All right, good afternoon, everyone.

Welcome to the Environment Committee meeting of April 16th, 2026.

Our committee liaison, Sarah Jordan will provide information and instruction for the public to participate in today's meeting.

Sarah, please proceed.

Thank you, Chair Ylo Rivera.

While members of the public are able to attend the meeting in person, the speech meeting is being televised and live streamed on the city's website, and Council Administration will continue to make arrangements for the public to comment using the Zoom webinar platform.

Members of the public who wish to provide testimony via a call-in or internet-based service option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first.

This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business.

Council President Lacava.

I am present.

Also attending the meeting today is City Attorney Representative Nicole Dino, Mayoral Representative Randy Wilde, and IBA Representative Jordan Moore.

And if you're in person, please complete a speaker slip located at the entrance of chambers and place it in the speaker slip box at the table at the front of the room.

Please do so in a timely manner to ensure proper meeting management.

Members of the public can join the webinar by computer, tablet, or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's webpage.

To join the Zoom webinar by telephone, please dial 1669, 2545252 and when prompted.

If you wish to speak to a particular item, please wait for that item to be called and raise your hand by tapping the raise your hand icon on Zoom, or if you're calling participant by selecting star nine on your phone.

If you raise your hand during non-comment period, your hand will be lowered, Chair.

Thank you, Chair.

Per rule two point seven.

Per Rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but are within the subject matter jurisdiction of this committee.

Each speaker will have two minutes.

We will begin with slips we've received here in chambers.

We will begin with Nate Fairman.

Nate, you will be followed by Mark, Rao, Patrick, and Catherine.

I will call those names again.

But if those individuals, if you heard your name, if you can please come up to the reserve seats at the front of the room and please begin.

Hi, good morning, uh council members and staff.

I just want to start by saying thank you.

I I really appreciate all of your hard work from the city council members to the staff to the people that work behind the scenes.

You have uh an impossible job.

Whatever you do, there's going to be people on one side or another side, but you still move forward.

You still put stuff on the agenda, you still continue to make decisions that improve the lives of your constituents.

It does not fall short on me, and I just want to say thank you.

I know you make a lot of sacrifices living in the public eye, working for the public good.

So, from the bottom of my heart, from on behalf of my family, I just want to say thank you for everything you do for your many sacrifices and for being, you know, honest, hardworking public servants with high levels of integrity.

Thank you so much.

Thank you.

Our next speaker is Mark O'Connor.

Hello, council members.

My name is Mark O'Connor.

I'm a volunteer lead for Surfrider San Diego County's plastic pollution program.

Surfrider is interested in reducing and eliminating the pollution caused by the senseless litter of cigarette butts.

Worldwide, it is estimated that 4.5 trillion filters are carelessly discarded into the environment each year.

I've personally collected thousands of filters in my eight years as a volunteer in cleanups.

This container holds over 2,000 cleanups that I collected for a project that I picked up in two days in the Incinitas area.

A filter is made up of 15,000 small strands of cellulous acetate, a form of plastic, which is a single-use product that, when finished being used for smoking, contains heavy metals and toxic chemicals.

Surfriter San Diego is in support of any policy that stops this form of plastic from entering the ocean.

Some remedies are ordinances to prohibit public smoking outdoors.

The thought is the lower number of places to smoke equates to the less number of butts on the ground getting into our storm drains and out to the ocean.

We've seen recent legislation that removes the filter from the cigarette is going into effect in Santa Cruz, Capitola, and Santa Cruz County effective January 1st of 2027.

Currently there are four cities in the state have solved the problem of butt pollution by prohibiting the sale of all tobacco products.

Those are Beverly Hills, Manhattan Beach, Ross, and Tiburon.

Surf Fighter San Diego is part of the San Diego Tobacco Free Coalition, which has other environmental health county and academic partners.

As a member of the coalition, I am here to offer any and all of the coalition's resources and expertise to you as you decide what would be best for the City of San Diego's environment and the health of its residents.

If you would like a staff member to contact me, my contact information is on my speaker slip.

Again, it's Mark O'Connor, and I thank you.

Thank you.

Our next speaker is Ron.

Ron or Rao.

I'm not sure which Ron.

Thank you.

And I've got a handout.

Good afternoon.

I'm Dr.

Ronald Aswin, conservation chair of the San Diego Sierra Club chapter.

When you go to the beach, the number one thing you see is sand.

The number two thing you see is cigarette butts.

Cigarette butts are, as Mark mentioned, are made of plastic that forms microplastics, they're contaminated with nicotine and heavy metals and other dangerous materials.

A single cigarette butt can contaminate up to 1,000 liters of water.

These pollutants impact wetlands like Candlefrost March and Mission Bay, harming fish, birds, and other forms of wildlife.

It's a toxic form of pollution that releases chemicals into the environment, harming the health of humans and wildlife.

It's time to stop relying on costly and ineffective cleanup efforts and adopt evidence evidence-based policies that prevent tobacco product waste at its source.

As Mark mentioned, there are many different options to address it before it gets to the streams before it gets to the ocean.

So would like you to start thinking about how we can do a better job to keep tobacco product waste out of our wetlands, out of the ocean.

Thank you.

Thank you for your comment.

Patrick.

Hello, uh, good afternoon.

Uh, my name is Patrick McDonough.

I'm the senior attorney for San Diego Coast Keeper.

Thank you for the opportunity to provide some non-agenda public comment today.

And as I'm sure all of the members of this committee are well aware, we're still looking at nearly a $5.1 billion deficit for the stormwater department.

Stormwater, uh, at a at first blush looking at this budget, it looks like it didn't suffer any great cuts, but then digging into the details.

The draft budget includes 1.9 million dollars in new funding to finally address some of the lingering issues of the San Diego River levies.

And that means, of course, that other aspects of the stormwater department were cut.

So I wanted to flag a couple for you at the beginning of this process.

First, uh channel maintenance is cut by 430,000, and pump station maintenance is cut by 230,000.

Coastkeeper couldn't uh oppose these more strongly, particularly in the face of a super El Nino that folks are starting to speak about that is brewing uh that is typically conducive to heavier and more frequent rainfall during next wet season.

Uh the new budget also proposes a 237,000 dollar cut in wetland mitigation, 535,000 to the water quality monitoring program, and then another almost 200,000 in ThinkBlue education and nonprofit partnership funding deductions.

Oh, and the loss of four staff.

In order to get a get out of this massive stormwater deficit, we need to continue with public education.

We need to continue with these programs because it ultimately, due to Prop 218, will come down to a vote, and you need the public support in order to get the funding that that stormwater department so critically needs.

Thank you so much.

Thank you.

And our final speaker here in chambers is Catherine Rhodes.

Hello, Catherine Rhodes, and I want to talk again about my um mine and Mandy Hamfflix ballot measures for um that would literally solve your structural budget deficit.

This is a quarter billion dollars in revenue, quarter billion.

The first one is the 125 million dollars in current um TOT revenue from the existing 13.2575% TOT that you're gifting away online travel agencies because of wording changes, just little legal wording changes.

So the wording of our measure one, amending municipal code section 350102 transit occupancy tax definition for operator and rent.

Shall the municipal code section 35.0102 be amended to confirm equal treatment of traditional and online hotel bookings by including online travel companies and third-party agents in the definition of operator, and by including the untaxed hotel fees, such as resort fees, destination fees, cleaning fees, pet occupancy, spa fitness center usage, early check-in, late checkout, internet Wi-Fi fees, or similar items paid for by visitors in the definition of rent.

Wording changes 125 million dollars, you're losing right now and you're gifting away.

It it it's it's a shame.

Um, our measure two is a two-part measure.

Our two-part measure, um, and the reason for this is because the existing convention center measure C that we voted on that we started collecting taxes on last year.

Um, we started collecting and getting $77 million in taxes last year, is going to go away in nine years because if you don't take out convention center expansion bonds within nine years and start your construction of it, you're going to lose that 3.25% TOT that we are what we voted on, and you guys fought for for so long.

And so this is like a pre-emptive strike to it.

And so it's basically repealing um the convention center and putting on a 4% TOT that's directed.

Thank you.

Thank you.

This concludes testimony here in chambers.

So I'll begin the five-minute timer for all those in the virtual queue to indicate if they wish to provide non-agenda public at this time.

We currently have three hands raised at the start of the five minutes.

Blair Beekman, please unmute and begin.

All right, thank you, Blair Beekman.

Thanks for the meeting today.

Sounds like a good uh good uh public uh showing for the committee meeting today.

Thank you.

I got it out of my mind there.

I was able to say the words.

Um, I wanted to comment that um a really interesting item on uh working on stormwater issues yesterday.

Uh new underground piping that has some sort of filtration system that goes into uh marshlands, grasslands or marshlands eventually.

Uh all the council persons were really uh happy by it.

I mean, just in just a serene happiness, you could hear uh them talking about it.

I'm interested how that item uh can relate to uh border issues with Mexico and their water concerns, uh, like with Tijuana River Valley issues.

Um, you know, there's just been a continual.

I mean, I I lived here back in the late 80s.

The dialogue with Mexico on these water issues was exactly the same in terms of uh, you know, what what we would ask for and problems developing, and yet they it felt like they weren't really wanting to work on it or have their own way of working.

Really good luck that this is a time to kind of work on those patterns and work on coordination and understanding and dialogue, and um man, we do that sort of work.

Um, good luck what that can be developing if we concentrate on those kind of ideas.

So good luck on that effort.

Um, there I have noticed there is uh on a lot of uh public meeting agendas recently here in San Diego in the Bay Area.

Uh wildlife concerns have come up and how um surveillance tech relates with wildlife uh issues and you know, trails and stuff like that.

So good luck.

Um, there can be really good examples from the city of Davis near Sacramento.

They've always had really good practices with tech around wildlife issues.

Good luck in those sort of references at this time.

Thank you.

Thank you for your concluding remark.

Phone number ending in 870.

You can unmute by pressing star six.

Uh thank you, Sarah.

Joy Sanyata C D3.

I felt a need to make further comments on the following modular wetland system, stormwater system, clean water loan for Choyous Creek and so forth from last Tuesday's city council meeting.

I studied the items back up more thoroughly this time and researched modular wetlands, which is very interesting.

The only concern I have after reading uh Google's points on these modular wetlands is the maintenance that is required for the modulars modulars.

Uh Google says that very special training is needed to do the annual maintenance of the modules.

I guess it's very tricky to get inside of them or something.

They didn't go into detail of what the training required, but it sounded uh special and perhaps expensive.

Um I learned something new in seizing this opportunity to say more on this.

And number one, sometimes I need to study the backup material more thoroughly.

Uh number two city council committees vote can be just the beginning step of a tall ladder to start of construction and to get to completion.

Yet I enjoy the small leap from step one to step two.

And as Nike says, just do it.

And you did it.

And I thank you so much on that item.

And thank you always for uh being there for us and listening.

And that gentleman at the very beginning of the non-agenda public comment sent something very beautiful to you.

Uh okay.

Thank you.

Love to all.

Thank you.

Our next speaker is Madison.

Hi, thank you.

This afternoon, I just wanted to talk about an environmental impact that gets overlooked as you consider the seed program and the expansion of marijuana storefronts.

We've already seen what happens when widely used consumer products outpace responsible waste systems.

Cigarette butts are the number one littered item in the world.

They wash into storm drains, end up on our beaches, and pollute our ocean.

What many people don't realize is that those filters are plastic, not cotton.

They break down into microplastics while leaching toxic chemicals like arsenic, lead, and nicotine, poisoning marine life and contaminating our waterways.

E-cigarettes and vape devices have made this problem even worse.

They introduce single-use plastics, heavy metals, and lithium batteries into our environment with very limited recycling options.

Many end up as litter in our communities or in landfills where they can leak chemicals or even cause fires.

Now we are on the verge of significantly expanding access to another inhaled product category through the seed program, one that also relies heavily on disposable single-use packaging and vape devices.

More storefronts would mean more consumption.

More consumption means more waste, more cartridges, more packaging, more batteries, and more toxic materials entering our environment.

And just like tobacco, much of this waste will not be disposed of properly.

Our storm drains, beaches, and open spaces will bear the burden.

Before expanding this industry, we should be asking do we have the systems in place to manage the environmental consequences?

Right now, the answer is no.

Thank you.

Thank you for your testimony.

The five-minute timer has expired with two hands remaining in the queue.

We'll take no other callers beyond these remaining two hands up.

Peggy Walker, please unmute and begin.

Thank you.

Um, you just heard from the previous speaker about marijuana pollution, and it does appear the mayor may have eliminated the proposed socially equitable uh marijuana or seat program from the budget, and I thank him for this and its cost-reducing impact on the environment.

I'd like to add to what's already been said about marijuana pollution's impact.

People tend tend to think about marijuana's environmental effects in terms of manufacturing the chemicals, water, energy, et cetera.

But research shows outdoor and indoor grows both are significant pollutants.

Studies show that growth release volatile organic compounds at more than double the existing rate of VOCs in the atmosphere.

This is concerning because VOCs interact with other contaminants to create ozone and unstable toxic gas.

Indoor hydroponic systems may sound like a win for the environment, but contaminated hydroponic wastewater treated with a range of nutrients becomes a pollutant when discarded, it seeps into water systems and can devastate ecosystems.

It can cause excess phytoplankton and algae blooms, depleting oxygen levels and releasing toxins.

Cannabis hazardous waste is especially problematic.

It interfaces with landfills, releasing harmful VOCs again into the air and polluting water supplies.

Further, the millions of cannabis vape pens making their way into landfills, produce all types of polluting waste.

So from an environmental standpoint, eliminating a seed program that adds more marijuana business pollution and hazardous waste.

Eliminating that program is a plus already.

Thank you.

This does conclude your time.

Thank you for your comment.

And the final speaker in the queue is Kathleen Lippett.

Thank you.

Good afternoon.

Thank you for letting me speak.

I would with respect.

I would like the city to consider.

I know the state has not, however, the city has the option of making policies more stringent, not less stringent, but more from the state standard.

If they think it's too generous or too faulty, they can make tweaks to it, and they should.

Typically on behalf of increasing revenues.

One of the hallmarks of a good leaders is that they admit when they make mistakes.

It's how a person responds to those mistakes that tells you who they are, permitting things like a ceramics factory next door to a couple who's lived there for years.

Uh is is a mistake that the city should never have allowed to happen and could still remedy.

One of the things one of the environmentalists that has looked at the harms from cannabis farms that poison California's forests, parks, private uh lands, said that law enforcement rated illegal cannabis operations in Shasta and Trinity County before, but rotting potatoes still fat on the growers making makeshift kitchen workshops.

Ecologist Greta Wangbert stared down the pockmarked hill of a pile of pesticide sprayers left behind long after the raid.

Wild animals had gnawed through the pressurized canisters releasing chemicals inside.

Thank you.

This does conclude your time.

Thank you for your comment.

And Chair, this concludes non-agenda public comment.

All right.

Thank you so much.

Thanks to everyone who participated.

With that, we'll turn to committee members, the mayor, city attorney, and IBA to see if there's any non-agenda comments.

Council President.

Thank you.

I must be a great leader because I've admitted to an awful lot of mistakes.

So with that, I want to quickly highlight that at yesterday's California Coastal Commission meeting, uh, the commission unanimously approved SeaWorld's application for drone shows.

For the past year or more, SeaWorld has been working with the commission and my office on a year-long pilot program to replace their summer fireworks with drone shows.

This is an issue close to me, as for years.

My constituents, neighbors, friends, and family hear the nightly fireworks shows that SeaWorld hosts during the summer.

While these shows have entertained SeaWorld's park visitors, many San Diegans have voice their desire for fewer fireworks, and more importantly, alternatives that are less impactful to pets and the environment.

I want to thank SeaWorld San Diego and especially their park president Tyler Carter for their willingness to evolve, listen to residents and work with the city and the commission to introduce drone shows at the park.

SeaWorld continues to innovate and in doing so adapt to the desires of San Diegans and uphold our environmental values.

And for you for those of you who follow the commission, this is the first time that the Coastal Commission has uh permitted a large-scale drone size show of this size.

Uh so it will set the template for drone shows uh and replacement of our traditional fireworks displays.

Thank you.

Thank you, Council President, and uh great work with that.

I I think um took a lot of effort, and I know that that's one of those things that um folks kind of just accepted as permanent because they had been the way they were for so long.

Um, and and your engagement, your team's engagement um definitely made a difference there.

And um I I will also say that I appreciate um that SeaWorld heard heard what you said.

Um and I think the leadership of of Mr.

Carter um is actually really important on that front.

Um since Tyler came to uh San Diego, there's a very different relationship.

Um prior to that, we were banging on their door and taking them to court for unpaid lease uh for an unpaid lease.

And um, you know, now they're coming to the table to have conversations that they wouldn't even entertain um and not just talking about it, but actually doing something.

So um thank you uh to Tyler Carter.

Uh thank you, Council President, for your work on this.

And I'm glad that there will be um some there are many, many benefits from um people who won't be triggered by that sound.

Um, the animals, uh the wild animals that won't be impacted, and then all the the um the the doggies in the neighborhood that um won't be hiding under beds um on a nightly basis.

Um so uh great work on that.

I don't see any additional requests to make non-agenda comments, so I will see if there are any requests for continuance.

Does not look like there are and we will now move on to our agenda beginning with our consent agenda.

Um there any requests to pull.

All right.

Uh Sarah, please proceed with public comment on our consent agenda.

Thank you, Chair Elo Rivera.

The public comment period for the consent agenda is now open.

The consent agenda includes items number one through five.

Item one, approval of the committee minutes from March 12, 2026.

Item two, agreement with JEB Sand and Gravel to furnish city departments with trench restoration fill materials.

Item number three, proposed update to council policy 400-04, emergency storage of water.

Item number four, amendments to chapter six, article four, divisions one, two, three, and five of the municipal code, all related to the industrial wastewater control program.

And item number five, establishing the third franchise compliance review committee.

Each speaker will have one minute with a maximum of three minutes to speak to the consent agenda, if you so indicate all items.

We've received two slips here in chambers, both from Miss Catherine Rhodes indicating you'd like to speak to item two and three.

So I will place two minutes on the clock up here for you to manage to speak to those items.

Hello, this is Catherine Rhodes, and this is part of Midway Rising or what I would want to be with midway rising.

Under um we are sitting on a gold mine that we don't acknowledge, and that is our sand and gravel that we have on our reclaimed tide lands that comes from the dredging of San Diego Bay.

It's all over the Midway area, the airport, um Pacific Highway.

And right now, we or Sandeg at least, um, brings in sand and gravel from Canada.

Comes in a bar from Canada, comes here, goes to the stores, and then you guys buy it.

You're now gonna buy 57 million dollars worth of sand and gravel when we have the sand and gravel sitting there unused under our feet, and everybody thinks that we can't use it.

And the reason for that is because um these maps called the mineral resource zones.

And back in the 80s, um this was mineral resource zone.

It was it it was number uh MRZ one because it was an urbanized area, not because the sand is not good.

This is good sand and gravel we're sitting on.

So if we actually had underground parking at Midway Rising, we could actually take that sand and use it on our beaches um to uh help against um uh uh you know cliff collapse and retreat.

And then the second one here for the um for the water storage or the the water thing that you have here.

Um it looks like you're going from like seven months worth of water storage down to to two months, and that seems a bit drastic.

I think two, you know, I could see maybe four months, but going from seven months all the way down to two months.

It seems like what's going to happen is all our um reservoirs that we have right now are going to be dry, and then we won't be able to use them for recreation.

So I would say do not just have that that little amount of um water.

I don't think that is prudent.

Thank you.

