partners out of the equation or at the 5.275 billion.

[1:47:20] So just summing up all that that looks and then there's a some additional information on the next slide.

[1:47:26] Breaking down with that means for the North County and groundwater charges and the average monthly impact to the average household.

[1:47:34] so you can see an FY29 to 33, it's about $9.33 with out or with partners and 1095 without partners.

[1:47:45] And so going through the rest of these ranges from FY34 to FY53, you can see there's quite a drastic

[1:47:50] jump between the with partners and without partners and part of that because we start paying a lot more

[1:47:56] of our withia debt service in that period of time. And then the same goes for FY54 to FY67 with that

[1:48:04] changing the impact to the average household bill would be. In the down below just another

[1:48:09] table summarizing similar information there, but then also including what the

[1:48:15] POS per acre foot would be increased for each of those different scenarios.

[1:48:25] Okay, this is the last slide. This is a summary of the WIFI programs. There's just a lot of

[1:48:30] different notes about what the WIFI program is and how it works. I'll just highlight a few of them

[1:48:35] that this with the program will fund up to 49% of our eligible project costs so we requested

[1:48:40] that 1.4 billion and then just going through how the rate is set there on the interest

[1:48:49] rate of, I think it's the fifth bullet, it's 0.01% above the US Treasury rate. We can pay

[1:48:57] it back up to 35 years after the project has substantial completion so that they say that

[1:49:02] that helps ensure intergenerational equity

[1:49:05] from the bullets down below there.

[1:49:07] And yeah, I think that's all highlight there,

[1:49:10] but it's all out in front of you for your information.

[1:49:20] Any questions?

[1:49:21] Thank you Ryan, committee members, Barbara?

[1:49:24] Yeah, so we have a hard stop in 10 minutes.

[1:49:27] Is that what I heard?

[1:49:29] Keep going.

[1:49:29] OK, so I will go through this very quickly.

[1:49:33] I'd like to thank the individuals and organizations

[1:50:00] Specifically on the the Sierra Club comments, because I think they have some very specific things, suggestions as well as questions they'd like to answer.

[1:50:12] So their initial comments that they felt should be expanded was information, breaking down on planning design for the different kinds of things like hospital environmental review permitting so forth.

[1:50:27] environmental cost for mitigation and the cost for monitoring.

[1:50:32] Construction breaking out the different costs and probably probably the,

[1:50:39] how do I say,

[1:50:44] the, the level of risk, like for example,

[1:50:49] connecting to the grid.

[1:50:50] I think that that is something we've had bad experiences with PG,

[1:50:54] If you can ask us have other agencies that don't have relocation, ability, even when cities have relocation ability, it's tough to get them to perform.

[1:51:05] So I think we may have to pay more than we might expect for the real providing electrical service, just if we want to buy certainty.

[1:51:18] So I think that's something we need to take a look at because and also there could be a delay to the project if we don't have the service in time.

[1:51:28] So, so you can read the rest of that. I just wanted to highlight those particular ones.

[1:51:34] And I also think that what the Sierra Club is asking for is detailed information that really helps the board and the community make decisions,

[1:51:53] right?

[1:51:53] to really figure out where are all the pieces and, you know,

[1:51:57] as professional engineers, you know, staff's obligation is to be providing

[1:52:05] factual information, you know, not criticizing the project, not being an advocate for the project,

[1:52:11] but, you know, just providing that information.

[1:52:13] And regarding to expenditures to date, I think this year I'd love to ask some

[1:52:21] questions that they would like to have answered, and I guess I will just, I'll just say $80 million.

[1:52:28] You used to be able to deliver a big project and now it doesn't even get us through the planning

[1:52:32] phase. So it makes me feel old, but it makes me feel really old. And one other thing, and this isn't

[1:52:42] specifically related to the cost of the project, but I'd like to know when we'll be able to make

[1:52:48] determination regarding the, how the project will affect flooding risks. And we had a

[1:53:02] rather spirited discussion recently with a couple of board members with one board member

[1:53:08] saying we wouldn't have flooding in the potato area if this project was built in another

[1:53:12] saying it would have no influence at all. And I think the answer obviously is somewhere in the middle.

[1:53:18] There would be some benefit, just like there is with Anderson dam of having a dam in place.

[1:53:27] But I do think that it's important to have a technical analysis, so the board has a good understanding of what is that incidental benefit.

[1:53:38] Because it does factor into our decision-making process. I'm sure.

[1:53:41] And so it's good for all board members to have the correct answer to that question so that we're not speculating and I recognize that it can be very difficult to come to a precise number because some of it is dependent on how the dam is operated, but I think we can talk about ranges right and just put it in context.

[1:54:04] So that we understand, yes, there's a level of uncertainty, but we're not going to achieve, you know, 99% flood protection from an incidental benefit, but it's not nothing either.

[1:54:18] So those are my comments and you may not be able to answer them today, but I hope that we will get answers to them. So thank you.

[1:54:29] Thank

[1:54:33] you. Thank you. Thank you. Thank you chair and thank you.

