 Oh, Dan, you're on mute. Sorry, Chair Galvin, you're on mute. Sorry about that. Do we have everyone that's gonna be here? Do we know? We have all staff, however, I thought we had a full subcommittee, but Secretary Manus, do you know if Board Member Walsh was attending? I hadn't received confirmation one moment. Let me double check my outlook. I can go ahead and shoot him a text really quick as well. All right. I did not receive confirmation via outlook that he was attending. All right, well, we can give him a couple of minutes and see if he responds to Director Burke's text. Chair Galvin, completely up to you. I've not heard back. I tried both text and email. So we're ready to get started whenever you want. Yeah, I think we can go ahead. I'll call the meeting of the contract review subcommittee for the Board of Public Utilities to order. And if we may have a roll call, please. Board Member Walsh, Board Member Bedenfort, here, Chair Galvin. Here. Let the record show that all members are present with the exception of Board Member Walsh. Thank you. Just a reminder, please mute your phones and microphones and put away your cell phones and personal computers. We'll now move to item two on the agenda, which is public comments. We're now taking public comments on item two. 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 Manus. There are no hands being raised via Zoom and no public comments received via email. Thank you. We'll move to item 3.1. Director Burke. Thank you, Chair Galvin and members of the subcommittee. The agreement before you today is a proposed phosphorous offset agreement by and between the city of Santa Rosa and the town of Windsor and Sean McNeill, Deputy Director of Environmental Services will be making the presentation. Good afternoon. Thank you, Director Burke. Good afternoon, Chair Galvin and Board Member Bedenfort. Excited to share with you today this agreement that we've worked on with the town of Windsor. And so really I'm gonna focus on two elements for you today. First, give a brief history of the nutrient offset requirements, which I think will lay the stage for why an agreement with the town of Windsor could be beneficial. With that, so just kind of going through real high level in 2006 is the first time that the city of Santa Rosa received a zero net loading for both nitrogen and phosphorous in our discharge permit at the Laguna treatment plant. To comply with that order by 2008, the regional water board approved a nutrient offset program which was a mechanism for us to go out and get phosphorus credits from some other mechanism from other entities that are discharging phosphorus and apply that towards our zero net load for phosphorus. And then since 2009 to the present, we have been actively going out and conducting projects to serve in this capacity as what are formerly known as nutrient offset projects, but they'll be in the future called water quality trading project. So that changes coming up here in this timeline. 2013, the city successfully pushed back on the nitrogen regulations and we changed the requirements to zero net loading for phosphorus only. So that's why we're today looking just for phosphorus credits. And then in 2018, the regional water board adopted a water quality trading framework. What's important to note about this framework is that it's open to all entities, whereas the nutrient offset program was an agreement between the city of Santa Rosa and the regional water board. So having this water quality trading framework is a tool that allows the regulating agencies to put other people into the program as the regulations dictate. So the town of Windsor has been included in having the water quality trading framework requirement in their permit, and they also have a no net load for phosphorus. The city's phosphorus strategy, compliance strategy is to maximize our reuse, which minimizes discharges to decrease the phosphorus in the recycled water. Is another thing that we work on doing, so concentrations are lower. And then we offset those discharges that we have through these nutrient offset projects. And now under the water quality trading framework, we have a fourth component, which is we are able to buy and sell credits that are generated to reduce the amount of unused and expired credits. And I'll go into a little bit more on this. One of the challenges the city has with meeting this no net loading is these phosphorus credits that we generate in these projects have project lives to them. And so the life of those credits, they could expire and the city's discharge is episodic. So I just wanna take a little bit to explain this graph on the left axis here. You see the volume in millions of gallons per year. That is for the discharge, which is the red line going through the graph. And then you have on the right axis, that's the rainfall annual precipitation rates. And that's represented by the blue bars. And you can see throughout time as precipitation changes, when we get a high levels of precipitation, that's when we tend to discharge. We can't plan for that. Also in 2004, I just wanna point out that's when the geysers project came online. We went from discharging every year to discharging periodically. And through the latest drought, we've been