Chair Staffers waiting when you are.

Good evening and welcome to the meeting for Wednesday, July 23rd, 2025.

It's 5 30 p.m.

The utility rate advisory commission is now called to order.

Will the clerk please roll read the roll to establish a quorum?

Thank you, Vice Chair.

Commissioners, please unmute.

Commissioner Tenekella.

Here.

Commissioner Gaspar?

Present.

Commissioner Burdock?

Present.

Commissioner Steinbaum?

Here.

Commissioner Sambay.

Present.

Commissioner Nelson?

Here.

Commissioner Olson?

Here.

Commissioner Johnson?

Here.

Commissioner Tran?

Here.

Chair Zito is absent.

And Vice Chair Burley.

Present.

Thank you, Wabacorum.

Okay.

I would like to remind members of the public in the chambers who wish to speak on any item on today's agenda.

Please turn in a speaker slip before the item begins.

You will have two minutes to speak once you are called.

After the first speaker, we will no longer accept speaker slips.

We will now proceed to the land acknowledgement followed by the pledge of allegiance.

Please rise for the opening acknowledgments in honor of the Sacramento's indigenous people and of tribal lands.

To the original people of this land, the Nissan people, the Southern Maidu, Valley, Plains, Mi Wok, Petwin, Wintune peoples, and the people of the Wilton Rancheria, Sacramento's only federally recognized tribe.

May we acknowledge and honor the Native people who came before us and still walk besides us today on these ancestral lands by choosing to gather today in the active practice of acknowledgement and appreciation for Sacramento's indigenous peoples' history, contributions, lives.

Thank you.

Please remain standing for the Pledge of Allegiance.

One nation under God, individual with liberty and justice for all.

Okay.

We're going to proceed with one of our new commissioners tonight.

Thank you.

If you would like to take a moment to introduce yourself and please uh take this to do so.

Thank you.

So I'm a new elected commissioner for this.

Utility rate advisory commission.

So I'm representing uh representing district one.

Um that's not from my site.

All right, thank you.

Um we will now proceed to the discussion calendar.

Item one is the Department of Utilities financial update for fiscal year 2025-2026 budget.

Is there a staff presentation?

Right.

Thank you.

Um there any members of the public?

Sorry, that's after, sorry.

Supervisor, analyst for the Department of Utilities.

I'm here tonight to present an overview of the fiscal year 2025-2026 budget.

This budget was adopted by City Council on June 10th of this year.

No, I will walk you through by fund the different elements adopted within the fiscal year 26 budget, as well as the reserves and the five-year forecast by fund.

I'll start with our water fund.

In the fiscal year 2026 budget, the water fund includes an operating budget of 130 million dollars, represented in blue on the chart on the right-hand side.

In addition, there is a 39.4 million dollar capital improvement program budget, also known as the CIP, shown here in green at the top of the chart.

And $4.6 million allocated for the multi-year operational projects shown in orange.

And just as background, the operation budgets support day-to-day expenses such as labor, material and supplies, software, and contracted services.

The CIP budget funds the design and construction of critical infrastructure improvements to maintain and enhance our systems.

The multi-year operational project budgets provide funding for initiatives that extend beyond a single fiscal year, including regulatory compliance efforts, long-term planning studies, and items such as implementation of a long or of a large-scale software application that requires investment over time.

So some highlights from the water fund budget include a total revenue budget increase of $589,000 and adjustment of expenses by $685,000.

As you can see on this list, the projected revenue for utility service charges has been reduced, while the anticipated payments for other agencies have been increased.

These adjustments were made to align the budget with trending actuals from the previous years.

Additionally, two new positions were added to the water fund, a construction inspector, and an instrumentation technician.

These positions are critical to operations as they will perform construction inspection and support the implementation of the department's security master plan.

Another item of importance for fiscal year 26 is the total reserves that each fund has in place.

DOU amended its reserve policy in 2024, which requires an unrestricted operating reserve of a minimum of 120 days of working capital, as well as an unrestricted capital reserve of a minimum of one year of the capital or of the CIP budget.

So as you can see on this side, currently our water fund reserves balances are $26 million for our operating reserve, $200, that's $231 days of working capital, and approximately three, sorry, I always make this bigger than it needs to be, approximately $32 million in capital reserves.

I always want to say $300 million, which would be nice.

This item is important to discuss because financial reserves strengthen the city's financial status and provide valuable resources to minimize disruption in the event of temporary revenue shortfalls or unpredicted one-time expenditures.

So this table shows the water fund five-year forecast that was adopted with the budget.

As background, we begin each forecast process with a fund analysis, which establishes the estimated beginning fund balance for the fiscal year.

Looking ahead, you can see in fiscal year 2028, you will notice a planned use of capital reserves.

That's the second line from the bottom in the fiscal year 2028.

This is planned to help fund the water capital improvement program.

This strategy is intended to avoid the need for a rate increase in fiscal year 27.

By doing so, we maintain the operating reserve at $26 million, while we draw down the capital reserve to about $5 million.

However, without a rate adjustment, the water fund will fall into a negative balance by fiscal year 28.

Therefore, a rate increase is planned for fiscal year 28 to ensure long-term fiscal stability and avoid resilience on the operating reserve, or avoid reliance on the operating reserve.

I'll now transition into our wastewater fund.

I'll follow the same format as the water fund so you have comparable information.

In the fiscal year 2026 budget, the wastewater fund includes an adopted, oops, sorry guys.

There you go.

All right, in the fiscal and the fiscal year 2026 budget, the wastewater fund includes an adopted operating budget of $39 million in blue, and an $8 million capital improvement program budget shown in green, as well as the $1.9 million allocated for multi-year operational projects in orange.

The budget highlights for the wastewater fund is a total increase of $700,000 in revenue, which is mainly due to the increase of utility service charges collected.

There are also no positions added for the wastewater fund for this fiscal year.

So the same reserve policies that I discussed during the water fund also apply to the wastewater fund.

So currently the wastewater fund reserve balances are $10.5 million in operating with uh $255 days of working capital and approximately $3.4 million for capital reserves.

Looking at the five-year forecast, similar to the water fund, the available fund balance shown here excludes both the operating and the capital reserves.

And as we look ahead, projections indicate that the fund balance will fall into a deficit in fiscal year 2029 if no action is taken.

To maintain fund stability, avoid draw on our reserves, and ensure compliance with debt service coverage requirements.

A rate adjustment is anticipated for fiscal year 2028.

I will now transition into our two storm drainage funds.

The first one is this storm drainage fund.

In the fiscal year 2026 budget, the storm drainage fund includes an adopted operating budget of $43.7 million in blue, and $2.2 million allocated for the multi-year operational projects shown in orange.

This storm drainage fund does not have a capital improvement program budget because the work is funded through our storm drainage property fee fund, which I will cover more shortly.

The storm drainage fund has also added two additional service workers tasked with working on the homeless encampment program and cleanup.

This is because the capital improvement obligations have been transitioned to the storm drainage property fee fund, which eliminates the need for a separate capital reserve in this fund.

Currently, the storm drainage fund maintains an operating reserve balance of approximately 12 million dollars with 240 days of working capital.

The five-year forecast outlines the fund's projected performance.

Without additional revenue, the fund balance is projected to fall into deficit by fiscal year 2030.

To prevent this, the department anticipates pursuing a rate adjustment in either 20, sorry, fiscal year 2029 or fiscal year 2030.

This increase would help stabilize the fund and ensure continued support of essential maintenance services and regulatory compliance efforts.

Finally, I'll discuss our newest fund and cover the storm drainage development fee fund.

As I mentioned previously, this fund's main focus is the storm drainage capital improvement program, and it was approved by voters in 2022.

The storm drainage development fee fund includes an adopted operating budget of $5.2 million dollars, again in blue.

For this fund, the operating budget mainly supports the administrative costs related to the capital improvement program.

So you'll see the main portion of this fund's budget is the two point or is the 12.2 million dollar CIP budget shown in green.

There is also 2.3 million dollars allocated to the multi-year operational projects shown in orange.

So the main highlights for the storm drainage property fee fund is the establishment of staff to help facilitate more of the cap uh the storm drainage capital improvement program.

The engineering technician position will support uh DOU's engineering and water resource division with implementation of the CIP, while the remaining positions and equipment will specifically support the trash capture program.

Uniquely, these positions are funded by the storm drainage fund and then offset by the storm drainage property fee fund, which is why I've listed them here in the presentation.

So finally, as you can see, um from the five-year forecast for the storm drainage property fee fund.

Um it is stable and maintains a healthy fund balance.

The expenses and revenue are consistent throughout the next five years.

So with that, that concludes my presentation of the fiscal year 26 budget.

Are there any questions?

Okay, thank you.

I have a couple questions.

Thank you, Clerk.

Are there any members of the public who wish to speak on this item?

Thank you, Chair.

I have no speakers list for this item.

Okay, thank you.

Are there any commissioners who wish to speak on this item?

All right.

Commissioner Olson.

Yeah, okay.

So uh there's a lot of a lot of stuff here to kind of understand.

And I guess one overall question is is the source of money for all of these um three different categories.

Um, uh wastewater is a separate fund from from water, right?

Yeah, so wastewater um water and storm drainage, and also now the storm drainage uh property fee are all separate funds and have specific specific uses.

And the storm drain uh property fee, that's a development fee from new development.

Is that primarily what that is?

No, those are our development impact fees.

The storm drainage property fee is related to the investment in our new CIP projects, so those capital improvement projects that the city needs to sustain the system moving forward.

So, so what are you diverting funds from the wastewater to create that?

Is that no?

So the wastewater is a separate fund.

