And I'm calling the November 6th Environmental Services Commission meeting to order.

First, we'll do a roll call for the commission.

Uh Commissioner Lauterman.

Present.

Commissioner DuPertis.

Present.

Thank you.

Commissioner Hainash.

Commissioner Laxon.

Commissioner Tyson.

Present.

Commissioner Margolis.

Is uh excuse absence?

Right.

Uh next we'll have a call for a motion to approve the agenda.

I move to approve the agenda.

Thank you.

May I have a second?

Thank you.

Are there any objections?

I mean not objections.

Are there any uh modifications to the agenda proposed?

No.

Hearing none, the agenda is approved as motioned.

We'll now move to oral and written communication.

Oral and written communication are now open.

Remember that there's a three-minute time limit per person and 30 minutes total per meeting.

Public comment shall be limited to matters relating to City of Bellevue government and to the subject matters encompassed within the power and duties of this commission.

Persons participating in commission meetings must not engage in speech or conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of any meeting.

Disruptions may include and are not limited to failure of a speaker to comply with the commission bylaws concerning public comment.

In compliance with Washington state campaign laws regarding the use of public facilities during elections, no speaker may support or pose a ballot measure or support or pose a candidate for an election, which includes your own campaign.

Any speaker who begins discussing topics of this nature will be asked to stop.

And we have one person registered for oral communication, Mr.

Zimmerman.

You can say right here.

Yes, in front of the computer.

Oh I'm sorry.

Yeah.

Yes, okay.

Yeah, about your bulab.

I'm totally confused.

Yeah.

New law law, what is you have?

Yeah.

What is make by consul and mayor Robinson and Nazi pig?

Yeah.

So I want to explain to you about fascist rule.

What is cut Bell?

Because Bellevue number epicenter of fascism in Seattle.

Yes, this my statement for election against Mayor Robinson was a cut.

Equip only from 2004 to only one sentence.

Make a bell of you greet again.

So they clean 200.

My statement for election.

Because I support Mayor Robins.

By definition, it's a crime.

They are criminals.

They're supposed to be being jailed for this.

And for my understanding, only one man and I have 15 elections before.

Yep.

Only one man in State Washington.

What do they do for me?

For them not matter.

Not a pig, it's not a pig.

Yeah.

It's number one.

Yeah.

I will talk about this.

They doing this for two years.

I will talk in for two years.

Another, they prosecute me with small misdemeanor claim.

Trespass second degree.

This trespass second degree.

Go for two years.

Betray a hundred pages.

One man, his name, Tony Maccaroni.

Make a hundred pages.

How bad I am.

Yeah.

So guys, it's very interesting for me.

You know what I mean?

Because public defender, City Attorney, your judges all acting like a Nazi pig.

Yep.

Conspiracy, totally.

Because statistically, in King County, misdemeanor case, like my or same similar public dependence spend one hour.

One hour for case.

Every Tuesday, two o'clock is commissioned court.

What is leader?

Oh Tolly.

They spent seven cases for one hour.

Five-minute case.

My case for two years.

Seventh time I try fire.

My public defender, because I don't want public defender from beginning.

They put my nick with judges, so can control me.

And after two years, they make dismiss case.

How much is it cost?

Who will pay for this?

You guys this fascism?

What is I called for shit with idiotic face?

Viva Trump.

We have a new American revolution.

Stand up, Slam in Happy Cow.

Guys, you're working for Dory Dory Fascist Junta.

Thank you very much for your time.

You need to understand who you are.

Well, you can all right.

Would anyone else in attendance like to speak?

If you're in the audience, please raise your hand.

If you are attending remotely, please use the raise your hand feature in Zoom.

Or if you're joining via phone, press star nine.

Good morning.

Welcome to all.

Are there any attendees online, Scott?

There are none.

It's all right.

Um that concludes our public comments section.

Oral and written communication.

Next, uh, let's see, Councilmember Lee is not here today, so there'll be no updates from him.

And so we'll move on to staff reports.

Scott.

Yes, thank you.

We do have a few items, uh uh informational items for the commission this evening.

First is a reminder of current training opportunities.

I think Joe mentioned this a little bit uh last month, but I'll just uh throw this out there as a reminder.

We have parliamentary procedure training on December 8th, and that is uh focused on conducting effective organized and fair meetings.

The RSVP was due earlier this month, but it's not too late.

If you have an interest in attending, there's still time to respond.

If you can confirm attendance with either myself or possibly Larissa this evening, would be great if you can, but maybe tomorrow uh would be fantastic.

Second, we have the uh open public meetings act and public records act training.

Um that's focused on implementing and complying with those laws.

Training must be completed within 90 days of appointment with a refresher training completed every four years.

Uh that training is available online, and once you've completed it, uh you uh need to be sure to email confirmation to the city.

So if you need assistance with any of this, more information, reach out to myself or Larissa.

We're happy to get that to you.

And then finally, I want to highlight uh that the upcoming 2025-2026 mid-biannium budget is to be considered by council later this month, which includes a 2026 sewer rate adjustment for utilities.

The council previously adopted a 7.6% sewer rate increase for 2026, which accounted for a 7% rate increase with for King County's wastewater treatment charges.

Earlier this year, the King County adopted a revised wastewater treatment division forecast, which adjusted their 2026 rate to 7.5%, as well as uh the increased rates in the longer term forecast.

King County's uh 2026 uh point five percent increase results in a 0.3% increase in the city of Bellevue's sewer rate for 2026.

And from our perspective, completing this adjustment is considered administrative in nature because it is consistent with the city's financial policies that direct wholesale costs to be directly passed through to Bellevue customers.

And with that, uh that concludes staff reports.

Thank you, Scott.

Any questions uh from any of the commissioners on uh Scott's report, whether it be the training or the administrative rate increase.

On the second training that you mentioned, so every four years you said that was needed.

Refresher, refresher, okay.

Every four years.

So if we just joined two years ago, this is likely not required.

Okay, yeah.

So it is if you're recently appointed within 90 days of taking your seat, or at four years of refresher is required.

Sure.

All right, thank you, Scott.

Uh, we'll move on to the approval of minutes.

First, I'll ask if there are any requested changes or modifications to the minutes as published.

No, okay.

Then with that, may I have a motion to approve the minutes?

I move to approve the October 2nd minutes.

I may have a second.

I second.

Thank you.

All right.

Then we have no unfinished business either, so we're gonna move to today's full calendar of new business.

First one is the adoption of the updated environmental services commission bylaws.

Okay.

One moment.

There we go.

Okay.

Good evening, Commissioners.

It's my pleasure to provide a follow-up presentation tonight concerning the Environmental Services Commission bylaws.

Staff is seeking the Commission's adoption of the updated bylaws, which requires two-thirds of the membership to vote in favor of any amendments.

The agenda for this presentation includes a brief background and summary of the changes, and then the commission will consider taking action to adopt the updated bylaws.

By way of background and summary, at the commission's last regular meeting in October, staff presented an overview of ordinance 6864 and ordinance 6865, which amended several provisions of the Bellevue City Code or BCC that apply to City Council advisory boards and commissions.

These ordinances limit service on any board or commission to two consecutive terms, extend the maximum period and advisory board or commission may exclude individuals from future public comment and/or meetings for any disruptions or other meeting violations.

It increases the exclusionary period from 60 to 180 days.

And it also clarified the appeal process by which any excluded individual may seek review of his or her exclusionary period.

Given these ordinances, amended chapter 3.55 BCC, which applies to the commission.

Staff prepared and recommended discrete amendments to the commission's bylaws to ensure conformance with chapter 3.55 BCC as revised.

Following discussion at the October 2nd meeting, the Commission directed staff to bring back updated bylaws for a final vote in action at the next regular meeting this evening.

The final updated bylaws are included in attachment A showing revisions and attachment B, which is the clean version for adoption.

Please note attachment A does reflect three additional revisions not previously presented at the Commission's meeting in October.

These edits are non-substantive and intended to ensure consistency and uniformity across the city's advisory boards and commissions, uh advisory boards and commissions, and are considered cleanup amendments.

The revisions include use of the city seal at top of the document, identifying the correct resolution that supports the current rules adopted by the city council, and using gender neutral terms throughout the bylaws.

Pursuant to Article 16 of the Commission's bylaws, a two-step process is required to amend said bylaws.

The commission has followed the two-step process required to amend the bylaws and may now take final action.

Any amendments again require two-thirds of the membership to vote in favor of amending the bylaws.

Thank you, Scott.

Um Commissioners, do you have any questions for Scott before we take a vote?

All right.

Then I'll do a roll call vote.

