 Although I don't see any attendees on my list here. Probably not for this closed session, this part 530. All right. Let's call to order this January 27th, 2021 meeting of the Board of Directors of San Lorenzo Valley Water District. Polly, would you call the roll? President Mayhood. Here. Vice President Henry. Here. Director Paul. Here. Director Smalley. Here. Director Too. Here. Thank you. Are there any additions and deletions to the closed session? Staff has none, sir. Do we have any members of the public that would like to give an oral communication regarding the items on the closed session portion of the meeting? We haven't had any attendees. There are zero attendees. Yes. I was just checking. No, I don't see any. Okay. So with that, I guess we'll close out this section and go to the go to meeting part, right? If adjourn this session, I'll go to the go to the go. Yeah, we'll adjourn this session and go to the closed session. And please, I'm sorry. And please remember to turn this off so that we don't hear you when other people joined this meeting. Holly, are you there? Yes, I am. I guess we can, are we ready? Hey, I'd like to convene this open session of the Board of Directors at on January 21st, 2021. And there are no actions to report from the closed session. Holly, can you take the roll call, please? Director Mayhood. Excuse me, President Mayhood. Vice President Henry. Here. Director Fault. Here. Director Smalley. Here. Director too. Here. Thank you. Okay. Are there any additions and deletions to the open session? Yes, Chair Mayhood. I would like to request the removal from tonight's agenda item 11A, the fire recovery surcharge. And I'd like to request setting a special meeting of the Board of Directors for January 26th or 27th to agendize this item. And I would also like to request a change in the order of the agenda tonight, taking item 11B first, the loan analysis followed by new business item 10A, the Board Policy Manual. This is because we have a presenter with us tonight to speak on this item. Right, and I'll just add that the reason we're removing the fire recovery surcharges, we realized that this is an issue that the public might have something to say about and we know that many people are having troubles with connectivity right now. So we thought it would be best to put this off for a few days. Okay, so with that, let's go to item 11B, the loan analysis. Yes, thank you. And I would request that the Finance Manager present this item. Everyone, so as you see in the Board packet, we have been actively pursuing some of the upcoming needed loans in relation to the fire damage and the FEMA projects. We were able to secure four lenders that gave us proposals. We have had bond council working on a tax exempt opinion and then most recently we did coordinate with Chris Perlitz to be our municipal advisor to help evaluate some of these discussions. He's been having a lot of active conversations with these banks, seeing what their capabilities are for the immediate needs that we have and some of the upcoming ones. He did go ahead and put together a comparison that was posted as supplemental. That was also emailed out to all of the Board members. And at this point, I'd like to turn it over to Chris and he can kind of start to discuss some of these loans and some of the different ins and outs of them. Oh, thank you, Stephanie. Hello everyone, it's been a little while. Excuse me, I'm sorry. I realized that I forgot to ask if there were any like comments at the beginning. I've done that. Gina, I think it's... I think there's a couple of things that could be done here. It's not necessary to take public comments on this item yet. You could let the presenter go first. Just the open things that are not on the agenda. Yeah, and that could be done after this item that you prefer. All right, okay. Thank you. I just wanted to make sure I didn't muck up too much. All right, I'm sorry, Chris, go ahead. No, no, it's okay. So I've... Stephanie had asked based on the FEMA allocation that's occurred to finance the improvements and replacement of facility infrastructure for the district and knowing the district's sort of credit scenario and what the general market will bear, whether it's in the capital markets in the bond market or working with some of the federal programs that I work with and banks as well, it's been a good exploration to discuss with these players. And I know a few of them already, which helps in the analysis and what they're capable and not capable of doing within the market. And really the number one question off of the analysis is what is the optimal terms from a rates perspective, what kind of rate is gonna generate the least amount of interest due by the district, as well as what their costs of doing, what they can do related to debt on this as well as what the long-term view might be talking with Stephanie with regards to long-term options if there is one. The FEMA allocation that's been made will reimburse some of the, if not most of the project costs minus about 20% or so for the project. And it's not known exactly when these reimbursements will occur, the timing of the reimbursements from FEMA will occur. And so we're walking sort of a fine line to determine what the need is on a short-term basis, but then also what kind of support we'll get from FEMA definitively from a timeline's perspective to do analysis on these offers. And so one of the questions we went out and provided, or Stephanie had negotiated an RFP process with these three potential lenders. And these are all very notable, viable lenders, by the way. These, they're specialists in this field. So I think she's done a great job of vetting, who the players are. And so now it's a matter of digging a little bit deeper to decide which offers the best. And the first, there is a variable option provided by all four. Well, actually through three to four provided variable options. There was also a fixed option with regards to a long-term debt piece. And so the analysis is split between, at least at this point, it's a work in progress, but we've got two different offers that are providing a what we call a revolving loan because we assume there's five, initial $5 million request is gonna go up because you're gonna have to build the project and the FEMA reimburses you as you build it, right? So on one of the offers, I think we have to ask a few more questions from First Foundation Bank, I think, just to digest what their capabilities are for what the needs are. Because the need isn't just five million, the need is actually more like 20, right? For the total project. So I think the notion is you wanna find an opportunity or an offer that's gonna be able to allow you to float debt when you need it as you go basis. And so we started out doing this fixed and variable. And then we up the amount because we realized that if you did five million, you're gonna require another 15 later, right? To bridge the FEMA monies for the project. So we've talked with at least the two leading banks at this point and they have expressed interest on doing a revolving loan. In other words, you could pull money from that loan, you could put money back into the loan as FEMA provides capital as your project progresses, but that number is actually higher than five million, right? So, and the reason why we did it only at five is because that was the original point we were working with it. And I think if you're looking at a total project, the notion is you could to mitigate the interest costs, you can go and you can ask for these for a bigger principal number under the assumption FEMA's gonna take out a percentage of it. But that's sort of one of the questions at hand at this moment is, are you looking to do five million now and then figure out at some point in the future how you're gonna go about the original 15? Because that's sort of where we're at. And I think based on the proposals we've had, we've expanded their principle available with Cobank and Western Alliance. They've been in agreement to increase the principal amount to adhere to what the requirements are for the project with FEMA reimbursement at some point here in the future. And those two have been sort of the leading offers. First foundation provided at a maximum loan amount on a five million using bank qualification. So a bank having not to get too much into the weeds, but bank qualified loans are usually gonna have 25 basis point discount because of the fact that it's a smaller principal amount. So anything over 10 million that a borrower has, government municipal borrower has over 10 million it'll be non bank qualified. So the rates gonna be a little bit different. So we can go back to first foundation and have future discussions with them here tomorrow, hopefully, and vet that additional offer as compared to the other two. But the real question here is, to enter into a long-term fixed structure when you anticipate money coming in from FEMA is that prudent or do you roll out this note as little as possible, earning as less interest as possible, for the next few years until the project's built and you know how much FEMA reimbursement you're getting and when you're getting it and then you enter into a fixed structure for a long period of time. So that's where we're at. And Stephanie and I've been going back and forth quite a bit trying to discuss what the best options would be. So it'd be good to get some board guidance as to where you think you're thinking regarding whether you're gonna do the five million now and then go and issue another one which will include additional cost of issuance at a future date or do you kind of try to wrap it all together in a revolver or kind of bridge loan structure. So, but based on the analysis, the two offers with Western Alliance and Cobank had favorable short-term options based on that point of the requirements for the FEMA for the total project cost. Their variable rate structures are favorable from a rate