one discharge in the last five years. And so very, very, very good so far in maximizing our reuse and minimizing our strategy. So when we take a look at those discharges just so that you have an understanding, here's the pounds of phosphorus associated with the various discharges from 2013 all the way till last discharge year. So we, a small amount, 114 pounds of phosphorus in the 2015-16, that was a test discharge to just ensure our system was operating. We had a really big discharge in the 16-17 year, and that was 15,488 pounds of phosphorus was in that discharge. And then 2018 and 19, it was 6,886 pounds of phosphorus. So you can see that our need for credits can be really large or they can be nothing. And so we're trying to manage that with a bunch of credits that have different credit lives. And I'll go into a little bit more of that. So we developed four different nutrient offset projects in this time. We had the Beretta Dairy Project. This was a manure and pasture management project. We've been given three year lives on these credits. So as the credits come into our system, we have another 10 years or so that this one will be giving us credits. The credits come in to our system when they do, they expire in three years if we use them or not. And Pepperwood Nature Preserve, this is road and drainage improvements. This project we believe has in perpetuity credits. We don't have a written determination from the regional board on that. We have a verbal that that's probably where that's gonna land. So that project is producing credits also for the next 10 or 11 years. And then the Ocean View Dairy, another project is a manure removal and land application. This project only had three year lives, it's over and none of those credits are moving forward for our compliance. And the Laguna One and Two Restoration, which is a project we completed three years ago with Sonoma Water and it was a sediment removal and creek restoration project. In those credits we believe will last in perpetuity until we use them. So just so you can get a sense of how much these projects are costing, I have here a table with the project name, the cost of the overall project, the total sum of phosphorus credits from that project over the project life and then a cost per credit analysis there. And you can see that our credits ranged from really low at $20 a credit for Ocean View. We don't, staff does not expect that we'll have many projects in that price point. If we would, we'd jump on them, but we're thinking probably more like the high, the Beretta project is probably gonna be the most common kind of costs like that or higher per credit. Looking at these same projects and taking a look at the total credits and the credit total credits that we've received from the project so far and then the credit life of those projects and then how many credits were used or expired and then remaining credits just for your understanding. So as I mentioned, Beretta so far has given us 3,337 credits. These credits only last for three years. So it's really important, if we're gonna get the most out of these credits if there's another way that we could possibly sell those credits in years when we wouldn't need them instead of them going expiring. And then Pepperwood is another project that will be continuing ongoing. We've received about 4,000 credits so far. We've used 3,680 of them already, remaining 337 credits, which is just this last year's credits that came in. Ocean View Dairy, as I mentioned earlier, that's no longer generating credits and all those credits have expired. And then the Laguna Project, even though they were cheap, they just didn't last long. The Laguna Project will have a total of 14,926 credits and those last in perpetuity and we have 14,880 of those credits remaining. So with that, just good to understand the content of the agreement that's before you, it really is set up to allow buying and selling of the credits between the city of Santa Rosa and the town of Windsor. Excuse me for one second, Deputy Director McNeil. Can you go back one slide? So on the column that says used or expired credits, I'm interested in the three-year ones. How many of those were expired as opposed to used? So it's a complicated answer. I'll try to simplify it as best I can. So under the Nutrient Offset Program, the way we calculated compliance was a three-year average of phosphorus controlled compared to three-year average of discharge. In that case, we're only talking about expiring credits when it moves into the water quality trading framework. So all of those credits are, it's hard to say that they were used but they were used under a different formula that you didn't have any banking of the credits. Okay. So they were just trying to get a sense of whether we're intentionally or otherwise letting credits expire as opposed to trying to use them before they lapse. Yeah, so we have not really let credits expire because it just didn't exist in the earlier program, although they effectively did. After three years, they fall off your averaging. But in moving forward, we are able to accumulate credits in like a bank account under the water quality trading framework. It's probably one of the biggest enhancements of that water quality trading framework