If you could uh indicate your vote with yay or nay, that would be appreciated.

Commissioner Lutterman.

Yay.

Thank you.

Commissioner DuPertis.

Yay.

Commissioner Heinash.

Yay.

Commissioner Laxson.

Yes.

Commissioner Tyson.

Yay.

And I am a yay as well.

Thank you.

So that concludes the adoption of the updated environmental service commission bylaws.

Thank you, Scott.

Next order of business is the sewer utility cost of service analysis and rate design recommendations.

Good evening, Commissioners.

Matt Thurber here with the utility, and I am with my good friend again, Matt Hobson, our fiscal manager, and we are back for better or worse to talk about uh sewer cost of service uh analysis.

And this time we are gonna get into some rate design options for you.

So uh the purpose of tonight's presentation is to continue the discussion on implementing the results of our cost of sewer study.

Bellevue utilities as well as utilities across the country use a cost of service study to evaluate the fairness or equity of rates for its customers.

Public utilities also rely on these studies to evaluate the pricing of services to help achieve their financial and customer service goals.

So this is the second of two meetings.

We met with you last on October 2nd, and we discussed the purpose and methodology of a cost of service study, and we also showed you some options for phasing those results in.

And so tonight we'll follow up with the commission about what their preferred option is for phasing those rates in.

Following that discussion, we'll present four rate design recommendations, and those will be focused on the fixed and variable portions of a customer's bill.

And there are three primary goals that go along with that.

First, to simplify the rate structure so to make it more understandable for the customers.

Second, to provide the customers with greater control over their bills.

So in other words, if they use less, it's possible for them to pay less.

And then third, to minimize the bill impacts to the extent possible on each customer's bill.

So this is our agenda for tonight.

Again, we'll recap the October 2nd findings.

We will provide three options for phase-ins.

First, we'll show staff's recommendation, which is a five-year phase in period, and then we'll provide two additional options for consideration.

The second is a three-year phase-in option, and the third, at the commission's request, is a seven year phase in option.

After that, Matt will provide some brief background and rationale for changes in rate design.

This isn't required by law, but again, there are several goals that we're trying to hit with the rate design recommendations.

Those include affordability, bill simplicity, and providing greater control for customers over their bill.

So we'll be seeking the commission's feedback on moving forward with those rate design options or sticking with the rate design structure that we have.

We'll wrap up the presentation with discussion questions, and then we'll talk about next steps for the cost of service study.

So here is a recap just briefly of our October 2nd uh findings.

So we talked last time about what the purpose of a cost of service study analysis is.

And so first and foremost, the state of Washington does require by law that public utilities base their rates on cost of service.

And furthermore, the city of Bellevue has financial policies that require the utility to set rates based on cost of service for water, sewer, and stormwater, so that rates are equitable in proportion to each customer class's demand on the system.

So there's three main purposes for this analysis.

First, it's a rational and defensible basis for determining the fair share of utility costs for each customer group in proportion to the demands they place on the system.

Second, these cost studies are compared or the cost shares are compared to the revenue collected by each customer group to measure if they meet cost of service, and we'll show a graph that puts that into perspective on the next slide.

And then third, the cost of service study is the most widely used and defensible basis for setting utility rates across the industry.

Okay, so we showed this slide last time, and this is a comparison of the cost of service for each customer class.

So I'm going to just orient you real quick to this graph.

So the black dotted line in that graph is 100% of cost of service, and that is a goal, but it is not always easily achievable.

So what those yellow lines represent are the upper and lower bounds of cost of service.

So we would like to get each customer class within those yellow bounds to the extent possible.

And for the rest of the graph, the bars, the dark green and the light green, that represents cost recovery for each customer class.

The dark green is cost recovery based on 2027 data, which is what our cost of service study is based on this time.

And the light green is the cost recovery from 2019.

So you can see that not much has changed from 2019 to 2027.

So partly that's because in 2019, when we did this study, we didn't act on those results.

And there's a reason for that.

So when you do cost of service studies, there is an industry standard that if you see results that show you're subsidizing other classes, it's good to verify that with another study just to make sure you're seeing the right thing before you act on it.

So at this point now in 2027, we are seeing the same thing, so it would be prudent for us to act on it.

One other thing that I'll mention before I get to the big takeaway on this slide is that it is possible for utilities to intentionally subsidize other classes with one class's rates.

If you're trying to create low income rates, for instance, Bellevue isn't trying to do that here.

So these are what we would call unintentional subsidies.

So the big takeaway from the slide, as we presented last time, is that the multifamily class, that's the class on the far right, is subsidizing the other two classes, the single family residential class and the non-residential or the commercial class.

So multifamily is paying more than their fair share of the cost, and the non-residential or commercial and the single family residential are paying less than their fair share of the cost.

So with that said, uh, I'm going to turn it over to Matt.

He is going to start talking about the phase in options and some of the major takeaways before we get into rate design recommendations, and we are going to do our best to switch chairs.

I told them we had to sing the song.

So before we talk about the phase and options, get a little scooter a little closer here.

And the high cost recovery result for the multifamily residential class is almost completely attributed to their unique rate structure.

I'll talk about that just briefly.

Our multifamily residential class, they are assessed a fixed charge that's assessed for every dwelling unit, every apartment unit in that building.

And that rate is 141.47 cents every two months.

So a 10 unit apartment complex, that fixed part of their bill would be about 1,400 every two months.

In that rate structure, there's an assumption that that 141 dollars per apartment unit includes an allowance of flow.

Flow is a measurement of water volume leaving the premise.

And that allowance is equal to, there they get 11 CCFs, 1,100 cubic feet of flow every two months.

So that fixed charge they're paying every month, includes this kind of basis, this amount of flow that's embedded in their charge.

And anything above that amount, they'll pay per CCF.

Okay.

Sounds great.

The issue we have though is that on average, a dwell an apartment unit uses a lot less than that.

They use about seven and a half CCFs every two months.

But that fixed charge assumes they're using 11.

And what that means then is that they're on average, the vast majority of our apartment dwelling customers, they're paying for an allowance that they don't need.

And that's why we're showing that high cost recovery level.

It's this unique rate design that we're trying to correct with those recommendations.

So these recommendations are designed to bring the cost recovery rate for multifamily down.

And there's just you push one side of the balloon down, the other part's going to come up.

So the rates for single family residential and non-residential would increase in proportion.

Okay.

And they're useless unless you make a decision based on the information you see.

And so we house two types of actions that oftentimes come from the result of a cost of service study.

The first one is if you see those inequities between classes, the first question to ask ourselves is that a real difference?

And if so, um, should we act on it?

As Matt mentioned, this is the second time we're showing these results.

It's a justifiable and defensible conclusion here.

And so in talking to the commission last month, there was a realization, yes, the city needs to do something about improving the cost equity.

The more difficult question is how fast do we make this correction?

And we talked about a three-year period and a five-year ramp up period.

And that, and then also there was a suggestion at the commission to also introduce me even a longer ramp up to seven years.

The second set of policy actions are um related to rate design.

Um that really deals with uh the the series of fixed and variable charges we provide to our customers.

Um, that is the economic signal that customers see on their bill.

This cost of service stuff, you know, unless they love this stuff and they're gonna pull this memo up, they're not gonna see this piece.

What they will see is the fixed and the variable charges on their bill.

And rate design is focused on changing those for the purpose of making it more simple to understand, providing greater incentives for conservation, if that's one of our goals, and then aligning to other policy goals that we may have as a city organization.

One of the requests from our last commission meeting was instead of, in addition to talking about these phase and options as a reflection of percent increases, showing them in terms of dollars and cents.

So to house that conversation, I'll walk through this chart here.

This is a um, if I can do my my counting correctly, a seven-year forecast of the typical single family residential sewer bill.

If the city does nothing in response to this cost of service study, sewer bills will still increase.

The cost that the city incurs to provide sewer services will go up regardless of the choices about improving cost equity.

This is an illustration or a projection of that typical single family bill, absent any changes in response to cost of service.

So the typical bill in 2026 will be about 124 per month, increasing to about 240 seven years from now.

Under the seven-year ramp up period, if we were to eliminate all unintentional subsidies from our rates, that would add about $3 per month next year in 2027.

Sorry, it's two years from now.

My brain's budget 2027 right now.

And then by 2033, that would add uh the seven-year plan would add about $30 for a monthly bill.

And so by year seven, by 2033, all customer classes will be paying their fair share.

And this would be the incremental cost to the single family customer to do that.

Under the five-year phase in option, that would incrementally add about a dollar 42 in 2027, and then about uh at most about $8 by 2031.