Thank you.

That concludes testimony here in chambers.

So beginning the five-minute timer for all those to indicate in the virtual queue if they wish to provide comment on items one through five.

Phone number ending in 870.

You can unmute by pressing star six, and if you would please indicate which item or items you'll be speaking to.

Uh thank you, Sarah.

I'll be speaking to two, three, and five.

Three minutes for you to manage, please begin.

Thank you so much, Joy Asunya to C D3.

Uh I chose two and three.

I was only going to do five, but after hearing Catherine Rhodes just speak and listening to her.

I know Catherine's work, I believe, since 04 or 05, I guess is better.

And especially at CCDC and you know, through other uh meetings.

And uh I hope I say this right, Catherine.

She's an engineer.

I don't know what part of engineering her expertise is there, but uh President Alacava, uh, I know you get that.

Uh and uh gravel first.

It it just sounds like a good idea.

Like she really, really is saying some great stuff.

So are we really listening and trying to apply at least pieces or really setting down with her and and figuring out what how you two can partner?

And the same goes for three.

You know, uh she just she's stuck talking about the you know storage of the water, and I didn't review that item, I didn't have time, but uh I I just think that what she says, it makes common sense to me that reducing it to two uh would would have impacts as she is stating.

So I I I wish there would be uh maybe there is a partnership, but I I wish I could hear Catherine say that.

Wow, thank you, that happened.

So anyway, on five though, which is really my item, uh, yes to establishing the third franchise compliance review committee to oversee compliance, yes to the independent audit, auditors audit on this.

Um you think we needed a discussion on this?

It it just sounds like a real juicy uh thing that the public would really need to hear and have discussed, and that'll probably pop up pop up on consent at city council.

I don't know, but I love this item.

I say yes to this item, uh, and I know you'll say yes to the consent probably.

It's it's all good.

So thank you for listening in love to all.

Thank you for your testimony.

Our next speaker is Catherine Lippett, and Miss Lippett, if you can please indicate which item or items you'll be speaking to.

I would like to speak to just one consent item, and it's about the environment, it's about the sand that uh that Catherine Rhodes spoke to.

She really would she speak, she has a uh a candor and a uh trustworthiness that is very refreshing these days because there aren't very many people who seem to who seem to reflect a very honest uh and deep understanding of the issue that she is speaking about.

So I hope you will listen to her on the sand issue.

She really does sound like she knows what she's talking about.

She sounds like she might be, if you're going to replace any of your city employees, she probably would do very well.

And you could probably eliminate some of the ones that aren't doing these kinds of jobs.

Thank you.

That's all I wanted to say.

Thank you.

Our next speaker is Blair Beekman.

And Mr.

Beekman, if you can indicate which item or items you'll be speaking to.

Items one and two.

Two minutes, please begin.

Thank you.

Uh, Blair Beekman, uh, believe it or not.

I also had nice words for Catherine Rhodes.

Uh she's been doing her work for years here at uh public meetings time, and um she's gotten better and better at it.

And uh, so a really good report from her today.

I wanted to ask and comment uh in working on um you know the future of of the sports arena issue area's uh concerns, so the housing development uh concerns there.

You know, she's offered a good idea, but is there a question of sea level rise issue overall that has to be taken into account in the future of the building of that project?

And um, what exactly does you know what part does that play in all of this?

And and as uh San Diego is taking this to court recently.

What what does that is that being spoken about?

Is that being addressed?

And should it be?

I'm not fully sure, but I'm not hearing from the city that it is an important factor when I think it is.

So good luck that we make the sea level rise issues for the future of this building project that Catherine Rose was saying we can get so much additional sand and gravel from at this time.

Um, that we were clear exactly what the future of that project can be and if it can be manageable or not.

And um I I don't know how applicable my words are, but I think they need to be uh addressed, and good luck that we can.

Um, to comment also on the previous uh public meeting uh on this uh in March, we talked about uh undergrounding uh cable issues, a really important item that uh good luck how we're working on that.

And thank you for your time.

Thank you for your testimony and the the five-minute timer expiring and no other hands in the queue.

This concludes comment on items one through five.

All right, thank you, Sarah.

Uh, we'll turn to Council President Lukava.

Nobody else to turn to, right?

Uh you're telling me uh a couple of things.

Anyways, sir.

Yeah.

Uh a couple of things on the consent uh for joy.

The reason that I think the franchise compliance agreement is uh committee, excuse me, is on consent because that'll be the third time we're doing this.

Uh and the juicy one is actually item 10, where we get a report from the current one.

Uh that's what you really want to listen to.

Uh, as first vice chair of Sandag, I'm going to investigate this uh representation that we're importing sand and gravel from Canada.

Um I don't think that's to be true, but I'm gonna check into it.

You never know going forward.

So anyway, with the rest of the items, I'm happy to move the consent agenda.

All right, thank you.

I will uh second that motion.

Um, and we'll just do a voice vote.

All those in favor of approving the consent agenda items one through five say aye.

Aye.

That passes unanimously, and that brings us to our discussion uh discussion agenda.

Um so a little bit of housekeeping here.

We'll uh we're going to hear combined presentation for items six and seven, and then take public comment on both of those items together, and then there will be separate motions for uh for those two items.

So with that, Sarah, if you would please introduce item six and seven.

Thank you, Chair Elo Rivera.

Item number six, adoption of the 2025 Urban Water Management Plan and the 2025 water shortage contingency plan.

Item seven amendment to chapter six, Article 7, Division 38 of the San Diego Municipal Code.

And if you're watching on City TV or the live stream and you'd like to call in to speak, please dial 1669-2545252 when prompted, inputting webinar ID 1607329638 pound chair.

Okay, there we go.

Um, if our presenters would please introduce yourselves for the record and let us know which time you'd like for your presentation.

Good afternoon, committee chair Ila Rivera and committee members.

My name is Christiana Gagger, and I'm the assistant director over the public utility department's technical support branch.

We'll need about 20 minutes for this presentation.

I'm very pleased to be here today with two members of the team that have worked to bring to you the 2025 Urban Water Management Plan and the Water Shortage Contingency Plan.

The team will also present in an accompanying item updates to sections of the San Diego Municipal Code that we are proposing in order to better support the city's emergency water regulations.

The city is required to update, adopt, and submit an urban water management plan and a water shortage contingency plan every five years, and Megan and Andrew will discuss how these plans meet state guidelines for compliance with the California Water Code.

In addition, the team worked to ensure that the creation of these plans was considered analytical and data driven in order to produce an accurate projection of future urban water demand and supply.

The team has a number of details to walk through, so I will now ask them to introduce themselves and start the presentation.

Thanks, Christiana.

My name is Megan Hickey.

I'm an assistant deputy director with the city's public utilities department.

With me today is Andrew Funk, Principal Water Resources Specialist with PUD.

During today's presentation, we will provide an overview of the Urban Water Management Plan, its components, our 2025 water supply and demand projections, relevant municipal code updates, and the actions we are planning to take forward to full city council in May.

Urban water management plans are high-level plans that project future water supplies and demands over a 20-year time frame to help inform local, regional, and state planning efforts, and must be adopted and submitted to the California Department of Water Resources every five years.

These are foundational documents for subsequent water supply assessments and water supply verifications performed by PUD to assess the availability of water for development in the city of San Diego.

The plan must include a water shortage contingency plan, which defines the actions the city will take in the event of a declared water emergency or enactment of more stringent restrictions on water use, allowing the city to respond in an efficient and timely manner to manage and mitigate any potential water shortages.

In addition, to be eligible for any grant or loan administered by the Department of Water Resources, the city must have a current urban water management plan on file that has been determined by DWR to address the requirements of the water code.

The 2025 Urban Water Management Plan is our ninth iteration of the Urban Water Management Plan and is due to DWR on July 1st.

Urban water management plans have five key required components as shown in the graphic on the left, including the development of a 20-year water supply and demand forecast, an overview of water demand management measures implemented by the city, an analysis of water supply reliability, as well as an energy intensity of our water and wastewater system, and the adoption of a water shortage contingency plan.

Our 2025 Urban Water Management Plan implementation goals included the development of a credible and balanced 25-year projection of water demand.

By utilizing a 25-year planning horizon instead of the required 20-year projection, we closed potential planning gaps during cycles where we are updating the urban water management plan.

Next, we wanted to update and refine the water demand modeling approach for more accurate projections.

This included the development of an alternative on-trend forecast, which is detailed in appendix F of the draft urban water management plan.

This is the lower demand forecast that the on-trend forecast will be utilized by PUD staff for strategic capital investment planning in the Pure Water Program and other CIPs.

By evaluating a range of potential future demands, the city can evaluate the size of the water system and consider downsizing where appropriate to reduce capital costs.

At the same time, the adoption of a more conservative demand forecast allows the city to support conclusions that we have adequate water supply for major development projects or other housing initiatives and community plan updates.

We also utilize and build upon the city's climate action plan and water conservation goals, and we prepare for the future inclusion and expansion of local water supply.

As the ninth iteration of the Urban Water Management Plan, we continue to strive for enhancing and increasing the accuracy of our demand forecasting approach.

For the 2020 Urban Water Management Plan, we developed a hybrid approach, which combines actual water use data at the parcel level with a statistical model that considers land use as well as water use factors, such as temperature, irrigable parcel area, number and type of housing units, income and persons per household.

This hybrid approach allows us to more accurately spatially represent demand within our service area, allowing us to better understand where we need infrastructure improvements in the future.

Based on the increased accuracy of the 2020 forecast, the first step for the demand forecast in the 2025 Urban Water Management Plan was adapting the 2020 model.

This included analyzing and updating the water use factors based on recent water usage trends and accept accepted planning practices in accordance with DWR's guidelines.

Next, we utilized the Sandag Series 15 regional growth forecasts to assess population and growth within the city service area over the planning horizon.

Sandag Series 15 includes projected household population, total population, information on single family and multifamily occupied units, household income and projected total employment, as well as information on development out to 2050.

In comparison to the Sandag Series 14 forecast, which was utilized for the 2020 Urban Water Management Plan, Series 15 projected a roughly 12 to 17% reduction in the forecasted population and total households within the city's service area.

This had a significant impact on the 2025 demand forecast, which will be detailed on the following slides.

Next, we selected a base period based on hydrologic conditions and water use trends from billing data.

Our base period also overlaps with the Sandag Series 15 base period, which increases our model accuracy.

Finally, we incorporate water conservation savings based on compliance with existing state mandated conservation and new regulations, such as Assembly Bill 1572, also known as the non-functional turf ban, which within which Andrew will cover later in this presentation.

PUD is confident that we have developed a defensible and more accurate demand forecast for the city as visualized on the slide.

The graph on the left illustrates historic potable water usage shown in blue, as well as the draft 2025 Urban Water Management Plan demand forecast shown in orange.

The table on the right provides the specific breakdown on total potable and non-potable water usage by sector, with residential water usage making up the majority of demand within our service area.

The demand forecast to be adopted in the Urban Water Management Plan represents a measured approach with respect to long-term water supply planning and meets the regulatory planning goals defined by the Department of Water Resources.

The 2025 Urban Water Management Plan is projecting a lower 25-year demand than the 2020 Urban Water Management Plan, which is primarily based on reduced growth projections included in Sandag Series 15.

Based on the updated Series 15 growth forecasts and water usage in the city, there is also now a projected flattening of water demand out to the year 2050.

For the development of the 2025 demand forecast, PUD additionally analyzed our historic water usage and legacy forecasts from previous urban water management plans, as can be seen on this slide.

Similar to the previous graph on slide six, the blue line illustrates the historic water usage for potable water demand in the city, and the hash lines show the past four urban water management plan demand forecasts.

For historic water usage, the city's water demand has decreased by 34% over the past two decades, despite the population growing from 1.29 million in 2007 to the current peak customer base of nearly 1.4 million residents.

This is primarily based on statewide droughts and subsequent mandatory water conservation regulations that have decreased customer water usage.

When looking at the previous urban water management plan forecast, the city has historically overestimated demand.

A primary driver of this is the use of the regional growth forecasts, which are required by DWR's guidelines.

However, in more recent iterations, the urban water management plans have been more accurate.

PUD updated its water demand modeling methodology, incorporating actual water use trends, recognizing that our customer use has significantly shifted over the past two decades.

Additionally, refinements from Sandag in their growth forecast for the region have increased accuracy in our demand forecast for the urban water management plan.

An adequate and reliable water supply is vital for the city, and demand has greatly outpaced the local supply from rain.

The city has historically purchased roughly 70 to 90% of our water supply, which is imported from Northern California and the Colorado River.

PUD actively pursues ways to increase and diversify local water supply and maintain reliability.

This includes pursuing additional local supplies and maximizing the utilization of our existing surface water, groundwater, non-potable recycled water, and in the near future, pure water.

As required by the water code, the 2025 Urban Water Management Plan also analyzes water supply reliability under multiple hydrologic conditions to confirm that the city has adequate supplies and methods established for reducing demand during times of single or multiple dry year periods, and through coordination with CWA can supplement any projected supply deficiencies as they may arise.

Based on the city's projected increase in local supplies and reduced demand forecast in comparison to the 2020 Urban Water Management Plan, the city is anticipating to utilize less CWA imported water supplies into the future than previously expected.

By 2030, the city anticipates using 40% local supplies, and by the year 50, that number jumps up to 70%.

The development of local water supplies and transition from imported will directly benefit PUD with water supply reliability during periods of multi-dry year conditions, as well as reducing the cumulative energy intensity required for conveyance and distribution, thus making it more sustainable and cost effective.

The updated energy intensity data from the Urban Water Management Plan will be utilized to aid in the five-year update of the city's climate action plan in the near future and is included in the city's GHG emission strategies.

Based on historic water conservation by customers, the city is currently in compliance with all state mandated conservation regulations.

Specifically, the city has met the Water Conservation Act requirements, which is the 20% demand reduction by 2020, is meeting the model water efficient landscape ordinance and our urban water use objectives.

The urban water management plan incorporated additional conservation for outdoor water usage in the demand forecast for future compliance with AB 1572, also known as the non-functional turf ban.

The city continues to offer active water conservation programs largely driven by state regulations, including residential water surveys and water conservation rebates.

As required by the water code and previously mentioned, the city must also prepare and adopt a water shortage contingency plan in conjunction with the urban water management plan.

Water shortage contingency plans provide the plan in the event of a declared water emergency and enactment of more stringent restrictions on water use, allowing the city to respond in an efficient and timely manner to mitigate and manage any potential shortages.

The plan identifies how the city will annually assess water supply and demand to determine if a water shortage exists.

Shown on this slide are the six standard water shortage levels and their corresponding shortage range that lead to a variety of response actions in addition to permanent water waste prohibitions and ongoing consumption reduction methods.

The table on this slide shows an example of the corresponding shortage response actions to water shortage level one, which is up to a 10% shortage in supply compared to anticipated demand.

Each water shortage level has corresponding response actions that are categorized as one of the following by DWR supply augmentation, demand reduction actions, operational changes, or mandatory water use prohibitions, in addition to state mandated prohibitions.

The response actions incorporate MWD and CWA emergency and catastrophic planning, as well as the city's Council Policy 400-04, the emergency storage of water policy.

With your support, the PUD team plans to hold a public hearing and request approval of the following actions by council in May.

Approve a resolution to adopt the 2025 Urban Water Management Plan and Water Shortage Contingency Plan as required by the California Water Code, and approve a resolution to declare that the adoption of the plans are statutorily exempt from CEQA.

An outline of public participation in the schedule for council adoption for the 2025 Urban Water Management Plan is shown on this slide.

Public participation began February 27th, and the draft urban water management plan was posted on the city's webpage for public comments until March 30th.

The draft urban water management plan has been posted to the city's website, was highlighted on the city's social media, announced via inside ISTE, sent directly to a list of interested stakeholders, and members of the public will be notified of their opportunity to provide public comments at the public hearing at the council meeting in May via the daily transcript newspaper, which is required by the California Water Code.

After adoption by council, the urban water management plan will be submitted to DWR by July 1st.

Thank you for allowing us the opportunity to present an overview of the 2025 Urban Water Management Plan and Water Shortage Contingency Plan.

I will now turn it over to Andrew to provide an overview of the municipal code changes that are being requested with this item.

Thank you, Megan.

My name is Andrew Funk, and I'm a principal water resource specialist with PUD, and I will provide an overview and background of Chapter 6, Article 7, Division 38 of the San Diego Municipal Code, emergency water regulations, before touching on the two updates we are proposing to make relating to compliance with the state's new non functional turf ban, as well as correlating with the city's water conservation, water water shortage contingency plan.

Chapter 6, Article 7, Division 38 of the San Diego Municipal Code, the emergency water regulations, was originally adopted in 1998 and amended in 2008.

The division establishes water management requirements necessary to conserve water, enable effective water supply pairing, assure reasonable and beneficial use of water, and prevent water waste within the city's service area in order to assure adequate supplies of water to meet the needs of the public, not only in times of drought, but at all times.

In addition to the general provisions, the division also establishes water management requirements to assure the city has adequate water supplies and details regulations to be implemented during times of declared water shortages or to what declared water shortage emergencies.

It established four levels of drought response actions to be implemented of times of water shortage, with increasing restrictions on water use in response to worsening drought conditions and decreasing water supplies.

Since the adoption of the San Diego Municipal Code, Chapter 6, Article 7, Division 38 in 1998, there have been multiple drought periods that have triggered statewide water conservation mandates, including the 2007 to 2009 drought, as well as the worst drought in California history occurring between 2011 and 2017.

As detailed previously by Megan, there was also an update to the California Water Code requiring the development of water shortage contingency plans for water retail suppliers such as the city.

Within the water shorta contingency plans, water retail suppliers are required to define the six water shortage levels with supporting actions to conserve water usage based on drought conditions or statewide water use mandates.

Lastly, there was new legislation passed in 2023, Assembly Bill 1572 banning the use of non-banning the use of potable water for non-functional turf for certain land uses across the state.

Assembly Bill 1572 passed in 2023 bans the use of potable water for irrigating non-functional turf at properties owned by local government agencies, the California Department of General Services, commercial, industrial, and institutional land uses, and common areas of homeowners associations, common interest developments, and community service organizations.

Examples of non-functional turf include grass on medians, strips of grass along sidewalks or in parking lots, and decorative grass in front of commercial properties.

This ban does not include bonds at single family residential properties and does not include functional turf used for recreation, community gathering, dog parks, golf courses, and other activities.

The first phase of the ban on watering non-functional turf with potable water begins in January 1st, 2027 for properties owned by local government agencies in the California Department of General Services, followed by January 2028 for commercial industrial institutional properties, and by January 20 by January 1st, 2029 for HOAs, common interest developments, and community service organizations.

The statute allows for the delayed implementation until January 1st, 2031, or later for properties owned by local government agencies, local public agencies, and public water systems in disadvantaged communities.

The ban does not impose restrictions on cemeteries and does not prohibit watering trees or other non-turf vegetation.

The San Diego Municipal Code will be updated to maintain compliance with the statutory requirements and point towards implementation timelines, non-functional and functional turf definitions, and other related requirements of this new permanent water use restriction.

PUD will develop and implement a plan of targeted outreach to impacted customers in the future.

As discussed by Megan, the city is required by the California Water Code Section 10 632 and 10632.1 to adopt a water shortage contingency plan to examine and memorialize the city's contingency plans if it had to declare water shortage and emergency or enact more stringent restrictions on water use.

The water shorta contingency plan is required to define the total of six graduated water shortage levels with associated response actions that the city can implement to address shortages in water supply based on the severity of any future statewide use, water use restriction or emergency.

