 yesterday my granddaughters were each comparing notes with each other and how many devices they had in their bedroom, they each had about, don't forget about Spotify. I think they're still on my Spotify account. That's what drags it down, they've got the, I said, hey, how come the bell charges went up? Oh, because you didn't buy a good enough plan, the kids over, like they're complaining about my, my internet services and go, wait a minute, that's life though, huh? Yeah, just an FYI guys, I think even though we're chatting, I think we are live, so I'm not sure if the public is hooked in yet or not, but I'll be careful. You are live. Just so you know. Great. Thank you. Thanks, Roberta. And I get the usual view or is that locked out for right now? Same here. We are sharing a screen, a slide, so I think as soon as that goes down, you should be able to see everything. Okay. Dr. Burke, I think we have everyone. Chair Galvin, yes, I do believe we have everyone present who's going to be here today. Very good. Then I will call the meeting to order of the Board of Public Utilities for the city of Santa Rosa. We may have a roll call, please. Yes, Chairman Galvin. Here. Vice Chair Arnone. Here. Board Member Badden-Fort. Here. Board Member Grable. Board Member Walsh. Here. Board Member Watts. Board Member Wright. Here. Great. Good afternoon, everyone. Just a reminder to please mute your phones or your microphones when you're not speaking and to please put away your cell phones and your personal computers. Item two on the agenda is Statements of Abstention by Board Members. Do we have any? Very good. Item three, do we have Mr. Mullen available for us? Yes. Yes, I just promoted him to panelist. Yes, I think I'm here. Welcome, Matt. There you are. Thank you. So we want to give you a little recognition for your service to the Board of Public Utilities. We're certainly sorry to see you go, so we want to thank you for your service, your leadership, your guidance of the Water Department utilities during your time on the Board. You and I go way back to softball days. You first served on the BPU in 2018, and you were reappointed in 2020. You shared with the Board and the public the expertise, the knowledge, and the experience that you've gained over your 35 years of tenure in the local government. During your time on the BPU, Matt, you graciously served on the contract review and water conservation subcommittees, giving of your time and bringing valuable insight to these committees. As a member of the contract review subcommittee, Board Member Mullen was willing to ask the tough questions and help champion some critically vital projects, including the UV disinfection replacement project. Board Member Mullen's participation on the Board helped ensure that the city continues to provide safe and reliable water distribution, wastewater collection, treatment, and beneficial reuse for current and future generations in Santa Rosa. On behalf of the Board, I want to thank you, Matt, for your service and your commitment to this community. I wish you much good luck to you in the future and especially on the softball diamond. With that, I will open it up to Board Member Comments before we hear from Mr. Mullen. And also I want the Director to have an opportunity to speak as well. So Vice Chair Arnone. Yeah. Do we still have Matt here? I don't see him on the screen anymore. I hope we didn't lose him, but because I hate all of our accolades to go to waste. It looks like he did not join or went away. He dropped off. He was there for a minute. He may need to log back on. I'm not seeing him in the attendee list either, unfortunately. He's not. Oh, he's back. Hold on. Just a moment. This is 2020 and 21. This is what this is. There we go. He should be coming back momentarily. Sorry, Mr. Chairman. That's okay. I take it. You just wanted me to repeat my speech twice. I assumed he was so bashful that he just logged off. He couldn't handle it. I was setting up a recording so I can record this and show it to my family. Well, then I'll start over. How's that? There you go. Thank you, Board Member Mullen, for your service, leadership, and guidance of the Water Department Utilities during your time on the BPU. As I mentioned, Matt and I go way back to softball days. He first served on the BPU in 2018 and was reappointed in 2020, sharing with the Board and the public the experience, knowledge, and expertise from his 35-year tenure in local government. During your time on the BPU, Matt, you graciously served on the contract review and water conservation subcommittees, giving of your time and bringing valuable insight to these subcommittees. As a member of the contract review subcommittee, Board Member Mullen was willing to ask the tough questions and help champion some critically vital projects, including the UV disinfection replacement project. Board Member Mullen's participation on the Board helped ensure that the city continues to provide safe and reliable water distribution, wastewater collection, treatment, and beneficial reuse for current and future generations in Santa Rosa. On behalf of the Board, Matt, I want to thank you for your service and commitment to this community. Much good luck to you in the future and especially on the softball diamond. And with that, I will open it up for Board Member Comments. I see Board Member Walsh has raised his hand. And I just wanted to say, Matt, that it's been a pleasure working with you three years. I had the pleasure of working with you when you were the town manager at Windsor and knowing your background with Windsor Water, which was the prior government of Windsor, you know, that you have such amazing depth of knowledge in the field of water that I was thrilled when I learned you were going to come on to this DPU. It's been a pleasure serving with you and learning from you just by the acuity of your questions and your willingness to dig in and uncover what's going on behind the scenes. So I will miss your participation on this Board and look forward to passing, crossing paths again in the future. Matt, good luck. Board Member Walsh. Thank you, Chair Jelman. And Mr. Molden, I want to thank you. I had an on-career government service at the County of Sonoma, our controller's office when Windsor was being incorporated into the town. And we appreciate you being gentle and I think compassionate with the new learners and for being quick and making great decisions. And I also thank you for serving on this Board. And we want to honor that, but I continue to do a great job. Thank you, sir. Thank you. Board Member Gaddonford. Board Vice Chair Arnone said it exactly how I was going to say it, that just in the questions that you asked over the months, I've learned so much from you and appreciate all of your service. And each and every time there was an item, whether it was in contracts committee or at the Board level, your history, your expertise, your unique expertise, especially in Windsor and how that relates to the city of Santa Rosa, it was definitely my moment to tune in extra close because too, I learned a tremendous amount in your questions, both in how contracts are set up, the implications for implementation, and always your grace for our staff. And so I appreciate you. I hope that we get to see you somewhere around the water world moving forward. Thanks, Matt. Remember, right? I think I first met Matt on the day he was going to retire or something. You presented at a little luncheon in Sonoma. And I know you were going to retire like the following week or something like that. So that's been like eight or nine years ago or something like that anyway. But so I never actually knew you very much, even though I interfaced a lot with Windsor, but it's been a pleasure being on the board with you and hearing your questions and just having you as a member here. You've been a good board member. And I believe probably our paths will probably cross again sooner than later. Thank you, Director Burke. Thank you. On behalf of the Water Department, I want to thank Mr. Mullen Matt for his leadership and grace while serving on the board. We really appreciated and could see your knowledge and expertise shine through in all the interactions that we have with you. You made our projects better. You supported staff greatly. And we just really wanted to thank you for the dedication, the time and the service. Thank you so much for your work on the Board of Public Utilities. Thank you, Director Burke. Any other staff personnel wish to make any comments? If not, we'll open the floor to Matt. Uh-oh. Your mic's not working, it's still really, really low. Better? Oh, there you go. I got you. No. You're good. You got it. Matt. Okay. Okay. All right. I don't, I don't want to take up too much and I appreciate the, all the kind comments. I've always dreaded these kind of things because it shines a spotlight on me when, when I, I don't feel I, I'm worthy of that sort of thing. The people that make the important actions and make this board function is obviously the chair and the director and all the support staff. They're the ones that really make the job of being a board member and a policymaker, the easy one because they do the heavy lifting. And it also kind of reminds me of my age because at some point in time they're going to do one of these when I'm dead. So, yeah, always one of those kind of things that be careful what you wish for. It's really been an honor to serve on this board in my two limited tenders here. One thing's obvious to me, I was mentioning to my wife is that I have a commitment problem because I can't seem to last any long stretch of time like many of you on this board. It's always been a pleasure. I enjoy the work that this important body does and has done over the years. I've admired it from afar. And it was really an honor for me to be able to be a member for a limited tenure here and see the important work that continues to be done. And I think it's, as I've said before, it's probably the best kept secret in this region is how important this the Board of Public Utilities is and the work that the Water Department does on behalf of all the citizens and ratepayers in this area. So it's really been a pleasure. I wish you all good luck going forward. I know there's a lot of important issues coming down the line and best of luck. And I will see you soon when we can all maybe get back to some normalcy. So thank you very much for the recognition. I appreciate it. Thank you, Matt. So we are now going to take any public comments that there might be on item number three. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. Secretary Aitha, do we have anyone? We have no public comments. I was hoping your wife might be on Matt, darn it. Not pictured. Okay. All right. Well, much good luck to you. And we'll see you down the road. I'm sure. Thank you again. Okay. That'll take care of item number three. Item number four is the reorganization and announcements. I have been reappointed by Mayor Rogers as the chair. So I'll be continuing on at least for now. And I would like to move on to having a election of a vice chair. So I'm asking for a motion from one of you board members to nominate the vice chair. Board member Wright. I move to nominate Bill Arnone as vice chair. Thank you. A second. We have a motion and a second. Do we have any other additional nominations? Hearing none, I'll ask for public comments on item four. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. Secretary Aitha, do we have anyone? We have no public comments. All right. I think we have a roll call vote, please. Yes. Chair Galvin. Aye. Vice Chair Arnone. Aye. With gratitude. Board member Badden-Ford. Aye. Board member Walsh. Aye. Board member Wright. Aye. Great. Congratulations, Vice Chair Arnone. I look forward to working with you, continuing to work with you as we move forward. And you're welcome to make any comments you'd like. Let's keep going. Okay. I like it. So item five, we have no study sessions. Item six is the approval of the February 4th minutes. We're now going to take public comments on the minutes approval. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine. And Secretary Aitha. No public comments. All right. The minutes from February 4th will be admitted. We'll now move to the staff briefings. Director Burke. Thank you, Chair Galvin and members of the board. We have three staff briefings this afternoon. The first item 7.1 is a review of the Trucked Waste Program at the Laguna Treatment Plant and Renee Gundy, our Environmental Compliance Inspector III, will be making the presentation. Hello, everyone. Welcome, Ms. Gundy. Thank you. Okay. So good afternoon, Chair Galvin and members of the board. My name is Renee Gundy. I'm Environmental Compliance Inspector in the Emergency and the Environmental Services Division. I'm here to talk to you today about the Trucked Waste Program that is located at the Laguna Treatment Plant. The Trucked Waste Program offers a service to waste haulers by providing them with a disposal option for a variety of liquid waste types. Next slide, please. So I'm going to start by telling you a little bit about the program and the history of it. As you'll see later in this presentation, the program has evolved over the years into what it is today. At the beginning, the program mainly focused on trucked-in wastewater from the Meacham landfill, waste that we call landfill leachate. Leachate is the water that percolates through the soil and landfill material and is collected in a pond at the landfill. Prior to 2006, there would be 10 to 20 trucks a day in the summer and 70 trucks a day during heavy rains. That would be driving into the plant to discharge leachate from the Meacham pond. In 2006, the construction of a pipeline from the Meacham landfill to the Laguna Treatment Plant was complete and provided a means of direct discharge from the landfill and cut back on the truck traffic coming into the plant. The septic receiving station started out as a small service to septic haulers who cleaned septic tanks and emptied portable toilets. The fee was not competitive though, so many of the septic haulers in the area opted to drive elsewhere. But in 2015, in an effort to provide better customer service to local septic haulers, the septic rate was lowered, which brought in more haulers. And then in 2016, the high-strength waste station began operation. This provided a new disposal option for haulers of liquid waste that the plant could not accept before. When the waste comes into the high-strength waste station, it's metered directly into the plant's digesters, which has the benefit of a lower energy treatment option and produces methane gas. Next slide please. So there are three locations for receiving trucked waste. The septic receiving station in the very back of the photo, there's a truck backed into it. This is 13 cents a gallon, and it's the portable toilet waste and septic tank cleanouts that go into this location, which goes into the primaries, but has little added screening at the septic station. The high-strength waste station is directly across from the septic receiving station. It's four cents a gallon for discharging items like animal processing waste, average processing waste, like beer and wine processing, fat, oil, and grease, mainly kitchen interceptor waste from restaurants, and then food processing liquids can also go here. And this is what feeds directly into the digesters. The emergency holding basin is the truck closest in the pitcher that is discharging into. It's two cents a gallon, and what we usually get here is equipment rinse-ate, groundwater from construction projects, landfill leachate, not the mechum as much because it is mostly through the pipeline, but we also have closed landfills that still bring in their leachate. And this goes straight to the primaries without the added screening that the septic station has. Next slide. So this chart shows the amount of waste received per year in gallons. You can see that in 2013, the plant received only 1200 gallons of septic waste, which accounts for about one truck load. And then at the end of 2015, when the septic rate was lowered to match other rates in the area, there was an increase in gallons that we started receiving. And then in 2020, there was over 4 million gallons of septic waste that discharged to the plant. And that's the great bar. And then in 2016, when the high-strength waste started operation and we were able to take in different waste types that we couldn't before, you'll see there's been an increase since in 2018, it was a huge increase. But one fact about this is that over 14 million gallons came of this was coming from one brewery processing plant. And that was their highest year. Next slide. So in order to have a trucked waste program, there's specific regulations and permits that the plant is required to maintain. A requirement for having a septic receiving station is that we must maintain a trucked waste management plan according to the treatment plans and PDS permit that's issued by the Regional Water Quality Control Board. The Regional Board also requires that we have a standard operating procedure for the high-strength waste receiving station. And then an air permit is issued by the Bay Area Air Quality Management District and is required because we have the high-strength waste station. The air permit regulates the throughput for high-strength waste and emissions from the high-strength waste odor scrubber. Lastly, the plant maintains a renderer's permit through the California Department of Food and Agriculture. This permit is required when taking in kitchen grease to the high-strength waste station and we're required to maintain and track manifests for each load that comes in by the haulers that bring in this kitchen grease. Next slide. Oh, you did it. One method of monitoring the trucked waste program is that the Environmental Compliance Section permits each hauler. The permitting process involves collecting an application and annual fee insurance requirements and any sampling data that they may have. So we can better determine where the waste will go and if we will take it. Once they are permitted, the haulers receive a scan card per vehicle and the scan card links the transactions to the high-strength waste hauler software that we have. And this picture explains how the haulers check in. They run their scan card under the barcode reader and it populates the screen with a company name, license number, total gallons by truck capacity. And then the hauler just has to pick the waste type that they're bringing in and it's associated with a cost and then a receipt prints and we get one and they get one. Next slide. This slide shows the number of haulers permitted by year. I included it to show how lowering the septic rate and adding the high-strength waste station has increased the number of businesses using our program. There are many local waste haulers happy that they no longer have to drive to East Bay Mud which is where many of the local haulers went for discharge. You'll see that the septic rate reduced from 27 to 13 cents. And then when the high-strength waste added it's just been increasing ever since. And in 2020 we had 42 permitted haulers which accounted for 103 different trucks discharging at the plant because most haulers have multiple trucks. Okay, next slide. So in order to protect the treatment plant the plant's operation staff takes samples as the trucks are discharging. This would be when there's a new waste type or a questionable load. But there's also routine sampling of septic trucks that happens two days a week and high-strength waste is sampled up to three times per day. The samples are turned into the Laguna Environmental Lab where the lab staff run the necessary analysis. Okay, so there are many benefits of the truck waste program which is why I wanted to highlight them on this slide. By offering the service to local haulers there's a reduction in the trucked waste miles traveled. An example in 2020 there were 6,718 deliveries through the trucked waste program and assuming that it's 100 miles to travel to East Bay Mud and without our trucked waste program all these trucks went there. That's over 671,000 miles that were saved which is an annual savings of or an annual 3,500 tons of greenhouse gases that were reduced. The trucked waste program has also increased water and biosolids reused and has increased the production of methane gas that has increased power production at the plant. The methane gas is collected and utilized in a combined heat and power system. Then the electricity is used to offset power purchase from the utility and the heat is used for maintaining digester temperature. And lastly the fees charged per transaction has increased revenue. Next slide. So in summary from 2013 to 2020 the trucked waste program has had over 36,000 deliveries and almost 150 million gallons was discharged. This accounts for almost $7 million in fees received and over 60,000 megawatts of produced electricity. And in comparison the electricity is equivalent to power in 700 to 1,500 homes for a year. And the pie chart just shows the percentage received received in gallons by waste type. You'll see that there's 17% received as septic waste and high strength waste in the holding basin get about the same at 41 and 42%. Next slide. For this last slide I wanted to include all who make this program possible. The trucked waste program has proven to be beneficial for both the haulers and the Laguna Treatment Plant but it takes many of us to make it successful. I've already discussed a little of how environmental compliance operations in the lab staff are involved but we also have admin staff that make sure that all the receipts and manifests are turned in. And then deputy director of environmental services reviews and approves the billing. Finance generates the billing. IT maintains the kiosk system that we have for our waste haulers and environmental services officer tracks