There are small changes in the outer years.

And that's because you know, we're we're it's very difficult to achieve a perfect cash balance between the different scenarios.

And then finally, for the three-year, the fastest um proposed um phase in plan, and we would add about $2 in 2027, an additional $7 by 2029.

Um, and you can see the values as they go out.

Just a couple takeaways.

Now that we have all the numbers and and bars on the screen here, um, the biggest lift is going from doing nothing to doing something.

You can see the biggest impact to the customer's bill is going from to the seven-year option.

The longest term one still has the biggest impact.

And as you shorten that ramp up period, it does have an increase impact to the typical family single family bill, but um, it is relatively smaller um compared to just going from staying the status quo to doing something about improving cost equity.

So, in terms of housing, kind of the choices we're presenting to the to the commission for discussion.

I'm gonna go through this and I want to pause and open the discussion up for the commission to kind of discuss preferences and recommendations from from this group.

If we were to measure these three phase and options from some of the key goals we're trying to hit here, those goals would be in those columns up on uh up on the table.

So one of the goals would be, you know, we know there's a cost in equity, and it's not fair uh to keep those progressing as long as uh forever out there.

And so the faster we address it, the faster we eliminate these unintentional subsidies.

But the faster you deal with it, the more likely you're gonna see some unfavorable or just dramatic bill impacts.

Um, and then the further we phase this out, the more we enter the unknown, the more that we may need to make further adjustments because we don't know what 2033 is gonna look like.

I have a little better idea of what 2027 is gonna look like.

Uh, and so there's also just the the uncertainty as the the longer the plan, the more uncertain that that strategy is.

So the three-year phase in plan, it does the most to eliminate these subsidies as as quickly as possible relative to these three options, but it also has the biggest impact to bills.

Unfavorable bill impacts to single family customers, non-residential customers, one could argue favorable impacts to multifamily customers.

And it's the one that we would have the most confidence in terms of managing because it's the shortest term.

Um, the five-year phase, and the reason it's a recommendation from the staff is it it's kind of striking that balance between these these opposing goals.

And then the seven-year phase, and it does help out the single family customers the most of the three options, but it is subject to that longer time frame.

And that's one reason I wanted to bring up that that that graph is the biggest lift is going from doing nothing to even just going to seven years.

That will have a the largest share of the bill impact.

Going to five and three years, it is a it is a bill impact, but it's not as much as going from nothing to seven years.

So with that context, just wanted to open up the floor for the commission to discuss these results.

Once again, our hope is that we can get a recommendation from the commission on which of these three that that you all would like us to present to council.

So can you go back a page?

Yes.

So for instance, for 27, the seven year includes all three of those numbers plus 293 plus 142 plus 238.

The seven year would only be the bottom number.

Yeah.

So if the the more the faster I accelerate the phase in plan, the larger the bill impact will be.

So the other way around, the three year would include the addition of those three numbers.

And so I'm I'm not following your point about um the biggest lift is with from zero to seven.

I'm not following that point.

Yeah, let if I can try this again.

For sure, 2027, the the going to the three year will have a bigger impact than than the than going to a seven-year.

What I what I'm looking at is as you look further out into the future, um, eventually we we'll get to the same place with all of these plans.

Um if you look out to the farthest on the right side of the screen, at that point, um, the biggest incremental increase from this phase in plan will be the 29 and 25 cents that teal on the far right.

Um, and that's that is the cost of of going to the seven-year.

The five and the three will all be around that same place too, is what I'm trying to convey.

Okay.

But you're correct if if I can maybe make a modification of my statement.

There is the the short term, definitely in 2027, that impact's higher for the five and three.

As you move further and further out in the forecast, they all tend to congregate in the same place.

Yes.

Okay.

Thank you for that, Claire.

I I have a question more related to the multifamily um structure.

So do most of the landlords pay the bill directly and then allocate it to their tenants, or is it each of those residents receives their own individual bill?

Because I do wonder sometimes I see in other industries where if you change the pricing structure, it doesn't necessarily follow all the way to the ratepayer themselves.

So I just wonder about what we know or where there's questions there.

Yeah.

So for our larger complexes, um, definitely it's it's paid for by um the building owner or their assignee, if they have a property management group.

Um, it is likely that when we have duplexes, three plexes, and four plexes that um they may get the bill and they just make the landlord may divide it in four and then pass it amongst the the four units in the building.

But to say there's a universal way of how the bill gets passed on to apartment owners, um, I can't speak specifically on every single case.

I would tend to think that the larger the complex, the more likely you're not gonna, the more likely detached the bill will be that the property owner pays versus how it's passed on to the individual apartment uh tenants.

And then in those cases, the individual tenants have less incentive for conservation because they don't see the impact of their behavior on their bills, too.

Correct.

Um, and and the inequity we're seeing in multifamily is more about the size of the bills that are being sent to multifamily customers relative to a single family customer, and not necessarily how that sewer bill is being passed along to the to the tenants in that building.

Yeah, just a few comments.

I think I'm trying to think of it more um from a multifamily standpoint.

And I I know you mentioned that that yeah, the single family and non-residential would see increases, but we've got inequity right now.

And I I think I would lean towards um fixing, you know, realigning that uh faster rather than you know, for the multifamily folks.

Um, and since it's been uh we've known about this since 2019, even if we did a three-year phase, then it'd still be a 10-year uh time period, right?

So um uh I would lean, and and again, and the other thing, I guess, just in sort of my rates experience.

We used to be doing five-year rate studies with some degree of certainty, and that has really shifted to uh, you know, two or three year timeline where you can really see what's going on with some degree of uh certainty.

Um even two years is kind of stretched sometimes.

And so it it feels like the at least to me, um trying to get this inequity aligned with the cost of service sooner rather than later, and in alignment with with how we're doing rate studies these days versus you know, three year versus a five year.

Um so I'm just I'm thinking that consideration maybe.

Uh wanna think about that.

Any other questions?

Commissioner DePertis, any questions from you?

I can't help but notice these meetings tend to go faster when I don't ask questions.

But that's no reason to not ask questions.

I echo that really.

Andy, you have good questions.

Well, thank you.

Uh I'll all find all fine here for tonight.

Okay.

All right.

So no, I think that ends the discussion section.

Okay.

Are you gonna make uh I'm sorry, can I just clarify?

Is that just you're you're gonna talk about rate design?

I I will.

So independent of the rate design, the phase in period, three, five, and seven, that's step one.

Once we have an idea of uh how quickly we we accelerate or don't accelerate that phase in, that impacts the rate design choices.

So the sequencing that so you'd rather have a decision on the phase in period first.

I we can certainly present rate design today.

I'm just saying that when when uh push comes a shove and we're showing dollar amounts, it it needs to be sequenced that way.

But we certainly have material to share tonight uh on rate design.

Um not clear.

Are you asking the commission for a uh vote on the phase in uh time period or no?

Am I Scott?

I believe the the action we were looking for was concurrence on the staff recommendation.

That is simply the the ask or the request of staff to the commission.

This discussion and where the commission actually leans would dictate which phase in period you prefer, whether it be three years or five, uh maybe worthy of more discussion to see where the commission truly lands.

So as a starting point, I move to that the commission uh concur with staff recommendation of a five-year phase in period.

All right.

Anyone second that motion?

I'll second it.

All right.

Um and are there any other motions for any other time period from any other commissioners to be put on the table?

I think we should also consider the three-year.

So to me, it's considering both.

We should perhaps vote on both, or you know, to see this get an even kind of clear direction, right?

Okay.

And is there any interest from any of the commissioners tonight to consider the seven-year option?

All right.

I take that to be a no.

Does that help where the commission is either between a three and a five?

Yeah, I think so.

Okay.

Yeah.

Um should we should we narrow it down or put some weight behind which of those we prefer at this point, or um, we can take a vote if that's uh, or do we does the commission want to have more of a discussion amongst the commissioners as to the pros and cons of the three to five, or would the rate design help inform that discussion?

I can I can certainly provide some some feedback here.

Um I'm not gonna speak on behalf of what the presentation would look like at City of Bellevue, but um when I've worked with other cities present as information, it's not uncommon to present, you know, two two or even multiple options to a city council say, hey, here are the results.

Here are the the technical results.

Let's say the commission uh would generally was was leaning towards a three and the five, and that still gives the city council some options to weigh in on in terms of how fast they want to land this plane.

All right.

So I think we've achieved that then uh by us uh considering both the three and the five year option at this point.

Okay, okay.

Thank you.

Okay.

Um so now we're gonna shift gears and talk about some proposed rate design um recommendations.