This is just storm drainage, and it's a separate fee from our current storm drainage fee that um supports a lot of our ongoing maintenance for our current infrastructure.

So I'm trying to try to um compare that to uh what I see on uh uh city utility bill.

You know, it's actually pretty complex, but it's I've got a I've got a charge for for water.

I have a charge for waste wastewater charge for sanitation, which I'm assuming is SAC sewer, but is there a specific charge there that's that's dedicated or allocated for the um uh storm drain property fee?

Yeah, go for it.

It was there when he created it.

Yes, uh good evening, uh Commissioner Osen.

Um I believe you have two questions.

The first question that you had is Department of Utility is a unified builder.

We bill for all the the commodity that you have identified.

The second question you asked was the FY2022 uh property is a storm drainage fee, it's not commingled with any other fee.

It specifically was approved by the Sacramento voter to provide funding for all of our CIP, and that is strictly for the CIP.

It doesn't pay for other operational costs.

Okay, so uh don't don't go away because I have some elements I anticipate.

Um so does that also mean that yeah there's no co-mingling between those funds?

You are absolutely 100% correct.

And is a violation of proposition 218 as well.

We cannot co-mingle any fund.

Whatever the cost of service that we perform, it gotta be paid for that fund.

So does that that storm drain property fee revenue source does it show up on our monthly bills or is it just part of the property tax?

Um that is a very complex question, but I will explain to you.

So if you look at your property bill, uh there is two uh storm drainers uh uh fee, one is 1996 fee, which it pay for all the operation and maintenance costs.

The second one that you talked about is the property related fee, which is uh 2022.

So those are both collected through the bill that we sent to you among other commodities that we build for the city of Sacramento, and you are 100% correct on SACSUR as well.

Um so the customer does the customer see a combined amount of money and you split that up or is it separate on the bill?

Absolutely not.

Uh you will see, and if you like, I can provide uh documentation that show you the bill that itemized dose.

So uh I can gather information and circle back with you if you like.

I think that's gonna be important as we go forward to show what the customer actually sees and and if we're having a rate increase, where is the rate increase going to occur?

So, so for example, I know the reason I ask about the co-mingling is it looks like you've got a projected um good balance for the storm drain uh property fee, uh revenue source.

There's no there's no projected uh deficit.

You are correct.

Uh, because we just recently got received voter approval for the 2022.

So that's why you see a healthy uh balance for for that Pacific fee.

And is that uh index for inflation or what how is it set up for?

Um Commission Ocean, I will have to do more detail.

I believe every uh rate adjustment, we do have a fee study.

I can look into that for you and report back to you, sir.

Okay, so Kelly and uh don't go away, just um there might be some other questions here.

Sure.

Uh I want to kind of probe into, you've got some really large reserve balances in your in your budget.

And uh does that mean that you're taking a chunk of money up front and putting it into an escrow account or uh that's an earning interest?

Is that is that what happens on a reserve account?

That is not what happened.

Uh what I can explain to you is we at the Department of Utility went to council and received council direction to establish a reserve policy, and that reserve policy served two things.

Number one, it provide us with funding available for any emergency that would be unanticipated, is also a good financial practice according to the uh CFMO and GFOA that we have to do a healthy reserve just to make sure that we demonstrate financial future future uh financial responsibility to the ratepayer.

The third thing I would like to share with you is our bond rating, which is now at double A.

Uh, it was as you saw the presentation from Mr.

Ryan Wong last meeting.

We went from AA minus to WAA, meaning that I have to maintain that level of reserve to make sure that I am having the Department of Utility and the City of Sacramento have the ability to pay a bills for the two bonds that we carry out for the water bond and the wastewater bond.

So those those um for the for the fiscal year you're looking at, are those um reserve amounts um accumulated over a whole year or or do they are they upfront?

Are they created up front?

They're they're created up front um from our fund balance.

So we communicate with David Wong who presented at the last meeting, uh actually Ray Tang in the office, but he we we communicate what amount we want to designate as our reserves, and the 120 days that we have in our reserve policy is the bare minimum.

So as Ryan mentioned, we have um bond ratings and and things of that nature.

So having that uh elevated reserve helps us meet those different uh thresholds so that we're able to carry a better bond rating and have the reserves for any kind of impacts we may have.

I didn't I didn't hear whether uh are you earning interest on that reserve?

No, I uh may I look into it?

I haven't been asked that question, but let me look into it.

I don't believe so because it's sitting in a fund balance, and uh that separate from what the city treasure is doing because they do pool A investment and and and those uh financial functions.

So I can circle back with you with a definitive answer on are we putting that for to accrue interest and uh investment.

So I'll circle back to that.

Yeah, thank you very much.

I think you're welcome.

Um do you have do you think it's a good idea to earn interest on that?

These are large balances that are in the reserves.

Uh Commission Ocean uh would do all respect.

Uh I absolutely from a financial perspective, or is always good to earn interest.

However, we are in an environment that we can have a catastrophic failure.

I we need to have the available fund balance.

And if you look at that moment in time where we are with 254 days, it may be gone tomorrow, and and I'm not the the individual that will tell you that, but that is basically for the protection of the city because we want to make sure we have sufficient funding to get us back to the normal business operation.

So it may uh fluctuate.

Commission ocean, if you allow us to come back another time, those numbers will shift.

Uh right now is where we are, is a healthy balance, and is where we as a department of utility are comfortable with our financial condition because we still have obligation to pay our bills, and if if we fall below that 120 day working capital, anything above that is considered uh uh very positive for department of utility, and anything below that it would be very um I would leave very challenged for department utility because we definitely work very hard to get from double A- to double A uh regular WA, so with the future uh project that we have, it'd be a good uh rating for us to have.

Any uh do you have any information about how often you tap the reserves?

We have it.

Um, yeah, I mean, so I am interim, so I've only been in this job for about four months, but I've been with the Department of Utilities for many years.

Um from my predecessor who provided the information, um, we're in the process of building especially those capital reserves, we would like them uh stronger than they are right now.

So as far as I know, we don't really cap them per se, there's no maximum amount that we can do, but we try to keep it at a reasonable level year after year, and if we have to use it for maybe a one-time expense, things of those nature, we try to replenish it again at the end of the fiscal year if there are savings within our um our operating budget or other budgets that we may have.

So we're always conscious of it and we're paying attention to it, especially at our year ends to see if there's anything that we can move over that won't impact our next fiscal year.

And and uh if you don't if you're not tapping that reserve or you have a large balance at the end of the fiscal year, is that carried over as a uh for our sorry for use in the next fiscal year?

I'm sorry, can you ask the question one more time?

Uh if you're not tapping, if you're not tapping the reserve, um does that reserve funding carry over to the next fiscal year?

Yes, it does.

Um we instruct uh our our city financial team um how much we want to keep in those reserve balances so we can fluctuate them if we need to, but we typically tend to carry it forward if possible.

I think it would be helpful to see how often you've had how much you have carry over from year to year.

And it goes to the question of the question I have, and it's um well, you you're making these summary comments on um you've got a certain percent increase.

So I'm I'm I'm guessing that's year on year increase from the previous year in terms of um expense.

Yeah, so those are all um we use different projections for different elements within those budgets, right?

Some of them are carried over.

We have a standing cost, maybe some inflation for certain things.

Um maybe we've seen a trend in like chemical prices or things like that.

So each element within our operating budget and our capital improvement budget is um detailed out and by our budget team, and we understand what we foresee those um costs being in the future, and then we roll that all up into what you're seeing in the table.

So all every single line item is.

Yeah, Shelly, thank you.

I think uh I think it would be helpful to see a multi-year trend on that, uh, looking back probably maybe five years, of the reserve or of our for your um for the reserve, but also for your um expenditures and and the net.

And uh just to see what the what the annual trend is.

It's hard to tell anything from just comparing one year to the next.

All right, thank you very much.

Yeah, thank you.

Okay, thank you.

Thanks for the presentation.

Um, I was curious with the multiple uh anticipated rate increases for water sewer, um do you anticipate the timing of that to be in one ask or one in 27 and then another later on?

That's something that's in discussion with our executive team, and I believe the next meeting that we're having, that's when they'll go through all of the details.

So I'm not long-range fiscal planning, I'm currently fiscal ops, right?

So I'm um here, and uh this is the this is the part that I work on is the current budget and a little bit of the forecasting, but that's our long-range fiscal planning team.

Okay, so I think the timing, sorry.

One I have one more question on um the storm fund that you mentioned that's a separate fund than um the other fees.

Um, can you explain?

Because we do have like a combined system for the majority, and there are can you kind of help me understand what just specifically the storm drainage fee is for and then how that's different also from the developer impact fees?

So I think of the fees that they fund the ZAC system or the exact pipes that are in the ground, right?

So our water is funding our water pipes and our combined sewer system, that fee is funding all of the combined sewer system pipes and whatever you know, pump stations, things like that associated with it.

The storm drainage um fund, the one that was that's been in place for for as long as I know that maintains all of our current infrastructure that we have and helps do some maybe repair and replacement on that.

The new storm drainage uh property fee fund will start to look at our future needs and our future enhancements on our system to help accommodate um other needs that we have within the city.

So it's still working on our storm drain system, but it's more the capital improvement planning.

Yeah, okay.

It did look like um yeah, most of the capital improvement is 12 million dollars for the adopted budget, but that's just in planning fees.

No, no, not just planning.

So it's like any kind of new infrastructure.

So if they have um a large infrastructure pipe that needs to go in, all your combined.

I'm looking at you and your combined sewer system.

So um, oh, ref here.

But if there's a large um infrastructure project that is going to be put into a specific area or a pump station, let's say, that needs to be put in um in a certain area, this fund will now help support that.