perspective. Western Alliance was around 2.02%. Cobank was at 1.38%. Just to give some background, Western Alliance is a traditional depository bank that does commercial loans. Cobank is a $100 billion dollar bank that does a lot of utility work in the space. They're pretty aggressive and they focus on the short-term piece of the market working with the USGA as well as the rural utilities, electric grids, et cetera. So that's why they're a little more competitive from a rate standpoint. Both could be on par with structure at this point. So really, from what I can tell, there was a minor difference between the cost of issuance with Western Alliance was roughly about $8,500 for their cost of issuance. And then Cobank was around $15,000 and that was factoring in legal work which you've retained your null shot to do that work. So I think based on the discussions with Cobank, they could drop that cost of issuance number and that's to be determined. So that brings them a little bit more in line with cost of issuance. And then so you're basically holding on to this component of what the interest rate difference between one and the other is. And so it's around 65 basis points. If you're looking at your packet there, I did a quick spreadsheet sort of showing the differences delta between the short-term interest rate variable rate which is index off of the market on a month-to-month basis. And so your 65 basis points less with Cobank than you are with Western Alliance. And if you choose to go on a long-term basis off of those two offers, not first foundations but the other two offers, it's roughly 20 basis points difference. So in this calculation, I tried to show sort of what it looked like if the five million took three years out in the future interest-wise between the two offers which is just a simple calculation on five million at that interest rate plus cost of issuance. So that's the analysis. I think if we can define sort of what the ultimate need is here and more clearly with the additional loan you're gonna need in the future, we can change these numbers and get them a little bit closer to what the demand and what you're looking for would be. So any questions? Dr. Fultz. I have several. Thank you very much for that overview. Is the issue with the first foundation bank that they didn't provide sort of a short-term variable rate? Is there any offset advantage that we would get by taking the full amount down and sticking in an account somewhere an interest-bearing account somewhere like we did with the 15 million certificates of participation? If you take down the five million, you can do that and you can have it sitting in an account for the project but the project is 20, right? I think total. So you- Well, I kind of separate the different at least in my mind I separated the difference between what I think the long-term debt issuance is which is the five million and sort of the revolving debt that gets us through the project. Those are two different sort of financial situations, right? And they, based on whatever you guys come up with may require two different financial instruments, right? Because if the first foundation bank and Western Alliance and co-bank, by the way, I'm assuming we've all rejected Santa Cruz County for being out of line, yeah. So we're really looking at three right now. If there are advantages to getting into a revolving loan type situation without prepayment penalties, without any of that other stuff, that's great. But my concern about the revolving loan is that typically is gonna come at a, potentially more of a premium. If it's not gonna be a premium, then sure, maybe it's better to roll it in. But if it is at a premium, you might wanna keep those two separate, right? So that's kind of what I'm struggling with right now. Just because I don't have what you have in terms of information. Yeah, no, and I think part of what we need to really ascertain as well is the 5 million, that's an assumption that's made based on what FEMA's requirement is for local contribution, right? 25% of the overall project. Right, exactly. So your total project's 20, and you've got 5 million, which you will get, I mean, presumably, some money back for that allocation. At some point in the future. You know, the question is. I don't, I don't know. Yeah, I don't know. I mean, I think. The only other, the only other money could be Cal EOF, oh, excuse me, Cal OES, that might come in with some additional money that would reduce that 5 million. Right. The worst case, our community is on the hook for 5 million if it's a $20 million project. So it sounds to me like you guys are kind of in the middle of a analysis and. Right. I mean, I think you're, it sounds to me like you're headed in the right direction. You're thinking about the right things. This is your gig, so you know how to do this. I would like to see that analysis completed and have it brought back to the board so we could take a look at the sort of final of what all the pros and cons are with the different approaches. I like the first foundation bank interest rate, you know, in terms of terms of a long term thing and if we can stick that money in an interest bearing account and offset it down to, I don't know, 65 or 75 basis points, that's not so bad compared to the variable rates. Yeah. If you, right. If you have, so then you would go for the, I mean, just following that trend of thought, then and I'm just, I'm just, I'm just, you know, just a thought process here. But if you do the 5 million and you fix it today at 2.45%, which is a solid rate, I agree, it's lower than the other two long-term options, right? And it is fixed, I hear I say variable, but it is fixed per the, Yeah, but you know, the question is how do you, on the next round, the analysis, I guess, would include what the interest impact would be on the remaining portion of the loan, because it is, you know, you've got another 15 million that you have to, you know, on a short-term basis fund at some point in the future, not knowing necessarily what the reimbursement, you know, when that FEMA reimbursement comes, then you just have to issue another note, like you said, separating the two, right? Where you had this one piece and then, you know, knowing that the 5 million is your liability and at this point, minus some grant, there's nothing against that. I think, you know, the question is, what's the cost of those other variable or the short-term options would be in the future for the remaining 15 million? So I think, yeah. That gets to the one we start the project and whether we started in a year or two years or three years, I'm not exactly sure. But let me turn it back over to the chair and yeah. Thank you. Thank you, Claude. That's a good point, yeah. Director Smalley, I think you had your hand up. Director Smalley. Did he freeze on a second? Director Smalley. Yes. Thank you. I was, took me a minute to unmute. We're talking about the fixed 5 million and then an undefined, revolving amount number that we think we might need of that 15. How do we get staff to get to a point of a reasonably certain, here's about how much of that 15 we would be needing given the timeframe for the construction projects and what we know from FEMA reimbursement schedules based on those as to what we think we might need because it sounds to Bob's point, that's something that we're gonna reasonably quickly need to figure out. Right. I agree. And that's one of the challenges is trying to figure out when the FEMA can reimburse anywhere from 60 days to 100 days. So I mean, it could be well into five years before you get to reimbursement. Rick, did you wanna answer that a little bit, if you can? To give you that kind of schedule, we're not there yet. We're putting the RFPs together, right? The first one's going out is the constructability of the five mile type of material and how it is to be constructed. I don't think these project on completion will be, I think will be a good three years before the last one's completed, but you're also putting together plans and specifications on ones that are more traditional mainline that we can go right out and go into construction. But we're looking at plans and specifications coming first, moving forward. So you're looking at maybe some of these projects going to construction fall, but realistically most likely for plan specifications the following spring 2022 to really start getting into a big construction. And then it depends on, there's some environmental review to do. The five mile pipeline is going to be the biggest challenge of them all because we will go into a process of constructability. The board will review that and make some decisions on how we're going to put that back. There's a lot of concern about, do we put it back in above ground HDPE? I think we're gonna find with a constructability report, there's gonna be other ways of doing it. We're gonna get into a pretty large environmental project and a pretty costly project, but that's a process I think we have to go through. So I'm saying we'll complete these projects probably three years, we're three years out, but we'll get a good start this summer fall. Am I correct that one of the reasons Stephanie has a sense of urgency is that we've pretty much run through our cash. Even though you may not be starting these to get big expenses for a year, we need to get some money right away as a bridge because we're just not gonna get much from FEMA in the next year. Is that right, Stephanie? Well, in the next year we'll get some reimbursement from the board that we've already done. But we don't wanna be cutting it so close on all of this. So we need to get moving. Yeah, yes. I'll let Stephanie speak to the immediate cash flow needs. Yeah, so we went from thinking, we had some more high volume invoices come through more recently that kind of essentially depleted a lot of what we thought we had in there. So that's what created this more eminent need for cash flow. And in general, we knew