As Matt mentioned, these while cost of service, we have state law and we also have city financial policy kind of dictating that.

These rate design options aren't required by state law.

These are ways for us to improve the how we uh charge our customers in the way that they understand the bill better, maybe there's more control over their bill.

Um, it's more aligned with maybe some of our city policies.

Um, when we do rate studies, these this is a common approach to just check up on your rate design to see are you getting the return that you expect um in terms of the education outreach, understandability of your customers.

Okay.

And I'm sorry, let me can I just ask you to pause for a second.

So just I think technically we had a motion to consider the five year option.

Can I have a motion, please, to consider the three year option?

Well, by parliamentary procedure, you can't have two active motions.

So what I can do is I can withdraw my motion.

All right, and then that takes it off the table.

All right, I withdraw my motion.

Okay.

Then with that, I think what we're then saying is we're gonna move uh to consider both the three and the five year motion that staff have recommended, right?

That's the sense I'm getting.

All right.

So may I have a uh motion to consider the three and the five year option from staff.

Okay, I move to what you said.

Okay, in a second.

Second.

All right, thank you.

All right, very good.

Thank you.

Make sure everything's here in line here.

Okay.

So rate design, I just want to start out the gate.

Rate design is revenue neutral.

We are not going to generate any more revenue or less revenue from these recommendations than we would do otherwise.

Um, it's more about how we collect the same amount of revenue.

Uh rate design is the next step following a cost of service analysis.

Umtilities like Bellevue leverage this tool to advance their financial goals.

They use this goal to uh this this tool to advance customer service goals and to uh uh encourage conservation.

Here's a there's a list of example goals that are oftentimes used by water, sewers, solid waste, electric utilities across the country.

Um I'm gonna start with the biggest box.

Sometimes rate design goals they they hover around ideas of producing stable, predictable revenue.

Um the cost-related goals, sometimes we design rates with a goal of of promoting cost of service um equity.

Um, other times it's it's promoting conservation, lower bills if you use less, more higher bills if you use more.

And then in almost every case, we're trying to also um uh thread that needle to make sure the bills are understandable as possible.

For those who have maybe lived in California or place where they have time of use rates, you know, if you want to try to understand those, be my guest.

Those are those are difficult.

Um, but they're precise, right?

They have different goals in mind.

Um my point here is there's a lot of goals that we try to achieve with rate design, they don't always play together.

Um, sometimes promoting revenue sufficiency and stability is gonna go counter to making sure folks have more control of their bill.

Um, and so when we are proposing rate design recommendations, we need to be cognizant of the both intended and unintended impacts to customer bills.

So, with that in mind, the four key goals that we're trying to hit here with these recommendations are up on screen.

One, where possible, we want to simplify the existing rate structure.

If there's not a purpose or value to a specific piece of the rates, there's really not a reason to keep them.

Two, um, where we can want to align the rates to be more consistent with the city's financial policies adopted by city council.

Three, um, to encourage affordability um and to make rates more um reactive to customers' actual demand.

I want to provide those rate structures that give customers more control over their bills.

And whenever we look at rate design, uh, I promise myself I wouldn't say it, but I can't, I can't help not to.

Rate design oftentimes produces winners and losers.

You know, it's it's the balloon effect.

You've pushed down one side of the balloon, the other balloon's gonna pick up.

And so one of our goals when when doing rate design is to mitigate those unfavorable impacts to the extent we can.

So the first recommendation, um, I'm gonna show you four recommendations.

One looks at the single family residential class, two, look at the multifamily residential class, and then one looks at the non-residential class.

So for the first one, um, this is a the goal here is to simplify the single family residential rate structure.

Today, uh, our single family customer class, their flow charges, there's actually a two-tiered flow charge structure.

So for your first 50 CCFs or 5,000 cubic feet, uh, that customers assess uh we propose $7.33 per CCF.

And then in the rare event, I mean, you have to flush the toilet a lot of times to go over 50 CCFs, but in the rare event you hit over 50 CCFs in a two-month period, you will be charged $9.46 for every CCF above that 50.

Um, as not surprised, then 99.9% of our residential customer customers never get over 50 CCFs.

There's not much value in having that second tier.

It's something else for them to see on their bill with with really no value.

And so our recommendation here is to eliminate this two-tiered structure in favor of a uniform flow rate.

Um, and so if we were to adopt this, um, the 2027 projected rate would be $8.54, regardless of how much flow you're using.

Um, I want to point out that maybe if you're looking at these numbers, you're saying, well, it's going to go from 733 to 854.

That's a big jump.

Almost all, I'm sorry, all of that jump is tied to just the increased cost of the sewer utility.

It has nothing to do with this rate design change, right?

Um, rates, uh, the cost of service will increase in 2027 compared to 2026.

So if I were to not make this change, the proposed rate for the tier one would be around $8.53.

All right.

So it's it's immaterial in terms of the impact.

Okay.

The next recommendation is so the next next two are looking at the multifamily residential class.

And remember, this was the class that we're that the cost of service results are being driven by this unique rate structure.

And so one of our goals was to where we could correct this and make it uh more simple and more aligned with um our city's financial policies.

So recommendation number one attempts to align the multifamily customer class rate structure with the way that we charge our single family customers.

What that looks like is looking at the columns here, you'll see that the rate structures for the class, and then the first column is the the actual um customer class.

So we'll start with single family residential.

It's a two-part rate.

Uh single family customers' fixed bi-monthly rate, we index to the King County charge.

That is their fixed charge.

When King County increases their rate, um, that charge goes up to the dollar.

Um, the remaining portion of the City of Bellevue's sewer utility costs are then captured on the flow charge.

And that's assessed uh on winter water average volumes for single family customers.

The existing multifamily customer class, just recap here.

We don't index that fixed charge to King County's charge.

And it includes that 11 CCFs, which as I mentioned is too rich for what they actually use.

Um and as a result, their flow rate only kicks in after they hit that 11 CCF.

Not surprisingly, almost nobody is assessed that flow charge in the multifamily class.

So our proposal is to index the fixed charge to the King County wholesale sewer treatment rate, eliminate the flow allowance, and then charge um for flow um at starting at zero CCFs.

So there is no more allowance.

And what that does, it drastically changes how that bill interacts with a with a customer.

Today, on average, 91% of a sewer customer's sorry, 98% of a typical multifamily sewer customer's charge never changes.

It's just a fixed charge.

They never hit that flow number.

So they have no control over that bill.

It's gonna be the same every two months.

With this proposal, on average, the portion of the bill that would be fixed would only drop to 61%.

So they go from 98% of their bill that never changes, they'd have basically 40% of the bill they have more control over now.

Um that's the advantage of this this proposal, in addition to aligning with our city's policies and index indexing that fixed charge to this to the King County rate.

How that would play out is that every year King County passes their treatment rate in 2027, it is projected to be about 141 dollars every two months for a single family residential account or an equivalent to that.

Um King County also produces a ratio for how they pass on capacity charges to multifamily customers.

They essentially make an assumption that for every multifamily apartment, it that's about equivalent to a 0.63 flow of a of a single family customer.

So our proposals to tie the multi-family fixed rate with those two numbers using the treatment rate that King County adopts and King County's ratio of equating a single family customer to multifamily customer.

How that would play out then in step three is a in our in the city of Bellevue, we would charge about 89 per apartment unit with this change.

And you can see the del Delta right now, we're charging our fixed charge right now for multifamily customer with an allowance is about 140 something dollars a month.

So it's a big change that we're a decrease to their fixed charge.

To illustrate how this would play out.

Uh this is going back to the the winners and losers piece.

Um you're gonna see some big winners and some unhappy losers.

Um so two examples here.

One is a hundred dwelling unit apartment complex with three CCFs per unit per month, which is about on average for an a uh multifamily customer.

The other example is 100 dwelling units, same number of dwelling units as the first example, but about twice that flow, six CCFs per month.

You can see the bills as they exist in 2026.

Once again, most of these bills are going to be driven by fixed charges, not much variation between these two customers.

If we ignored the cost um the these this phase and uh this this rate recommendation, both these customers' bills next year, looking at that third column would grow up at the same amount, 6.6%.

If we were to restructure the the multifamily rates, bringing that fixed rate down to about $90, giving a lot more control to the customers or the property owners for their bill.

The uh the first row uh example, their bill would actually go down from in 2027 from 2026 levels by about 2%.

Whereas the other example, their bill would increase almost 30%.

These are the kinds of you know, uh unfavorable rate impacts I was talking about.

And so one option, uh our third recommendation is that we adopt this new rate structure, but we align it with our phase-in plan for the cost of service.

