Good to go.

Good evening, everybody.

We're gonna go ahead and call to order the council meeting for Tuesday, February 24th.

Uh if you'll call the role.

Council members Kozlowski.

Here.

Leary here.

And Rachel.

Here.

And if you all please stand with me for the pledge of allegiance.

My Pledge of the United States.

One nation.

Under God, indivisible with liberty and justice for all.

And do we have any agenda updates this evening?

Yes, Mayor.

Do you have an app?

I think your microphone's off there.

Thank you so much.

Um, let me just make sure I have the proper item here.

We have some additional information transmitted on our public hearing, item number eleven, and that has been provided to the council, and there's also copies on the back table for members of the public.

Thank you.

And next up we have business from from the floor for those of you that are not familiar uh with this process.

This is the time where the public can address the council uh for three minutes on any unagendized item.

And it looks like we have one request tonight.

Uh Michael Harris.

There you are.

Come on down, Mr.

Harris.

I'm trying to get my brain together.

It's funny.

Uh I was hanging out with my mom for Black History Month.

And uh said, Mom, I'm getting social security checks.

How do you feel about that?

He said, You don't start paying me back.

I said, No, my mind paying you back yet.

Give it to the grandkids.

So, yeah, so this is like 100th anniversary.

Oh, mayor, city council, staff greetings.

Hundred anniversary of Negro History Week.

Dr.

Carter G.

Woodson, you know, had enough.

Omega Sci-Fi fraternity.

You know, the brothers will be stomping and barking and stuff.

If I joined the fraternity, that's probably the one I'd be in.

But uh, you know, I'm fraternity one, I'm enough.

It's 50th anniversary of President Gerald R.

Ford officially recognizing Black History Month.

And it's just interestingly, I was looking back on that date.

Uh Robert Pritchard, Dr.

Robert Petard, he's in Africa doing some amazing stuff.

He was the politics behind it, but Vernon Jordan and Jesse Jackson is there at the signing ceremony when Gerald Ford recognized Black History Month, and you know, this Friday we'll be uh everybody will be saying nice words about Jesse.

Jesse was y'all think I'm bad sometimes.

Jesse was rough, you know, born quote unquote illegitimate in South Carolina, and then moved to Chicago, you know.

Uh Jesse was a stud playing football and probably could have gone to NFL, but somebody grabbed him.

He started preaching.

You know, he did another thing.

But the idea here in Folsom, um, it is the history is just amazing.

And you know, I've just, I mean, that's one of the reasons why I live here.

And uh some of my elders um uh calming me down because I spent a lot of time in cemeteries, I hang out with old folks.

Uh I mean for real old folks.

I was just at the Democratic Convention pushing around a 95-year-old woman from San Diego who said, get here now.

So, you know, I was tired.

You know, but I'm gonna go tell a 95-year-old woman, tired, I don't need to go nowhere.

But the blessing was is everybody who's anybody was running to her because she was Jesse Jackson's uh campaign manager in San Diego, uh 88 or 84 back then.

So anyway, uh this year is the 60th anniversary of Leitesdorf Plaza, and some of y'all may have seen the little plaque there.

Some of y'all might be old enough to remember, used to be a fountain, Lightisdorf Plaza, and a little triangular park down there, and George Chan had the cash and carry store.

But I'm gonna pass these out.

We're gonna dig that history up.

Somebody gonna have pictures of all that.

I don't know where they are, I don't have them, but somebody has them.

That's it, that all happy black history one.

Thank you, Michael.

Good to see you.

All right.

Any other requests from business from the floor.

You have no additional requests to speak under business from the floor.

Perfect.

Uh, that moves us on to schedule presentations.

If you please call item number one.

Yeah, item number one is the presentation of the fiscal year 24-25 annual report from the Folsom Tourism Bureau.

This will be regarding the Folsom Tourism Business Improvement District.

Good evening, Mayor, members of the council.

Uh it's my privilege to be able to present this.

What am I doing wrong?

It's on here, but not up.

Yeah, I've got it.

There we go.

It just takes it a second, it'll be.

So uh it's my privilege to uh introduce our team to talk a little bit about what we did in fiscal year um 24-25 relative to the tourism bureau.

But some questions have come up about choose fulsom and the organization.

So we've come up with this um display to show you a little bit about what choose fulsom's about.

There's three organizations as we've shared with you.

There's a fulsom tourism economic development corporation.

There's the chamber of commerce, and there's a fulsom community development corporation.

Each one has a different mission, but with the sole purpose, all of them is to uh a thriving economy.

The chambers here to support small business.

Uh, the fulsome economic development, I mean tourism economic development corporation is really focused on both economic development and tourism, and then the Folsom Community Development Corporation is about the enhancement of economic development.

Tonight, our team is going to be speaking to you about what what occurred over the past year in uh the tourism.

And so I'd like to introduce our team.

Uh Jody Franklin, uh, who has just joined us over this past year, Sally Buchanan, and then Jennifer Cliff, who is with our marketing.

So with that, here you go with Jody.

Here you go with Jody.

Okay, uh let's see.

This is the first time I've presented in front of you.

I think I've met each one of you.

So this is exciting.

Thanks for letting me be a part of it.

Looks like the uh battery is flickering on this, just for whoever might know.

Um, I just wanted to share with you um some visitor impact, visitor spending uh stats uh tonight.

Um, and this would be for the um we're looking at calendar year 2024, calendar year 2023, the comparison there.

Visitors spent over 38 million dollars in accommodation in accommodations for in 2024, and that was 643,000 uh and some change and a 1.7 increase.

Um obviously you can see they spent more money on arts and entertainment, food service, food stores, transportation, etc.

Retail.

Uh this is um broken down by accommodation type.

Uh visitors who stayed in hotels, motels, or uh short-term vacation rentals contributed 92 million to the visitor spending, and uh that was 3.6 million or a 4.1 increase compared to the previous year.

I just wanted to break this down a little bit.

The hotel motel, that's pretty uh short-term rental.

Below that says private home.

That's when you have friends or uh family staying with you, visiting from someplace else and staying in your home.

They're not paying for accommodations, but they're still spending money in the community.

They are considered visitors in a private home.

So they're spending retail, they're spending restaurants, they're spending events, that sort of thing.

Day traveler, that's pretty um pretty self-explanatory, and then seasonal home.

Uh direct employment.

Um, this is the travel industry employment, so this is the jobs created by the travel industry, uh, 900 in accommodations and food.

Uh uh eight nine over eight nine.

So uh 10 10 people increase on the that one category, arts and entertainment, and then retail and transportation.

Uh this is overnight visitor volume.

So now this is not visitor spending, this is the number of visitors.

So you can see an increase 22, 23, 24.

Um, excuse me, and then uh that's on the top the uh overnights uh same sort of categories, and then the trips are um the number of trips they took, so not the number of people.

There's more people in a in a trip.

So the number of trips they took, um, and then on the right is the party size.

We've got uh 2.3 um is a stat on the uh number of party size, average party size of a visitor to Folsom.

Next is local direct local tax receipts generated by visitor spending.

Um on the left, you'll see the TOT that goes directly to the uh the city, and then the sales tax, so one percent uh that's the city share uh share of that tax.

Um, and you can see that climb, you know, took a dive there in 2020 for obvious reasons, and then it's been climbing since then.

Okay, now I turn it over to Jen Cliff for the marketing.

Uh thank you, Mayor and Council members for allowing us here this evening to present.

Um visit Folsom.

Our role is to position Folsom not just as a place where people live, but a destination people choose to visit, stay, and experience.

So tonight, my intention is to walk you through how our marketing efforts affect that and driving measurable results from increased visibility and engagement to website traffic, hotel bookings, and ultimately economic impact.

What you'll see, and hopefully, what you'll see is strategy that's not only creative but intentional, data-driven, and directly aligns with supporting our local businesses, hotels, and overall community vitality.

So on this first slide, um you're we are seeing and we have seen for the last few years exceptional growth in reach, up over 350%, which tells us our content is breaking beyond local audiences.

Our strategy is working, we've shifted to more short form video and reels and are driving the strongest engagement and discovery.

Um our audience is still largely local, regional, but that's actually a strength.

It's allowing us to build community pride and also converting visitors through shared content.

Bottom line here for us is we've built a highly engaged digital audience that is now fueling tourism visibility.

This next slide, website traffic is up across the board.

Um, sessions and users both have increased by over 85% this last year or year over year, actually.

Engagement is strong, 55%, meaning visitors are aren't just landing on our site, they are exploring, they're staying there.

Organic search drives about 75 or 70 percent of our traffic, which shows our SEO strategy is delivering high value, low-cost visibility.

Our top pages are dining, things to do, and lake recreation aligning directly with our visitor intent.

We're not just attracting traffic, we are attracting the right traffic.

So people really are using the site as a resource.

Um, talking points on this slide.

Um California, sorry, I'm just popping around here.

The regional part, this regional partnership allows us to punch above our weight by leveraging collective marketing dollars.

Um we have partnered with Gold Country and Visit California numerous times this past year.

On this, we've had over 5.5 million impressions delivered with Folsom generating over 600,000 of those.

Most importantly, the campaign drove 55,000 travelers and 217 hotel nights.

This is a strong example of collaboration translating into real economic impact.

Other additional advertising campaigns that we did, our creative strategy was set is centered solely on positioning Folsom as both adventure and lifestyle.

We're targeting visitors at different stages from inspiration to booking.

You'll see a strong alignment across platforms, whether it's print, digital, or email, and everything tying back to visitation and overnight stays.

And then we are on, oops, online booking.

I lost my talking notes here.

Um this is where the marketing turns into measurable economic impact.

We saw a 63% increase in sessions and 11% increase in reservations.

That translated into over 700 room nights and a 26% year-over-year increase.

Again, our intention is not just inspiring visits, but we directly we are directly facilitating bookings.

The hotel packages, we've built hotel packages around our marquee events to drive overnight stays.

This help specifically target midweek and shoulder season occupancy, something we know is a priority.

By bundling experiences, we've both increased length of stay and visitor spend.

This is a strategic way for us to connect events, hotels, and local businesses.

And then we have noted some of our main hotel packages of the year.

And last but not least, um, the campaign themselves.

The campaign delivered over 285,000 impressions, 8,200 clicks to hotel offers with a 2.89% click through rate performance and exceeded industry, which is exceeded industry benchmarks.

Cost efficiency is strong, about 15 cents per click and per landing view page.

Most importantly, these campaigns support demand around key events like Rodeo, Wine Falls, Bust, and then TEDx was a strong performer.

We are successfully moving audiences from awareness to actual booking behavior.

So at the end of the day, our strategies are simple drive awareness, convert interest into bookings, and generate generate real economic impact for Folsom.

And the data shows we're doing exactly that.

Thank you.

Good evening, everybody.

So just to talk a little bit about marketing before I go into visit Folsom programs.

Folsom is not a resort destination.

We don't have, as we'll hear later on tonight, we don't have major destination infrastructure like conference center to drive certain types of traffic.

And the revenge travel after COVID is going down in most of the gateway cities, San Francisco, LA, and those types of destinations, they're all seeing tourism go drop.

And we're holding steady, I believe we were up about two percent in 2025, if I'm correct.

So hats off to our marketing.

When I started three, four years back, we rebranded Folsom, really focusing on our outdoor recreation and um and the our beauty and nature, and I think a lot of that has also helped, but our marketing team is really driving it home for us.

But we do work on programs such as our destination support grants.

As you'll note here, I think almost everyone are our outdoor recreation events, and we do support these events.

They drive heads in beds.

The one item on here, inductive automation conference that drove about 750 to a thousand people from all over the world here every September.

We supported that conference, unfortunately.

They grew it out grew out of their space and had to move to Sacramento last year.

And I've heard that they didn't have a great time there, but we really don't have space to accommodate a conference of that size.

We work, the Choose Folsom, all of our organizations supports many community events, mostly through in-kind donations of road baskets that they can auction off at their um at their galas or fundraising dinners, sometimes with um purchasing tables and event tickets.

Um we have a funding opportunities and grant application hubs where anybody can go on and submit their um for whatever program that that they most suits them.

So we do the community grants, the destination support grants, transportation reimbursement grants.

Think if someone's coming and staying for a wedding or has a small corporate event, they would apply for that, and then our sports grant fund examples of how we work with our sports teams.

We're just now starting our relationships with the Sierra Marlins.

We use our online booking engine.

We give them a unique link that is good for their event or organization, and room nights that are generated through that booking link.

Um we give them a rebate back to help support their organization.

We also have our event boards around town, and um, these are some of the events that advertise it.

These are iconic.

People drive into town, they get to see what's going on, and thousands and thousands of cars pass by these.com.

There's a tab on the bottom that says um advertise your event.

We also this past year finished our meeting guide, and we have to get creative in our meeting space.

So we've got unique spaces in there like the zoo, zoo barn, and things like that.

Because if we're going to have groups of any size, we have to get creative, and this is our um our attempt to let people know.

And it also has some itinerary suggestions in that.

And next, I'd really love to work on a sports facility guide.

We um gather and toast at the depot is open, offering visitor services.

If you haven't had a chance to pop in, go try a crepe.

They're pretty great, and the selection of um think of a brick and mortar mortar farmers market selection of goods and um Folsom branded merchandise is um getting better every day, and hopefully soon to see some new branded merchandise, which we'll give you a peek of in a minute here, and um before I turn it back over to Jodi for future initiatives.

Um this slide was out of order, should have gone before, but we we collaborate with all of our um destination marketing organizations in the gold country, visit California, visit Sacramento, the Aquatic Center, State Parks, Visit Rancho Cordova, the city.

So collaborations and networking and working together is what it's all about.

And next, I'm gonna turn it back to Jody.

Okay, so um this is um some materials I uh created when I came on.

Um, since El Dorado doesn't have a visitors bureau anymore, we really wanted to use Folsom as the base camp to gold country adventure.

So stay in Folsom, play wherever you want in Folsom and around Folsom.

So we've created these itineraries that um have Folsom as a home base, and so we can attract groups and leisure um travelers as well.

I think that's uh partly Folsom's done such a great job of diversifying their kind of portfolio.

So when other people are taking the tank, uh kind of going down after the revenge travel, uh then we we still stay pretty steady, and then we've um had incremental growth as well, so more power to them.

Looking ahead at the um at the NorCal Film Festival, short film festival that's this weekend.

Uh we created this event as a uh something scalable that fits into our shoulder season on those softer times when the um occupancy isn't high.

Uh we feel like this is a great fit for Folsom.

We've got lots of theaters, we've got lots of arts and culture in the area, and um so far it's proven correct.

We just starting small at Plaudio Lux, but so far it looks really great.

We've had a lot of tickets this weekend.

Yeah, we do still have a few tickets left.

Okay, looking ahead, also the um the updated the getting around guide.

So this is more of a piece that's in market, so once you're here at the visitor center, they can hand that out.

It gives all the shopping, theater, lodging, everything, but it's also online, and um, so we'll be um embellishing that a bit too.

And then this is what uh Sally alluded to, the paddle board capital of the West.

Um, we've got this water around us, and there are so many opportunities.

So I feel like it really fits into all that um that the city of Folsom has, and um, so you'll be seeing more of that in the future, and that's it.

Do you have any questions?

Questions?

Uh Councilman Ruggino.

Jody, could you please go back to one of the first slides where you show the hotel nights, room stays?

Okay.

No, keep going.

Where it showed the nights, number of nights.

Right there.

So hotel motel nights, 458 for 458,400.

So I don't think we're gonna be at a thousand hotel rooms until AC Marriott comes online, but let's just say for argument's sake, we're at a thousand.

If every single one of those hotel rooms was booked every single night, wouldn't that be 365,000 hotel motel nights?

How do you get to 458 400?

Well, we've got those are people.

Oh, that's people.

Yeah.

Okay, people.

Got it.

Okay, that's what I needed to know.

Thank you.

All right.

Any other questions?

Councilwoman Ricky?

Councilmember Blurry.

Um, I I have a couple of questions.

This was a great presentation.

Thank you all for putting this together because it sort of pulled everything together in a very nice presentation and made a lot of sense.

Oh, good.

Thanks.

Yeah, and and I really appreciate seeing all the data you've collected.

Uh so really one of my uh questions is just how do you um sort out private hotel stays or not you know not private hotel, private home stays.

Well, I think uh that I think it tells you where it came from, but um it's probably your phone.

Oh, okay.

Yeah, you can track phone data and they know how long you've stayed here, who's you know, it's not you in particular, but in general, and then they they aggregate that.

That's usually the location is usually um the way they get where they're staying.

Yeah, and then I noticed one of the packages had uh, you know, two passes for paddle boards, and I'm wondering, you know, how do you compare?

I I'm not gonna read them all, but how do you compare the draw with one kind of a package versus another?

Because I like in the summer, it's pretty tough to probably get a space on the water on a paddle board on some of the hotter and more popular weekends.

