 Oh my goodness you guys are up early. It does feel a little early for this kind of stuff, doesn't it? Drive around looking for a burrito. I didn't know the corner deli didn't open till seven. It's actually all right. My brain hasn't been mushed by emails yet. Are your allergies a little better this week? Oh my goodness, yes it ranges a little bit or enough and then yeah last week I got just blasted. I was cleaning out rain gutters and the wind was blowing and it's just not yet. I did just want to remind everyone we are broadcasting live right now. Okey dokey, thank you. Good morning everybody. Dr. Burke, do we have all the staff on the meeting that it needs to be in attendance? Chair Wabb, I believe everyone's present. Great, thank you so much. Well we will call the meeting to order at 8.01. I do apologize for being one of the people that selected an 8am Monday morning budget time slot. I am sorry for that ahead of time for any public watching as well. But I just want to remind everyone that to mute their phones and microphones when they're not speaking. And Secretary Atha could we do a roll call? Yes, Chair Watz. Here. Board member Walsh. Here. Member Wright. Here. Great, thank you so much. So we will move to public comment. We're now taking public comments on item two, public comments. If you wish to make a comment via zoom please raise your hand. If you're dialing in via telephone please dial star nine to raise your hand. Secretary Atha, do we have any live email or voicemail public comments at this time? We have no public comments. Great, thank you so much. So now I'd like Director Burke to address item 3.1. Thank you, Chair Watz and members of the budget subcommittee. Our one and only item today will be a review of our preliminary water wastewater and regional fiscal year 2021-22 O&M and CIP budget. And Deputy Director of Administration Kimberly's Amino is going to lead off the presentation. And I believe there'll be other team members also participating. I'm just getting my screen. I believe am I host now? Roberta so that I can share my screen. I made you a co-host. Did you have that option on your screen? There we go. Can you see? Can you all see the presentation now? Perfect. All right. Good morning, Chair Watz and members of the subcommittee. We are here to take our first look at the 2021-22 fiscal year budget to board members, Watz and Wrights. This will be a very familiar depiction of the budget as you've seen it before. But it will be a little newer to board member Walsh so I'm going to go into a little more detail on this presentation than you might typically see from me. We always like to show this picture at the beginning of our slide shows. We also joke a little bit that this little guy is probably 40 years old now. We've been showing the slide for a while. So but our mission in the water department is to do these things, protect the public health by sustaining water resources infrastructure and the environment. This is just simply an overview of what we will be talking about today. Staff's assumptions, the preliminary operations budgets. I will give a little update on the FEMA projects that we are working on, preliminary regional operations budget and the partner contributions, and then the preliminary CIP review, which we have a couple other staff members here that will be covering and then the budget schedule. So in anticipation of a dry year and the possibility of the restrictions for reductions in water use, we are going to estimate for budget purposes that we will be reducing water use by 10%, which means that will be a reduction on both the revenue and expenditure sites. Sewer usage, which is not as volatile because of sewer caps, will be decreasing, but we feel that will be a less significant decrease for us. We are also already seeing a decrease on the sewer side because of COVID and commercial businesses being shut down. So we are going to decrease that slightly, but not as much as on the water side. We expect that demand fees will increase. However, just in case you see something in the budget reports that show you a large increase in demand fees, I wanted to do a little explanation here. We budget demand fees each year, and then based on the way that our financial system works, they transfer the amount we budget into the water and wastewater funds, but not the actual amount collected. So over the last couple of years, we have been under budgeting this fee, this revenue a little bit. And so in order to move those back over to the water and the wastewater funds, we're going to bump that revenue up a bit this year. And then that's just really a function of the accounting system that then moves that money into the water and the wastewater funds from the demand fee fund. We also expect that all other revenues and fees will be fairly flat. So as highlights, overall, our O and M increases are very low this year, which we'll go to in a lot more detail throughout the presentation. And then we are continuing to work on the FEMA process, so reimbursement from and recovery from the Tubbs Fire. This slide's just giving you information about the various funds. You can see that overall, if you add them all up, we're pretty much flat. So that's good news for us. We have a little bit of decreases in some of the funds and a little bit of increases in some of the funds as well. This slide is really giving you information about different items that increase and decrease in the