 I was, I was checking on the sun exposure. Just remember that we're live streaming right now and recording. And you wanted to promote Lori Andy and Tonya correct. You're muted. It's just going to be Tonya and Andy. You can bring Lori up as a panelist in case you need to answer any questions. Thank you. Good morning. It looks like we're still waiting for one more board member I believe so we will give him a couple of minutes before we get started. All right. We have all of the board members now on. So I'd like to call the meeting to order at eight oh three and secretary if I could you do a roll call. Yes. Chair Watts. Here. Board member Walsh. Here. One member right here. Great. Thank you. I would just like to remind everybody to mute their phones and microphones when they're not speaking. And with that, I will open it up for public comment. We are taking public comments. If you wish to make a comment and be a zoom, please raise your hand. If you are dialing in via telephone, please dial star nine to raise your hand. Secretary. Do we have any live or email or voice message? We do not have any public. I'm sorry. Did I, did I skip something? Or is there just an echo? Ken is my microphone working? Okay. Okay. So we have no public comments then. That's correct. We have no public. Okay. Great. Sorry about that. Thank you. Great. So we will move to item 3.1 director Burke. If you could introduce the item. Thank you chair Watts and members of the committee. Our only item today will be a review of the water wastewater and regional fiscal year 2021 22. And if the committee is so inclined, we're also making a recommendation to the BPU at this meeting. And Kimberly Zanino, our deputy director of water and water administration will be leading off the presentation. Good morning chair Watts and members of the committee. I'm going to share my screen and I will run the presentation. So as director Burke mentioned, we are going to go over the proposed fiscal year 21, 22, O and M, CIP and regional budgets. And at the end, if you are comfortable, we will be requesting a recommendation to the full board of public utilities. Much of this is going to be exactly the same as you've seen before, as nothing has changed since we programmed the budget. Before the preliminary presentation, but we'll go through and remind you of all the things that we covered previously. We are going to go over the staff assumptions. We'll go over the local wastewater and water budgets. We'll go over the regional budget and the partner contributions, as well as a CIP review for all of the funds, the budget schedule and then the recommendation. We will be adding some information on the CIP portion today, which will be a little bit more detail on some of the highlighted projects. So as we mentioned before, and as I know, we are all aware, we are going to bring the. Projection for water sales down by 10%. This also means that we reduce our expenditures by 10%. But it does mean that we would be seeing a reduction in revenue on the water side based on the anticipation of a dry year and the possibility of restrictions on water use this year. We are expecting to see a reduction in revenue on the water side. The sewer usage, we are expecting only to be decreasing slightly. This is because of residential sewer caps. It makes it a lot less volatile than the water side. And also the fact that as we see commercial businesses opening, we might see a slight uptick in the commercial sewer usage. So we're expecting that to decrease, but not nearly as significantly as on the water side. We're expecting to see a reduction in revenue on the water side. So we expect demand fees to increase slightly. And then we expect all other revenues to remain about the same. As far as percentage goes and increases and decreases. And then we are proposing this budget based on. The approval of the rate schedule that has come before you. And we'll be going forward on May 25th to a public hearing. So we're just going to try to get a little bit of the data. And with that, I will go over some of the other items from sub regional. So you will see the, the regional fund separately from this. There are some decreases and some slight increases, but overall we are flat in all of our funds. On these next two slides, we are just giving you line items. That roll up different. Categories in our budget. I will point out a couple of them because they're not clearly there is for operations and maintenance projects and these are projects that are covered not in the CIP. There are things like work on the UFO or the parking lot at the UFO or modifications inside of our buildings and these projects are not housed in the CIP but they're housed in our O&M budgets. The other miscellaneous line item includes things like rental equipment, leases, training, copier services and on the water side it also holds our H2O program. And then the items that are increasing this year you'll see our vehicle costs are going up, insurance is going up and indirect costs are showing as increasing in the water and the local wastewater but as we discussed at the last meeting that really has to do with a redistribution of the internal overhead which is the administration fund so that is the group of the administration of water such as director Burke, myself, my team, our support services and some of the other groups that support all three of the funds and so you'll see there's an increase in the water on the wastewater side but you'll see a decrease when we get to the sub-regional side on that. The other line items in that indirect costs are also our overhead city-wide which is our portion