Alright, it's 6 p.m.

And I'm calling.

All right, it's 6 p.m.

And I call the May 21st Environmental Services Commission special meeting to order.

First up is a roll call.

Commissioner Lutterman.

Present.

Commissioner Dupertis.

Commissioner Hainosh is excused.

Commissioner Laxon.

Present.

Commissioner Margolis and Commissioner Tyson are both also excused.

But we do have a quorum.

Good evening and welcome to the May 21st Environmental Services Commission meeting.

First off is the approval of tonight's agenda.

May have a motion to approve.

Move to approve the agenda.

I have a second.

Second.

Thank you.

Are there any objections or modifications to the agenda?

Hearing none, the agenda is approved as motioned.

Next up, oral and written communications.

Joe, are there any written communications tonight?

There are no written communications.

All right.

And we appear to have no one registered for oral communications.

So then just if anyone has not registered but would like to speak and is in attendance, please come up.

If you're attending remotely, please use the raise your hand feature in Zoom or press star nine if you're attending via phone.

Nothing online.

All right.

Then we will move to the next item on the agenda, which is the new business.

So tonight we will be hearing about some revised policy options to expand the utility bill assistance program.

Scott and Matt, I believe you are up.

Good evening, Commissioners.

Tonight, appreciate the opportunity to come back.

All the good items get three touches with the commission.

So this is a fun one.

Um tonight we are providing you with an update.

Uh you were you last received the options to consider expanding the utility bill assistance program back in March.

And obviously, you made a recommendation at that time.

We are back because as part of the 2027 to 2028 budget development process, we've had an opportunity to refine the cost estimates that uh will fund some of these options.

And I think in some ways this is a good news item tonight for you to consider uh some revised cost estimates and options for consideration uh for ways that we can expand or consider expanding uh the utility bill assistance program.

I'm gonna directly turn it over to Matt Hobson, who's gonna run through the entirety of the presentation, and then we can obviously answer any questions as we go.

Thank you.

Good evening, Commissioners.

Uh the presentation tonight is likely less than 10 minutes, so hopefully it's it's mostly discussion amongst uh the commission.

Uh so we are here to update um the utility bill assistance options that we presented to the commission back in March.

Um, as part of the 2027-28 budget development process, we have been refining cost estimates across our budget, including uh the estimates for the bill assistance program, um, and we want to present those updated cost estimates to the commission for consideration.

Now, we don't often come back uh to the commission to ask you to confirm or revise something you've already decided upon.

Um, but given uh the the cost estimates, we thought it was a prudent uh chance to come back here for three reasons.

One, the cost estimates were different enough from both the original cost and rate impacts that we thought it was justified to take a second look at the policy options that we showed you back in March.

Um, second, when we did present the options back in March, we heard the clear discussion amongst the commission that there was a goal to expand the program, but a strong um concern about the impacts to those who would pay for the program, the other ratepayers.

Um we think these revised cost estimates and some of the other options we'll present tonight, respond to some of the debate and deliberation that you all had.

Um the options that you will see tonight, um the new options that you will see tonight will expand assistance to more households than you originally showed we originally showed you while keeping the rate impact on par with the commission's original recommendation.

Okay.

Why is this not working?

There we go.

So our agenda tonight will focus on four areas.

We'll first just as a recap, provide the original long-term assistance options that the ESC reviewed back in March.

I'll then summarize the need for and the impact of the revised cost estimates for the policy options.

Then I'll show the revised cost and rate impacts for the main options that the commission reviewed back in March, as well as two new options.

As I mentioned before, these two new options expand assistance to more households while keeping the rate impact to all other utility rate payers on par with the commission's original recommendation.

We'll then seek the commission's direction to either confirm its original recommendation or vote to revise a new recommendation.

And then Chairman Juan is scheduled to present the commission's recommendation to City Council next month.

So back in March, the Commission studied several options to expand the long-term assistance program.

The table on the slide provides an overview of four of these options.