So if we're gonna phase in the cost of service to three or five years, we also phase in this new rate restructure within three or five years.

If we were to do a five-year phase in this rate restructure, you can see that um in 2027, there would be different bill impacts for these two customers, but it wouldn't be as significant.

It wouldn't be as severe in terms of the the range of impacts.

And so both of these customers would still see their bills increase at a slower pace relative to everybody, all other customer groups.

We would also still achieve this this goal of giving more control for their customer to customers, it would just be on a three or five year um timeline as opposed to immediate.

This was a tough one.

This was the one that took took the most amount of time.

I mean, hopefully everybody can follow along and has um some selling opinion on the last one.

Um you mentioned the fixed charge would go down for multifamily.

What does the volume charge look like?

Would that be similar to what the single family volume rate would be?

Great question.

Um I don't have oh, I do have it here.

Um if we under this proposed approach, we're gonna take in the this is an example of phasing over five years.

Okay.

Um, by the fifth year, the flow charge for multifamily would be about $9 per CCF, whereas for residential customers, it'd be about 14.

Okay.

And the reason being that is um the for a single family customer, the King County charge makes about half their bill.

And under this proposed approach, the King County bill would still make up about two-thirds of a customer, uh multifamily's bill.

If I'm gonna go back one slide.

So even with this phase-in plan, that that ratio 0.63.

So in generally, the the the still 60% of that customer's bill would still be fixed.

Yeah.

Whereas our single family about 50%.

I I guess my question is is really going to the flow rate.

Um, and I'm trying to figure out what the cost drivers would be between residential and multifamily for that flow rate.

And it is, I guess you'd on a side conversation, typical sewer bills are, you know, the strength issue is a um driver, but in this case it doesn't sound like it is.

So on the flow side, is it it's volume?

Yeah, it's all the volume.

And you know, how do we um explain the differences between the the customer classes, I guess, or how do we account for the the differences?

I see.

Um that's just something that maybe, you know, if you could get back to us on, or if you want to explain.

Great.

So if I can if I can take a shot at keep this conversation going here.

So that what you bring up is a great rate design consideration.

Um if one of our goals is should we have you know the same flow charge for a multifamily customer and a single family customer, and then just make our fixed charges fit that that rationale.

That's a that's an approach we could explore.

In this example, our goal was to number one goal was to index that fixed charge as close as we could to the King County charge.

But but I see.

So it was basically if we we say this is how we're gonna capture the fixed charge, then the volume charge is whatever it needs to be to capture that cost of service for each customer class.

Right on.

Yep.

Got it.

Thanks.

Okay.

Yeah.

I all right.

I I think it's um when I look at the rates, I I want to just be able to say, oh, that makes sense that you know the flow charge would be different for a customer class than this customer class because you know, ABC, but um in this case, that's really not explainable, right?

Yeah.

Yeah, yep.

And we can we can talk offline.

There's there's some the nuances there in terms of uh how we're billed by King County.

Okay.

Um it's not 100% based on flow.

Okay.

Um it's based on their their residential customer equivalent methodology.

And yeah, I realize there are so many little nuances with this cost of service.

I think I'm just looking for um that the differences between the customer classes would not be would not be big enough to raise that question.

You know, like you know what I mean?

Like if $14 per CCF versus $9 for CCF, that's kind of a big difference between customer classes that are relatively homogeneous in terms of their characteristics, right?

Yeah, and and if if I I think what I can go really quickly here is I think to answer your question, the reason why the flow charges aren't uniform between the two customer classes is is on step two there on screen.

We're using the ratio that King County publishes, their assumption for how many the equivalent uh uh for an apartment well how how equal it is to a single family customer.

Our actual experience in Bellevue, that ratio in Bellevue is not gonna be 0.63.

It's gonna be slightly different from that.

And that's probably one reason why um we're we're indexing our fixed charge to data published by King County as opposed to using our own data.

Yep.

The last recommendation is focus on the non-residential or commercial customer class.

And once again, similar flavor here.

We're trying to um make the bills more consistent, simple, and indexed to or matching our our our city's financial policies.

So right now, our non-residential class rates, it's a two-part rate.

There's a minimum charge, it's not indexed to the King County charge.

Um, it's about 200 every every two months.

And then we assess the flow rate on all metered volumes.

Our proposal is consistent with the other two classes, indexing that minimum charge to the King County treatment rate, and then assessing the flow charge um uh based on all off flow.

Once again, the goal here is is more just simplicity and consistency.

Now, the impact for this is right now our minimum charge um results in some of our smaller customers um paying more than they actually use.

Um and I'll show you here.

So this is a histogram of the number of non-residential bills that we send out over the course of a year.

And the X axis is their bimonthly flow.

So just on the left side of the screen, you can see that the the most common type of customer is about the five CCFs every two months, small, small business, small, small shop.

And then and then you can see to the way out to the right, we have some really big businesses here in Bellevue where flow is you know over 2,000 CCFs in two month period.

A lot of variation in this class.

Today, um, that if you use below about 15 CCFs, if you're in those first three columns, your bill's not going to change.

It's gonna be the same amount every year or every month.

If we lowered and indexed the minimum charge to the King County rate, that would actually end up reducing the bill for these smaller customers.

So this dotted line, if you want to index it, it's following that the y axis on the right side of the graph, it's showing the bill impacts.

So customers are using this a less amount of flow, their bills would actually go down because right now they're paying a minimum charge and x's of what they actually use.

Now the corresponding impact is those customers use more, their bill would go increase to around 18% in 2027.

By context, if we didn't make this rate change, every customer's bill would still go up by about 15%.

So if we do nothing, the yellow line is kind of where their bills will be.

If we make this rate design change, it will have a favorable impact on customers who use less flow and a slightly higher bill impact to those who use more flow.

Okay.

And once again, the the main goal of this this rate structure change was more about simplicity and making um indexing our minimum charge to the King County rate.

This is simply the side effect or the the impact of that change.

You want to take a deep breath.

We're just gonna wrap things up here.

Um, it doesn't go one slide.

So we presented uh four rate design recommendations listed there on the on the left side of the table.

Along the top of the table, those are the four key rate design goals I mentioned at the beginning.

We wanted to simplify our existing rate structures, making them more understandable, aligning where we can to cities financial policies, providing greater control to our customers over their bills.

And then if there were unfavorable impacts, being able to manage those with some some um other structure changes.

So for the first recommendation, we're consolidating those two tiered flow rates into one, does make it more understandable to our customers.

Um really has no impact in terms of aligning to our our uh financial policies, doesn't impact the customers' bills.

Once again, 99% of our customers never get into that second tier.

Um, and we don't see as it really has no impact um on, or very, very, very small impact on a customer's bill.

For recommendation number two, this is the restructure of the multifamily rates, indexing them to King County, making them look more like our single family bill.

It achieves those first three goals and spades.

It's more simple.

It aligns to our policies, it provides our customers a lot more control over their bills, but it does it, you know, there's gonna be some impacts.

Um, one thing I wanted to point out, I forgot that is um we we mapped these impacts to all of our accounts in the city of Bellevue.

And the unfavorable impacts that I showed, those are more pronounced in areas of the city that have lower incomes for multifamily customers.

So if we just did recognition number two, um, yes, it would make things more understandable, more simple, more control.

It would raise bills to the folks who probably have the least ability to pay for those those bill impacts.

This is why we're not recommending the second recommendation unless it's paired with the third recommendation.

Um the third recommendation is um it's a good idea to the goal.

We have a lot of pluses in that second row, but let's fix that negative on that second row by phasing this in between three and five years.

And then the fourth recommendation um hits each of those goals.

Um that those are our recommendations.

Once again, these aren't required by law.

You don't have to do all of them.

Um, the decision to the commission we're looking for feedback is are there a suite of these that you're okay with?

Are they do you want to pursue all four of them?

Um, or do nothing and keep our existing rate structure.

But uh no decision tonight is just presenting the group uh information and and looking for feedback from from the commission.

Uh I I'm personally of the opinion all four recommendations sound reasonable and worthwhile of doing and phasing in on over that period, whatever we decide it is.

Yeah, I I mean I like this summary of recommendations, and I'm I think generally in favor of all of this.

I think my I guess my confusion a little is I was looking into the detail.

You guys knew I was gonna look into this.

So I'm looking at attachment A and just not clear on the bi-monthly fixed charges that I'm seeing um for the multifamily, but I guess don't or maybe I'm maybe I've got that wrong.

I'm looking at the multifamily residential at 15145.

Yep.

So it's yeah, I can speak to that.