of the city manager's office, the city attorney's office, HR so those different departments in the city that we pay for a portion of and then utilities are up also based on increased costs to us but you will see a slightly higher uptick in the water fund and that has to do with an increase in electricity being used for pumping at the farmer's lane well and also because we added climate control to that facility which increases the cost there. This slide is the same as on the water side this is the local wastewater side as you can see everything is is trending about the same that increase of course again in the indirect costs which I pointed out before insurance and vehicle costs also increasing. The next two slides just give you those expenditures in a different look so that you can see it graphically just a pie chart to show you where all of those expenditures are going and what the categories are. That is the water fund and there is the wastewater fund. We always show you what the purchase of water what's happening with the purchase of water as we already discussed we are anticipating or projecting a decrease in water sales and then also as you have seen previously Sonoma water is increasing their wholesale rate to us by 3.47 percent and it is going from 966 or 967 dollars basically an acre foot to a thousand dollars an acre foot. On the next two slides we like to give you a different look at the budget from a revenue to expenditure so that you can see that we are making sufficient revenues to cover the expenditures we're planning on on the water side once again because we are projecting a slight decrease in water sales and due to the possible water restrictions that may happen we are slightly under in revenue compared to our expenditures however we do have sufficient fund balance to cover that as you have been seeing in some of the presentations we've been giving you and if it were to get much more severe than that we would be then talking about some of those other proposed rates that we have been working on which are for a water shortage but as projected we have enough fund balance to cover. On the wastewater side we are just about even so looking great revenue and expenditure is right on target and now I will go through the regional fund and the regional allocations from our partners or the contribution from our partners so first I'll talk about the budget drivers for this year as we have discussed many times we did secure a bond last year at the end of last year this was for our UV replacement project it was a 70 million dollar bond we got some very favorable interest rates we also had some premiums on the bonds so it was very successful for the city it does increase our debt service by a little over two million dollars however it's important to note that we had expected and had things not been so favorable for us that it was going to be three million dollars annually that we would have seen an increase in debt service professional services is increasing this is due to an agreement with Liz tech which is the agreement we put into place so that we could decommission the biosolids composting facility while we are seeing a an increase in the yearly budget right now we expect for that agreement to save us 8.7 million dollars over the next 20 years and a significant amount of capital costs because that facility was degrading very rapidly and would have cost millions of dollars to repair on the LNM projects you're also going to see an increase there and this is due to a couple factors it's a combination of the UV system aging since we don't have it replaced yet we have to do additional maintenance order in order to comply with our regulatory requirements on that system so those those costs are going up for this year we are also at the 24,000 hour service for our CHP engines and generators and so we needed to put that project into the to the O&M as well and we can't suggest delaying any of those maintenance projects as we see that system age it creates more emergency projects for us so it's very important for us to keep up on these maintenance items this year so because of those two increases the the O&M increases and the increase in professional services we are seeing a 1.6 increase or 1.6 percent increase on the O&M budget this year debt service which is the the bond that we secured for the UV system is increasing our debt service by 9 and then you'll also see that we are increasing CIP by a million dollars which is what we have agreed upon with our partners that we would increase the cash funding in CIP by a million dollars a year this is the same as you saw on the water and the local wastewater site here you'll see that those indirect costs are going down due to that redistribution that I discussed you can see that those uncategorized which are those O&M projects that I discussed going up and also the professional services based on that Liz Tech Agreement and this slide is another graphic just showing you where all the expenditures go this includes however the miscellaneous revenues that are applied to the fund which I'll talk a little bit more about in the next couple slides these come directly off of the operations and maintenance total budget or projected budget and then we also have a slight increase in the O&M reserve because we are required to keep a 15 percent operating maintenance reserve so there's a slight a $31,000 increase based on that increased in O&M so we use this slide to give you a picture of what all the costs are that will be distributed between our partners outside of debt service so you'll see that's our total operating costs expenditures on the