Um, um, so uh I get to probably uh answer marketing questions because all the packages are a little bit different, they're all being marketed to different audiences.

That happened to be the rodeo package, Barbara, that the paddle boards are in, and um actually we work with um Dan who does the paddle boards at Black Miner's Bar who offers the tickets, and they I haven't heard of any complaints on those.

Yeah.

So we do we try to like what's you know what people go for in package.

We try to our packages get so many click-throughs online, and we advertise them in our key feeder markets, Reno, Bay Area, and they get tons and tons of click throughs.

Rodeo packages predominantly have that.

Can you come up to the mic, Jennifer?

Um the rodeo packages have been um uh predominantly successful with the Reno and uh lower valley markets.

Um, so I think that there are both markets that are not unfamiliar with heat and they're but they're looking for a you know, little and for our holiday package.

We work with the ice skating, you know, historic fulsome ice skating rink, and we do a Palladio gift card.

We work with we look for um we do all of our events that we own, of course, but we try to reach out for further.

So we worked with the Hellwig concert series.

It's a sort short drive from Folsom to get out there, but they had like six concerts last year, and so it gave us a lot of content to talk about, and it really drives brand awareness for Folsom in these markets that might not know we're even here.

So it's been and we just kind of tinker with things and find new packages and and see what what resonates.

Well, you're able to collect a tremendous amount of data.

Oh, yeah.

I mean, which is what we're trying to get to on everything these days.

Uh when I came, yeah, that was one of my main initiatives when I came on, is just making sure that everything had data behind it.

So there wasn't emotional marking decisions.

It was like, no, this is working, this one's not.

Right, that's great.

And one last question is um the sports grant fund.

What does that uh support?

It right now, um, we have the Sierra Marlin's Broadstone Racket Club, um, Folsom Lake Surf, who's working with them.

I um encourage, I try to meet with our local teams to see if or you know, if they want to apply.

Folsom Lake Surf is gonna go with their own travel agent now, so they're not gonna be working through our grant program.

But um, Folsom, I've presented to full of the Athletic Association, so they know and hope you know help me spread the word, but it's it's a way for organizations to potentially get a little additional funding in their belt.

And if it if the way we do it doesn't work with them, we can do it other ways too.

Right.

And I was impressed to see that the pool was one of the highest draws on the list of um facilities that are used in the city.

And that was some of the data in the report here.

Oh, sure, yeah.

Yeah, yeah, it's it is that was good data with um Placer AI.

Yeah, yeah, and that's cell phone data.

Okay, well, thank you so much.

You can't find Vice Mayor Orba.

Any questions?

Uh Councilmember Kozlewski.

All right, thank you all so much for coming tonight.

Thanks for presenting.

And that moves us to our consent calendar.

I've had one request to pull item number eight.

Uh, any other requests for items to be pulled this evening.

Mr.

Mayor, I'll move the remainder of the consent calendar inclusive of the four individual items named as number nine and the two individual items identified as item number 10.

Second, please call the roll.

Council members Kozlowski.

Yes, Leary?

Yes.

A keynote?

Yes.

And right there.

Yes.

And please call item number eight.

Okay, item number eight is resolution number one one five five eight.

This is a resolution amending a prior resolution to modify the eligibility requirements for the program for local assistance youth recreation scholarships.

Um, giving it a new name.

Uh, yeah.

So I I sent a question to you earlier, and I just saw that you had sent me an answer.

I got through it briefly, but could you explain um what the impetus was for this and um kind of the thought process behind changing this?

Sure.

Good evening, city council Kelly Gonzalez, uh Parks and Recreation Director, and we brought forward to a recommendation.

We've had some requests, a handful of requests from our seniors and our adults, asking if we have a scholarship program.

Um I personally talked to a few of them and some really compelling stories, um, and said, sure, we can bring that to city council um for consideration.

Um of the things right now we're not giving, like we have scholarships available.

We haven't given all of the scholarships.

Um, so we do have some capacity.

We are making some changes administratively.

So in the past, um, each scholarship is 250 dollars.

Uh we would put that on account and would stay on the account.

So let's say a program was $100, they would have 150 dollars on their account.

We're changing that.

So the the scholarship, it's up to 250, but it's just for the cost of that class or that program.

So we know we feel that we're gonna have some more capacity, so we see that this change won't have a major impact.

We'll still be able to continue to give out those scholarships.

I know one of the questions that came up, we're recommending a 75-25 percentage.

So the reason that we were doing that is to show there's emphasis on the youth, 75% youth, 25% adult, but pro at the program level, but we may make adjustments.

Um, this will be our first year um potentially taking scholarships for adults and seniors.

We do have some pretty stringent requirements that you have to show uh proof of being a Folsom resident and have to be on some type of federal or state or county low-income program.

Um, but we have capacity and um we're making this recommendation to to make sure that it's open to adults or seniors that may be in need.

So I have a concern that I mean it looks like I mean the COVID year was a weird year right after, but um that we're subtly going up, that you used 8,250 of the 10,000.

Um, so 7500, 75% of the 10,000 would put us below that.

So then that would mean I understand the adjustments with the programming um and what you just explained, but I'm worried that um we're not gonna have enough to give to our youth that are now obviously they're more aware of it.

Something's happening, right?

Also, with the raising of fees um that we've just done over our programs, um that's gonna exhaust some of this money too.

So I'm a little bit worried about making this solidifying this at this moment when we would already be over.

Um, because our focus, like you said, should be on our kids.

Now, when I looked through this and I thought, well, if we're gonna add something, then the senior population, because I've heard very similar things.

Um, not no one's reached out to me saying they need a scholarship, but how important the senior center is to to a lot of this adult population.

So I'm concerned about the levels there.

Uh um, you know, the trajectory on this is showing that this next year we should be maybe 9,000 that we've that we've put out.

So um I would hate to give out 2,002,500 this year to a senior population.

Hopefully they would want, you know, use it if it's there, um, and then have to take that away next year because our priority for this is our youth, or for me it is.

Okay, you bring about really good points, and hopefully, I don't know if there was a question in there or there, um, so currently we have increased our capacity for the scholarship program.

We're working closely with the school district.

So I know our staff have really good relationships with counselors.

Um we have foster youth in our program.

Uh, that will the teachers and the councils will make recommendations for uh students to apply for these scholarships based on what we're looking at um administratively each year.

We feel that we're gonna have additional capacity.

So let's say right now we gave out 8,250, but approximately 2,000 was put on account and was never used.

So we feel confident that that 75-25% wouldn't be an issue.

Um, but also at the program level, let's say it is on a first come first served basis.

So as they come in, uh we'll make we'll go ahead and make that grant.

If we saw see all of a sudden that 25% or 30% are our seniors, and those are coming in first, then we would um make some modifications or or some adjustments, but that more at the program level.

The goal is um each year, it doesn't roll over um year after year, but the city council did say in that resolution that they wanted to be able to provide up to $10,000 annually.

So that um our goal, like we we want people to participate in our programs or our goal success.

What we see is that we are giving out $10,000 annually in that scholarship program because we want people to participate in the services that we offer.

One of the discussions we had when well when we were talking about you were talking about Parks and Mark was talking about uh raising fees is that we did have the scholarship fund to help those that may not be able to afford it.

So that's why this is a kind of a priority.

I can tell that you're kind of on it.

Um I wonder if there's also ways.

I think this was brought up at Parks and Rec Commission, um, that when someone's signing up for class, they could give because our community is very giving, um, you know, a family could give $10 towards the scholarship.

So in a way to kind of raise funds in another way rather than having to raise this in the future if that's something that we are anticipating.

But what I'm hearing from you is that you're gonna be watching it, you're gonna try not to turn any kids away.

If you do, you'll come back to council or you'll find a way to, is that kind of what I'm hearing?

And then we can readjust next year.

Yes, you'll bring it up.

Yeah, this is our trial basis.

Um we've had some seniors, some really heart-compelling programs.

I would have loved to say yes, I would love it like it sound really reasonable, but told them currently based on our policy, I'm not able to do that, and I would love to be able to offer that for the few seniors that have come and made some of those requests.

I think that's fair.

Thank you.

Thank you.

Can I just add one thing?

Because I I sent um similar questions to Kelly.

Um, I think the fact that you're you're only going to provide a scholarship in the amount of the actual cost of the classes is good policy.

But the other thing is um the percentage of 7525 is not in the resolution.

So, although that may be what you're thinking, it's not set in stone.

I I think just the message from the council probably is that while we are um support opening up scholarships to adults and seniors, we don't want it to be at the expense of somebody under 18, correct?

Correct.

Yeah, yeah.

Yeah.

Definitely noted and we'll look at some of our processes and make sure that that doesn't happen.

We'll we'll monitor it very carefully.

I know you will.

Thank you, Kelly.

I had a resident call me with similar um concerns today.

Um, but I I do want to point out that I think it's uh I don't know whether it would be wise to carry that money forward so that you know if you have something left from this year that you could increase the rate or I guess the other possibility would be to consider an increase in the amount um allocated for that, like maybe from 10,000 to 12,000 next year, depending on the needs.

Uh I don't believe it costs anyone money to participate at the senior center.

Uh, but there is a great need for people on fixed incomes.

Uh and we have a fair number of those residents here, and I you see some over having lunch over at the senior center.

Um, but they're using the facilities like the aquatic center for aqua aerobics and the arts classes.

So um and I'm all for making sure all of the kids in need have something, but I I'm very supportive of continuing a program that allows uh seniors on fixed incomes to be able to participate uh in our activities as well.

Thank you.

Any other questions?

I'm happy to entertain a motion.

I'll move adoption of resolution one one five five eight.

Please call the roll.

Councilmember Kozlowski, Leary, yes, yes, a keynote, and Rachel.

Yes, uh, that moves us to our public hearing portion of the agenda.

Please call item number 11.

Item number 11 is resolution number 11539.

This is a resolution declaring the results of a majority protest proceedings and modifying the assessment rate of the Folsom T bid district.

This is continued from the January 27 council meeting.

Great.

Thank you, Mayor.

Members of the council uh just uh providing some updated information uh this afternoon we received or early this evening we received communications from uh the owners of five of the hotels.

Uh and they have uh the question was uh should uh the uh T bid rate be increased from four percent to eight percent, so a four percent increase.

Uh I'll just read uh the statement uh that was included in these emails.

Uh it says we remain opposed to any increase of the TBID assessment rate from four percent to eight percent, doubling the assessment would represent a material and immediate financial burden on lodging operators and is not something we can support.

However, we are open to consideration of a modified, more measured T-bid proposal, increasing the assessment rate from 4% to 6% years one and two, and then an additional 2% in years three and four, hereby resulting in an 8% T bid by year three, provided that such an increase is implemented within a clearly defined governance and accountability framework that ensures meaningful hotel oversight and measurable return on investment to the Folsom Hotel and Tourism community.

However, we are open to consideration of the modified T bid proposal increasing the assessment rate from 4% to 6%, provided that such an increase is implemented within clearly defined governance and accountability framework that ensures meaningful hotel overnight or oversight and measurable return on investment.

We respectfully request that the city and relevant stakeholders allow a 60 to 90 day collaborative working period, um, a 60 to 90 day collaborative working period with assessed hotel years to develop a more structured implementation plan that includes clear hotel owner governance over the incremental assessment funds, defined performance benchmarks tied to the uh to occupancy, uh ADR room night generation and incremental TOT impact, fiscal safeguards regarding feasibility studies and consulting expenditures to maintain focus on value for hotels and the larger community, transparent reporting and measurable accountability mechanisms.

We believe a structured and collaborative approach will produce a more sustainable and effective district framework while preserving alignment between the city of Folsom and its lodging community.

So, with that information, uh as I've consulted with our our city attorney, uh the way we view this is if the city council uh you know, after we open the public hearing in the council's uh desirable uh desire is to approve, you know, this increase that it would need to uh continue the public hearing uh because if we don't grant the 60, uh at least the 60-day window uh that the protests are still intact, right?

So uh otherwise um we'd have to continue it and allow for that discussion between the city uh uh TECORP and the hotel years, and and then come back at a future date.

Uh I think we looked at it uh if we were to allow a 60-day window, would be the second meeting in April.

Um so anyway, just wanted to start off with that.

Uh I'd be happy to answer any questions the best that I can, and I'll turn it over to the council if you so if I'm understanding correctly, opening the public hearing, and then we would tabulate the results uh or you know, at that point, are there results to be tabulated?

Obviously, we've gotten requests, but we we tabulate results and then we continue.

Uh yeah, so I I think it would be determined on whether the council wants to accept the request to continue the item so that the things that they requested could be worked out.

And so if that were work through, then the protest would be in in essence kind of revoked, and we would continue forward with the process, and we would uh continue the public hearing to a uh that second meeting in April where we would present back what those changes are, and um you know uh I so it's it sounds like the withdrawal of the written protest is contingent upon allowing this 60 to 90 day period, so to allow that to occur, the recommendation would be to open the public hearing, um, then not close it and leave it open for the requested period of time to allow those discussions to take place, bring it back for the continuation of the public hearing so that the council could hear from the hotel owners and anybody else that wanted to weigh in on the outcome of so can we not take public comment?

You you can okay.

Yeah, and so what I would add, I mean, obviously, I described if the council would want to um you know adhere to their request, or you could just decide, you know, um we don't want to wait.

Let's let's have this item resolved tonight, and then it's our opinion that the their uh protest would stand and it would fail.

Got it, understood.

May I of course just to the city attorney the the question that was posed to the electorate in this case was whether or not to raise the particular rate from four to eight percent.

So at least in the communication that we've received today, it seems like that question still stands.

It's just a they want an opportunity to modify the pace of the increase and the circumstances of oversight.

Is that the way you see it also?

Yes.

So the question doesn't need to be changed necessarily, the details need to be added.

Correct.

They they have the authority to do a conditional or a partial protest, and it appears that's what they have done.

Got it.

Okay.

Oh, sorry.

You're okay.

Yeah, I'm just questioning the you know, 60 to 90 day window.

Um, if we set a date now, could that be changed if they feel that they need more time to set up uh, you know, all of the things that need to be put in place that Mr.

White Meyer uh detailed there.

You know, do you have to stick with that original date, or would they have to put that on the agenda and say, hey, we need another 30 days to complete this process to everybody's satisfaction?

Yeah, that is a great question.

And the way I would interpret that is that if we set the date, you know, after the 60 days, which would be that second meeting, the hotel years or any member of the public would have the opportunity to make that request for additional time if needed.

And at the time that it's brought back, um, we would be provided with the details of the governance structure, uh, the goals, and um their anticipated outcomes.

Absolutely.

Okay, thank you.

Other comments this evening?

I have a comment.

Do we have any requests to speak this evening?

You have no request to speak under this public hearing.

All right.

Don't close it.

Got it.

Okay.

Got it.

So now we can.

Does anybody have any more questions before we move to comments?

All right, Councilmember Aquino, the floor is yours.

Well, I'm just gonna renew my comments from the last meeting.

I have no issue with increasing the TBID.

Um, but as I said at the last meeting, there is a very prescribed process to do this, and it was clearly communicated.

There is a very specific timeline that accompanies that process, and I don't see how this process is any different than um increasing the L and L assessment, which we voted on last um meeting to start that process for an Atoma station.

And just because the results maybe not be going the way that we had hoped, it doesn't mean you get to deviate from the process, and so all of this negotiating and talking about whether it's two percent or four percent and who should be the decision makers, that was supposed to happen before the ballots went out.

So again, I have no issue with with increasing the T-bid, but I just cannot support um deviating from the process like this.

I think it undermines our credibility, and I just I can't support it.

Councilmember Leary, any questions or any comments this evening?

You know, and that kind of brings up the question as to whether we need to close that initial loop when when there was uh apparently uh hasn't really been announced, a protest, you know, a um a prevailing protest vote against the original proposal and then bring this you know back with direction to come back with another process, you know.

Cause we initially voted to proceed with evaluating the process, and you know, bring bring it back after a vote was taken.

Do you understand what I'm saying?

Is there a question there or well it is a question?

Do we need to close the initial process?

You know, and say, well, the initial vote was um was in favor of protesting the proposal for the four percent increase, and then reinitiate a process to uh reevaluate the new um proposal that has been worked out.

So I think um there are a couple of things in there.

So first, I did want to just mention in response to council member Aquino's comment.

I did look at this, and it is a distinct process from the L.

Although it's similar, it is not subject to Prop 218.

So for those reasons, it is it is a related but different process under a different code section and series of procedures.

So there is more flexibility in this process than applies to L's or uh rate setting for the water department, other Prop 218 processes, so that's why there's this seems very foreign and it seemed very foreign to me as well.

Um but in response to council member Leary, in looking at it, the protests as I understand it were submitted in writing, but they have the opportunity to withdraw those protests in the same manner in this case in writing any time up until the close of the public hearing.

So, for instance, one of the letters received by the city was read by the city manager just now, which was um a withdrawal of the previously submitted protest subject to those conditions that were just read by the city manager.