budget. Salaries are down overall. This would be a result really of newer employees coming on board, and they are budgeted at the lower end of a pay scale. You can see that benefits are increasing. While we don't have a lot of control over this, this can also be a little bit of an indication of having those newer employees come on board. It typically trends a little bit higher when you have newer employees that are younger with bigger families, because that does increase the cost of the benefits, as you're paying for larger families instead of just one or two people on the benefit scales. Utilities have not been confirmed yet by Sonoma Clean Power, so we are estimating conservatively here by budgeting higher than hopefully what we will need to cover the expenditures. And then vehicle expenses are going up this year. This is a result of some shifts in the replacement of costs for vehicles. And so we're seeing that go up a little bit. And then insurance costs, which we don't really have any control over, are also increasing very likely because we have been in multiple emergencies over the last few years, and so our insurance premiums are going up. This slide is really giving you just a lot of detail about the various line items in our budget. I'm not a huge fan of displaying costs by percentage increase and decrease because a reasonably small dollar amount increase on a low expenditure online can sometimes cause undue concern, but it is a way for us to really indicate which light items we should be looking in too closely. So we continue to show them on this depiction of the budget. So on the next two slides, you're going to see the water operations budget and the wastewater operations budget. And then first for clarity, I'll explain a couple of the line items. The uncategorized line item, which is that top line, is really the operations and maintenance projects. So those are for projects such as work that may need to be done on one of our facilities, which is not housed in the CIP. Another one that doesn't give you a really clear definition is other miscellaneous. So this line item holds things such as rental equipment, leases, training, copier services, and on the water side it holds funds and expenditures for the H2O program. So as for the actual expenditures being shown here, I want to point out a couple of items here. As I had said previously, vehicle costs are definitely going up a bit because of those reimbursement costs, insurances up, and then overhead or what's listed here as indirect costs, which are both internal to Santa Rosa water, as well as citywide overhead for our portion of things like the city manager's office or the city attorney's office or human resources. Overall, this line item for the entire water department is flat, but you are going to see a little bit of an increase on the water side and the wastewater side, and that is simply due to a redistribution between the funds. So you'll see those little bit of increase on the water and the wastewater fund, but you're going to see a decrease on the subregional fund. And then utilities, as we discussed, are up in water. You see a little bit more of a bump here, and that is really because we have some additional increased costs due to the farmer's lane wells, and we have increased pumping at the wells, and we have also needed to install a climate control to those with that facility, which increases electrical costs. This is the same picture for you on the wastewater side, same types of shifts that you're seeing here. Once again, you're going to see that indirect cost go up a little bit based on that shift between all three funds, and insurance and vehicle cost, again, we're seeing increases in. On this next two slides, we just show you in a different manner where the expenditures go. When we collect revenue, where we're spending that, and it just gives you a picture of it instead of showing it to you by line items. And this is the water fund, and then the wastewater fund. As I said previously, we feel it is prudent to estimate a decrease in the water purchase as well as water sales this year. So we are decreasing the volume that we will purchase and sell for budget purposes at 10%. And then as you saw last week at the actual BPU meeting, the Sonoma water wholesale rate is going up by 3.47%, or from $966 to $1,000 per acre foot. We like to provide you with a revenue to expenditure look at the budget each year. As you can see on the water side, we are expecting to be slightly under budgeted expenditures for revenue we'll collect. And that is basically a factor that we are expecting to be reducing water use through this next year. I will remind you, though, that we rarely spend the entire budget. So there is the possibility it could be covered by an expended budget. But we also have some undesignated fund balance that would cover any significant reductions in revenue based on that reduction in water use. On the wastewater side, it's literally trending just about even. So we are expecting by budget that we will be collecting enough revenue to cover the wastewater fund expenditures. You'll also see on these slides that it's showing you basically where our revenue is coming from. Rates and fees are the majority of the revenue that we collect. And then that little bit of demand fee as well. It also shows you on the expenditure side, where those dollars are going. So I'm going to take a little pause here and see if there are any