 the board of public utilities and ask for a roll call please. All right, Chairman Galvan, Vice Chair Anoni. Here. Board Member Bannonfort. Here. Board Member Bannister. Here. Board Member Doud. Here. Board Member Grable. Here. Board Member Mullen. Here. Thank you. Are there any statements of abstentions by any board members? Seeing none, there are no study sessions. We have two sets of minutes for approval from October 4th and October 18th. And if there are no amendments that anyone would like to offer, then they stand approved as submitted. That brings us to item 5.1, Laguna Treatment and Plant Disinfectant Improvement Project Update. We have two briefings today. One in the largest project ahead of us on the wastewater side and one in a very large capital program on the water side. So this first one is an update on the UV project. And I know for many board members, this discussion has been going on for some years. I would suggest that that's appropriate. This is a very large, complicated project. And recently, Ms. Walton and Mr. Schwal have really done, I think, tremendous effort wrapping up a lot of the loose ends and outstanding questions. And today, we're confidently bringing you a direction with our recommendation going forward. Thank you. We are here today, as Director Hornstein mentioned, to just provide the board with an update of the work that staff has been doing since we last presented on this effort. As the director mentioned, this has been a very long process and kind of the synopsis that we're bringing today is by no means a representation of all the work and analysis that has gone into making this decision. It's just kind of the final pieces that have brought together the recommendation that we're going to bring. So this is kind of just our project background. We previously disinfected with gaseous chlorine. In 1998, we installed our UV system at 67 MGD capacity. In 2012, our capacity was derated by the DDW. There was kind of known in the industry that Trojan 4000 systems, the one we operate had kind of not been functioning or operating as originally designed. And so we took a look at our system and did a test to see the disinfection efficacy. And subsequently, the system was derated, which left us with a capacity deficiency. And so about since 2013, we've been looking at how we're going to make up this capacity deficiency. Most recently, so previously we went through many efforts looking at many different alternatives, came to kind of a conclusion that we would move forward with a new UV system and a supplemental hypo system. And most recently, we've looked closer at whether or not we really want to move forward with just a single UV system or a new UV system in conjunction with a supplemental hypochlorination system. We do have existing chlorine contact basins at the treatment plant that we previously used when we disinfected with chlorine. It would be fairly easy to retrofit those and use them again for chlorine disinfection. So that's where that idea kind of came from. So the two alternatives we were considering, as I said, just one single new UV system, that would be a single process, about a 63 MGD capacity. The capital costs associated with a larger UV system is higher than a smaller UV system with a supplemental hypo, but the ongoing O&M costs are less because the cost to purchase chemicals is more than the cost to purchase the energy. So the second alternative is the new UV system with a supplemental hypo. It would be a smaller UV system and capacity would be supplemented by, or disinfection capacity would be supplemented by disinfecting with hypochlorination. It would be a dual process. These would work in parallel. It would provide more capacity than just the single UV system because with a hypo disinfection, you do get pretty good disinfection capacity. The capital cost is lower, but ongoing O&M costs are higher. So when we're wrestling with determining how we were gonna move forward, we really dove into the operational considerations with how would these two alternatives operate in various flow, UVT scenarios, and with all the facilities that we operate. So we do operate a West College facility that is a wet weather diversion facility that's upstream of our treatment plant. So we pull off high flows. This impacts how we disinfect at the treatment plant because it means that we have to disinfect less at any given time. It's kind of a peak shaver. So we can size our disinfection system smaller if we utilize the West College facility. So we had to take that into account. We have in-plant upstream processes, a treatment plant since it is a biological process. Every tweak you make to one process can affect upstream and downstream processes in various ways. So that was something that we really had to take into account and in particular for the UV system, how we deal with nutrient removal upstream could be impacted. So I'll get into that a little bit later. We also looked at the disinfection system operations itself. So operating a single system in steady state under controlled conditions versus two parallel systems in steady state under controlled conditions. How is that gonna operate? What happens if there's an emergency shutdown? What happens when there's planned shutdowns? How are we going to kind of respond in all of these different scenarios and what's the level of effort required? We thought through each of those scenarios. Also additional infrastructure that would be required in each scenario. So with a hypo system, with a dual system, we would be adding a pump station. That's more O&M, that's more assets to maintain, that's more things to go wrong. So really just really noodling down on all the different things we really need to consider from an operational standpoint. Downstream operations, we're planning on installing a diversion system. How would our diversion system coincide with a dual disinfection system versus a single disinfection system? We also operate a geyser system. How would we deal with different effluence in that system? A