To orient the commission to the layer of the slide, the first column describes each option based on how it expands eligibility for assistance.

The second column provides estimates on the number of eligible households.

We estimate that about 25% of eligible households would apply for assistance initially in the first year.

The third column is the level of assistance provided to participating households as measured as a percentage of their utility bill.

The fourth column is the estimated utility rate impact, is the estimated cost, annual cost of the program.

And the fifth column is the estimated utility rate impact to all other utility customers to fund the expanded assistance program.

And the fifth column, sorry, the sixth column, I can count, I promise.

The sixth column converts this rate impact to an equivalent increase to a typical single-family residential monthly bill for water, sewer, and stormwater services.

I highlighted that dotted line around option B.

That was the option that was originally recommended by the commission, in which it would expand the assistance program to all households with incomes up to 50% of the area median income.

That would expand it to a total eligible population of 10,000 households, of which we estimate about 2,500 would initially apply for assistance in the initial years.

All households would receive a 50% discount on their utility bill.

And that would cost about 2.3 million dollars per year with about a 1.2% rate increase on all bills.

About a little under $3 per month.

One of the discussion points of the commission on around option B is that it would actually lower the level of assistance for customers currently on the program.

But that was an intentional choice we heard from the commission of a goal of trying to get the assistance out to more households.

So since the commission's meeting back in March, our team has revisited y'all's feedback to provide a more holistic and broader assistance program.

At the same time, we are preparing the 27-28 proposed budget.

And so as part of this overall process, we've refined the cost estimates for expanding the program.

The key change in the cost estimate applies to the long-term utility bill rebate program, which provides a rebate check to qualifying customers who live in apartments or other multifamily complexes and who do not directly pay a utility bill.

Assumed that the amount of the rebate check was equivalent to the bill discount provided to households who directly pay a utility bill.

However, the amount of the rebate check is actually lower than the bill discount because it accounts for the lower utility costs that folks in multifamily homes pay relative to a single family home.

So we've adjusted the level of assistance, the cost of that assistance to better reflect actual conditions.

And that adjustment decreased the cost estimate for the commission's recommendation by about $400,000 per year or a 17% reduction in the original cost estimate.

So before we show the revised options or the revised cost estimates for the options we showed you back in March as well as these two new options, want to just talk about some of the guiding principles that we considered when developing these two new options.

One, and this is also based on what we heard back in March from the Commission.

We were obviously mindful that we have about a thousand households who are currently under the program and receiving a 70% discount.

Most of the options that were considered back by the commission in March preserve that level of assistance at 70%.

The options you'll see, the new options you'll see tonight maintain the current assistance at 70% for customers who currently qualify for the program.

We also believe all the options you'll see tonight will have a meaningful impact on a household's ability to pay for utility services both today and into the future.

With the anticipated rising cost of utilities that we showed last month as part of the early rate outlook, the options you'll see tonight provide meaningful relief to customers ranging from $500 to $1,600 per year, depending on the option.

We do this by creating a two-tiered assistance program, which expands assistance to all households up to 80% of the area meeting income.

Households currently in the program would continue to receive a 70% discount, and customers who are within 50 to 80% of the AMI who are seniors would get a lower discount, as well as all other customers who don't currently qualify for the program.

I'll have a slide in the next next table that shows these the differences here.

Some of the other things we thought about is, you know, asking for help can be difficult for many of us, and for this reason, many of these options align with the eligibility requirements with other regional utilities like PSE and with the recommendations from Bellevue's Human Services Needs Update.

This recommendations can help streamline the application review process and allows us to provide quicker assistance to those in needs.

And last slide, the new options you will see will keep the rate impact and the funding requirements on par with the commission's recommendation from March.

So on screen is the revised cost estimates for option A and B that were showed to the Commission in March, as well as two new options labeled as option B1 and option B2.

I'll summarize the changes to option A and D first and then talk about the new options.

Option A now has well, option A was expanding the program to senior still, but up to 80% of area median income.

So keeping the age restriction in place but raising the income limit to 80% of AMI.