questions related to those slides from the operations and maintenance budget. So we can kind of go back and look at any of those slides that you might have questions on. We're going to wash. Thank you very much. Kimberly, I missed a part on the indirect. I didn't understand. I'm sorry. On the water operation slide. Sure, not a problem. Line item 5400. The indirect cost. It sounded like there's shift between the two, but water ops and wastewater ops are both up by a few hundred thousand. Maybe 600 all together. So we haven't gotten to the subregional fund yet, which is where you're going to decrease. If you get to all three of them, we're just about flat on it. So those costs are overhead costs. As I said, like city manager's office, city attorney's office, but we also have a group, the administrative group. That's the internal overhead. So basically it's director Burke, myself, communication staff, the support staff, which is moved between the different divisions in our department. That's what in that one fund, that administrative fund. And we distribute that administrative fund between all three funds because we support those three funds equally. Okay. Great. So the citywide overhead gets distributed to departments. Your admin department absorbs that. And then your admin costs go to your functional programs. They're actually two separate overheads. So one is that external one, which is our portion of covering what it costs for the city to be run and those things that support us in the city. And then internally, it's that division of people who support all three funds. Okay. Great. Thank you very much. Sure. Deputy directors. And you know, I think that last year, if I'm not mistaken, last fiscal year, you reallocated a lot of these support services into that fund. They were previously in other areas. And you said, I think a few minutes ago that you did a little bit of reallocation again for some of the salary or staff members. Is that correct? Correct. So really what we did is we did last year move a bunch of people into the administrative fund because we moved that support staff around between the different divisions as needed. And that's the easiest way for us to do it. What we didn't do last year is then redistribute that entire amount between each one of the three funds. And so that's what we've done this year. It isn't a shift of people this year. It's just a shift of how we allocate that specific fund to the different three funds. Great. Thank you. Any other board member questions before we move forward? Okay. Great. We'll move on. So we want to give every year now that unfortunately we're in a position where we have to work with FEMA every year on disaster recovery and update on where we are with the FEMA projects, especially related to the Tubbs Fire in 2017. So this is really just a list of our projects that we are working on. There are two kinds of projects that we work with with FEMA. One are called public assistance projects. These are projects that are damaged that was actually caused during the fire. And so they are recovery projects. And these are the projects that we are at a point now where we have finished some of them. We are going into construction on some of them. And so we have to work with FEMA to get reimbursement for the rebuild on many of these projects. And you can see here that we are showing you what the current reimbursement, the possible reimbursement is. And I want to point out that I say possible because those projects can cost more or they can cost less than what FEMA obligated the project at. The obligation is based on FEMA's estimate for what it will cost in order for us to rebuild or to recover from that damage. The expenses though that are reimbursed to us are based on the final cost of the project. And they are also based on costs that are eligible for reimbursement. There's also another thing that happens when there is a significant disaster. And that is that the federal government opens up funds for grant opportunities. And this is a different type of funding that comes from them. It's for hazard mitigation grants. And so while the PA projects are for direct recovery of the disaster or from the disaster, the hazard mitigation grants are actually projects that we can submit to try to become ready for emergencies that might come our way that might help us through those in the future. So we just wanted to highlight a couple of them here. We have an actual approved grant for a generator project. We are actually just in the process of trying to increase the cost of that project with Cal OES and FEMA so that we might be able to even get more funding for it. We also have a very large project that will be completed at the plant, which is a flood wall that is out there. And so we are working with FEMA and Cal OES in the environmental review portion of that project, which could bring us as much as $10 million in funding, which is really great. And then there is another project that we submitted, which is for seismic improvements on some of our water facilities. That project, while they have said they like it, has been waitlisted. So we have no information yet about whether or not that will be moving forward or any funds will become available for us on that one. So now we'll talk about the regional contribution allocation. So this one, while water and wastewater are fairly straightforward, there's a lot more nuances and complications in this budget. So we'll