the plant's permits and keeps the trucked waste program in compliance. Next slide. That's it. Thank you. I want to thank you for your time and hope you learned something new about our trucked waste program. Thank you for the presentation Ms. Gundy. I'll open it up for any board member comments or questions. Board member Wright, you need to unmute yourself. Sorry about that. Thank you. Is there a way that we can quantify the increase in methane gas production or estimated or do we have any idea? About that or I think you gave the total numbers at the end of the day. I do believe that there is somebody that keeps track of that. I can get back to you on that. I'm just curious if that's important. But I'm sure it did increase the methane gas production. Yes. That's it. Thank you. Board member Batenford. Thanks for the presentation. I always appreciate these every year. It's helpful. I believe when we heard the report last year on the high-strength waste, we anticipated the opening of a Petaluma site. And potentially there might be some inputs changes on R. And has there been a significant change since the Petaluma site has gone online? Actually, that Petaluma site never came to fruition. So we're still getting... Yeah, we thought it might have an impact, but yeah, it never happened. Is it still in progress or? Not that I know of. Not that I know of. All right. Well, I guess it's even better that we have a strong program. Thanks very much. And I think Renee... Thank you, Chair Galvin. Renee, correct me if I'm wrong, but I do think we've seen a reduction in truckways from log and meat, or one of our customers, because they have some onsite treatment that they've put in place. So we've seen a little bit of reduction from that perspective. That is correct. Yes. Other board member questions or comments? Very good. We will now open it up for public comments on item 7.1. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. Secretary Aitha, do we have anyone? We have no public comments. Very good. That'll take care of item 7.1. Thank you again, Ms. Gundy. Director Burke, item 7.2. Thank you, Chair Galvin and members of the board. So as we've had a new board member and had some other board members receded, we thought sort of with this time frame of a new board, it would be a good time to bring back some of our updates and information on the various divisions within the department so we can make sure the board is aware of all the different responsibilities and programs that we run. So we're going to be starting that series off and be bringing staff briefings to the board on our various divisions throughout the department. And today, item 7.2, we're going to start off with our Environmental Services Division and Deputy Director of Environmental Services, Sean McNeill will be making the presentation. Thank you, Director Burke. Good afternoon, Chair Galvin, members of the board. I'd like to just give a brief update on the Environmental Services Division. One of our star performers, you just saw Renee Gundy presenting on our trucked waste program. Really impressed by all the work that that team has done or actually everybody's done to pull that program together. So next slide, please. So to talk about the Environmental Services Division, I just want to kind of give a broad overview of the different teams that make up the division and then I'll go into each of the teams individually. So we have a group of us who work on permit compliance and quality control. There's three of us working in that with some support services. We have an environmental compliance team which Renee Gundy is a member of, our pre-treatment program. We have nine staff allocated in that group and then the Laguna Environmental Lab. None of the work that we do in permitting would work if we didn't have the data that the Environmental Lab produces for us. We have 16 staff in there and then we have our stormwater increase team that addresses the impacts of our storm drain system on local waterways within the city and we have 11 staff in there and I'll go into them a little more briefly. Next slide, please. So the Laguna Treatment Plant Regulatory Compliance, I'm going to stay high level. Next month you'll be getting an update on our regulatory updates. So a lot of the greater details will occur then but I just want to remind you that one of the main components of this team is to focus on our discharge permit which is a national pollutant discharge elimination system permit or NPVES. That's the common term that we see kicked around with this type of permit. We also oversee the biosolids compliance. That's covered under a different permitting mechanism called the general order. So we make sure that those reports are getting turned in on time. We also manage and oversee the permitting and report writing for the recycled water program making sure that all that data that we are required to collect is uploaded into state databases and that all our reports are filed on time. And then we have a whole host of activities related to air permits. We have air permits for all of our different mobile large engines and stationary generators. And so we have a staff person who oversees all of the permitting and reporting and testing required for those. In addition to the mobile generators, we have the large combined heat and power engines that we have at the treatment plant that use the biogas as well as some really large generators, backup generators that we have for the plant that keeps the plant running should we lose electricity. Those are our biggest ones. And we work with the Bay Area Air Quality Management District on those permits. Next slide, please. The environmental compliance section, you just heard one of the programs that they work on. I just want to let you know in the past year, 2020, most of it being in this shelter in place COVID-19 restrictions. We've been very active. This is a requirement from the EPA on all waste, excuse me, wastewater treatment plants. And we provide this service to all of our regional partners because ultimately the goal is to protect the Laguna treatment plant from any toxic substances or substances that we're not able to handle in our treatment process at the plant from getting there. So we've conducted over 572 inspections of businesses in 2020, collected over 215 water quality samples, diverted 2,400 pounds of pharmaceuticals from the landfill from our medicine take back program. That take back program is going to be morphing in the next year as the state is going to be taking over control of those kind of programs. And it'll be a statewide program. So it won't just be regional, which we believe is a good thing. In addition to providing service to all of our sub-regional partners, we also provide a fee for service support for pretreatment compliance for the town of Windsor. And then we also have, as you just heard, we're managing the Waste Hauler program for the Laguna treatment plant. Next slide, please. The Laguna Environmental Lab, as I mentioned before, these are definitely the people behind the scenes on our compliance, all of our samples run through the lab. Many of most of those samples are analyzed in the lab when we are unable to analyze those samples. We do maintain contracts with outside labs to make sure that we get samples analyzed in the time frame that's required under the regulations. So in 2020, we analyzed for 30,254 analytes in the lab. That's kind of our normal business. In addition to that, we analyzed 145 drinking water samples for volatile compounds in response to the glass fire and we were able to turn these around relatively quickly to assure that our water quality met all regulatory requirements. It's important for me to acknowledge the staff and let you know that they do operate every day of the year, holiday and whatnot, because these measurements need to be made. And so we support primarily the Laguna treatment plant, but we also provide support for our water quality program, as well as stormwater, police, and fire. And another task that they've taken on this year, and you'll get a report later on as we get more data, is the Laguna Environmental Lab staff have taken the lead on coordinating the polyfloral alkyl substance sampling, which is PFOS, and these are the Live Forever chemicals. This is the new emerging contaminants that all wastewater entities are on the lookout for, based on our requirements from the State Water Resources control board for us to look into that. And so as we get more data, we'll be sharing that with the board. Next slide, please. So when we are a lab that's collecting this environmental data and using it for regulatory purposes, we are required by law to have a quality assurance program, and that quality assurance program consists mainly of a quality manager who oversees the quality of the Laguna Environmental Lab, but that individual also helps to support many of our teams in the water department on yield sampling training to make sure that they're collecting the samples appropriately that we're not inadvertently adding pollutants into our sampling process that aren't actually in the water. And the reason for a quality assurance program really is to provide data of a known undocumented quality. And so we aim for a high quality in our data, both from collection all the way to reports, and we have to document each of those stages, and that's what our quality assurance program does for us. A big change for us this coming year and probably the next two years after is that there have been some new major changes to the accrediting body or the accreditation process from the Environmental Lab Accrediting Program, or ELAP. This is run through the State Water Resources Control Board in these wide-sweeping new standards for Environmental Labs. We're in the process of updating our job descriptions and make sure that we meet all those requirements in there as well as the quality program to make sure that we're documenting everything as is stipulated in the new. There's over 800 new requirements in these new programs and they're giving labs three years to comply with these new regulations. So that's going to keep our quality assurance program really busy over the next year. So next slide please. So the last team I want to talk about is a team that you probably don't hear much from because this is our stormwater and creeks team and they report directly to the city council. They have their own enterprise fund which is generated by a runoff coefficient on all the properties in the city. But I just wanted to give you an update of what they're working on. So in the past year, even under these COVID restrictions, they spent over 1500 staff hours cleaning our creeks, removed over 833 cubic yards of trash, worked with over 7,500 residents in the city of Santa Rosa, including 6,374 youth, primarily through a distance learning education program. We took our environmental education program and made it virtual so that we could provide that to the students as part of our