So they will pay for the design and construction of that infrastructure, as well as potentially some maintenance of it, or um, some of our new regulatory requirements like the trash capture program, things of that nature that are new on our system that we have to maintain, that's part of the new fee.

So when they develop that, they outlined what is included, and that's what that fee pays for, nothing else.

Okay, so yeah, thank you.

Commissioner Shambe.

Uh, good evening.

I would like to uh know if possible of the storm drainage property fee.

Is there any studies that show how much of uh the trash that uh personnel have to remove from the drainage affects the costs?

Uh if do you all know that or a study has been done on that?

I do not know that, but there might be a study that's been done.

I can ask um the group that's working on it, and we could follow back up with some information.

Yeah, I think that would be uh excellent for us to see that, and then also too of the cleanups that are done within the city uh with the different homeless encampments.

Is there any studies that show the percentage that affects the budget negatively having to divert attention to the area because in a lot of areas there may be a lot of trash that's blocking key central uh storm drainage areas and with that backup, it stops the machine, so to speak, of uh filtering and things of that nature.

Um, is there any studies on that as well?

I don't know if there's official studies, but I do know that there has been analysis of how much money it does uh take for our crews to work on the homeless encampment projects and maybe some of the impacts from it.

Uh we try to track those with specific codes so we can track that information.

Um again, I don't know the specific numbers, but I do know that's something that's been in discussion before that we've looked at, so I can also follow up with you on that one as well.

Uh yes, I think that would be interesting only to to know if uh if the actual fees, all of these different fees together definitely will affect, but if if we can know if it affects, has a drastic effect on a budget, a min uh a small effect.

We know it's gonna affect in some way.

But I'm just curious to know those type of things as we see it affect other different city departments, uh, specifically with this uh with the storm drainage, is there a big effect on that?

Yeah, I do know that they've they put a lot of time to start to track that because it does impact them.

We have our levy system, um, we have our pump stations that are affected by it.

So I don't have any more on that.

So I think we can uh follow back up with you.

All right, thank you.

No further questions.

Commissioner Johnson.

Thank you.

Um I was wondering if you could please put into context for us or give us a little perspective on the um operating capital reserves, those levels.

You mentioned the 120-day required level.

We've got about twice that much right now.

Um do you do product projections as we head into potential rate increases of what the working capital will be over the next five years, and also the perspective of um you mentioned the bond rating, like how sensitive is our bond rating to what kind of level does it require to maintain our current bond rating, and what do other utilities of our size, what kind of reserve levels do they run?

Yeah, and I don't have all of that information because I am a little newer.

Um I know the long-range fiscal planning team is definitely looking at what those what the effects of no rate adjustment will do to those operating budgets, especially as we go further into the deficit of our spending, and also what that will do to our um our ratio, our debt ratio, um, because that is something big that um if we don't carry a certain amount of reserves, we start to have that ratio um change and that impacts our ability to fund additional projects.

So I don't have a all that information right now, but I think at the next meeting they probably will go into detail on that.

Um I felt like you asked me one other question.

Did I cover them all?

Oh, yeah, no, I think I think that's what moving forward it would be useful to have maybe some quantitative understanding of how the level, what kind of levels are really minimum levels we need to maintain by requirement for the bonds and what other people are doing so we have a larger perspective of yeah how much reserve we're keeping while we're also asking for rate increases.

Oh, and I think what I was gonna mention on that five-year forecast, we only show that we're dipping into our reserves at one time uh to help with the water capital improvement program.

Um so ideally our reserves would still remain the same, but as we move forward in those years, right, that's when we'll have to start dipping into it, and then if we have any kind of emergency or one-time expense come up, that can start to erode it.

So it puts us in a precarious position.

Okay, may I add uh again?

My name is Ryan Fan, if your business services division manager, may uh add to what Kelly just said.

So, Commissioner Johnson, you did ask for the some clarity on the bond rating.

So the bond rating is independently determined by SP and and Fitch.

They have a process called civilian, and they come in every fiscal year, they ask for our financial number, and they determine of our ability to uh commit it to our debt payment that we have for the water and the wastewater.

So they follow through with those processes and the rating agency analysts, they do their own projection, Commissioner Johnson, and they will determine whether we met only only our operating obligation, but uh our ability to pay our bond, and they do that.

And if they feel that we are financially stable and viable, that rating will continue, and and that is basically an independent Wall Street uh wing of our finance, and they determine that.

So that would be something that we are definitely looking at our reserve uh commissioner Johnson, and the thing that they are rating us on our AA uh rating is uh how much the ratio between our debt and revenue ratio and our ability to pay debt.

The other one is do we have sufficient quote unquote saving to make sure that if if we have emergency, we have the ability not to not pay them but continue to pay them and support whatever that the emergency that we have at hand.

Uh, the thing that I want to add to what Kelly said, uh Commissioner Strand, we have not yet a rate adjustment for the storm drainage system since 1996.

And basically, what you have seen, we had doing our best as far as the Department of Utility, trying to make sure that all the our systems are financially viable because we had the 2017 and 20 rate adjustment for the water and the wastewater, and immediately we sprung into action and got some kind of relief for the 1996 and the uh FY 2022 rate adjustment that would approved by the voter was to take care of the CIP.

It means you have heard from us that you have multiple uh meetings that you have aging infrastructure.

So those portion of that storm drainage fee is gonna strictly focus on those CIP project to make sure that our infrastructure continue to deliver services uh consistently for the citizen of Sacramento.

So thank you for your question.

I appreciate that.

Commissioner Johnson, may I ask if I address um audio question that you asked?

I think yes, I think it helped me understand the process.

Thank you.

And maybe moving forward, it would be helpful to know is there a direct correlation, like quantitatively.

If we if we to choose to keep a lower um operating reserve, then we're when we hit a certain level, we know we're gonna lose our the advantage of our bond rating.

Or it I don't know if it doesn't not work that way.

It's not a trigger uh a level, but I think understanding that would be helpful and seeing the projection of what the reserve is going to do over the next five years would be helpful, and also maybe seeing what other utilities carry.

So, in perspective, are we about doing what everyone else does?

That seems to be um an advisable, you know, best practice, or are we carrying more or less than we need to?

Thank you, Commissioner Johnson.

I do want to add the last point is when we meet with SP and and and Fitch, they do provide a really robust explanation why those stuff.

So I will definitely provide that information to you because they do the civilian every 12 months because they want to make sure they're consistently looking at our finance.

So make sure that we are able to deliver on our financial application.

So definitely I will uh consult with Mr.

Wong and we'll provide update for you as it become available.

You're welcome.

And just so it doesn't become confusing if there's other discussions, that 120 days of minimum working capital, that doesn't include our debt service load.

So if you start to add that in, you have our days of working capital then are reduced.

So that's the bare minimum.

Um we can try to go more conservative.

They made an adjustment in 2024 that we don't include debt services in there.

Um so that's why it may look even more inflated because we're not counting for that, but we do need to continue those relationships in order to build our infrastructure.

So that may help.

Okay, okay.

So it's interesting that we're finding a consensus of curiosity on this.

Uh but to go back into the um reserve days of funding.

I know that 120 is the base.

I'm starting to understand why we carry more.

I've seen it creep up more and more and more, and now it seems to be across most of the funds.

We we carry quite a bit.

One of the reasons that it's asked about so much is because often when a rate increase is asked for, people will look at the reserves and say, Well, why are you holding back so much money?

Why is it not being spent?

What was the reason for a rate increase?

And you're answering the questions.

I think tonight that it's more complex than just keeping the 120 in reserve.

Is there a reason that 120 is still maintained as that and it hasn't been raised so that because I would imagine that debt servicing is a fundamental requirement for the reserve, or maybe it's not, but it does seem that we keep very high numbers that I've been explained the reason why we do that, but it's doesn't seem as transparent of why we would do that if councils only said we need a hundred and twenty days.

So that's a minimum.

And I wasn't here in 2024, okay, and Ryan was.

So it comes with a lot of thought process, it comes with case study and and and work from the other finance folks in California.

So that explained the reserve.

I would like to touch on the the the question that I I think haven't been touched.

The 120-day working capital is still in our saving account.

So it would basically somewhere that we put the money there.

So just in case just like you're saving at home, you have a kitchen ferry, you went and take that money and pay for the kitchen.

So that's what it is for.

We are very cognitive of the fact that those things are climbing up, but we are not if you look at the reserve right now today, 254, but what about the next couple years?

We would we have not have the rate in increase in 2020.

So we technically have a rate holiday, as Mr.

Uh Wong has just alluded at the last meeting.

So those are the strategy, Commissioner, that we want to be able to have the fund available just because when we need it, it's there for us.

So we will do that as far as our strategy is to maintain the the Connie operation until we get the next rate adjustment.

So it may fluctuate up, may fluctuate down, but when it goes you look at the five-year, and I think one of the action items that we was asked to provide, we can provide a trend, and you can see they go up and they go down.

Okay.

So because you were you were talking about uh the rating agencies how what they like to see.

So I assume that there's an internal thing where these are really the reserves you would like to have that are above the 120 minimum.

Um is I don't know quite how you would frame it, but just to see where what the city really comfortably needs to maintain in the reserve beyond the 120.

Um, as you asking your question, my memory come back.

We at the Department of the Utility did hire a financial advisor, and that we had a contract with the financial advisor and the financial advisor that the the one that provide those recommendations to us.

They actually provide us with recommendation with a higher reserve.

Now they don't have the realistic uh expectation or understanding of the challenges that we have with the aging infrastructure.

So we basically had to go back and forth with the financial advisor as our consultant before we make a recommendation to CD Council.