go through quite a bit more detail on this budget and how it is allocated to our partners. So as we've discussed in some of our other meetings, preparing new board member Walsh for understanding the water department's budget, I'll just explain again that the subregional system does not have rates and fees that come directly into it, other than a small amount of miscellaneous revenue that does come straight to that fund. The subregional expenditures are covered by the five regional partners and the expenditures are distributed based on the subregional agreement between those partners. This is the same expenditure categories that you saw on the previous slides, but I'll highlight a couple of items here because you will see some significant increases and decreases. So first of all, the uncategorized, which are those O&M projects. This line item is increasing pretty significantly this year, and this is due to additional maintenance that is needed on the AG and UV system or ultraviolet system until we replace that, which is what we received or what we bonded for last year. There are increasing costs that are coming along with that system, which is getting older. There's also a pretty significant bump in the professional services, which is a direct result of the LISTEC agreement, which is the facility that we are using now instead of our composting facility, which we used to run. While we see an increase now, that will be saving us money in the future over time. That agreement and us tracking that to LISTEC saves us money as well as the fact that that facility was becoming very old and needing a lot of work, and so it saves us a significant amount of money in the future from having to put money into that facility and bring that facility up to where it needs to be. I want to just point out that keeping in mind that our partners are also in the same situation that we are with COVID and possibly having some issues with collection of their fees as well, that we have worked very hard to keep costs down in the operations and maintenance budget this year. Some of those decreases include that redistribution of the internal overhead that I talked about. When you look at it on this line item, it has the decreases that are increasing in the other two funds, but we also are being fairly conservative in covering some of the costs for new regulatory compliance that we are seeing by budgeting a little bit lower there, but we feel that we will be sufficiently funded to cover those costs. Once again, just a visual picture of the expenditures. You can see obviously the sub-regional fund has a large amount of debt service. That is just because of those very large projects that tend to be needed in the regional system, and so we bond fund for those last year's bond, which we've talked about with all of you actually now many times is for the replacement of the ultraviolet system. We got really lucky in some ways by it being a very favorable bond market for us. While our debt service is increasing, it's not increasing by as much as we had previously expected it to. Also on this slide, I show you the decrease by those miscellaneous revenues that come straight into the sub-regional fund. As I mentioned, the distribution of expenditures or the allocation of costs is all dependent on the sub-regional agreement with the five partners. For operations and maintenance, those expenditures are distributed by flow amounts. So what we do is we take a previous full actual year of flows from each of our partners, and then that's how we project out the budget allocations for each of the partners in the current fiscal year. That gets chewed up at a later time, but that's how we do the projections for budget. So this chart is showing you the historical flows over the last many years, as well as the amount of flow that we are using as the distribution of those operations and maintenance expenditures this year, which is that 2019-20 numbers. So operations and maintenance are split between the partners based on those percentage amounts. On this slide, I'm showing you the revenues that come in. So these are those miscellaneous revenues that come in directly to the sub-regional fund. These are items that are directly related to the operation of the sub-regional system. So it is for things such as the trucked waste program that we have, the sale of recycled water, amounts that are by agreement come to us from Calpine, excuse me, and Windsor. And then this direct revenue, we remove from the operations and maintenance total before we distribute or allocate the cost to each one of our partners. This just gives you an overall picture of how we distribute all of the costs. So we take the operations and maintenance total, we add in what our cash funding is for CIP, because operations and maintenance typically goes up just a little bit. There's also an increased need for the operating reserve, because our operating reserve is a percentage of our operating costs. So we have a little increase there. And then you can see down at the bottom, we are removing the actual revenue that is coming into the fund before we get to the amounts that are distributed or allocated to each of the partners. So then this slide looks a little complicated, but it is really the overall picture of how it's distributed. So you can see that the O&M expenditures are listed there, all done by what I had previously talked about, which are those percentages based on flows and