first line and then we have the $8 million for the CIP cash funding and then there's that increase of $31,000 to bring up the operations and maintenance reserve to 15 percent then you can see down at the bottom that's where we are removing those miscellaneous revenues the miscellaneous revenues are for our revenues actually come straight into the regional fund they are for things like the high strength waste program the sale of recycled water payments from the geysers power company and Windsor and then other small revenues that come directly into the facility and benefit all of the partners and then these expenditures are these revenues are applied to the operations and maintenance expenditures and reduced from that line item before we distribute to the partners excuse me so this is the total allocation that is proposed for the budget this year for all of our partners and they are distributed differently O&M is distributed based on the an actual percentage of flow so the flow actually coming into the plan from each one of our partners from our previous years how we determine how we will distribute the operations and maintenance portion of the budget the CIP is distributed on a defined percentage or defined percentages which are actually in the agreement with our partners and then debt service is distributed based on the repayment schedules of when the debt was incurred and the type of the projects that the funds were used for and you can see that the main increases here are the debt service as we've discussed for that new bond that we secured at the end of last year and then the increase in cash funding for CIP that is where the main increases come from for the fund this year and the distribution to each of the partners I will remind you that Santa Rosa's allocation is covered by the rates that are collected from our wastewater rate payers I'll let you take a look at that for a second before I move on to the next section so now we're going to move into our capital improvement program I'll talk a little bit about how much we are funding each of the CIP programs and then I will be handing the presentation off to some other folks on on the meeting we always like to show you all of the assets that we have and that we are taking care of we have a very large system that is very well cared for and so we we like to just show you this slide that gives you the numbers and the statistics on how how much we take care of each year this slide is just showing you the total amount of funding that is going to each one of our CIP plans on the water side we are budgeting three points or 13 sorry 13.8 million dollars on the wastewater side almost 12.8 and then on the regional side eight million dollars to the cash funding for that CIP plan these are the five-year sheets we just give you this picture to remind you you know how to look at them last week I also sent out an email to all of you that had a little presentation that you could run that shows you how to read those five year CIP sheets we know we had some technical difficulties last time so we wanted to make sure that you were able to actually know what each section of those sheets means and how to understand them the sheets have not changed since we sent them to you last time or since they were delivered to you last time and so those sheets are the same and with that I am now going to be turning this over to Andrew Allen who is going to go through the CIP and some highlights for water and local wastewater thank you deputy directors and you know thank you to the members of this committee for letting me present here to you today so you will start off with our proposed water CIP and a pie chart breakdown of where those funds are headed obviously a big part is the water mains we do have a significant portion to reservoirs and we've got our grant projects as well as big pieces so next slide a little simpler on this pie a big big portion going to sewer trunks which is a real focus for us these days those trunks are aging and we're putting our efforts and finances to the sewer trunks but we aren't forgetting the sewer mains and services a little sliver for our master plans studies in miscellaneous we had sufficient funding to make it through this year and as you look in on the budget sheets the out years have more money going into that category but that's why that sits as it is this year next slide please so this the map gives you an overview of where our CIP projects are our local water and wastewater CIP projects we have two new and only two surprisingly that's rare that we have so few brand new projects those are the the red dots in the map and that's a name one of those is a neighborhood sewer project and I'll talk a little bit more about that and the other is a sewer trunk project rehabilitation again I we have multiple continuation projects sewer trunks neighborhood replacements and reservoir upgrades they're all key to continuing operations of our water and wastewater system next slide so we'll go with one of the two brand new projects this is the shorewood forest neighborhood phase one so you'll probably see this in the future future phases will be coming but this is kind of the backbone that goes up shorewood and needs to be placed first we've got some existing six inch and eight inch ac and concrete pipe that needs to be replaced all aged out and of course in addition the water along with the sewer aging out next slide please this is the other brand new project robles trunk lining if you look at previous years you'll know that the more downstream phases an in design or in the works so this is the next step moving up the robles