So those body of work was basically was a collaboration between the Department of Utility executive team and the financial advisor to come up with a comfortable within alignment with our other jurisdiction within California.

So those was the thing that I failed to mention because it was happened like three years ago and three years ago was a long time for me because that that was something that it was a aspirational uh design for the department's utility.

Since I worked here for nine years, it was something that I thought that would be a great uh financial uh KPI for us to maintain.

So we did all of those stuff.

We always put the 120 days as uh uh uh an aspirational, but we need to formalize it just in case you know, and we not formalize this not for the city, but to sit in, but like you allude earlier, it's for the the the the Wall Street as well, because we anticipate eventually we're gonna have to go out for another bond uh uh uh security uh secure kind of stuff.

So that's the reason why we had that formalized.

Right.

Yeah, so there was a way to see sort of those numbers that you have, even if it's just for the commission or something, just to kind of know where where you guys are thinking about and what your recommendations are, so that that helps to clarify that.

And uh lastly, I won't talk about it too much, but the storm drainage uh property fee.

Um would you so I understand that is focused on CIP, but why was the decision to go that outside of this normal storm drainage fund?

Is it because there hasn't been a rate increase and we needed CIP funding?

Is that the idea, or I mean, it's uh thank you, Commissioner, for that question.

Um, I'm gonna uh defle uh the delegate that to our city attorney Michael Voss, because Michael Voss worked with us, and he was responsible for uh assisting us to come up with those strategies, so and he is very articulate how the the the the fee have become so and and I can supplement whatever that that you have for the question.

Thanks, Ryan.

I'm not sure how articulate I will be, but uh so I'm Mike Voss, I'm the advisory attorney that's assigned to the Department of Utilities.

Um I staffed this commission and I also helped formulate the strategy for the fee.

Um the city was in a position where we had a very old fee with an older methodology because we hadn't changed it since 1996.

Um the new state of the art methodology is based on impermeable surfaces for storm drainage, and we were in a position to decide whether to open the old fee up and to increase it, or to create a new fee with a new methodology with the sort of state of the art um methodology.

And so we decided to bifurcate the fees, a sort of a strategic decision on what we thought um and what our consultants told us um would pull well, would have good results that voters might be willing to approve.

So a lot of those considerations went into the fee, and that's why we ended up with two fees and two different purposes that they're serving.

I see.

So yeah, it's an interesting strategy because uh we don't do that with any other fund.

Uh is it I mean, I don't know if that's is that's gonna be a kind of a way to work around the rate adjustments.

I hope it's it's we want to stay within the the normal framework where we use the enterprise funds to do ONM and CIP and all those things we need to do.

It's just um it's just kind of a different little animal there that we did.

And I understand the the politics, if you will, of it and understanding and voter settlement, but I figured that was the purpose of it, but uh it's just kind of an interesting new thing.

So I appreciate your presentation.

Oh, I'm sorry, we have uh more speakers.

Um Mr.

Gaspard.

Um I just uh yes, uh he actually covered someone on asked, but I just want to just reiterate so I don't really need response.

We kept hearing 120, and then you come and say, well, 120, we like 120 is a minimum, and you're like, well, it's not really a minimum.

We need more.

I think the city, the department should come to what is a realistic number or probably a range of for your operating fund and come up with the written justification for that number range.

I think that'd be better than telling people it's one twenty.

Well, catastrophically, something might happen, so we want to keep it higher.

I just I think the city needs to come with a better number.

Well, I think you for that comment, Commissioner.

May I respond?

I should merely respond for the Commission Ocean.

He specifically asks where we are.

I definitively will tell you that 120 uh working day capital is the minimum.

Uh and and that is what we strive for, and that what we have disclosed to the uh financial uh the Wall Street folks, and we will continue to stay by that.

Uh I would just merely try to ex provide uh uh explanation why that thing is accumulating, because like Commissioner Ocean Jet asks, it carry over.

So, and it will be subject to uh expenditure once we have the need for it, and and that's the whole purpose for that.

But I can definitely follow up for you and and like uh Commissioner Spencer have asked, we have the uh um uh the film and team, the the consultant that we hire that provide the the not only the the the recommendation, but they provide us with comparison with other cities.

So we're definitely gonna follow up with that, sir.

Thank you for that feedback.

I hope that provides clarity a little bit more as far as uh I want to make sure that I'm not articulate that we are wishy-washy above 120-day capital.

I believe that is written in our city policy, and we're not gonna be deviate from that.

So that that would be something I want to reassure you that we're not doing that.

Right.

Any other commissioners?

Okay, thank you, Commissioners.

This item is for review and comment only.

No vote is required.

We will move on to the next discussion item, which is item two, the deferred maintenance highlights, and there's a staff presentation.

Good evening.

My name is Michelle Carey.

I'm the interim engineering manager for Department of Utilities and tonight I will be presenting on deferred maintenance.

In August of 2024, the Department of Utilities provided a presentation to this commission on deferred maintenance of the city's utilities system, which highlighted the funding needed to complete the necessary infrastructure replacement investment for our water storm drainage and wastewater systems.

Tonight I'll provide a brief update on DOU's deferred maintenance needs, also referred to as a deferred asset investment, along with an overview of proposed projects for this current fiscal year, which is fiscal year 26.

This presentation highlights key deferred maintenance projects included in the council approved CIP that will support DOU's efforts to replace and rehabilitate aging infrastructure.

This update is part of DOU's ongoing effort to keep the utilities rate advisory commission informed in alignment with the commission's advisory role on future utility rate recommendations to the city council.

An update on expenditures from fiscal year 25 is planned for December.

So tonight's approximately 15-minute presentation ensures the commission is informed about upcoming infrastructure priorities.

So I will start by defining deferred maintenance or deferred asset investment.

Deferred maintenance is a term we use to describe infrastructure repairs and replacements that are not performed when they should have been.

Level of services to our residents.

DOU strives to provide the highest level of service possible, so addressing this issue is critical.

The lack of investment in our utility infrastructure could also have regional impacts.

For example, agreements with the state of California related to conjunctive use of our water supply include requirements for the city to provide a specified amount of groundwater in dry years.

If groundwater wells are offline due to failures, then it becomes difficult to meet these regional agreements.

By reducing the amount of deferred investment in our system, we will increase the reliability of our services to our customers and regional partners.

As you can see, this issue is significant and can have a major impact to the community.

It is the responsibility of our department to minimize the amount of deferred asset investment within our systems using our limited funding resources.

I will highlight what we intend to do during this new fiscal year.

Starting with our water system, which provides water to almost 149,000 customer accounts and consists over 1,600 miles of Maine, two water treatment plants, 17 reservoirs, and 21 permitted groundwater wells.

This system provides drinking water to the entire city as well as support to other communities with their water needs through water transfer sales and to the region by coordinating conjunctive use efforts.

And I wanted to note that the number of groundwater wells has changed over the last year.

DOU submitted a permit update to the state in April of this year and removed nine wells from the department's permit as they have reached the end of their useful life as a productive asset for the water system.

The water system currently has an estimated $740 million of deferred maintenance or asset investment, and this cost was calculated in 2021.

As we look at the current fiscal year, the department plans to contribute $8.5 million to deferred maintenance projects as part of our council approved CIP for the water program.

The first project on the slide is a transmission main replacement project.

This consists of an existing 24-inch welded steel transmission main that was installed in 1935, and it runs from the City College reservoir and is parallel to the train tracks from 7th Avenue north to Broadway.

The main is 90 years old, has had several leaks that have caused property damage and have been repaired by city crews.

The main is showing signs of advanced corrosion and is located in backyards along much of its alignment and is difficult to access.

The design has the new main in Freeport Boulevard and then north on 24th Street until it connects to an existing 24-inch transmission main in Q Street.

Alhambra Reservoir Electrical Project has a scope which includes replacing the existing electrical switchgear instrumentation and other associated appurtenances.

The existing switch gear was installed in the mid-80s and is nearing its expected life cycle and is in need of replacement.

Electrical switch gear typically has a 30-year lifespan.

There will be work completed at the City College Reservoir with funds budgeted in fiscal year 26.

There's a wood platform on the interior of the reservoir that is used by OM staff and is in a state of disrepair.

The platform is not safe to walk on as it has decayed over the years and is in need of replacement.

It's beyond its useful life.

The next system is the city's storm drainage system, which has 146 drainage sheds, 860 miles of pipe, 109 pump stations, 76 detention basins, 266 floodgates, and 71 miles of creeks, ditches, and channels.

This system is responsible for collecting and pumping stormwater out of our streets and away from our homes.

Currently, the city's drainage system has an estimated $364 million of deferred asset investment, which was also calculated in 2021.

And in reality, this total is larger because about half of the city's drainage basins lack hydraulic models and master plans.

And without these tools, it's difficult to know the investment needed to achieve and maintain tenure and 100-year levels of service.

As we complete this work, we anticipate the value of the deferred investment will grow.

Based on the deferred asset investment conditions, we do know the department has budgeted $7.4 million in fiscal year 26 to design and construct projects to address critical items.

The first project that I wanted to highlight is the Beach Lake Berm Repairs Project, which is a repair of a failed berm that separates Morrison Creek from Lower Beach Lake.

If the berm fails, DOU loses the ability to pump down water levels, which would then cause harm to environmentally sensitive areas.

The Elder Creek Repairs Project will repair the failed concrete channel between Tangerine Avenue and Center Parkway.

The channel has a concrete bottom and portions of it are missing, which makes maintenance very difficult.

The Arden CMP project replaces failed corrugated metal pipes near Arden Way at four locations.

The pipes cross all lanes of Arden Way, which will make this a difficult construction project.

And we will also be designing SUMP 39 outfall replacement project.