The revised cost estimate is now $800,000 with a rate impact of four-tenths of 1% and a bill impact of just under $1 per month.

Option B now has a cost estimate of 1.9 million dollars down from 2.3 million.

The rate impact is 1% and a bill impact of $2.33.

This was the original option recommended by the commission.

The new option B1 would expand the program to all households up to 80% of the area median income for reference for a family of four that's just under 120,000.

So seniors or those who are permanently disabled who are making less than 50% of AMI would continue to receive a 70% discount on their bill.

Seniors who make between 50 and 80% of AMI would qualify for a 35% discount.

And all other households who qualify, making up to 80%, would also receive a 35% discount.

This would have an annual cost of just under around $2.4 million, which is on par with the original cost estimate for option B.

The rate impact would be 1.2%, with about a $2.80 increase per month.

Option B too is slightly different in that it provides an even higher credit or discount for customers, up to 40% of the utility bill for those new enrolling customers.

In terms of what that looks like on the bill, the 35% option would be around $480 for a multifamily customer and $800 for a single family residential customer.

The 40% option raises those numbers to $500 and just under $1,000 per year for customers.

It has a similar funding impact to $2.7 million, a 1.3% rate increase next year, and the monthly bill impact would be about $3.

I want to pause here.

I'm going to stay on this slide.

I think this provides you all the information that we hope you need to deliberate and have a conversation about this.

Once again, we're looking for action from the commission to either confirm the original recommendation and/or or revise recommendation amongst the four options here.

So can you clarify what those tiers are for the new two new options?

Just to put it in my head very clearly.

So for both options, they preserve our existing program for seniors who are currently enrolled in the program or who meet the current qualifications for the program.

Which is disabled, disabled or senior.

Making up to 50% of AMI.

Okay.

Okay.

So that's one tier.

That's one tier.

It's just the status quo program in essence.

Okay.

That's the 70% benefit tier.

Okay.

For option B1, for all other customers who would qualify for the program, which is all other households who make up to 80% of AMI in the area, they would qualify for a 35% discount on their utility bill or rebate on their bill.

For option B2, the 70% bill credit for existing customers under our current programs continues as the option B1.

The only difference between option B1 and B2 is that we raise the credit or discount amount from 35% of your bill up to 40% of your bill.

Okay.

So tell me if I'm thinking about this correctly.

The two new options essentially preserve the status quo tier, bring that back in, which was not in option B that we voted on in March, bring that back and to mitigate the payment of that, reduce the benefit amount from our previously approved 50 down to 35 or 40.

Correct.

Yes.

And increase the eligibility all the way up to 80% of AMI.

Oh, because we had said 50% before.

Okay.

So multiple mitigating factors there.

Okay.

The 80% AMI target, we talked about this back in March.

That's the that's the most common metric we see in assistance programs and other utilities.

It's also consistent with Bellevue's human services needs update plan that was released this year in terms of defining the initial basis for need.

Matt, I asked you a question.

Yes.

So it seems like the options B1 and B2 focus primarily on trying to maintain for existing assistance uh customers the status quo while expanding some sort of benefit to new customers that were not currently getting assistance.

Is that a fair statement?

If I could yes, and if I could just revise and um it preserves that 70% discount for customers who currently qualify for a program but have not yet applied.

So essentially very low-income seniors who want to ensure that that 70% credit, whether you're on the program today or will be on the program in the future, that will be offered to you.

Thank you.

But given the revised numbers, increasing the discount or rebate percentage from 50 closer to 70.

I know you're not gonna get to 70, but closer to increasing it to given the change in numbers to keep the the additional annual cost roughly the same.

I see.

We did not we'd not look at that um that option.

If I could um one main reason we want did not look at that option initially was um considering the goal of getting the assistance out to more people, um was the primary goal as opposed to increasing the the assistance upwards.

I see.

So broadening the umbrella as far out as we could, um, and then seeing what we could provide in terms of assistance at that regional budget amount.