So um King County's rates, their treatment rate is going to we're we've been told by King County that that rate will be increasing 12 to 13 percent every single year over the next five years.

So if you look at the multifamily charge on that on appendix to exhibit A, it's pretty much staying steady at the previous years.

Um and so we're phasing in that structure over that the proposed structure, and that's it's not it results in in the fixed rate not going down.

What it results is in it not increasing at the same pace that King County is gonna be charging us.

Does that if we weren't being faced with 12% increases by King County, you're right, the fixed charge would be we'd be going down for multifamily.

But because King County's rate, King County's increasing rate 12, 13% every year, um we have to recover that cost along with restructuring the rate.

So I guess if we're looking at 2027, fixed uh the 2027 bi-monthly fixed charges, the single family residential is 1413.

So would is that the projected King County R for one RC?

Right.

And then we're saying that that would be for single family, and then we'll change the non-residential based on recommendation number four to the 14130.

But the multifamily help me explain.

Because I guess I'm thinking Can I hear my other screen here?

Is that possible?

Can I do that?

You'd have to throw it, maybe.

That's okay.

I I can I can I follow via I have the table here to kind of show you.

Yes.

I'm looking at the 150145.

Yep, right.

If if I if I can go go go on with me in a path of imagination here.

So today, um our uh if you're looking at exhibit A, uh the multi-fam multi-residential class fixed rate is 15265.

Which, and if you compare that to the single family residential rate in 2026, 12532, that ratio is 1.22.

So our multifamily rate is 1.22 times higher than the single family customer group.

Now shift your eyes five years later, 2031.

The multi-residential rate is 14676, and the single family rate is 232 95.

That ratio is 0.63.

That's the target rate we're trying to hit.

Remember that that's the that's where we want to end up.

But it's gonna take us five years to bring that that rate up right now, it's pretty high.

It's one point two times higher than single family rate.

We're gonna take five years to bring it in line with the with our target of uh ratio of 0.63.

Yeah, I mean, I can see that now.

All right.

So if this point six, so is it cons I guess we're being consistent with King County, but you also mentioned that Bellevue, we have our other rate.

What is our ratio?

I I can follow up.

I'm gonna round the nearest point one.

It's about point seven.

Okay, I was thinking it'd be higher.

Okay.

Um so you know, like because I I'm just seeing that, you know, why is there such a difference between the single family and multifamily?

There is it's the I can see that point six three now.

Um, but is it an opportunity to take it to point seven to be more consistent with Bellevue in reality?

Um yeah.

I mean, I guess that's one consideration, right?

And lining the so detaching that 0.63 county and making more Bellevue, yeah, Bellview flavored ratio.

Yeah, um, it it's something like that.

I I yeah, that's good.

But a question, King County is billing us 0.63 times that number of multifamily units we have, correct?

They're billing us for our for our reported flow, which ends up being very close to that.

Okay.

Um it's you know, it's gonna be somewhere between 0.7 and 0.63.

Okay.

Um the the benefit, yeah.

The benefit of using 0.63 is it's provided by King County.

We kind of it's not gonna shift year to year if if flow changes in King County in our system, it's saying, okay, this is the assumption we're making.

It's close enough and it's not gonna shift year to year.

And that was the idea behind using that that ratio.

Yeah.

Thread in the needle.

Question.

They were answered.

Okay.

Any other comments from any commissioners.

You know, I I guess just kind of thinking aloud or trying to summarize a little bit for myself, but but putting it out there.

Um, because um in considering four separate recommendations, it's interesting to think about how they're interdependent and how they're mutually exclusive.

Um, because they're all presented as recommendations, so thus we should all generally concur to do those.

It was interesting what you described that um, you know, uh number three serves to make kind of two fully inclusive, that just doing two doesn't solve for that uh unfavorable bill mitigation.

It just strikes me.

So recommendation number one is probably kind of the most minor of all of these, it's just a little bit of a cleanup of something that most people don't even look at.

Yeah, um, and so it's kind of the most trivial, but really the heart of all of this is down in two and four for the most part in three, just kind of round set number two.

I I would agree with that character.

Okay, okay.

Thank you.

Okay.

Yep, thank you.

So um appreciate that uh sidebar just a moment ago with Lucy.

We do need to revisit the vote on a recommendation for either a three or a five-year phase in the motion was made, I believe and seconded, but there was no formal vote taken.

I withdrew it though.

You withdrew, you withdrew the three.

I withdrew the five.

The five.

Okay, thank you.

Was no motion, but so you're saying you would like to have a commission vote on which is the preferred phase in period.

Yes, let's revisit the motion for an action to recommend a phase in period.

Let's do that, and then the ask the second ask for tonight on the on your materials was feedback on the rate design options, and we would take both the recommendation on a phase in period and the feedback on the rate design options forward to for council consideration in the spring.

That was the intent of tonight.

So if we could revisit the motion and vote on the phase in period.

Okay, we can do that.

Ann, you say something.

Okay.

I think we already need them.

No, but withdrawn.

We need to consider both the three and five year options.

There was a vote.

Yeah.

There, yeah, it was a motion to consider both three and the five, right?

Ruling out the seven.

And what I'm hearing now is that you don't want that motion.

Maybe there was confusion.

There was thought that there was no vote.

Well, I think I have to withdraw that one to consider both, because they want one.

I that yeah.

I think seconded.

I think it it became a discussion more than no.

Oh, did you?

Yeah, when we went through it again, it was seconded.

So we didn't currently had a motion that was seconded.

We did not vote on anything.

And what I understand.

Correct.

And so you would like a vote on the three vote and a vote on the five separately.

Just pick one.

Correct.

A three or a five-year.

So staff are asking for concurrence of a five-year.

That was the original recommendation.

Staff recommendation.

Yeah.

On the five-year phase in period.

The commission can choose a different phase in period.

Okay.

Well, why don't we take a vote on the five-year period?

Depending on its results.

If we have to, we'll take another vote on the three.

Correct.

All right.

Yes.

All right.

All right.

So correct.

Okay.

Okay.

So I think the commission would like to recommend a three or five.

We just haven't voted on that motion.

So we're going to now vote on that motion, which is to recommend the three-year and the five-year phase in plan.

But that does not accomplish the staff's purpose.

Yes, I think we have to clarify this.

The staff wants to leave here with either.

Right though, I heard that a five.

I heard that uh sorry.

I heard differently earlier.

So yes.

Either recommendation.

Or have a different recommendation account.

Okay.

Sometimes what we can do if that's what you choose to do a different recommendation to count though.

When we go to count though, we will share the staff recommendation.

We'll also share any commission with them.

Okay.

And the commission has to pick one as the commission has to pick one.

Preferred has to.

Does the are you the can the commission pick the its current recommendation, which is the three and the five.

We recommend either of those two.

Is that okay?

So if the commission wants to say, you know, either a three or a five-year fate, then we would move forward with both.

Yes.

And I think that's where we ended up.

So I do wonder if it's if if it's worthwhile to explore where we land, if there's actually a preference between the three and the five.

Okay, well, we can not take an official vote, but take just a preliminary.

We can just discuss around table.

We could do that too.

Okay.

Um I Kirk, go ahead.

Is that okay?

Yes.

I heard your Commissioner Hyino's concern about the three-year.

Um, my original concern was as they said, the rates are already going up 12 and 13% for everybody.

So to tack that on top of that, um a three-year, I think was it would be too much.

So I'm uh personally in favor of the five-year.

I I similarly, I think, you know, the staff took to heart what we discussed in the last committee meeting.

And um I feel like in your recommendation today, that's baked into your recommendation to us.

So I also lean towards the five year for the reasons that you described.

Okay.

And I guess I'll just reiterate everyone knows my preference for the three, and the focus is really on looking at the multifamily who has been um subsidizing the other classes.

And so I feel like the you know, the sooner we can get them or get everyone to cost a service, um, especially in light of the periods that we keep looking at, things change a lot faster um than what they're used to.

So a three-year seems like a reasonable time that we can make this happen and still have um alignment with even the assumptions that we're working with.

Have to think about this, but uh I agree with both points.

Um, I think yeah, rates are going up already.

Um, but as someone who's in the multifamily space.

Um I think obviously the faster we can get um the cost recovery more even.

Um personally makes me feel better.

But it's tough.

Um and that's where some of my question earlier, too, about how much does that go directly to uh the ratepayers themselves, or is it that the assignee or the property owner kind of would keep some of those savings or you know, that it wouldn't get passed back to the individual units.

That's that's where I was trying to process how the equity actually executes, you know, if it really does make it back to the individuals or not.