that 20 million, 25%, around five million is what we were gonna need to fund ourselves. So that's kind of where the five million came around. And then we figured we were going to be needing another bridge loan here within the next year for the other main construction piece with FEMA. What's happening right now is a couple of these banks have said they're willing to go higher if we need it. Revolving loans has been something that I have always been told no in the public industry multiple times. And so two of these banks are actually sitting here saying that they would consider a revolving line of credit which could be advantageous to where we're only gonna need to go and get one financing. And we can kind of have that fluid as we're getting the reimbursements from FEMA we're able to paint down that revolving line. So it is definitely something that in these last couple of days has been turning up to be very much of interest to me because we don't know if we want to lock in this, do we know if we wanna lock in this five million over the next 20 years? One of the things that isn't hinged on any of this but for example, if the district were to go and ask our customers to do some sort of a fire recovery surcharge, if you're going and asking people to repay X amount of money and say five years, you going and taking out a 20 year loan to where you can't make a prepayment for 10 years isn't exactly prudent. I'm a rate payer as well. If I'm paying you now for it, I wouldn't want you to be incurring unnecessary interest in the longterm. And so that's kind of where it is a very fluid situation. We do have a couple of these banks that are willing to play ball and kind of give us a lot of the different options that we want. We do have the immediate need of where we do need to secure financing here by March. So, that's where we're trying to get a feel for the board as to, what route are we looking to say? We wanna lock in longterm. Are we looking to have some of the more flexibility to where we can do some of these short-term drawdowns with the flexibility to lock it in, if we see the interest rates starting to kick up, we can turn around and say, lock in that five million. That's kind of the things where a lot of the discussions that Chris and I are floating around. Yeah, and so there's a couple of components here. I think that I've sort of addressed the thought process is that if you had a 15 million, I mean, let's just set the five million aside. And I think that the notion about you brought up going longterm on the five million at 2.45% is pretty favorable, right? It's not higher, it's about about 55 basis points higher than the capital markets would be on a 20-year fixed term. That's pretty powerful. So, that's important, but setting that aside, right? And we'll vet a little bit more of that here in the next couple of days. But on the other side, with the 15 million, the variable component and having a revolver, Cobank did have a better offer. The thought was how much does that number need to be? Because if you, we don't need to issue, you don't need to issue 15 million because you're gonna be having money reimbursed while the expenditures are occurring. So, and this is where maybe Rick can kind of help define a general schedule or just general schedule. And so the contemplation was instead of asking for 15 from these on the remaining 15 amount needed that you would ask for maybe, I was throwing out a number of 7,500, for example, or something, right? Because what's not used on that revolver is got what they call an unused interest fee of 25 basis points. It's not a huge number, but it's still something, still interest. So, whatever that, when you get to the point with this construction timeline and draw schedule, vetting it, vetting the draw schedule would be one thing. And then the second thing would be understanding as best you can through discussions with FEMA or the state, where the allocations occur from, what their timeline of reimbursement is, right? Cause that'll really give you a handle on what your ultimate needs gonna be for the remaining 15 million. And on the five million, if you get a grant or it is like Stephanie to say, it is fixed for 20 years, they do have a prepayment penalties that you could pay it off a little bit earlier in a 3% penalty charge. And it declines over time until you get to 10 years and then it can be paid back in par or be paid back at par with no penalty. So, that again, it's not a no-call feature for 10 years. It's a gradual call with a penalty declining over till you get to the 10-year period. So, it's not a, and I think the idea for me would be, if I was thinking about it from your standpoint, is the five million the right number on a fixed 20-year term, the rates good. I mean, right now the rates are, if you're looking at the general market rates, the lowest on the long-term end of the scale have been I think almost ever, right? I mean, even if you go back to, I just did some analysis on another issue recently in California MMD, which is how things are priced in the market, your 40-year paper is roughly at a 1.5% back in this October, or back in October of last year there at 2%. So, it's 50 basis points lower than it's been. It hasn't reached the lowest it ever got was December 1st of 2020 by two basis points lower than where it is now. But this 245 is a reflection of that, right? So, that's very favorable. So, for whatever that's worth, right? Thinking about where the market's at and where your rates are at. For, you know, you don't wanna make a decision based on rates, but there is a notable rate impact here, and your variable options from these other offers are variable. So, they will move with the market. So, if the Fed decides to raise rates in, you know, six months, you know, which is presumably more in line with what they recently have reported, you're not increasing rates for a period of time. And so, in six months, they decide to raise rates for one reason inflation or whatever, you know, you'll see all of these numbers go up by, you know, on the short-term or the short end of the curve, like the five-year paper or 10-year paper, it'll go up exactly by 25, if not more. And the long end, it'll go up even higher. So, you know, there's a bonus here that you've got a window on this fixed piece. So, I think that's a good question to vet here with regards to this, you know, the five million, you know, if you decide that's what you wanna do on a fixed 20-year term. So. Do we have any other comments or questions? One quick question. Does this tie into a Pacific list of projects or just the fire recovery projects or, you know, like our other security participation are tied to individual projects? It'll be the FEMA projects. It'll just be FEMA projects, okay. It has to be, it's not a working capital. It's because of the tax exemption on the notes. It has to be tied to specific uses. That's true. Yeah, no, it's a good question, but that's exactly right. So, we can't use it as working capital. It's not a revolver like the others would be. Another thing is to do the revolver, I talked to your NALL about an hour ago, you know, on the revolver is probably is gonna have to be a taxable piece of deck. And what that does to these rates here, it moves up and I didn't address it. Yeah, I haven't got a chance to address it, you know, the restaurants, but for Cobank, they put a 20 basis point increase on the tax exempt rate. They have 1.38%. So you'd be 1.58% for whatever that's worth, right? So I think Bob's point is, you know, we're kind of mid-streamed through the analysis, but you know, we'll get to a real definable option here, several options as we get further in. Director Fultz? Yeah, I'd like to throw something out here for y'all to consider. Sometimes the way to try to address a problem is to make it bigger. I've been an advocate of wanting to take down another, excuse me, 15 to $20 million in debt to do the next set of normal projects, not the fire recovery projects, normal projects after we get done with the pipelines next year. Is there any advantage to us to be thinking about taking out something around 20 million or 25 million, something like that, whatever keeps us well below the 1.25 minimum, I never want to get to 1.25 minimum, I'm more at 1.5 to 1.75, and I'm still clenching a little bit at that, but I think we have some leeway here. Would it be possible to do that, make the deal a little bit bigger? We wind up with having the capital for both the projects to bridge us on the FEMA loan. At the same time, Rick and his team can be taking the inventory that we're supposed to be getting, I think here in a couple, three months, and we're gonna start looking at what those next set of projects are. And maybe that also might be more attractive to the lenders if we were dealing with it at that level. I don't know if it's possible to do all that tax exempt, but it would seem to me we could identify projects to do that. And that might actually allow us to kill two birds or three birds with one stone here and maybe make your guys' analysis job a little bit easier. So I kind of wanted to throw that out, Rick, for your consideration, because we have talked about this when we took out the 15 million, I think that the board at that time was pretty unanimous in its view that we were gonna take out at least that much, if not more, for a subsequent round of projects. I think the one thing that you would need to do for tax-exempt bonds, if you, you know, and these are, these lenders are considering the tax exemption. Tax exemption will, for those that are sort of not completely aware of the difference between taxable and taxable bonds, you generally, you get a lower rate for tax exempt, right? And on the short-term piece, like I mentioned, when we talk this afternoon with Go Bank, that they have a 20 basis point hit on it, which is not a huge spread, right? Right now, the difference between taxable, tax-exempt is thin. But one of the