The water shortage plan, as mentioned, will be updated every five years in coordination with the city's urban water management plan.

To better align with the city's adopted water shortage contingency plans and PUD planning practices, the San Diego Municipal Code will be updated by removing the existing Ford drought response levels, instead relying on the city's updated water shortage contingency plan for identification and application of water shortage levels as required by the California Water Code.

Shifting to this approach will enable the city to continue to respond appropriately to any future water shortage or drought scenarios, limit updates to the San Diego Municipal Code as water shortage contingency plans are updated every five years and any potential subsequent updates to the California Water Code are established.

This will also help better guide PUD's implementation of city's policy and better communicate water shortage responses to customers while also remaining compliance with the California Water Code.

The permanent water use restrictions for customers will remain memorialized in the San Diego Municipal Code.

So to summarize our proposed actions for item six, we are requesting that the City Council approve a resolution to adopt the 2025 Urban Water Management Plan and the 2025 Water Shortage Contingency Plan and declaring the adoption is exempt other the California Environmental Quality Act.

For item six, we are requesting that the City Council approve and authorize an ordinance amending Chapter 6, Article 7, Division 38 of the San Diego Municipal Code.

Thank you again for allowing us the opportunity to present an overview of the Urban Water Management Plan, Water Shortage Contingency Plan, as well as these municipal code changes.

We are now available to answer answer any questions you may have.

All right, thank you for the presentation.

We'll now turn to public comment.

Thank you, Chair.

The public comment period for both items six and seven is now open.

We will begin with Patrick McDowell.

McDowell, excuse me, and you have indicated you wish to speak to item six.

So you will have three minutes.

Yes, Patrick McDonald Coast Keeper.

Thank you so much for allowing the opportunity to comment.

First, I want to emphasize that these documents aren't just a mere formality or a compliance box to tick their critical planning documents that drive multi-billion dollar investment decisions that occur over many, many years.

And we have to get them right.

If we underestimate, then we don't have enough water.

And if we overestimate, which as you saw, we have typically done in the past, that's that has been the main driver of our current water rates crisis, which is completely untenable.

So this plan has to find that Goldilocks zone.

And with that, Coast Keeper very much appreciates that this draft plan acknowledges those past demand overestimates, and we also support the draft's recognition of the importance of local supply development, most notably including pure water, both phases one and two.

However, we believe the plan still overestimates demand, albeit by less than past plans, because it fails to account for additional conservation that will result from recent and future water rate increases and the rapidly changing hotter, drier climate.

So what we saw is the demand forecast is relatively flat in this new plan.

It actually increases a little bit, but it has actually been trending down for many years, and Coastkeeper believes it will continue to do so.

That is in part because both per capita and overall water use have been declining for decades all over California, not just in San Diego, and the climate forecasts are pretty dire, and we're already seeing this rapid eridification of the entire southwestern United States, which requires using less water because our relatively cheap supplies, relatively cheap, uh those are drying up, and thus water must come from relatively more expensive supplies, which drives rates up and in turn drives demand down again.

It seems like the demand forecast in the current draft plan is it appears intended to ensure sufficient indoor residential use to maintain wastewater flows for the pure water project.

However, it doesn't really get into uh the outdoor water use conservation.

Those two things are not mutually exclusive.

We can maintain indoor flows while at the same time reducing our overall use through outdoor irrigation reductions.

So Coast Keeper requests the draft be revised to include a more robust discussion of the outdoor water conservation possibilities, uh in part because residential irrigation is a big part of our overall water portfolio or water demand here in the city.

Some estimates put it about 30 percent, so thus it represents the largest and most achievable source of future demand reductions, and it requires and deserves a more accurate analysis.

And in closing, I'd just like to remind this committee that CoastKeeper has been right about these demand forecasting issues for about 20 years, long before I'd joined CoastKeeper.

So please heed these comments before adopting this plan.

Thank you.

Thank you for your concluding remark.

Our next speaker is Catherine Rhodes.

Hello, Catherine Rhodes, and thank you, um, Councilmember Lacava for saying that you'll go to Sandag.

We're billionaires.

We're so rich, we're as rich as can be.

We just don't acknowledge it.

And the reason why is because this map right here, which is the um the from the California Geologic Survey, that has these areas right here in pink that they think that we can't use that sand.

And it's it's a it's a misinterpretation of a map from the 1980s.

Um so anyway, um, besides Canada, San Diego also um brings in SAN from Barge from Mexico.

So great.

And then what I want to talk about is my whole entire thing about water, my my solution to San Diego to our stormwater problems, to our water problems, to our water storage problems.

And what I call it is my La Playa plan.

And I have it located at TinyURL.com/slash 2022 0419A.

And it's already been used already in the Navy Broadway complex.

That's eight blocks of land that we took out all the junky soils, and before they weren't gonna have much parking.

Now they have so much parking under eight blocks of it.

But what I would like for it to be is to be used at midway rising, underneath midway rising.

Um what you would do is um what it is is called a full tide lens reclamation.

Right now we only have a partial tide lens reclamation because we have a low water table.

And so what a full tide lens reclamation does is you um go down to the good formation material, you get rid of all the junky soil, and you build cisterns, underground water storage cisterns underneath all our areas right here.

And then we could use a sand, put it on our beaches, and then we could also use a sand for construction material.

We could it would solve so many problems.

So anyway, what it does is it creates subterranean space not only for um cisterns for parking for transportation corridors.

It also um, and then we could get money from the state also and the federal government because these are called reclamation projects, and then it has an area for stormwater capture.

You know, I was pushing the um the airport for for a long time to finally do it.

They finally put in two giant cisterns there.

So that that's another you know thing that they're actually doing.

So we already have pilot project on that too.

And one of the most important things is it deletes the seismic hazard of liquefaction, and it creates um mineral resources for sand beach replace placement.

And one of the main things it does is it feature proofs against sea level rise, because if you go all the way down and then you build your foundation up, um you you won't have um you won't have problems with sea level um water intrusion.

We use it at the county administration building, the port building, and now the Davy Broadway complex.

Thank you.

Thank you for your testimony, and this concludes comments here in chambers.

So I will begin the five-minute timer for all those to indicate if they wish to give comment on item six and or seven.

We will begin with phone number ending in 8700.

You can unmute by pressing star six, and you will have a total of three minutes to speak to both items.

Uh thank you, sir.

I will be speaking to both items.

Okay, three minutes, please begin.

Thank you so much.

Uh Joy Sunyata, C D3.

Uh, several thank yous.

U big thank you to PUD.

I love PUD.

Uh thank you, thank you for everything you do for our city and the people that live here.

Okay, Coastkeeper.

Keep it up.

Thank you for 20 years of continuing to help us with uh water usage.

You're the best.

And I hope I say this right, but I totally agree with you.

We need more analysis on what to do with uh the use of water outside the home.

I don't think that's clear.

And on the uh let me skip ahead to seven on the stake bands.

I don't know how that's going to be enforced or monitored.

So um, okay, those are my thank yous, I believe.

So yes to the urban water management plan, uh, because for you know, mostly for me, we want to qualify for grant requests.

And um I I have to make oh, here's a big huge thank you to the public.

Uh uh we did a lifestyle change.

We did a paradigm shift on our own.

We created water conservation, and over the last two decades, we've decreased water usage by 34%.

Now you know I've harped on the fact of how that impacted our water rates, and I won't go there today.

I'm over it, thank you.

Um, but but it's just terrific uh what we did with water conservation, and we're not done yet.

The paradigm shift is in place, so I'm concerned about SDW SDCWA as council as chair Elo Ravera said way back that something's wrong with their system, and I'm very concerned that that has not been worked with by SDCWA, I believe I got that right.

So that needs to be changed, and I hope you're monitoring what they're doing about the impact of what's happening with pure water and how that's gonna discrete decrease our need for water from them.

New things are happening, they just happen involving water side riverside sowing water, so uh it could impact our water rates.

Please, please, everybody monitor what's happening with the San Diego County Water Authority.

I think that's everything.

I may have forgotten something, but in any case, I support both items.

And it's a huge uh it's our water, it's second to breathing.

So love to all.

Thank you.

Our next speaker is Blair Beekman.

Please unmute and begin.

You will have a total of three minutes to speak to items six and seven.

All right, thank you.

Uh Blair Beekman, I don't think I'll need all that much time.

But uh thank you a lot for this item.

Uh what you're trying to strive for.

It uh can be a bit stringent, actually.

Um, hopefully it uh it can offer good conservation practices without hurting people.

Good luck how we we can be moving forward.

Um the importance of working with um water boards is really important for the public, I think.

Joyce mentioned it previously.

Um, you know, it's a time we really want to be aware of what our uh regional water boards are doing.

Um they're having a public meeting process that is not having any public involvement with it, basically.

And um I hope this is a time to remind that uh we're working to correct that and and uh public participation, uh just ideas can really be uh a major focus for the future.

Um it's public participation is a really good thing in the government process.

We're trying to re-develop those concepts.

Good luck uh what we can do, and it's a safe trusting process.

Um, I also wanted to comment uh a public commenter yesterday very nicely offered that uh uh damming a few of our local uh and estuaries, uh or not estuaries, but you know, the the few of the systems in our area can possibly be a way to create groundwater for the for the local region.

Um I thought that was an interesting concept.

And so uh good luck in those efforts.

Um is there such a thing as safe damming?

Uh is it would it be a safe practice?

Um damming on the large scale, like in Oregon, you know, the Pacific Northwest, that's big stuff.

Um good luck what we can do with that.

And thank you to the words of uh Catherine Rhodes, I guess.

Uh, you know, the previous public comment on on words about uh uh engineering, water.

Oh, great.

I have a little bit longer time.

I'll just need a bit longer time here.

I can't, I I've I'm not misplacing her name, but the person who's who's very speaking very eloquently these days on on city matters, she very nicely mentioned, you know, there can be um issues to to address sea level rise, engineering issues, and I'm sure she knows several engineers uh and she may be an engineer herself, in fact.

So, you know, she she has that understanding and knowledge.

So I don't I don't, and so I do look to her for, and she came through with uh with those kind of uh engineering suggestions, how to address sea level rise issues.

Um good luck, what we can be doing to consider that, and that it can be part of a long-term conversation as well.

Um responsibility and safety.

Good luck to that too, and uh thanks for this item.

Thank you for your testimony.

The five-minute timer has concluded.

We have two hands remaining in the queue.

We'll take no other callers beyond these remaining two hands up.

John Stump, please unmute and begin.

You will have three minutes total to speak to items six and seven.

Uh I'm showing one minute.

Do I get three minutes?

Yes, we'll be renewing after each minute passes for a total of three minutes.

Okay, thank you very much.

Um it's always interesting to follow Cash and Rhodes, who's always technically correct.

And I agree with um uh Joyce Sonata that the public utilities district staff should be complimented.

The problem is that when you talk about public power, the first thing that the public says is we can't have the city run public power because of the terrible job they do on your water bill.

Look at your water bill.

They're doing terrible.

So I don't think that they're actually doing terrible, but uh, you know, I want to they're the ones that public power, the public uh nonprofit utility is always compared to.

Now let's talk about um what's going on here.

First of all, we live in a desert.

We have a limited amount of water, but the city continues to have programs to increase density, increase population.

The city needs to adopt a population, sustainable population limit for San Diego, and stop trying to do things like um sewer to tap pure water programs, which only raise the cost of water.

Um we've made a big mistake in San Diego.

We converted our water capacity, which we use for agricultural purposes, growing food, more than a sustainable amount of food, to more development and more residential.

We've got to find that balance again and stop cutting down our agriculture, our avocado trees because we're robbing the them of water so that we can uh increase the demand for new residents and development.

Um we need the public utilities district to start looking at the Tijuana Baja and San Diego as a single region.

We don't have a sewer problem in Tijuana.

Uh they are part of our system.

We're a linked region, and the public utilities district has got to start planning, not where there's some kind of imaginary line uh at a border fence, but we're gonna supply water regionally to our joint city of Tijuana and San Diego.

Umly climate change.

We will know that we're in the depths of climate change when we have eutrophication of the Sea of Cortez where the Colorado River was supposed to exit.

Thank you very much.

Thank you for your concluding remark.

And the final speaker in the queue is Tony.

Please unmute and begin.

You will have a three minute total to speak to item six and seven.

Oh, can you hear me?

We can hear you.

Please proceed.

Hey, thank you.

Um, yes, I just wanted to speak to both the items today.

Um, I I wanted to start by saying um great work with the presentations this morning, very uh thought-provoking, very informative.

Um, and I wanted to mention that um currently, right now, with our issues that we're having with um water and uh it being a limited resource and us being in a tropical desert.

Um, I wanted to speak to the current missed opportunities that we have with regard to our storm water.

We were alluding to it uh just in in conversation the other day.

Um, and I wanted to circle back to that.

Currently, with all of our gutters that we have uh on all of our buildings and all of our rooftops, it's a wasted potential uh rainwater collection.

If we had water storage tanks uh connected to all of our gutters throughout the city, um it's a huge amount of rainwater that we could be collecting.

Um, and we should be looking at when we're uh developing new buildings or in our on our existing buildings in our existing um gutters, we should be investing some water collection storage tanks um for all of our water needs throughout the city.

Um, and I also wanted to speak to uh the presentation that was given um by the brilliant um uh uh woman who was speaking earlier.

Um I believe her name was Kathleen, but I may be uh incorrect in that.

Uh in any case, she was talking about the sand here in San Diego in certain areas, and it's not uh uh useless sand as she described, and she's totally correct.

Um in fact, uh I have a background in agriculture, that's what I do for work uh is agricultural consulting up in Mount Shasta.

Um, the very sandy soil that we have up there is amenable, is is actually makes it some of the best soil um to work with in the state of California up in uh MacDoel County um in the Butte Valley um near Mount Shasta.

And so um, yeah, we have she's totally correct in saying that our our sand is an enormous resource that um we could be utilizing, and we should not be um squandering it as uh as an opportunity for us to uh uh you know potentially have another revenue stream um or for us to just have a healthier environment in general.

Um so yeah, uh good luck with everything and uh thank you for your time.

And that that concludes my comment.

Thank you for your testimony and chair.

This concludes comment on item six and seven.

All right, thank you so much.

Uh as a reminder, um, we will enter uh have two separate motions here um for one for item six, one for item seven.

Um and I will turn to you, Council President to see if you have any comments or would like to make a motion.

Yeah, I'll make a few comments um but be happy to.

So I want to thank staff, the PUD for all the work you did.

Um, this is incredibly important stuff, and some of it is mandated, but nevertheless, it is important work.

Um, this is the kind of state direction that I like because it keeps us uh on track with the kinds of things that would often get lost in the weeds.

But thank you for the data-driven approach and using updated data from Sandag and drilling down to the parcel level.

Want to acknowledge the two graphs and charts you presented on slide seven and nine on slide seven, you highlight the historic water use decreasing, decreasing dramatically over the past 25 years.

And what is equally significant is that we've continued to do that despite rising projections in each of the prior urban water management plans.

The leveled projections in the 2025 plan make perfect sense and are apparent in the charts you have in slide nine showing an entire reversal from predominantly imported water to local supply via pure water.

Uh this is an accomplishment that we're all well on our way to achieving.

I appreciate you pointing that out there.

Uh to the comment spot, Coast Keeper.

I think it's the engineer in me that says, yes, I think we can do better, we can do reduce our water demand, but I like uh relying on a projection based on past evidence there to make sure that we're on top of things.

Uh, and when we do our next iteration, um, we can see whether the turf reductions that are now going to be required have an impact, whether folks that live in single family homes as I do, more readily convert their outdoor areas into uh drought tolerant or even water uh irrigation free areas.

Uh, but I think at this time it is prudent to make the pretty radical change uh that you're demonstrating here for this updated plan.

So I think it's just the right amount of recognition of the re uh reduced demand uh while being a little bit sensitive to making sure that we're accounting for future water demand.

Um and I don't know why we have to keep repeating this.

The density that we're building has no landscaping.

The water demand from condos and townhomes and apartments have very little impact on our water supply.

We are not doing anything with this increased demand to accommodate the population that is making a radical difference in water demand or stealing water for anybody else.

That's part of the idea for infill development and switching from 5,000, 10,000, 20,000 square foot lots that were heavily landscaped and irrigated.

Those were real impacts, and I think really generated some of the water demand that we saw in past years and that we thought we needed to accommodate for.

We've turned the corner, we're on the right path, um, and especially in terms of water.

Uh every so again, thank you to everybody at PUD for the very hard work you're doing.

And with that, uh Chair, I will move the staff recommendation on item six.

Thank you, Council President.

Uh, we've got a motion there.

I'll also say thank you.

I appreciate that last point.

Um not only is it a more efficient way, um, but we need the people actually, or the bills will go up even more.

Um, so it'd be kind of the the worst of both worlds to not have um those homes come online in that way.

Um won't go too far down that rabbit hole, but we um opened up a new affordable housing development in City Heights yesterday, and it's on the corner of uh where was the a thrift store there is now over 70 homes.

Um over 40 of those are three and four bedrooms.

Um it's an incredibly efficient use of land.

Um, and again, uh those folks who live in those homes will um help pay for the region's water.

Um, and that's a good thing.

So um anyway, you you got me going on on that one.

Um I blame you.

Um we've got a motion.

I'll second that motion.

Uh this is for item six.

Um all those in favor, please say aye.

Aye.

Aye.

Uh that passes unanimously.

Uh we'll now move to item seven.

Uh council president, I don't know if you have any uh additional questions or comments there.

Happy to move the staff recommendation for item seven.

All right, I will second that.

And all those in favor of approving item seven, please say aye.

Aye.

Aye.

That also passes unanimously.

And that brings us to item eight.

Thank you for the presentation again.

Um, thank you, Cherry Lovera.

Item number eight is the Mission Bay Park Improvements Program.

And if you're watching on City TV or the live stream online and you'd like to dial in to speak, please call 1669-2545252.

And when prompted, input webinar ID 16072-9638 pound.

Chair.

All right.

Um, as we turn um turn things over over here, once our presenters are ready, please introduce yourself for the record and let us know how much time you'd like.

Um good afternoon, members of the committee.

We are very happy to be here today.

Um my name is Carrie Persell.

We need about, I would say 15 or so minutes, I would say roughly.

All right, please.

Thank you.

My name is Carrie Purcell.

I'm a deputy director at the Engineering Capital Projects Department over the program project development division.

And with me today, I have Nancy Graham.

She is our program manager who manages our CEQA and entitlements section.

So we're here today to present the Mission Bay Park Improvement Program and the Implation Framework and EIR.

Um, we'd like to thank you for the opportunity to share this important milestone.

The the result the the this is the result of several years of hard work and dedication of ECP staff in close coordination and partnership with the Parks and Recreation Department, as well as other departments such as the planning department.

We'd like to acknowledge our consultant DUDEC, who has provided the technical studies, the analysis, as well as the support for the public outreach effort.

Finally, we like to thank the members of the public who have provided input and feedback, the outside organizations, the other stakeholders, and this information has helped to shape those program elements that we're going to talk about today.

And with that, I will turn it over to Nancy.

Thank you.

Thank you very much, and thank you for having us today.

Um I'm going to be presenting the Mission Bay Park Improvements Program.

Uh our presentation, we will do a project overview and history.

We'll review the implementation framework, the environmental impact report, and the actions before you.

Um, where we started this very public process to develop different program elements.

Um in the fall of 2024, we came up with our um scoping for the environmental impact report.

Last summer we put the implementation framework out for public review and received comments and made changes.

The draft EIR was made public last December, and we had it open for longer than the required 45-day comment period in order to accommodate for the holidays.