And I guess it's a little hard to discern that precisely, and there's so many different kinds of multi-family dwellings that there is no one answer.

Um but I trust that you're the closest to that sort of analysis and have done the best to consider that in the recommendation.

Just curious how many households in Belleville are multifamily accounts versus single family or non-about half of our households are in what we would define as multi-family half-belling it's so 33,000 of our 60, some odd thousand uh households are in multi-presidential.

And that's probably growing faster than the single family by visual.

For sure, yeah.

Skyline of Bellevue would indicate.

Can I also ask for clarification?

That what I heard Lucy say the director say is that um at council you will present the staff's uh recommendation, regardless of what the commission votes on.

I mean if it's the same, if the commission votes on a five, they're an alignment.

But if we vote for something else, then you'll just you'll see both.

And so I and my original interpretation of what we moved on was that you folks would take our recommendation and develop rate design for both the three-year and the five-year, and then an ultimate recommendation from us could be made once we see the rate design for a three-year and a five-year.

The the rate design the rate design piece is more we just needed direction so we can run the math.

Um the impacts of the five year versus three year, um, whatever the deltas are that we showed in terms of percent, that would be the changes in the rate impacts.

Um yeah, so if you need more information on those, we're happy to provide that.

Um the it's what I meant more by that is we need direction on three or five years to come up with the actual schedule of charges.

Okay.

Uh Commissioner DuPertis, what are your thoughts?

Uh I'll be candid.

I'm I'm lost.

Um I'm not sure what we're voting on.

Uh I see the slide.

We have four options, but then we have a three-year and a five-year side of overlay.

Uh I I may abstain for uh to give myself an opportunity to understand this better.

Okay, yeah.

So uh we kind of uh moved past, we've gone backwards now.

We're going back to the earlier discussion about the three, five and seven-year phase in, and uh trying to get a sense from the commission whether uh we truly are recommending to city council three-year, five year, seven-year, or any combination of those three.

Staff recommendation is the five-year.

And what I've heard so far is uh two commissioners uh in favor of the five year, one commissioner in favor of the three year, and one commissioner on the fence at the moment.

And so just trying to get a sense from you so that we know I know whether or not we should be voting on a motion to recommend the three and the five year to council, or just vote on a motion for a single year phase in.

So I think that's where we are.

I think we should vote on the recommendation from the staff, and then pending that outcome, we may not need another vote, right?

Yes.

So that might be the simplest way to do it.

Oh, we can do that.

Um before we go there, uh given your comments, Commissioner DuPartis, would you like to ask any questions of staff?

I think any questions I would have would be just too I I think it would be too much too much.

Uh so the the the vote that we have is is the slide that's in front of us, is that correct?

That is correct.

And the staff recommendation is the five year.

So what I'm gonna do now then is I'll ask for someone to withdraw our earlier motion to consider the three and five year, because that motion was moved and seconded.

So let's get that off the table and then let's move on Kurt's first motion, which is the five year, and then take a vote on that.

Shall we?

So I move to withdraw the motion to consider the three and the five.

All right, thank you.

All right, and then may have a motion to consider the staff recommendation of the five-year phase in the I move to that the environmental services commission recommend the staff recommended phase in of five years.

And do I have a second?

Second.

All right.

Then uh if we're ready, we'll go around and take a vote on that motion.

All right.

Commissioner Lutterman.

Aye.

Very good.

Commissioner DuPertis.

All right, uh.

Yay.

All right.

Uh Commissioner Heinosh.

No.

Commissioner Laxon.

Yay.

Commissioner Tyson.

Yay.

All right.

And I vote nay.

So we have four yes and two nays.

Nays.

For the record.

Okay.

Is that what staff needs?

Yes.

Thank you.

All right.

Thank you.

Yeah, I'll I'll be candid.

I don't think I fully understood what we just went over.

Anyway, that's fine.

Moving on.

Okay.

Would you like to change your vote?

No.

The questions I would have, I I think would be just too much for this, too much for this forum.

Uh okay.

I think going forward.

Uh I I guess I'm I'm just not grasping.

I don't I don't have my head around what we discussed.

All right.

Uh Commissioner DuParres, your vote was a yay, I believe, on record.

Would you like to change that to an abstain?

And the the vote was for a five-year phase in.

Yes.

Yes, no.

Correct.

With no other option on the table.

So if we reject that option, then there's no path forward.

So all we're voting on is five years, yes or no.

We're not selecting three, five, or seven.

Is that right?

But there could be a second motion.

There could be a second motion if this first motion fails.

And the staff recommendation is five year, which is what we're voting on.

Correct.

Okay.

And this limited in this limited case, then uh I'll continue to support the staff recommendation.

All right.

Thank you.

Does the staff have what it's needs for the uh phase and time period?

Yes, we have the the motion and and the decision, the recommendation.

We thank you for that.

The second piece of it was uh feedback or guidance, if you will, on the rate design options.

We received that as well.

Correct.

So I think you have everything.

We do.

We have everything that we need.

All right.

Yeah.

Thank you for your time the last two evenings.

Uh really appreciate it.

I know there's a lot of information, and these are big decisions, they're weighty decisions.

Um, just as a kind of a path forward, we are planning on taking this information to a for as a formal briefing to the city council um in the spring of next year, um, pending their feedback and direction, incorporating uh their direction into the 27-28 budget process.

The earliest these results, the rate design changes and the cost of service discussion we had today, the earliest that that would take place would be part of the January, part of the 2027 rates that would be uh adopted for January 1, 2027.

That's all I have, unless you want to talk more.

I I would just add one notice while I was reading the briefing materials and all the the thing that stuck out in my head is that uh with these large uh increases in the next seven plus years, um that the department should have what I called excessive communication with our ratepayers about these things that are coming down, these these kind of increases, yeah.

Yeah, I would agree, and especially since it's so dependent on the King County rates that are outside our control, but that they're forecasting or communicating pretty significant rates for the foreseeable future.

It it is a bit jarring, I would imagine for the typical rate player.

But I I think that's that's the the key point that I would like to land is we need our obligation is to rise above that.

So if we anticipate that there are going to be significant rate increases, and we don't control them, and we don't necessarily know what they are going to be in Seattle, may not know what they're going to be either.

We need to ensure that we are adding sufficient buffer so that we don't give rate shock to our ratepayers predictability over some goal of happy path thinking about lower rates is going to be better over the long term.

So I don't want to get caught in this trap of underbilling and under billing and then suddenly having a shock in in the future.

So I So we should be able to calculate and I think this is one of the things that our former our former Andy was very good at was how do we how do we actually calculate and think about the buffer that we're going to add that is going to optimize for predictability over some number of years.

I would much rather be in the position of telling a ratepayer that here is the here is what we're anticipating versus we have this overly optimistic happy path.

Excuse me, I'm losing my voice.

This happy path lower rate to I I I don't know, a peas in some short-term sense.

And then have a conversation three, five to the charts seven years later that says now we're going to have this significant uh uh increase.

And it would be very easy to say, well, we don't know what that increase is, and that insulates us today, but it really doesn't.

The fact that we don't know what that what that rate increase could be three, five, seven years from now means that we need to properly plan uh today.

I I hope I'm I'm saying that well.

Everyone here is nodding their head.

Commissioner.

Yes.

So I just wanted to um ask a cut one question.

I know that in parallel with this discussion, there was also um some talk about a customer assistance program update.

Um, and I'm assuming that's coming maybe in at some point.

I wasn't sure if it was on the calendar or not.

It is.

I appreciate you bringing that up.

That was the intention.

We originally had it scheduled for September.

We deferred or delayed it uh actually to October.

And then again, uh, because of the meaty topic that we're discussing tonight, there's a lot on the table to consider when you are considering a cost of service analysis and rate design options as you just experienced.

It is fairly weighty material, and we really did want to wait until we could truly focus uh on that and then give the time that the customer or a utility bill assistance program deserves.

Well, I I think I'm passionate about that as well.

And thank you for asking that.

Uh something that I'm passionate about as well.

And and I uh insist is a strong word, but uh I'd very much like to have at a minimum, and and I agree with the commissioner, uh a few bullet points on where we are with the rate assistance program.

Uh those data have to exist in Excel.

They just can't, it's a financial program.

The the data have to exist, even if it's a uh simple table in a in a PowerPoint, we we we can work with that.

I don't know that we need a whole uh evening uh dedicated to it, but uh that was something that uh I think we were expecting in September.

Let's let's make sure it happens in in the next uh meeting if we can have your commitment for that.

And thanks for the commissioner for bringing that up.