Uh, I understand.

Yeah, uh, but I'm asking it because I think the commission previously voted not, I mean, we went option A was available, but we voted on option B with the smaller uh, you know, the lower AMI, 50% as opposed to the 80.

So we we did we went with that one um to get to the yeah, so that's that's the reason for my solution.

Yeah, yes, and and if I can just option A, while it is 80% of AMI, it's still constrained to just those who are seniors in that case.

But there were some other options too that are not on the board right now.

Yes, because they were much, they had a higher funding requirement.

Any other questions for Matt?

Commissioner Flaxon or Dubertis?

No, yeah.

All right.

All right, then I think the staff are looking for a recommendation from the commission tonight.

So if we can leave this uh chart table on the on the screen, um staff are requesting the commission consider revising its recommendation based on the refined cost estimate for expanding the long-term bill assistance program based on these four options A, B, B1, and B2.

Um consistent with the commission's last recommendation, any change to the income eligibility criteria for the city's long-term utility billing assistance program would be applied to the city's short-term assistance program, for example, neighbors helping neighbors and emergency assistance program to provide consistent qualification requirements for both short and long-term assistance.

And our recommendation would also include expanding the solid waste bill assistance program in 2027 by providing rebates to qualifying multifamily residential solid waste accounts, so and then following tonight's commission's recommendation, the proposed changes to utility bill assistance program would be presented to city council for consideration in June ahead of the 27-28 proposed budget process, as Scott has mentioned.

So with that, and of course, these approved changes would go into effect in 2027.

So, in order to start the discussion for the commission and voting, may I have a motion to recommend an option?

I move that the uh the commission recommend option B1 to replace our earlier recommendation, all right.

And do I have a second for that motion?

Second.

Okay.

So um well, at this point, as a commission, we can kind of chat about it, and if we're done chatting, we can we'll then take a vote.

I I would like to ask staff on that.

Um what was your primary drivers in going back and doing this work again?

Was it the people we would lose from the current or or was it more of the getting to that 80%?

Do you think or or yes?

Yeah.

So it's speaking on individually as as me as a one person, um, listening to the commission kind of debate and discuss the the trade-offs.

They had to be made as you move through option A and B and C and D.

Clearly heard that you know helping seniors, and if we would expand the senior umbrella, it's good, but there's a bigger need that's not being addressed.

And then seeing you all move to option B and saying, yeah, but we're gonna we're getting to more households, but it means we're gonna a thousand people who currently getting uh about a sixteen hundred dollar bill discount, that's gonna become about a thousand dollars in uh a year, yeah.

Um, it is a trade-off we're willing to take.

And hearing that trade-off, um, we did these cost estimates and revised them and said okay.

So we we could both preserve the existing assistance and broaden the umbrella for the original cost estimate.

That aha moment made us think we should come back to the commission just to see if this is something that you all would reconsider.

Okay, thank you.

Any other points any commissioner would like to raise in considering option B one I'm not sure I'm fully understanding, so quantity of households.

Did we align on that as the thing we're optimizing for?

We what we had presented to the commission back in March were four options that slowly expanded out to 80% of AMI, and we provided a range of rate impacts um and and um and bill impacts with those.

The commission arrived at option B.

Option C and D did broaden the umbrella more, but came with a corresponding higher rate increase.

Um, so I in terms of Andy answering a question.

I I don't know if there was a a target population group other than this is how typical utilities measure assistance need.

I think it was a balancing act by the commission in terms of bill assistance, number people can reach, and the impact to all other ratepayers.

I think we want the assistance to go to the people who most need it, right?

Absolutely, it was the goal to expand number of people that get the uh the assistance.

I think that's what I'm hearing.

Yeah, and let me if I can here we go.

So if we look at and these are these are those those criteria we were thinking about, and I'll go back to the table if we need to.

Um, it was it was a combination of factors.

How do we reach um the most people that would be considered to be in need?