CIP, which is the cash contribution for our CIP yearly. That increases per an agreement between the partners by a million dollars a year until we get to, I believe the final number was 12 million, but I'd have to look at that. Yeah, Jennifer's saying yes. So 12 million is where we'll stop and then just go to an inflationary number for CIP cash increases. And that is distributed based on the agreement. It specifically calls out the percentage of cash CIP funding that each partner is responsible for. Debt service is basically calculated by when the debt was incurred and what type of project the debt was incurred for. If it's a capacity project, there are some different percentages like the UV project, then the costs are distributed for debt service based on that CIP distribution. So there's different ways that it's done. It's all by the time that the debt was incurred. So those are repayment schedules that are set and that we actually, the finance department provides those actual total numbers for each one of our partners for each year. Then you can see what the difference is between the previous total and this total and then the difference in dollars as well as the percentage increase. There is a pretty good percentage increase this year that is based on some of those O&M projects that are going on. It's also based on the fact that our debt service went up. But I want to point out again that we had all expected that our debt service would be going up by at least $3 million and because of the favorable bond market, because we got some significant premiums paid on our bond and because Santa Rosa water has a very strong credit rating, we were able to only have a $2 million increase in our debt service. So in the lower chart, what we want to show you, we have not yet met with our regional partners. We will be doing that this week actually. And so when we meet with them, what we are going to propose knowing, you know, the situation that all of our utilities are in currently with the pandemic, that we apply some fund balance. So we all, when we have an expended budget, we all have a little bit of undesignated fund balance that sits in that fund. And we are going to propose that we apply some of that fund balance. Those of you who are familiar with the Sonoma water budget process, that's what they do as well. They apply fund balance to pay for things in order to bring some of the increases down. The difference with us is that we don't get to just choose how that fund balance is applied. And so we'll talk to the partners about that. We'll propose that to the partners and see if they agree about applying some of that. And you can see how it could significantly decrease the percentage of the allocation increase for each one of the partners. And then with that, I will stop again and answer any questions that you may have from the sub-regional discussion. Any board member questions? All right, seeing none, it looks like we can continue. So now we're going to turn it over to the capital improvement program budget. While my responsibility here is just to work with the funding part of it, there are other team members here who are going to actually talk about the capital improvement program itself. And so I believe Lori. Yes, there she is. Yay. Lori, you're going to start. If you will just tell me, I will switch the slides for you because I have control of them. Great. Thank you so much. If you could just advance to the next slide, please. Okay, so just a quick reminder to all of those folks who are familiar with our annual CIP is we do all these projects just to maintain our infrastructure. And one of our biggest local resources or assets is the number of miles of sewer and water main we have in our system. And I always think of it as kind of interesting to think that you can drive midway to Kansas and that would be about 1,200 miles or you could do a double trip down to LA and back and that would be about 1,200 miles. So it gives everyone kind of a sense of just the magnitude of the infrastructure that we have to maintain. There's 23 reservoirs and in the regional system, obviously the treatment plant is the biggest asset and the most expensive to replace. So next slide, Kimberly. Thank you. So first, you know, we we and this is just a little primer just quickly. You know, we developed the CIP. We use our master plans and we meet with operation staff. We review maintenance records. We also hear from the public through the Citizens Advisory Board and then also folks just call us and let us know what they're seeing out there. And then as far as prioritization, we look at a lot of different elements. Primarily, we use risk management to make sure that we understand where the critical infrastructure failures could be and try to avoid that. We also look at the consequence of failure, how many customers are we supporting on a particular asset? So if you look at the difference between say a sewer main eight inch in town versus the failure of one of our mainline chunks, you can understand that the consequence of failure on a trunk line is significantly higher than a neighborhood who might be shut down for a period of time. We also look at our regulatory requirements, take those into consideration, water quality, public health, safety and so on. We also look at performance criteria such as hydraulic capacity. And with that CIP this year, our plan funding for water is about, well, 13.7 million and wastewater