[1:55:00] I think it's making sure that the full board gets a reviewed version that tried to anticipate some of the questions.

[1:55:10] So in that regard,

[1:55:13] that I agree with Director Keegan's comment related to Sierra Club's comment letter.

[1:55:21] First of all, I do want to thank Herzegare Club that you submitted your detailed comment

[1:55:28] letter to us several days before today's meeting, which gave us some time to read the

[1:55:35] letter.

[1:55:38] That's really helpful.

[1:55:41] There's one thing I want to point out at the beginning is that the letter indicated that

[1:55:49] disappointing that there's no new information and the whole thought process for the board to get

[1:55:58] into this individual areas that's related to this project is to really get to the detailed level

[1:56:09] for that particular area. So, for example, last board meeting, we delving to the benefit of the project

[1:56:18] And then today the committee is reviewing the cost aspect and finance aspect of the project.

[1:56:28] Having said that I do think this process is working that because it's generating many detail questions from the Sierra Club, which will help us in understanding what is your question.

[1:56:41] and so that it's everything is transparent and then we'd like to put all the information on

[1:56:49] table and because the board will rely on this information and your input to this information

[1:56:58] to help us reach a decision. And so I think very kind of I hope this process as designed

[1:57:06] is working. And the detail questions from Sierra Club, my suggestion is that when this item

[1:57:18] is ready to go to the board, I know it's planned for June and my suggestion may as a more

[1:57:25] work to your packet.

[1:57:30] If we, I think we should include this public comment in the agenda

[1:57:37] packet, that's planned for the board briefing and also that answers as we can as of

[1:57:48] to these questions, particularly, that's coming from Sierra Club.

[1:57:56] So that would be my suggestion.

[1:58:01] I do have one disagreement with Sierra Club to

[1:58:07] the cost of dollar per acre fee to water supply in this presentation.

[1:58:16] I personally, I don't feel that that's this cost project cost presentation. I feel that's more of a

[1:58:32] water supply master planning presentation because there needs to be looked at in that regard in

[1:58:39] a range of projects. Each project is different that simply look at total project cost at this point,

[1:58:49] divided by the number of acre feet of water. I just think it's first of all, it's isolated

[1:58:56] it. And secondly, it can lead to many conclusions that's not based on looking at the

[1:59:10] complete picture. So my suggestion is that include that. And I know that a lot of supply

[1:59:18] Master of Planning, have that as a Caliburial Presentation, as always.

[1:59:25] And as we move forward on the Master of Planning,

[1:59:28] that number will be more meaningful, because they're more and more

[1:59:33] aspect to consider as part of the overall acre-feet of water that's received.

[1:59:39] So that's my suggestion for this.

[2:00:00] I'm adding more work to your package for the board. It's a question that's generated from the board.

[2:00:10] When we talked about the project benefit and Dr. Keegan earlier mentioned about the incidental float protection benefit to the power of our river.

[2:00:26] And so, if we probably, to do have a more concrete,

[2:00:38] as you may need to do some analysis to get to that point,

[2:00:45] but then for the board meeting,

[2:00:49] maybe a list of questions that's raised by board members,

[2:00:54] So that we don't lose those things and some can be answered now, some can be answered in the future.

[2:01:06] But the main point that this process that the board asked us to do related to the particular reservoir is because it's such a large project complex project and a huge investment that

[2:01:27] every useful information and data that will help the board to make decisions that make sure

[2:01:34] that we provide that in a transparent manner and the public will have that information and so

[2:01:41] they can profile feedback. So that's my feedback. Thank you folks bear with me because we got a major

[2:01:47] meeting come up here right now we're really running late. So here's the deal we got the letters from

[2:01:51] Thank you so much, Irvin, Sierra Club.

[2:01:53] Got Jim Curl here, Dr. Young.

[2:01:55] I'd be glad to let you speak.

[2:01:57] If we can, folks, the staff has this information.

[2:02:00] They will enter the year of question in your attendance.

[2:02:03] So first of all,

[2:02:04] Scott, are you there?

[2:02:04] Do you would like to elaborate at all?

[2:02:09] Hi.

[2:02:10] I will skip elaborating on that.

[2:02:12] I really think the directors for taking our comment letter

[2:02:17] in seriously and I'm looking forward to responding to that.

[2:02:21] But I wanted to thank Mr. Cole for the analysis he submitted around the cost for acre-foot for

[2:02:28] potable reuse versus cost for acre-foot third-bit take-o.

[2:02:32] His analysis suggests the need for an in-depth comparison of the Pacheco Dam project versus

[2:02:38] focusing on potable wastewater reuse.

[2:02:41] These are the two most expensive future projects in the CIP and passed analysis for the

[2:02:47] 40 water supply master plan indicated that we do not need both to meet future water demands.

[2:02:54] It seems important for the 2050 water supply master plan update process to compare the

[2:02:59] different water supply options that can address drought, water shortage scenarios.