things you need to do to qualify this additional other project as tax-exempt, you have to identify the project. Yeah, yeah. And then the other thing is you have to spend the money over a period of time within a reasonable IRS, you know, regulations for arbitrage restrictions. So you, unless you're planning on doing it in the near term, there might be some interesting wrangling I've never done, but you could, well, you have roughly about a three-year window to expend those monies. So if you went for a larger amount, if you didn't have the actual project in mind and you would have seen your broke ground two years from now, you'd have a short timeline of using the most funds before the IRS would look at it and say, this is you're issuing too much for what you're actually, but from a coverage standpoint, right? I did some calculations for Stephanie when she first called me and I said, well, what is a district capable of covering from a principal standpoint on future debt? And it's roughly about at a high rate, maybe 80% higher where the market's at now, you're capable of paying roughly 41 million in project, right? So before you get to the one, what I did is I backed into how much debt service could you cover to get to one and a quarter? And so the 41 million is the number. So there's a lot of leeway here. Yeah, it's great. Yeah, so that's good. So, but we'd have to talk to kind of get creative on the tax exemption side to see if what kind of avenues there might be or you could do because the spreads are so thin between tax exempt and taxable that you do a taxable piece of it. So let's say you do 15 million or 20 million on the tax exempt for this project. I don't know what the FEMA money that might offset. There's some questions, technical legal questions that we could address to ask that. So I know Rick, I thank you. I appreciate that. I know Rick has a list of projects as long as it's armed before the inventory. So, you know, I think we can identify projects. We can, it's just that they're not shovel ready and what we want, we don't want anything that's gonna impact our cash, like getting our gas flow back in. Thanks. I agree, but the pipes are fast, Rick. Pipes are fast. Yeah, environmental. Thank you. I appreciate it. Pipes in the road. I understand how you want to move it at home. Okay, director, I'm gonna go back to my alphabetical thing. So director Henry is next. So am I hearing right that this district can afford 41 million dollars in payments on loans? Is that what you just said? So yeah, when I said the 41 million, that was based on the minimum amount of coverage that you'd want to be from a district standpoint, right? I don't think you wanna get, you don't wanna get to one in a quarter, right? I'm just saying that, yeah, that's pushing the envelope on the coverages, but there is some flexibility. 41 million is just a, if I was using one in a quarter as a ratio that we're using for coverage ratios on debt service to real income revenues. Right. That would be that number, but that's a decision that I think needs to be handled lightly or heavily, right? That you wanna take too much, my rule is you do things incrementally where you don't wanna go and take too much debt on too fast, especially when you're gonna bring yourself down to one in a quarter times raw coverage. Because if you're below one in a quarter times coverage, you're getting into non-investment grade type of credit land and your rates then double, right? So you're getting into a difficult market as far as finding debt at a reasonable level, yeah. So that, it kind of concerns me 41 million. I mean, we have people out of work. Maybe the world's gonna change this year, I don't know. We have, I don't know how many people lost their homes and we are not collecting anything from them. It just like, what is our real income and what is a debt ratio? For that are what our actual income is to what the actual cost of say a 41 million dollar loan, which I know we won't be getting, but that debt ratio bothers me. It goes deeper than that because that coverage analysis is just based on snapshot current coverage. It doesn't factor in increases in the market rates. It doesn't factor in increases in expenses. So there's several factors that go into that, but if you did a snapshot, the reason why I did that is just to determine, it was more of a back of the napkin analysis to say, you've got some coverage here, which should give you better favorable light from a creditor standpoint as far as issuing debt. And as far as there's an additional project in the future, and that project sounds like it's a number like 15 million or so, which is important for replacing infrastructure. And that might be right in tune with how much revenues you have. And we've got other expenses. When we did this last COP, the capital markets, even when you look at the capital markets is the place to be. So I mean, we're not ready for this second round of major capital funding when we are. There's a good chance we're gonna, it's gonna be recommended that we go back to the capital markets. We did the huge lift getting that first COP. We're now rated, we now have all of the docs. We're gonna be able to go to the capital markets a whole lot easier the next go round. So that's likely where we would be going. These banks wouldn't be able to compete with that. And so that's where we kind of have this more initial piece, the bridge loan piece. Like that's kind of where our discussion is now, which is where credit facilities like this are a little bit easier to work with. When we go for that next longterm, we'll probably be heavily looking at the capital markets again. And really the bank offers that we've gotten is a byproduct of the current credit. If you were not in better than average standing, and I just say better than average standing, then you wouldn't be getting these rate levels. So the market wants to lend to borrowers that have better than average credit when you get to average and below average, then it starts to make it more difficult. Like if you've got a bad credit rating and you're trying to get a mortgage rate, the mortgage lenders will have a higher interest rate when you want to get a mortgage. It's unfortunately that's how the world works. I know if you have a good credit rating, you get a better rate. I understand that. Okay, let's let Gina pop in here quick into our order. Thanks, Chair Maynhood. I was just going to provide a reminder to go out to the public at some point here in the near future. Yeah, I thought when we got through this issue. Let's see, Dr. Smalley, did you have anything you wanted to add? Chris, I think your point on the 41 million is we from a cash flow could be comfortable at a number significantly less than that. Right. Not that you're advocating for 41 million. Absolutely not advocating for 41 million. So that if we're at 20 million from a debt ratio, that looks reasonably comfortable. That's correct. Okay. Yeah, and that's okay. Yeah, and I'm not assuming, and again, that was the back of the napkin analysis. Yes. It did not include inflation. It did not include increases in market and increases in expenses. So that's a flat number, yeah. Exactly. Director Toe, did you have anything you wanted to add? Yes, I had some questions for Chris. I'm not a finance person, so forgive me. I just have to ask a few basic questions here. When I look at this spreadsheet that you made and it says the availability is three years, is that when you mentioned that the funds would have to be used within three years? You had said something to that effect. And then if we don't use the funds within three years, what happens to them? That's more about the tax exempt nature of the debt. So that the IRS says you have arbitrage requirements of spending money during construction. So they don't want borrowers to going out and issuing the exorbitant amount of taxes and debt with the intention of doing a project three years or five years from now. So they want you to spend it over a certain time. And it's based on percentage of construction completion. So there's a whole schedule, yeah. I appreciate that. So, and then with co-bank it says no prepayment penalty. And then that's for the fixed one. And then for the variable one that I'm assuming the fixed one is like just a fixed interest rate. We make payments on that until we're done paying it off. And then the variable one is the revolving credit. Is that correct? Correct, yeah. Okay. And so now I understand is a good time. Interest-wise because we're in this sort of like fiscal place. Yeah, but the variable rate would increase as the Fed increases the interest rates because let's hope we're heading towards a better economy. Right. That's correct. And then, so is there any reason why we couldn't take out a fixed rate loan for part of the debt? And then just another 5 million like a revolving account. So we could have 10 million at a time instead of taking out the full 20 million. And so that's sort of my thought here is because I'm a little nervous about taking out a full 20 million all at once. And I'd like to keep our debts to a minimum just because I feel like we don't know what the next thing is coming down the line, right? And I don't necessarily want to get locked into something for 20 years. Right. That we have to pay back. And that also would come with a 10 year prepayment penalty. That seems a little like it because we're expecting to get money back, right? So can you explain to me the benefit of having these two separate events is that we're kind of what we're looking at right now? I think that's, while we're contemplating doing at least the last thought process with Stephanie was we were contemplating having a higher amount for the, because we have to go when we go and we issue this variable note, when this short-term component, right? With a really low rate, the 5 million isn't going to cover the whole project. The question is that the last thought process was what if you did something for like 10 million, right? And it's a variable component. FEMA is going to take and it revolves. So it'll get you to the total 20 million. And then towards the end of it, you'd have this tailpiece, which is presumably 5 million, which you could do at a fixed level. One of the components of these offers, which is favorable is that you could presumably take, at some point in the mid, if the rates start to rise, you can pull the trigger and enter into a long-term fix. You could even go out and try to find another bidder for a long-term fix. You could have first foundation do it at that point. So there's a couple of different ideologies here, but your point is right. If you did 5 million now and then you did some sort of variable or even, or a variable component at a later date, that would be just as good. You could get there. But when you whittle down the details, it's all about how much interest you're going to pay. And these numbers are pretty close, right? I mean, whether you're, well, 1.38 is significantly lower than everyone else, but everyone else is pretty close, right? 