And we are here now bringing the item before you and hoping to certify a final EIR.

So these are the core program elements: the wetland and water quality improvements, shoreline restoration, upland habitat expansion, seawall restoration, and bike and pet improvements.

For the wetland and water quality improvements, we um are looking to replace the um Fiesta Island causeway in order to allow water circulation to improve the water quality that happens behind Fiesta Island, as well as having wetland expansion within North Fiesta Island and uh Cootiehe Creek.

For the shoreline restoration, most of the shoreline restoration will happen in the western portion of Mission Bay.

That's where we found that there's the most degradation and where we have opportunity to have improvements to the shoreline as and also bring in more natural things such as oyster reef balls in order to bring in more shoreline protection.

The upland habitat expansion will happen in North Fiesta Island, South Fiesta Island, the South Shores area, the triangle parcel, as well as the parcel that we consider to be the clover leaf parcel, and this will expand upland habitats and also provide opportunities to better protect the California leaf's turn.

The bicycle and ped path improvements include the Fiesta Island Causeway access from Ocean Beach, as well as the Rose Creek bike path.

Seawall restoration, as I mentioned, would happen in Mission Beach.

There's a new segment between Grand Avenue and Thomas Avenue.

We would upgrade beach access points and replace the parapet on top of the seawall.

And we would also replace the deteriorating sections of the parapet between San Fernando Place to Balboa Court.

We do want to clarify that De Anza Cove is not included in this project.

It was originally in this project back in back in 2018, but as it was identified that a land use plan amendment to the Mission Bay Park Master Plan was required, that element was spun out and the DNs and Natural Project was taken up by the planning department.

The planning department finished the Anza Natural, and that item is now currently before the Coastal Commission for certification, and then it will come back to council.

And then once council certifies the plan that was approved by Coastal Commission, that will move into a general development plan, so it is no longer part of our project.

So in order to implement the charter, we created the implementation framework document.

It establishes how to implement the charter as an interim step to funding and prioritization.

It identifies the approach for implementing projects, maintenance needs, as well as resilience to sea level rise.

It lays out the applicable engineering and permitting procedures to realize each project.

The document itself consolidates the various proposed improvements and program elements and components into a single document.

It's a tool for city engineers and planners to implement the improvements program.

It's intended to be transparent and digestible to the public.

It supports funding decisions and prioritization for implementing the charter, and it's the basis of our environmental impact analysis.

Essentially, it's a very large project description that our environmental impact analysis studies.

The EIR itself is a program EIR, and this allows us to look at the entire program comprehensively with all the environmental impacts.

It's required per the Environmental Quality Act.

It informs the public and decision makers of the potential adverse effects of implementation of the program.

It afforded the mandated opportunities for public input.

It identifies feasible mitigation measures to reduce effects and alternatives that could reduce those effects.

And it establishes tiering opportunities for streamlined implementation of the individual projects.

So that is the core of why we did this document.

So when the council wants to fund these individual projects, we will have this EIR in place, and we can just do consistency review with the CIR instead of having to do six or seven EIRs.

And it also allowed us to look at all of the impacts in conjunction with one another, which is better for cumulative impacts.

The document itself clarifies any potential for significant impacts and required mitigation.

It has feasible alternatives, and we also include conceptual habitat restoration and monitoring plans for all of the restoration projects.

So the EIR itself found that there would be no impact or less than significant impacts for a significant number of resource areas.

And there are a few, a couple of resource areas where the EIR did find the potential for impacts.

Both air quality and cultural resource impacts, there's the potential for impacts, but the mitigation measures that we identified for these issues help to make these less than significant after mitigation.

There's four areas that there's the potential for impacts even with mitigation, but some of that is because these projects are only at 30% design, and because they are not fully designed, we don't know for sure that we would have impact, we would not have impacts, so we have to disclose that that potential still exists until we can prove otherwise.

For biological resources, we have a significant amount of environmental protocols and mitigation measures, as well as those conceptual habitat restoration plans that explain that although we have to temporarily impact resource areas, overall the entire program is far superior for the environment and especially for biological resources at the end.

But the way CEQA works is if you have a temporary impact, it's considered an impact until it can be fully restored.

In addition, the seawall itself is historic.

So although all of our changes are consistent with the Secretary of the Interior standards, it's still considered a significant impact when you do restoration to a historic resource.

There's the potential for noise impacts because these are large construction projects that will happen next to habitat areas, though we'll do everything we can to reduce those potential impacts.

And because Mission Bay Park itself is a park, that any impacts within the park means that you have recreation impacts.

So it's kind of a global because of these other impacts.

CEQA requires a no-project alternative.

We also looked at an increased public access alternative, and we looked at a reduced hardscape alternative to identify an environmentally superior alternative because that is required by CEQA.

The environmentally superior alternative is the reduced hardscape alternative because we would not be doing improvements to the seawall, which then eliminates cultural resource impacts near the seawall.

Our actions that we're bringing forward are to certify the final program environmental impact report and adopt the implementation framework.

And we're happy to answer any questions you may have.

All right, thank you for the presentation.

Do we have public comments, sir?

We do.

We've received three slips here in chambers.

And each speaker will have two minutes.

We will begin with Catherine Rhodes.

You will be followed by Anthony Dang and Lillian Barnes, if those two individuals would like to come move to the front reserve seats at the room.

Catherine Rhodes.

Okay, I can come back to you.

Anthony Dang.

Good afternoon, Council.

My name is Anthony Ding.

I'm with Climate Action Campaign, and we are excited to support this EIR.

The Rewild Mission Bay projects and restoration are exactly what San Diegans had in mind when they voted to create the Mission Bay Park Improvement Fund.

Yesterday, the mayor dropped a budget with 118 million in deficits.

Parks, libraries, arts, it's hitting everything.

The city's in a tough spot, but the Mission Bay Park Fund is not general fund money.

Voters protected it specifically for Mission Bay.

It cannot be a piggy bank for other departments' shortfalls.

Additionally, for over 10 years, more than 90% of that fund has gone to lower priority parks and rec projects instead of Mission Bay's top needs.

With uh 118 million deficit on the table, we're worried that pressure only grows.

We're glad the city's going to use the fund for these Mission Bay projects, and with this EIR now formally enabling and requiring it, there's never been a clearer mandate to follow through.

Please keep this all in mind as you continue to work on the budget.

Thank you.

Thank you.

Our next speaker is Lillian Barnes.

Thank you so much to the committee and to the city council in general for getting this plan passed.

I know it's been a lot of years.

So my comment today is brief.

I'm with the San Diego Audubon Bird Alliance Conservation Committee.

Give me a minute here.

We support this EIR and expect the city to begin funding work on them and the rewild project of the Mission Bay Park Fund for the last over 10 years.

The city has put over 90% of this voter prioritized fund towards the lowest priority projects.

And this EIR and DeAnza Natural now enable and require the city to use the fund to begin work on them.

So we would ask the city council members to commit to using the fund this year to begin this great project.

Thank you so much.

Thank you.

And the final speaker here in chambers is Catherine Rhodes.

Hello, Catherine Rhodes.

And first I want to say, wow, what a great report you guys have.

It's so comprehensive.

Thank you so much for that.

This is the kind of EIRs that I actually like, but it's so big that I haven't even finished reading it, you know, because it's um six thousand pages, just what the report and the um appendixes.

And so since it's so big, um, you know, I I I tried to make files for them so I could actually read them.

I haven't finished, but I have um two of them at tiny url.com slash 2026 0407A and TinyURL-com 2026 0407B, um, where I put them all together so it'd be, and then I did the character recognition so that you could actually read it.

And so um, you know, first what I really wanted to say of course the rewild stuff.

Um very much agree with that.

But what I really like is how you're going to finally do something about our seawall, you know, or seawall um along Mission Bay.

Um, you know, um back when Captain Fockner was a council person, he actually uh I'm a civil engineer, and so what he did is he um he asked me to look into the seawall.

And so I did a whole entire study on the seawall, and you know, I don't know, what was that 20 years ago or something?

So you guys are finally have it there.

It's it's a miracle.

So anyway, um thank you so much for that.

And um, you know, um then I just wanted to throw out you know part of our TOT thing that we're trying to bring in.

We also want to have uh money for the um the new lifeguard station in Mission Beach, which it's I'm not sure if that's a project.

I haven't actually uh looked into this.

But there's there'd be so much money coming in that you would actually have money to do this.

Thank you so much.

Thank you.

And I'll begin the five-minute timer for all those indicating which to wish to indicate if they want to speak to item eight in the virtual queue.

Each speaker will have two minutes.

We currently have five hands raised at the start of the five minutes, and we'll be begin with Blair Beekman.

Please unmute and begin all right.

Thank you.

Uh Blair Beekman, thanks a lot for this item.

Um, yeah, it sounds like something's pretty thorough here.

So uh thank you.

Good luck that um we had a uh at City Council uh on Monday, uh a really important item about the future of uh lease agreements within the park system that need to be better understood and addressed.

And it seems like uh there's a there's a chance, the capability that we can be working on this as a full community effort of understanding and clarity and accountability, and um how that relates to all this efforts on this item.

Uh good luck in that management and figuring out what that management can be.

Um I think we're headed towards something really hopeful and positive that we're gonna be working on on better accountability with uh lease issues.

So good luck in those efforts and with Balboa Park too, with the parking fee issues there, how how that can be there's many ways to explain it, and that can be more and more clear with ourselves as a community.

Um thank you.

Uh I also wanted to mention there's a lot of uh it was mentioned in this item in the presentation about parking.

I mean, about uh bicycle and pedestrian issues.

So that's gonna be uh a lot of uh tech involved also, and you know, the bicycling community is gonna want uh tech things and uh good luck that we're really want to be working towards um uh open public policies, clear policies with the tech involved.

We want to talk about responsible policies that um we really can be building more and more responsibly, and that less tech can actually do just as much as a plethora.

And good luck how we can be figuring on that and understanding that.

Even in this age of a new war we're at around the world, we talk about our best practices here at the local level towards peace.

I mean, uh and responsibility.

That that that shares around the world.

Thank you.

Thank you.

James Royer, please unmute and begin.

Thank you.

Uh my name is Jim Royer.

I'm a resident in zip code 92117 and a volunteer with the San Diego Bird Alliance.

I'm in support of these projects in item eight and in the EIR, and expect the city to begin funding work on them in the ReWild project through the Mission Bay Park Fund.

For the last 10 years, the city has put over 90% of the voter prioritized fund towards lowest priority projects in this EIR and BNSA Natural now enable and require the city to use the fund to begin work on them.

I requested the council members commit to use the fund this year to begin these great projects and not spending uh the fund on other lower priority projects of the parks and record department.

Thank you.

Thank you for your comment.

Our next speaker is Tony.

Please unmute and begin.

Uh yeah, I just wanted to say um again, great work.

Um it's been really informative attending this meeting this morning.

And um, I'm I'm looking forward to um these projects moving forward.

I'm in support of this project itself.

Um, I think these improvements are greatly needed.

And so thank you.

Good luck with everything.

That concludes my comment.

Thank you.

L Webb, please unmute and begin.

You will have two minutes.

Thank you.

Uh this is Larry Webb on the Mission Beach Town Council president.

We urge acceptance of these motions uh to move forward.

We especially would like to see the restoration of the seawall be made a priority.

Uh mission beach is a huge tourist destination.

The current condition of the seawall um is ridiculous and inhibits tourism.

So it would help increase tourism throughout the city by having this project finally completed, which would help city budget processes.

We urge the Mission Bay Bay funding committee to prioritize the seawall registry restoration.

Myself and many members of our council have spoken with both state and federal officials who show great interest in providing funding, additional funding to for this project once it is moved forward by the city.

Unfortunately, nothing can be done until it is moved forward by the city.

I again urge this to be a priority in moving forward with these recommendations.

Thank you.

Thank you.

Our next speaker is John Stump.

Please unmute and begin.

Um, I completely support this, and I particularly support it because the uh Lillian Baines, who is the appellant uh for another environmental determination uh in Los Penosquitos preserve, uh supports it.

You know, when you listen to the report of staff about all the work they needed to do in a park to foster park usage, uh it made me think, wow.

That's the kind of uh substantial evidence and work we need to um establish that there's no harm or the harms are mitigated under CEQA in any of our parks when a use is either fostered, like in this case, or a use is significantly changed to the detriment like uh Ms.

Baines's appeal.

So, yes, I support it.

This was good environmental work.

Uh, and I really think that as you look at the analysis of what they did, they fully met the standards expressed in Helltop versus the City of San Diego or County of San Diego.

You the city did the substantial evidence work.

Thank you very much.

Thank you.

And with the five-minute timer expiring with one hand left in the queue, we'll move to Andrew.

Please unmute and begin.

Thank you very much.

Can you hear me?

We can hear you.

Please proceed.

Thank you.

Um, thank you very much, Chair Elo Rivera and committee members.

This is Andrew Meyer, Director of Conservation for the San Diego Bird Alliance and manager of the Rewild Mission Bay project.

Um, I also want to say that the San Diego Bird Alliance supports approving this EIR, and I appreciate all of the work that the city staff and the public have put into the project to get us where we are now.

But I want we want the San Diego Bird Alliance wants the city council members to hear loud and clear that these projects should be funded with the Mission Bay Park Improvement Fund.

I know this this is the issue uh uh issue for us because these great projects in the AIR should be funded, and the Mission Bay Park Improvement Fund is that fund.

We expect the city to begin funding work on these EIR programmatic projects and the Rewild uh project, Deanza Natural, through the Mission Bay Park Fund.

For the last 10 plus years, the city has put over 90% of this voter prioritized fund towards lowest priority projects in this EIR and DeNZ and Natural now enable and require the city to use the fund to begin work on them.

This is another bad budget year for many worthy public goods in the city of San Diego, and the city has hard decisions to make about where the budget goes.

But this fund, the Mission Bay Park Improvement Fund cannot go to the general fund.

It must go towards investing in natural resources, natural resources in Mission Bay as the public has created it.

I call on the council members to commit to using this fund this year to begin these great EIR projects and not spend the fund on other lower priority projects of the parks and rec department.

Thank you very much.

Thank you for your comment.

And Chair, this concludes testimony for item eight.

All right.

Thank you so much.

What's the president?

You got anything here?

Just a little bit.

Thank you, Chair.

Thank you, Carrie, Nancy, Engineering Capital Projects, Parks and Rec and Planning Staff for bringing this forward.

This is a very big step and very good work, despite how long it, especially because of how long it takes, how expensive it is to do this kind of work.

But it's as you described in your presentation, something that's long been considered by the city, and the commitment to bring this forward and actually get it done is just so huge because we can't do anything else without these documents in hand.

As you mentioned, this plan represents a long-awaited opportunity to finally get busy to restore our coastal wetlands, another habitat that was once abundant in the old Mission Bay.

70 acres of restored wetland and upland habitats, improved dune habitats for endangered species like the California Least Turn, creating habitat corridors across the bay, shoreline restoration projects, and so much more.

And I see this as a major step for significant reinvestment in the Mission Bay as called for in the charter.

You know, there's been a lot of talk of the charter during our budget conversations that are going to be very painful over the next two months, but about getting back to core responsibilities as identified in the charter.

So I'm supportive of this action.

A couple of questions.

Thank you for taking the time to talk about Danza Natural, that that has been set on its own independent and concurrent course.

And of course, it still sits with the Coastal Commission.

I appreciate everybody that is navigating the Coastal Commission conversation to try to get Dan's Natural finally approved.

One question didn't occur to me during the extensive briefing that we had on this is we were also presented some pilot programs to deal with sea level rise, kind of in the same area.

How do those intersect, or do they, or is that kind of set aside because we're focusing on the more specific elements that you've worked on in this so Julia Chase, our chief resilience officer, was a key stakeholder in these documents.

So she reviewed everything for consistency of what's going on with our resilience planning.

And within the implementation framework, there we addressed sea level rise for every single component of the program.

So we anticipate sea level rise.

We will be doing specific studies when each project goes full to full engineering.

We did studies already, but because all of this science is constantly changing, we will be doing additional studies when we go to get to 100% design.

However, we have been coordinating with our counterparts the entire time to make sure that this program is reflective of the direction the city is moving in.

Okay, great.

Thank you for clarifying uh clarifying that.

Um there was a lot of uh public comment about the priorities uh in mission bay.

And I just wanted to go through really quickly uh what the charter tells us in terms of those priorities.

Number one, restore navigable waters.

Two, number two, wetland expansion and water quality improvements, which this does in spades.

Three is restoration of shoreline treatments, including restoration of beach sand and stabilization of erosion control, four, expansion of endangered or threatened species preserves and upland habitats.

Number five, and last is deferred maintenance projects.

And as the public has articulated, and I don't think anybody disputes that a most of the work has been done on priority five.

And I was glad to hear that the Mission Bay Committee is starting to refocus on what this charter requires.

The reason I bring this up is I will tell you that I'm a little concerned about the introduction of the seawall in this larger package.

And I'm concerned that this will cause the seawall to leap ahead of all the wetland and upland and projects that you have so clearly identified in here.

I'm not going to ask for a response.

That while Mission Bay is an important hairst destination, which drives TOT taxes, which helps uh generate revenue uh to meet uh the ever increasing expense of writing a big cities like ours.

I'm concerned that we're not really adhering to how the original charter really was dictating what our priorities should be in the order they should be done.

Having said that, Patrick knows that my daughter and her three-year-old on our granddaughter, our three-year-old granddaughter is very excited what is happening just north, because I can never remember the name of the area just north of the the um uh of Claremont Drive with the new playground, the new conversation.

Her and all the mothers from Claremont are going to be very excited to come down Claremont Drive and have access to that.

So despite me being my her father, I'm gonna go off in a different direction because I think we really need to figure out how we really commit to delivering the projects that you so clearly articulated in here.

We're not doing a budget conversation, we're not allocating funds, we're not improving construction documents.

But uh, and I don't know how we do it, and we'll come back and circulate with um Mr.

Wilde about this about how we we pivot the conversation.

These are I I you know I I often repeat as excited as I am about DeNza Natural, as excited I am about the wetland projects you hear, these are incredibly expensive projects.

Um to do these and to do them right.

Um again, it's very expensive.

And how you accumulate the funds and whether there's proper four dollars uh and what access we have to to state or federal grants is going to be very challenging.

But you're here today, and we can't do any of that until we get this done, as you so clearly articulated today in in the briefing.

Um I have a question for the city attorney.

I know they always get excited when council members ask a question.

I'm I'm very supportive of this.

I'm kind of reluctant to make a motion.

There's only two of us here.

This is going to come to council, full council, because CECA actually demands it goes to the full council.

Um I don't want to send any kind of negative vibe by sending it without a recommendation.

Do you have any guidance?

Jordan, don't look so tortured, but my question.

But do you understand the point?

Um I do.

So you wanted to continue to council, but without making a motion for it to move forward to council.

I wanted to move forward to council.

Okay.

But I don't want to, I don't, this is going to come to council.

Maybe I'm overthinking this because this is going to be heard as a document item.

We're not going to slip this on consent and sneak it by.

So maybe I'm talking myself into being a little more comfortable because we're only making a recommendation that council should approve the resolution.

We're not actually approving the resolutions.

Correct.

You're just moving it forward.

Yeah.

Okay.

I had to work through that, so I got really uncomfortable.

And thank you to the to this very crowded chambers that is giving us a little bit of room to do these other important items before the last ones.

So I will move the staff recommendation.

You've heard some of my concerns is those will be future conversations.

Mr.

Wilde, you've heard them, and you know, parking records hearing it.

So we've we've got to figure out something uh to do these because a lot of this is also embedded in our climate action plan.