This replaces and relocates a failed outfall at Drainage Sump 39.

The outfall discharges into Willow Slough, which is south of the executive airport in South Sacramento.

The last system I will cover tonight is the city's wastewater system, which is divided into two systems, the combined sewer system and the separated sewer system.

The whole wastewater system services approximately 80,000 customers and has two primary treatment facilities, 56 wastewater basins, four storage facilities, 48 pump stations, and 840 miles of pipe.

The deferred asset investment costs of these two systems reach 1.1 billion dollars calculated in 2021.

The deferred investment related to the wastewater system includes rehabilitation and replacement programs for pump stations, pipes, and the treatment facilities.

It also includes capacity improvements associated with the combined sewer system national pollutant discharge elimination system permit compliance program.

These programs replace or improve infrastructure that are extended past their useful life.

Much of the infrastructure in the combined sewer system is close to 100 years old, so it's reaching or has exceeded its anticipated useful life.

For fiscal year 26, the department has allocated 6.9 million dollars of wastewater or for wastewater system deferred maintenance projects as part of the council approved CIP.

The currently planned projects include the 24th Street wet weather storage project, which is a flood reduction project associated with the combined sewer system and PDES permit compliance component of the deferred maintenance and will reduce existing system flooding to protect public health.

The separated sewer projects include the SUMP 85 force main replacement, where 5,900 feet of force main will be replaced, and the construction of sewer improvements in the Del Paso Boulevard area, which is partially funded by a green means go grant, and this project will replace 3,430 feet of pipe that is beyond its service life.

The combined system treatment facility, deferred maintenance project, the Pioneer Structural Repairs, is one phase of structural improvements that will extend the useful life of this critical treatment facility.

These projects will continue to strengthen the reliability of the wastewater system and allow for our city to service our customers and meet the increasingly strict regulatory requirements that are placed on our wastewater systems.

So as you can see, the primary challenge DOU faces related to maintaining our system is lack of funding.

While we are prioritizing and allocating funds to address our most critical deferred maintenance projects, other necessary repairs and improvements and replacements remain unaddressed.

This not only compounds our deferred investment backlog, but also increases the gap for the following fiscal year.

Even though the challenge, even though there's challenges and obstacles, we continue to work to bridge the gap.

DOU conducts planning efforts such as the 30-year capital improvement program and the development of an asset management program, which helps the department identify funding priorities and focus spending on improvements that will have the most impact.

These planning efforts also inform the rate adjustment process and other financing options to ensure the city collects adequate funding in the future to help complete the needed improvement projects.

Through these efforts, we are hopeful that over time we will bridge the gap of the necessary deferred infrastructure investment and build systems in line with industry standards, growing regular regulations, and provide the needed level of service to our customers for many years to come.

It's important for the department to continue our long-range financial planning that includes grants, federal appropriations, short and long-term financing, and rate increases.

We ask for your support as we continue to pursue and implement these strategies to secure sustainable funding, reduce our deferred maintenance backlog, and ensure the long-term reliability and resilience of our water, wastewater, and drainage systems for the communities we serve.

So this concludes my presentation.

I did want to mention that there is uh three slides in the back for you to look at at your convenience that includes the allocations from fiscal year 26 for each of the three systems.

And if you have questions, uh I'm happy to answer.

And I also with me tonight is Brett Grant, who is the supervisor of the drainage CIP program, and Roxanne Dilly, who is the supervisor of the wastewater CIP program.

Okay, thank you.

Clerk, are there any members of the public who wish to speak on this item?

Thank you, Vice Chair.

I have no speaker's lips on this item.

Okay.

Okay.

Are there any commissioners that would like to speak on this item?

Commissioner Nelson.

Yeah, thank you, Mr.

Chair.

Thank you for the presentation.

That's quite a backlog.

Um, I'm curious.

I'm looking at the sort of enormity of the backlog, and considering some of the uh rate increase scenarios that staff have laid out before us.

Can you help me sort of true up if you know one of those rate increases is implemented?

How far does that get us toward starting to dig into this deferred maintenance backlog?

Because that's that's quite that's quite a lot of money over even five years, right?

Right.

So I would um there's different scenarios that could come forward for uh the rate increases and it will likely be a combination of addressing some or a lot of the deferred maintenance, but it also will balance with uh the need for for new improvements as well.

So it's hard to say at this time, but uh but that is something that we will be be looking at as we prioritize and make recommendations.

My sense is looking at these numbers and the impact to service and probably higher and higher risk of catastrophic failures to systems that we really don't want to have catastrophic failures, is that the question is not whether or not we need a rate increase, it's how much and how do we roll it out in a way that minimizes impact to ratepayers.

So thank you very much for the presentation.

Commissioner Train.

Thank you.

Thanks for the presentation.

Similarly, similarly to Commissioner Nelson, was noticing the big discrepancy in even just the annual revenue that the water system brings in, like $150 million compared to the deferred maintenance backlog of $740.

Can you, or or maybe someone else explain kind of how the rate increases and deferred maintenance backlog interact with Prop 218?

Is it a matter of whatever you put on to like if you're prioritizing the deferred maintenance and adding that to you know the work that you're gonna do?

Is that fine to be kind of calculated into the necessary rate increases?

Does that yeah, I don't know that Prop 218 is long as we're uh focused our spending on department of utility related um projects.

Um I'm I don't believe that Prop 218 would come into play.

Um, yeah.

So is it just a matter of prioritizing this deferred maintenance and then putting it into the CIPs and then charging the adequate rate to meet the need of the work you're planning to do?

Yeah, I think um we would um let's see.

I don't know here.

We would um develop a uh a package of projects and um whether whether it's deferred maintenance projects or or new new needs that goes forward um once if the you once it's approved, yeah, they're they're delivered and as as uh uh CIP as a capital improvement project.

Um I don't I don't think I'm answering your question.

Yeah, I mean the the biggest obstacle seems like there's not enough money, but does is there just a matter of asking for more and like are there other obstacles to that other than like passing the rate increase.

I think I just want to highlight just as you saw in when we're going through our operating budget uh presentation earlier, right?

Our budget is comprised of operational costs and capital improvement program, and so it's a balance of those.

So uh as we move into the uh next three meetings throughout the year, we're gonna tee it up in August and bring back more detailed information in October and December on some of our proposals, you'll start to see different options and what we're recommending on how we're spending our money and what these rate increases might be.

So we have to balance operation costs like I'll say something like chemicals, right?

To me, I always feel like that's a non-negotiable.

You have to purchase chemicals as at the prices uh that the market is asking for to run your treatment plants, right?

So our capital program, then we adjust that based on some of those other things.

But all of these different costs go into our annual budgets, and what we will might bring is recommendations for our re-increases, whether it's adding staff, right?

Cost drivers for electricities and chemicals and staff, uh, all the way to how much do we believe we can afford for our capital program, and then um our three supervising engineers that are here work with our operations team and do their best um to invest the money in the right spots so we can minimize or prevent those catastrophic failures.

So I don't know if that helps, but.

Can I can I just jump in here and address one of your questions, Commissioner Tran, which is is there anything in Prop 218 that stops the city from just asking for 740 million dollars because we can show that we have that need.

Um maybe not, but I think we also have to look at DOU's capacity, right?

DOU has a finite finite amount of project managers, and the capacity to deliver projects is also finite.

So I guess DOU staff would be in a better position than me to say whether they could deliver 740 million dollars worth of projects in a one, two, three-year time spray.

Probably not.

So are there are some practical limitations on what a rate increase could pay for and be justified with a cost of service study?

I think that would be really helpful to pair with it then, just in just saying that you know, money's the biggest uh hurdle.

I feel like is not completely transparent because it's like there you're just people you can't do all this work in a year, so it'd be interesting because like once you get to 740 million, that's like too big a number for my brain to comprehend.

And so, you know, is there a plan to to kind of break it down and what does that look like feasibly?

And maybe that's multiple rating forces.

But if we grow our CIP, right, the 6021 fund, it would be an example of that, right?

It's a brand new fund for a drainage capital improvement program that prior to that fee, we had like 250,000 for a drainage CIP, right?

So, as a part of that new fee and capital program, it comes with staffing.

So you would hire staff to deliver the capital program that you were moving forward.

So you'll see a blend of that from us.

We may say, hey, we just believe we should invest in our capital program, what our existing staff could deliver, or gee, we have some projects where we believe we should add staff and deliver it, or maybe we're focus on operations, but we're gonna bring the different uh details of information on what we feel our needs are, and then we'll you know, different recommendations um for you all to consider.

All right, Commissioner Olson.

Uh thank you, Michelle.

Very good presentation.

Um, just a couple clarifications.

Um so this is this is good detail, and in essence, it kind of gets to the point I was asking in the last meeting, but you know, what are the priorities in projects and for this next fiscal year you've identified um a handful of them?

And um, but just going to, for example, the um water system, 740 million dollar deferred maintenance, and your your budgeted project 8.5 million.

So uh do you have the same level or are or are you planning to provide the same level of detail that you've provided here for this fiscal year for all the future multi-year projects that shows the breakdown for 740 million?

Uh so for the fiscal year 27, 28, and 29.

If that's what you're requesting, then uh we can get that information.

I don't have it with me right here, but um, we do have a proposed uh five-year budget that is um we have a 30-year budget as well, but we have a five-year budget with um what we expect right now to be allocated, and we have um uh we've got we have it fairly detailed and we could identify future uh years and what deferred maintenance projects we plan to work on.

Yeah, I think just to know what's what's encompassed in the 740 million, how did you create that?

You're adding up several projects there, I assume.

Oh, and you might have to um if your projection was done in 2021, you may have to update that.

Right.