So it is not a straight line, it is um unusual, but it is, I believe, permissible under the statutory scheme that we're operating under.

Thank you.

I have a question.

Vice Mayor.

Um, so I have a question for Brian.

You read that I tried to capture in my mind everything that you said, but um there was a part, I understood the scaling, um, but there's the next part where it said modifying from four to six percent without the scaling, it seemed like.

Are they might I I'm sure I heard it wrong, but it seemed like they would be acceptable to a two percent raise.

But are this is the the governance, the hotel governance part still?

Yeah, so you bring up a really good point because it's two different options, but it's not very clear.

So my recommendations like like just to highlight what I believe the council has is two options is one, you don't want to continue with this process, you accept the rejection, uh and we just close it out like it didn't pass, or you uh accept their request, and I think in many ways their request for the time is to clarify the governance structure, but also uh from a staff perspective, like well, what did you want, right?

Because in one paragraph it does say, hey, let's scale it, but we're also amenable to just going to six percent, and so if the council wants to provide additional time, I think it's necessary from a staff perspective to make sure that we get it right.

Any comments, Vice More Orbov?

No.

Councilmember Kosowski.

Um I see very clearly what Councilmember Aquino has pointed out here.

So the alternative, if we were to accept the original protest vote or the original vote as it was submitted, can we even do that now that we have these retractions?

I don't believe we can.

So under the statutory scheme, I don't think we have the authority to say you submitted something, we're gonna rely on that and ignore the more recent submittal.

So does that mean though that the votes that have not been retracted run rule the day, or does this need to be a comprehensive vote and we're now waiting for a final vote by five of the electorate in this case?

I think we would have to have the clerk open the votes and do the tally and figure out if there is in fact a majority protest with the whatever it is that remains in effect as of today, but that okay, let me ask this differently.

If there are if there are in fact 11 hotels, they are the entirety of the electorate in this case, each one gets a single vote.

Is that roughly accurate?

Yeah.

Yeah, and so so if it's my understanding, okay.

Let me change my hypothetical.

There's a thousand hoteliers that gets a vote, right?

If only ten of them vote.

Can that be a majority protest in the same way that the 218 process?

If only 10 people vote and only 10 feet those 10 people vote against it, or six of them vote against it, does that constitute a material protest?

Yeah, so um in this particular instance, or do you need to actually receive all of the votes that are possible?

You so it's weighted based on um a proportion of that's why I use the hypothetical, based on their sales, and I have the language for what is a majority protest, and I will I will just read it.

Um so a majority protest is defined as written protests received from owners of businesses in the business improvement district, which would pay 50% or more of the assessments proposed to be levied.

So we have to look at the proportion to be paid by each hotel and add up all of the ones that are protesting, and if that exceeds 50%, it's a majority.

So then the question to the clerk, Joe, just hang on, is how much time would it take to make the actual tally?

Because it sounds like we can't take action right now, it it we it we already know that number.

You do know that number.

Okay, so last question then on this line of thinking.

Um, if in fact there is a majority protest, we accept it as it was sent to us.

There is a majority protest in spite of the fact that some people have retracted their votes.

Is there some time where they have to wait to propose a change again?

Right.

If there were a majority, if there were a majority protest, they couldn't bring it back forward to the council for one year.

Okay.

All right, then let me just make my counterbalancing argument that there was enough for my purposes at least, or my personal opinion, there was enough discussion of the gray area around who would have the oversight of the funds that were collected in spite of everybody's good intentions.

There was some gray area as to how that would how that oversight would take place and giving time just for that to be flushed out and a final proposal put in front of all of the hoteliers.

So all right.

Joe, did you have some comments?

No, I was just gonna answer any questions if you had them, and then we have John Lambeth here who is actually the author of the legislation that created all this.

Thank you so much.

You have any questions for any questions for Mr.

Lambeth?

No.

Go ahead.

Councilman Barkino.

So I question whether even the bid protest has been withdrawn.

I mean, the question, the original question out there was do you want to increase the bid from 4% to 8%?

Um the bid process that we got before that that I don't believe that has been withdrawn.

They just are saying, Well, we don't want that, but we we're willing to entertain something else.

But um, yeah, if I could add to that, I mean, as I read through this, that's why I made my statement before that if the if the council is willing, they're basically countering a proposal.

So if the council is willing to entertain that, it would require, in my opinion, uh continuing the public hearing so we can go through that process that they're requesting.

If the council is not willing to do that or uh wants to just accept their protest, I think you could do that.

All right.

Well, we'd have to accept not only, we'd have to accept the votes that remain after the withdrawal, right?

No, so so they're they're trying to negotiate the the letter tries to negotiate a circumstance under which they would they would vote in favor, correct?

And they're saying that they will they are retracting their previous vote and saying they don't want to so it let me reread it.

The first sentence after it introduces themselves says we remain opposed to any increase of the TBIT assessment rate from four percent to eight percent.

So, in my opinion, they're saying that hey, we're not rescinding our uh protest vote unless you consider these all options, right?

And then it goes on.

I mean, let me just say this is one of the most bizarre situations I've ever found myself in as it w as we've gone through this.

Is it is it possible that somebody that can speak for any of the hoteliers is here to comment on what the intention of this letter really is?

So I can comment on it.

I met with them this afternoon.

Okay, excellent.

Um so I got a call uh uh three o'clock this afternoon, three and a half hours before this meeting started.

Would have liked to have that call much earlier in the process than that.

Um I talked to the hotel owners, uh, and uh, you know, I said, hey, this is the table that's been shown at multiple council meetings, right?

So all of our neighboring uh cities all show sixteen percent combined, right?

Kind of summarized our discussions that we've had because it was clear that there was not an understanding of the discussions that this council has had.

Um and I said I only speak for myself, I am one vote.

Um I have really uh as far as you know how we get to parity with the other hotels in Sacramento County or Rancho Cordova or Roseville.

Um you know, whether it's TBED or TOT, I think those are the discussions that we've been ha having.

Uh and so I wanted them to be aware that those were the discussions that we've been having.

I think, you know, as the transmittal shows tonight, they're already aware, should have been aware of those discussions.

Uh after uh that meeting, they sent in their withdrawals.

Um, what it sounded like to me is is that their main concern was uh governance one, which I think they've outlined in that letter, the amount of money that's spent on studies, uh, versus spending money on uh deliverables.

Uh I think there was significant concern around us spending too much money, or not us, but the entity uh spending too much money on studies, uh, and kind of using the money in that way.

They they're I think the what I took from them was that that there's been a lot of studies already.

You know, that was their their view on things.

Um, and then that uh they would be okay with a phased uh approach going forward, which I think they've outlined in that letter.

So that's where uh that letter came from.

I don't think it's it's any really difference, um, other than, you know, when they told me 60 to 90 days uh delay, uh I said, well, I think that what that might end up with is is us just choosing to go a different direction.

Uh by saying, hey, we're not okay with 60 to 90 days, and we might just move on at this point.

I said that might be the council's decision this tonight.

Uh that being said, I guess what this boils down to me is it's still an argument of and I was gonna wait and share this in my my comments, but really what this boils down to is an argument between TBID and TOT.

Um our earliest opportunity to put TOT on the ballot is this November.

Uh we have until June, uh maybe May to make that, you know, let's say May or June to make that decision.

Uh these is these are, you know, we've asked we have had a continuance or request for continuance at one time from uh from TED Corp.

Now we've got a request for continuance from the other side.

Oh, as they work through the details of how this both parties, you know, work in this negotiation.

Um I don't have an issue until we start running into the inability uh to raise our TOT at the next opportunity that the city has in order to bring us to parity with our neighbors to this 16%, roughly 16%, uh that is collected with each and every room stay.

So that's kind of where I stand right now is is I'm when we get to 90 days, I start to get a little nervous uh that we are not gonna have enough time to discuss TOT and and put it on the ballot.

Um but if we don't interfere with that, you know, our other option is we kick this down the road a year.

Uh I'm not willing to wait.

Personally, I'm not willing to wait another year.

Uh my preferences is if this doesn't go forward in a reasonable amount of time with these two parties, um, we are missing out as a city with every single room night that is booked and paid for in the city, we are missing out on four percent uh reinvestment that helps out Folsom's amenities, it helps out Folsom's residents, it helps out Folsom's hotels.

Um, so to me the advantage of the TBID was we got it in there earlier.

Uh, but we're not really in, you know, any rush other than our decision on TOT.

So that's personally what it comes down to me is is, you know, which one is better.

I think to me, either one is good because either one reinvests in Folsom with visitor dollars.

So I have a or do you um.

We could be here in 90 day or whatever the date was, sixty to 90 days and and they could they could still oppose it.

Right.

They could not come and we might not agree with it and might not move forward with it.

Um it doesn't sound to me that that's a clear withdrawal of their opposition.

Um I think what you made me think of um mayor was this allows us to talk through if TOT is a possibility for this fall or not.

Um I agree with you that the the timeliness of this and being able to um you know gather some income um revenue for the city in whatever way possible um to improve economic development and all the good things, um, was more immediate that we would have been able to start collecting in April.

So, this is just messy, it just feels messy.

Um but I mean I I one of the things conflicts I had with this, the only really conflict I had with this is that we didn't really have a full discussion as a council if T-bid was the right way or a TOT tax.

Um, and this opens that door.

And so I don't know where I'm at.

Oh, um I would throw out what's in order to focus this.

I'd like to make a do we need a motion to extend the the public hearing?

Yes, yes, please.

Okay, so just just to focus things, we can continue talking, but I'd like to make a motion that we extend the um public hearing or the op what what am I extending?

That you continue the public hearing and that we continue the public hearing for 60 days till April, whatever that is.

The second meeting in April.

The second meeting in April, um, in order to allow for refinement of the um the plan that would satisfy the you know the hotel those who have offered to retract their uh protest.

Can I add an amendment to that?

That's right, you know that nobody seconded it, so it doesn't well, it's really amendment.

You would be making a substitute motion at this point, okay.

For a different one.

Well, would make the same motion, but with the um uh the addition of including the list of things that the hoteliers wanted to negotiate uh prior to this coming back that uh Mr.

White Meyer outlined and you know it it it is significantly different in that the hoteliers are asking to change the governance of the um of the body that will be managing the funds.

Let me let me offer to modify my motion in this way.

Um extend the public hearing for the purpose of giving time to all parties interested to refine the pace of implementation of the increase and the um governance process for the funds because it was already that so that's the end of the the motion.

The the discussion we had last time was plain that the whole purpose of this increase is to collect additional room tax money, the hoteliers have to have a say in how that money is spent because that's what a T-bid is, it's their money that they're giving over to projects that the city will help implement.

So we already know that they must have some level of governance over that.

Um they're saying that they want that clarified in further detail.

So that's that's why my motion is.

Because the prior discussion had been that the um I'm trying to remember the correct terminology for the for the um committee that already exists that would be making those decisions.

So I'm a little confused.

Was that a substitute motion?

Uh I I modified my motion.

Perfect.

Black's a second at the moment.

Is that a second, Councilmember Leary?

Uh I'm I'm still considering this for uh after hearing more discussion because I also agree that it would not be bad to you know reconsider the possibility of a TOT.

Fair enough.

Uh for the purposes of discussion and this since I've telegraphed my support, I'm gonna second the motion.

Uh shot, I see you keep trying to approach the microphone.

Uh um uh, Mr.

Mayor.

Yeah.

Uh does anyone have any questions?

Yes, what would you like to share?

Yeah, you want to come on up.

I'm hesitant to interrupt deliberations for a statement, so uh by going.

And I'll I'll try not to stir the pot.

Thank you, Mr.

Mayor, uh, members of council, John Lambeth with Civitas.

This is a murky situation, right?

Yeah, and I don't blame council members for really struggling with it because of the nature of that withdrawal that you've received.

But I guess what I would highlight is we've made a lot of progress.

We've made a lot of progress with the hotels.

They were many of them saying we don't want this at all.

Now you're hearing from them, we can accept this under certain conditions.

Those conditions seem very uh reasonable to us in terms of a way to go.

And I think if we do have this time, we think very much we can work it out.

And as and as ugly as this process seems, uh it really was designed this way.

There are no ballots in this process, there are no elections, these aren't electors.

This is a majority protest procedure that, as your council very articulately said, allows for a portion or conditions on their protests, and so it leads to this kind of debate and discussion.

So we would just uh ask from visit fulsome standpoint to give us the time to work it out.

We think we can come back with a really good solution that we can all embrace and give you something that uh I think will work very well for the hotels for visit fulsome in the city.

So what you're saying is you wrote it this way.

We have you we have you to blame for tonight.

This is very common in assessment district protests to have portions uh done like this.

So this isn't a unique animal to this assessment district.

And humor me, how does this normally get resolved?

Uh much like you're doing it.

I mean, I think if if the council is willing to give a continuance, and if the protests are cleared at that point, I I think there's some murkiness around the protest, although I would say the most compelling uh piece would be say those protests were withdrawn, because they said we withdraw it at that point for the 4%, but at 2% we don't, and then they went on to say we want all these other things.

I think the best read of that is those protests are withdrawn, and I think uh some of your staff had said that as well.

But having said that, the way to do it is to get agreement.

And we've we're very happy to make progress.

None of us wish this process happened quite this way, but we are making progress, and we would just ask for a little more time to get it over the finish line and have something that hopefully we can all be very happy with.

Well, just to be clear that that it's only withdrawn if we continue it.

If we decide as a council to continue it, then it's then the opposition is withdrawn.

If we decide to open the public hearing and the votes were not in favor, then their opposition stands.

Yeah, if you close the public hearing tonight, the question will be, what effect did those letters you get today have?

And I would argue that those letters withdrew their protest.

That if you if you you could move forward with the 2% increase, even though they've added these other pieces.

There is murkiness to it, and there is ambiguity to it, no doubt.

And it's really up to your council to give you, you know, her advice on it.

But I would say the best argument is that that was a withdrawal if you lowered the assessment.

Beyond that, uh, it would be up to the council whether or not you wanted to move forward with it.

It would be so much cleaner for everybody involved, I think, if you didn't go that route and you gave us a chance to get clarity and bring it back to you with with that clarity.

And I recognize you've already given us that and you've given us time, and there's concerns about process and how it looks, but I think if you can if you can do that one more time, I think we can come out with a with what we think is gonna be a very good solution.

For what it's worth, if I may just kind of add on to that, the this has more the flavor of a request by a private entity to our pub to our planning commission um to do a project.

The you know, the request came to us.

Um the public well, you know, in a planning commission instance, if the public raises concerns, we would pretty liberally give more time to the applicant to be able to try and resolve those outside the room somewhere um so that's why I'm viewing this the way that I am and I'm I'm I'm happy to continue my motion thank you for the second and what I I will say that I'm gonna be loath to extend any further than 60 days I in fact I won't so that was gonna be one of my stipulations as well is to me it's pretty clear that that I disagree with you on I appreciated your first part of it but I do disagree with you I think it's pretty because it's so murky it's a very clear withdrawal if we don't continue it but it's also there is clarity there that if we continue it the discussions will continue my question is maybe it's I'm not sure who it's for is if we continue it and they have discussions and they come back and propose a two percent raise or the scaled version either one let's just say a two percent um does that all go back out to all the hotel years I mean how does that process no so um the the same proposal is out there we have the same resolution of intention that the council passed back in November the same proposal is for a four percent increase however any of the hotels that would be subject to the increase have the ability to say I protest the four percent or I protest um uh partially I'm okay with two but I'm not okay with four or another alternative I'm okay with two now and two in two years or any variation on that theme so um what we were looking at here is the initial protest now we have the I believe conditional withdrawal and just for the record there are three letters that are all worded slightly differently they are not identical so I don't think we can say at large we have a a clear uh outcome at least not the same outcome for all three it's similar but not exactly the same so the in other words everybody that is gonna be subject to this assessment has the opportunity to vote again change their vote or do anything they want to do that's the purpose of keeping the public hearing open is because they can change their vote up until it is closed.

So we have eight right eight votes is there eight votes I believe okay so my direction would be I'm okay with the continuance but I want I don't want five different emails saying five different subtly different different things I want a consensus on from at least five right the majority on a very clear direction but so I I just want to add one thing it's not really clear where this all stands because we've never heard the results of you know the initial votes and then how many have sent letters and what the percentage of the number of that is compared to the total those get read when the public hearing is closed.

Yeah I understand I understand that but it just makes it a little bit murkier in making a decision on like a vice car robots I believe we have received these type of letters from everyone who submitted a protest.

That is correct thank you.

All right any further comments before we call the role I guess I will add one more thought is this I don't want to be doing this at three o'clock on April 28th.

This um it's a great it's a good discussion but um let's please get it worked out uh in 30 days uh if we're going to get it worked out um if it comes down to it I I agree with council member Kozelowski uh the murkiness doesn't help it doesn't add to the trust in this process I get it that this is a different process um but I think uh if we can all uh if those parties can get together sooner um and make sure they get the letters uh to our city attorney and the clerk early, then if we do have ambiguity in the letters, that allows us to clear that up uh in time for the meeting.