2.3%, 2%, 2.5%. The fixed numbers you see here under the co-bank and the Western Alliance numbers are fixed for 20 years. So you're basically locked in and you have this prepayment component, right? Or no call component or no prepayment component. And so, you know, that's, you're locking in at that point. So, but that's an, I mean, there's lots of options here, just a matter of figuring out which the best, the best way to structure this based on the FEMA component and how to mitigate your interest. Okay, I think I wanna just, everybody's had a chance to speak. So let me go out to the public. We've only got two people just to make sure that, since that, if any of them wanna pipe in here. Chair Mayhood, I just need a quick interruption. Director Henry has lost her computer, it has went dead and she is asking for a call-in number. Holly, do we have a call-in number she could use? I don't have one. It would be on her invitation to this meeting from CTV. She can use that if she has any access to her computer and she can see what that, the invitation that she received, that would be the only way to get a call-in number. I doubt her, she does. Is it okay if I can text that to her? Now, why don't you just text it to her phone? No, it's different. It's different for each individual. Oh, okay. She could call in, she could call in as an attendee and you just have to, you know. That's a good idea, Bob. I'm trying to think, where do we get the attendee number? I guess I could go to the internet, our website. Yeah, yeah. On the agenda. I can view there, okay. Rick, it would be on the agenda. Yeah, just tell her to look at the agenda and call that number. And we'll see if I have a computer. Anybody? He needs to call her. Can we please just go, just, I don't know if Cynthia or Mark has a comment, but I just want to make sure that we give them a chance before we go around anymore. So I don't see any hand just raised out there. Okay, so I will come back and I think Director Fultz, if you want to go ahead. Yeah, thanks. Stephanie, you mentioned that we would want to go to the capital markets for money instead of this. What is the interest rate on our current certificates of participation? Chris, I think it's just below 3% is what our current ones. Yeah, and what would be the salient advantages of, I mean, it's some level to me, money's money and it's around interest rate, what the terms are with you, you can pay it back early or not. I don't really care who it is. But what are the salient advantages we'd have of going to the capital markets for this additional money rather than thinking advantage of what seems to be pretty historically low rates? Well, Chris can kind of speak to that because I mean, what you're paying the bank for is you're paying the spread. So in his example, he has the first column, the general capital markets fixed, would be at about 1.9%, including the cost of issuance, which is obviously a lot more favorable than the 2.45%. Okay, so at this point in time, we expect the interest rate in the capital markets to be under 2%. That's what we're saying? Yeah, so the, let me find the last California MMD, actually it's right here. The 20, so you're a AA credit with the insurance and we got the insurance on the COP. Your underlying credit would probably be around an A, but the AA helped us get to at that time, get that lowest available. But the, in the current market with the AA California, you're probably around, let's see it'd be a average life is roughly 19 years or so, with level amortization, right? Where you're paying up principal in interest, like a typical amortization table where you're paying more principal at the end, more interest in the beginning. So your average life ends up being around 20 years. So your 20, 40 maturity as of today was at 1.33%. What about 30 years? 30 years is at 1.56. Okay. So that's the 30 years. So you would be a 1.33 and maybe a little bit of spread on top of that. And I was just, in fact, let me see when I did this initial analysis for you guys on the capital markets. I'm just analyze, I was sort of brought in to analyze, the option of doing this with the grid. Let's not spend too much time on it right now. I just wanna say, man, with those interest rates, we gotta figure out some way and brawn down another amount, but that's a topic for another day. So thank you. Okay. Thanks, Gil. Okay. Are there any more comments? I kind of get the impression that we're not really at a position where we can give guidance because the sounds to me like analysis needs a little bit more work, especially putting in some kind of very crude time scale of how the projects would go over the next three years and when we should pay them off. So, Stephanie, what would you like from us or what would you like to have happen? I figure some of these could be, the district manager is able to move forward with securing debt for the district. The board does have to ultimately be the ones approving it. I think we have a couple really good lenders that are willing to work with us. If we're able to pencil out some of these details, it should become more clear for if we wanna go for the larger revolving loan and try to encompass both debts to where we only are having to go out for one loan. And then the district manager can kind of make that decision and then we can at least start that process and then come back to the board with kind of the final recommended route of which type of lending we wanna get. It'll come back to the resolution as well. Okay. So what you'd like from us now is a sense of the board to continue and finish up this modeling and bring those back to the board or what do you need? Ideally, I'd like the district manager to be able to select one of these lenders so that we can actually start to come back to the board with the more finite piece. Okay. Let me just ask Bob if he's got a quick thing he wants to say, because we need to move on on our agenda. I was going to respond to that but you can put me in wherever you want now or later to respond to that. No, go ahead now. We need to finish up. So I'm concerned that First Foundation Bank hasn't been more fully analyzed, I guess. The interest rate on that on at least the fixed part is to my way of thinking very advantageous. And we do have offset capability that we can do. So I'm not prepared to say we're down to two and the district manager can make the selection. This is also a very significant decision that we're making on behalf of our community. That is the community that are all in one form or another owners of this district. And I think this needs to come back for that review. And as part of that review, I would absolutely expect the district manager to make a recommendation and have a resolution attached but to just come back with one, I'm not comfortable with that. Well, how about if we do this? We've already decided that we're going to have a meeting on the 26th or the 27th to that will be an open meeting to discuss the fire related surcharge. Can you think you guys could come back for that meeting and have this final bit of modeling done so that you can present a few sort of final options to satisfy what Bob is talking about. And then we can end your recommendation and then we can vote on that and give you a final vote. Is that possible? Absolutely, for me. Okay. As far as projects, having projects defined in a somewhat of an estimate of construction, I mean, we can get our best estimate. Yeah. I think Rick, you know, I don't think we're really looking at, you know, we're looking at sort of order of magnitude numbers, you know, like 1 million, 2 million, nothing more specific than that. So, you know, and frankly, I think, you know, what we're asking for is what you could, after we sign off right on a napkin, you know. We can get those, we can, and it's in the next question is Stephanie, do you feel that you'll have all your information so we'll be able to move ahead? These banks have been, these banks have been very responsive to Chris. So, you know, we can go at, you know, two of them have stated interest in being able to do this more expansive. We definitely can reach out to First Foundation, see if they're capable of doing something like that as well. So we could at least have the three options for the different way that we're thinking of it. And then if Chris and I are able to get kind of these ballpark timeframe and dollar amounts from you, we can pinpoint more what the pinch is gonna be, you know, what the big pinch is gonna be to figure out if, you know, a $10 million revolver will be the best route. And then we can kind of, I'm picturing two routes. It's either this 10 millionish revolver as being the option to take both financings that we thought we were gonna have as one or we sit here and we do a 5 million fixed with, you know, 10 million X, whatever it is, revolver that we need down the road and compare those two. Obviously there's a lot of different ways that these can be spiced and looked at, but I think those are kind of the two routes that I'm hearing are the most likely options for the district. And we- I think Bob suggested another one that I would like to see modeled out and that was to take a larger fixed loan. And as long as there's not pre-payment penalties and put the extra money in interest-bearing accounts, am I sort of self-rising that correctly, Bob? Yeah, sorry, Gail, I backed off of that after Chris went through the capital markets. However, I would say we need to take advantage of that quickly at one point, what was it again, Chris? 