And um, yes, there's we didn't want to just put an escalator on that to bring it forward because um there's some costs that have gone up uh more than others, and uh and there and there is some work that we have done in the last couple of years.

So we'll have to so we will be working on a uh an updated number.

And uh just for clarification, I didn't quite understand this is just capital investments.

Does it include any staffing, operating cost um labor expenses?

Uh it it includes city staff.

It includes the staff costs to deliver those particular projects.

From a contractor for the from a contractor and uh for project development and delivery.

Okay.

And it would be helpful to know, um, given you've gone through the step here of identifying projects, what your criteria is for the priority setting.

So for example, these projects in fiscal year 25-26 are the the facilities just falling apart and they have to do you have to do something next year.

Um what was the criteria used to come up with these for this year?

Right.

Well, for example, the Freeport transmission main.

Uh we've had uh we've had leaks and and damages that have resulted for uh for on that on that extent of Maine.

Um it we don't want um we know that it's a 90-year-old pipe and it's in a state of of failure that was high on the list because of all the the breaks and the damages.

Um so we do we we are prioritizing we don't have a full asset management pro all the tools that come with a full fully functional asset management program, we're working on developing those.

There will be a prioritization tool uh once we have uh done more work on our asset management program.

Um for now we are um we are using um the knowledge from our from our staff and um and and using just different information, whether it be the age of of the infrastructure or um what we see when we video um uh pipes to you see what's happening in internally um so we are using uh various methods to um to capture the information and prioritize.

Uh one other question, it's it's more of a broader question, and it's um so you've got you've got for the waste wastewater storm drain, you've got the combined sewer system project, which is significant part of the city, and then you have a large part of the city that's separated systems, and um so is there a and a lot of that's underground as you as you're connecting to individual homes, and um is there a and I'm my my guess is it's over a hundred years old, um, but is there a kind of an end to useful life of that overall system where the repairs are so significant that um you know, does it make sense cost-wise, even um functional-wise, to change that at some point, or is it continue to be we're gonna have to repair it and repair it every every year?

We're just we're committed to the to the combined sewer system, uh storm zames sewer system, and it's just a matter of repairing every year.

Um well, we we would like to do more pipeline replacements um and funding is is the issue there, but um until we can fund and replace more pipe, we uh as there's leaks, we uh we repair those, whether it be um uh on let's say um whether I'm thinking of of water pipe where we will do a point repair or or um replace a section of pipe, um but uh yeah if there is a complete pipe failure then we replace the pipe um, especially if it's an emergency, do you want to add?

I think it's talking about separation.

Yes, it's talking about separation.

Are you referring to the possibility of separating the combined system and the cost associated with that?

I'm pretty sure it's expensive, but does it make sense to consider that?

How long can you really rely on a combined system before the repair annual repairs are so significant that it doesn't make sense?

Yeah, and we we do have some studies out showing the uh estimated cost of separation, it's mostly the construction cost, and it's in the 4.7 billion dollar range, and additional costs would have to be added on to that, and then say you can do that in a hundred-year period.

You're looking at 47 million dollars a year to do that, so that number is uh not sustainable or not achievable, so looking at our other methods when it comes to our gravity pipes.

We do luckily be have uh multiple tools to assess our pipes.

Uh, some pipes luckily will last much longer.

Uh if you do dig and disturb them, yes, maybe more will happen, but we do rate our pipes, and if we see multiple defects, uh, that will kind of trigger replacement over repair.

So we work very collaboratively with our operations and maintenance staff to ensure that the areas that they have a lot of high maintenance areas on, we can assess as a CIP and then balance with all the priorities which one which CIPs will move forward.

Okay, very good.

So, Michelle, I have another kind of going back to the priority setting question.

Um, using your example, the um transmission main replacement freeport or the Alhambra reservoir.

You've got some some cost associated with those for that will be um say longer term improvements to enhance those those areas.

Um can you provide information?

And you said that they're becoming um significant repair costs every you're having breakage and lots of leaks, and can you just uh provide what those costs have been to make that um kind of the priority to focus on a longer term fix?

I think that's I think at a good example would be helpful that if you had to continue doing um interim replacement and and repairs, is that going to be how costly would that be compared to this investment in this project?

I have um one other kind of comment about the combined sewer and the separated sewer.

Um is are the projects so this would be going back to the kind of kind of long-term, how many of these projects that that uh that comprise the 740 million?

How many are in um I'm sorry, it's not in the water system, but in the um the other one that's a built 1.1 billion, how much of that is related to geographic areas of where the combined sewer system repairs and and replacements need to happen versus the separated system.

So, in essence, is there equity and and and I'm guessing that the all the city residents pay the same for that kind of fee on a monthly basis?

Is it are we gonna get complaints that well it's not fair with with all of the all of the uh maintenance and and uh CIP projects are in the combined sewer system and very few are in the separated system?

Do you have any any insight about that?

Uh we do try to make sure that we're investing in most of the city.

The combined system does tend to take a lot of resources.

Uh so there are other things that we keep an eye out for is grants and other opportunities to support other areas of the system.

One of the projects that are listed on there, the Del Paso Boulevard infrastructure sewer improvement, that's in association with the grant, and that was a great opportunity for us to replace uh a long line of our backbone for that entire basin.

The pipes are over a hundred years old, so with grant funding, we were able to go in and be able to make sure that that can happen, with an eye being able to also to support future growth.

So there's um some capacity improvements there.

Well, and it will benefit the entire basin, not just one little location that they're trying to identify for improved development.

And we will also keep an eye out on our separated system.

We have much more data on our separated system and uh a ranking system, at least for the gravity pipes.

We're starting to work on our force mains as well.

The 85 force main is also in the separated system, so we're investing a large amount of effort in that area too, because we tend to have better data for it.

A lot of times in the combined system, it's just pipe replacements, but then our pumping plants and our treatment facilities are just a higher dollar project, so it looks like you're putting a lot more money in the combined system, but right now we have a good spread of allocations in all of the basin.

Well, I shouldn't say all both the separated and the combined system.

All right, thank you very much.

I just have uh one quick ask for our CIPs.

I'm always curious about where they're located.

I mean, we get a little bit of you know the title, but it doesn't exactly tell us.

Do you guys keep a list where it lines up where the approximate address of each project is going on?

Um we could plot it on a GIS map, a GIS-based map.

Okay, and maybe we just put it in the binder or something just for a rough just approximation of where the projects are located because I'm always curious.

Some of them are large and you know where they are, but there's you know, I don't necessarily mean all hundreds of them, but just some of the larger projects, just visually see.

Thank you.

Thank you.

Um see here.

All right, thank you, commissioners.

Uh I'm sorry.

Or do we move on to the next item?

Yes, okay.

Sorry, I have to find my place.

Okay, thank you, commissioners.

Uh, this item is uh for review, and wait, I'm lost, or am I in the right spot?

Is this our presentation?

We're at okay.

So we just did the combined sewer thing.

I thought we did deferred main notes.

I'm on the wrong spot.

Okay, so we are moving on to item three.

Sorry, I apologize, guys.

All right, all right, thank you, commissioners.

This item is to review and comment only.

No vote is required.

We will now move on to the last discussion item, item three.

The presentation is the combined sewer system long-term control plan presentation.

Is their staff presentation?

My name is Roxanne Dilly.

I'm the wastewater supervising engineer for the Department of Utilities, and I will be presenting on the combined sewer system long-term control plan, what we commonly refer to as the LTCP.

I will provide an overview of the combined system, discuss the combined sewer system, long-term control plan, and how the CSS infrastructure needs are a significant rate driver for the wastewater fund.

The city's combined sewer system collects sewage and stormwater runoff in one pipe.

And this system is located in the older parts of our city, including downtown, land park, ESAC, and the Oak Park areas.

This system is regulated by the EPA's combined sewer overflow control policy and all discharges to the river for our combined system are covered by a combined sewer system, national pollution discharge elimination system permit.

I will provide an overview of the combined system treatment, the city's progress in the treatment of the combined system, and I will provide helpful understanding on key terminology in the permit that helps explain how regulations can impact our wastewater rates.

So two key terms in our combined system and PDS permit are outflows and overflows.

Combined sewer overflows are flows not fully treated by a publicly owned treatment works that discharges to our Sacramento River.

There are two types of combined sewer overflows, or what we call CSOs.

There are treated CSOs.

These are discharges to the river with primary treatment occurring at the city's combined sewer system treatment plants.

Primary treatment includes bloatables and debris removal, disinfection, and declorination prior to discharge.

The untreated CSOs are discharges directly to the Sacramento River without any treatment and are allowed by the NPDS permit as long as our storage and flow requirements are met.

The other term, outflow, is when combined flow releases out of the complaints system onto the surface during surcharging due to either wet weather or from a system blockage.

All summer and dry weather combined wastewater flows and small to moderate storms generating up to 60 million gallons per day discharge to the Echo Water Resource Recovery Facility where flows receive tertiary treatment before discharging to the Sacramento River.

This is considered stage one of three types of combined system discharges to the river that are covered under our NPDS permit.

Stage two discharges are the treated CSOs, where primary treatment occurs at the city's two combined wastewater treatment facilities, CWTP and Pioneer.

These treated CSOs typically occur with storm events greater than one inch in depth or high-intensity storms producing flows from 61 million gallons per day to 380 million gallons per day.

Stage three discharges rarely occur and are the untreated CSOs typically discharging to the river at the sump two outfall location.

These untreated CSOs can occur during prolonged or rare frequency storms that exceed CWTP or Pioneer's treatment capacity.

There has been one untreated CSO in the last 10 years that occurred on an historic rain event on October 24th, 2021.