Please call the roll.

Council members Kozlowski?

Yes, Leary?

Yes.

Robot, yes, Aquino?

No, and Rachel.

Yes.

All right.

April 28th.

Oh, now on to new business.

Please call item number 12.

Okay, item number 12 is resolution number one one five five six.

This is a resolution directing the preparation of the engineers reports for all the L and L districts in the city.

I will spare you reading them.

All right, on L's.

Good evening, Mayor and members of the council.

I'm Derek Prez, Municipal Landscape Services and Manager for the Parks and Recreation Department.

I'll be presenting information on the first step in preparation of the annual engineers report for all 30 landscaping and lighting districts.

As you know, Folsom has 30 L and L districts that maintain assets that provide a benefit to the residents in the districts.

These assets include landscaping, street lights, monument signage, artwork, many parks, as well as other assets.

All L districts are formed persuading to the landscaping lighting act of 1972 and the California Constitution.

Folsom has districts that range in size from 10 to 2,370 units.

The map here shows all the boundaries for each NL district in the city.

Here's a brief explanation of the key elements of Article 4 of Chapter 1 of Part 2 of Division 15 of the Streets and Highways Code and the Landscaping Lightning Act of 1972.

The upcoming annual reports must be prepared by an engineer in accordance with Article 4.

A report must be prepared for each fiscal year in which assessments will be levied, collected to pay the cost of improvements.

Each report must include key elements such as plans and specifications for maintenance of the improvements, estimate of the cost of maintaining the improvements, diagrams of assessment districts, assessment of the estimated costs for maintaining the improvements.

And we are currently in step one, as you can see here.

City council will be directing the preparation of the engineers report for all 30 LNL districts.

This shows the current schedule trajectory of the preparation for the engineers' reports for all 30 on the L districts required by the Streets and Highways Code and the Landscaping Lighting Act of 1972.

Staff made sure to include a review of the preliminary injuries report with the landscaping and lighting advisory committee at the March 26, 2026 meeting.

A resolution directing the preparation of the engineers report for the referenced landscaping and lighting districts for fiscal year 26-27.

With that, I'm happy to answer any questions.

Yeah, great question.

Yeah, so the cost of the each individual engineers report for each district is around $1,136.

Now that is charged towards each district, so they're paying for the engineers report for each of those.

It's to be prepared.

Yeah.

And that would be included in the preliminary engineers report.

Any other questions?

Yeah, I actually um I asked this yesterday in the agenda review.

But um, so we once we accept these current engineer reports, several of these districts are going to have to be looking at a potential increase in the lighting and landscaping fees and a new engineers' report will be necessary to do so to identify um any additional costs that are not included in the current language that's been reviewed by the engineers.

Yeah, correct.

So as direction from council in this year's preliminary engineers report, we're gonna be providing uh a table that shows the revenue and the expenses for each district.

So it'll show where there's deficits for each district as well.

So we're gonna make sure that's included for the next engineers report.

So that answered your question.

Okay, thank you.

But if I could clarify when we're talking about the lighting and landscape districts that may uh that will need to be looked at to see if the residents want to increase their assessment to help uh provide those services, uh a new engineers report will need to be prepared that shows the methodology of what those new costs uh will be and how those will be allocated among all the different properties.

Yeah, and that would be a new Prop 218 process with that specified districts, correct.

You know, so if residents want to have something in their district added to the L and L maintenance program, that could be part of the next evaluation for the engineers report.

Like let's say, I mean, the example here is like you know, playgrounds have uh equipment has in many parks has been covered by the general fund, and if it is uh probably a better idea to have that covered by the L and L because they're sitting in a park that's already maintained by the L and L, that uh that kind of activity would have to be added to the next list of what the engineer report evaluates.

Yes, it would have to be included report, and then when the ballot process happens, they would have to vote to approve that.

You know, it's it's uh kind of a tricky situation in the sense that the lighting and landscape districts that uh um are struggling are the ones that were adopted without uh cost inflators, and so um as we've kind of gone through this initial process with one of the lighting landscape districts.

I mean, we've learned a lot, you know, uh, of like just educating um ourselves and the residents of of what the process is and what the costs are, and so we try to find that balance where for new districts uh that are now CFDs, we want to make sure that we allocate and all the costs associated with that.

I think it we have to be careful because I think there will be some reluctance if we add too much to it because they're accustomed to paying for certain elements, and the main justification is those elements that you agreed to pay for way back when uh because of inflation and just cost increases, unless there's this overwhelming support to increase the amount of services.

We haven't necessarily gone that route, you know.

Uh in some ways we're fighting just to get them to approve the increase to maintain the existing infrastructure that they have.

You're right on point, but then what do people want to pay?

All right.

Thank you.

Any other questions?

All right.

Do we have any comments on the side?

No comments, very much.

Ready for a motion.

I'll move to approve.

Got it.

I'll second, please call the role.

Thank you.

Council members Kozlowski, yes, Larry, yes, Rorba, yes, Aquino, yes, and Rachel.

Yes.

Okay, your next new business items number 13, ordinance number 1362.

This is an ordinance amending certain sections of the municipal code for minor code cleanups to remove outdated references and reflect current best practices and laws.

This will be uh introduction and first reading, and then followed by determination that the project is exempt from CEQA.

Thank you, Krista.

Mayor, members of the city council, Pam Johns, your community development director, and um I'm happy to be before you with um what I consider to be a whole bunch of um minor fixes, some of them um really non-substantive, and I'm gonna get through these as as quickly as possible.

The municipal code was adopted initially in 73, and so in 50 years since that time, it's been updated dozens of times, and more often than not, it's updated for a very kind of specific targeted purpose.

In this case, we have a lot of uh miscellaneous cleanups that we're just packaging and bundling all together at once and bringing them forward um to you as a way of um kind of efficiently taking care of some of of the um the items that really should be cleaned up.

So uh I'm gonna go through a couple of of summaries.

The staff report lists 16 specific changes that are proposed in six of the titles in the municipal code.

And of those 16, half of those are removing just eliminating outdated provisions that are no longer relevant.

Three of them are updated for compliance with state law or a regulatory framework.

And then there's a non-substantive correction, and I'm going to focus on what I consider to be kind of four substantive amendments that are part of the consideration because I think that's what matters most in getting the record clear.

So in title two correction to replace personnel with human resources, repeal a section on community correctional facility that isn't any relevant anymore.

There's an antiquated section about city clerk's salary.

And then in bold here is one or two of the substantive sections.

So we're suggesting adding a waiver for processing fees on city projects that serve a public purpose.

And so we've had added a new section, and I'm happy to read that into the record if you'd like, but essentially, if the city's doing a project like the police substation or a new fire station, we're not the city's going to charge itself building permit and plan check and inspection fees unless those are fees that are required by an outside expert or agency that the city would occur incur, and if those fees are required to be paid by an outside agency, like there's a school district fee that applies or a sewer district fee that applies to it, something like that.

And so we think this is an important opportunity to come in and for the council to see this.

And then if there's not clarity about that, we would bring it to the city council.

The last item on this page in Title II is to modify what's listed as the limit on contract contingencies currently, just says a flat 10%, but best practice is really now somewhere in the 10 to 20% range on contingencies for certain contracts.

And so we're just asking council to modify that to a minimum of 10% to give that flexibility.

In the revenue and finance section, there's reference to commuter bus service fees and fulsome stage line fees that are no longer relevant.

The third substantive item is in the animal keeping section of the code in Title 17, where we have an unusually low number of chickens that are allowed, and this has become kind of an increasingly popular activity for residential lots.

So we had public request at a council meeting in the past, and we are bringing that forward now to better reflect kind of current best practices and regional comparisons.

And so it would take the number of chickens or hens that could be kept in a yard from two to six.

We would specifically exclude roosters and clarify the setback requirements.

Right now, we say 20 feet from a property line, it would go to five feet from a property line and 20 feet from a residential, a neighboring residential dwelling, which is really just a performance nuisance type of issue.

And again, that's in keeping with best practices.

So it was pretty consistent and straightforward when we did that comparison.

And thank you, Mayor, for your assistance in that comparison.

So we're happy to be bringing this forward.

My two chickens appreciated.

Hopefully they'll have some friends too.

We'll have some friends soon.

We are recommending the repeal of the commission on substance abuse as no longer established in the city.

And then in Title 10, there's uh an anti-cruising chapter that needs to be removed because it's now prohibited under state law.

Uh we have references to taxi stands, parking meters, and business license requirements that are, or I'm sorry, bicycle license requirements that are no longer relevant.

I feel like this is important to say that the parking meter statute, you couldn't hitch your animal to the parking meter.

That was my favorite part of this whole report, I have to say.

When when did that get adopted into code that you couldn't hitch your horse to the parking meter?

It was an in it was an entertaining process for me, too.

Um, and then there was a uh, and then finally a repeal of the prohibition on riding a bike on Folsom Dam Road, which is no longer publicly accessible.

So it might seem to you unusual that we have these things that we don't go through some annual cleanup, but we just don't.

And so this was a way to capture um those things and bundle them together in an efficient way.

The last item is um of substance is that uh there's recommendations to amend uh several sections of the lighting and landscaping district advisory committee updating references to um both staff, the districts that are listed, some come out, some get added, um, and then best practices for the process for that committee.

And so with that, um, we're recommending that you do first reading of the ordinance and determine that it's exempt from CEQA to uh incorporate all these changes, we would bring it back for second reading on March 10th, and the ordinance would be in effect 30 days after that.

Any questions?

I'm happy to answer.

Did you have to pay the parking meter when your hit horse was hitched to it?

I just have so many questions on what happens when you hitch to the parking meter.

Questions uh for staff?

Actual good questions.

And that's why duck no more than two ducks are allowed because you know, ducks uh and rabbits are you know some gourmet items for some people's uh cooking tastes.

I think you could still have your six chickens and your two ducks or rabbits.

Absolutely, but are go are goats still in there?

But not six, you know, uh ducks.

Not six of each, no.

Correct.

What is the rationale for that?

I'm just asking.

Honestly, I don't have a lot of background other than we did look at, you know, best practices for this, which have to do with um, you know, kind of what are the noise impacts for in a residential zone.

What are the types of of issues that might affect uh other people outside of the property?

It's it's really about that.

We have some animal keeping regulations that have to do with you know having uh a certain amount of space for keeping of the animal, but in this case it's just looking at residential lots and cumulative types of animals that could be kept.

Um I just brought this up because my daughter and her husband have what three chickens, two rabbits, and a couple bucks.

And that would be allowed.

It could be not louder than the dogs next door, but council member Aquino.

I am entirely serious when I asked this question.

Have we do you know if we have any complaints to code enforcement that about excessive chickens?

Um I did ask that question after we got the public comment.

And no, we didn't have a record of complaints about chicken noise.

Yeah, I mean, it's I I don't see why we need to limit it at all.

Um, I just I mean, this reminds me of during COVID, we um eliminated, you know, there used to be a restriction on the number of garage sales somebody could have, and we suspended that during COVID because thinking it was going to be short term and maybe somebody needed to sell some belongings or whatever in order to pay their rent or their mortgage, and we didn't get any complaints about excessive garage sales, and so we just deleted that from the code um a couple years later.

And to me, this is kind of one of those things that's like there's no way we're gonna enforce this.

If somebody has seven chickens instead of six, we're never gonna know, we're never gonna enforce it.

How about if I have sixty?

Well, there's gotta be something else that you we could cite you for.

So I if it were up to me, I would just get rid of the limit entirely and let people, you know, decide for themselves how many they can afford.

As a compromise, what if we allowed two additional chickens this year and then two more two years from now?

It does become a problem with uh removing waste from the yards.

Yeah, but again, there's something else.

I'm sure there's something else in the code that we could cite them for.

I bet you we if we change this and didn't even mention that there's a limit of chickens.

Um, just the general nuisance rules would you know, if they're being a nuisance, they're being a nuisance.

Yeah.

If you'd like to make a uh alternate, you know, a motion different than staff recommendation.

Are there any public comments?

No.

No public comment.

Um, I'll make a motion to as written.

I'll second.

I'm not gonna die on my sword on this one.

So, please make a substitute motion.

Do we have a substitute motion?

That's really, yeah.

I have been a chicken owner for a long time.

There are there can be challenges, you know, with other things that come with chickens, especially as you learn to keep chickens.

Uh so I'm comfortable at least going up to where our neighbors are at and seeing where that because if you tell me I can have 60 chickens, I might have a lot more chickens at home.

So it's probably best that we cap it at six for me personally.

But I get your point of not having um you know excessive regulations, and I appreciate all the regulations that we are going to get off the books that don't make any sense.

So I think it's a step in the right direction.

And I hope to see more of these in the months to come.

Please call the role.

Okay, so on this just to be clear, this is the motion to introduce and conduct first reading of the ordinance and determine that the project is exempt from CEQA.

Yes.

She's got a second shot later is what you're saying.

Yeah.

Council members Koslowski.

Yes.

Larry?

Yes.

Akina.

Yes.

And Rachel.

Yes.

Okay.

Now, is there is there a rule about vending eggs from a private residence?

Not in our ordinance.

Item number 14.

Everybody just kind of looks the other way.

Yeah.

All right.

Your last discussion item this evening is presentation on the water and sewer rate study and direction to staff.

Thank you.

Mayor Rathel, members of the council, Marcus, Yasu Taki Utilities Director.

I will be brief in my opening remarks and turn it over to uh Gabe Sasser and Rick Simonson from HF and H Consultants to go through a majority of the presentation tonight.

I will come up at a couple of times just to explain a couple of the slides as it relates to the process of uh the rate study and cost of service analysis.

And then as you go through the presentation, you'll probably be anticipating, okay.

Well, what does that mean in terms of what does a bill look like or what does the comparisons look like?

There are slides in there, so they will be shown at different parts of the presentation.

So just so you know that information is contained in here, it just may not pop up on the first slide that you see that they're talking about how they came about doing the cost of service analysis, the revenue requirements, etc.

So just know that it is in there.

So if you're anticipating asking the question, uh that information uh will be in there.

So with that, I'll turn it over to the HFNH team, but I will be in the front row to answer any direct questions.

Thanks.

Thanks, Marcus.

Good evening, Mayor, Council members.

I'm Rick Simonson, senior vice president with HF and H Consultants.

We've been setting water, sewer, and solid waste rates since 1989.

So we've been working with Marcus over and staff over the last six months to develop what we're here to present and give you a high-level overview.

We're not looking for action on deciding what rates should be moving forward.

This is informational only.

And for those members of the public that may not be familiar with the cost of service study and the Prop 218 process.

So we will discuss as we had the outset of the project.

We had some rate making objectives.

We'll go through the rate study on a high level and provide our summary of the recommendations for the revenue requirement, the cost of service analysis that allocates the cost to each of the customer classes, and then how we've designed the rates uh for the revenue that needs to be generated.

And as Marcus said, we'll preview some of those bill impacts based on our preliminary findings of how they will affect the different customer classes, as well as a review of the current and some proposed surcharges for both water and wastewater, and get into a discussion of the low-income uh rates that are currently available, and get your feedback on continuing that.

And we will have uh time for questions after each section of we'll cover wastewater first and then water.

But in general, some concepts that apply to both uh the water and the wastewater rate study, uh the overview and our main objective is to provide the revenue sufficiency and financial stability to fund both OM day to day operations as well as upcoming capital costs to maintain the infrastructure, the collection system for wastewater, as well as the treatment and distribution system for water.

In addition, we want to meet the city's reserve fund targets, so having cash on hand on a day-to-day cash flow basis and what that target should be.

We want to make sure rate payer, there's rate payer equity where each class just pays their proportionate share of the costs as required by proposition 218.

And during this process with customer and customer outreach, we want to make sure these proposed rates are understood by the public.

It doesn't matter if you can explain the math of it, but if it's not understood by the public, you may not get the support necessary to adopt the rates.

And those rates should be practical and implementable with your billing system or overcontrived rates, can be problematic.

So we want to keep it as simple as possible for understanding as well.

And the city has developed a plan for public outreach so that this is a transparent process, such as tonight's meeting that the public can listen in to.

We've gone through all three phases up to date, so we have preliminary findings.

Just that real high level overview, though, a more detailed report will be forthcoming once we decide this is the direction we'd like to go on what is a cost of service.

How do we look at costs and allocate them to those customer classes?

Once we understand the revenue requirement, there are different components within that revenue requirement that should be allocated based on either demand, how much usage, how much wastewater is being disposed, and how much water is being used by each customer specific to their usage.

And then capacity, how much capacity does each customer need within the system?

A larger commercial development will need more capacity and should pay accordingly.

Then there's what we call customer related costs that are fixed from customer to customer.

Think of billing.

You receive one invoice regardless if you're a large commercial business or a small single-family home, and you have customer service support if they have questions.