hypo system could help in that system as we are experiencing some biofouling or growth on the inside of some of those components. So really just thinking through every single process, our reclamation system, how we would manage the water in that system. If we had chlorinated water, we would have to operate differently if we just have UV disinfected water. And then similarly with our discharge, if we have chlorinated water, it limits where and how we can discharge. So there really are just a lot of things that we really thought through and considered in making this final recommendation from an operational standpoint. We also looked at regulatory considerations. As I mentioned, the disinfection byproducts associated with chlorination, we are strictly regulated on our discharge of disinfection byproducts. We also are regulated on our nutrients and how much nutrients we discharged to the Laguna. And so whether or not a hypo system or a UV system would impact how we were able to remove nutrients upstream. And in a hypo system would limit how we could remove nutrients upstream and take some kind of beneficial ways we could do that off the table. We also thought about the biofouling in the geysers pipeline. As I mentioned, the regrowth in ponds, there is a TMDL coming out for pathogens. So really thinking through how either system might be affected by that upcoming regulations. Our available discharge locations, we currently discharge in a number of locations that are after where we store water in ponds. And so disinfection byproducts kind of become less of an issue at that point because there's a chance for them to kind of break down through the pond system. And then when we discharge that water, we're anticipating that the disinfection byproducts associated with hypochlorination would likely not be an issue. But if we were ever forced to or ever found ourselves needing to discharge directly from the plant, we could find ourselves in a situation where we would have to dechlorinate water before discharging. And then our coliform compliance locations with a single disinfection system, you have a single point of compliance with a dual system, you have two points of compliance. So just adding a little complexity there. And then finally, the cost considerations. And really this effort wasn't focused so much around the cost considerations as it was really focused around the operational considerations and the regulatory considerations and really making sure that we're installing the best system for our needs. But of course costs are always accounted for. And as you can see the total capital costs associated with just the ultraviolet system is slightly higher than with a dual system with the UV and supplemental hypo combined. This is partly because we did account for continued use of our West College pump station where we divert high flows so that we could kind of decrease or not be so stringent on where we put the design point for our new UV system. And then ongoing O&M costs as I mentioned are slightly less for a ultraviolet system as opposed to a combined UV and hypo system. And that has to do with the cost of the chemicals. So after kind of going through all of these considerations staff is confident that we would recommend moving forward with just a single UV system full capacity that would handle all of our flow. It's a single process. It provides the most flexibility in the future with respect to not having to address potential disinfection byproducts with our ability to more easily and readily implement nutrient removal processes upstream. And the challenges associated with operating two parallel disinfection systems and things that could go wrong and starting up one system partway through the season. It's a very nuanced circumstance that the benefits of the additional capacity that the hypo system provides just don't outweigh. And also a hypo system is pretty cheap to implement and if at some point down the road we find ourselves needing hypo chlorination for some reason we need some residual disinfection in our system somewhere we can always install it very cheaply if and where necessary. And that might not be at the plant if there's an opportunity to help with the regrowth in the geysers we could install hypo at the point that makes the most sense and maybe that's not at the plant. So those are kind of the reasons that we came to the recommendation that we're moving forward with. So the next steps are we need to amend the current contract that we hold with Corolo. We would bring that back to the BPU for approval. There's some scope that needs to be adjusted based on the recommendation we're making today. We would reengage with Calgon if you remember we did enter into MOU a memorandum of understanding with Calgon to pre-select or pre-qualify their equipment for our UV system. So we're re-engaging with those conversations. We would move into design. We are anticipating that this effort will need to be bond funded at least partially. So we're planning on moving forward with that into construction and then as always providing the board with updates as we move through the process. Kind of in a parallel effort, staff are beginning to develop a pond sampling program. This is to sample the pathogen regrowth in our ponds. And then so we can kind of better understand if there's hypochlorination that could help benefit that and there's also parallel efforts that we need to understand the pathogen regrowth in our ponds. Anyways, we are beginning to engage with Calpine to better understand where the regrowth is happening in their system and how we might alter operations to help manage some of that regrowth. So with that, I will open it up for any questions and I forgot to mention, Joe Schwall is here with me to help answer any questions. He is the Acting Deputy Director of Sub-Regional Operations. Thank you. Are there board member questions, Director Dunn? My question really, I'm looking at your chart six where the cost considerations are shown. And it really is, this is a simple