We set very ambitious goals for the amount of wetlands that we were going to create, and Mission Bay is one of the great opportunities to be able to actually achieve that.

Um with that, I will move the staff recommendation and feel comfortable about doing that.

I don't want to freak you guys out too much.

Thank you, Council President.

I will second that motion.

Um thank you for the the work on this.

Uh we'll do a voice vote here as well.

All those in favor, please say aye.

Aye.

That passes unanimously and moves us to item nine.

Sarah.

Thank you, Chair La Rivera.

Item number nine is the public power feasibility study phase two report.

And if you're watching on City TV or the live stream all nine, you'd like to dial in to speak, please call 1669-2545252.

Inputting webinar ID 16072-9638 pound.

Chair.

All right.

Uh once our presenters are ready, please introduce yourselves for the record and let us know how much time you'd like for your presentation.

Thank you, Chair Heather Werner with the Department of General Services.

We need about 15 minutes.

Please proceed.

So thank you, Chair.

Thank you, Council President.

As you know, tied to the award of the SDGE franchise in 2021.

The city embarked on a feasibility study for alternatives to a franchise under some sort of public power structure.

That study was done in two phases.

Phase one was delivered to council in July of 2023.

And this is then phase two.

And the presentation done by uh Scott Burnham of New Gen Strategies and Solutions, and we have representatives of their two subs Bell Burnett and Associates and Siemens Power Technologies International, or just Siemens.

So I'm going to hand it over to Scott to go through the results of the phase two study.

Thank you, Heather.

Thank you, Heather.

Council Chair, Council President, staff.

Thank you for the opportunity to be before you this afternoon.

As Heather mentioned, my name is Scott Burnham.

I'm a partner with New Gen Strategies and Solutions.

We led a team of consultants to look at the public power feasibility study.

I'm joined here by Nelson Bacalau with Siemens and Drew Atwater with BBA.

Next slide.

All right.

So what I'd like to begin with is just the overview of the phase two report.

The phase two report suggests it is both economically and technically feasible to form what we call a MEU, a municipal electric utility.

The economic feasibility depends on the value of the acquisition of the assets that we'll talk more about.

There's a range of assets, beginning with at the low end is the original cost, less depreciation, or book value, or OCLD.

And at the high end is replacement costs, new less depreciation, and we'll talk more about those concepts.

One of the important considerations is that the MEU would be a delivery only utility.

SDCP, the CCA that serves the majority of the residents in and businesses in the city would continue to provide power supply.

The economic feasibility suggests that there's a range of savings, again, dependent on the value of the acquisition of the asset between 6% and 16%.

That's cumulative at the end of a 30-year period.

That equates to approximately $19 billion at the lower asset price and $7 billion at the higher asset price.

One of the key considerations in this study, and we'll talk more about these assumptions, is the uh rate increase, percentage rate increase relative to SDG and E's current rates.

We're assuming 4% for the period of the 30 years.

The formation of the MEU would require the development of an independent electrically isolated in a sense MEU as well as the surrounding area continued service outside of the city by S D GE.

With the additional data received in phase two, we determined that that cost for separating those two systems has been reduced by approximately 100 million dollars.

This analysis is conducted on what we call an overnight analysis.

Next slide, please.

Thank you.

There have been certainly uh significant changes since the phase one study was three years ago, approximately uh in 2023.

Those changes include the additional detailed technical information uh as a result of a uh data request submitted to uh SDGE, as well as changes in policy in the regulatory environment.

So looking at the different uh landscape in terms of the change from phase one.

Phase one relied on public information, uh information provided by FERC, the Federal Energy Regulatory Commission, or the CPUC data.

Again, that information was supplanted in phase two with detailed information from SDGE that provided detail on the financials as well as capital planning for the MEU and ongoing capital investment requirements.

On the regulatory front, um looking at the there's a case in San Francisco before the CPUC recently relative to the acquisition of PGE assets there.

That certainly has an impact on the feasibility going forward, as well as other potential policy considerations, looking at things like climate change, commodity risk, wildfire mitigation, and post requirement or post separation requirements.

Next slide, please.

The phase two approach, as I mentioned, is a 30-year cash analysis, basically cash comparison between these two entities.

To be very clear, the the city would only serve load within the city.

It would only acquire assets that are in the city, and not all of those assets.

Well, we'll talk about that in the next slide.

As I mentioned, SDCP, SDCP, the CCA would continue to provide power.

In terms of looking at ongoing costs, I think those include metering, customer service, all the costs associated with operating a public utility.

There's also public benefit programs, non-bipassable charges, payments in lieu of franchise, and other current applicable state approved charges for uh for within the city.

The idea is we're showcasing the idea the benefits of public power in this analysis.

Um as I mentioned before, this was an overnight analysis, recognizing that it would take many years to actually accomplish.

Next slide, please.

Thank you.

In terms of the assets to be acquired, um, we could go on and on about all the different other assets that are there.

Um, but in summary, there's approximately 800 miles of of low voltage conductor.

There's also uh underground conduit, there's there's overhead conduit, there's all sorts of uh there's all sorts of equipment out there, transformers, meters, and other equipment, but basically providing retail service.

The MEU would provide retail delivery service to approximately 660,000 customers.

The city would acquire the 42 electrical substations within the municipal boundaries, and would acquire the subtransmission systems that are basically the conductor, the wires between those substations.

The city would not acquire the extra high voltage transmission or the bulk transmission systems from SDGE, nor would they acquire any generation assets.

So looking at the costs based on purchase price, as I mentioned, we had basically two uh bookends.

The lower price is based on the original cost list depreciation, which is akin to book value, the value of the assets that SDGE has on their books now.

We determine that price to be 2.4 billion.

That's adding in the depreciation on and estimating the original cost that was paid for.

The replacement costs, less appreciation, same amount of depreciation, but looking at what it would cost to replace those assets in today's dollars.

In terms of appraisal, in terms of looking at valuation, a prudent seller would unlikely accept uh original costless depreciation, and a prudent buyer unlikely accept replacement costs new less depreciation.

Typically, valuations go for somewhere in between OCLD and RCNLD.

Certainly the age of assets impacts the analysis.

The age of assets drives the amount of depreciation, and the difference between the OCNLD and RCNLD is pretty significant at one at 5.2 billion dollars.

In addition to the asset acquisition, there's also upfront costs that would be required of the MEU to fund operations and get fresh operations set up as well as to fund the separation process, the separation process and reintegration of the electric systems would would take a while.

It certainly would not be an overnight analysis either.

Um certainly there's startup costs as well.

There's also financial uh reserves built into our financial model relative to liquidity and other measurements uh for the operating utility.

Looking at some of the key assumptions then within the phase two study, certainly the purchase price, the range of purchase price between 2.4 billion and 7.6 billion.

The long-term uh growth rate of retail rates for SDGE, we've assumed 4%.

Um historically, that number has been higher.

The most recent uh rate case was came in approximately 4%, so we use 4% going forward.

We'll talk about a sensitivity about that in a few slides.

We've also included the payment in lieu of franchise fees and the public benefit charges that are currently received, uh, the the franchise fees that are currently received by the city and the public benefits that are charged, so that it was equal, sort of on both sides of the ledger, so we weren't necessarily weighting one by not including that.

Essentially, no government entities would be harmed in a sense from this uh from this acquisition.

To mention the separation costs, reintegration costs, uh, some startup costs, umfront working capital.

We also updated the estimate around staffing.

That was one of the concerns coming out of the phase one report, uh, recognizing that uh there was concerns from IBW and others, and certainly would would recognize that we would want to acquire that that uh workforce as part of the MEU.

So we updated that analysis, included those costs.

In summary, um we look at the results by selected years, and we look again at the bookend OCLD.

The OCLD is cash flow positive in year one.

And you can see there we have year 10, year 20, and year 30.

So it grows to uh 19 billion dollars by the year 30, the end of the analysis, which is approximately 16 percent uh difference from SDG and E.

The RCNLD takes a little longer, it's obviously a higher purchase price, so it becomes cash flow positive in year 12.

You can see in year 10 and year 20, we're showing that it would be not not be cash flow positive, but the cumulative benefit in year 30 would be 7 billion dollars or approximately 6 percent savings.

This slide shows just uh the same results, but looking at an the every year for the 30-year period.

On the left, you see the OCLD comparison, the blue line is the city of the MEU, that the red line is SDG and E.

You can see that the blue line grows slower than the assumption around the rates for the S D GE, primarily because the blue the city would offer issue debt and bonds that would be basically flat payments for the period of that time.

On the right, you can see the RC and L D value there.

You see the blue that is higher, so there's disk savings uh for the first 12 years until such a time that it comes cash flow positive, and then that difference continues to grow.

Mentioned the sensitivity relative to the assumptions in the analysis.

One of the key assumptions is that 4% uh retail rate growth for SDGE.

Uh historically, as I mentioned, it's been higher, it's been about six percent.

The most recent rate case was about four percent.

So we looked at a range between three percent and six percent over that over that 30-year period.

You can see there's pretty pretty significant delta between the three percent, uh, which is barely even showing in the bottom there, so it would not be very much savings at all if the rates in fact grew at 3% per year for 30 years.

At 6%, uh they would be a significant amount of savings, and that difference is approximately 60 billion dollars over the course of 30 years.

And again, that's cumulative.

Looking at going forward in terms of key considerations, certainly there are certain uh uh material considerations to monitor and evaluate that the city we want to do that could impact future feasibility, electrification and the impact on projected load growth.

We made some assumptions in the report about that.

Um, but those could definitely drive feasibility.

Um certainly we're seeing a potential direction in state policy objectives to uh address affordability and potential rate changes by the CPUC while also recognizing the need for ongoing reliability or investments in the system.

The evolving regulatory and legislative environment could also affect feasibility.

As I mentioned, the CPUC proceeding in San Francisco relative to the PG and E case there will set precedent, but is still currently being challenged.

Certainly, legislation at the state, including Senate Bill 875 to expedite the San Francisco municipalization could potentially impact the city's abilities as well.

And then the impact on by the CPU C in terms of uh wildfire investments, obviously, wildfire investments is a is a huge issue in the state, and how the how the CPUC treats those past and future investments is a major unknown.

In terms of conclusions, takeaways, uh phase two significantly refined the financial projections.

Uh, we did get very detailed asset information from SDG and E to facilitate this.

That resulted in a larger gap, a larger difference between the original cost, less depreciation, and the replacement cost new less depreciation asset values.

The phase two still finds that it's financial and technically feasible, and there is an opportunity to save billions of dollars over time for the ratepayers.

But that biggest driver is the is the assumed uh long-term growth rate of the SCG and E retail rates.

Certainly there are no guarantees in any of these numbers.

We're making estimates of over 30 years.

And the legislator, legislative and regulatory environment is very fluid and evolving, often you know, critical, including critical issues around cost reimbursements, valuation, and potential processes, all of which could impact the feasibility of this analysis.

So overall, the results are more defined in the phase two report, but significant unknowns and variables remain.

Thank you.

The public comment period for item number nine is now open.

We've received 13 individual speaker slips along with a group presentation.

We will begin with Nate Fairman.

You will be followed by Brittany, Mark, and Eric.

If those individuals can please come to the reserve seats at the front of the room, each speaker will have one minute.

Nate Fairman, IBW Local 465.

I'll keep it simple.

This does not protect workers.

You have bigger priorities, and you don't have the money to do this.

The phase two report talks about workers, but it's all assumptions.

It says we assume workers will be retained or acquired, purchased, like the uh speaker said.

We assume wages and benefits will be protected, but assumptions are not protections.

There's no binding agreement, no guaranteed jobs for pensions or seniority or even union recognition.

So you're asking the people to keep the lights on just to trust you that it's going to work out.

There's no way that we're going to be able to do that.

This is a huge change.

This is the most complicated city takeover that you can try with billions in risks and years of uncertainty.

Meanwhile, the city is already stretched thin.

Infrastructure, homelessness, stormwater, public safety, the parking rates at Boboel Park.

Why are we talking about something this big, this risky right now?

If this goes sideways, you know who pays for this?

It's the public and it's our workers.

This gambles with reliability, it gambles with people's livelihood.

Please protect workers.

Please do not move forward with this phase two study.

Thank you.

Thank you.

Brittany.

Good afternoon, Council members.

My name is Brittany Seats, and I represent SDGE.

Like many others here, we have serious concerns about the study.

It leaves out or significantly understates costs and risks that matter most to our residents.

Taking over the electric grid would be one of the most consequential decisions that you make as council members.

And it requires complete and reliable facts.

This study does not meet that standard.

It fails to answer the most basic question.

What would customers actually pay?

Key inputs are missing, and major costs like the CPUC required exit fees, which are not de minimis.

They would add billions of dollars, and those costs are not included.

It also shows an unusually wide acquisition range, not a refinement, as the presentation said.

It's a five billion gap from 2.4 to 7.5 billion, well below our prior estimate of roughly 9 billion dollars.

The feasibility study should reduce uncertainty, not expand it.

Thank you.

Thank you.

Mark.

Mark Kercy.

Good afternoon, Mr.

Chair, Council President.

Great to see you guys again.

Today with San Diego's current budget was it's more important than ever to do a deep dive on ideas that carry hidden financial consequences.

It's crucial that policymakers analyze budgets, plan for long-term obligations, and evaluate whether idealistic signing proposals are truly affordable and not just politically attractive.

Leaders must conduct this due diligence before making decisions that will have an irreparable effect on this region.

This feasibility study says it this is feasible.

The fiscal responsibility requires a standard that is more than just plausible.

It requires precision, transparency, and a clear accounting of who ultimately bears the risk.

First, the price tag is not an actual number.

Second, this proposal collides with the city's existing financial reality.

Third, the consequences do not stop at the city's borders.

And finally, taxpayers deserve proof, not assurances.

Public dollars demand public discipline.

Feasibility is not enough.

You need responsibility as well.

Thank you.

Thank you.

Our next speaker is Eric.

Eric Bruvold.

Okay, we will come back to you.

Miriam Mendoza.

Good afternoon, committee members.

My name is Mariamadoz, and I'm speaking on behalf of the more than 2,000 business businesses represented by the San Diego Regional Chamber of Commerce.

The chamber opposes the city's potential pursuit of a municipal utility.

It represents a significant financial and operational risk to San Diego's economy, business community, and workforce.

As the city faces a continued budget deficit undertaking such a large-scale transition, could further strain public resources and limit funding for critical city priorities, including infrastructure, homelessness, housing, and public safety.

While phase two of the report suggests the city acquisition may be feasible, there are still several key factors that are not accounted for that could increase overall cost, including risk management, wildfire mitigation, workforce training, and cybersecured safety.

The city should continue to focus on addressing its core challenges instead of spending billions on a risky new undertaking that relies on uncertain valuations.

We thank you for your time and consideration.

Thank you.

Our next speaker is Gail.

And Gail, you will be followed by Jessica Anderson and Isaiah Glasgow.

Glasgow, excuse me.

Thank you, Council members and staff.

60 billion.

Not including the water and wastewater enterprise funds, which are separate.

At the same time, the city is imposing ever increasing financial burdens on its residents, identifying these costs as ways of managing the city's budget.

But meanwhile, the million dollars a day in profit taken out of San Diego by SDGE and its parent company, SEMPRA, is financing not only a for-profit monopoly, but non-sustainable and destructive practices, building unnecessary and towering long distance transmission lines, purchasing fracked gas, and other polluting and climate crisis fuel activities.

The city has been overlooking a means of reducing its expenses by the billions and cutting any number of environmental ills at the same time.

Thank you.

Public power is the answer.

Jessica Anderson.

Good afternoon, Council members.

As a young adult trying to build a life in San Diego, affordability and climate change are major issues for me and many in my community.

The promise of public power is clear to be able to address both climate change and affordability.

Even conservative estimates show billions of dollars in saving.

The feasibility study shows that this is possible.

It is time for San Diego elected to take action against corporations like SDGE, whose greed forces many tens of thousands in San Diego into debt, all while forcing dirty fossil fuels that pollute communities across our country and accelerate the devastating impacts of climate change that we are already feeling in Southern California.

The time for a public power that protects both workers and the environment and creates a more sustainable and affordable San Diego is now.

Thank you.

Thank you.

Our next speaker is Isaiah.

Yes, this is with the presentation package.

So what I'm going to do is go ahead and call out the names of the people who ceded time, and then once we get account of that, I'll be able to determine if you've hit your 15-minute max to go with your presentation.

Okay, so we've got Isaiah.

Yeah.

And then Park.

Adrian.

Barbara.

Is Barbara present?

Thank you.

Randall.

Robin.

Sarah.

John.

Here.

Lewis.

Luis, thank you.

Elizabeth.

Ann?

Kennedy, thank you.

Jared.

Jerry.

Thank you.

Lane?

Thank you.

Rita.

Rita Clements here.

Thank you.

Carolyn.

Janelle.

I apologize.

I can't read the first name.

I think the last name is Das, D A S.

Thank you.

Abby.

Preston.

Ms.

Preston present.

Craig.

James.

And Catherine.

Okay, so you have exceeded 15, so you have 15 minutes total for your group presentation.

Okay.

We have the slides.

So thank you, everyone, for being here.

Thank you, Council members.

Thank you, New Gen team, for the report.

My name is Dr.

Adrian Fusick, and I am part of a growing coalition of individuals in San Diego pushing for utility affordability.

So this coalition is made up of the organizations on the slide there and several others, including the Climate Action Campaign and ACE.

We represent community members across all council districts, many of whom could not be here today, but all of us are feeling the impacts of the high utility rates.

So the exploration of public power has been in the works for a decade, and today we actually have a clear answer for a very long-term solution.

Next slide, please.

So we're here today because the cost of allowing a for-profit monopoly to provide electricity to San Diego businesses and residents is unacceptably high and is continuing to worsen.

So this graph is by the California Public Utilities Commission, Public Advocates Office, and it clearly shows that SDGE rates are again the highest in the state.

And by extension, the continental United States.

So their rates actually are growing three times faster than inflation.

Next slide, please.

So this slide also compares the residential electricity rates across California, but this time it's broken up between IOUs and POUs.

And so you heard in the previous uh presentation.

POU is actually equivalent to MEU in this case.

So investor-owned utilities are beholden to investors, and POUs are guided by public interest.

So we can see here with the top three uh rates.

Um we see uh Pacific Gas and Electric, Southern California Edison, and then SDGE, which is our utility highlighted in red there, is really surpassing them all.

So these numbers show the magnitude of this crunch that we're all feeling, but it does not really show the impact that everyday San Diegans are feeling.

So in fact, one fifth of all San Diego residents are in debt to San Diego Gas and Electric.

Next slide, please.

So San Diego Gas and Electric is part of SEMPRA, as mentioned earlier, and SEMPRA is the publicly traded transnational company.

So they're beholden to Wall Street, and to them, the lives and struggles of everyday San Diegans is a mere number or even less.

So their business model basically demands year-over-year profit, and as a natural monopoly, they're meant to be regulated by the state.

However, they have incredible political power, and they are their influence often outguns regulators.

So because they profit because they value profit over everything else, including including community priorities, they're often extending and overspending on infrastructure project, and they are perpetuating the our reliance on dirty fossil fuels, which are polluting our communities.

On the other hand, we have our public power, so our MEU or our POU.

And so with this, um the POU could be structured in any manner of ways, but the key here is that the control is with us.

So by eliminating profit, we actually take a huge slice off of our electricity bills, and it really puts the public interest at the forefront of these infrastructure decisions and the priorities that we make as a community under local control.

Also, having a POU would remove a huge barrier to our climate and environmental justice priorities and ambitious goals.