So those costs are borne equally by the ratepayers.

So we do assign or allocate those costs to each of those components specific to each customer class.

Some of the drivers that we use, it's pretty simple on the wastewater side, looking at the number of accounts, also how much flow is anticipated to come from each of the different customer classes.

On the water side, it gets a little bit more involved.

We look at the number of accounts again, those fixed costs that should be borne equally.

That you need to make sure the system is built to withstand those costs can be allocated specific to the users that need that.

And then meter size, that is the capacity of the meter that's providing the water to the specific customer.

Costs also included here are fire protection that can be broken down into public and private.

So the public, the fire hydrants, again, those costs should be borne equally by each.

There are private fire lines, and those are only specific to those who need that service.

So stepping back, and it sounds like from earlier discussion today, you're pretty aware of the proposition 218 process.

It is broken down into two real components, substantive requirements as well as procedural requirements.

The substantive requirements require that the total revenues do not exceed the total cost of service.

So you need to look at the revenues, the costs that are necessary to provide the service and generate revenue tied to that.

That doesn't mean each year you're breaking even right on the spot.

They are projections when revenues exceed expenses, those are placed in reserves, and those revenues from those reserves cannot be used for any other purpose.

It cannot be then be transferred into the general fund for other services.

So each of these utilities are standalone.

And the rates again must be proportionate to the uh customer class receiving the service.

And this all relates to property related, such as water, sewer, solid waste that is immediately available to each of the ratepayers.

So getting more into the procedural for those members of the public that may not be as familiar.

Once we complete the study, and there's a recommendation for rates over the next five-year period, notices of those proposed rates need to be mailed to each property owner, at least 45 days to a public hearing.

That notice must include what those proposed rates for each of the years under review, the reason for those increases, what are the costs that are being incurred to justify those increases, and the basis for the rate calculation, the rate design specifically, and that's contained in the report that's typically provided and posted on the city's website, and a link within the Prop 218 notice so folks can read really the math of what's going on so they feel comfortable with the increase that's being requested.

In that notice, must provide when the public hearing will be heard in order for council to contemplate approving the rates.

At that public hearing, if there's not a majority protest or 50% plus one protesting, the council will be free to adopt those rates, not mandatory, just free to adopt those rates or something less.

If there is a majority protest, the council cannot take actions.

Rates will remain the same.

Here we've just put together a brief outline of when we started the process.

We know we are aiming for increases to become effective January 1, 2027.

We're still working through the preliminary results and receiving feedback tonight if there's different directions the council would like to go.

And there's public outreach between now and at least September, and these this timeline can be moved up if we get to a conclusion quicker.

This would be the latest you would hold.

We would come back to the council to ask permission to mail those notices.

So they can be mailed in October of this year, which will start the clock taking on that 45-day period to allow for the protests and objections from the public, which will allow for a public hearing in December.

So the approved rates at that time could be adopted for January 1, 2027.

So what have we done to date?

Again, this has been it will be from start to finish about an 18-month process.

We began in July of last year, kickoff meeting with staff to understand the systems within the city of Folsom for both water and wastewater.

At that time, developing a timeline and a process moving forward.

We have reviewed, much like today's meeting that we're condensing really all tonight.

We covered three different topics at three different uh utilities commission meetings starting in October, just doing an overview of what a proposition 218 process is, what our rate study will entail.

And in December, presented the revenue requirements that based on capital plans and OM projections over the next 10-year period, what the outlook of the water and sewer funds is looking like before moving on to the actual cost of service analysis and the rate design that we presented to the utilities commission last week.

They provided a lot of good feedback that we've tried to incorporate into tonight's presentation.

So I'm just putting this slide up there for now.

These questions will be revisited at the end.

We're just looking for some guidance.

I'll walk through what your current and we have some proposed reserve targets that help us identify what the necessary revenue and rate increases should be.

We'd like to get your feedback on that, as well as the recommendations for the proposed water rates, the establishment of a Sutter Street interceptor surcharge for the wastewater discharge, as well as the proposed water supply and water treatment surcharges.

You have some existing surcharges.

We're looking to revise those.

We'll get into a little bit more detail and like your feedback on those changes.

For water rates, we are presenting two separate options from feedback we've received from the Utilities Commission, and we'll get into more details on that.

And then finally, your opinion on the low income rates for water, understanding that providing a cost break to low income cannot come from the revenues cannot be used from current ratepayers to pay for that, so it does come from the general funds.

So just wanting your uh buy-in or your discussion or your thoughts about continuing the low income rate program.

So I like to just start off with the reserve policies.

It both affects the wastewater and the water utility.

Your current policy is to target about 40% of annual operations and capital costs on an annual basis.

What are reserves used for?

It really is there for operating needs on a day-to-day cash flow basis as you bill monthly revenues come in sporadically.

You need that consistent revenue stream so that you have a reserve that can withstand the volatility of when revenue comes in and where expenses need to be paid.

Most importantly, on the capital side.

There are larger chunks, millions of dollars that come and are necessary to be paid over time, where again you're just being uh compensated on a month-to-month basis from your ratepayers.

In addition, uh debt needs, when you have issued debt, there's typically a requirement for debt coverage, and to make sure you have one year's debt service payment on hand at all times.

So that's included in reserves as well.

And those unexpected uh water main breaks, other emergencies that come up that were not anticipated within your capital plan.

So that's the necessity of reserves, but at what level should those reserve targets be set?

There were some questions from the Utilities Commission on what others do.

Uh so throughout our work throughout the state, we've noticed there's no one consistent policy.

Uh, they do vary quite drastically.

How we look at this and most of the industry is to have two separate components, what we call our minimum reserve, the operating reserve.

We've seen as low as one and a half times your billing.

So since you bill monthly, that would be six weeks of cash on hand.

Again, if you bill more frequently, you would need less on hand.

But that's a low that we see, and as much as a hundred and twenty days cash on hand.

For the capital component of a reserve, the low that we see is about one percent asset value.

That's barely just keeping up with depreciation, assuming the facilities last a hundred years, that's quite optimistic, so that's quite low.

Uh it's not something we recommend, but just wanted to note we have seen it as low as one percent of the asset value, more typical.

And what we see a bit on the high side is looking at your next five years, so the five-year average annual cash funded capital.

So, what do you plan for capital for the next five years?

Make sure you have at least one uh full year of that average on hand at all times.

And the reserve policies you'll see will come into play when we're debating what should those revenue increases be over time, and you'll see this a bit more clear when we get to a little more of the details for wastewater and water.

Again, as a recap, your current policy is 40% of the combined OM in capital, which currently is about $7.4 million in reserves for wastewater fund and about 11.7 million for water.

We are proposing identifying within that policy two separate reserve amounts.

The minimum reserve or the operating reserve at 25% of that annual OM.

So in between the low and the high that we typically see, plus that one year of debt service to make sure you can make debt covenants.

And this does align with the GFOA practice of 90 days of cash on hand.

And then incrementally, on top of that, for the proposed reserve target, that minimum and an additional 50% of the five-year average forecasted annual capital expenditures.

So again, not quite at the highest that we've seen, but a respectable 50% of that annual average.

So now I'll get into the details specifically on the wastewater side.

Can we go back to that slide in a second?

Do you have a number for that?

Oh, yes.

I just haven't been flipping through my slides.

Sorry, is it?

I'm just I'm just confused.

Is it 7.4 million substantially different with the policy?

So with the new policy for the wastewater, it actually comes in about the same 7.4 million with the 25% and 50% of capital gets to the kind of that average of 40% because of the heavy capital spend.

For the water fund, that's up based on our recommendation for a total target up from 11.7 million up about 2.5 million, so slightly higher than what your current policy requires.

Thank you.

You're welcome.

And you'll see how that is important as we get through how we set rates.

So the first step, and I'll start with wastewater.

Here's the revenue requirement.

What are the spec expenses that need to be covered?

We show here a 10-year financial plan, though with proposition 218, the maximum allowed adoption is five years worth of rates.

We feel it's better to look on a 10-year outlook to make sure you're setting yourself up during that next five-year period that you don't have rate shock at that point.

So we look at the annual average or the annual OM expenses, your salaries and benefits, starting the stack bar chart in the dark blue, moving up, general operating and maintenance expenses, admin and overhead costs and the light green there, and then most significantly your capital projects.

For this current fiscal year ending here in June, we're seeing the capital expenses and total expenses being something slightly less than your revenue at current rates at this point.

So we'd be able to add to your reserves if everything plays out through the end of this fiscal year.

So that gold straight line here that does represent revenues at current rates and any other non-operating miscellaneous revenue.

So we do see uh expenses being a little less than your current uh revenue at current rates, but you do see with the capital improvement plans increasing over the years that some sort of revenue increase is necessary.

We have highlighted here additional personnel costs.

So, in order to accommodate some of these projects that need to get done, staff is recommending an increase in some personnel to accommodate those projects.

This is just the detail we wanted to make sure you understood.

Uh we're looking at about 8.7 million in average annual pay go over the next five years and just over 9 million in capital expenses moving forward.

Again, this is a long-term outlook and not as detailed during the out years.

So we've reserved about $7 million per year in those out years for projects that have yet been identified, but there's some substantial uh basin for sewer phase one through six projects that will be coming on board over the next five to ten years.

That's making up a bulk of those capital projects.

So what does that all mean?

So this chart here is meant to distill first highlighting the minimum balance of OM.

We wouldn't like to see your reserve stay above that line, and ultimately, this is our ultimate target.

You'll notice that you have built up quite a reserve to date in anticipation of these capital projects that staff is recommending over the next five to ten year period.

So along with our revenue increases of 5%, followed by four or four percents.

Those capital projects are being funded through reserves, which is indicated with the solid green line here are the fund balances with the revenue increase is the projected expenses moving forward.

The dotted green line is if you do nothing with rates, you'll quickly deplete your reserves below the target, and fully by 3132 if rates are not adjusted at some point.

So we showed dot in line here again.

We're approaching the target using those reserves for those large capital projects that you see on this line above because our crystal ball is not quite as good out, you know, year six through 10, but we do want to set you up for success in the future.

So again, we're looking at five and followed by four or four percent increases.

And I'll note this five percent during a cost of service study.

This is the overall revenue that needs to be generated, but it may affect different rates, different customer classes differently.

That's an average increase, and we'll get to those specifics.

Let me talk first about the cost of service allocation.

I won't go into too much detail.

We just wanted to highlight here that we look at the 13.3 million, the 13.1 million that needs to be generated for fiscal year 26-27.

That's broken down into what we call fixed base costs or flow based costs that are adjusted based on how much wastewater is disposed.

Looking at those costs, we identify the units of service, single-family equivalents within the city are 41,588.

So a commercial business, if they use 10 times as much or discharge 10 times as much as a single family, that's considered 10 ESDs.

So this is an equivalent per single family, and the HCF associated.

So an HCF, 100 cubic foot is 748.052 gallons.

That's a typical industry standard for setting rates.

Understanding the components of both the fixed 114.62 cents per single family equivalent and the cost of usage at $2.35.

We develop a single family equivalent rate here with one single family dwelling unit for the fixed charge of $114.62, and the average family discharge is 85.790 cubic feet per year times the two thirty-five gives us the $201.

That's what we use to develop the annual charge for single-family dwelling of $316.12, or the equivalent of $26.34 per month.

Is handled by Sacramento Sacramento Area Sewer District.

So those are passed through on the bill to your customers, but what we're talking about is setting the rate just for the collection component of the wastewater discharge.

When I mentioned we're having a 5% increase overall in revenue, it is borne differently.

Your largest customer group is residential, about 95%.

You have non-residential of 5.2%, and then of just 20 customers that fall into what we call flow-based commercial customer that doesn't fit within, and I'll get into the details of who a non-residential rate customer is in those categories that are charged solely based on flow and then the college.

So those costs are shifting.

We're seeing about current uh rates generate about 83.7% of the revenue from residents, though with the cost of service, residents pay about or the cost to provide the service to residents, about 82.6% of the total and so forth.

So we're seeing about a 3.6% increase to residents and most non-residental residential, but a substantial increase to those flow-based commercial customers in Folsom Lake College.

To give you an idea of those costs or those new rates, there are a substantial number of different classifications based on the type of business that you are.

Commercial customers so the commercial customers aren't confused both on their collection and their treatment rates.

The average bills just based on the average usage of each of the customer classes, and I'll note that auto dealers are charged on a per thousand square foot basis, five dollars and nine cents.

Bakeries, again, per thousand square feet.

They do differ, and on the next slide, you'll see those units of service.

But this is just to illustrate how most of the non-residential customers are increasing about 3.6%.

We're seeing those larger increases for the college and the metered customers.

What do those rates look like over the five-year period?

With the cost of service, once that's realigned, about a 3.6% increase to the non-residential, all customer classes would see a 4% increase thereafter.

Looking at the residential bills, currently, here's some examples of single family are currently charged 2543.

A multifamily unit is also charged 2543 per unit.

A 24 unit complex would be charged as $610.

Those would increase on a monthly basis by about 3.6% again.

And this is how you compare to your neighboring agencies.50 cents per month up to Placerville's 102.91 cents.

Again, I want to point out we're talking about just the portion for collection that the city of Folsom is responsible for, and that's a 25.43 per month currently increasing this January 1 to 26.34.

And even five years out, we see that increasing to $30.82.

The rest of these comparisons are of course current rates.

They'll be undergoing their own cost of service studies over the next five-year period to keep up with rising costs.

So even this five-year increase here is pretty low compared to some others may increase beyond that.

So there is discharge from 26 customers.

They would pay a fixed amount per account for each month to fund the cleaning of the Sutter Street interceptor that has is inundated with what we call fog fats oil and grease that requires additional cleaning over and above what you see in other areas to pay for that additional cleaning.

For 26.27, that would be six dollars and ninety-nine cents per month for those twenty-six customers, increasing to eight dollars and seventeen cents by 3031.

So that is a high-level overview and our recommendation for wastewater.

We'll have a similar presentation for water, but I figured I'd stop here if there's any specific questions around the process or the rates that have been proposed.

Any questions, Councilmember Kino?

I have a question about this slide.

So presumably those 26 customers are restaurants, bars, something like that.

There's a mixture.

Yeah.

So why is that just in this part of town?

Don't do other like Palladio or something like that doesn't have the same issue where the fat soils in Greece accumulate or something?

Yeah.

Great question, Councilmember, you know.

Yes, the Sutter Street is uh very special in this regard that when the revitalization project occurred years ago, one of the challenges we had was because of the limitation of space and the sidewalks that are there and the limited space in the street, we weren't able to build and design individual interceptors for each location.

And so at the time it was agreed upon uh by the project team, the engineering team, and then city manager Everett Palmer is that individual interceptors would be installed in the street, just slightly larger than normal, and then at certain points the businesses that were connected would flow into that, and then that would be the interceptor prior to discharging into the city's sewer mainline.

And so it is not typical in most instances, like in Palladio, a restaurant in and of itself would have its own interceptor and then flow into the interceptor and then into the sewer system here because everything for the most part outside of a couple of businesses flow into Sutter Street.

We did not have the space requirements to put these, and at the time the city manager didn't want us to put them in the sidewalks, which I kind of agree with that you wouldn't want to put a sewer interceptor in the sidewalk where everybody's walking because it then becomes a challenge to operate maintaining clean.

And so uh the kind of compromise was to install interceptors at every so often within Sutter Street, and that is what we are proposing that needs to be clean.

These are all private um interceptors, but when we were talking to uh some of the folks at FHDA, and with former council member uh Rodriguez, we were figuring out kind of an idea as to okay, what's the best way we can still clean these, but not have FHDA so to say be the cleaning company, right?

And so they asked, okay, could you develop a fee?

And then charge that potential surcharge to each of the businesses and then use that as the funding mechanism.

We'd collect it, set it aside, and then use that as the funding mechanism to clean the interceptors on a five-year average or every five years.

Got it.

Thank you.

Other questions?

I got a quick one.

Um, can we build in an escalator for Prop 218?

Like, we pretty much can guarantee the costs are gonna go up three percent a year.

And so do we build in an escalator?

Like, or do we have to come back and do a study and then set these rates for five years and then come back and do it all again?

Maybe legal counsel can weigh on legal.

Typically, you said it for the five years, those would be the maximum rates that you could generate based on you know the projections of the OM and capital.

Understanding you have additional reserves in case costs are higher than projected.

Typically, you need to adopt the rates for each of those five years.

Got it.

But the Prop 218 process does allow an escalator to be built in or it does not.

So uh council member Rathel, um, we won't put an escalator in Prop 218, but what we do with each of the categories, so construction has uh index each year that we say, okay, about I don't know all the numbers, but each category, like electricity, we assume X amount per year is an increase, O and M X amount per year and an increase, salaries and benefits X amount per year as an increase, and then on the construction side, there's an X amount per year increase in what the cost would be.

So, like if we assumed a base of a dollar, we might say, okay, next year it might be three percent higher for that same dollar.