Since 1991, the city has been tracking the volume of CSOs from Pioneer and CWTP.

The red color represents untreated CSOs, while the blue color shows the treated CSO.

The city was treating about 54% of the volume of CSOs until 1998.

Since 1998, the city has invested in combined sewer system facilities to their pump stations and to our treatment facility and was completed in 2001.

And this graph demonstrates after the completion of these projects a drastic reduction of untreated CSOs into the river.

For the overall performance for our regulatory compliance, the city is to achieve the permit obligations of minimum of 85% treatment of annual average flows.

Performance of our system between 2002 and 2025 is 98% treatment of annual average flow, and that is a key benefit of our combined system.

Our combined system facilities rehabilitation and replacement efforts are critical to staying in compliance, maintaining continuity of operations, protecting public health, and supporting the long-term resiliency.

So the city is doing adequate work on achieving CSO treatment, but the NPDS permit now requires the implementation of the long-term control plan for continued progress in the combined sewers.

Excuse me, the combined sewer system.

The long-term compliant long-term control plan requires the city to ensure that CSOs do not exceed applicable water quality objectives and to manage the flow capacity of the combined system to minimize CSOs and outflows.

So our current goals of our long-term control plan focus on the outflows or flooding, which is to minimize street flooding during a 10-year design storm and to prevent structure flooding during a 100-year design storm.

A computerized hydrology and hydraulic combined sewer system model has been the primary tool to demonstrate progress in reducing outflow volume.

Historically, modeled flood volume has stood as a proxy for outflow volume, and this is because when the combined system reaches capacity, the model cannot distinguish between stormwater that cannot enter the system and combined flows outflowing from the system.

A combined sewer system improvement plan was developed and identified 29 potential storage projects and two programs to reduce flooding and outflows.

The long-term control plan and this combined sewer system improvement plan, or CSS IP, were used interchangeably.

However, the CSS IP did not address rehabilitation or replacement for critical facilities or pipes.

With the current LTCP requirements focusing on existing system capacity improvements, the total remaining estimated cost is $543 million, where $362 million is for storage and conveyance costs and $181 million are for two program costs.

The city has worked on phase one projects and has expended 41.6 million dollars.

And it is important to note that our deferred maintenance includes the long-term control plan's storage and conveyance costs.

The long-term control plan utilizes an adaptive management strategy to continuously refine the information and accuracy of our tools so that we can further refine our long-term control plan.

The adaptive management process is informed by evolving technologies such as smart covers, our CCTV data, hydraulic modeling, and its predicted flooding, recent new development impacts, field observations, and customer complaints.

The current NPDS permit also required the city to recalculate our design storms with updated precipitation data from the region.

This updated precipitation data resulted in a 10% increase in rainfall depths during the 10-year design storm, which is what is used for the long-term control plan projects to design.

Demonstration of flood volume reduction progress of the phase one LTCP projects is overshadowed by this increased rainfall depth and therefore runoff volume.

With nearing completion of the phase one LTCP projects, and this issue of measuring flood volume reduction progress of the 10-year design storm being a moving target, the adaptive management process are revealed to need revealed a need to update the long-term control plan to balance the rehabilitation and replacement projects with the outflow mitigation projects so that priorities focus on protection of public health, ensuring compliance with water quality objectives, and to maintain asset reliability.

So the city has proposed to update our long-term control plan, and instead of solely focusing on eliminating modeled flooding, the city proposed to prioritize projects that will result that will result in long-term system resiliency that ensure in this in the future the city can continue to maximize CSS flows conveyed to the Echo Water Facility, minimize untreated CSOs, and minimize the frequency and volumes of outflows with the greatest risk to public health.

With uncertainty regarding climate change, the city needs to prioritize and sequence where appropriate those infrastructure projects that provide the greatest or fastest environmental and public health benefits.

For the combined infrastructure needs, I will cover the CSS and PDS permit compliance program, the CSS pump and treatment facilities rehabilitation and repair program, and the combined sewer system pipe rehabilitation and repair program.

The combined system NPS permit compliance program is focusing on the capacity improvements to reduce flooding and capacity surcharges.

As noted, it's 362 million dollars.

The long-term control plan and its partnered combined sewer system improvement plan projects projects and programs do not eliminate total volume of modeled predicted flooding from a 10-year design storm.

The remaining model flood volume for the updated 10-year design storm would cost two billion dollars, which is not a feasible strategy.

So we will move forward with conducting real-time monitoring for observed outflows to ensure we're putting the right projects in the right places.

As mentioned earlier, the combined system pumping and treatment facilities rehabilitation and replacement program is critical for regulatory compliance and to protect public health.

An upcoming significant improvement needed is the Pioneer Resin War Treatment Facility Roof Rehabilitation, where we have one option to repair the roof, which would extend the service life 25 to 35 years, or an option to replace the roof that will extend the service life 40 to 55 years.

For the combined sewer system pipe program, this is our oldest infrastructure with approximately 154 miles of pipe older than 100 years old.

This places these pipes at higher risk of failure with emergency projects since 2021.

There has been 14 million dollars spent on emergency projects, where 9.2 million of that was in the CSS.

So I will conclude with the combined sewer system challenges.

Aging combined system infrastructure requires investment to reduce emergency repair needs.

Changing regulations and climate change considerations create uncertainty on resiliency.

Ensuring continuity and operations of treatment, storage, and pumping facilities is critical, and prioritization and sequencing of projects will be dependent on the new NPDS permit.

Thank you.

Thank you, Clerk.

Are there any members of the public who wish to speak on this item?

Thank you, Vice Chair.

I have no speaker slips on this item.

You are there any commissioners who wish to speak on this item.

Commissioner Johnson.

Thank you.

That was an excellent presentation.

So thank you very much.

My question is related to the tenure design storm, and you mentioned it's a moving target, and you have requirements to use certain types of precipitation forecasts for that.

Do those forecasts that you're using or required to use include climate change as part of their modeling forecasts on the precipitation precipitation levels you're working with?

So the precipitation update we did that showed the 10% increase, that was just with historical rainfall data for our region.

We also did do a climate change.

The data that we have right now for climate change is like worst case scenario, and that did show like a 20% increase over a certain range of period.

I don't have that memorized at this point in time, but it's pretty far out, so it was too much detail to kind of add into this.

But we did assess climate change, and we have that information available to continue utilizing with the projects as we move forward, but we need to work as a region to determine which level of climate change are we going to move forward with and all municipalities, everybody that has to utilize that climate change uh data to come to a consensus of what are we going to use to roll that out for information for for the general public.

Yeah, very helpful.

Um it seems, I mean, that's a big difference: 10%, 20%, and by the time you build the system, it's already undersized.

And that's the 10-year.

The hundred year didn't show as much of a change, which is good news for like structural flooding, but for us trying to make decisions and design projects for the 10 year, it's it it sets us up for failure essentially.

So we're working with our our regional board to come up with something that's gonna be more achievable, and then also trying to separate the combined sewer system improvement plan from the LTCP and focus on what projects can we verify is a greater risk of public health, and so far they have agreed.

We just have not agreed yet on our new permit of what design storms um are we going to be able to use to measure progress.

So we showed that we measured progress so far with our historical rain event, but once we did the precipitation update, it it canceled all the progress.

So um bringing in new technologies to help us determine how we can separate flooding versus outflows is our our next move that we're gonna be working on, but there's a lot to be worked out to make sure that we're not over taxing our our operation and maintenance crew for responding to any additional alarms.

Thank you.

Commissioner Train.

Thanks for your presentation.

I really appreciate all the work that you've done to kind of make this digestible.

Um I know that you know, if we had built Sacramento this year, we might not have separate done the system this way, but working with what we got, I really appreciate the amount of detail you presented, and this is a lot of money, but it's not 47 billion dollars.

So um moving forward, I'm I'm glad that there's a lot of work going towards it.

My question is on um the overview of um the discharges, uh the untreated discharges.

I think it's on slide six.

Um it shows that you know, in there there are two other years after the project was the projects were done in 2006 and 2017, where the total discharges were higher than 2022 without those untreated um CSOs.

And is that I just wanted to confirm, is that a question of like the magnitude of the storms?

Um or it could be a variety of things.

It could have been more storms, smaller storms, uh, where you didn't have any uh untreated CSOs.

We could have had a cell that parked right on top of the combined system itself, and we've had have had that where you just get more intensity that will result in a higher volume, whether it's a treated or an untreated CSO.

There's a lot of factors that play into it.

Okay, yeah, thank you.

And another plug for I think for the tours that you guys put on.

Uh, one of the last ones I went to was to um the heart what you call the sub two.

Yes.

Um, and I did appreciate, I think the the ONM folks work so hard there.

They're talking about, you know, their responsiveness during storms of watching like the clouds roll in and you got to turn their car and come right back and keep working.

So appreciate the work you do to prevent the CSOs.

Commissioner Olson.

Yeah, thanks, Roxanne.

Good presentation.

Uh, just a couple of clarifications here.

Um so have you experienced um any problems to date, conveying primary treated uh sewage from CTWP, what is it called?

WTP.

Yeah, and the or Pioneer.

And by the way, I appreciated the uh tour of that um to in the um CWP, what do you've heard of it?

CWP.

That plan on 35th Avenue.

And a better understanding of how how that material gets moved to Echo, the um SAC sewer project.

That's where everything is treated.

Is that my my that's that's my understanding of how that the goal is everything goes to Echo.

The goal is to get as much as we can.

They can't take everything during wet weather, so and they do tertiary treatment, which is exciting and it's great for water quality or for a dry season as well, because less space or urban runoff is not very clean, and so our all of our urban runoff in the downtown core is treated year-round.

So um just uh where is sump two A?