is about 12.7 million and the cash funding for the regional is 8 million. I'm not going to go over all the projects that Nicholl talked about in the sheets that you saw, but I will mention that some of our notable projects for new projects this year is another phase of the Robeless trunk lining and then for local sewer and water, the Sherwood forest sewer main and water main replacement. And with regional, we have a new project, which is the aeration manifold and basin replacement. So that has recently popped up on our radar. So next slide, Kimberly. And with that, I will turn it over to Nick to explain these these budget sheets that he's so familiar with. Thank you, Lori. Good morning, board members. I manage the department CIP budget for all three enterprise funds. So quickly go over before you. Basically, they read left to right, the area with the gray headers, essentially explaining the history of the keys and the example slide there shows red for years one through five. If we start with the far left, we start with the PID number, the project identification number, which is the internal the number we use to reference these projects internally in our database. The second column is the IFAS key, or that's the ledger key within our accounting system that holds the budget for each of these projects. Continuing on, the next column is funding type and just to touch on this, this is a financial funding type distinct from the project type or project status. So from an engineering perspective, we have project statuses such as design, planning, construction, complete warranty, etc. But for the funding type, this is referring specifically to the where it's at and the funding cycle. So there's four statuses you'll see. The first is CANC or canceled. Not references projects that are expected to be complete by the end of the current fiscal year and are not receiving any funding in the five-year plan. CO stands for carryover, which are projects that have received funding in the past and are continuing but with no further funding. It's simply relying on carryover funding from prior years. CONT, which stands for continuing project. Those are projects that have received funding in previous years and are slated to receive funding in the five-year CIP plan and new projects. And those are projects that have never received any funding and are going to get their first funding within the five-year CIP window. Then as we make our way further right, again, this is basically the history of each of the keys starting with the carryover from previous fiscal years. The current year budget request, any budget revisions, year-to-date and inception-to-date expenditures, current encumbered amounts, which represent funds that are already earmarked to pay for contracts. And finally, the last column before you get to the five-year CIP plan is a projected available, or in other words, how much available funding is left in each of these keys within our accounting system. So if you go to the bottom of the page, the water funding sheet, you'll see years one through five, year one, which is the budget we're asking you all to approve this year. We're slated for $13.7 million, as Lori referred to, in total year one CIP funding. And we're escalating that at approximately 3% per year for years two through five for a grand total five-year CIP funding level of $73.2 million on the water side. If we go to the sewer funding sheet, sorry, Kimberly, I should be prompting you on the slides. If we go to the sewer funding sheet, we see that we're asking for a year one budget of $12.7 million. Again, we're continuing with approximately a 3% year-over-year increase for years two through five for a total five-year CIP request of $67.5 million. One other note on the project sheets, I mean, you'll see that the sheets are broken down into categories of projects. And to make it easier to read and to get the final priority, sorted the amount first by year and then by dollar amount. So for any given category, if you start in year one column, you're going to see the highest dollar projects for each category first and then descending as you go row by row. So in my mind, that makes it easier as an end user of the document to see where we're really prioritizing the dollars. And if we go to the regional funding sheet, we are, so this one has a little extra element. So at the bottom of the funding sheet, what you'll see is two grand totals. The first grand total is the cash basis CIP funding. As Kimberly mentioned in her presentation, we're starting at $8 million on the cash funded CIP piece for year one, fiscal year 21-22, and building that by a million dollars per year until we get to the aforementioned $12 million cash funded level in year five for the regional CIP. And then the line below that is the grand total CIP, including the 2020 bond funding. So if you look just above that, you'll see that in years one and two for the UV disinfection project, which is a project that we specifically targeted for the bond funding. We're planning on $30 million in years one and two and $2.6 million in years three. And so that puts our total CIP request for year one at actually $38 million even rather, which is the $30 million bond funding in addition to the $8 million cash funded CIP. And with that, I'm happy to answer any questions if anybody has any. Any board member from a funding perspective, before we go any further, I just wanted to also remind you that what