permit. And we also completed three special reports which Director Burke will mention. They were very lengthy. I think over 600 pages worth of reports in this pathogen study looking at sources of pathogens in the city of Santa Rosa that might be getting into our storm drain system. We did a review of all potential sources for sediments so that we could identify any places that we could prevent sediment from getting in. And we also did an analysis of some stormwater best management practices or BMPs that we installed as part of a grant program at City Hall complex and we analyzed the effectiveness of those BMPs. Next slide please. So the stormwater permit is also an NPVS permit but it's very different than the treatment permit in that they don't have numeric limits but they really have programmatic approaches in goals that they have to meet to fulfill the requirements of this NPVS permit. And education is a major one of those. And so we started this streets to creeks campaign and we brought it to the Russian River Watershed Association which is a regional authority that shares information throughout the entire Russian River Watershed. This program in 2020 had over 13 million impressions and it has these nice little pictures and depending on where you're logging in and seeing this on Facebook or Instagram or wherever your social media might be we'll pop up a zip code and a local creek there and highlighting it. So here's Oakmont Creek in the 95409 and it's been our most successful outreach campaign to date by far. And in addition to this program we typically have a creek week where we have activities for people to work on. This year we adopted that to be a virtual creek week activities for people to go out and have a virtual bird tour, bird walk with one of our biologists and in a whole bunch of other fun things. It's much better in person I will say and our hope is to bring it back again in person next year. And we've coordinated over 300 educational and stewardship activities over this past year all with the in-observance of the COVID-19 restrictions for these types of activities. So with that next slide I'll take any questions. Thank you Deputy Director McNeil. I'll open it up for any board member comments or questions. Okay seeing none thank you for the presentation it's always good to get these updates and we'll look forward to future ones on other divisions within the water department. So at this point we'll take any public comments on item 7.2. If you wish to make a comment via zoom please raise your hand. If you dial in via telephone please dial star 9 to raise your hand. Secretary Aitha do we have anyone? We have no public comments. That will conclude item 7.2. Director Burke item 7.3. Thank you Chair Galvin and members of the board. Item 7.3 is a water and recycle water supply update and Deputy Director Water Resources Peter Martin and Deputy Director Regional Water Reuse Operations Emma Walton will be making the presentation. Thank you Director Burke. Good afternoon Chair Galvin members of the board. It's like we're pulling up the presentation. It can be very brief today but I just wanted to quickly kind of give you an update on water supply conditions of forest normal water and also just some updates on our winter water conservation camping. Next slide. So as of February 4th Sonoma Water or excuse me the State Water Resource Control Board issued a order granting the temporary change petition filed by Sonoma Water in January. Since the issuance of that particular order storage has continued as a kind of got a little bump as a result of that and as of today storage is 31,107 acre feet or about 45 percent of target water supply curve in Lake Mendocino. Reservoir outflows from Coyote Dam have been in between 25 and 30 CFS for the last past few weeks which is in compliance with the reduced flows in the East Fork of the Rush River that was granted by the State Water Boards order. Next slide. Lake Sonoma's storage as far as echoes reservoir levels are currently at about 157,000 acre feet or 64 percent of the available storage pool for this time of year. Releases are set at about 75 CFS. It's important to note that Lake Sonoma's operations are aligned with the terms of the dry year weather conditions pursuant to decision 1610. The order by the State Board did not affect the releases from Lake Sonoma and Dry Creek. Next slide please. So as I kind of briefly mentioned the temporary change petition that was filed in January by Sonoma Water and an order was issued on February 4th. That if I remember correctly that request was specific to changing the hydrologic index that determines flow regimes for decision 1610 for Sonoma Water's water rights from the index that is based on Lake Pillsbury inflow to specifically storage in Lake Mendocino. As a result of that conditions change from normal water year to critical water year flow regimes in the upper watershed. As I mentioned it affects only the in-stream flows in the upper Russian River specifically the east fork of the Russian River. So you'll see that in-stream flows are at about 25 CFS. That's a reduction from I believe 75 CFS previously. This order is not without any conditions. There are additional terms and conditions for Sonoma Water that includes reporting on conservation activities, water quality and fish monitoring and quite a bit of consultation with the fishery agencies both the federal and state fishery agencies. And then they are also going to be required to implement a framework with a methodology for water diversion accounting in the upper Russian River. So they're working through how those reports are going to be done and last that we heard from Sonoma Water staff. Next slide please. And then just really briefly wanted to kind of give a quick overview of some of the recent winter outreach activity regarding the dry conditions. We've been working closely with city communications team on a variety of work products. That includes internal and external outreach. You may have seen some speaking points or talking points that went up to both the VPU and city council regarding the dry year weather. Additionally we are kind of launching internal kind of outreach to staff about the dry weather including tag lines. It's a dry year. Save water with us. People will be adding that to their signature blocks for internal email to try to continue that message both internal and external. Additionally we're continuing to coordinate with our regional partners in the Sonoma Grand Water Saving Partnership. And then I just wanted to highlight that there has been quite a bit of effort going into an improved WaterSmart customer web experience. So our web pages have gotten a really nice refresh. You'll see some of the graphics there in the middle. It actually looks really nice. It's appealing and then it's also based as far as feedback from customers navigating the web pages. Some significant improvements there. And then lastly you'll be seeing some bill inserts that just started going out this week through the month of March. Again signifying to customers that it is a dry year and we're seeing below average rainfall for the last two years and it's extra important that customers save water during this winter. And then also of course diverting their attention to the resources that the Santa Rosa Water offers as well. So last slide. So we're continuing to offer planning services to customers trying to get folks to request a WaterSmart checkup in their home as well as you know that's a socially distanced of course. And also folks can get sort of a DIY kit but there's a lot of follow-up with staff as well. So go to srcity.org, WaterSmart and request that WaterSmart checkup. So with that I'll go ahead and hand it off to Deputy Director Walton and let her continue the presentation. All right thank you Deputy Martin and thank you Chair Galvin and members of the board. Roberta you can go ahead and thank you. I'll just provide a really brief update on our recycled water supply as unfortunately conditions haven't really changed much. So next slide please. So here's a graphic of our recycle water production again just a reminder average over the last about 35 years shown in gray there last year shown in blue which was our previously historic low production. And then currently in black along the bottom we have we did receive a little bit of an uptick in our production so far for January or excuse me February. This is shown in a dotted line as obviously we are not completely through February yet and if we don't get additional substantial rain this average will come down. So just again trending very very low with our production. Next slide please. Similarly with storage we are also trending very low below average. We did get a slight uptick given the recent minimal amount of rain that we received as well as Geysers system going offline for a day due to a power outage but we don't anticipate that we'll see this trend continue obviously unless we get some good rain. So very critically low in production critically low in storage and ultimately availability of recycle water as we move into this year's irrigation season. Next slide please. So just a recap and information that we've previously shared with you. We are at this time anticipating that there will not be any water available for our frost protection users at this time. We just don't have sufficient supplies to offer to offer that service right now. If our circumstances change we will meet or we will reach out to our frost protection users immediately and let them know but right now we are not providing frost protection water and we do not anticipate that we will. We are also preparing for little to no recycle water for other interruptible customers. Just with the trends we're seeing such little water if we do have water available it will be very minimum. Just as a reminder last year was our previous historic low and we delivered about a billion gallons less than we typically do and this year we're on track to deliver even less than that. So it's going to be critically low supply. A reminder we have established a BPU ad hoc to start identifying any opportunities that there might be as well as get direction on how to allocate the limited water that we will have. Again just as a reminder we are under delivering to the geysers currently given the low water production that we have in our need to keep some water in storage to provide us operational flexibility. We are under delivering and we will need to make this water up throughout the year. It's working well for us operationally and we are confident we will be able to make up this water but as you look at those storage curves just keep that in mind that if we were not under delivering to geysers currently those storage curves would be even lower potentially you know at zero or as low as we really can go which is about 200 million gallons. And then again ongoing cooperation with our regional partners Windsor and Sonoma water as well as extensive and consistent