1.53 or 1.- Yeah, I mean, the rates in the capital markets are low. My analysis here is not on the capital market side. Yeah, no, I got it, but I mean, just the rough interest. Yeah, I mean- Just the rough interest rate, that's- No, it's crazy. It's crazy. Yeah, I think management, I agree. This is so, you know, a chance at a lifetime. But a separate topic from this. Yeah. Let me just make sure that Lois is, she's phoned in here. Lois, did you have anything you wanted to add? You can talk, Lois, you just have to demute yourself. I actually didn't know how to do that when I was on the phone. No, okay. Well, rats. Does somebody else know how to do it? Can you take her off mute? The CTV, it says talking permitted. So yeah, I'm afraid I don't know how to do it. I think we better move on. I think he has to hit star six. Pardon me? Star six and unmute her. As a participant, it says talking permitted, and but for whatever reason, as Tina says, it's not- Oh, yeah. Stephanie was saying she would, she would have to push star six on her phone. Oh, star six, okay. Try, Lois, if you can hear us, try star six. Yeah. Okay, I can hear you. Yeah, I can hear you. All right, we just wanted to make sure that if you had anything you wanted to add to this discussion with the idea that Chris and Stephanie would come back with a new report for the meeting on the 26th or 27th. That sounds like a good idea to me. Okay, good. All right. Gail, just one thing, it would, for me, it would have to be the 26th. I have a meeting, a night meeting on the 27th. I can't get out of the international conference call. I don't wanna try to figure out a time, you know, to, right now. Just giving you a heads up, that's all. Yeah. Okay, so let's, let's go on to the next, well, let's see, I never did get oral communications on things that were not on the agenda. So I will open that up now to the two folks that are out there, Cynthia Denzel and Mark Doulson, if they had something they wanted to talk about that was not on the agenda tonight. And I don't see any hands up. So with that, we will go on to- Before we go on, can I just get some good, clear direction on what the board has did this last, on our loan item, what the direction was? The direction was for Chris and Stephanie to model these other scenarios, or rather the scenarios that we sort of settled on and present them on a meeting, hopefully, on the 26th and with their recommendation of the scenarios, what their favorite one is, so that we can then direct the district manager to follow through on that. So we're gonna return on the 26th with a recommendation and a resolution to move this forward. Yes. Honestly, on the loan that we were talking about earlier, we're gonna stick to the prior recovery. Yes. Could I- But- If I could just make a clarification there, there won't be a resolution needed unless there's desire for one on the part of the board. Just a motion to proceed with one of the options would get us moving forward. There will ultimately be a formal resolution that the bond will prepare. We'll need a resolution for the tax, and I don't know if the board's passed yet, a resolution to reimburse for expenses, et cetera, but we'll want to have some resolution at some point. We can ask Myrnaul to check on them to make sure she's, we've got that in process. But yeah, the couple of things we can do before that call, before that meeting, which hopefully gets closer to home here. Okay. Yeah. All right. We need to move on, unless this is really- This is the meeting we actually hear tonight, or as meeting is over, we've set a special meeting. We have not done that yet. I appreciate the drive for efficiency, but I think Rick may have, I just want to clarify, may have an incorrect impression. What I thought the request was, is that all three options were going to come back with the analysis. Right. A recommendation to be made for one of them and whatever motion language needed to be associated with that, that is different than what had been requested earlier, where only one option would be brought to the board. Right. Okay. Just thank you. Can I just ask real quick, just so clarity, for clarity purposes, so we come back here next Tuesday and we have a definitive, you know, lay out what you're asking for. So we're going to do it. We're going to do a 20 year, we're going to analyze the offer from First Foundation and marry that with the others, right? From a comparison standpoint. And then we're going to look at the draw, potential draw schedule for construction on their remaining portion of the 15 million, right? So we know generally the draw looks like so we can do some analysis to determine which structure is more fitting for that. And is that it? That's it. Okay. Okay, great. All right, thank you all. Our next order of business is the discussion of the board policy manual and Gina will start us off on that one. Okay, thank you, Chair Mayhood. I'm not going to go into any lengthy discussion of the background because we did that at a meeting in December where the board members were asked to take a look at the board policy manual and provide written input. And we did get that and written input from the board is contained in the packet. What you see in the memo in front of you is, I guess I would describe it as a lot of a menu of options related to the substantive proposals that the board members came up with in reviewing the board policy manual where it would be good to get some board direction in terms of which of these to implement by drafting proposed language. And Chair Mayhood, we had a brief conversation about a process to go about doing this. I'm not sure if you wanted me to talk about that or if you wanted to see that. I think you're on. Yes, please go ahead and do that, Gina. Okay. And I would add also there's an attachment A that just was going to have some kind of minor changes. And I regret that I wasn't able to provide that for the agenda. So those minor changes will be coming later. And I did just want to say thank you to the board members for your attention to detail and doing the review. A lot of good issues were caught. And in particular on the sort of the minor changes front, more than one of you noticed a couple of issues with written communications. The stipend for committee meetings and another kind of sentence fragment typo that appear in the board policy manual, but all get corrected as we go through the substantive changes. But on the substantive front, there's a lot of these here. And as a way of getting through them, we had talked about just perhaps going down the list and polling the board. And to the extent folks are on video, could just be visible. If you agree with making the change presented in each item, if you raise your hand, if we get say three board members who are in favor of making the particular change, then we'll make it into a red line version of the board manual to bring back to you for final review and approval. And also if there's something that you thought should be changed substantively that didn't make this list, I think at some point it would be good to have a discussion of anything along those lines. And if that gets three board members in support, and then we could make that additional change as well. We have the challenge here though, which is that director Henry is on the phone. So if we do the kind of the visual polling process, share mayhood that we talked about, we'll have to make sure to get director Henry's input on each of these items. Yeah, okay. And also people keep going on and off visuals so I can't always see them all. So we, yeah, it's gonna be a little bit tricky. Did you have a question about process, director Fultz? Yes, I do. May I suggest that what we do is put together a document that has numbers one through whatever and each of us fill out yes, no, and send it back in. And at that point we can be able to collate those and decide how to move forward on a matter of subsequently. Just from a time point of view, if we want to move forward. Yeah, I think personally I sort of like that idea too. I think the question is, is whether we get into trouble with Brown Act in terms of having public, the public see us talking about it, but I'll defer to Gina on that. Sorry, this would all go into. Yeah, it would be in the, it would be part of the packet. Yeah, and the emails would go into Holly, for example, the collate. We're not communicating among ourselves. But Gina, before I bring Bob's idea to the rest of the group, did you have a thought about that? I think that could work as long as it goes to staff and goes into the board packet and it isn't sort of circulated for discussion in advance of going into the board packet. Okay. And it would be good to have an opportunity to let board members who think there's something else that should be on this list, to have an opportunity to suggest that. Added to the list is number N plus one. Yeah, at the end. I think that's fine. And then the way you would take all these results is that if three people agreed, then it would be put into a red line draft. Is that correct? Yeah, there may be one more session or iteration that's needed. And the reason for that is that there are conflicting items in here and we might get lucky and we won't get three directors on each of