trunk I'm headed towards the city very important that we do that we've got this is 270 feet of the 45 inch sewer trunk that we will be lining and as I indicated their phase one is currently in design and this will be the next step as we move up this particular trunk next slide please so these are two I'm going to talk a little bit about two other projects that aren't brand new projects but we're putting some significant funding in this year they've started but now we're putting more money into it the east haven foothill drives sewer and water improvements phase six so we have been working in this neighborhood continuing to upgrade the sewer and water mains along with being vcp sewer we're helping with the fire flow in that area as we upsize those water mains next slide this is it's not a new project but we are moving it forward this is the lead well rehabilitation lead well is one of our emergency wells however we have we are not using it or not able to use it right now because there's a separation in the in the lining of that the casing excuse me of that well and so we are going to evaluate what the what the issues are with that casing and look at ways to bring that existing system up online and that's where we're putting some money this year in future years headed to take care of that so those are the the four projects I'll be talking about there's obviously many more on as you can see on the budget sheets but those are some highlights we wanted to present to you next slide please so now we're going to turn over the presentation to Tanya Mokvits who will talk she's our water reuse engineer and she'll talk about the regional system thank you md good morning all and thank you for your attention I will go over the next few slides over the last year asset management team has been working together with regional operation staff and based on their input and our master plan and risk of failure analysis we have identified CAP funding needs for the next year so our regional 2020-2021 year budget would fund approximately 69 percent of plant infrastructure improvements 24 percent of master planning in miscellaneous studies and seven percent in geysers infrastructure improvements project I'm not going to go over every project I will just highlight most notable urgent and critical projects next slide please the first one that I would like to highlight is from our master plan its emergency generator fuel tank replacement project this is a critical regional project that asset management has been actively working on we funded engineering evaluation and design efforts portion last year this year we're funding construction portion of the project for a total amount of 1.5 million dollars this project will replace the existing underground 15,000 gallon diesel fuel tank that serves our two emergency generators with the above ground 20,000 gallon diesel tank the existing tank exhibits signs of deformation and is undersized for increased generators demand due to higher frequencies of psps as part of those efforts we will also install gasoline fuel station at the treatment plant as the closest one that we have is at that brown farm next slide please the next important project is laguna treatment plant electrical infrastructure improvements this project is critical to the plant and also was identified in our master plan it will evaluate and complete treatment plant electrical system the project objective is to maintain and improve our electrical infrastructure reliability as part of the evaluation process we will develop structured maintenance program we will also develop a list of CAP projects with priorities cost schedule while utilizing condition assessment to quantify the probability of failure along with consequences of failure we will also upgrade update our 2016 power master plan similar to emergency generator fuel tank replacement project we funded engineering evaluation portion last year this year we're funding construction of critical electrical improvements project that needs to happen sooner than later next slide please next project that i would like to bring your attention to is aeration basins and aeration header improvement it represents one of the new projects that was recently identified as critical and urgent laguna treatment plant staff discovered that low pressure air duct that conveys process air between the blower building and aeration basin is leaking the existing pipe was installed in 1994 is about 15 feet deep and approximately 230 feet long the blue dash line on the left picture shows approximate location of the underground pipe between the blower building and aeration basin the pipe is in danger of collapsing due to poor structural integrity and heavy soil loads maintenance staff also noted that corrosion damage and air leakage are present at many of the above grade air valves were piping routes air to submerged diffusers inside of our aeration basins picture on the right shows an example of that corrosion this project will replace underground low pressure air duct it will also evaluate and replace all aeration basin low pressure pipes fittings involves due to our CAP teams continue to be understaffed in urgency of this project we are currently looking at alternative project delivery methods next slide please and finally i will go over the maintenance building roof improvements project which is another urgent project that was identified recently our maintenance staff discovered leaks in the roof over the equipment in the maintenance building our CAP team is currently working with a contractor on a quote to temporarily repair the roof we're expecting the project