So we build that into the different components of our operations, maintenance, capital, um, including electricity, chemicals, et cetera.

If that it's not an escalator in and of itself where we escalate the rate each year on a percentage, but we are building in escalators to each cost component that ultimately is doing the same thing.

So your answer is yes, you're just doing it in a granular fashion and building up rather than with spreading it like mayonnaise to start out with.

That's correct.

The operating costs that are included for each of these years is escalated as you can see.

Just with the dark blue, you can see they are escalating over time by the 4% increase in in labor and benefits.

So that's built into the assumptions.

It wouldn't then also be appropriate to take the rates that we show here and escalate them again for actual CPI.

Yeah, I get the process that we're doing.

Mine is more of a legal question, it would be great if we just said, hey, residents of Folsom, expect an increase in your utility bills, like everything else in your world of three percent.

And then when we do a study every five years and we check in, we'll let you know if it's two and a half or three and a half or four, versus going, Well, we're only gonna tell you what the magic is for the next five years, and then having to come back and say, Well, we've determined it's actually gonna be five percent or four percent.

So just more of a legal question.

Yeah, so uh unfortunately I don't have the specific answer tonight.

I could look it up and get it back to you to the council.

I know for L and L's, for instance, we can do that, and that's what we heard about tonight.

There are, I think, different rules related to rates compared to assessments.

And so I just want to double check that.

And so if I'm understanding the question is, can we build in like a CPI type increase that goes into effect year over year, like what we see with the L and L's?

Correct.

Yeah, correct.

A CPI sort of adjustment to me makes you know somewhat sense and that we know costs are going to go up every year, and then we have we at least have a target versus saying we're gonna start from zero.

Yeah, I apologize, I don't know the answer offhand, but I'll get back to the council.

Sounds good.

Mr.

Mayor, are you suggesting a um projecting a CPI increase that would be perpetual rather than limited to five years?

Correct.

Okay, thank you.

Yeah, and then we only kind of go to the voters when we're deviating from CPI, right?

I'm saying we still have to go to the voters if we're gonna deviate from what we said, but if we're within that three percent, then we carry on with business as usual, right?

Or if maybe the council goes and says, gosh, we're only one percent difference, we got 30 million in reserves.

Maybe we don't go to the voters uh and ask for that one percent.

Maybe we figure out operationally how to get one percent more efficient.

For the CPI though, for the um L and Ls, it's it's got a cap.

You know, like some years there is no increase, and other years there is an increase, but the cap I as I recall is like three percent.

Yeah, I think I think we have some of them that are higher than three percent though.

But we can give the money, we don't have to raise the entire amount, right?

We can say, hey, we don't need the extra money this year and not do the increase, right?

We have some districts within a higher cap than we charge, is my understanding.

Yeah, I don't recall there being a difference between districts, but that that could be since they're all established at different times.

Carry on.

Thank you.

So if there's no further questions specific to wastewater, we'll move on to water and happy to answer any questions after that as well.

Good evening.

Alright, so as Rick pointed out, um, I'll be covering the water portion of the presentation.

I'm Gabe Sasser, project manager with HF and H consultants, leading the day-to-day interactions with the city and really overseeing the study.

So, first I'll walk through the revenue requirement projections, as Rick pointed out in his portion of the presentation.

Starting with your current fiscal year 2026, we've reflected budgeted cost projections in 2027 and thereafter, applying cost escalations for your various categorical expenses.

You have two existing obligations, two revenue bonds from 2019 and 2021, and those obligations will be addressed fully by the end of fiscal year 2034.

So these stack bars and these expenses are contrasted with the rate revenue and the non-operating revenues.

You have about $300,000 annually in non-operating revenues, which come from your development impact fees associated with water.

And then in addition to that, you have your rate revenues.

So this is defined by the gold line.

And as you can see, the gold line falls below the stack bars in each consecutive year.

And so what this really represents is that rate revenues being outpaced by your cost projections.

Also, want to point out that as far as additional personnel is concerned, that pink category or red category, that begins at 254,000 of additional personnel costs in fiscal year and 2027.

That is to support additional and expansion of the capital program.

That entails the addition of four FTE over a three-year period, as well as a reclassification of one existing FTE to a more senior role.

And so this really sets the stage for the reserve fund balance.

If you're curious, this capital improvement program is identified on this slide.

Again, we're not going to spend too much time on the slide, but just wanted to point out that the average annual five-year cash funded amount is 8.4 million over this four five-year period.

And then in year six through 10, although not all the projects have been identified here, they're a part of a larger risk prioritization matrix, which staff would use to then accommodate and populate this list.

And collectively, those costs in year six through 10 work out to about $8 million per year, assuming construction cost inflation.

So this brings us to the reserve fund balance projection.

And again, the water enterprise is beginning in a healthy position, as you can see, just south of the $25 million threshold, as of this last fiscal year.

And then the intent is to make use of reserves.

You can see the fund balance, that dark green line is trending downward.

And then the intent is for that reserve fund balance to always stay above your minimum balance.

That's to ensure that you have adequate operating cash flow needs met, as well as your annual debt service payment on hand.

And so really the intent is to provide for inflationary type increases in years three through five.

Again, we want to see the reserve fund balance course correct away from the minimum fund balance and move closer to the target reserve balance.

Your target reserve will ensure that you have more monies available to fund your day-to-day cash flow needs.

These types of revenue increases are necessary if you intend to cash fund all your capital projects, and in all our communications with staff, that's been the intent from the get-go.

And so that is always a lever that you could consider if you want to explore executing the type of capital improvements and the extent of those capital improvements.

But I just want to note that this is really a plan that consists of only cash funding, as has been city practice primarily.

Again, years six through 10 are grayed out on this dashed line of the fund balance because we're really trying to de-emphasize that.

That's a part of the next rate setting process, you can only set rates for the next five year period through fiscal year 2030 31.

And we're looking at inflationary type increases to address those outer five years, but again, our crystal ball will be informed with time.

So with the revenue increases of 12% in fiscal year 26-27, this really establishes the revenue requirement for which rates must generate.

So with the 12% increase, this would equate to a $24 million revenue requirement, which is split between demand costs and fixed costs.

Demand costs being costs that are recovered through consumption charges, and fixed cost being those costs that are recovered through your fixed monthly base charges, so independent of water use.

The costs recovered through the consumption charge could really be thought of as two categories.

There's average day use, so that's really reflective of the costs of use of water that's equal to or less than average water use, and then the cost of water when usage exceeds that average.

Otherwise known as peaking.

Rick touched upon it briefly, but that's really the benefit of the fire protection services of the city's fire hydrants, which benefit benefit all ratepayers.

And then there are two capacity components.

There's the potable capacity, which ascribes costs based on the size of the meter, such that as the size of the meter increases, a customer would pay more for the capacity that that larger meter reserves in the system.

And then finally the private fire protection services, which again are capacity driven, but reflect only the cost of the capacity for the private fire services.

So I want to, this was really to set the table to say that we're looking at demand costs and we're looking at fixed costs.

And the whole intent is to design rates to recover the 24 million dollars to meet the cost of service.

And so next, I'll move into how that 12.9 million of demand costs was allocated.

And there's really two scenarios for your consideration.

There's a bit of math on the slide, so I'll try to save you from some of that.

The intent is really in scenario one, there's three separate customer classes.

This first proposal would mean that your single-family residential and your condo townhome customers would be considered as part of this class.

And for the tier one rate, which reflects average use, for the first 15 units of water use, they'd pay $1.35.

And then for the 16th unit and thereafter, any unit beyond that, they'd pay $2.11.

For the non-residential customers, this reflects your larger multifamily customers as well as your commercial businesses.

And then with the second tier for additional use being charged at $1.69.

And finally, your landscape irrigation customers, those customers, the city is identified specifically with a landscape irrigation meter.

Those customers use substantially more water on average and would pay $1.37 for that average tier of water use and $1.94 thereafter.

Now, this is more complicated structure, and the city has existing separate customer classes.

So we wanted to accommodate a structure that's similar to what you currently have in place.

There's a lot of ongoing discussion around tiered water rates, and our recommendation is that if you're going to pursue tiered water rates, that you apply them to all customers.

And so that's really what these two scenarios are considering.

We know that right now your resident or sorry, your non-residential and your irrigation customers all pay a uniform rate such that their rate does not change regardless of the amount of usage.

Quick question.

Yes.

The non-residential, is that you mean commercial then and like Folsomite College?

Yes.

That means commercial as well as multifamily.

So your current rate structure singles out condo and townhome as part of the residential customer class.

So we want to make sure that we're also naming uh the larger multifamily complexes, you know, anything beyond uh a duplex as part of this customer class.

And then also currently you separate your temporary construction meters, and so we would lump those customers into this customer class as well.

But right now, I guess I'm confused.

What are we doing right now?

Uh I can let me just skip forward a couple slides and maybe that's easiest for you.

So you have a three-tiered rate structure for your residential customer class, and again, you have a uniform consumption rate for your non-residential and irrigation customers, and then your temporary meters actually have a declining uh block rate structure.

So you're actually incentivizing them to use more water, making it cheaper as they use more.

Um alternatively, this is a more simple approach for scenario two.

You could decide to charge all customers the same two rates, such that the first tier consists of the first 24 units of water, and the 25th unit and thereafter would be charged based on the tier two rate.

So those are really kind of the proposed scenarios, and I'll show you some uh bill impacts on future slides.

Why why did you go from two?

Sorry, you properly raised your hand.

Um on the residential only on the scenario one, um, you go from one dollar thirty-five to two eleven, and on the other one a dollar thirty-five to one eleven.

Is that just math that of combining all three of them together?

That's where you're getting to that number.

Yeah.

Um simply put, it's uh it's it's really coincidental that the rates are the same for tier one, but it's a result of so much of your customer base being the residential customer class.

Okay, quick quick question.

Did you say or are you gonna get to why 15 was the break in the tier one tier two for residential?

No, good question.

Uh so proposition 218 requires that rates not be set arbitrarily, and so they must be based on the patterns of use associated with your customer base.

And so those 15 units are reflective of the current average water use by your residential customer class.

15 is the average.

That's correct.

Okay, so okay, and does it have to be the average?

So we're recommending that that is the most defensible rate structure as far as defining what is average use versus what is above average use.

Uh, there are other ways to set those tiers that are coming under legal question and scrutiny right now that we're trying to reduce that headache for the city.

Then how did you come up with the 24 on scenario two then?

So the 24 when you combine all customers and you look at the average water use across your entire system, it's 24 units again, reflecting how much of an emphasis residents play in this calculation.

So is there any, you know, I I guess I have two-thirds of an acre, right?

Uh so I'm just looking, my neighbor has two thirds of an acre, right?

My other neighbor has got, you know, an eighth of an acre, right?

So obviously, our water usage is different.

Is there any um, you know, obviously we have a desire for trees and green space, uh, in the city?

There's no um per acre or a lot size makes no calculation in a because obviously my average use for my two-thirds of an acre might be stupendous, but it's never gonna compare to the eighth of an acre neighbor that I have.

So is that taken into account at all?

Uh, this is true, and this is something that some agencies consider as water budget-based rates.

Uh, this is not something that has really come under uh significant legal scrutiny, but it's a matter of time.

So we would not recommend going in this direction of a budget or a land-based sized rate structure.

Okay, so some agencies are doing a land-based structure, right?

Yes, got it.

Yeah.

That's um it's you'll see that more commonly in Southern California.

Interesting.

Okay.

I have another question.

Um, I don't know if you'll know this.

Um, I live in an HOA, and we don't or do we pay for the water?

Like our HOA does all of our water in our front yard, all the maintenance and all of that, and that comes out of HOA fees.

So, how is that calculated?

Is the water usage by lot still or by household?

Yeah, so the HOA would receive a bill as a commercial business, or in this case, if they're identified as a landscape irrigation customer and built accordingly.

And then, as you said, uh, it's really up to them to decide how those costs are recovered through their HOA.

Are you going to clarify how the parkway works, Marcus?

So uh I am not aware of any HOA that is collectively the bill error for the HOA for your individual unit, right?

So they are maintaining your front yard from a landscape perspective, and they may be adjusting your timer or doing something like that, but they are not paying your individual water bill or sewer bill, but they are also collecting for any other um HOA maintained properties within so like frontage roads or medians or that type of landscaping.

They are collecting a separate bill for that, which then they may pass along to you all as an individual owner, but they aren't covering your individual household bill.

Okay.

And real quick, just to kind of address the question on the lot size or the budget-based rates, and yes, you typically do see those in Southern California.

And one of the main drivers for that is that for an agency in Southern California, for every acre foot of water they have to import, it costs a lot of money compared to the city doesn't have to import any water during shortage times or anything like that.

And so it is very, I don't want to say it's easy, but there's a lot more connection to tying of water use per a budget based on the next incremental cost of that unit of water for an agency that has to import more water for their general services of their uh service area.

But I guess carry this analogy a little further, right?

Our non-residential rates here.

Um my thousand square foot restaurant is gonna have the same rates as a 200 unit multifamily apartment complex, right?

So they're gonna so I'm gonna if I'm about my thousand square foot restaurant, I can use 6600 cubic feet before I get into that tier two, right?

Which correct never gonna happen, right?

But my multifamily, you know, whether I have a 50 unit apartment complex, a 10 unit complex, a 200 unit complex, I may or may like it has nothing to do at that point, like we're fooling ourselves to think that this has anything to do with water efficiency, right?

Because we're treating a tiny residential customer the same as a huge residential customer, and vice versa, a tiny residence or a tiny business the same as a massive business, and saying that that's somehow gonna increase water efficiency, right?

I think that's the intent of these tiered rays, right?

No, it's not the intent of the tiered rates here at the city isn't to say, hey, you need to conserve more water, it's intended to say, hey, on average, people use X.

When you get above that average, you are now costing more in chemical cost, more in electrical cost, more in distribution operations and maintenance cost, potentially more in other areas that the average day is as it's known is average to everybody.

If you are using more than that, you are putting more of a demand on the system in totality, and that is what you're paying for.

Okay.

We can agree to disagree on that because I don't think you're really doing that with just think of the example of where you have a 10 unit apartment complex and a 200 unit apartment complex, right?

So that 10 unit complex never hits that limit.

So they're not ever subject to that, and they could be using all they want, right?

Like it just it doesn't.

Yeah, but for practical purposes, if you I mean, just thinking of examples here in town.

If you have a 10-unit apartment complex, and then you have a 200 unit one examples we have, the the 200 unit complex is not, doesn't have 20 times as much landscaping necessarily, right?

So the the share per unit of you know per residential unit starts to get it starts to get distributed amongst more units.

Yeah, but they're gonna be into that tier two, their residents are generally gonna pay more just because they their only reason they're paying more is because they live in a larger apartment complex.

I guess what I'm suggesting is that $1.37 and $1.69 if your share of that big bill is 2%, it's not it's not much of a delta.

Sorry about that.

Fair.

Yeah, I think it's much larger on the on the single family side and the irrigation side.

You would exacerbate the thing that you're concerned about by going to the single customer class.

Because they would go to the higher rate almost immediately in that example.

Well, I'm just using that.

I feel the same way about the residential too, but I just to me it's I I don't get it's not really tied to a max usage per day.

It's tied to an on-average water use.

Um, so I just I five I find it tough to be defensible, but we can carry on.

I can continue having this discussion.

That's I'm not gonna get convinced here tonight.

I don't think I'll have to look into it.

Okay.

Do some research.

So well, as we stated previously, there'll be a forthcoming report, which you know, we don't want to overwhelm you with the math, but we'll certainly be explaining more uh to set the second tier.

It's really a reflection of, you know, the ratio of that customer class and their peaking characteristics, you know, how frequently are they peaking with respect to their average use?

So we can uh discuss more of that in a report.

Uh we thank you for your comments.

Are there any other comments or questions before I continue?

All right.

So these are just the usage-based rates.

Uh there are your fixed or your base rates as well.

And uh there's many numbers on the slide.

Just want to say that the intent is to fund 11.1 million dollars, and how that's spread is really through uh three components in that first table the 6.9 million dollar figure, which works its way down into a monthly rate per meter of 20.84 cents.

So that is a uniform service component, and it is the same for all customers, regardless of meter size or customer type.

Then there are capacity unit costs.

So that first capacity unit cost of $4.17 per month.

That component is for all potable meters, and then the private fire costs is indicative of the private fire capacity for those private fire service customers.

So in order to arrive at the monthly proposed rates in the blue column, column E in the second table, uh we start with the service component, column A.

We add the capacity component at $4.17, the capacity multiplier, so it's really reflecting those costs, which increase to account for that meter size capacity reserve and system.

And then that generates the capacity total.

Add columns A and D, and you get column E.

So that would be the proposed monthly rate that a customer would pay before any water usage is considered.

That's for potable meters.

We follow a similar process for private fire service lines, again, starting with a service component, column A, and then a private fire capacity component and column D, which is the product of columns B and C.