And when we look at how the city of Bellevue identifies communities of need and how other utilities in the area identify communities of need, the general standard, the most common metric is uh a percent of AMI, and that percent is most often 80% of AMI.

Um so that was one piece.

If we can align with how other entities in Bellevue classify assist communities of need, it allows us to it's better like much more likely for us to be able to establish reciprocity with those agencies.

So if one person qualifies for that program, they automatically qualify for our program.

If we can align our programs that way, we see there's opportunities to speed the amount of the the time it takes for us to process assistance, and it makes it easier on the on the customer, if they only have one bar to hit, yeah.

That that that um that third logo with that the paperwork that was like a line of eligibility, yeah.

Um the dollar amount is a the logo was about us making sure that whatever we did provide had to be meaningful to customers, giving someone a three percent discount, while helpful, it's not gonna it's not gonna help out.

And so that's why our range our costs the benefits range from 35% to 70%.

Mathematically, that's anywhere from five hundred dollars to sixteen hundred dollars a year.

We thought those are meaningful impacts to a household budget.

Um the first logo of the people, that's really about that logo is about preserving the the assistance for those currently in the program.

Um and then um the fourth column, the scale is is just measuring the impact to other ratepayers.

Um all of the options keep the rate impact at or around 1% rate increase.

Um and so what we are getting as you move down the options is we're expanding the umbrella to to meet uh, andy to your question, more to what um utilities in the region and the city of Bellevue uses the classify initially a community of need a house.

Are we reducing the subsidy to lower income people in order to expand it to what's the right term?

Well, up to the 80 percent between the 50 and 80 is that's your question.

Sure.

So the difference would be so the answer is yes, uh 50% bill discount is about a thousand dollars.

Um, a 40% discount is about $800.

Um the difference though is we can use the $800 goes we're doing reaching a lot more households with the $800 versus that goes back to the original.

I'm sorry, like go ahead.

That comes back to the question, are we optimizing for quantity quantity of households?

Is that really the thing that we're chasing?

But I guess it also depends on what your baseline is when you say lowering the number because we're purposely those 1500 that are in the program today, we're maintaining every one of those by option B1.

Are we?

Yeah.

Which is great.

So that 1,000 that are in there today will all be still in eligibility of B1.

But they're the subsidy goes down for them, right?

No, for them.

They're the 70 that they're there.

Those 1,000 people stay at 70%.

It's the everybody else, the the difference between the 1,000 and 3,800 that go to that gets added at 35%.

I see.

So we're not reducing the subsidies for people that are currently in the program.

That is over tier of the AMR.

Correct.

Well, uh correct for seniors and permanently disabled.

It preserves existing uh existing assistance levels for seniors.

So 62 plus and and permanently disabled.

Correct.

Okay, 70% discount.

So the idea is we know that we have an affordability gap of up to 15,000 households, and so the options that have been presented allow us to achieve some financial assistance for that level.

So we we satisfy the affordability gap, if you will, for the right area of the community that needs it.

And the question becomes to what level of discount do we provide?

And 35% or 40% obviously are the options for that up to 80% level of AMI, and at 35% or 40%, I just would add one other thing.

The consistent with the human services programs that we have, their perspective is that something is better than nothing.

So we can go broadly reaching the full body, if you will, of households that need assistance and provide some level of financial support.

And that's the intent behind the 35% or 40%, depending upon the level of benefits.

So who what's what's the in and we seem to be coming back to B1?

What who is the person that gets less than they do today?

What's that profile?

No one, no one, no money.

Unless we stick with our original recommendation of option B.

Because in option B, the seniors and permanently disabled will get only 50% discount or rebate versus their current seven.

Correct.

I see.

But Andy, I think we're you were also trying to ask the question in B one.

While there's no change to the assistance to seniors and permanently disabled at 50% or lower AMI, the all other households that are 50% and below AMI that are not seniors and that are not permanently disabled only get 35.

Okay, so that's the person that's less that's what you're actually doing.

They're getting more in the sense that we don't offer support for the they currently don't get anything but they'll get 35 but they won't get up to the 70.