outreach to our customers. Right now our main focus is really just getting the message out to our customers however we can the best way that they can receive it and get the information out there. So with that you can move to the next slide and I'd be happy to answer any questions. Thank you to both of you deputy directors do we have any board member questions or comments? All right seeing none we will now take public comments on item 7.3 if you wish to make a comment via zoom please raise your hand if you're dialing in via telephone please dial star 9 to raise your hand. Secretary Aitha do we have anyone? We have no public comments. Thank you that'll take care of item 7.3 we have one item on the consent calendar item 8.1 which is an extension of the exclusive negotiation agreement with uh renewable Sonoma. I'll move approval of the consent calendar the consent item. Second. A motion by Vice Chair Arnone seconded by board member Batten for any further discussion at this time we will take public comments on item 8.1 if you wish to make a comment via zoom please raise your hand if you're dialing in via telephone please dial star 9 to raise your hand. Secretary Aitha do we have anyone? No public comments. May we have a roll call book please? Yes Chair Galvin. Aye. Vice Chair Arnone. Aye. Board member Batten Ford. Aye. Board member Walsh. Aye. Board member Wright. Aye. Thank you passes unanimously that'll take care of the consent calendar. We'll move to our one report item item 9.1. Director Burke. Thank you Chair Galvin and members of the board item 9.1 we're pleased to bring you our 2021 water and wastewater cost of service study and proposed fiscal year 21-22 through fiscal year 24-25 rate schedule as well as our proposed update to the water shortage rate structure. Deputy Director Kimberly Zanino will be leading off the presentation we also have consultant Bob Reed participating and I believe Mark Hildebrand maybe not. Before I turn it over to Deputy Director Zanino I just want to again thank the board this has been a very big effort an internal staff effort for the last two years to put this information together and work on the modeling and cost of service study and everything we needed appreciate all the board's time for meeting with us individually with your council appointers so we could hear your feedback and then also really wanted to especially acknowledge the budget subcommittee we asked a lot of this subcommittee this year we really appreciate their time and effort it was chaired by board member Watts and board member Grable and board member Wright also participated just again really want to thank everyone for all their time and effort this was a really big effort and we're very pleased at the results and happy to bring that before you today so with that I'm going to turn it over to Deputy Director Zanino. Good afternoon Chair Galvin and members of the board can you move to the next slide please this is just the agenda showing you what we'll be discussing today there has been something added since the last time which is what I'm going to be discussing with you which is some of the effects on billing and revenue because of the COVID-19 pandemic so can you move to the next slide please next slide so before we get to the rate recommendation slides I wanted to share some information regarding the pandemic and how Santa Rosa water has responded as well as the effects in relationship to billing and revenue we will also be sharing this information with City Council at the study session on March 2 so first we will start with talking about our response to the pandemic as we discussed several times before there was a moratorium on shutting off water for non-payment in March of 2020 when the shelter in place orders began to be implemented around the state Santa Rosa water has complied with this mandate and in addition restored water services that had been shut off prior to the order Santa Rosa water also discontinued charging delinquent fees to customers and implemented process to make customers to help customers make payment arrangements with any terms that they could commit to in addition there has been increased outreach for the help to others program making customers aware of the program the qualifications to participate and how to apply and then finally City staff is monitoring any state or federal programs that may provide assistance to our customers as well as working with the county and our regional communities to stay informed on any possible bill assistance that may become available and how as we as providers will be able to help our customers participate in any of those programs next slide please we also wanted to make you aware of the work that is being done to address the tracking of customers and the bills that are in arrears i'll start by discussing the constraints of the billing system as it relates to the pandemic and the moratorium on disconnection of water our billing system as designed is based on our policies and practices which does not allow customers to become overdue by more than 90 days and therefore tracking of customers at that level of arrears was never necessary with the moratorium we needed to find ways to track those accounts but were limited by the design of the system while we do not want to make permanent modifications to our billing system which are very costly and require a significant amount of staff time we did want to be able to work within the constraints to find ways to determine the number of accounts more than 90 days past due and their total balances in addition to tracking another change in process for staff was making payment arrangements for these longer period of times that the customers are overdue our collections process allows customers to make payment arrangements that requires them to keep those defined arrangements if they do not the process for disconnection is started in the system and because this process is currently suspended those arrangements are now being handed in a manual tracking manner so what we have been able to do is to modify some existing reports to determine that we have a roughly 1700 accounts that are more than 90 days in arrears and the total balance of those accounts is $1.4 million what I'd like to do though is give you some perspective on what those numbers mean the 1,700 accounts is approximately 3% of our total customer accounts which is not out of our normal range of percentage of overdue accounts this means the majority of our customers are paying their bills as they do in any normal year as for the total balance well we can't compare to prior years because accounts would not have been able to be in arrears by that length of time I will let you know that that is only approximately 1% of our revenue the collection and tracking of this data was developed one to make sure that it is not creating an unmanageable financial burden on the current budget which it is not and it was also developed so that we could identify and determine the customers that we want to be available to help with participating in assistance programs as they become available even if this did become a revenue loss with the higher than projected sales this year due to higher use by our customers because of the dry hot year and existing fund balance Santa Rosa water would remain financially healthy and the budget would be sustainable I do however want to point out that this is not considered a loss for us the customers still owe the balances and Santa Rosa water will make all efforts to collect the amounts due which includes trying to help those customers to participate in any state and federal programs that may become available to them with our regulatory requirements we cannot just forgive balances and we will be doing and we will not be doing that with these accounts that are in arrearages even now while we do not have our normal tools available to us we continue sending bills monthly and we also send reminder calls out monthly to remind customers that they are overdue and that their bills are becoming further overdue and in the future when the moratorium is lifted and we can return to normal billing processes we are working on solutions to collect the overdue balances the goal will be to create a collect create a collection process for the overdue balances that allows us to perform our normal process on current charges for the customer while continuing to pursue collection of the overdue charges from this period of time and with that before we move on I think I will answer any questions related to the pandemic before we get to the slides that are for the rate recommendation. Thank you any board member questions or comments regarding the effects of the pandemic? I can't see you on the screen so if you have something to say go ahead and jump in. Hi Lisa Badenford here I just have a quick appreciation and thank you on all of your efforts to to to deal with the complexity of the moratorium while keeping service going for those that are struggling. A couple questions maybe they're not answerable right now does this have any complexities kind of for our multifamily customers? It strikes me that not every individual unit right has an individual bill and so it just and I appreciate your efforts to to just manage all of it state and federal dollars are still in the works a lot of that is coming out as housing and rent and utility assistance so I'll be hopeful that the city is able to tap into some of those but I'm just curious around is there any connectivity for example with any of the property management firms or any complexities that might arise out of arrearages and multifamily customers? Well what we'll be doing is so we have we have the list now and we know we know which customers they are and so we're really starting that process of looking at what classes of customers they are how far they're in arrearages the amounts of their bills and we will be looking to reach out to those customers likely by mail or by call or in other ways so that we can reach out to them and start determining where they are and what their issues are and then working with them like one of our ideas is that we would work with them to have the arrearages in a specific account and then their current charges be in another account and then we would be able to work with them on that arrearage account separately. As far as multifamily we haven't thought yet because we've been watching all of the legislation that's been coming out as well and we're also as regional companies working on letters that we can send in response and making sure that we're staying in contact with those that are in charge of those programs so that we can figure out how they will be defined and if there are ways that we can use those that funding or help our customers to use that funding because so far what we're seeing is that they're going to have to be the ones who have to reach out to get the funding. It doesn't look yet like we would actually be receiving the funds ourselves. It wouldn't