chart to look at and interpret, but what is the foundational information? Where did you get it? How exploratory are we in doing what is being recommended here? Do you feel comfortable with the cost figures that you've come up with? So some of that background I'd like to hear. Yeah, so the costs are all derived from the value engineering effort that Corolla did for us to kind of kick off this rethinking of whether or not we wanted to move for with just a UV or a UV and supplemental hypo. The costs for the new UV system were, I believe and correct me if I'm wrong, were obtained directly from the vendors themselves given certain design parameters that will need to be adjusted. So those numbers are not by any means set, but they're good working numbers. The off-spec diversion is included there for both, those numbers I think have shifted slightly now that we've gotten into design, but we are moving forward with that project in both scenarios. And then the West College Pump Station number is from a preliminary analysis that was done a number of years ago to better understand what it would take to upgrade that facility. And then the O&M costs again were developed by Corolla in kind of anticipating energy use and parts replacement and maintenance costs over the life of the equipment. And just to kind of put those numbers in reference, our annual O&M costs associated with our disinfection system currently is about 2.1 million. So by replacing our system, we are saving about 1.5 million in energy costs just associated with the new UV equipment and the energy efficiency associated with that. Thank you. And if I could just add the cost estimating that went into this most recent value engineering effort, the numbers do track a number of earlier planning efforts that were done, they all pretty much align. So we do have a fair degree of confidence in these numbers. Great. Member Mullen. Thank you. Forgive me, as I go through my questions, I didn't go through, I haven't been here and had all the updates that you've been coming forward with. So I apologize in advance if it's repetitive. I want to back up for a second to the issue about with the Trojan system where we lost rating capacity. I'll let Deputy Director Schwall answer that. So the system was installed in 1998 with a design flow of 67 million gallons and providing a certain dose. At that time, there was no regulatory requirement to do a bioassay test to actually prove it out. It was all based just on design. Since that time, the regulations have changed where they require the system to have a bioassay test done. So it proves the design concepts. We were grandfathered in, except that we were told from consultants that yeah, other Trojan systems such as this were not performing as expected. And at that time, we decided we needed to do the test to find out really what our system was doing. And through those tests, it was determined that to provide the dose for Title 22 requirements, the flow would have to be lower too. It's a bit of a moving number, because there's two factors involved. There's flow and transmittance, which is a factor of UV radiation being absorbed by the water. And that can change with the quality of the water. But at 43 million gallons per day, at a given UVT is the current rating capacity. So are we proposing bringing a new improved Trojan system back through this process, or you know where I'm going with this? Is this a proprietary system with this Trojan system? Any system we purchase will be proprietary. We have an agreement with Calgon Carbon for their system. There's, we looked at four systems total to arrive at Calgon as being the preferred manufacturer. Trojan is in that mix as well. But it will be proprietary, a proprietary system. There's no off-the-shelf UV system that's been approved. And to clarify, prior to you joining the board, we did go through an effort of selecting based on qualifications and value to the city, a competitive process to select Calgon as the preferred vendor. If I could add, because I think the derating issue is important, that is not the sole driver for moving forward with this project. The equipment is about 20 years old. By the time we do design and installation, it'll be about 25 years old. It is showing its age, there's parts availability issue and we get this incredible operational savings because the new technology is much more efficient in terms of the bulbs and the energy they give out. And so one of the reasons I'm asking these first couple of questions is this ability to protect ourselves from a regulatory change that like we experienced with this system in the 90s where we bought something that we expected to provide capacity at a certain level and due to those regulatory changes, we lost capacity and then we have to go out and buy more equipment to or do something on our end to do that. And so is, are there any lessons learned dealing with these vendors so that we can try to hook them into, I don't know if any of their representatives are here today, but giving away trade secrets, but is there a way we can hook them into this so that they can assure us that they have confirmed with regulators that it's gonna meet a certain capacity, blah, blah, blah, so that we kind of know what we're buying this time around? I'm not gonna start with that. So regarding the regulations, I think it'd be hard to protect ourselves against future regulations, but one thing to understand about UV disinfection is that when we purchased that system in 1998, it was pretty close to cutting edge. It was a new industry or a new application for UV disinfection and for UV radiation. It was a new application and the regulations have matured since then as has the industry who are in the third generation of equipment. So between that and the testing that is done after the installation, the bioassay testing and the proving we're in a better place today than we were in 1998 with regard to that. In terms of being able to guarantee pricing and availability and all, I didn't leave that to you. I