So I'll turn it over to Park for more.

Hello, my name is Park Trumpman, and I want to talk about the confidence we can have in this study.

We know there's still a lot of work to done to do.

There are still questions and issues and decisions that have to be figured out.

But this is an in-depth analysis of whether public power works financially for San Diego, and the results are a green light to move forward regardless.

Next slide, of which acquisition scenario we look at, even the most conservative.

Which makes sense.

Public power works elsewhere.

So it makes sense that public power would work where the electricity rates are the highest in the continental United States.

The long-term savings are substantial, and as you heard heard from the uh consultants' presentation, it's really a question of how much they'll snowball.

And as the study emphasized, yes, there are risk, but we can be prudent about managing them.

Next slide.

Thank you.

And I want to emphasize, and you saw this uh before of slide 11 in the presentation.

Uh brought this up to emphasize as an example of how conservative the report is.

This uh shows saving based on the growth in the revenue base for SDGE, and that in front of the public utilities commission is the number used for calculating rates and profits.

As was mentioned in the presentation, uh they used 4% as their basis, and historically it's been 6%.

They came up with the 4%, or is consistent with the current general rate case that San Diego Gas Electric is operating under.

But this should be understood as a baseline.

It's been a growing problem that investor owned utilities, including SDGE, are asking for rate uh increases outside of the general rate case.

So 4% absolute.

Uh I can think of that as a baseline.

And for planning purposes.

Uh yes, it makes sense to be prudent, but that's exactly what this report is doing.

Uh, next slide, please.

Uh and also another way to think about this, do kind of a gut check is to uh hearken back to the earlier slide showing all the public utilities in California making a lot less money or charging a lot less than the big three investor owned utilities.

Sacramento has uh Sacramento Utility District, which is a mature form of public power.

And the difference in their rates and what we have to pay is stark.

Stark.

Imagine if we had established public power decades ago.

And and uh for next steps, I will turn it over to Isaiah.

Thank you.

My name's uh I thank you, Park.

My name is Isaiah.

I'm with uh Public Power San Diego.

Um I want to reiterate before I get started.

Uh next slide, by the way.

Um, before I get started, that this report shows structural cost savings.

Um moving the profit costs from our utility company will save us money and proves that public power is an amazing opportunity for the city and for the people of San Diego.

Um so what's next?

Um phase two identifies that phase three will kind of focus on the legal aspects of this.

Um, but we kind of think it needs to be expanded a little bit and focus on four uh major key points here, which is the number one thing is labor engagement and protection.

Um this study assumes that there would be no change in compensation to labor.

While few would maybe argue that there's a distance between that assumption and the people who actually do the work of running the grid.

The workers need to have confidence in this process.

We have to get this right.

The city must engage with labor to determine exactly how we can protect them during this transition and beyond.

Second, we want to examine the relationship between San Diego community power and and this newly formed public utility.

We really want to remove any roadblocks for them being the generator, uh, the generation for this distribution utility.

Third, we want to explore different governance models.

There's a bunch of flavors for public power around the nation, around the state, um, and we want to make sure we're choosing the right governance model for San Diego.

We also want to start to develop a regulatory strategy.

We need to engage with the California Public Utilities Commission and navigate the LAFCO process.

Ultimately, the next step for this count for this environmental committee is to send this to the full council.

Next slide.

Now I want to recap um, you know, what does public power make possible for San Diegans?

The number one thing is rate relief for all.

Cutting the profit costs reduces reduces our rates substantially.

Um it's not, it's no longer you know shipping profit to shareholders and transnational corporations that where we see money just leaving San Diego.

Uh we also can you know design uh equity and low-income programs to help San Diegans who need it most.

Another very important thing about public power is climate alignment.

The profit incentive of SDGE often gets is a major roadblock uh in the way it in the city achieving its climate action plan.

Profits are prioritized over habitable habitable climate under SDGE.

Last but not least, we have to gain local control of our energy utility.

We cannot continue to let a captured California public utilities mission dictate what happens here.

We need a utility grid grid governed by San Diegans for San Diegans.

Next slide.

And I really want to end with this framing that this is a generational decision.

This this report shows multi-generational savings.

Public power is a viable and potentially transformative opportunity for the city.

The decisions we make over the coming months and years are going to echo for generations.

We're building a public utility for the future, um, and we need to get it right.

Thank you so much.

Our next speaker, Tyler Andre.

Please approach the electron.

You'll be followed by Lori Lifzman and Catherine Rhodes.

Hello, committee.

My name is Dre, and I'm a resident of District One and an SDGE ratepayer.

I'm also a community organizer, and I will say that not many things unite the people quite like their hatred for SDG C suite, not the workers.

When you have a company with one in four of their ratepayers in debt while they're making billions of dollars in profit year after year, I think that's a problem.

And if affordability is such a big thing to us, this is something we should absolutely be prioritizing.

I also want to bring up corporate influence in politics.

If you look around the community, you will see SDGE's logo plastered all over the place, donating and sponsoring uh organizations and events.

And they don't do that out of the goodness of their hearts, they do this for political influence.

And I want to remind you, this is the money they're extracting from our community.

So I ask the council to please consider this moving forward.

Uh let's get this uh corporate monopoly out of our politics and it'll save some money for the people.

Thank you.

Thank you.

Our next speaker is Lori Lipsum Lipsman.

Hello, hello, committee members.

My name is Lori Lipsman, a resident of District 3 and a member at BAES.

I personally know many who have struggled to pay for housing and now are going into debt for thousands of dollars with SDGE.

It is incredibly important for the city to push forward towards a not-for-profit public utility.

SDGE continues to make record profits, and I wish I could get them out of our entire region, not just the city.

Thank you.

Thank you.

Our next speaker is Catherine Rhodes.

Hello, Catherine Rhodes, and here's a chart of SDG and E's um price on the stock market.

Look at how much they went up.

Even in the even since 2020, they went up, you know.

Is this double?

Doubled since 2020.

Crazy.

Six years, doubled.

Insane.

Uh that um the what the reason why they have so much money and they're so rich is because of us.

Because they go to the um public utilities commission and just um ask for whatever they want and they always get it.

You know, um, for the submarized prior link, you know, um, when that was going through, I was trying to get them to do you know a straight shot around along the border on the um the 60-foot right-of-way that we have with the Roosevelt um thing.

And for some reason they want to go up and down all over um say all over the backcountry.

And then I I learned that they get um, you know, uh what nine percent for the cost override of what whatever they charge.

Thank you.

Thank you, Leticia.

Let's just still in chambers.

We can come back.

Admiral.

It's Admiral here.

Anthony Danger.

Good afternoon, Council.

My name is Anthony Dang from Climate Action Campaign, where we're building an affordable, resilient, and 100% clean energy future.

We thank Council President Lacava and Councilmember Ilo Rivera for your commitment to tackling our city's energy affordability crisis.

The phase two public power study is clear.

It is feasible to move forward with a real alternative to SDGE.

Right now, 35% of SDGE customers are behind on their bills.

And San Diegans don't pay these high rates just once.

They pay them over and over, first in their utility bill, and then again in the cost of food, housing, and building materials because high energy costs ripple through supply chains.

Small businesses pass these costs down to customers just to stay open.

Our families are paying SDG and E's rates at every turn.

The study confirms municipal utilities cost roughly costs roughly half what corporate utilities charge.

There is no lasting path to lower rates under the existing monopoly.

Thank you.

Thank you.

And one final call for Eric Bruvald.

Is Eric in chambers?

Okay.

And we've got a few more speaker slips here registering their position in favor, but do not wish to speak.

Ann Ramos and Brad Barber.

And I apologize, I've got two hidden speaker slips.

Um, Peter.

Is Peter present?

Thank you.

Peter.

Good afternoon.

My name is Peter Zishi.

And I have to tell you that one of the things you learned as a machinist in technology is everything changes.

That's just the way it is.

Now we're making things out of 3D printers.

And I wouldn't have dreamed of that when I was in the trade.

A hundred years ago, we used utility companies to build the energy resources and transmission systems in the United States.

Now we have alternatives.

Now we have alternatives.

Everything changes.

This can change too.

I'm also a machinist junior member.

So I really uh want to back up the comments of Nate is that I personally, as an active union member, I didn't expect this study to do justice for the concerns of the uh IBW and the workers there.

And I would encourage this committee to seek additional input from the IBW and those workers to fully exercise their voice and their concerns because those are the people we want to work at this utility.

Thank you.

Thank you.

And the final speaker, Kevin Machado.

Either one.

I'm here to speak in favor of public power.

I've lived in San Diego almost my entire life, and I'm seeing more and more hardworking families struggle to get by.

More than one in five San Diegans are in debt to SDGE.

We pay one of the highest rates in the nation.

Our bills and our and their profits are at record highs and they are trending up.

The public power report shows clearly it would lower a bill significantly.

San Diego would save billions of dollars.

Sacramento moved to a public power model over 100 years ago, and they pay about half of what we pay.

The report confirms that a public power model would lower our rates and keep them low.

Please act in the interest of San Diego.

What the SCGE people spoke about risk.

When the SDG people spoke about risk, they were talking about risk to the profits.

Thank you.

And I wanted to do one final call for Letitia.

If Letitia is here in chambers.

Okay, and there was another name that I had, Admiral, but I see that their hand has gone up in the virtual queue, so we will get to them.

I will start the five-minute timer for anybody else who would like to join on the virtual queue to provide comment on item nine.

We currently have 10 hands raised at the start of the five-minute timer, and we will begin with John Stump.

Each speaker will have one minute.

Please begin, Mr.

Stump.

Thank you very much.

He reminded me that before I was a lawyer, and before I was um a joint powers agency worker, I was a member of IBW 58 in Detroit.

So what's going on here?

The council has the ability to address concerns.

Yes, we can hear you.

My brother Fairman's concerns.

You should immediately during the performance item require that SDGE and there be a policy that we're going to guarantee union jobs and benefits.

That should be off the table.

You should do it.

Second, the law of fixtures.

We're being charged in this report twice for the stuff that the ratepayers have already put in the ground.

Got to get rid of that.

Thank you.

Thank you.

This does conclude your time.

Our next speaker is Mobby Castro.

Please unmute and begin.

Good afternoon, Council members.

My name is Lobby Castro.

I'm the chief impact officer at Lifeline Community Services.

We're an organization that serves more than 25,000 people annually from across the county of San Diego.

We appreciate the city's efforts to explore long-term energy solutions.

However, we do have concerns that the city's phase two feasibility study paints an incomplete picture.

Specifically, the study doesn't reflect the unintended impact that the plan could have on vulnerable families outside of the city of San Diego.

They're often coming and going between the city of San Diego, other and other municipalities for work and for leisure.

So without accounting for a full analysis, we don't have a clear picture of how the financial and service burden would be redistributed to municipalities and residents outside of the city of San Diego.

For organizations like Clifeline who operate countywide, that may lead to an increased demand and strain from the families living outside of City of San Diego.

And so we do encourage the city to consider incorporating a regional impact analysis and engage stakeholders across the country.

This does conclude your time.

Thank you for your comment.

Our next speaker is Blair Beekman.

Please unmute and begin.

Hi, thank you.

Interesting item to myself.

I'm not all that knowledgeable about these things, but it's been really important to myself.

I mean, I spent uh years now here at council just trying to always ask yourselves.

Just give that slight nod, that slight hint that we're trying to work on public power issues.

Uh, you know, whatever you can say, what anything informational you can say uh can really help.

And this item is trying to do that.

People are asking it can do a lot more.

Um, Council Person Wilkirk has been asking in council of our environmental reports.

How there can be a way that uh staff can just make presentations more interesting and factual and just uh accessible, understandable to the community.

Uh maybe this report needs the same thing.

And um just we can understand speaking in in facts in good good language.

It makes the process better for all of us.

So good luck.

What uh the future of this item holds for all of us.

Thank you.

Thank you.

Our next speaker is Tony Hey, good afternoon, council.

Uh Anthony Ralph's here, vice chair of the Boulevard Planning Group.

And I just want to say that I'm in full support of this project.

I'm in full support of public power, and I hope that this council will be brave enough to stand up to the billionaires to stand up to the special interests, to spend to stand in opposition to all of the special interests that are against the public will.

And this uh uh what SDGE is doing, the rates that they're making us pay right now, the profit that they're reporting.

I mean, just two years ago, they reported 950 million dollars in profit.

One is enough enough.

You know, they they reported over 500 million dollars in profit last year, and it's never enough for them.

And my backcountry is totally torn apart with their giant uh polls.

There's 300 foot metal poles that look terrible, uh, that are you know that they're building so that they can avoid uh their catastrophes that they've caused in years past by having their smaller polls which caught fire.

Thank you.

Our next speaker is Kelvin.

Kelvin, please unmute and begin.

Kelvin Barrios, I've given you permission to speak.

Please unmute and provide your comment on item nine at this time.

Kelvin.

All right, Kelvin, we will come back to you.

Phone number ending in 870.

Please press star six and begin.

Uh thank you, sir.

Joey Sanyata.

Hey, I'm still healing from approval of SDG and E.

And it was really hard for me to look at this.

Uh, but I will say this.

Please continue.

Please do everything you can in spite of the negativity of spite of the our obstacles.

But I want to say this.

I lived in San Francisco for 23 years.

When I moved there, I paid 400 for a small one-bedroom apartment, and I lived almost next door to the pyramid downtown.

Now San Francisco is considered by many to be the most gentrified city in the United States.

And here they are doing what we're trying, they're way ahead of us, I guess, within courts doing this thing.

Is that confusing or that messes with my mind?

Uh yet they have just as many pill people back not paying their bills as we do.

So I don't get to think about it.

Thank you.

This does conclude your time.

Thank you for your comment.

The five-minute timer has expired.

We have six hands remaining.

We will take no other callers beyond these six hands up.

Heckler, please unmute and begin.

Thanks for saying thanks for taking my call.

And we ain't in we're just drones paying the bill.

That's all we are.

The only thing we could do is something like how about solar panels on all trolley stations.

All trolley lines have solar panels for the whole thing.

Then put Mission Valley and Fashion Valley of solar solar panels over the whole thing, like solar farms right there.

And then don't even think about buying a house with the young guy now.

Don't even drink that's a nightmare.

If you own the house, you don't own it.

The bank does.

You got 800 grand in that.

You're paying the payments, the bank owns it.

You don't own it.

You just make the payments and the windsurf and the water.

Don't buy a house, whatever you do.

Even if your parents give you 300,000, you're still gonna owe them.

Don't do thank you.

This does conclude your time.

Our next speaker is Marco Espinoza.

Please unmute and begin.

Oh, Dustin, can you hear me?

We can hear you, please proceed.

Thank you.

Um good afternoon, Marco Espinoza.

Um, I am in total favor of Public Power.

Um at the end of the day, uh company, a for-profit company will just always want to maximize profit and revenue.

Um I mean, it's just you know, it's the market.

It's uh it's our system of uh economic lifestyle.

Um right.

But uh there are some things in society uh and in life um that I think should be looked at and cared for uh and managed uh in the aspect of the public good um because it is a necessity.

Um so yeah, I would love to see SDG and A go away.

Thank you for your testimony.

Our next speaker is Admiral Rivera, please unmute and provide your comment.

Admiral Rivera, have you given you permission to speak?

Please unmute and provide your comment at this time.

Okay, uh, am I on muted?

Yes, we can hear you.

Please proceed.

Okay, all right.

Good evening, council members.

So SDGE is not affordable.

I have a six thousand dollar bill.

I'm a retired veteran on a fixed income from the South Bay community organizer activist.

I brought a bill, but had to leave because of the time.

So I have been on an extension with S D G and E so that I could qualify for the AMP plan.

I was on the AMP plan, but since I'm on a fixed income, the pay cycle for the SDHD falls in the middle of the month.

So I cannot make any payments at the middle of the month with SDG because of the payment cycle.

The rates and plans are not helping and are not practical.

I would like options other than trying to figure out payment plans, other options from the city of San Diego.

Options that don't put patrons at risk of being turned off, or options that could be on a realistic affordable plan.

San Diegans should never be at the risk of getting the electricity turned off.

Thank you.

This does conclude your time.

Thank you for your comment.

Our next speaker is Kathleen Lippett.

Please unmute and begin.

Thank you.

Good afternoon.

SDGE lobbyists met with the city council, yet they were not required to declare their conflict of interest.

Council member Lakava, thank them for their efforts.

S D GE is guaranteed a rate of return on investments by the state, in addition to the cost of infrastructure.

The regulators set that profit margin at 10.2% above inflation for every dollar the utility spends building infrastructure.

They are allowed to charge customers an additional 10 cents in profits for their shareholders.

County supervisors leased or sold 21,000 acres of fragile biodiverse habitats for decades to come, if not permanently, with industrial solar projects, etc.

Since 2023.

Thank you.

This does conclude your time.

Thank you for your comment.

Jay Powell, please unmute and begin.

You will have one minute.

Thank you, Jay Powell.

I've uh first I want to thank both the environment committee members present today for leading the uh funding for this study.

My concern is where we're going in the future.

I've submitted a one-page letter requesting you to refer this report to the climate climate advisory uh board, and uh which was created to advise you on these matters.

In the staff report requesting approval to move forward with the phase one, the environment committee meeting.

It was stated that the feasibility study phases would include review by any applicable advisory boards.

That representation has not been followed throughout the series.

My understanding is the climate advisory board has not been provided the opportunity to review this in any doubt before it's been presented to you.

Please refer it to the advisory board to engage the public, identify and recommend options for an expeditious transition to not for profit electric distribution utility to provide the city and your constituents with affordable community-based renewable power.

Thank you.

Thank you for your comment.

And circling back one final time to Kelvin Barrios.

Kelvin, please unmute and begin.

Hello.

We can hear you.

Please proceed.

Thank you.

Hello, Council members.

My name is Calvin Barrios.

I'm here on behalf of the laborers union local 89 and my business manager of Al Macedo.

Here in opposition to this report, we can we continue to believe it does not benefit the city and would endanger the city's financial future.

The phase two study does not address the real costs associated with this effort, which should not be acceptable to San Diegans nor the city council.

The PUC standards for just compensation, which serves as a guiding principles for the current proceedings like PGE and CCSF are at most lost over in phase two, or at worst, completely ignored in this visibility study.

San Diegans deserve better.

A reliable utility requires significant capital investment and infrastructure in a highly skilled workforce with competitive wages and benefits and construction expertise to build and maintain the grid and pipelines in San Diego.

We continue to believe this is a business or a service that the city should not get into.

Again, appreciate your time today.

Thank you.

Thank you.

And Chair, this concludes testimony for item nine.

All right.

Appreciate uh the report.

Thank you to the public for your engagement.

Um I will turn it over to Council President for questions or comments.

Uh okay, thank you.

Uh Chair.

Uh to Miss Lipett who called in.

I don't think I caught the gist of what her comment was.

So please reach out to my staff so we can understand what you were trying to say.

Maybe I misunderstood.

If so, my apologies.

Uh, anyway, uh thank you, Heather, uh, for the good work.

You've been chasing this for a very long time.

Uh, everybody at General Services, uh, Randy Wilde, uh, and the teams at New Gen and BBA for the work in this second phase.

The phase one report was an equally impressive undertaking as phase, excuse me.

The phase two report was as equally in impressive undertaking as phase one, provided greater detail and clarity on a proposal that is massive in scale and complex as anything we do at the city.

We do big things.

We do big complex things uh here at the city.

Um, I'll just talk about the billion dollar uh community power.

Uh and the audaciousness of the San Diego community power that people thought was an impossibility of what could be done.