just be giving the funds to us. They would be working with the customer. They may then send the funds to us but it would have to be the customer who was reaching out to them for those programs. So we'll continue to look at that. We know we want to be ahead of it. We don't know when the moratorium will get lifted but as we start to really analyze all that data we'll be taking all of the into account. Fantastic. Thank you so much for your foresight on on the on the funding and how it may roll out and how to best help liaise that for our customers. Appreciate it. Other board member questions or comments? Very good. Thank you Deputy Director. We'll I guess move on to the next part of your presentation. So now I'm going to hand it over to our consultant Mark Hildebrand and he is going to go through the water and waste water rate study recommendations and then after him our other consultant Bob Reed will be going through the water shortage rates with you. Great. Thank you. Can you hear me okay? Great. Thanks for for having us. We've presented to the subcommittee previously and we have a few slides that you've seen. So I'll go through relatively quickly because it is material that's been presented before but we can certainly take questions at the end. Next slide. So when we do the rate study there's three major steps that we follow as shown here. The first one is called the revenue requirements. You can also think of this as a financial plan where we look for about 10 years out and we simply look at all the revenue coming in all the expenses going out and come up with a financial plan both in terms of rate revenue increases and potential debts you know issuing new debt that will allow the utility to provide continue to provide services and minimize rate increases. Once we understand how much rate revenue we need we move to the cost of service which is allocating costs to specific customer classes to make sure that everybody's paying the appropriate amount for the service that they're receiving. And then finally the rate design is the last piece where we look at the way that we're going to collect that revenue. So that's largely whether it's going to come in the form of fixed revenue versus variable revenue which would be based on how much water is used as well as decisions about tiered rates. One thing I would like to point out is that both for the cost of service and rate design we are using the same methodology that was used during the last study five years ago. We've updated the values going into it and so some of the results were slightly different but the methodology is the same. Next slide. Here we have the big picture the big cash flow projection for your water utility. This is an image that we've shared in the past so I won't go through the exercise of explaining all the different components but basically it shows the rate revenue increases down at the bottom there and so what we are proposing for this phase is a four-year schedule of two percent rate increases on July 1st close to that date followed by three percent for two years and then four percent in the fourth year. The numbers below that show that you remain in very healthy levels of debt coverage ratio which is a way of measuring how easily you can pay for your debt and those are healthy numbers. Also summarizes the capital spending that's planned for the water utility and it shows the middle shows that you're going to be keeping at or just above your reserve target levels your target reserve levels. One thing I do want to point out is that Dr. Walsh did make an observation about the capital spending there at the bottom and we did make some adjustments to make sure that all years were being inflated by that three percent. There was one year that was slightly off and so we've made that fix it didn't change any of the results. Next slide. So here's the same picture for the wastewater utility. Again the rate increases are shown there in the box towards the bottom and in this case we're showing two percent per year for the next four years. So I think in both cases you can observe that these rate increases are quite small, pretty close to essentially what inflation is expected to be which is a great sign. It's a sign that the both utilities have been managing their finances that there's no surprises. The capital spending will continue to increase to make sure that you're investing reinvesting in your system and the district has also the city has also recently issued a pretty important debt for the UV system which really helped keep the rates low and I believe we covered that in some slides coming up. Next slide. So here's just a summary of those rate increases in case you want to see it in simpler format for both the water and the wastewater. Next slide. So that was the first step, the revenue requirements, the essentially the financial plan. Next we took those revenue requirements and as I mentioned earlier we looked to allocate cost to specific customer classes based on the way that they use the system. So the principles that we followed involved assigning cost to customers based on the existence of an account. We also assigned cost to customers based on the size of their meter, capacity cost, that's really the cost associated with the infrastructure, the size of your infrastructure and the size of the system need to serve your customers which we then measure based on the size of their meter. And then the last component there is the commodity cost which we assigned to customers based on how much water they use or sewage they produce. We looked at water supply and water conservation cost to justify the tiered rates that you have and on the water treatment side we looked at different strength characteristics of some of your commercial customers to charge them a higher rate for the cost of treating higher strength sewage. Next slide. So here's a couple pie charts that just give you a sense of where how how large each of those categories are. You can see that the smallest piece there is the customer cost really associated with administrative and billing and then capacity costs or your fixed costs and then your commodity costs are quite large because of your purchase of water. Next slide. So here's a table with your rate schedules. A lot of numbers here. You have a relatively detailed rate schedule focused at different types of customers. I won't go through all of these numbers but you can see the percentages on the right are pretty consistent between the different customer classes. Again in year one you will see slightly different rate increases for different types of customers based on the the results of the cost of service. So when we update the cost of service it will affect some customer classes slightly differently than others and so it's normal to see slightly different results when it comes to the different components of the rate schedule. But in year two and thereafter all the rates will increase identically across the board. I think that's all we need to cover here. Next slide. Same idea here for on the wastewater side and again you can see the percent change to these different components is pretty consistent across the board with some some changes based on the results of the cost of service and the changes in the way that the city spends money particularly the balance between capital spending and operating costs. And I find this slide to be the most instructive the most informative because all the previous slides you really need to know what you're looking at to understand what it means and how it impacts your customers. This helps translate that into actual dollars. So what we're looking at here are typical types of bills that we'd expect. So we identified specific types of customers and made some assumptions about the size of their meter and how much water they use and wastewater they are measured to use. And so for example in a single family class at the top there we looked at three different levels of water used from low to very high and we calculated what their bills would be with the current rates and then what their bills will be with the proposed rates and the percent change in the last column. And again you can see a lot of very similar numbers in that last column. The the changes that we're proposing really is going to be pretty uniform across your your different customer classes. So very little variability between the different customer classes and quite modest rate increases across the board for year one. Here's a breakdown of what an average residential bill looks like and where these different cost components fall within that bill. So we've made assumptions it's a four resident home with seven thousand gallons of water usage per month and a sewer cap of four thousand four hundred gallons. So again that's water used during the winter. You can see what the current bill would be and how that breaks into the different components that we talked about. So the fixed costs and the usage component. We also show there on the left side how much that monthly bill will increase each year based on the rate increases that we proposed. Here we have a survey to show you where you stand in the region in comparison to the rates that are charged by other utilities. And you can see that you're right there in the middle of the pack and that the rate increases that we're proposing leaves you from a ranking standpoint in the same place. There's quite a few rate studies as Bob can attest as well. There's quite a few rate studies that are in progress in this region and so you can expect every all the number of these utilities will be making adjustments to their rates over time and I expect a lot of them to be probably higher than the two and three percent that are being proposed for for your city. So I believe that your rank will probably go down over the next four or five years if I had to guess just based on my knowledge of the region and the direction that the rates are going for most of these utilities. Next slide. And that covers it for me. I think we'll pause here to take questions on this portion and then Bob Reed will I'm Kimberly or Jennifer yeah pause here yeah. So we'll take a pause here and allow you to ask questions on that component and then Bob will give a presentation on the water shortage contingency plan. Thank you questions comments from the board with regards to the proposed increased charges and rates. My thanks again to everybody's hard work particularly the budget subcommittee and our outside consultants and get putting this all together. So I think it's a relatively modest increase and hopefully our ratepayers will be happy to see that it's not greater than it could have been. As we've paused here I will just point out too I wanted to thank board member Walsh for pointing out that in the report as well that we should identify more information about CIP and we did add that to the report so that has also been included into the finalized report. Okay then I think we can move to the water shortage contingency