don't recall offhand if we included ongoing O&M or parts replacements in the MOU we entered into with Calgon, but that's definitely something that we can look to include moving forward. Thank you for that. My last couple of questions are related to the hyper chloride option and do we currently have any capacity to use hyper chloride either at the treatment plan or at any remote locations? We use hyper chlorination at the plant for algae control, but we don't have the capacity for disinfection at this time. We would need contact time, which is what the chlorine contact basins could give us and also just much higher doses of chlorine. So we're not either able or required to maintain any chlorine residuals in our urban reuse? We operate a very small urban reuse system as they do chlorinate at the pump station that distributes that water. I'm not familiar with those, what the requirements are for that, but I can find out and get back to you. Your comment earlier in your presentation was that if we change somewhere, we have flexibility to be able to set up a hyper chloride station in an area of need in the system somewhere if it came up down the road. Correct, it would be additional infrastructure that we would install, yes. Sure, thank you. Other questions? I guess my question is about time horizons. First of all, do we have a, not a deadline, but a date by which we must make a change and how does that track with how long it's gonna take to implement these recommendations? So we're working on incorporating that language in our report-always discharge that's kind of in the process of being negotiated right now. We are, I don't know that we're putting definite dates in there, but we're anticipating kind of working with our financial advisors about a bond issuance or a bonding available in 2022 for construction and then construction kind of occurring after that. So that's kind of the timeframe and it would be probably a multi-year construction that would happen, but we are going to start moving forward with design a couple of years of design and then funding for construction. Good, and then what's the next event that would bring it back to this board for approval review or whichever next step we have to approve a review? So we're working with Carolo to update the scope of work that we're currently in contract with them. And so there's slight adjustments that just need to be made to what we're anticipating the work that they're doing. That amendment to that contract will be brought to this board. So you guys will know exactly what we're asking them to do for us. Great. If there are any more questions, thank you very much for a complete presentation. Appreciate it. Thank you. So item 5.2, emergency groundwater program update. Yeah, this is a update in the program by director Burke and a bit of a different message and the prior presentation where we're gonna share some of the challenges that staff has had in implementation, talk about some new conditions that may drive different directions and really presents an opportunity for staff and the board to think about the program that was developed 10 years ago and now what are the array of alternatives going forward? Okay, great. Okay. Sorry, I'm freezing. It's cold in here. I know, sorry. Good afternoon, vice chair, Anoni and members of the board. As director Harnstein mentioned, I'm here to give an update on the emergency groundwater program. And for those that are relatively new to the board, we wanted to give a background on sort of the history of the city's use of groundwater, talk about the groundwater master plan and sort of the recommendations from the groundwater master plan which focused on trying to develop emergency groundwater supply. Remind the board of implementation challenges and some considerations and potential next steps. So for those that may not be aware, prior to the Snowman County Water Agency's system, the city actually relied primarily on groundwater for our water supply. As the water agency system was being developed, the city signed on and agreed pretty much to be exclusively reliant on purchase water from the water agency. So right now we are pretty much 95% of our supply comes from the Snowman County Water Agency that we purchased from them. And we do have two wells on Farmer's Lane that were previously, a long time ago, they were our main source of supply. They actually were put into standby conditions. And then in about the early 2000s, we recognized that we needed to look at some diversification of our water supply portfolio. And so we worked on and went through the whole process to convert those wells on Farmer's Lane from standby to production. So they are now production wells that can provide up to 2,500 acre feet per year of water supply. We began using those wells in 2007 to help with peak demand in the summertime. And that's pretty much our current water supply in terms of production. We also have a number of wells that can provide some emergency supply, in particular, Carly and Peter Springs Wells, which I will talk about in a minute. And then we have our Leetwell, which I'll also talk about as well. So going back in time, as far back as 1998, there was recognition by this board that the city needed to develop additional emergency groundwater supply. And at that time was looking at a planning number of 8.7 million gallons per day of emergency groundwater supply. There were a number of other things that happened between 1998 and when we actually started working with the board on the development of a groundwater master plan, including some direction and resolutions about looking at a number of different supplies, including groundwater. In 2011, we started working with the board on the need to develop a groundwater master plan. And so we actually put out an RFP and got a consultant on board and began the development of the groundwater master plan. We worked with the board and had seven meetings with the full board and three meetings with an ad hoc subcommittee of the BPU to develop the master