[2:03:05] Monetary cost and water supply benefits are obviously important variables to compare, but

[2:03:10] analysis should also assess other cost and benefits such as environmental impacts, environmental

[2:03:16] benefits water rate impacts risk of construction cost escalation and public perception.

[2:03:26] So yeah, I just I hope there's the water supply master plan process update will

[2:03:32] consider this input. Thank you. Thank you. We have your letter and your comments or staff.

[2:03:40] Let me see you get Mr. Kerl. Go ahead, please. If you don't mind quickly go ahead,

[2:03:44] later has got to be submitted.

[2:03:49] Again, my name is Jim Cool.

[2:03:53] An economic analysis has been

[2:03:56] performed comparing the $2.7 billion per Chaco reservoir expansion project to Orange County's

[2:04:04] wastewater recycling facility. The analysis determined that the cost of converting wastewater

[2:04:13] to portable water would be 30% less than the cost of storing water at the

[2:04:23] Chaco reservoir.

[2:04:28] I want you to remember that 30% less.

[2:04:34] With more

[2:04:34] sugar droughts caused by climate change, the advantage of using waste water

[2:04:39] recycling aggressively in the water supply planning is enormous. Recycling water

[2:04:48] would be a more cost-effective alternative to Pacheco and provide water supply resiliency.

[2:05:00] It could be terminated an portion of the funding employed to expand wastewater to portable water recycling, plus make water more affordable.

[2:05:13] Pocheco is the primary cost driver for a 12-times increase in wholesale water rates for 1.6 million residents in North County.

[2:05:29] Pocheco's $29,000 per acre for storage capacity is 5.7 times more costly than expanding the carols.

[2:05:43] The main value of Pachagol from what I can determine appears to be reducing reservoir algae

[2:05:51] blooms.

[2:05:55] It's not combating droughts. Pachagol ship has left the dock. But it's not too late to reverse

[2:06:04] the direction. And achieve efficient effective water supply resiliency in a sustainable manner.

[2:06:13] In developing the 2050 water supply plan, it is recommended one before more funding and time

[2:06:23] or committed to the Chaco conduct a rigorous, sloping comparison analysis between the Chaco

[2:06:31] experiment, expansion, and waste water recycling

[2:06:35] gold in Greece.

[2:06:39] Published the results for review.

[2:06:43] If waste water expansion is superior,

[2:06:47] incorporate this strategy into the master plan,

[2:06:52] this is comments have been given to the board and others.

[2:06:57] And basically, they detail the justification

[2:07:01] for this position.

[2:07:04] Jim, if you don't mind, summarize, please.

[2:07:06] Okay.

[2:07:07] I have decal copies.

[2:07:09] Did you have it here?

[2:07:10] I've been meeting hands.

[2:07:11] We haven't here, sir.

[2:07:11] You'll be submitted.

[2:07:12] I thank you for your time.

[2:07:14] Thank you.

[2:07:14] Please.

[2:07:17] Microphone please.

[2:07:18] We've got to move on.

[2:07:19] We're running away late folks.

[2:07:21] But your information is here.

[2:07:22] We'll be submitted.

[2:07:24] Okay.

[2:07:24] Well, in the interest of time,

[2:07:27] I'd just like to reiterate.

[2:07:29] Mr. Gross comments.

[2:07:33] The current plan of Chaco is basically one that we've seen for the past 100 years.

[2:07:39] You create a reservoir, you fill it up with water from bite-draining rivers and put it in the reservoir.

[2:07:47] That is a non-sustainable ecologically.

[2:07:50] It's a non-sustainable approach.

[2:07:52] What we have to do is move aggressively towards water reuse.

[2:07:57] basically wastewater purification, storm water capture. We have to use the water we've got.

[2:08:06] We can't keep draining the rivers, have filled up yet more reservoirs, which is the plan here.

[2:08:12] So I just like to reiterate what he's saying, and I know everything is just a time

[2:08:16] that's got it there. Thank you, Dr. Young. I just sent chair for the chair. I know where we're working.

[2:08:25] Yeah, wait wait wait wait wait wait wait wait. I just want real quick that I appreciate hearing

[2:08:29] our the public comment but then the comment sounded to me that this is the only project we're

[2:08:34] working on. I would encourage both of you to look at all with the past the the already completed

[2:08:40] study and then the progress that's going on on the water supply and master plan. Put your

[2:08:45] reservoir is the only one thing that's being evaluated on a lot of things, which includes a hundred

[2:08:52] purify while they recycle while they're many things. So, so the best way to handle that is

[2:08:57] answer to the questions, provide the education, and we'll be fine. So with that, Ryan, thank you so

[2:09:02] much. Anybody else up there? Uh, through the chair there is one online hand raised, are there

[2:09:15] water or existing water because if the the the the considerations whether the whether the water

[2:09:26] is this anyway whether we know water or existing water that's a good question. Thank you.

[2:09:32] Thank you.

[2:09:33] It's going to forepoint.

Water Supply and Demand Management Committee Regular Meeting - May 17th, 2024

Agenda

Transcript