plan portion. Super thank you chair Galvan and the members of the BPU thank you for allowing me to present this information. Mark talked about water and wastewater rates and the revenue needs of the center rows of water during normal water supply and demand conditions. What I'm going to talk about with the water shortage contingency plan is the financial strategy and the rates and charges associated with dealing with drought conditions and I know all of you are familiar with the fact that California from time to time has some fairly significant droughts that come along. So if we move to the next slide the water shortage contingency plan is really a component of the city's urban water management plan and the urban water management plan is something that the city is required to prepare every five years in accordance with state statutes and then and that talks in broad sense it provides a lot of information about your water supplies, water demand from just different customer classes and demand characteristics and then also about your water management strategy including conservation program and whatnot and the water shortage contingency plan is an element of that that talks specifically about shortage conditions including droughts and also includes water use restrictions and other measures to help reduce water demand during shortage conditions. The water shortage charges is a component of that we're looking specifically at that narrow component of the strategy. If we go to the next slide the water shortage contingency plan and the financial strategy includes a system of water shortage charges as well as excess use penalties that come into play at various stages of water shortage. With this update to the water shortage contingency plan the city is defining eight stages of water shortage the state guidelines require at least six stages so part of the update is to comply with the requirements of new state guidelines and also update the analysis consistent with current financial information and whatnot. Your existing water shortage contingency plan already has these water shortage charges and excess use penalties and we're simply updating those to conform with the new structure for the plan as well as updated financial information. And with this you can see there are eight stages of water shortage is defined by the plan that these are above and beyond normal water supply conditions. The first stage is really a voluntary stage where with very modest use reduction goal only up to 10% and then as you go through the subsequent higher stages all the way through stage eight there are increased water use reduction goals going all the way up and over 50% in stage eight. With each of these stages there are various water use restrictions as the and those become mandatory in stage two that limit how customers can use water and then in conjunction with that we impose the initially the water shortage charge which kicks in in stage two and then continues through through stage eight and then in the more severe stages of shortage starting in stage five there's an excess use penalty which is something that applies to those customers that are not staying within specific water allocations that are assigned to each customer. So that is something that can be avoided by all customers. It only kicks in when they use more than they should be. The water shortage charge however applies to all water usage during those stages and provides a little bit of additional revenue. We go to the next slide. So these water shortage charges and excess use penalties are really part of a three prong strategy that we've developed with the water shortage contingency plan. We we had some graphs and prior presentations that showed that as water use is reduced you generate less revenue you're selling less water so less revenue is coming in but you are you also have a reduction in some costs you're not buying water because you're not selling that water but your revenues will fall more than your costs and that will create a financial deficit. So the financial strategy that we're looking at is how do we bridge that that gap in that that occurs and grows with increasing severity of shortage conditions and so our three prong strategy includes first looking at our available reserves and reaching basically reaching into our pocket using monies that that we have in reserve those might be undesignated reserve balances or even the catastrophic reserves that you could use to help bridge the gap and in fact in in stage one where everything is voluntary that's what we would do is use some of those reserves to bridge the fairly modest gap at that stage when things are not there isn't a mandatory requirement for cutbacks. Then we would implement a water shortage charge as a second component and generate some additional revenue from that it would those water shortage charges would apply to all water usage occurring at very at each stage starting in stage two and generate some additional revenue and these are cost-based because they're intended to help bridge that financial gap. The excess use penalties that I mentioned are not expected to generate revenue because they can be entirely avoided by all customers and so we're not planning on getting revenue from that however if if revenue is generated from excess use penalties that would be help to bridge the financial gap and cover the cost associated with shortage conditions including additional extra outreach and assistance programs that may be in effect during the shortage or to replenish reserves and then a third component of this three-pronged strategy is considering deferring a part of the capital improvement program and in effect preserving some of the cash particularly if a drought situation might last more than one year and it becomes important to preserve some of the cash that you have so that's our three-pronged strategy. If we go to the next slide this presents information on how these water shortage charges and the excess use penalties would be applied to the water usage rate structure and this example is using the proposed rates for the upcoming fiscal year and you can see the that first column of rate numbers to the left of the normal rates that Mark talked about the water usage charges would not apply and would not affect fixed service charges so those would remain as part of the bill and not change or increase as a part of a shortage rate structure but as we move into stage two and then subsequent stages we would increase each of the water usage rates by a set percentage depending on the severity so you can see in stage two there would be a five percent water shortage charge so each of the usage rates would increase by five percent thereby generating a little bit of additional revenue and that would increase in stage three to seven and a half percent and then to ten percent in stage four and then so on all the way up through stage eight. What happens in stage five is the approach to managing the shortage with the more severe restrictions in water use is the water shortage contingency plan calls for establishing specific water allocations for each customer and for residential customer this would be based on people per household with some allowance at least in stage five and six for some irrigation and then eventually that would be cut off as well but there would be a specific water allocation for each and every customer the rate structure would would change to a uniform rate over shown as tier one here which would apply to all water use up to that allocation if you go over your allocation up to a hundred and fifty percent of the allocation you would be in tier two that would include an excess use penalty and if you go over that hundred and fifty percent of the water allocation you get into a third tier which includes a higher excess use penalty so again that would generate additional revenue if customers did not stick within their water allocations but those could be avoided simply by reducing water use. One of the real benefits to this structure and approach is what happens to water bills and if we go to the next slide this shows as an example what happens with a single family residential customer and the top half of this table shows a customer that is reducing their water use consistent with the water use reduction goals and so their normal water demand might be 10,000 gallons so this might be a typical summertime bill for example and then through stage one stage one through eight they reduced their water use consistent with the water use reduction goals or their allocation in the higher stages and then you can see what their water bill would look like so as you go across this this table up at the top you have that monthly service charge which remains all the time the water usage charge which is based on the amount of water that's being purchased in the normal rate applied there and you can see as your as a customer is using less water that component of the bill goes down but then we starting in stage two we have the water shortage charge and that starts to generate a little bit of additional revenue across each mandatory stage and then excess use penalty would kick in starting in stage five but since this customer is meeting their water allocations there there would be no penalty and so you can see in the far right hand column here that in all cases because customers reducing their water use their bill would go down relative to a normal bill with normal water usage in the in the standard water rates because they are using less water the bottom half of this table shows what happens if a customer does not reduce their water use and they ignore the requests and the requirements of the city to reduce water use and here you can see their bill increases and initially maybe not too dramatically by a few dollars but certainly when you get into very severe stages those bill increases could be pretty dramatic because of the excess use penalties but when we're at a stage seven or stage eight of shortage and we're looking at somewhere on the order of 50 percent reduction people ought to be conserving and there's a consequence to that so again this strategy is really consistent with what's already been adopted and has been in place within the city this is just being updated to reflect the the new guidelines coming from the state as well as the financial information that we have and and while the adoption of the new urban water management plan and shortage contingency plan will be separate from from the rate study per se and they're on parallel track the adoption of these water shortage charges will need to be part of the prop 218 process and so that's why we're bringing this together in parallel at this time so that all of both of these elements can be included in the same notice process so I think with that I will we can either pause here or turn it back over briefly to Kimberly to talk about some outreach efforts you can turn it back oh there we go thank you Roberta or Priscilla I don't know