plan. And it was really developed to provide a strategic roadmap for the city on how groundwater resources could be most effectively used both to meet existing customers' needs as well as potential future customers' needs. One of the questions that the board may have is, they're in the master plan, we looked at initially both production supply and emergency supply and a decision was made to only focus on emergency supply at this time because when we were in the middle of developing the master plan, the USGS study was in the middle of its development. The Groundwater Management Plan, that's the voluntary AB 3030 Groundwater Management Plan was also in the middle of its development. And so direction was received to only focus on emergency groundwater supply at this time, but to come back at a future iteration of the groundwater master plan and look at production in the future. So that's really sort of an overview of the groundwater master plan. Really, that's how we got to focusing on emergency supply wells. So in terms of the analysis for the emergency supply wells, there were a number of things that were taken into consideration. And this is all the assumptions were used to develop a planning number for what we would look to develop for emergency groundwater supply, ranging from different scenarios from a partial loss of agency supply to full loss of agency supply, looking at a short-term outage, which was two days up to a long-term outage, which was 14 days. The short-term outage requires less water because we were also building in the assumption that we would still have some potential supply from the water agency's tanks, as well as our tanks, whereas the longer-term outage has significantly more need for supply because we run out of that storage pretty quickly. We also chose a 14-day criteria because the definition of an emergency groundwater well only allows you to pump it for 15 calendar days. So that was sort of how we came on that scenario. There were a number of different operational considerations that were put into the assumptions as well, including that the tanks would be half full, that pump stations would be operational, that we'd have some pipelines operational, as well as the ability to pump our existing wells, and also that we were under an assumption that wells that we would be looking to bring online in the future would be about one million gallon per day, which is similar to what we see at each of the farmer's lane wells. We actually have a little bit more production capacity than that, and was also similar in the past to what we had seen from the freeway well. We looked at, from a planning perspective, both our current demands and build out conditions and what those demands would be based on the adopted general plan at the time and the demand projections from the urban water management plan. And then we were looking at providing health and safety water at a minimum, but also looking at the level of service that we could potentially provide, such as service to all pressure zones, which I'll talk about in a minute, to the extent we could, that we could try to have water to key pump stations and that we were really looking to provide supply equivalent to about half of what our winter water demand was. In terms of looking at how we could potentially operate the system, I do have to recognize that we had a lot of help from our operations folks, and in particular, Ron Marinschek was actually the mind behind this scenario of really looking about how we could provide water to key zones so that we could take a system that has 33 pressure zones and basically bring it down to seven master zones where if we could get water into that key pump station, we could potentially get water to as many customer connections as possible in those zones. So that was also a scenario that we looked at operationally about how we could strategically look to get water supply in those sort of seven, whoops, sorry, seven zones, and if we were able to do that, could potentially then pump up in between all our other pressure zones. So that gives you an overview and background of the Groundwater Master Plan and sort of the emergency scenarios and level of service that we were looking at. Along the way, we started implementing the program and there were a number of different challenges in looking at those challenges, and I'll talk about that in a little bit more. We actually re-looked at what the demand scenarios would be. We had worked on this with a BPU ad hoc to kind of re-look at what those demands potentially could be. And we updated the information based on our 2014 and 2015 water demand and arrived at actually an increased demand potentially that we would have to develop. And this was shared with the board back in 2015 and 2016. And this was an updated amount of additional groundwater need for current demands of 7.1 million gallons per day and potential future demands at 12 million gallons per day. And again, this is at the 14-day outage and is also sort of a planning number in terms of the build out, which may change as we continue to update our general plan and our urban water management plan. And with that, that sort of changed the initial number of recommended emergency wells that we were looking for. So initially we were looking for four to five in the groundwater master plan based on the updated demand information. It brought us to six to seven currently and 11 to 12 at build out. And again, we were still under the assumption of being able to find wells of one million gallons per day. As was mentioned by Director Hornstein as we were going through the implementation of the emergency groundwater program, we've had a very robust criteria for trying to find potential areas where we could site wells. We did four different well-citing studies in various areas throughout the city with very rigorous criteria for selecting where we could potentially find a property where we could have a well and looking. And that's sort of a list of some of the criteria that we looked at. In