Um, and yet community power, which I was honored to chair for a few years, uh, rose out of nothing to become a billion dollar operation, got a top credit rating faster than anybody thought possible, and serves across what seven agencies going forward.

It's a little bit different animal.

Uh, but they are delivering um power to all those customers.

I believe San Diego is holding it about 95% of uh San Diegans were enrolled in community or everybody was enrolled in community power, 95 are still with it years later, a real testament to the work uh that they have done there.

Uh so anyway, the fact that it is massive in scale and complex does not mean it's not possible.

And I want to start by highlighting the opening slide, which said a municipal energy utility is both economically feasible and technically feasible.

And I want to emphasize the word municipal.

It is not a city utility, it is not a city department, it never was.

No one's ever talked about that.

Uh, while the city could be the lead in that conversation, it is going to be a municipal energy, and there's lots of ways that that actually could be structured.

Um, other joining cities might be interested, it could evolve into a joint powers authority.

Uh, but there's the structure of what it would be is yet to be determined, but it is not going to be a city department.

With no disrespect to the city employees and the amazing work they do, including uh PUD that we heard from earlier.

I don't think anybody on the operation side wants one more big thing added to uh our our uh work schedule.

But this is what the city set out to determine, and we should decide to proceed.

Uh, should we decide to proceed?

And you know, the why are you doing this?

Because that's what's in the franchise agreement.

That is what the council voted for in 2001.

I should say what eight council members voted for.

I didn't vote for it.

But that's the path we're on, and we have a 10-year clock ticking away that is a determination about whether we stay with the franchise agreement as it stands, because if we don't make a decision or take appropriate action, necessary action, it's a better way to phrase it, then it's 10 more years before we would reopen that conversation.

So it's all part of the franchise agreement and the MOUs that were done as part of it, and that's why we're doing it.

Life doesn't always set things up in a nice neat pattern as we often wish it would.

So it does come with risks and assumptions, and some of those were clearly articulated.

The degree of the risks, the variability in the assumptions is really going to be key in terms of whether to move forward or how to move forward.

And whether you feel the study has been too conservative in its projections or due to generous if you oppose the study, or that it may take longer than initially anticipated, a municipal energy utility is still feasible.

And since the outset of exploring public power, and when I, as I said, I'm gonna say it twice.

I voted against the franchise agreements that we have in place.

I've talked about the limited options we have had as a city.

And just as we fought for the creation of San Diego Community Power and giving customers options, it would be irresponsible for us not to pursue alternatives to our electric distribution system.

I would not do that to the city or our residents or the ratepayers and continuing to pursue a municipal energy utility is in everyone's uh best interest.

So a couple of questions.

I don't want to go too far into the weeds, but there were some questions that were raised by the public.

Um the um let me start with what is happening with San Francisco PGE and the CPU C that could set some precedence, even though it's a a little bit different animal.

San Francisco is a much smaller component of the entire PGE uh landscape.

Do we have any sense of timeline of how that may proceed or when we would get some indications?

Sure.

So the first major decision on that uh petition by San Francisco for the CPUC to effectively help determine the acquisition cost.

That's a big part of what that is.

There's some other additional kind of just compensation components to it.

Um that came out at the end of October.

What that decision really outlines is the next step.

So the biggest chunk of that is just laying out look, the next step of testimony includes all of these things that must be submitted by the city and county of San Francisco and all of these things that must be submitted by PGE.

It also identifies three different valuation methods that they want both parties to kind of go through.

One is cost, which is what the feasibility study is based on, one is income, and then one is called market-based.

Um we imagine that that part of the precedent will absolutely probably establish, and that would be a same process that that any municipality, San Diego or any other, would probably have to go through.

The results of a full appraisal of the systems, not just the system within San Francisco, but the full PGE system.

The appraisal pieces would have to be done.

Um that takes that detail we did here one more layer deeper.

Um, the valuation models, all of those things.

So the it's going to probably be at least, I would say that the filing of testimony for that is I believe later this month, uh that we'll see the first sets of the next round of this, how long then you go back and forth on the numbers, where they align, where they don't, which valuation model.

That if we use just the GRCs as a standard process is going to be a year back and forth of testimony.

Um and and staff obviously is tracking that docket and that proceeding closely because as it sets precedent, we'll be able to say that's probably gonna hold that's really specific to San Francisco as opposed to where we sit within the SDG and E system and kind of iterate from there.

Okay.

Um so we're still several years out, even on that proceeding.

Um of the issues that was raised, you know, one of the conversations about solar and net metering has been the allegation that um ratepayers were subsidizing solar customers.

So that's been the back and forth of net metering.

So one of the comments was made that if this happens in the city of San Diego pulls away out of SDG, that there could be a financial impact on the remaining ratepayers.

Did we study that?

Will we study that?

We would not, but however, that just compensation calculation and how it is calculated, what it ends up being, and how whichever flow of the money needs to happen in whatever direction and what that's structured as will all be part, would all be concluded in us in a CPC proceeding.

But no, other than there needs to be just compensation between the two systems, there's been no indication.

So right now it's a little bit of throw whatever number looks good up on the wall.

Some people think that's how CPUs strike that from the record.

I didn't really mean that.

The I mean you it's an important point because I think of San Diego Community Power again.

Um for all the success I talked about, there were headwinds, and the PCIA was one of the headwinds, and actually the way that it manifested itself was much more challenging than we had anticipated.

Nevertheless, community power has been able to deliver better product for a lower price of uh of electricity.

Um the other element, this was not in negotiation this afternoon, but I thought I heard a valuation of nine billion.

Um, how much of that, if that was actually the price, how much would that change your analysis?

Come on, right off the top of your head.

I mean, it would obviously the seven point was it would push out if if indeed the assets were nine billion, then it would push out that breakeven period beyond what we're saying now.

I can't tell you how long we push it out, but we could certainly look at that and run a sensitivity around it.

Okay.

Um then to help us understand, because these are going to be really big important decisions, and we're gonna need to understand.

Help me understand um the very pretty two graphs you did about revenue requirements.

You didn't characterize it as rate payers, but when can infer uh revenue requirements results in what the ratepayers have to pay.

Um in the more expensive acquisition price, this the seven point.

In the early years, the blue bar is higher than the orange bar.

Does that mean ratepayers are going to pay more than what SDG is currently charging?

Or is there some kind of stabilization process to prevent that from happening?

So the revenue requirement is the total cash needs of the municipal electric utility.

Under the RC and L D scenario in the initial years, that revenue requirement would suggest a higher rate, all-in rate for the that period of time, which would then eventually catch up because of the fact that the rates are the PGE or the SDG and E rates are growing at 4%.

A lot of the costs, the structure of the debt issued by the MEU is flat.

So those parts would not change.

Now, inflation does impact the MAU in terms of its operational elements, but the non-operational costs are generally speaking, or the debt-related costs are generally flat.

But in terms of the revenue requirements being higher, we would still be able to protect the city and shield the rate pairs?

No, it would suggest a higher rate for the for the citizens and and and essentially a higher revenue requirement than the all-in rates for SDGE during that period of time.

Okay.

And then that during that worst case scenario, how many years is that?

That's about it.

Twelve years?

Twelve years.

Okay, that's yeah, you're right.

You did articulate that.

Okay.

Um again, that's kind of the range.

And and actually, I I want to do stop here for a moment and thank you, because most of these studies, there's always a range in the assumptions.

We often get a study that says, I'm gonna pick a spot somewhere in the middle there and let you have it.

But offering that extreme ranges on either end was very helpful to me to understand the scale of this in terms of the implic uh the implications of it, like you said, under both scenarios, so you can make an informed decision.

Um I think I will um stop there.

Um, you know, I I appreciated that this was a component of the initial franchise agreement.

You know, we've invested money to do these first two phases.

Um, you know, I kind of debate about Mr.

Farriman's a good man.

I appreciate what he's fighting for his membership.

Um, and the way I look at it is that if you actually believe in this, you're also going to believe in protecting workers.

Now, how that manifests itself and how that works itself out, you know, there's a lot to be debated there.

And if you don't agree with this, you probably don't care about workers.

And so uh they won't vote for this if this council should change and flip in a different direction.

Um so I'm not worried about this.

He should be worried about it.

That's his job and his current role, and so I do appreciate um his comments.

And I should also give a shout out to former council member Mark Kersey who showed up, talked and left.

But I always appreciated Councilmember Kersey's comments, and I don't actually disagree with anything he said.

It's all the caution, understanding the risks, uh testing the assumptions before this is still a big idea, which is what we did with Pure Water.

It's what we did with community power.

We all took very careful steps.

We didn't jump anywhere without getting his best handle on that.

So I'm starting to ramble, so I'm gonna stop.

Thank you for the good work.

Uh thank you for everybody who showed up, and frankly, on both sides, because we need to hear both sides uh because this is big.

Uh this is an information item, so I'll stop there.

Thank you, Chair.

Thank you, Council President.

Um thanks to everyone who engaged in the conversation today.

Um we talked a little bit about it, but I do think it's important to continuously um mention how we got here.

And it and it is a action that was set in motion when the franchise agreement was um was agreed to.

And as I've had personal conversations with some of the folks in this room, and I definitely mentioned at the time, one of my big points of frustration in that moment was the lack of work that the city had done to prepare for that moment.

We had a 50-year agreement that we knew was going to expire at some point.

The date was in the agreement, um, and the city did nothing to prepare for it.

And um that put us in a really bad spot.

At a minimum, it meant that we didn't have um the leverage that we should have had, and um we certainly didn't have the planning that we should have had um to pursue um the seriousness of of making a shift of this uh magnitude.

And so that's why we set that work in motion, and it was timed up because this takes a long time, and um we wanted to be in a place where when that 10-year uh mark is hit, we actually know what our options are, what the pros and cons are, and um can be in a better place than we were uh in the spring and uh this the the winter and spring of 2021.

Um so that's like kind of technically how we got here, but then there's like why the people are here, and that's a different thing, and that's because you're fed up with paying as much as you're paying, and people all over San Diego are, and many people who don't have the ability to make it here are, and it only becomes more frustrating when you see the profits that are being derived from the payments that you can't afford to make.

Um and that is why the drum beat only grows, um, and it's important that we we keep pursuing this in the way that we are.

So um, you know, I think we're having a conversation about the the about affordability, accountability, climate action, um, and a really really important one, which is like who does the energy system actually who is it designed to serve?

Sandy Agans or shareholders.

And right now, it feels like it's designed to benefit shareholders, and that's not right for everyday Sandy Eagens.

Um I I have a couple questions.

Um there's just some like general questioning of the quality of the report that SDGE offered.

Do you is there anything you'd like to say to respond to to that?

No, I have no comments on that.

Okay.

Um you're nicer than I am.

I I would definitely have said something.

Um good for you.

Um appreciate that.

Um there was one question that SCG asked, SCG asked that I think I I have to call this part out because it it's the there's this question of why the report doesn't guarantee what customers will actually pay.

And I will take that question seriously when you can guarantee to cust to the customers what they will pay.

Um it's it's questions like that that it just makes people super angry.

Like like how how can they take that seriously as a reason not to pursue this when it is a month by month, year by year guessing game what their utility bills will be, um, when the system seems to be gamed in such a way where San Diego Community Power is trying their best to save people money, and STGE plays games with to make that more difficult.

Um I just that that really frustrated me.

Um because SEMPRA is posting billions in profits, um, while we've got families figuring out if they can keep the lights on and um feed their families.

Um the the other thing that I think is is just really important to be clear about especially for those who want this because your day-to-day lives are being impacted, or you're fighting for someone whose day-to-day lives are being impacted.

This is a long process, and the report makes that clear, and I I I just I have to say that part because no pun intended here, this is not the sort of thing where you can just flip a switch and things change.

And um that's frustrating, but we have to just be honest with ourselves that um if you're someone who's frustrated with today's utility rates and tomorrow's utility rates, you have to be engaged in that fight as well.

And that's not fair to you, it's just a reality because there's no magic solution coming from this process that's going to change your bills tomorrow.

Um a question about the report.

Um I've done a little bit of research on this.

Um I'm curious, and if I if I'm misunderstanding anything on this, but by all means let me know.

Um so Long Island has a structure where the municipality own municipality owns the infrastructure but contracts with operators to run it.

And those operators are the work same workers who operated under the IOU.

And this addressed operational readiness, made sure that the people who know how to do the work because they're doing the work, continue to do the work.

Uh it um reduced work for workforce disruption, it kept their contracts in place, right?

So there was uh uh the the contracts that they'd have fought hard for and won.

Um they they weren't um those weren't disrupted.

Um it very importantly also removes the shareholder profit motive from rates setting.

So why was that part of this?

It didn't seem to be you know really discussed.

Is it not appropriate for the situation that we're in?

It wasn't necessarily included as that type of model.

The intent was that we would basically hire the existing staff, yeah, and they would become part of the MEU.

Um, and their and their their wages and all the analysis that we put into that was based on SDGE's numbers.

So, in terms of that that specific model, that's a pretty unique model in the country.

Um, and we did not choose to we did not seek to replicate that.

Are there any red flags thus far from that model that we should be aware of?

I've I've heard that that perhaps there is there is some potential reform there with Long Island.

I don't know how that how long that's if that's being pursued, but I have heard that in the industry.

Okay.

Okay, thank you.

Um that gets me to the next point.

And and um Nate said it, and it's it is true.

The report assumes wages benefits, labor agreements will be preserved, and and that's that's different than a guarantee.

A guarantee doesn't come in a report, so there's that you know reality, but it's also a reason why this discussion can make um the workers again who fought hard for um what they have, what they need to survive, um I would make them nervous.

And we we've said it in previous conversations, I'll say it again.

Um that part is a non-negotiable to me.

Um this can't be done on the backs of the of the rank and file workers who make who do all the good stuff that STG SDG does and certainly are not being compensated like the folks at the top of the ladder who are making decisions about how much um to make off the backs of everyday San Diegans that that will remain the case as this that'll remain the case for me as this conversation moves forward.

Um then the the last question I had San Diego Community Power.

Um, this is it's really important.

Again, they're fighting hard to deliver clean affordable energy to San Diegans, they're doing that.

Um the acknowledgement that current law may not allow a CCA to operate within a municipal utilities uh service territory.

Are there how early should the conversation would the conversation need to start in order to ensure that the appropriate landscape is created legally to ensure that there wouldn't be disruptions there?

So I want to be very circumspect in how I say this because some of this is I don't, I am not a lawyer.

And I think one of the reasons that that language is in the report and it's been highlighted is the I think it's AB 117 that actually the CCA law that allowed for the establishment of CCAs carved out that municipal utilities that were established by I think no later no later than 1993, you could not have a CCA within them.

The law does not imagine a municipalization following us community choice aggregation setup.

And so it's really silent, and so it's one of those where we want to acknowledge it because there hasn't been any kind of decision or jurisdictional decision in that.

And so, yes, we would need to, and I think this is this will be true.

Should we continue to pursue this in any form?

Is there is a need for kind of a legal opinion and analysis section of whatever areas of kind of scope and support the council and mayor's office direct staff to continue to if they choose to do so.

Okay.

Appreciate that.

Um I don't think I have any additional questions right now.

I I again appreciate the the work that went into this.

I'm glad we're having this conversation, appreciate the public's engagement.

Um again, this is a super important issue.

Um what folks are paying impacts not just that bill, but everything else that you're paying for in this city.

Um, if you go out to eat, that part of that price is based on what that restaurant is paying for their bills.

Um we were just um talking up here, your water rates are impacted by what the city has to pay or the what PUD pays and it it's it has a cascading effect on affordability in our city uh that can't be understated and the distrust of SEMPRA as being an ally in the fight against climate change is well earned.

Um so um I appreciate everyone staying engaged in this fight.

Um it's in the engaged in the conversation, appreciate um all the work that's going into it.

Um and with that, we will uh we don't have an action in front of us.

Um so we will move to our final item, uh, agenda item 10.

Sarah.

Thank you, Chair Elo Rivera.

Item number 10 is the SDGE franchise independent audit report and franchise compliance review committee report of 2023 to 2025.

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Inputting webinar ID 16072-9638 pound.

Chair.

All right.

Um, once our presenters are ready, please um settle um once you settle in, please let us know how much time you'd like for your presentation.

I will just briefly mention we've already kind of run a bit long because of the amount of public participation today.

Um just take that as you will.

Understood.

We'll try to keep it short.

Uh thank you, Chair.

My name is Meganong.

Um, we are gonna try to keep it under 20 minutes, but we do have two presentations together in one.

All right, thank you, everyone.

My name is Megan Ong, program manager in the Department of General Services.

I'm joined today by Deputy Director Heather Werner, as well as our consultants from Crow, Eric Nylon and Bert Nuring, um, as well as the Tommy Rash Zagler from our franchise compliance review committee.

Today we'll be presenting to you the results of our second two-year compliance period of the SDGE franchise, which will include a presentation from our independent auditor as well as a presentation from our franchise compliance review committee.

Uh to provide a to buy excuse me, to provide a bit of background.

In July of 2021, the council passed two ordinances that awarded the electric and gas franchise to SDGNE.

The franchise has a 10-year term with an automatic renewal for a second 10 years, unless other actions taken by council.

As an additional level of oversight, the franchise requires two things.

First, the city is required to retain a third-party independent auditor every two years to perform an audit of SDG ⁇ E's compliance with the franchise.

Second, the franchise requires the city to establish the franchise compliance review committee, also known as the FCRC, a citizens committee comprised of two mayoral appointments and three council appointments.

The FCRC is charged with receiving the independent auditors report and providing its own report to council with a recommendation on the automatic renewal of the second 10-year term.

Both of those reports are being presented to you today.

In July of 2024, we present a similar item for the first two-year review period.

And at that same meeting, council passed a resolution to establish a second FCRC to oversee the second compliance period, which covers July 8th, 2023 to July 7th, 2025.

I would like to take a moment to thank our volunteer committee members, Matt Brennan, Linda Latimore, Cody Huben, Satomi Rash Zegler, and Corey Albright for their time and dedication to this committee.

In regards to the independent auditor, in October of 2022, city staff released an RFP for the independent auditor.

And through a competitive process, Crow LLP was selected.

The city chose to exercise its option to extend Crow's contract for the second two-year compliance cycle.

I have with me today representatives from the Crow team who will go into more detail about their audit procedures and findings in a few minutes, but at a high level, the audit covers the second two-year of the franchise and includes the financial, operational, and cooperative requirements under the franchise ordinances as well as the supporting documents, which includes the administrative MOU, undergrounding MOU, and the Energy Cooperation Agreement.

At this point, I'll be passing it over to our independent auditor Crow, who will provide an overview of the audit findings and recommendations.

Thank you so much.

Thank you so much, Megan.

My name is Bert Nearing, partner with Crow, and with me today is Eric Nyland, a director with Crow.

Just briefly, we will uh talk about the actual scope of the audit as well as our findings and recommendations.

Also included within the audit was the review of the state phase one uh audit findings, and so we'll give you an update on what we found with that review.

On the next slide, then with regards to the scope, the phase two audit.

The scope was July 8th of 2023 through July 7th of 2025.

Our scope included four objectives, which was to determine SDG and E's compliance with the franchise agreements, administrative MOU, the underground utility uh MOU, as well as the Energy Cooperative Agreement associated with those franchises.

The procedures we performed included interviewing SDGE and city staff in various departments as listed here.

We also reviewed the documents of each of the four uh documents I mentioned before.

We submitted our data requests to SDG and E and the city, and uh those requests related to various documents that were necessary to perform our work.

We also looked at the annual franchise fee calculations and documents and uh looked at the appropriate calculations uh and the payments uh appropriately to the city itself.