two conflicting items, but that you may have that issue to resolve. Okay. I think that's a fine way to proceed, but let me ask the rest of the directors how they feel about it. Director Smalley. In current. Okay. Director Toe. Thanks, Bob. I think it's a great idea. Okay. And let's see, can I get, how about you're allowed to talk, Lois. So star six. Okay. Okay. I just been running into one problem after another here. So I really didn't care what Bob said because I was afraid I was going to lose my phone and came out to my car. So I didn't. Let me just quickly summarize what Bob said and everybody else thinks it's a good idea, which is that we just go ahead and go through the list and basically everybody comments, yes or no. And if three or more board members agree to an item, then it will be included in the next draft. And as Gina said, there might have to be another iteration, but I think that's much more efficient than there's an awful lot of items here. And if we go over each one of them, they could just be interminable. Yeah. Okay. I'm with the rest of you. Great. Thanks. Thanks so much, Lois. All right. Then, so that's what we will do and would you like to set a deadline for when you would like us to send those to Holly? Before we move on, President Mayhood, I'd like to ask the board's indulgence for perhaps a point of personal privilege. Yes. I have a statement that I'd like to read and I will send it to Holly with a request to include verbatim in the minutes. Is it on the current topic? It is on the current topic. All right. It has to do with the board policy and vision for running board meetings, which was all part of the things we're talking about here. So I'd like to share with our community my vision for board meetings for many years. I've been a consistent advocate for maximum transparency and maximum participation and have worked very diligently to have that vision reflected in the board policy manual. I would like to see this inside of a deliberative process that ensures all viewpoints are discussed, debated and questioned prior to decisions, even if especially if those viewpoints may not be popular or represent a majority opinion at any particular point in time. I believe that this is critical for small local agencies like the St. Lorenzo Valley Water District that depend on community support for funding. Sometimes, particularly for more complex and monetary topics, this may not appear to be efficient. That is absolutely correct. Our system of government is not efficient by design because efficiency is generally not the friend of transparency or of a full airing of all positions and any issue. Efficiency and decision making is more often found with private institutions, corporations, universities and family businesses to name a few examples. And our system of government, the process by which decisions are reached is just as important and sometimes more important than the actual decision itself. On almost any significant issue that comes before this board, I guarantee you, based on my 30 plus years of residence here within our community, there will be a wide variety of opinions on it, certainly not unanimity. Further, an airing of an issue is not simply a process of everyone offering comments. That process must also accommodate the need for back and forth debate and discussion, questions and answers between board members, between staff and board members and which also involve the community. This concept is also embodied in the Brown Act and subsequent case law, which also emphasizes the importance of the deliberative process. It absolutely does not set a time limit on meetings. Recent grand jury reports focusing on our district also emphasize the need for maximum transparency and engagement in a respectful fashion. Over the past two years, this board has made huge improvements in this area in which I believe the community at large recognizes and supports. I will not support any policy or procedure that attempts to roll back any of these improvements. That said, I've also advocated for policy and procedural improvements that would move meetings along faster and provide more flexibility for senior staff participation without infringing on the overall deliberative process. I will offer those suggestions at a future time, assuming that topic comes before the board for discussion. Thank you very much. Okay, thank you. Are there any other comments? Next, so we didn't get a deadline for when you would like the comments to come back or the votes. Well, I would suggest close the business February 28th, Thursday, February 28th, if that's a good one. Well, let's make it sooner than that. I think that most people can do it pretty quickly. We met January 28th. Yes. Oh, okay. January 28th, that makes sense. All right, okay. I was like, please don't drag this out anymore. All right. Okay, then our next item on the agenda is the consent. Mark had a question. Oh, I'm sorry, Mark. Go ahead. One simple request, can we get an email with this list attached to it, with the deadline, just as a follow-up to this meeting? Yes, Holly, did you catch that? Well, if not, I will confirm with her that that will happen. Thank you. The next item of business is the consent agenda. This contains items that are not considered, that are considered to be routine in nature, and they will be adopted by unanimous consent, unless one of the directors states an objection. Are there any objections? Hearing none, we will move on to the district reports. Similarly, no action will be taken on these, but we welcome any comments by directors or questions, by the directors, and I believe the staff members are here to respond to those questions. Before I turn it to the board, is there anything that you'd like to say, Rick? We have staff here that can't answer the board's questions. Okay. Any questions from the board? Environmental Committee is meeting for their first meeting on January 27th at the Civil Check here at 11 a.m. So that's all to report, because we haven't had a meeting yet. Any other questions? I'm sorry, I'm confused. Are we talking about committee reports, or are we talking about the substance of the committee reports that are in the agenda packet? So if you have any questions of the staff, here's your chance to ask. Again, sorry, I'm a little confused. Are we talking about the district staff reports or the committee reports? Staff reports. Staff reports, excellent. Thank you. And Dale, would you like me to do the, I have questions on I think several of them. Do you want me to do them all at once or one report at a time? One at a time, please. Okay. Starting with the environmental report, since that's at the top. Carly, this is a very comprehensive list of all the projects that I know are in your hopper and have different time frames and endings and that sort of thing. What I'm a little fuzzy on is sort of what your top three to five priorities are for this fiscal year in terms of driving things to conclusion. And I was hoping that you might be able to expound on that a little bit, sort of extract out of this report, sort of what your top ones are. Sure, Bob, no problem. So, I mean, ideally all these projects are in motion at this point, but I would say the main priorities, it looks like we're probably going to be able to go to construction for the fall creek fish ladder, which has been a project that's been in the works for many years. So that would be a very large accomplishment. It looks like we have about all the permits except for the nymphs permitting, they're completing their biological opinion and we should have that in the beginning of March. And then we can go out to bed. So that'll be really great. After that, we are working on the urban water management plan. So I'm starting to supply data to our consultants working on that project. We're also starting to move forward on a couple of different tank projects, some of our pipeline projects that we've already gone the environmental completed on. So those are all moving forward. Some of the other ones will include some different wildfire management. So we'll start doing some different hardening and hopefully some work in the actual watershed. And then we'd also like to see some progress on the broom and the Olympia. We're working on the permitting there to be able to do some removal in the sandhill habitats. So we'll see what happens with that this year. Otherwise, I'm sorry, go ahead Bob. That's fine. Okay. Those are the top five priorities. I would say so. And we will be discussing in the environmental committee in our first meeting what priorities we would do want to take on this year. So we'll kind of bring the full list to the committee and then we'll have all of us prioritized together. Great, thank you very much. I just before Bob asks his next question, I would just say that was a very impressive list of activities. And I was especially glad to see the report on the implications of fisheries for some of the projects that we have in mind. And it's really timely for me and Mark in terms of preparation for Santa Margarita and thinking about how different projects that they're suggesting might impact the fisheries. So thank you for that. Bob, did you have a question for another committee or department status report? Yes. Go ahead. Go to finance and business. By the way, does anybody else have any questions about environmental before I move on? Or not, okay. This one is on the budget or excuse me, the finance and business status report. Stephanie on the past new policy, do we have a rough number yet for where we are now at the end of December? We'll have that shortly because bills are just about to go out. Okay. Would you be able to email that number to all the board members as soon as you have it rather than waiting for February? Yeah, we can get that together for next week. That would be great. Thank you. Trying to see what the trend is because it looked like at least there had been some favorable trends over