addition, we were also driven by information from where our current test moorings are located from the sort of inception of the program in 1998 to present we have installed eight different test moorings throughout the city. And they have actually been really telling in some cases we found some pretty okay amounts of water supply and in some cases we found absolutely nothing which was quite surprising but really helped tell us and inform the geography. And I will also say a great benefit to the test moorings that we did construct is that we were able to share all that information with the USGS and it really helped them shape sort of their understanding and the study that they did on the Santa Rosa Plain Groundwater Basin. So this map here shows you the eight test moorings that we put in those are the black dots as well as some other wells that we still have where we're monitoring and getting data from those wells. So we have had a number of challenges in particular property acquisition and negotiating site access has been difficult and I will talk about that a little bit more. Because of that, as well as the information we had and looking at the additional potential supply that we were looking for, the project team which consists of staff from our operations staff, our planning branch as well as our capital improvement project engineers revisited with our consultant team what we could potentially do to implement this program successfully. And looked at various options including continuing to pursue new sites, looking at converting existing test moorings to emergency wells, which hadn't been considered before. Really reinforcing at making sure we're protecting our existing emergency supply and then looking for opportunities for agreements with others that may have emergency groundwater supplies that they're either not using or are superfluous and would be willing to consider having some type of agreement with us for those supplies. In addition, we were also finding that the well yields that we were hoping to initially find such as similar to farmer's lane are most likely the exception and that more typical well yields are probably in the 350 to 450 gallons per minute which is closer to like a half an MGD as opposed to looking at one MGD. And so we had worked with the ad hoc subcommittee to look at these ranges and had brought back a sort of recommendation that it could be instead of looking at 10 to 12 we may need 20 wells at build out. So based on providing all this information we received and worked with the BPU ad hoc and came back to the board in 2016 and decided to refocus the program and receive new direction to convert the test moorings to emergency wells, to continue to pursue property acquisition, to continue to pursue additional test moorings and to look at partnership opportunities. In terms of costs, we wanted to provide an update on where we are with expenditures on the program. So since the program was put into effect to date we've spent roughly $11 million on the program and that includes the eight test moorings that we've put in and related expenses for that property acquisition, et cetera. It includes the development of the groundwater master plan as well as the conversion of farmers lane wells to production wells in the 2004-2005 timeframe. Going forward and looking at most recent costs as well as what our costs have been to convert one of the test moorings which I'll talk about in a moment. We're anticipating that we're looking at between two and a half to three million per emergency well and if we do need to install all 20 wells it could be a capital expense of $60 million, potentially more. So something that we need to consider especially as we continue to look at various infrastructure needs and how we will be competing for those limited financial resources. In addition, we have seen that the Sonoma County Water Agency has done some upgrades to their aqueducts to increase their seismic reliability. So that's reduced the potential risk hopefully for any kind of disruption to their system. And we are also going to be working with the water agency on a regional water supply resiliency study. That contract is tentatively looking to go to their board in early next year. And the first phase of the work would be to develop a modeling framework and plan of action for looking at potential options and regional water supply resiliency. In terms of where we are with converting and potentially looking at new wells these are a number of projects that we had started under the Emergency Groundwater Program and pleased to say that a place to play is one of the test warrings that we've been looking at converting. We have completed the design and actually the little design at the bottom there is gonna be sort of the designed fence that would be around potentially the place to play groundwater well. We are scheduled to go to the Arts and Public Places Committee in early December next month. And if we get approval from them then we can move forward to the city council with the master plan amendment and then could potentially go out to construction to convert that well to, or that test boring to a well. We also had a test boring at Madrone School and we worked with them quite a bit. And due to a number of different changes including some changes they made to their facility building a new track. Sorry, keep that, sorry. Building a new track as well as an athletic field they are now no longer interested in working with the city to have a pump station put on their property. And then another opportunity we're continuing to have some discussions with the parks department about a number of other test borings that are on various parks facilities to see if we can look to convert those test borings to emergency wells with the associated pump stations. We're also exploring additional opportunities. One of the things that we have been in discussions with the parks department is is in relation to the Bennett Valley golf course. They have a need for some new wells for irrigation