Again, column E is the annual rate, and the monthly rate is shown highlighted in blue.

So first, looking at the potable meter sizes, when you compare, there are differences between the current rate and the proposed monthly rate.

Well, note that when rates were last studied, the approach to setting these rates was entirely based on capacity.

And that meant that customers with larger meters paid significantly more.

And that's why, under these proposed rates, they'd pay less.

Whereas customers with a smaller meter size did not pay a service component.

They benefited from having a smaller capacity.

And so with that service component introduced, they would see an increase.

I'll note that the city does have a long-term goal to replace all 5-8-inch and three-quarter inch meters with one-inch meters.

However, that's a proposal or a plan that's not concrete, that's not something we can reflect in allocating costs as part of this study.

If you look at the private fire service lines, the reason there's such a large increase is because rates haven't been looked at in over 20 years.

Okay, so the cost of service column for both of these tables is reflecting the rates that would be implemented January 1, 2027.

And following that cost of service realignment for the fixed base charges and the private fire services, future increases to those rates would entail the percentages that you see 9% in January 2028, 3%, January 2029, 2%, January 2030, and so on.

And then returning to the water rate design, again, you have your current rate structure on the left-hand side.

And then we're proposing one of two scenarios.

Either moving to a three customer class system where each customer class pays their own two-tiered rate structure, subject to their own individual breakpoints, or combining all customers into one class, such that all customers would pay for the first 24 units of water at $1.35 in fiscal year 26-27, and that any water usage beyond that 24th unit, so the 25th unit and so forth would be $1.91.

And then rates would increase by the revenue increases that we previously identified on the reserve fund balance graph.

So just to just a follow up on the tier break, the 2040 break in residential, that one was a little bit more arbitrary than choosing an average.

Is that the refer here?

As best as we can tell, that reflected the water use patterns of the district during the previous study.

Yeah, so the average use was 20 units at the time, and then there are really tiers two and three are accounting for two different levels of peaking.

Okay, so we've talked about fixed base charges, and I've walked through the consumption charges.

So that takes care of the baseline level of service.

There are also surcharges, which I'll bring up, Marcus, to introduce the topic.

Thanks, Gabe.

So real quick, just to give a little bit of background on why some of these surcharges uh currently exist.

So just to note the area here in American River Canyon, that is served retail water by San Juan Water District.

So we cover sewer in that area, but not water service.

This Ashland or what we call the Ashland area, uh San Juan Water District wholesales water to the city of Folsom, and the city of Folsom retails that to this customer base.

All of the uh cost for the treatment of that are borne by San Juan Water District, and then that's covered in their wholesale rates with the city plus the other member agencies in the wholesale area of San Juan Water District.

And so we do not actually treat and serve any water to San Juan Water District.

So that cost component within the city's overall operations, we cannot charge to the customers in the Ashland area.

So they would have a separate surcharge that removes water treatment from the city that's charged to all the other customers in the city.

This area, kind of in this reddish maroon color, we call that the east area.

That currently has an east area surcharge for residential and non-residential, and that was born out of a Central Valley project contract the city has with the Bureau of Reclamation.

The plan area has its own water supply agreement, and that's for 5,000 acre feet.

That contract is a take or pay contract that the city negotiated in the mid-90s.

And those two contracts with that Central Valley project were all part of development within the city as part of this East Area and the Folsom Plan area.

So the Folsom Plan area has its will have a surcharge associated with it for the cost of that water.

And then the East area water back in 2019.

So while we were doing our previous analysis and study, the city submitted a request to reclamation to use that entire amount of water anywhere within the city, where previously it was only allowed to be used in this area.

We got approval for that request.

So you'll see that this surcharge here is now going to cover this main kind of middle portion of the city.

And Gabe will talk a little bit more of how we got to the actual numbers, but that's kind of what each one would represent geographically.

Thanks, Marcus.

Just to reiterate, there are two surcharges, and the current practice is that residents are charged a fixed amount per bill or per account, and commercial customers are charged based on water use for the East area surcharge and the Folsom plan area surcharge.

And our proposed uh water supply surcharge structure is to apply three surcharges to across four areas of the city.

So again, revising the east area surcharge, calling it the Central Valley Project Surcharge, because that's indicating that both both Folsom Maine as well as East Area benefit from that central valley project water.

That's 7,000 acre feet that the Bureau of Reclamation provides each year that the city purchases.

Folsom Plan Area surcharge would continue to apply solely to Folsom Plan area, also known as Folsom Ranch.

Again, reflecting the 5,000 acre feet take or pay that the city pays the Golden State Water Company.

And then the Ashland surcharge, which accounts for San Juan Water District's treated water purchases, and this applies only to Ashland customers.

As Marcus stated, San Juan Water District treats their water.

And thus the Ashland customers subsist only on that San Juan water and do not rely on the city's treated water.

Therefore, they would not be eligible for a water treatment surcharge, but all three other areas of the city would be.

So East area, Folsom Main, and Folsom Plan Area would each pay an additional surcharge for those water treatment expenses.

This is the five-year schedule of what those surcharges look like.

So those would increase on a separate schedule from that of the baseline schedule of rates that I presented on previous slides.

The treatment surcharges, though, those reflect the city's cost.

So those would follow the same revenue increase schedule.

Okay.

So now the moment you've been waiting for.

Bill Impacts.

Yeah.

Sure.

Just for a moment.

The so the current situation is that the East Area surcharge is 400 $4.20 cents a month.

Yes.

And you're suggest you, Marcus, you were suggesting that that's now going to apply across all of the main part of Folsom.

Yes.

And also be increased by six cents.

It will now just be six cents per hundred cubic feet of water usage.

Oh, versus the fixed charge.

That's correct.

Of 420.

Okay.

Thank you very much.

I guess I'm still unclear.

So it's going over the whole main area, but that water, can we back up to why that is being applied to both areas again?

Yeah, I mean, I can start, but basically the agreement was revised to allow for other areas of the city to have access to that water, and currently only Folsom main area has the infrastructure to uh supply that water source.

But that water source was secured so the east area of the city could be developed.

Yes and no.

So it's a little more complicated that.

So going back to the map, um, the east area water initially had a larger surcharge to it.

So that 5,000 acre feet that the plant area currently pays was previously, because that contract came in in the mid-90s to use in this area, so the previous east area surcharge was closer to $11 and I think 20 cents or something like that prior to 2016, 2015, somewhere in that time frame.

The reason for that is when the east area was annexed and developed, part of that annexation and development was to secure another water supply source.

That ultimately got into uh a Fosio legislation, I believe it was to acquire that, but by the time that physically came on board in 2004 or 2005, the city had to look for a different supply source from a timing perspective to develop the east area.

So the east area had a surcharge for the 5,000 acre feet.

When the supply for the 7,000 acre feet was now in writing and under contract, the city was then able to say, okay, you don't need the 5,000 acre foot contract anymore, you need the 7,000 acre foot contract, what as what was originally planned and intended.

So that 7,000 acre foot contract could physically only be used in this area, right?

And that was then the 5,000 acre feet that was here from a timing perspective in the early say 2010 2011 time frame when the process was going for the plant area was then allocated through an agreement for the plan area.

So this previously was supposed to be the CVP water, it got because of timing, the 5,000 acre feet was used here.

Then when the plant area came on board, the city had the contract for this, so they moved the 5,000 acre feet from here to here, reduced the east area surcharge, then in 2019, because the way the Bureau of Reclamation calculates their water shortage in certain year types, it's on your historical water use for three what they call unconstrained years, so no restrictions on water at all.

So in order to take advantage of using the full 7,000 acre feet, we requested in 2017 and got approval in 2019 to change the area of usage from the east area to this entire area here, because at build out in the east area, the city was not ever going to use 7,000 acre feet.

It was going to be closer to 5,000 acre feet.

So whenever the Bureau of Reclamation had a shortage in place of 25, 30, 35, 40, 45%, whatever they landed on for what they call a municipal industrial use, which is the city of Folsom, we would not ever be able to apply that to a full 7,000 acre feet.

We'd only be able to apply it to about 5,000 acre feet at build out.

So in order to maximize the full 7,000 acre feet, and let's just say a 50% average, we would get 3,500 instead of 2,700 acre feet or 2,500 acre feet.

We decided back in 2017 to say, hey, we want to be able to use that water in this entire area.

So now that 7,000 acre feet we have, that can be used all in this entire area where before that was not the case.

Got it.

Okay.

So wait, can you go over that again?

I'll invite him back up.

It's uh it's a great history lesson.

Okay, so this really helps bring into focus all that we've presented as far as how do these rates manifest in the bills that you see.

So what we're presenting here are four different service areas, Ashland, Folsom, Maine, East area, and Folsom Ranch or Folsom Plan Area.

And how you would read this table is you have three levels of water use low average and high, low being 50% of average, average water use that we identified on a previous slide.

So that 1,500 cubic feet per month for typical residential household being average.

So how you would read this table, you have the delineated water use.

So we'll take the average line for the Ashland customer.

That percentage of bills column is a cumulative percentage.

So that means 66% of all residential bills across all four service areas consist of bills that are 1,500 cubic feet or less.

So the bill at the current rates using the current service charge and the current consumption charges based on that three-tiered rate structure is $42.74.

Using scenario one, the bills at the proposed rates would be $59.62.

So that figure also accounts for the surcharge applicable to Ashland for their water supply, as well as the consumption charge for the base rate and your base charge.

And so the positive difference in the next column over represents an increase in that bill for that level of usage.

And then we're doing something, we're doing the same thing in the one combined class columns.

We're comparing the bills at the proposed rates under the one combined class rate structure to that of your bill at the current rates.

And so again, because that tier one rate is the same under both scenarios, that's why you're seeing the same dollar difference for that average level of water use.

Now, as water use increases and you get into that tier two distinction and the differences, that's where the bills and the impacts change.

So we've done this analysis based on a one-inch meter for residential customers.

And we've also done this for non-residential customers based on a two-inch meter, which is your most common meter size.

The difference column indicating a savings when it's a negative value, and a positive value indicating an increase.

Again, we're reflecting average water use.

And then with respect to that average double or uh 50% of that average.

And we've also done that for irrigation.

And so again, irrigation customers were modeling based on a two-inch water meter because that's your most common size.

And to expand this comparison, uh, we've included neighboring water agencies.

So this is for a typical single-family residential household for a one inch meter based on average water use of 1,500 cubic feet.

There are a number of colors here, and that's why we've included the legend.

You have the fulsom main uh water bills, both at current rates and proposed rates for both fiscal year 26-27 using the cost of service, and then following that cost of service by the fifth year 2030-31.

So you can see the increase from 42.74 cents up to 62.02 cents.

We also included a comparison for Ashland customers as well as Folsom Ranch, and then all neighboring agencies reflect water rates as of January 1st, 2026.

So no future rate increases are included within this, but we would expect those neighboring agencies to be conducting similar studies and pursuing increases to address their rising costs.

And then finally a combined residential bill comparison.

So now we're looking at the wastewater bill and the water bill that uh residential customers at the given level of water use of 15 units per month with a one inch meter would pay both within the city and outside the city.

Uh we're using the same uh patterns of colors for Folsom Main being the gold, Ashland being the green, and Folsom Ranch being that pink or red color.

I'll note that East Area customer bills fall within the range of the three of these, and really for brevity, we've not included them, but we could certainly include those uh for future outreach to the community.

Uh Folsom customers do include the cost of wastewater treatment, as uh the previous slides did include the Sacramento Area sewer district cost of 44 per month.

And then uh I'll bring Marcus up one last time for low income assistance.

Right.

Thanks.

Do you want me to go back to that one map?

No, sorry, just kidding.

Can I go can I go back a couple slides?

I'm just trying to figure out the 15 HCF.

How many go back one more here?

I'm still stuck on this.

That's percent of bills.

There we go.

So what you're showing is is that this comparison is gonna be for about 40% of users.

When you're showing the comparison slides, you're showing this low use case, right?

The 15 HCF per month.

That's the middle use case.

So that's two thirds of users.

That's correct.

Okay.

And just for uh for numbers, 90% of your residential bills use 3,500 cubic feet or less.

How many percent?

90%.

So that 30 uh figure, that high figure, it says 87%.

Just expanding that to capture, you know, uh nine tenths of your residential bills, that figure would fall at 35 units of water use per month.

That would increase another three percent is what you're saying.

Yeah, okay.

Exactly.

So nice, so there's still 10% of users that are gonna fall out of that.

That's true.

Okay.

What percentile is Mayor Rafel?

I'm on the high side for sure, right?

I and that's right.

I like trees.

I like to water trees.

So I see a number of dead trees around.

I'd like people to water those trees too.

Um, always worried about unintended consequences, so but we can carry on.

Okay, I'm gonna bring in Becca for low income.

So uh I will make this one quick.

Uh, currently we the city does offer uh low rate income for uh certain circumstances.

We currently have about 282 accounts, and the on the sewer side, there is a low rate income assistance program from Sacramento Area Sewer District, one for collections and then one for treatment.

Since our customers aren't collections uh members or collection customers for SASD, they are only uh able to apply for the treatment portion of that bill, which is about 165 dollars a year.

Uh currently for the city, it's only offered to water customers.

It's when you do the calculation, it's about a 37% discount off of the base rate.

So the off of the current rate of I think twenty dollars and nine cents, it's about eleven, seven dollars and thirty cents or so less.

Um, as mentioned earlier, we cannot use rate funds to offset those costs.

So we can't take another ratepayer's dollar and use that to pay for uh the this discount.

So uh it's in the general fund currently to pay the difference.

It's about currently 25,200 a year in any proposed items presented tonight.

That will increase if the number remains 282 to about 39,0200 a year if if this were to remain in place.

So really some of the feedback, and it'll be on kind of the the last slides is: you know, is this a practice city council still wants to have?

Um, and if so, do we want to match something that's similar to what currently is in place?

Now we may name it differently.

I did get a recommendation from HFNH to not say it's a reduction to the base cost, but instead it's a discount dollar amount provided to a customer each year, or sorry, each month, which then would prorate over the entire year.

So just something to think about uh in terms of what this might mean to the 282 customers or so.

Can um is it based on income or how do they apply and how they qualify for this?

Stacy, do you know exactly how they I know they do have to apply.

So they just have to prove.

So are these mostly fixed income or do you have an idea?

Generally, I could get you more information on what type of applicants we generally have.

I am curious, especially if we're gonna decide to keep it or not keep it.

Is is all revenue that goes to the enterprise fund, you can't use it for this purpose.

So, in the instance where we are collecting, you know, late fees, could that be repurposed to help pay this program?

So that question need to come up in late fees can be used.

I've looked at the past couple of fiscal years, and it's typically between two thousand and five thousand dollars, but it it but is something that we could at the end of the year reconcile that number and and offset the cost.

Thank you.

Okay.

This brings us back to uh your feedback in this slide.

As far as do you have any further questions uh regarding the proposed reserve policies and as far as our staff recommendations that we presented tonight as far as the wastewater rates, the Sutter Street interceptor surcharges, the water supply and water treatment surcharges, and then I think the uh the pivotal one as far as the water rate structure for your consumption charges going forward, and then finally the low income rates and/or assistance.

So with that, I'll turn it over to you, Mayor.

Sure, I'll I'll kick us off.

I think my first question when I see it is is both water and wastewater have significant reserves at the start of the plot, and then it looks like they got to the cliff's edge and dove off.

Uh so I'd like to see 10 years of historical um with those uh along with what was set aside uh for capital in each of those years because just because I when I look at that plot, it's like well, how did we get all these reserves in the first place if we're running such a massive deficit?

Like all your projections show like we're significantly far off in what we're expecting to take in from revenue versus expenses, but we couldn't have been that far off historically because both funds are pretty flush.

So that's my economic forecasting brain says something must be off here.

Um so I just want to better understand the historical uh data that's gone into those.

Okay.

So that's a historical accounting for the revenues and expenses over the last 10 years and the fund balance.

Yeah, if you could just add it to that same plot, that would be that would help me to understand kind of what we're we're looking at.

It also helps me understand the reserve uh calculation too, like what we we need there.

Um, because it looks like there was some big expenses in the first couple of years, but then as it went down, those weren't really projected to go forward also.

So just trying to understand kind of what those have looked like in the recent past would help me.

And then, you know, I've never understood tiered watered rates, maybe because I have a big yard entries.

Uh, so it makes me naturally adverse to tiered water rates, but it looks like we used to have about a 10% between tier one and tier two and tier three, $1.50, $1.60, $1.70, $1.75, something like that.

It was a five percent increase, right?

So it encourages people to conserve, but it's not necessarily punitive.

Um, what you're looking at now is a tier one to tier two rate, which is fifty to sixty percent higher between tier one and tier two.

So I think that would need to be justified.

Um, as was mentioned, we're not we're not Southern California, we're not bringing water in.

I could carry a bucket to the lake from my house.

Um, you know, it's just not that far.