cost to be in the neighborhood of under 300 000 the temporary repair will extend the roof life for at least five years which will give us time to fund design and construct a permanent roof replacement next slide please so this concludes my portion of the presentation but before i turn it over back to kimberley our team would be happy to address any questions or concerns that you might have do any board members have any questions at this time uh direct board member walsh thank you chair walsh um and uh tony just i just missed it on the aeration basins project the cip team is at capacity and you mentioned alternative project delivery methods what what does that mean uh we are working with our own cold designer and see what we might have as far as um expediting the design of the project and construction oh okay so just bringing it outside help oh cool thank thank you very much i appreciate your presentation any other questions at this time here you see me yes yes i see you now thank you okay two simple questions um first of all who's doing the local uh or have you chosen who's going to do the local uh wastewater master plan and secondly on the roadways trunk it looks to me like um it's more than 270 feet so i'm assuming the that what you have budgeted is the first phase and i'm guessing that might be where it turns the corner but i mean i'm just curious about that as well it goes for andy so the the current wastewater master plan is um is being done by woodard and current and we're in the process on that on that project and your other question glenn i'm i apologize oh it's on the roadways trunk yes uh and it said you said 270 feet but the graphic shows a lot more than 270 feet so i'm assuming 270 feet must be the first phase i'd have to look that uh up myself that was the information in the in the database so i'll uh okay i can get back to you on that um yeah that's okay i remember right but we will definitely complete the work so the first thing well i know no i understand that that's obviously multiple phases then yes the the entire robles trunk is is being done in phases so um i might have missed that that dimension on there sir okay all right thank you all right it looks like we can proceed so i will take back over um if there were any other questions about any of the other um budget pieces of the presentation as well um please feel free to ask them now you're always welcome to follow up with us afterwards as well if any questions do arise later especially about projects um as always you would just reach out to director Burke and she would find the appropriate person to answer any questions you might have uh this is the current budget schedule um we are going to meet this when i put the slide together this was to be determined but we are now meeting with the regional partners on the 29th we will then meet with them again on the 1st um in order to get their recommendation to the board of public utilities on the distribution and allocation of the expenditures for the regional system um and then we will also be at the subcommittee if necessary again on the 29th we have a scheduled meeting if today you decide that you would like to have one more meeting um our schedule is also to be at the full board of public utilities on April 1st we will be holding a study session on all three funds operations and maintenance cip and the regional funds and cip we will be back on the 15th to the board of public utilities for the recommendation to city council and then April 27th we will be at city council to do the preliminary approval of the regional budget since we need to notify our partners by May 1st we have to bring that to them early as just a preliminary approval and then May 11th and 12th are the budget study sessions this year with city council and then consideration of adoption of the budget will be on June 22nd this year with that once again interrupt anytime if you want to oh i'm sorry board member wall she had a question yeah thank you very much and through the chair um so kimberley just a a couple comments and then and then two two small questions one comment i think the the onm charges were really good they're compared to the actuals from fiscal 19 and in the prior budget looks like we're holding down costs as good as we can i appreciate that um and then i'm assuming the the onm for the uv maintenance we were you said that's a budget driver we're increasing that by 4 and 28 000 that that that will go down in the short run once the new uv is it's up and running but then maybe we'll have to of course but budget in some maintenance of the new uv system so we don't wind up back in the similar position where you're fixing old old stuff that's not necessarily efficient so i appreciate that as well um and then a couple of questions on the on the miscellaneous revenues that come in or the ancillary revenues that come in that are offset in the uh in the regional fund how do we calculate those or is it by contract how how do we calculate the charges for the recycled wastewater uh so we have set charges we just have to make a projection this year we are not projecting collecting very much from the recycled system based on the fact that we do not have a lot of recycled water unfortunately this year and so the projection is very low on that piece the other pieces like the geysers power company revenue that comes in that's a set amount per agreement they pay us 300 a year i believe that still goes on for another several years before it ends and then windsor pays us to do some environmental compliance work for them and so that is also a set amount that we know and also to add recycled