the last month in terms of people paying their bills and not slipping into the 30 to 60 at the same level they did the month before. So that was... Overall it came down around 30 grand or something like that. So that's definitely going in the right direction. And then we'll have, we can have an update that I can send out to the board next week. Yeah, because this one here for me, getting a half million dollars in arrears, man, that is a huge chunk of our revenue and our ability to cover our operating costs. Okay, let's see if I have anything else on that one. Yes, Stephanie, on the report that you put together for the pass-through analysis, which is very helpful by the way and very clear, but I was confused about why we included the balance under 30. So is that considered really sort of jeopardized dollar amounts? I wouldn't consider it jeopardized. We do have a significant amount of people that get that, they ignored it, they get their next bill, they see the $10 penalty and then they turn around and pay both of their bills, their current and their past due to get. So usually it's not like we really have half a million dollars sitting out there. It is some of those do more so than in the past. Some of those have been trailing into those latter buckets now. So it's definitely something we still wanna keep an eye on, but we do have a good portion that do turn around and still pay every two months essentially. Okay. The last question on the bill list, I've been meaning to bring this up, sorry, just the meetings have run so late. Was there a bill list in this report? I don't know that I saw it, let's see. Second, you said that I'm sitting there going, I don't remember attaching that long report. So no, I did not attach the bill list. It's complete, I can mail it out, I can get it attached and emailed out to everyone. I apologize for that, totally missed the bill list. No problem, I mean, by the way, I mean, as I've expressed before, the current format is a little bit overly complex. I'm perfectly happy if you were to assemble a different format that basically gave us the top 20 or 30 or something like that bills. But yeah, in lieu of having different format, at least having the bill list would be helpful. That's no problem, thank you for sending that out. My, let Director Toe, Director Fultz, let Director Toe jump in. Yeah, I was done with my questions. Okay, thank you. Director Toe, go ahead. You're muted, Tina. I saw that, thank you. I don't know if you've had any experience or if it would save us any money to bill people every two months instead of every month. Stephanie, what's your experience with that? We used to do that. The district did used to bill by monthly, they switched to monthly billing the month after I started, so 2014. It was, it's quite the switch there's pros and cons to it. We've talked about it quite a bit at different things. One of the pros is the customer then has a lot of oversight of their consumption where otherwise you don't know how much you used. If you had a big leak, something like that, you're not gonna know about it for two months. And so that was really big and it came at a very pivotal time during the drought. So that definitely was beneficial. The district does have increased costs with postage and paper and stuff like that because it did go from every two months to every month. So there's definitely, it's been a discussion since I've worked here. Is there, because I'm just trying to figure out where it's for us to save some money because we're in this financial pinch and I know every little bit counts. Is there any way, and I know we've really encouraged people to sign up for the online billing and so forth, any way to, if people are signed up for online, do they not get a bill, like a paper bill? Yeah, so if people sign up, well, you have to sign up for e-bills and turn off the paper function. Okay. I would still love to keep figuring out ways to get the community to do that. We did do that YetiCut promotion to where if you were signed up for auto pay and paperless billing, you got entered in, which we did get some, we did get some more people to sign up, but that definitely, the postage fees, it's definitely a way to save money. So the more people we can get signed up for electronic billing, the better. I know we have some big PR campaigns happening right now. So maybe we can get something like this scheduled for later in this year as well. I think maybe we can continue this discussion because it's not on the agenda, but- Right, okay. Yeah, I'm hoping maybe my next comment was just gonna be maybe we can discuss this another time and or put it on a future agenda item about ways that we could save money as far as like these little things that are adding up, right? So anyway, that's my, and I think Gina has something to say. I'd support that. Gina, did you want to speak? Yes, please. Thank you, Chairman Hood. I just wanted to suggest that if the bill list is gonna come out with some additional financial information to the whole board, perhaps that could go into the special meeting agenda packet for next week. So there's not a bunch of emails going to the full board. That's fine too. That's a good idea. Are there any other comments on department status reports? Then not- Are we gonna review minutes? Well, I was gonna go to committee reports. Okay. If there are any comments on those and then the minutes of any of the committees or any other minutes? Bob, go ahead. Yes, just one on the LADOC minutes. Stephanie, I think at the last meeting here in the minutes it says Stephanie Hill explained that all of the assessment district funds have been spent, which I think is correct. Is there a conclusion or a takeaway that we need to do as a result of that statement? That would probably be a question for Rick or Gina. So I mean, we know that all of the projects what are coming in is going to exceed what the assessment district revenues are gonna be. That is a fact that we are able to state as far as what we need to do outside of that. I think that's kind of more of a Rick and Gina. We've kind of talked about how, I've heard the board say how we don't plan on going back to the Lompico customers for that additional funds. I don't know the logistics of making up if that is chosen to be a public statement or kind of the steps after that. I understand. Well, thanks for the perspective on that. I think in light of that, Gail, I'd like to, and Rick, I'd like to see the Lompico situation be placed on an agenda at a future meeting, not burning urgent, but I think given that this is now kind of out there in the ether, we need to address it fairly quickly. I agree, and the future of the oversight committee with the fact that the money's all gone is also another issue. So I think that's a good agenda item. So Rick, do you wanna put that on your list? It is on the list to bring it back for board discussion. We have not come to any conclusion yet. Yeah, okay. So that won't be done at the board level. All right, that sounds good. Are there any other comments on minutes or anything else? Does that mean that we are pretty much done? Go ahead, Rick. Well, I'd like to get a date from the board all in advance for the special meeting. We've heard Director Fultz say what date he's available, but it makes it so much easier when we're together and if we can work on the... I can do any time. Selecting the date. I'm available to 26 as well. So I do believe that Director Fultz said you were available to 26 as well, or the 27th? 26, 27th, I have a lead. Okay, 26. So we will schedule a special meeting for the 26th. Mark, you can do that? Yes. Okay. Okay, what about Lowe's? 530. Okay, 530 on the 26th. Are we doing closed session first? Well, the closed session before, and then we'll have the regular session at 630 that we'll have both the loan and the surcharge. Gina? Just to clarify, so we're gonna do the closed session at the special meeting. I didn't think we were, but it sounds like we are now. Well, if you don't, I mean, we could do it on the fourth if you want, but I thought we were just kind of trying to finish it up, but it's up to, I don't have a preference, Mark. Do we have sufficient time if the meeting is on Monday to publicly notice this for what the staff needs to do tomorrow to get an agenda out? It's Tuesday, Mark. It's Tuesday. Oh, okay. They're not gonna have all the supporting materials. Those will come out later, but the agenda can be published. Yeah. Okay. I would prefer if we didn't have closed session. Okay, well, we can make that on the fourth if you prefer. Right. Do you have a problem with any of that, Gina? No, all of that sounds fine to me and Director Smolley just for clarification, because it's a special meeting, we have the 24-hour agenda requirement. Okay, thank you. Which we all try to be. Right. With the items of the loan and the potential surcharge, it's good to get this information. This is information that people are gonna wanna look at and see. So we should get it out as soon as possible. I think we're pretty much ready to get it back out again. We just have some minor room, okay. And if I may, just one last sort of procedural point, Chair Mayhooth. In the past, the district has typically provided a public comment opportunity on the district works at least, you know, with the group. And so I just wanted to provide that reminder and suggest that that be done. That they have an opportunity to comment on what, I'm sorry, I didn't hear that. The district reports, so they've all been grouped under a single agenda item. Let me go ahead and ask them. Do we have any comments from now? Three attendees on the district reports, staff and committee reports. Hearing none, I'm sorry I didn't ask you. Then I think we, unless there's anything else we need to do, I think we're ready to adjourn. Is that the case? All right, then we will see you on 630 on the 26th. Thank you all. Do we need a motion to adjourn? No. Okay. Bye. Thank you. Bye.