who's changing slides so we did still want to remind you that we continue to outreach to our customers in all ways that we can in the current environment we are actually in the process of finalizing the third video you have all and we're all able to see the first video that was released during a bpu meeting but it was difficult with zoom to get those to run smoothly so instead if we send you the link then you can go to our website and you will be able to see the two videos that have been created and one that will be released soon those videos are being released so that we can help our customers understand all the work that we do where we've come from where we're going and what their dollar is spent on we are then going to enter the next phase of customer outreach and communication which is really explaining the rate increase we are trying right now we are working on developing a toolkit that will be available to you as bpu members and council members so that when questions come to you you will have additional tools outside of just FAQs which which are always provided for you but we will continue to make all efforts that we can to reach the public and get the information out next slide please the next steps in the rate setting process are a study session on March 2nd so we will be before council in a couple of weeks there is a second one scheduled in case we need it so we will also be there on March 16th if we need to be the proposition 218 notification which is the required notification to our customers which also requires a 45 day waiting period before the public hearing will be sent out near the end of March beginning of April and then the public hearing will be held on May 25th and that will be the final approval by council for the proposed rate structure next slide please so without I'm going to go to the recommendation which is it is recommended by the board of public utilities budget subcommittee and Santa Rosa water that the board of public utilities by three resolutions recommend that after compliance with all applicable law and conduct of a public hearing pursuant to proposition 218 on or about May 25th 2021 the city council one enact increased charges and rates for water services two enact increased charge and rates for wastewater services and three adopt a change to the water shortage rate structure thank you deputy directors and you know I'll open it up for board comments and questions I am going to let you know that we have three resolutions before so we're going to want to take them in separate motions but we can have a general discussion of all three prior to any motions being made so any board member questions or comments I know we've all been through all this before so if that's the case then I will entertain a motion to enact the increased charges and rates for water services so move back and then we have a motion by a board member right seconded by a board member walls to approve the enactment of the increased charges for water services at this time I will open it up for public comments if there are any public that wish to make a comment please raise your hand if you're dialing in via telephone please dial star nine secretary atha we have no public comments may we have a roll call vote on the first motion please yes chairman galvin I vice chair Arnone I board member badenford I board member walsh I board member right all right thank you passes unanimously the second resolution is to enact the increased charges and rates for wastewater services may I have a motion please so moved that was uh who was that uh vice chair Arnone move made oh excuse me board member walsh and seconded by board member right will now take public comments on this motion if you wish to make a public comment please raise your hand or dial star nine if you're on the phone so we have any one no public comments may we have a roll call vote please yes chairman galvin I vice chair Arnone I board member badenford I board member walsh I board member right hi great that passes unanimously the third resolution is to adopt the change to the water shortage rate structure I'll make that motion second the motion we have a motion by vice chair Arnone seconded by board member walsh to approve the changes to the water shortage rate structure will now take public comments on that motion if you wish to make a public comment please raise your hand via zoom or dial star nine on your phone do we have anyone no public comments okay may we have a roll call vote on the third motion please chairman galvin I vice chair Arnone I board member badenford I board member walsh I board member right hi great passes unanimously thank you again for the to the presenters and for all the hard work in getting all this work done so that we can move forward and get this before the city council so that'll conclude item number nine item 10 is public comments on non-agenda items if you wish to make a comment be assumed please raise your hand if you're dialing in via telephone please dial star nine to raise your hand secretary atha we have no public comments all right that'll take care of item 10 we have no referrals we have no written communications do we have any subcommittee reports hearing none any board member reports uh uh chair galvin pardon me yes um I believe you're going to make an announcement under subcommittee reports I am aren't I excuse me so under the subcommittee reports um I'm going to be you're going to be receiving a memo uh after the meeting I've made some adjustments to our committee assignments and we've eliminated a couple of subcommittees so I'll just announce that the city council bpu liaison subcommittee will be myself vice chair Arnone and board member badenford the water conservation subcommittee will be chaired by board member watts and the other members will be board member grable and board member walsh the contract review subcommittee I will be chairing and board member badenford and board member walsh will be on that committee the budget review subcommittee will be chaired by board member watts and board members walsh and right will be on that subcommittee the compost facility negotiating subcommittee will be consisting of council member soyer and board member badenford the groundwater management ad hoc committee will be board member grable and board member right and the recycled water ad hoc will be myself and board member badenford and you'll get a memo from um secretary atha that outlines all of that um based on that we'll take public comments on item 13 the subcommittee report that I just made if anyone wishes to make a comment via zoom please raise your hand if you're dialing in via telephone please dial star nine do we have anyone no public comments thank you uh now board member reports any okay directors report thank you chair galvin and members of the board I'll be relatively quick a couple things I just wanted to update the board on uh first um just wanted to let the board know that the city council has been starting their goal-setting process um today was uh day two they'll be wrapping up uh day three tomorrow uh they're working on their work plan and setting their goals and there will likely be some um participation by water department or some of their goals and work plan that will affect our department so we'll let you know as that goes on the second thing I wanted to let the board know is that um we will be starting our budget preparation very soon uh we do have a new cfo that started in january and that's delayed the schedule just a little bit um so staff is currently working very hard on pulling budget information together and we anticipate that we will be now that uh the new subcommittees have been announced uh in particular the budget subcommittee should be looking for a number of meeting requests coming up very soon as we are looking to start working with you on the budget preparation for this next fiscal year and then last I wanted to let the board know that um the Sonoma water budget and rates we have been working through that process through the technical advisory committee or the TAC wanted to acknowledge that deputy director Zanino has been leading the TAC subcommittee on review of the Sonoma water rates and budget for next fiscal year the committee consists of representatives from santa rosa, Windsor, Katadi, north marine water district, marine municipal water district and city of Sonoma the technical advisory committee will be considering a recommendation on the budget and rates on march 1st we'll be bringing it to the board of public utilities on march 4th for you to give direction for how the WAC member should vote our current WAC member is council member Schwedhelm we'll be bringing your recommendation to the city council on march 23rd and then the WAC will be voting on those Sonoma water budget on April 5th that is my report and I'm happy to answer any questions that the board may have any board member questions or comments for the director hearing none we'll now take public comments on item 15 viewers to make comment via zoom please raise your hand if you're down and in via telephone please dial star nine to raise your hand do we have anyone secretary aether we have no public comments all right we'll move to item number 16 I would ask interim legal counsel mr. Matto to announce our closed session thank you chair gallup there's one closed session item today it involves a conference with the city's real property negotiator which is permitted under an exception to the brown act it's found in government code 54956.8 property in question is that 601 Paisie road the assessor's partial number is provided on the agenda the negotiators on behalf of the city are Stephanie Valkovich and Jill Scott the negotiating party with whom they will be negotiating is the county of Sonoma and the topic will be price and terms of payment in this discussion for the purpose of the board giving instructions to its real property negotiators is appropriately said in closed session thank you prior to going into closed session I'll open it up for any public comments on item 16.1 we wish to make a comment via zoom please raise your hand you're down and via telephone please dial star nine to raise your hand do we have anyone we have no public comments on this item thank you we'll now go to closed session I'd ask each of you to log off and use the connection information that you have to log on to the closed session and see you shortly we have everyone all right we're back in session on the board of public utilities meeting I would ask Interim Legal Counsel Bob Maddow to report out on our closed session thank you chair galvan the board of public utilities did meet in closed session to consider agenda item 16.1 conference with real property negotiators as identified on the agenda there was no reportable action taken in that closed session very good we will then adjourn the meeting of the board of public utilities for today and we'll see you at our next meeting in March have a good afternoon everyone thank you