above the nutrient offset project, but it gives us this drop dead date of use the credits or lose them. And the one benefit of partnering with the town of Windsor on this is they typically discharge small amounts every year. So if we have small amounts of credits that they could use that would expire, it would be beneficial for us to get some of that money back and put it towards new projects for the future. Instead of just letting those fall off our roll, but it's a great question. Okay, thank you. Yeah, and sorry, I can't help chiming in, but as Deputy Director McNeil mentioned, it wasn't, we tried to use them whenever we could. It's just if we weren't discharging, we only had a certain timeframe. And so it wasn't that we didn't use them, it's just the way the program was set up. We didn't have the ability to offset our discharge because that's the way that the regional board had set up the program. And that's why we pushed so hard on doing the petition for review and working with the regional board so that we could invest in bigger projects that would allow us to have credits in perpetuity that would provide environmental benefit all the way around that both the regional board and we would want to do. Whereas if we were still under the old requirements, we wouldn't be investing in those programs because we would know that the program credits would expire. Sorry, it's just so much history on this and I couldn't help but jump. No, that helps, thank you. Yeah, so as I said, this agreement would just be allowing the city and the town to exchange credits and funding. The rate would be at the cost of development of the project. So the rates that I had showed you earlier, the cost of the project plus a 20% handling fee. So it is the agreement allows us to both buy and sell credits. And so we would agree to that and that the seller gets to choose which credits that they're gonna sell. So obviously for us, we're most likely gonna want to sell the credits that would be expiring if they're able to use them. And the city does currently have credits that will expire if we do not use them or sell them. And Windsor's credits needs are much more frequent as I mentioned, almost every year. I think last year was the first year they hadn't discharged but it's much smaller amounts that a max around 1,000 credits per year is what they're looking for. But as I understand that exhibit B chart, at this point Windsor has no credits to sell to us, right? That's currently correct, yes. And that's all that I have for you today. Okay, that explains, I think one thing, I'm looking at the proposed agreement and there's an indemnity provision in there between the city to indemnify the town based on rising out of re-connection with those credits, but there isn't a reciprocal indemnity agreement where the town would indemnify the city presumably because the town isn't gonna be selling any credits. That is probably most likely. Developing a project takes quite a bit of effort and we have the greater need. So we've developed all the projects so far. There might be cases where we're code developing projects and cost sharing on projects. But this agreement would simplify some of that if we do work with contractors and such, just one entity has to do that. Okay. And so the recommendation is it's recommended by Santa Rosa Water Department that the contractor view subcommittee recommend approval of the phosphorus offset agreement by and between the city of Santa Rosa and the town of Windsor to the Board of Public Utilities. Thank you. Board Member Baudenfort questions or comments? Comments. One, thank you. Two, it looks like an excellent policy solution providing very needed flexibility. So thank you for your great work on it. Just out of curiosity and my apologies if I missed it. The two years where we saw the spike in need for credits or the need for offsets, what drove those? Just out of my curiosity. Oh, rainfall. Okay. Yeah. Just wanted to make that really explicit. Yeah, so rainfall, high amounts of rainfall increases the amount of water that we're handling. And if our ponds get, our storage gets too full and we can't deliver more water, we have to have a controlled discharge. Indeed. All right. Thank you so much. The motion is gone from the screen. I have it here. I'm happy to make it. I'm also happy to just say so. Whatever is required, Chair Galman. No, I think you just made the motion to recommend to the full Board the approval of this agreement and I will second it. I certainly do. All right. We'll now open it up for public comments on item 3.1. If you wish to make a comment via Zoom, please raise your hand. If you're dialing in via telephone, please dial star nine to raise your hand. Secretary Manus. There are no public comments for this item. May we have a roll call vote please? Board Member Walsh is absent. Board Member Bedenfort. Aye. Board Chair Galman. Aye. Let the record show this motion passed with two affirmative votes. I think that concludes our agenda. Thanks again, Deputy Director McNeil for the presentation. This looks like it has a lot of benefits certainly for the city and hopefully for the town of Windsor as well. So thank you and we are adjourned. Thank you. Thanks everyone. Bye-bye. See you all Wednesday.