purposes. We have a need for potentially emergency groundwater supply. So it seems like there could be a good potential partnership opportunity there. We're exploring what that could look like. And if there is opportunity there we'd sort of take next steps to identify what that would be, what the costs would be and regulatorily if there's any challenges for us to do something of that nature. But it seems like if we can find partnership opportunities that provide mutual benefit definitely areas that we're looking to target and explore. We also are still in the process of finalizing the easement with the highway site that I know came in front of the board a bit ago. Oakmont treatment plant, we have looked at that site from various ways. We do own that site so that was appealing from that perspective. Makes it a little easier for the property acquisition challenges. But that has a number of constraints. So we're making one last look to see if there's any potential opportunities for a well there but there might not be just because of creeks and setbacks as well as a number of other site conditions that could prevent the opportunity for a well. And then also we had done a lot of work on property that we acquired on Spears Road to look at putting a emergency well there. We've continued to have a lot of concerns and questions from the residents in that area. We held three community meetings and then of course last year with the fires a number of things got postponed and disrupted and our focus was elsewhere. So we haven't been back to Spears Road but that's something that we do need to sort of regroup and reconsider and see how we might move that forward. We had committed to doing a fourth community meeting with the residents in that area. So those are all the potential opportunities that we have been looking at for new emergency wells either test warrings that we can convert or properties that we have that we own. In terms of our current emergency supply, again, we're looking to focus on ensuring that we keep that emergency supply in place. We embarked upon upgrades at Farmers Lane Well. Those upgrades in terms of the construction for increasing the production capacity have been completed and so we're finalizing those. We have been looking at a number of improvements that we have to do at Carly and Peter Springs and so evaluations have been completed and then we would be looking to sort of have projects at both of those in the very near term. In terms of Leetwell, we are still in the need to evaluate that well to see what would be needed for rehabilitation and so that will we're gonna complete that and see if it's worthwhile for us to make those improvements and have that emergency supply in our portfolio. Collectively from these wells, it's potential for approximately 15 gallons per person per day of emergency supply. So that is a pretty good amount of supply. So in terms of where we're going in next steps, we are suggesting that in 2019, we'd be bringing some information back and conduct a study session with the BPU to relook at the level of service for emergency supply. One of the documents that we have is a recommendation by FEMA and EPA and the Red Cross for emergency supply that could be as low as 0.5 to five gallons per person per day. I will just acknowledge and quote from the document that it is looking at drinking food preparation and hygiene related to health and safety just for residents, but emergency water required for firefighting hygiene and other needs is beyond the scope of that document. So I just wanted to make that for context. But that is something we could look at, that level of service and just providing for residents. We have the ability to utilize our existing wells and continuing to reinforce that. So getting those rehabilitation projects implemented at Carly, Peter Springs and LEET. And then seeing if it still makes sense to use the amount of groundwater that we considered as part of the development of the groundwater master plan. In addition, really focusing on the regional opportunities that could be available for using existing groundwater supplies, such as looking at partnering with local cities or exploring more opportunities that might be there for agricultural wells or other potential wells where we could look at mutual benefits, such as if there's another opportunity at a different golf course or something like that. So with that, I'm happy to answer any questions that you may have and thank you for your time. Thank you very much. Board Member Pesci, Board Member Dow. For first, I wanna commend staff for taking a look at this and certainly the five year kind of plan that you stated, Ms. Burke, is to really go back and look at it where we are. I think that's what we need to continue to be doing. One of the things that jumped off in my mind was, I know many of us, including myself, when we were thinking about establishing an emergency groundwater well system, we were thinking of earthquake. Well, lo and behold, we got a serious fire a year ago which was certainly category emergency, but it has different repercussions than an earthquake would when we were trying to say, how are we gonna get water from the west side of our community over to help supply the east side of our community? So I think we do have to continue to look at these issues and adjust as conditions change or our knowledge changes. I was very happy to see that, I still wanna call it the Sonoma County Water Agency, but I have to say Sonoma Water, that they're looking at what's their resiliency because if something really serious happens in their neighborhood, then we don't have any water supply coming from the east potentially for some period of time. So I think some of the other things that you're doing is looking at regional partnering with Rotor Park, Ag, whatever else may also be very fruitful for us to look at. So I'm happy with the fact that you're making progress about this and that we're not stuck going down the same road without evaluating is it still the best road to go