you will be recommending to move forward is just year one. We provide you a five year CIP look, but what gets approved is only year one by city council this year. And if you have questions on specific projects, that's why other staff are here as well. And that's why we provide you the spreadsheets early so that you can take a look at them if you have any. Board member Walsh. Yes, thank you, Chair Watts. Nick, I'm a little bit slower than I actually looked too. But I love the layout and the terms. I just missed a couple. So on the funding type, if it's continued, that means it received funding before and it's been slated to receive funding again going forward in our five years. I'm sorry. The canceled, it was funded in the past. It's expected to get completed within the current year and it won't then receive funding for the future year's budget, which will be our year one. Is that okay too? That's correct. This is great. And then the other too, there's a CEO and I forgot that I didn't catch with that net that was continued or I'm sorry, the category funding type of CEO. And that's. Yeah, that's that stands for those are projects that are expected to continue beyond this year, but are not slated to receive any more funding. But it's a complete carryover. It's not receiving more funding, but we do expect the projects to continue beyond this year. Got you. Thank you very much. And so that's carryover. And that that's as if we're finished funding it, but the project's carrying over so that can be complete. Those funds are sitting in our capital projects funds. Okay. Cool. Thank you very much. I appreciate the help with that. That's all chair. Thank you. Any other board member questions? Board member right? I'm a little confused on the on the bond funded section on the disinfection upgrade and the LTP onsite diversion. One, I'm a little curious what the onsite diversion is. But secondly, I'm seeing all this money out there in year one, year two, year three. I'm assuming those are bonds we've already sold and we're only obligating them in future years. Yeah. So we closed on the 2020 bonds in the amount of $70 million in December of 2020. And that was issued, those bonds were issued specifically as far as onsite diversion piece and worry, please step in if I'm incorrect. My understanding is that in addition to upgrading UV disinfection system, we wanted to add an infrastructure to take off spec water after the treatment process and pipe it back to the head works for retreatment to get it within spec. I believe that's what the onsite diversion project. Yeah. Yeah, I think I've heard about that now. Yeah. Is that correct, Laurie? I'm clearly not the expert on there. But you know, we have Tanya and Emma also on the call. That's fine. I got it. I remember hearing that discussion earlier. So when do we expect to on the disinfection? I thought we're going to spend more than $21 million in next year, but maybe it's phased or how does that work? Well, I can take a shot at that, Glenn, if you want. I don't know how the $21 million was established, but the project should go out to bid later this summer. So we would probably just start groundbreaking and get all of that initial work start up. And then as we go subsequent years, you know, through construction, that's how much money we would probably anticipate spending on an annual basis. Okay. I thought we had to have all the money on the bank on the day that we awarded, but maybe we can do it this way, whatever. Doesn't matter. That's fine. Well, yes. So remember, right? The money is there. It's just these are the expenditures, how we'll spend that money. So all of that money is already in the bank for us. This is just the order in which we'll spend them by year. Oh, okay. All right. I get it. We received a very large transfer of money after the bond closed. So if we need to spend more, if they move faster, then we can bring it forward. Okay. Thank you. That's just the expenditure schedule. Yeah. Thank you. I'm done. Great. Thank you. Any other questions? Just what? Oh, yes. Board number one. Thank you, Chair Watson. Member Wright, your question kind of kicked off something in my mind here. So we also have a current encumbered amount for the same project of disinfection upgrade, the 5.5 million. That encumbered amount would be in addition to, I'm asking staff, is that 5.5 million? That would be in addition to the request for, for instance, for fiscal 21-20-22. So then the total available for spending, including the encumbered contracts, would be 26-5 or something like that. Is that, is that how that works? So the encumbered amounts would be added to the year one request amounts and that would get the total, the total that we have in play for both staff and contractors for those respective projects for the fiscal 21-22. When the dollars are already encumbered, they've already been approved for that project. So, so in year one, we may encumber more, but these will come back to you as separate agreements. So we're giving you a budget for how we expect to spend the funds, but as those agreements come forward and as pieces of the project come forward, you'll actually see them again, because then you, they come forward to you for you to approve that bid that comes forward and to actually grant the project to whoever wins the bid. So that's, those, those will come to you in the future. These are, this is just our, our over, over look of how we expect that those