With regards to the administrative MOU, we selected a sample of 13 projects and audited those specific requirements of permitting inspections and collaboration by reviewing supporting documentation under for the utility undergrounding MOU.

We selected eight projects that were in process, and we looked at those for the permitting inspections collaboration as well.

And then with the uh ECA or the Energy Cooperation Agreement, we looked at the supporting documentation for each of the requirements in that agreement.

The conclusion then of our audit for this period of time, the two-year period, it ended July 7th of 2025.

We identified two findings that were not deemed to be significant to the audit objectives, but we felt they warranted inclusion in the report.

And I'm gonna turn it over to Eric to talk about those particular reported findings.

Eric.

Yeah, thanks, Bert.

Uh so the first finding relates to some non-compliance in the undergrounding MOU, and there's four sections of that MOU that we found non-compliance in, and those are listed here.

And I'll just walk through a couple of them relate to project block 8R.

The first was that the company did not complete internal processes on time, which caused some delays in assigning inspectors to that project.

And then there were some written schedule that wasn't put together with days and hours when the inspectors would be ready and available.

So these cause just you know intrinsic delay in projects in that one and specifically that Brock 8R project.

Um with regard to section 7.4.3, STG did not provide a construction baseline for the trench and conduit work on that project.

Um, that one was 2BB job two.

And then finally, um, SDG did not submit detailed 90% estimates of cost, the design estimates, and the supporting documentation around those, uh, which clearly differentiate those those costs, and that they've reached that 90% design threshold.

And so our recommendations are to establish stronger project management controls and standardize some timelines and checklists, assign a dedicated compliance liaison, or project coordinator to help uh facilitate these items, uh revise invoicing backup materials to more clearly distinguish the 90% design estimate, which is a requirement uh within that section eight uh of the franchise or the MOU, uh establish regular joint review meetings with city staff, train personnel on these requirements internally, and then link compliance to performance metrics.

So there's incentive to meet these um deal requirements in the MOU.

Um next slide, please.

The second finding relates to some non-compliance with regard to the admin MOU in Section 10 B, where they did not uh the company did not schedule a pre-construction meeting with the city has required for uh a project um that was assumed to be a Cat 1 project or category one project, which require which would not have required pre-construction meetings, um, but it was actually a category two project, so they should have had that pre-construction meeting.

So that um in and of itself that was one of maybe ten that we looked at, so it's not a predominant um non-compliance problem, but it's a deficiency, and so we suggest strengthening you know, project classifications to make sure you know which one it is, whether it be category one or two, developing a project checklist to be reviewed by a supervisor before construction begins, and then training field crews on this matter uh to clarify the differences between these categories.

So those are the two findings.

Now, with regard to prior findings, um, in the past phase audit, we found inconsistent undergrounding project cost estimates.

Um we think this is still a matter of concern.

The cost estimates were pretty high, and over the several periods that we looked at, they were progressively going higher, and in this case they actually dropped back down a little bit, and the overheads associated with that, uh, those cost estimates came down a little bit, but uh again, this merits continued monitoring and uh and uh and follow-up on these on these cost estimates.

Uh the second was limited collaboration with the city on underground and construction MSA evaluation criteria, and this doesn't wasn't relevant in the phase two audit because the MSA had already been set up and um so it was an active contract and they didn't rebid it.

So that one was moot, if you will, but could come up in the another phase.

Um the third one was that the STGA did not comply with uh section 6A of the admin MOU, and because that was uh renegotiated, it no longer applied in this phase of the audit.

And finally, the city and STG did not comply with section two of the energy co-op agreement.

Um, and then this was remediated and so didn't apply, and it was quickly taken care of, um, so it didn't apply in phase two.

So, with that, I will turn it back to uh Megan.

Great, thank you.

Um at this point, I'm gonna pass it over to a our vice chair of the franchise compliance review committee, so Tommy Rashadegler, who will be presenting uh the FCRC presentation.

Thank you, Megan.

So, as Megan stated earlier, the franchise compliance review committee is formed every two years to review franchise compliance and make a recommendation to the city council to be renewed for a second term.

Um the committee's response key responsibilities include ensuring accessible public engagement on franchise agreements through Brown Act compliant meetings and a transparent online hub with materials and recordings, um, work with independent the independent auditor to review the franchise audit, develop a comprehensive report with input from key stakeholders, and of course provide a recommendation to the city council on the 10-year franchise uh renewal.

So on to our franchise findings and recommendations.

So the committee found that SDGE uh demonstrated overall compliance with all four agreements, um, and the audit identified only a few minor issues, mostly related to documentation, scheduling, or classification.

These were ICE isolated and um tactical with no evidence of systemic problems, financial harm, or governance breakdowns.

The committee recommends that routine monitoring of franchise compliance continue with the focus of clarifying expectations, standardizing documentation, and reinforcing early coordination between SDG and SDGE and city departments.

Right now, there's a timing mismatch between when these agreements can be renegotiated, renegotiated and when the committee is actually doing its work or doing its review.

That means the committee's input may not may come too late to meaningful meaningly meaningfully influence the process.

So what we're proposing is to better align those timelines so when the negotiation opportunity arises arises, they coincide with the committee's review cycle, allowing their work to directly inform city decisions.

For the undergrounding MOU, the committee recommends providing detailed cost breakdowns and establishing a regular review mechanism.

Right now it's kind of like going to a restaurant and just saying the total is $200 with no like itemization.

And so it would be helpful to actually have a breakdown to make sure everything looks reasonable as far as cost.

For the energy cooperation agreement, the committee suggests setting realistic timelines, maintaining energy efficient program commitments and improving reporting and expanding public engagement opportunities.

Okay, so while compliance is strong, the committee noted several areas where processes could be improved.

These include ensuring pre-construction meetings are consistently held, clarifying documentation practices, increasing transparency and project costs, enhancing tracking and reporting under the energy cooperation agreement, and creating additional opportunities for public engagement before agreements or modifications are executed.

The committee recommends continuing to monitor prior audit themes to ensure progress is sustained, recognizing that some issues require ongoing management rather than one-time fixes.

It also suggests creating plain language.

We also suggest creating plain language summaries of all agreements to help both the committee and the public understand purpose, process, and timelines.

Renegotiation of timelines should align with the biennial review cycle to improve public engagement, and the committee should have access to the draft audit findings for early review.

Oversight shouldn't just focus on compliance, though.

We also need to look at uh financial impacts and how these agreements affect the community, creating structured opportunities for public input along with more standardized reporting across all franchise agreements would improve transparency and make it easier for both the council and the public to review and understand what is happening.

The committee observed that not all franchise activities care carry the same level of risk or public concern, so oversight should focus on areas of greatest impact.

For example, routine routine administrative uh updates like minor contract amendments or reporting changes don't typically have major community impacts and can be reviewed more quickly.

But decisions involving undergrounding projects, rate impacts, or long-term renewal terms have significant financial and public implications.

So those should be receive deeper scrutiny and more uh detailed oversight.

Uh to strengthen the oversight, the committee recommends establishing success criteria beyond compliance.

For example, instead of only confirming compliance, we would like uh we would also look at outcomes like whether projects stayed on budget or were delivered on schedule.

Sharing all public comments or feedback from residents is fully visible throughout the process, not just summarized, expanding structured public input early in the agreement process, and enhancing audit scope for cost drivers, and standardizing reporting across all franchise agreements to improve transparency, consistency, and accessibility.

Let's see.

So the committee is recommending that the franchise be allowed to renew automatically but with conditions.

This reflects SDGE's compliance, financial uh SDGE's compliance, financial contributions, and overall performance, while also ensuring the alignment with the city's long-term goals.

So the council's decision should both consider individual agreements and MOUs, as well as the overall structure and long-term impact of the franchise.

The committee's recommendation is that the renewal is conditioned on aligning and renegotiating timelines to ensure meaningful public um engagement and council input input before agreements are finalized.

So our key findings generally, SEGE is generally compliant with only minor issues noted in the audit, undergrounding costs are high, and overhead transparency could improve.

Previous concerns have mostly been addressed, but climate action progress has been limited.

Public input was considered and renewal preserves flexibility for future options like municipalization.

So we recommend that conditional renewal is the approach the committee is the approach that the city should take because it supports the San Diego rate payers and the city's broader policy objectives.

However, it's important to recognize that simply meeting the terms of the agreement, like compliance alone doesn't fully address bigger concerns like affordability, potential rate impacts, and how these agreements align with the city's long-term energy and climate goals.

Thank you.

Thank you.

Thank you.

We'll open it up now for public comment.

Thank you, Chair.

We've received five speaker slips here in chambers.

We will begin testimony with Caitlin Haley.

Caitlin present.

Each speaker will have one minute to speak to item 10.

Thank you and good afternoon.

I'm Caitlin Haley with SDGE.

SDGE's full response to the audit report can be found in appendix D of the report.

But in summary, SDGE is proud that for the second time the audit of our franchise compliance shows no significant findings or deficiencies related to SDGE's performance of the various franchises and related agreements.

These results show SDGE's commitment to the agreements we made with the City of San Diego, and we also acknowledge that there's still room for improvement.

Again, our response to the two findings deemed not to be significant to audit objectives can be fine found in appendix D.

Regarding the franchise compliance review committee report, the committee has invested a lot of time and effort into their process.

Their conclusion, after all that work and effort, can be summarized into finding that the continuation of the SDGE franchise agreements is in the best interests of the ratepayers and supports the City of San Diego's policy objectives.

We sincerely thank all of the committee members for their service on that committee.

Thank you.

Thank you for your testimony, Lori Lipsman.

And Lori will be followed by Catherine Rhodes, Park Troutman, and Anna Ramos.

Hello, hello again.

I'm Lori Lipsman, District 8.

I am against SDGE and any automatic renewal of this franchise.

Communities of concern are disproportionately impacted by greedy corporations.

It's estimated that the compensation for SDGE CEO is 10 million dollars, and the estimated compensation for SEMPRA CEO is 19 million dollars.

These are outrageous compared to what people are paying for their electricity and gas.

Thank you.

Thank you.

Catherine Rhodes.

Hello, Catherine Rhodes.

And so my issue with the SDG franchise agreement was when they came here in 2001.

Um and doing the undergrounding work.

And so I would go to the people just working in Point Loma and ask them, you know, where are you guys from?

And they would say Orange County in LA, and they would tell me that they get per diem every day, which was now 200 a night, to stay in hotel rooms, but they would drive back and forth to Orange County and take the money, our money.

And so SDG and 2021 at the hearing, they promised to start training San Diego County ditch diggers and workers and union workers in San Diego to take over all the jobs.

So has jobs been taken over over by the um local unions as promised, or have they not?

So I don't know the answer to that.

If you could tell us, thank you.

Thank you.

Park.

Hello, my name again is Park Trumpman.

I'm with San Diego 350.

Uh first one to say, you know, being on this committee, I tracked it as much as best I could uh over the last homey months, and being on is definitely uh example of selfless civic engagement.

Um I do like the phrase uh beyond compliance for thinking about this in the future.

One concern I would like to raise for future iterations of the audit itself is the two audits uh follow the structure of methodology conclusions, and they do not explain the example they explain how they reached their conclusions when they thought STGE was compliance.

And this uh is a particular concern with the energy cooperation agreement where it's not just a matter of numbers, uh it's a matter of interpretation, and we need to know how they reach those conclusions.

Thank you.

Thank you.

Anna Ramos is Anna here.

All right, I'll begin the five-minute timer for all those in the virtual queue to indicate if they wish to provide comment on item 10.

We have five hands up at the start of the five minutes, and we'll begin testimony with John Stump.

Please unmute and begin.

You will have one minute.

Okay, counsel.

You heard from the public that the we should not continue.

This audit report is recommending continuing.

You've got to say no to the automatic renewal.

Some things that are missing.

Where is the diversity report on SDGE's employees?

How many men, how many women?

Uh, and where do what zip codes do they come from?

Are they supporting climate change by employing local folks to do local work?

What about SDGE and the city's suits with each other?

How much has the city had to pay for SDGE's non-compliance with the undergrounding?

Uh, as far as revenues, did you know that SDGE doesn't have to pay tax on its properties that it's reserving for future updates?

Thank you.

This does conclude your time.

Thank you for your comment.

Our next speaker is Tony.

Please unmute and begin.

Yes, hello.

Can you hear me?

We can hear you.

Please proceed.

Yes, hello.

Thank you, Council.

Um, I just wanted to speak against um whatever proposition S D G and E has uh today that they're proposing.

Um, I know that this report that has been made is just documenting the way that they go about their process.

Um, and I know I I want to credit Satomi Reesh Zeigler, that's actually my professor of labor studies at City College.

So shout out to her and all the work that they've done.

Um, I I don't want to minimize uh uh what the effects that SDGE has on the community on the impact uh that I've experienced.

I live out here.

I'm the vice chair of the Boulevard Planning Group, and they've had an undergrounding project uh that started at like 5 30 in the morning.

I could hear their diesel trucks every day, had a huge impact on an oak grove that's out here that's close to a thousand years old.

And I complained about this and their process of hearing me out and listening to what I had to say was an endless rigor morale of them not hearing me.

So please take that into consideration when you're making your decision about this project.

Thank you.

Our next speaker is Heckler, please unmute and begin.

SDG.

Also, ask me if they should have a Jubilee or debt uh forgiveness.

They want to do business in San Diego.

They got an institute of debt jubilee every December to forgive all kills that are late.

So just can start over every year.

That's something the mayor would have to believe.

The council just listened to speak.

The mayor is the dictator.

He does the guy when we would talk.

That's your time.

Thank you for your comment.

Our next speaker, Blair Beekman.

Please unmute and begin.

Hi, Blair Beekman.

Thanks for the item.

It was pretty hard to hear Hector today uh for a few items.

Uh good luck he can work on his Zoom issues.

Um, thanks a lot for this item.

Uh, you know, you're trying to coordinate uh, you know, how you're working with the future of public um power issues, and it seems like this item tried to agendize some things, so there can be that coordination.

So thank you.

Uh it's a good start.

Uh, I I'm not informative enough in how fast or slow this is moving forward.

As long as we're moving forward, as long as we're constantly talking about how our local, you know, community energy plans can can make an important, significant uh uh future movement, you know, and that we're thinking about it and talking about it more regularly and moving away from S D G E.

How are we doing that together?

And and in a good fashion.

Um good luck how to do that.

The public process is so important to all of this.

Thank you.

Thank you.

Phone number ending in 870.

You can unmute by pressing star six.

You will have one minute.

I thank you so much.

Uh okay.

Here are my findings.

There's only one.

Six of nine of our city council members, plus our mayor approved the SDG agreement for our gas and electric provider.

I find this did not support the needs of our people.

Now, President Lacaba just explained his no item.

Thank you.

I didn't fully understand your explanation, but I appreciate that you gave it.

Now, Chair Ilo Rivera, you're one of the six seven, including the mayor that said yes.

I was very upset then.

I was very confused in 21 on that item.

I need to know all over again.

I must know.

I'm gonna find out why.

What did you base on?

What policy did you base on to support that item and vote?

Yes.

Thank you.

This does conclude your time.

Thank you for your comment.

With the five minute timer expiring, we have two hands remaining.

We will not take any callers beyond these two individuals.

Jay Powell, please unmute and begin.

Hi Jay Powell.

I uh was really in involved in uh tracking the first uh uh green uh uh group that was uh um looking at compliance.

I really appreciate the uh volunteer work, Cody Hoven, yeah, who incidentally was uh critical in creating San Diego Community Power.

And I didn't hear from the report uh uh especially about the cooperation that uh might have been uh been uh done or needs to be done on the uh programs that Shane Community Power is trying to implement for local power.

Um and um I just wanted to uh I think the uh recommendation about better public engagement uh out in uh that this is even going on.

I think uh the work that's being done by these volunteer board members is important.

Um also SDG's interpretation that this somehow is that they are going to be uh continued automatically under is thank you.

This does conclude your time.

Thank you for your comment.

And the final speaker in the queue is Kathleen Lippett.

Please unmute and begin.

Thank you for letting me speak.

One minute is not enough time to provide any context whatsoever.

I do want to clarify the city approved several revisions to their energy cooperation with SDGE, indicating an ongoing collaboration without any formal declaration of a conflict of interest.

The council approved a 10-year franchise agreement with SDGE in May of 2021 with a potential 20-year extension.

STGE has exclusive rights to provide energy services in exchange for 80 million dollars in franchise fees, 20 million for climate equity goals, and 10 million in solar rebates for underserved neighborhoods.

In May 2025, revisions to the energy corporation agreement were debated, but ultimately they did not mandate an increase at SDGE's annual contributions to the solar equity program.

The council has rejected a municipalization effort in 2024.

This does conclude your time.

Thank you for your comment.

And for any individuals wishing to expand on their comments, you can submit an email at councilcommittee at Sandiego.gov and this concludes testimony on item 10.

All right.

Um thank you so much.

Thanks for the report.

Council President.

Uh just yeah, real quickly, uh, thank you, Satomi and all the volunteers who served on this committee.

Very much appreciated.

Thank you to the auditors for the good work.

Um I think the only question I have actually is for you, Megan.

We've now gone through two rounds of committees.

Have we learned anything that would suggest that we should change the composition?

Should we actually let these good people go and let five, you know, five more people to serve on the committee now that they've learned so much.

I don't know if you want to serve, but uh, but it's always kind of struck me that you know, really once you get up and up to speed, you're then saying thank you, you did go to work.

Uh let you go.

But is there any other thoughts about the the composition or how we structured it?

Yeah, absolutely.

I can speak a little bit to that.

Um I so actually, between our two different committees, we've had a full refresh of volunteers, and I think that has been great.

It's really wonderful perspectives from um throughout the city.

Um, of course, would invite any of our members uh from the first or second to come back, but I I do appreciate kind of having these different perspectives from uh throughout the the industry, absolutely.

Okay, you've really been at the heart of it, so you would have a good perspective, so thank you for that.

Um and that concludes my comments, Chair.

Thanks, Council President.

I was thinking that the same thing.

I was looking at Satomi and being grateful, and also you like you learn a lot and and that we have this kind of institutional knowledge turnover.

Um, but Megan, I I can see um, and I wanted to say thank you for this.

You can see that you actually like know the folks who are on this um on this committee, and and that means you're spending the time to like actually like have real conversations with them.

I appreciate that that you develop take the time to develop a rapport and are paying that close of attention to it.

So I think your feedback on that super is super um important to us.

Um thanks for this.

I also want to acknowledge that some of the frustrations that were expressed in public comment, compliance is different than satisfaction, right?

So compliance with the legal document is a very different thing than satisfaction with everything that we're we're seeing.

And so um a lack of critique of compliance does not signal um, at least for me, that I'm happy with the with the way everything is.

And the compliance part is important because of frustrations that we had in the past.

Again, a lot of where of this comment the lot the last I don't know, two hours of conversation here today, it it stems from what we saw as council members when we stepped onto the dais in uh December of 2020, because we were hit with this immediately, the the the franchise, and what we wish wished our predecessors would have done differently.

And some of that was you know uh seeing what other options were out there, preparing so those other options could could actually be options, and then just simply doing a better job on a day by day, week by week and year by year basis of tracking whether or not the agreement was actually being adhered to.

And uh you all are eyes and ears on that front, and I want to say thank you again for that.

Um so with that, um, as this is an information item, we don't have a there's no motion required here, and we're at the end of our agenda.

So I'll say thank you to everyone who participated today, and we will adjourn this meeting of the environment committee to the next regularly scheduled uh meeting on Thursday, May 21st, 2026 at 1 p.m.

Thank you, everyone.

We're we are adjourned.