Chair Harris, staff is ready when you are.

Thank you very much.

Well, welcome everybody to the June 29th meeting of the Water Committee for the City of Sacramento.

Madam Clerk, will you please call roll to establish a quorum?

Councilmember Valenzuela.

Here, Councilmember Vang.

Here and Chair Harris.

Present.

Thank you very much.

I believe we've we've just got an hour, so why don't we roll right into item number one unless you have announcements to raise?

I have no announcements.

Very good.

So we can move to item one, which is a storm drainage survey update and an oral report.

Mr.

Buse.

Hey, thank you, uh, Chair Harris and uh members of the uh committee.

I'm Bill Buseith, uh Director of the Department of Utilities for the City of Sacramento.

Um we are going to have a presentation from our consultant team on the results of some uh survey work that we've done with regard to uh the feasibility and of our storm drainage rate adjustment.

Um next slide, please.

Um for some time we've noted uh we've known that we needed uh that we need a storm drainage rate adjustment.

Uh we had a an independent audit done on the uh on our drainage fund um back in May of 2020.

Um the outcome and findings were expected.

Um that you know uh around the year 26-27, we will be exceeding uh our revenues and and uh reserves, and the fund will go negative.

Uh we have a system that's valued at a little over $8 billion to uh that's what it would cost to replace it.

And we are not spending uh enough money on an annual basis uh to maintain that that system properly from a capital improvement standpoint.

Um they determined that a best practice would be that we would be spending uh at least 34 million dollars a year on capital improvements, and that uh we have a CIP currently a CIP backlog of about 300 million dollars.

That is based on uh the the current master planning that we've done, which is only about 35 to 40 percent of the system.

Next, and there you see the fund um going negative.

Uh, you know, about FY27.

Um this is no surprise.

Uh you know, we've messaged this before.

Um what is different is is that we've hired a consultant team to help us to move forward with the drainage rate adjustment, and one of their first um actions was to perform a scientific survey.

And so I'd like to go ahead and turn the time over to our consultant team now to uh present the results of that survey work.

I is Jared Boygan speaking.

Um Mindy, I'd like to ask if you could unmute the 415 number.

It's better if I speak from the phone.

Um, yes, I've sent you a request to unmute.

You need to do that yourself.

Okay, thank you.

Does that work?

And can you all hear me now?

Yes, we can super okay.

I appreciate that.

Um, so this is Jared Boygan with uh TBWBH props and measures.

Uh Bill said, I appreciate that my internet connection may be unstable on the video, but the audio will work this way.

Um we tested um a goal, we had a goal of trying to identify 15 to 20 million dollars uh annually uh as a uh fee that would be paid by industrial commercial and residential property owners.

Um and the best practices for currently calculating those fees are to base it on impervious surface, um, which is a little different from how the city has done it in the past, which is based on whim count.

The goal of such a fee, as Bill, I know has and his team have explained many times to this group, protecting our local drinking water quality and supplies, including safe clean water for droughts and emergencies, preventing toxic chemicals, sewage, and even human waste from impacting rivers, creeks, and overflowing on a neighborhood streets, and that's particularly important in the older areas of the city where the combined system is in place.

Obviously, replacing aging and deteriorating pumps, water pipelines, et cetera, that prevent flooding and protect our local rivers.

Next slide, please, Tara.

So in this survey, and in a minute I'll turn it over to Kurt Bailo from FM3 Research.

He's going to walk us through the results.

I'm just going to describe a little bit of what we tested.

We tested three different variations or alternatives for the survey for the potential fee.

One is simply to replace the existing room count revenue stream with a new structure based on uh impervious surface, which more or less holds city revenues constant.

It would hold property owners' fees more or less the same, although you know, when you shift a cost calculation like that, obviously, you know, some people pay a little more, some pay a little bit less.

But basically, that's a replacement only scenario.

We viewed that as just kind of a data point to test.

It obviously doesn't generate new revenue for the city.

Um, an increase only, which is leaving the existing revenue stream in place and establishing a new structure, a new fee, new property fee based on impervious surface, um, as I described, you know, hardscapes, et cetera, uh, that would generate new city revenues in the amount of about 20 million a year, which is what we tested in the survey.