are going to come to you and how we will spend the funds over the next few years. Got, gotcha. So, but the, the encumbered amount, so if I had, if I let out a contract, let's say on June 29th for 5.5 million, my request year one is say 21 million. If it's encumbered, it's already been before the board and is already approved and is already budgeted for. Correct. So it doesn't add to year one. It's already been done previously. So that contract for, and that one I believe is for design would have already come to the board and been approved and been awarded. So it's carrying forward a prior year's expenditure authority for that capital project, right? Correct. Okay. That, that's what it's getting to. So that, that in addition to the new expenditure authority due to the total that could be spent in any one timeframe. Correct. Or okay, great. Then I, there was a question. So this does tie really close to what we're talking about in the, in the rates. And so that's, that's great. And then there's a question on if there's, if there's any reconciliation that we need, if we wanted to tie it even closer, did we want to add a contingency, because they're relatively, these are relative, a little bit less than what we saw even in the rates. And that's just a consideration for, for, for, for the Director Burke is that we want to consider even just, just kind of tie in these directly to the, to the rate study. And there's just minor differences it looks like in a couple of weeks, but I think it looks great. That's, that's my comment on that. Great. Thank you. I think we can move on to the next portion the schedule. Alright, so if there are no further questions about budget, we will be meeting again as you already have on your schedule. So at the next meeting, we'll bring you a little bit of detail about some of the CIP projects as well. And so you'll be seeing some highlighted projects as we move forward. And typically in this very first meeting we had, we're not quite ready for that yet. So we're just giving you the, you know, the preliminary, although we are fairly close already with where budget will end up, which is, which is good news because we, we have very shortened time frames, unfortunately, with the finance department of when we're allowed to start entering budget and when budget completes and, and in order for us to make our timelines for our sub regional partners and notify them of their allocations. So, so while it has been a very condensed again budget season, we're fairly far along, which is good news for staff, especially because it means that we're pretty close. What will happen next is on March 23rd, we will be bringing the Sonoma Water rate increase to the city council. So what you saw last week and recommended city council will be going on the 23rd on March 11th. So later this week, we will be meeting with our sub regional partners and discussing that allocation. And as I had mentioned, the possible application of some fund balance to bring down the increase for this year. And then we will also, if we need to meet with them a second time before April 1st, but on April 1st is when we will request a recommendation from them that would go to the Board of Public Utilities. And then two more meetings, as I mentioned, with you scheduled, as well as then on April 1st, we will have a full study session with the entire board on all of the budgets. So on MCIP and the regional budget study session on April 15th, we then will request a recommendation to city council from the board on April 27th. We will bring forward a preliminary budget to the city council for the regional system. We need to bring this early, which sometimes creates a little bit of confusion, but we need to notify our partners by May 1st, it's written in the agreement that we need to do this, so that they can then plan their budgets and get their fiscal year budgets ready. So this goes early to city council so that they can do a preliminary approval basically for our subregional partners. Then city council will hold budget study sessions on May 11th and 12th, and then consider adoption of the entire budget on June 22nd. So a very busy schedule for all over the next over the next couple of months. And with that, that is the end of our presentation today. We are happy to answer any additional questions you may have, as well as if you have any follow-up for us to address in the next meeting, we are also happy to do that for you. Thank you. Any additional questions? Well, I just want to thank staff and the budget subcommittee for your work and ongoing work over the next few months as deputies and you know illustrated where it's going to be a busy couple months for staff. So thank you. I also wanted to also just thank Secretary Aitha for distributing these paperwork for us who are home. I really appreciate that. I know it's a difficult time for everyone with meeting virtually still, so just want to thank you. We will now move to taking public comment for item 3.1. If you wish to make a comment via Zoom, please raise your hand. If you are dialing in via telephone, please dial star 9 to raise your hand. Secretary Aitha, do we have any live or e-mail or voicemail public comments at this time? We know public comments. Great. With that, I will join them. I can't even speak. I'm so tired. It's already, we'll end the meeting at 8.55. Thank you all. Have a good rest of your week. See you later. Thank you, Chair. Thank you. Bye, y'all.