And then the second point, I just want to say thank you very, very much to both the Matt's and to Scott and the whole department, because this, as you can see, cost of service um is not easy by any stretch and rate design.

And so I know I know there is a lot of work put into this, a lot of work and rework and and you know, turning things around.

So I'm just really proud to be part of this organization that that really does knock out work in in all areas, and especially here in the financial uh area, where really paying attention to our our rate payers, our citizens, and and really being stewards of their resources.

So thank you so much.

Thank you.

And if I may just add one more comment too.

Um, so when we were talking about the sticker shock or potential sticker shock, and um when people receive their bill, it says City of Bellevue, right?

And so that's who they will direct their questions or you know, any feedback or frustration.

But we also know, you know, insiders understand that it's not dependent on City of Bellevue that there's outside sources.

I wonder just to consider as other municipalities also go through similar rate increases and you know, that there's kind of coordination of communication, thinking bigger of how to help ratepayers understand why these costs go up, what's involved in you know the King County services.

Um, you know, just it's not just for folks in Bellevue.

It's really, I don't know how many different municipalities are affected by this, but it's a much broader um situation and doing broader community efforts can really help rate payers understand what's going on and what's within their control, and so much unfortunately will be outside their control.

So thank you.

If I may, just to your point, uh, I don't know if the commission is aware, but there is a regional utility summit, utility rates summit uh that will convene on November 14th.

Elected officials from across the region, staff members from across the region will meet to convene or convene to discuss exactly what you're talking about.

Awareness for the for the community.

This is a regional issue of affordability, and is one that regionally all the jurisdictions, all the cities, all the municipalities, the counties will come to the table and try and dialogue around what can we do uh to get ahead of it.

Thank you.

Great.

And maybe Scott, that can be not uh next month, because that's our special meeting, but on the staff report for January, get a report out on that.

Great.

Thank you.

Yes.

Very good.

Thank you, Matt.

Um, and now shifting gears to the solid waste program update management brief.

Certainly I'm happy to introduce you.

So this evening we have Wendy Wiker, uh, Wendy Wiker is a representative of Republic Services, um, and John Geyer, our Solid Waste Program Administrator here to present this evening.

Yeah, I just wanted to say for my perspective of that work stoppage.

I was just very impressed with both the city's and republic's response.

Um, the communication was clear, straightforward, timely.

Um, and then the alternatives for uh drop-off locations that were provided.

Um it it was my experience that me and my neighbors just was a very minimal impact.

I mean, uh obviously it was inconvenient for that one week, but um, you know, it was all in all a minimal impact.

And and I'd like to commend both the city and republic for for handling that is probably as well as could have been done.

Yeah.

I will also echo um Commissioner Letterman's um comments that maybe we were fortunate our day fell on the right day.

And so yeah, I think we didn't miss very many either, but I I I heard from um neighbors and and folks that the coordination between you know Republic and the city, they were they really appreciated that and the communication.

So thank you very much for that.

I'm sure that was not a pleasant way to spend the summer, a month of July.

I just I wanted to be here tonight just to thank you guys.

Our team sorry, we're picking you up.

Uh, can't thank you guys enough for your patience and working with us last summer for the work stoppage that it wasn't anticipated and certainly wasn't expected.

And uh we plan for these things, we plan for inclement weather, we plan for accidents, we plan uh to be ready for any manner of mayhem that might happen on the streets or in the community and when Bellevue needs us, we are here.

So uh we just appreciate the partnership, appreciate the grace and uh flexibility for this summer, and and we couldn't have done what we did uh on behalf of the residents, multifamily, single family, and commercial uh without the the value of the long-term working relationship we've been able to build in the last several years that I've been lucky enough to to work with this company serving this great city.

So thank you, thank you, thank you for uh being patient with us and working with us, and uh can't thank your staff leadership enough for for always working as with us day in and day out.

We have a really solid partnership and um just want to thank you and your team for all of that leadership and partnership.

Any other comments from any other commissioners?

Otherwise, I'll just say in my few years here on the commission, this is the best performance update I've seen.

So congratulations.

Uh really great results, even with the July work stoppage.

So thank you.

Right to get to zero, I promise.

Um, and regarding that utility summit, I encourage you guys to attend if you can.

On the 14th, there are 38 nine cities in King County, 38 outside Seattle that are working with all the utilities that we all partner with the county on solid wastewater utility, uh stormwater wastewater.

There's a lot of interconnectedness and working well with the county is also a key part.

And a lot of the cities turn to Bellvy for that leadership.

Um, given the scope scale and impact that Bellvy has on the rest of the east side.

So I also want to thank the staff for helping the rest of the east side in the north garden.

You know, I was just gonna add to I think um what I've always appreciated about Republic is uh the direct consumer communication when there is some situation, especially inclement weather when we're all puzzling.

Gosh, it's really snowing heavily.

Are they really gonna pick up tomorrow?

That often we get kind of the automatic calls, and I even have it as a contact, so I know yes, answer that call.

I know who that is.

Um, so I I would say continue those efforts and sometimes there's some outlier reasons why there may be some service disruption, but still kind of find a way to communicate with the ratepayers would be great.

And in general, we tend to follow the school district and in general the service days Monday, Tuesday, Wednesday, Thursday, Friday.

It depends, and then your neighborhood with the hills and the end and the alleyways.

There are a lot of variables in serving this diversity and uh multifamily, single family.

Um, our drivers know their routes, our drivers know their customers, and every day crew out when the snow is coming.

We plan the night before, we plan it 4 a.m.

that morning.

My supervisors are driving the roads at 1 a.m.

and checking with the school district.

So you would think we're only here, you know, seven to noon.

We are working 24-7 planning, preparing, and uh being ready to go.

So except for weekends, which is why we can't get those four Friday pickups when we get that call at four o'clock on Friday to come back on Saturday.

Uh but yeah, we uh I think we all plan for inclement weather and emergencies in this region.

It's just getting to be part of the course, the weather outside tonight currently.

So thank you.

All right.

I think we're getting an encore performance from the two mats, possibly on the 27-28 operating budget and 27 to 32 CIP budget planning overview and calendar.

Or just one Matt.

The other one builds well.

I didn't hear any booze there, did I?

No.

Well, so thank you for having me back.

Uh, we we don't have any slides prepared for you, but we had uh just an overview memo just to lay out the budget process.

Um, believe it or not, we're starting to think about the 2027-2028 budget process now.

Um, as you may or may not know, we in the utilities start the budget process earlier than anyone else in the city.

So we wanted to give you guys just advance um scheduling notice um that we'll be here often uh starting in 2026 to talk about budget.

Uh and if you have any questions about that schedule or about uh what we're planning, you can certainly let us know.

I will say as a caveat to all that, since we start earlier than everyone else in the city, that schedule is subject to change.

We're doing our best uh to anticipate what the citywide budget process will be and sort of adapt to that.

Um, but that is the best information that we have now.

So we wanted to go ahead and get that to you.

All right.

Thank you.

So what I heard is buckle up starting January.

It's gonna be a lot of financial uh reviews.

Thanks.

Commissioner DuPartis, that means you're gonna ask a lot of questions next year.

I am I am getting ready.

All right.

Uh Scott, would you like to review the calendar?

I certainly will try.

Uh the calendar I have uh projected up here is the commission's calendar.

Obviously, we've just completed the November meeting uh coming up in December.

Uh, I think Joe spoke to this last month.

And so I'll simply restate we're going through uh a typical year-end process where we meet off site.

We look at a year-end review for 2025, and we do some planning uh for the upcoming year 2026.

You just heard from Matt Thurber.

That will be heavily uh focused on budget because of the biannual budget development process.

We will also include a fairly healthy update on the utility bill assistance program and the work that we have going on there in ways that we're looking to consider expanding the program to the extent possible.

Um that is the conclusion of the year.

And so then uh, as Joe said, I think last month that we start all over again and kick it off in 2026.

Looking next at if I can do this.

The council calendar.

We have a couple of items this month, the town of Boarts franchise agreement and a management brief on the Northeast 24th emergency procurement uh next month uh in December.

It's a series of capital projects.

I believe Joe spoke to that to some degree last month.

I won't dare to go into it in detail uh at this time.

Uh and so that is what is on the calendar for the rest of 2025.

All right.

Um, do we know where our special meeting will be next month?

Rob Robinswood.

And and the uh the main floor, the lower floor living room area.

Oh, yeah.

Specifically, yes.

Okay.

Thank you, Commissioner Letterman.

Um, very good.

Uh, then uh with that, may I have a motion to adjourn?

Motion to adjourn.

And second, second.

Very good.

So the meeting is adjourned at 818 p.m.

Thank you.