water to the geyser pipeline the the tipping or the high strength waste program we have been watching that revenue go up we saw it decreasing a little bit again this year because one of the main contributors to that or i guess main dumpers in that program put their own facility together but then that facility wasn't working well so now it's going back up again and we have another facility that's coming in and we're going to start actually working on promoting that program even more to try and bring those revenues up so we just look at each one of the revenues how the expenditures have been over over the years and whether it's a contracted amount or what we're going to project that they will be i see in the the 300 000 per year to the geysers that's that's for quite a lot of the waste water so that is that by long-term contract that that can't be changed yeah that's so that's by the long-term contract um they participated in installing that system so they don't actually pay us for a volume of water we need to deliver that based on on the agreement with them and their participation in actually building the geysers pipeline that goes up to the geysers and recharges the fields so but they do have a specific amount that they agreed to pay year over year which was that 300 000 dollars thank you very much and then on the on the water on the water side do we charge Santa Rosa municipal facilities for water use we do okay thanks very much it's all for questions any other board member questions i had a quick question about i think it was in the um the maintenance of the facilities i was just wondering when you um you talked about you know in providing funds to provide some necessary maintenance that will um pretty much take off some of the long-term expenses that we have with with the with updating those facilities i was wondering um just in the budget what do we mark um depreciation for these facilities and which line item would that be in we do not um add that to this budget um the finance department keeps track of our assets and we use those depreciations when we do things like our rate studies our demand fee studies um all of those are included in those but they don't aren't actually a part of the operations and maintenance budget um some of the facilities we're in we share a facility with um transportation and public works for part of our water team that facility that we are in is old you know i don't know that it even gets depreciate anymore so there isn't a lot other than you know just projects maybe that might have to happen or reconfigurations inside for the water teams you know that might have to happen but the ufo we do have things that we need to work on we need to work on um sometimes the hvac system or like i said the the parking lot might need to be striked or maybe it needs to be um you know maintained to some extent so those are the kinds of projects that are used for those for the that uncategorized line item okay great thank you for the clarification and any other questions all right uh so we will now take public comments on item 3.1 if you wish to make a comment via zoom please raise your hand if you are dialing in via telephone please dial star 9 to raise your hand a secretary atha do we have any live or email or voicemail public comments at this time we have no public comments great so i believe we have a recommendation before us so i will make this recommendation to you senator as a water staff request the board of public utilities budget subcommittee recommend the proposed fiscal year 2021-22 operations and maintenance cip and debt service budgets and the regional partner allocation to the board of public utilities chair watts i'd like to make a motion great i move that the uh budget subcommittee of the board of public utilities recommend to the board of public utilities approval of the wastewater rates uh wastewater budget on m and cip regional budget on m and cip and water budget on mcip for the fiscal year 2021-22 as presented by staff i will second great thank you board member walsh and right with that um secretary atha can you do a roll call vote yes chair watts hi board middle walsh hi board member right hi hey i just noticed everybody in the subcommittee's last name starts with w we're all at the end of the alphabet i'm still last though i was last for many years board of the right so i appreciate that all right so it looks like that passes you have a recommendation out of this committee to go in front of the full bpu um with that i do believe this concludes our meeting and oh a director work yeah so chair um watts thank you pardon the interruption but uh two things one just wanted to uh very much thank the committee for all their work with staff on this um based on this we won't have the third meeting um so just you um should expect a cancellation so wanted to let you all know and then we will plan to bring this to uh the board and study session it's your first meeting in april and then the recommendation to the second meeting and then also also um andy allen was able to um get additional information and uh board member right you are correct it's 2700 feet not 270 feet so we missed a zero in that presentation so thank you for calling that out and we'll correct that going forward thank you and thank you staff for for all your work on this and i'll spin them again another difficult budget year with with things not uh predicted so thank you all for your time and the rest of the committee and look forward to canceling our third meeting that we you all were so efficient in this process so thank you and with that we will adjourn okay thanks folks bye