So I think it's really hard to justify tiered rates that are that far difference uh between those scenarios.

So those are my two like when I look at it, those are the two things that stick out to me that are somewhat different than our historical approach.

Uh, and so I want to better understand why those changes are being made and what justification we have to ratepayers uh to do that.

And then I'll say as far as the scenarios go, um, you know, as far as a reserve policy, I would need to see some of that historical data, but it doesn't sound like we're changing anything on wastewater, so really the water rates.

If I saw that historical data, I could give you a better opinion.

Um, but based on our very healthy reserve balance, my inclination would be to stay with what we have done in a reserve policy until we see that data.

Um, and as far as customer classes go, um, I don't see a strong justification uh for this because there is so much variability in residential customers and their water use expectations along with the commercial customers.

There's extreme variability, so coming up with some average where we have a tier that's based on that doesn't make a whole lot of sense.

You know, the idea that us sending a hundred cubic feet to a commercial customer versus a residential customer has some different inherent cost of the system.

I think it's fundamentally flawed.

Um so I would lean toward the one customer class because delivery of water is delivery of water um from our standpoint and a cost standpoint, and I'm fine with the lower income rates.

I appreciate the suggestion on offsetting those rates.

And I think that's my feedback.

I'll turn it over to whoever wants to go next.

I have a I have a question.

Um, the three classes, how many irrigation customers do we have?

789.

Oh.

I mean, sorry, as far as meters go, I'd have to uh consolidate.

I'm sure there's probably more than one meter for some of those parcels.

No, that was a great answer.

He's just being honored tonight.

You might have 790 once I switch to an irrigation meter and uh and residential meter.

My gut is also, or my my instinct is to go to a one customer class, but I think now that you said that many irrigation customers, they would be hit by this drastically, I think.

I don't remember what their average use or irrigation, what their average use was.

Uh their average use is 183 units of water per month.

And then so you do have the combined class different rates here.

So their rates don't jump up that much.

What they pay, or how am I am I reading this?

Yeah, so this accounts for both uh changes to the two inch meter, uh, which we on a previous slide were showing uh here that the two inch metered customer would see a $52.88 reduction per month for their fixed base charge before accounting for their water use.

So that is partially to explain why they're not seeing a a more sizable increase.

Sorry, let me get to the right slide.

Uh based on their water use.

Okay, so they it wouldn't be a huge jump.

I think for a real big burden.

I don't want to make a gross generalization.

It really depends on the level of water use and the size of the meter of that customer.

So we could provide additional uh bill impacts to provide your uh broader range if you'd like, but based on average water use, uh.

Yeah, based on the numbers I see here, it's not as big of a jump as I was gonna think it was.

Okay.

That's that was my first question.

Okay.

And only question for now.

I have some things, but we can wait.

Uh I'll be quick.

Um, no offense to Rick Gabe and Marcus, but it's a lot more fun to talk about chickens um than this.

Um, I'm gonna start with the last question first.

Um, it seems a little bit um silly if we're um offering um scholarships to people for parks and rack um you know programs if we don't do this for such a basic need is water.

So it seems like we need to continue um that.

Um I honestly this is so much information I feel like I need some time to digest it, but in terms of the three separate classes versus one combined class, and what's going through my mind is you think about um the solid waste rates, right?

I mean, you and I live next door to each other, my garbage can is full every week, and yours is half full every week, but we're we're paying the same rate.

Um, you know, and even if you get a smaller can, it's a couple bucks less, that's it.

So anyway, I don't know.

It it's a lot of information.

I need a little bit more time to digest it.

Any comments or questions at this time?

Uh yeah, it is an overwhelming amount of information.

I probably have some questions asked staff uh once I go through this presentation one more time.

But I my understanding was uh, and you can correct me if I'm wrong that some of the disparity in the um amount of uh the increase in costs and the income seems to be because of increased future needs for infrastructure repair and replacement.

That's correct.

And I think that that's something that we can't ignore uh from now going forward.

And I don't know if there's any other way to recalculate that to make it look a little bit different, but I don't want to short us on um moving ahead with infrastructures repairs as needed um instead of waiting until there's a huge issue.

Um my other comment is about the um subsidizing um the low income fund.

And you know, if you take a look at the late bill fees uh that are charged, uh, and you'd have to look into this approve it, but Mimescus is that some of the people had that have those late charges are also struggling to pay most of their bills.

I don't think the reason is that they're just ignoring their bills and don't want to pay them anymore.

So um I I'd have to know more about that before I went along with that suggestion.

But thank you for the presentation, and um I think all of us will be doing a lot of studying over the next.

Uh council member, if I may, uh just briefly comment on your comment.

Uh we did model uh an alternative capital improvement scenario, so really looking at about a 75% funding option of the uh capital improvements modeled, and so we could quantify what those types of rate increases and revenue increases would look like as well.

And what are the other options for funding other than self-pay?

For funding.

Yeah, I mean, it would be uh combination of uh trying to acquire uh use of surf loans, so you know, uh lower cost uh borrowing through the state or uh potentially through federal programs if you know it is uh allowed through Wiffia, um, or a revenue bond as you've done in the past in both 2019 and 2021 for uh treatment capacity of your water system.

Okay, thank you.

Can you go back to the rate slide?

Sorry, I'll let you.

I just wanted to see like the water rates.

Water in current versus future.

Sure.

Um stop me when you say these one, yeah.

Okay, perfect.

Okay.

So our tier one rate is actually dropping, even though we have so this just made me think of it.

So we have all these infrastructure needs, but we're we're dropping our tier one rate.

Right.

Yeah, so the intent is that uh specific assets are really designed to accommodate average water use and specific assets are designed to accommodate your peaking water use.

And so what this reflects is that there is a greater proportion of assets that address your peaking needs as part of this capital improvement program.

Okay, and that's irrigation related basically.

It's basically your summer months and irrigation related.

Yes.

Okay.

I uh I just am gonna say that um I love this topic and I really miss my time on the utility commission.

Um two questions.

Um maybe a counterpoint to the idea of a single um rate structure for all users.

Um we have we have a number of businesses in town that have moved here specifically for excellent quality water that are undoubtedly some of our largest users, and having a specific rate for that type of commercial use, I think makes sense from a business development standpoint, so that's that's my counterpoint to that.

Um and then um the the conversion of the east area surcharge to cover full the all of the main body of Folsom, is it really a surcharge at that point?

And shouldn't it just be baked into the main the base rate for Maine or into this user charge right here?

Because we're basically, I mean, if you take that average user that's using 1,500 cubic feet, um they're going from paying in if they're in the east area, they're going from paying four dollars and twenty cents as the surcharge to the equivalent of about ninety cents after, and the people in the remainder of the main part of Folsom are going from paying a zero surcharge to ninety cents, right?

So at that point it's balanced, why not just bake it in rather than calling it a surcharge?

And I'm kind of looking past you at Marcus, because of the specific designation of the 7,000 acre feet, do we have to for accounting purposes?

Because the whole time you were explaining the whole history lesson about the five and the seven and the where and where, um, I was thinking, hey, water's fungible.

Once it goes into a tank, nobody knows where it came from.

However, there is an accounting purpose to showing that we used the 7,000.

So I'm just wondering from a rate perspective, um, does a ratepayer care?

And does it need to be a line item on a bill to complicate things, or could it just be baked into the base?

He's looking past me.

And then and then we have then we have the specialized surcharge for the South South area and for Ashland, and instead of having three now we have two, and just simplifies things a bit.

Yeah, and I may defer to Gabe and Rick on this one, but with that 7,000 acre feet, the city does pay each year that unit rate cost changes for uh CVP water supplies, but there may be times when you only get 50% of that supply, and so I'm not quite sure how we would then bake in a 50% reduction in a total rate, if that makes any sense.

I mean, it's a it's an overall cost to that part of the operation, right?

So how do you do it now?

Because you're paying a fixed surcharge right now, regardless of how much you buy.

Correct.

So when it was built in at the last um rate study, we were building in the full 7,000 acre feet of purchases and then being able to spread that uh across the east area, right?

Yep.

So I don't understand your point.

I mean, I guess you if we only get 3,500 acre feet and we only the city only has to pay for 3500 acre feet, you don't reset the surcharge now.

Correct.

And I'm not suggesting.

Part of what we're doing is and part of what we're doing is making it right and making it defensible.

And before with charging for the full 7,000 acre feet, there are years when we weren't getting the full 7,000.

What I'm suggesting is that you have the ability to defend that that water was used and distributed amongst the fulsom main area.

Is it necessary to have a line item on the bill that has a specialized cost to it in order to make that case?

I'll maybe ask you.

And I don't need that answer tonight necessarily where we would fit in.

If you could research that, I'd appreciate it.

Sure.

I'm for simplified billing, right?

So if we don't have to have uh, you know, line item for 500 different things.

Let's scratch some of those off.

Understood.

So I have another question.

You may have answered this already.

Um, but just a slide that and I couldn't tell you what slide it was on.

Um so to Sarah's point, I I do need some time to digest this.

I think there'll be more questions, but our current rate tiers are from zero to 20, right?

Um and you, your suggestion or one of your proposed proposals for the not the combined the other one is zero to 15.

And that's based the 15 is based because of the average use of the customers within that class.

And you have to defend that or why are we going from zero to 20?

Why don't you just stay at 20 as the the first tier?

Yeah, so according to proposition 218, in not setting the rates arbitrarily, that includes break points.

So we're reflecting the water use pattern specific to that level of use.

Okay, and that's because that was residential.

Yes.

And then if you do all the combined all customers, the average use is 24.

Okay, got it.

Right.

Yeah, I mean, you have more than almost 24,000 residential meters, and uh I think 27,000 total meters in the system.

So that just shows you the weight.

Okay.

You got it.

Probably remember that one.

Thank you.

In my Redwoods, we'll drink 60% higher water cost than my neighbor's redwoods.

Uh but we could talk about that more later on.

Uh any other comments or questions?

Mayor, I was able to find an answer to the question you asked earlier.

Um, and so there is in fact a government code section specific to water, wastewater, sewer, and refuse collection that does in fact cap it at five years.

So we are not allowed to set a variable rate or an inflator beyond five years.

We can do it for up to a maximum of five years at a time.

Thank you so much.

If I think you're looking for more direction from us than we've given, is that I mean, I guess from my perspective, I mean, this is kind of what we intended, not just to suck away your life, but also to provide information where we can kind of get some feedback and then come back with some um more answers.

I mean, from my perspective, I think we have uh a good idea.

I appreciate the questions about the reserve level.

What are we doing?

What are we doing going forward that shows the decline and what what we spent on it?

Uh I'm gonna go back and and meet with our team as far as you know uh let's further assess the capital improvement projects, the timing of those projects, because that can actually change what the rates look like, the years that we actually put those into play.

So um anyway, this is very helpful for uh for me, you know, just so that we can come back.

As we we talked about there's still some time before we're recommending implementing this, because we knew this was gonna be a simple process.

So uh, you know, Marcus and his team have built in you know time for us to kind of go through this in a in a life sucking way, but that's not that you guys are in great.

You can count on me to do that, but no, uh, to to answer the question, uh I think we have uh enough tonight to go back and look at a lot of the items, address you know the questions that were answered, and you know, identify what uh all that means.

Uh we will have this presentation available, so it'll be something that everybody can take a look at um as well.

So this isn't a night where we were trying to make any specific decision.

We just wanted to get some feedback as to okay, is our approach going in the right direction?

You know, or we understanding the the cost versus the revenues, etc.

Do we want to continue with some programs, but also explain why we were making some of the changes that we were recommending just to align with where those costs are allocated from uh the different customers, both on the water and wastewater side.

All right.

Any other comments or questions?

All right, thank you, Marcus.

Thank you guys.

Thank you.

All right, that brings us to city manager report.

Uh great, thank you, Mayor Members.

Council.

Just uh wanna um highlight the announcement of our new fire chief, uh Chief Solak.

Thank you.

Uh sorry, um I hope you actually, is he still here?

I don't blame him, but he's asleep in the back row, I think.

Anyway, uh, we're really excited.

Uh uh he officially starts as our uh permanent fire chief on March 1st, and uh he's done a phenomenal job in this interim period, and I look forward to working with him going forward.

Uh, just a couple other announcements.

Um Folsom was ranked number one best place to live in California.

I'm new to Folsom, and uh I can't really disagree with that.

It's uh been a privilege to be here.

Uh my family's really enjoyed it, and so not necessarily surprised by that rating.

Uh just a reminder uh that we have uh the opportunity to volunteer to help build uh Castle Park that'll take place during the spring break period of April 7th uh through the 12th.

And as a reminder, volunteers must be 10 years of age or older, and those uh ages 10 to 13 must participate alongside a parent or guardian.

So anyway, that's all I got.

Thanks.

Councilmember Kazowski.

Uh yeah, thank you.

So um this week earlier uh or towards the end of last week, we had the monthly SACOG meeting, and uh one of the principal presentations there was made by Desmond Parrington, our fantastic uh planning staff member, and it was all about the steps that Folsom has taken over honestly decades to put in place a robust program for building um low-income housing and multifamily housing specifically, and the mayor and I were both on hand for that, and uh it was uh it was impressive to hear it told in a single go.

And um as an intro to that, um I kind of gave everybody a very brief history lesson about Folsom that went basically like this.

There's been a place called Folsom since 1855.

We were incorporated 80 years ago, which we're celebrating this year or in 1946, um, and in 1948, um, we became a city that didn't just have a prison, but one that had a groundbreaking to build Folsom Dam and ultimately Folsom Lake.

And I mentioned that we have a park named for um one of the people that was at that grand opening, or groundbreaking, named Norman Banks Livermore.

But then it begged the question was he the right livermore that the park is named for?

So I'm I'm gonna ask uh Kelly to do a little homework because Norman Liver Norman Banks Livermore Sr.

was a director of the Natomas Mining and Water Company and also of PGE, right, in 1948.

His dad had actually built the powerhouse here in Folsom and was the um person who incorporated PG<unk>E.

Um his dad, prior to that, Horatio Gates Livermore, which sounds like somebody from the 1850s, um, he built the original Folsom Dam, the small one that's by the prison, and he founded the Notomas Water and Mining, or he he took over the Notomas Mining and Water Company in the 1850s.

Um, and then that company persisted all the way into 1984.

Um, but it gets even better.

So that's Norman, that's Horatio Gates Livermore's son Horatio Putnam Livermore, son Norman Banks Livermore Sr.

Who was at the groundbreaking for the dam.

His son, Norman Banks Livermore Jr.

played baseball in the 1936 Olympics.

He was also a director for PGE.

He was this is this is crazy.

He served as our secretary of resources under Governor Ronald Reagan.

Right.

He was the one that helped to push Reagan to sign into law the creation of Redwood National Park here in California.

He, as his in his role as Secretary of Resources, helped to put in place the protections for the California Condor that ended up getting that that species to bounce back.

Um he helped found TERPA up in Lake Tahoe to protect Lake Tahoe as a joint effort by Nevada and California.

He was a director or president of the Autobahn Society and the Sierra Club.

And in the most ironic thing of all, having had this family that built dams, he has he led the effort for more than 30 years to remove the Hechachi Dam and restore HC Valley.

So anyway, that's my history lesson for the night in my ongoing first part of series water.

Who are our parks named after so there you go.

That's all thank you.

It was a little shorter at SayCog.

I was way shorter as a little bit shorter.

But since we were all 10 o'clock at night at say I just went for it.

Thank you Mike.

Vice Mayor I'm with everyone.

No part of that was short.

So anyways it was riveting.

Just fantastically riveting.

No.

That's it.

That's all I have Councilmember Larry.

I'll just let um Councilmember Kozlowski know that a lot of those names were put on the parks back in the mid-90s when I was on the parks commission and the history of uh who was selected and why um should be on the plaque in the park and should identify the correct livermore although it seems maybe we shouldn't name them number of parks after the Livermore family.

But maybe after I'm not gonna go for all of them collectively.

But yeah um I was intimately involved in that process so we can talk about that at length later.

I just want to um uh thank our uh city manager for giving us all the opportunity to put together a list of our priorities and uh set up a time where we can all discuss those.

I think it's a great step in uh making sure that the council is able to communicate and come up with some um collaborative efforts in the next two years.

Thank you.

Councilmember Aquino uh councilmember Kozlowski I expect to see you out at the railroad turntable next Wednesday 10 a.m to 2 p.m when we celebrate Folsom's railroad history count on uh pretty much every city department uh has had a hand in helping me with this event so thank you all in advance for your efforts and um whenever I next time I have a bright idea like this you are all free to talk me out of it thank you very much I'll just share briefly that uh we had a good central business district uh kind of task force meeting today with some business owners and property owners had a couple more attend um working with city staff uh choose fulsom and the business community there on um you know working uh to implement the central business district vision plan so excited that that uh is getting some progress and momentum and more to come oh and we are adjourned uh much later than I thought at 10 02 p.m.