 now. Can you check if it's going? Yeah I'm looking at it right now so I'll tell you as soon as I see it. There's a little bit of a delay so don't don't worry about that because it does take a couple seconds for it to show up. Thank you everyone for your patience. It looks like we're having a little bit of technical difficulties but I think we're getting everything sorted and looks like we do have a quorum now. So Secretary Reyes are we, is everything okay for us to go ahead and get started now? Everything should be good now. Okay thank you all for your patience apologies for the technical difficulties. So as I mentioned looks like we do have a quorum and if folks are able we'd love to have you on video committee members. So we'll go ahead and call this meeting to order at 1035 and Secretary Reyes can we have a roll call please? Sorry can you hear me? We can now. Okay sorry about that. Santa Rosa water? Here. City of Cotadi? City of Rona Park? Sonoma water? Here. City of Sebastopol? Here. All right and can you also list out the staff and other members of the public that are present and it looks like Cotadi just joined as well. Great. Staff president Emma Walton, Jason Roberts, Yannine Saragosa, Joe Shavoni, Kimberly Zanino, Lori Orbanic, Mick Harvey, Peter Martin, Sean McNeil, Tonya Mokovitz, members of the public, Vanessa Garrett. And it looks like we also have Brenda Edelman on as a member of the public as well. We also have yeah Brenda Edelman sorry I missed the top of the staff. Andrew Allen, Emma Walton as well. All right thank you. So item two are there any announcements? Excuse me I joined late. This is Craig Cotadi. I could just check in. Thank you. Great we got you Craig. So if no announcements we'll go ahead and go to item three public comment. So we are now taking public comments on item three. If you wish to make a comment by a zoom please raise your hand. If you're dialing in by a telephone please dial star nine to raise your hand. And Secretary Reyes do we have any live email or voicemail public comments? We have none. All right thank you. So now we'll go on to item four new business. We have one item 4.1 and this will be a review of the fiscal year 21-22 regional operations and maintenance debt service and capital project budget and allocations. And deputy director of water administration Kimberly Zanino will be making the presentation. Good morning everybody. Going to share my screen here. All right is everybody able to see that? Perfect. Okay so there has been no real changes to the presentation other than shortening it a little bit from the last time we were together a couple weeks ago. What I will though and what I have added is the amounts that people have let me know that they would like to apply from the refund reserve to the final amount. So we'll just go through the information that you have received previously one more time. So we'll go through again just quickly annual flows, our expenditures, the allocations and then the final budget schedule. You can see here that these are the annual flows which are the basis for the ONM for this year. Also we discussed last time the budget drivers so I'll go over these again one more time. The UV bond that we secured at the end of last year was very successful for us and luckily we were able to bring what we expected our debt service to be down by quite a significant amount. So we were all expecting around three million dollars a year of debt service to be added to what we currently are paying in debt service but that only ended up being 2.1 million dollars. We also discussed last time that because of the closure of the facility for biosolids that we are now using LizTech to dispose of biosolids for us and so that agreement while it is increasing our professional services on a yearly basis right now over the life of that agreement we will be saving a significant amount as well as the fact that we will be saving a significant amount for the large repairs that we're going to be needed on that facility. ONM projects we are seeing those increase and that is based on the fact that we have not yet completed the replacement of the UV system and there are some regulatory requirements that are going to require us to increase maintenance on those and then finally the CHP engines and generators that we discussed last time is ready for or need their 24,000 hour service and so that is also included in that ONM project line item. Fun changes the operations and maintenance for the entire regional system we kept to 1.6% as an increase even with those numbers that we discussed or those projects that we discussed on the last slide and then debt service is obviously increasing based on the new secured bond. This just gives you the line items so you can see those operations and maintenance projects and the increase that is going on there the professional services which has that LizTech agreement included in that line item and then as we also have discussed previously we have redistributed the internal overhead from the administration of the water department and with the ability to move that around we have had a significant decrease in that line item just an overall picture of the budget itself for CIP we're just we're not going over projects today we're just showing you the different categories in which the cash funded CIP will be spent this year. This slide we show every year to just identify where and what we will be distributing between the partners and what we will be allocating out so you can see that our operating expenditures are listed on that first line item the cash funding that we will be applying for CIP is listed there and then that $31,000 is the increase to the ONM based on the increase to the operations and maintenance budget. We have to maintain a 15% operations and maintenance reserve based on policy and so that's the increase that we need in order to cover that. You can see that we have removed down below the revenues that will come directly into the sub regional fund and then the total contribution that is going to be allocated to each of the partners outside of debt service sorry I should mention that debt service doesn't get included in the slide. So here's the total allocation and what we will be bringing forward with your recommendation if you choose to make that to the BPU and also to city council and these are the total expenditures for ONM the CIP contribution based on the distribution identified in our agreement and then debt service which is identified by when debt was incurred and the repayment schedules and then finally we have discussed applying some of the refund reserve in order to bring down increases to the various partners and you can see here that we will be based on oh you know what I put the wrong number in here sorry Mary Grace I didn't add your number in there but