So I think that's what you were trying to sort out.

You go from zero to 35 or we're spending budget to go make that happen.

Correct.

Correct.

I see.

The need is there and we are now offering some level of financial support.

I just want to mention to the commissioners because it's it's on my mind that we're looking at this somewhat in a vacuum in the sense that we're looking at additional cost additional rate increase just for this program.

But in the coming months we're also looking at rate increases to the entire system and this won't f our recommendation tonight will be on top of that.

And at the city council presentation was it last month when I was there council made a few comments during that presentation about how much rates are going up.

Now albeit that has very little to do with Bell V utilities as itself versus pass through amounts but council is very concerned about rate increase and threw out some suggestions that I don't know that we would pursue but they are concerned.

So I just want to call that out because that's something of concern to me that may lead me to wonder okay we're saving we're gonna spend less now on option B our original recommendation but is that good because then it'll be taken away through the rate increase through the normal process.

So I'm just gonna put that out there for the commissioners as you're thinking about this.

And if I can comment on that so the rate outlook we put it to you last month and then what council was shown uh back in April at the sewer cost of service uh that accounts for the cost of option B.

So the the cost of expanding the program we we were our budget we showed you last month uh includes the count the commission's recommendation and so going with option B1 will not increase your rates beyond what we already showed you back in May.

It's just the additional 100% sorry the 100 thousand dollars yeah so um very marginally I guess uh over 200 million dollar utility right okay I see if you recall you telling us two weeks ago that those budget numbers you gave us did not yet include the effects of this program expansion.

Yeah and I could be wrong.

I need to revise my minutes then if I said I apologize.

That is not I maybe remembering it wrong.

Yeah we tried to give the commission as much up to date numbers back in May as we could.

Okay.

Thank you Matt.

And but then that means that if we let's just say hypothetically go with option our original recommendation then the rate increase will be slightly less that's all it means.

But possible.

And that would be my second choice.

I mean I just I was wondering uh I came into here tonight of two wines was one of them says let's just celebrate the win that it's we're gonna help more people that we thought then it's gonna cost less than we thought.

Right.

That was my only point to make any other there's a phrase you know thread the needle right you don't you don't have a needle here you have you have a whole loom I get the complexity of it so I just want to come back to principles the money is very much not linear, right?

If I give if I give a hundred dollars to somebody that has a billion dollars it's meaningless.

If I give a hundred dollars to somebody that has a dollar it's life changing right.

Right.

So as we develop these plans and thread that needle or thread the loom uh let's let's keep that in mind.

That helping, even though the percentages and all of that, let's make sure that we help the the people most in most in need.

And I think that we can have a uh greater impact on the on those people, and that we should.

Rather than optimizing for the quantity of people, let's think about the need that we can really address and make sure that the funding that we have and the money that we have to allocate is doing doing the most good.

Um as you as you work through the you know, as we said, the excel behind this kind of thing is really hard, and I'm glad you guys are out there doing it.

So uh let's just keep that in mind as a principle.

All right, that might lead us to options B1 or B2, Commissioner DuPartis.

So if we're ready, we can vote on the motion that's currently on the table, which is uh a recommendation for option B1.

And if it prevails, we're done.

If it does not prevail, we'll seek another motion.

So um all right, so on the recommendation to on the motion, sorry, to recommend option B1.

Um we take a roll call vote.

Commissioner Lauterman.

Aye.

Aye, Commissioner Laxon.

Aye.

All right, Commissioner DuPartis.

Yay.

All right.

And I think for me, it's a nay.

But we're a three to one, so I think uh the motion passes.

Thank you so much, everyone.

All right, so with that, we're gonna move to the next bit of uh new business tonight, which is our utilities capital investment program tour.

I do not see any member of the public here, so I don't need to instruct them to do anything.

All right, that's Joe.

We'll stop the recording, obviously, and then we'll still be in uh session, and then we'll close it out after the end of the third location.

Okay.

Yeah, we have um.