Maybe I saw that, but I didn't.

They're in the same location, so when we say sump two, the historic building is sump two, and then there's a newer building that's called Sump 2A.

There's a dry weather side and a wet weather side, it's all in the same location.

Um less pumps in Sump 2A, the sump two has multiple pumps, yeah.

And that's on Riverside and 11th Avenue.

Um, so I and my question is have you uh have you experienced any incidents where you could not convey that primary treated material to Echo?

So we don't convey the primary treated flows to Echo.

Normally those are going to the river.

Now when we are filling the reservoirs and we don't know if we're gonna discharge or not, treatment is occurring, and that will that will go to uh the Echo um facility, but when we're discharging to the river, that's the primary treatment is also going to the river.

We don't have difficulties conveying to the treatment plants, and then the discharge from the plants that infrastructure has been working for us, and we will be continuing to uh assess them.

Uh the CWTP will be getting a more thorough condition assessment coming up pretty soon.

We have the funding set aside for it, and a project manager set up for it.

So we'll be assessing those uh facilities in a little more detail, and pioneer has already been thoroughly assessed, and we're starting to roll out projects to ensure the serviceability of that facility.

So that SUMP 2, SUMP 2A has um maybe I get this wrong, but I think it has diesel generators like eight megawatts of power.

It's a beast, yeah.

We call it the heart of the combined system, and there's a uh flow control structure there to determine where flows are gonna go.

We try to send stuff to CWTP first because that's usually the dirtiest we call the first flush, and it has more of the settling basins, it has a better opportunity for um suspended solids and everything to settle out a little bit more in those basins, and then once CWTP is set up, then we start filling pioneer.

So those diesel generators operate only during the stations, yeah.

So during the events, is that correct?

Correct, and then if we have a power failure for some reason in dry weather, they it would assist to make sure that all of our flows are going to echo water resource recovery facility.

Which means in the events you can't have power interruption, which is my understanding why you're not really high on connecting to smudge.

I'm not an expert on our electrical connections.

I knew I do know we have redundant connections and we're continuing to work to make sure we have paralleling in there and smud versus as well.

If we do go offline our generators, I'm I'm sorry to interrupt right here, but we're going to need to take a vote uh to extend past the 7 30.

I know we probably have a quick few more questions and then that, but if we are going to continue beyond the 7 30 mark, we have to take a vote.

Okay.

So is there a motion because of council rules of procedure chapter 8 section D, subsection six, this motion is required to extend the meeting beyond the 7 30 p.m.

I would like to remind the commission that if the motion does not pass, we are obligated to adjourn this meeting at 7 30.

Is there a motion and a second?

I'd like to make a motion to extend the time.

All right.

Um do I hear a second?

Sir, okay.

We have a second.

Okay.

So um thank you, commissioners.

I have a motion by Commissioner Olson and a second by Commissioner to kill me.

Thank you.

Um will the clerk please call the roll for the vote?

Thank you, Vice Chair.

Commissioners.

Please unmute.

Commissioner Tenikella.

I'm sorry, was that a yes?

Yes.

Thank you.

Commissioner Gaspar?

Yes.

Commissioner Burdot?

Yes.

Commissioner Steinbaum?

Yes.

Commissioner Chambey?

Yes.

Commissioner Nelson?

Yes.

Commissioner Olson?

Yes.

Commissioner Johnson?

Yes.

Commissioner Tran?

Yes.

Chair Zito is absent.

And Vice and Vice Chair Mberley.

Yes.

Thank you.

The motion passes.

Okay, so to uh continue with that question.

Um, trying to remember where I was.

I guess one of the other questions I have is um uh to what extent you rely on modeling for what parts of this forecasting?

Just from uh weather data, or what what is the model actually the modeling work actually provide in terms of analysis?

So the model is pretty comprehensive.

It will do the hydrology, which will put in the design storms.

We could also put in our historical or we can after an event has happened, we can put in that uh rain event and compare to what our observations were.

It has uh a large portion of the collection system in it, um, and it's used to understand capacity essentially, and it could address a myriad of questions that come up.

Uh if we need to plug part of the system, it could tell us how long we can plug part of the system in order to do some maintenance work, and it will help us in uh assessing new development that's coming through to tell them what their uh hydraulic grade lines are so that they can comply with uh our our standards and we have um we've been using it for regulatory compliance, and I think that's all that's coming to me off the top of my head.

So did I hear in your presentation that it's also a factor in the estimated increase in capital needed?

For condition assessment, no, that's kind of a separate model.

We do have a model for that, uh, but for capacity related improvements, and because of the long-term control plan having such a large focus on existing system deficiencies, and we could also use it for uh deficiencies associated with growth.

Um we will utilize it for capital improvement projects, and we will utilize it when we're designing a capital improvement project to determine do we need to upsize it or will it make if if we do a change, will there be a negative impact somewhere else because of it?

And it will help us confirm our capital improvement project.

So I'm I'm I'm kind of getting to your confidence level and that that those modeling results, and why you at the end of your presentation you referred to the long-term system resiliency that you wanted to do real-time monitoring and in essence additive types of analytical things.

Yeah, so we can put smart covers out in the system and it can see raises in uh a manhole, and then we can calibrate our model.

So the model can either underestimate or overestimate, and we add these additional technologies.

We can continue to validate and calibrate our model.

And so the more data and accuracy we get in our models, the more confidence we have in in that model.

In some areas we're very confident, and other areas we know we need to do further calibration to have a better idea of what is actually observable and what is our model predicting.

And so, and you uh you have you have confidence in that approach?

Yeah.

Have you been uh what's how long you've been using that approach, that methodology, and uh what what have been the kind of comparisons of what actually happened versus what was modeled?

Um I have been working with the combined sewer system model probably for the last 10 years.

Uh it's predated me by several years.

It has changed the type of software because we've uh had better and better options in technology for software.

Uh I think Brett would have a better idea of when we first started modeling, but it was probably in the 90s, so 1990s, that's how long we've been working with these models and continuing to refine the models over the years.

What was your second question?

Well, I'm I when I hear modeling that's a key part of uh any kind of forecasting, which I can understand why you do it, and uh, but I also want to know what are the assumptions that go into it, what are the factors and how realistic are they?

So I like your idea of the real-time monitoring and some kind of reality check type of approach.

Yeah, we also install temporary flow meters as well, so we can calibrate the model.

Uh, there are assumptions that go into it as uh we get better information, we can update that uh to go into a full laundry list of those assumptions.

We would have to get back to you on it, but it's quite extensive.

Yeah, I'm um I'm interested in knowing whether um to what extent you're relying on your your assessment of what's needed based on modeling and how much money has to be allocated to address those projects versus are they does it square with your kind of reality check of what's really needed.

It is a planning tool, and we are finding often once you start diving into the details of a project, the project costs often do go up once we start looking at the details and actually planning a project, but sometimes the project is roughly around the same thing.

So it is just a planning tool to get you started.

Again, it's gonna be mostly for our capacity related improvements and not necessarily to be a separate item for dealing with our our uh condition related projects.

Okay, very good.

Thank you, Roxanne.

Commissioner Nelson.

Yeah, thank you, Mr.

Chair.

Um, also just want to express again appreciation to city staff for being here well past your usual hours.

I'm sure you'd rather be on your couch at home.

So we appreciate your your presence and your expertise in the room.

Um I have a question for city staff, and that might be a question for Mr.

Voss.

Um, since I'm a relatively new member of the commission, it would help me to sort of understand the um the box that this commission is in and our our purpose.

Um, you know, looking at the the commission charter, um, you know, it my understanding of our charge is that we're to react to sort of the rate setting process and the information you're providing here is to justify a rate increase proposal that will come before us at some point, but it'd be helpful for me to understand to what degree it's useful and appropriate for us to get into really nitty-gritty sort of city operational things versus sort of higher level.

I'm I'm new and would just sort of like to understand the confines of where it's useful and appropriate for us to operate.

Um Mike Voss, uh senior deputy city attorney.

Appreciate the question.

Um I did get a request from our DOU staff to do a presentation to this body on the rules and the responsibilities of this commission.

Um a good place to start is in the city code that you mentioned, and so I think the city code tries to draw a distinction between setting the rates and not delving into level of service, right?

And so um a good example would be for this commission to say um we approve a recommendation that would allow a Department of Utilities to provide a 10-year level of flood protection in the city.

It would not be appropriate to say we think that you should actually provide a five-year um level of flood protection in the city.

We don't like the level of service that you're trying to provide.

So that's that's it in a broad stroke, but of course um the two factors are interrelated, right?

The level of service and the cost, they they have something to do with each other.

So I will be returning with a presentation that kind of breaks down city code and maybe gives you a bit of an overview of why this commission was started in the first place to sort of help guide your thoughts as you learn about the system.

Um and really right now, um, I think Department of Utilities staff is here to educate you about the system, and so that's what all this is.

And it seems pretty nitty gritty sometimes, but I think it's important that everybody have their question answered, questions answered, and understand you know what they need to about the system and what Department of Utilities does.

So appreciate the question, and there will be more information forthcoming.

Yeah, thank you.

I appreciate that.

I this is deeply interesting stuff, and I would love to nerd out until midnight.

Um, but also want to be respectful of the commission's role and staff's time.

I just want to add in we um are planning to have Mike bring that presentation back in the next meeting in August.

Thank you.

Thank you.

So uh the next item on the agenda is commissioner comments ideas and questions.

Are there any commissioners who wish to speak on this item?

Okay, seeing them.

Um, okay, I guess, okay.

So adjournment.

Uh this concludes today's meeting agenda.

Thank you, everyone, for your participation.

The meeting is now adjourned at 7:38.