your increase will be 0% because you have let me know that you guys will be applying the full 858 for your allocation. Katadi has indicated they would like to apply 70,000. Sebastopol I know that you have still to get some approvals that will go through your committees but to keep yours as a 0% increase as well and so these numbers while I am waiting for all of you to finalize what you are sending or what you would like to apply as far as the refund reserve goes this piece of it does not actually go to city council we're going to bring to city council for the preliminary budget just the expenditures so you just need to confirm that these are the amounts that you would like to apply towards your allocation for this year and then what will happen is we will figure out how the billing works for you guys based on what you have determined will be what you're going to apply and then finally we have the budget schedule so we are with you today we will also be meeting with you on the first we will be meeting with the BPU on the first also to do our study session which will include our local budgets as well but we will be going over and requesting a recommendation on April 15th for this to move forward to city council and then on April 27th we will be going to city council to ask them for a preliminary approval so that we can notify all partners at the beginning of May of each partners allocation and then city council meets on the 11th and 12th of May for their buddies budget study sessions and then city council will consider adoption of the budget on June 22nd and with that I am happy to answer any questions I will stop sharing my screen so all participants can be seen are there any committee member comments or questions envelope just a quick one we're south park we are leaning towards using no fund balance for the rate increase and and just passing that along the six percent thank you other questions or comments Joe Kimberly I was questioned by department staff when when I presented the scenario of the refund reserve and the possibility of using Sevastopol outstanding balance to offset any rate increase this year of course they jumped right on it they like that idea but I was questioned about how Sevastopol was able to amass a three-quarter million refund reserve and I didn't have any answer to that so if if you can give me like a a five-year look back on what Sevastopol is paid and how that refund how Sevastopol's refund reserve has built up I would appreciate that or do you want me to send that to you so that that slide actually shows you multiple years of how much Sevastopol is getting returned to them each year the way the refund reserve works is that once there is a true up of the actual expenditures so we base your expenditures each year when we budget off of a previous full year of actual flow then what happens is when that year's actual flow comes in that budgeted year's actual flow comes in they true up how much each partner was actually responsible for for the ONM expenditures then we take whatever turnback we have and that is applied to each one of the partners based on that and so that's where the turnback comes in and that's how that refund reserve is built up and then previously it was determined that the partners were choosing for us to keep that money so that you could use it in years like this when people want to apply it in order to smooth rates basically. Yeah I understand how the refund reserve builds up the question was has Sevastopol used it in the past? I'll have to look back and see if you've used it in the past there was one year when several partners did and I will look back and see if that occurred I think there was there's only been once or twice that it's actually been used by partners. Okay thank you. Any other questions or comments? Yeah just real quick Kimberly I did get one question on this which was is the 6% rate increase this year an anomaly are we expecting in the years to come similar rate increases or do we see them dropping back down into the you know the four to six percent range? Well debt service is the largest portion of that increase and so that's going to be maintained it's pretty stable throughout the repayment schedule so unless we incur more debt that's where you're going to see it the cash funding will increase it slightly but we are continuing to try to keep O&M expenditures low. So again what do you have an anticipation what's your anticipated future rate increases? Yeah I'd probably just have to do some calculations on that you know we're trying our hardest to keep those O&M expenditures down so we could kind of do the outlook based on that increase in the CIP cash funding and give you a percentage that kind of lands there. Okay and I guess maybe let me rephrase another way is the rate increase this year more of an anomaly because of the increased debt service cost? Yes. Okay that's that's my answer thank you. Yes I will add though as part of what we did this year to keep costs down I just want to remind this committee that we've delayed some of our regulatory compliance and so you we have to start that near to for some of those long-term studies that we have to do for the permit and so that we are going to have probably a bit of a higher rate increase next year as well just because of those new regulatory requirements so I don't know that the six percent is going to be that out of the ordinary from that perspective so just please keep that in mind. Okay thank you. We'll hopefully have some decreases in the O&M projects though once the final replacement of the UV system comes in as well because that that's a pretty big expenditure for us this year keeping that that system in a place where we can meet those requirements. Thank you. Any other questions comments or feedback that we need to incorporate I think we heard back from everyone and I'm kind of where they're leading so you'll see this again in what three days. And all sorry I thought I updated that chart with runner perks amount but I will update that before I send this out to the whole group and then I will also send it out to you like I normally do the entire presentation. All right if if no other comments or questions from the subcommittee then I'll go ahead and open it up for any public comment. So we are now taking public comments on item 4.1 if you wish to make a comment via zoom please raise your hand if you are dialing in via telephone please dial star nine to raise your hand. And Secretary Reyes do we have any live email or voicemail public comments on item 4.1? We have none. All right seeing no public comment and no other comment from this committee this was our only item for today so with that then we'll go ahead and adjourn the meeting thank you all for your time and we will see you on April 1st. Thank you everyone. Thank you. Thank you.