down? So I appreciate it. Thank you. Great. Other board member questions? So I guess I kind of following up on what board member Dowd said, if we're looking for partnerships, should we be looking to the county of Sonoma County Water as one of our partners in developing more resiliency? I mean, we buy a lot of water from Sonoma County Water and to what extent does our purchase pose on them an obligation to assist us in weathering emergencies? Yeah, I think that's a great question and I think that's part of what the regional resiliency water supply is gonna look at. It's gonna sort of develop a framework and a model so that we can look at different scenarios, whether it's an emergency scenario, whether it's climate change scenarios and the impacts that that will potentially have on their water supply and what that means and where they would potentially have troubles with their infrastructure and could there be opportunities for us to look at developing things with groups of contractors, with the water agency, et cetera. So I think all of that is gonna be looked at as well. Great. Other questions? Board member Grable. Yeah, I know I second all these comments. In terms of resiliency and contingencies, it seems to behoove us to have as much diverse, you know, as much diversity in our portfolio as possible. This moment, especially considering just the likelihood of more massive wildfires and from what I understand the lack of moisture, the continual decline in moisture content and vegetation relative to temperature changes is apparently exponential. And so, you know, just adapting to that through diversification of it seems to be our duty to do that. I sat with Lisa McKaylee, Dr. Lisa McKaylee at Pepperwood yesterday and she is working with the water agency on their hazard mitigation plan for Lake Sonoma for instance. And I know the last year at the watershed task force we had discussed similar sort of contingencies if there were to be a severe carbon contamination to any of the gravel filtration system in the Russian River. So it does seem to me for us to have as many, not just many, but geographically diverse locations in terms of emergency groundwater wells with as many partners as possible and maybe with the infrastructure in place to be able to onboard that quickly. I just think it's, you know, crucial. So thank you. Good. Any other questions? Yes, board member Muller. Thank you. Again, I want to second the comments earlier about the presentation, how thorough and obviously the staff has spent a lot of time to develop this program and over the years and bring it forward. Following up on some of the earlier comments about disaster preparedness and the example being the fires a year ago here where it devastated Santa Rosa but didn't devastate Runner Park or didn't devastate Windsor. And the Sonoma Water Agency is sort of the big dog in this because we're all sort of connected to them in some way or another. And so it's part of our regional effort that you described as the resiliency study. Is that the one that's looking at the regional effort about all the stakeholders coming and coming up with something for the whole basin that would meet all of our needs? Because the fact that we're already have infrastructure connecting us gives the ability in a scenario that we just had a year ago to wheel water from Runner Park all the way down to Marin to meet the disaster needs up here or vice versa if it got forbid if it happens again. So is that part of this regional effort, this resiliency study that you were describing? So we're still putting that together and working on the scope and the contract would be going like I said early next year. But yes, that is the intent is to look at the water agency's infrastructure in coordination with all of the contractors infrastructure and do some modeling work to understand where there could be potential disruptions, what those could be, what those could mean and looking at the gamut from natural disasters that happen sort of instantaneously like earthquake or fire or something to that effect, two things like climate change to really see where we could look to develop potential projects and really look at the modeling. So it'll be a two-phased approach. The first will be sort of putting the parameters together and what we want to look at. And then once all that's built then it would be actually running a number, building the model and running a number of those scenarios. So has that sort of discussion been taking place in the water agencies, Sonoma Waters study in the last year or so? So we, there have been a lot of discussions to kind of look at more regional opportunities and the water agency put out an RFP. And so a number of the contractors sat on the proposal review, including Santa Rosa, and looked at the various consultant proposals and what we're looking at. And so it's brand new, it's just starting, but that's what we'll be looking at going forward. And so how those opportunities could work with and potentially alleviate perhaps our need to develop as much groundwater. And that's what we'd be looking at as well as other opportunities. And then my last question is some years back I, there was a part of a study was also on groundwater recharge, trying to look at the Russian river at the excess water that goes out to the ocean in the wintertime and capturing some of that and bringing it back and recharging, which may work on some of these well sites that you described that we hope to get a higher yield but testing has shown that it isn't, is that still a part of what we're looking at? So two different things, two different studies. One is aqua storage and recovery. And so looking at, so those higher winter flows and seeing if we can move those through the water agency's infrastructure and then recharge the groundwater basin and then potentially bring those flows up in times of higher demand or bring that water back up. So there is a pilot study that is occurring as a partnership between, this is gonna sound funny, Sonoma Water and Sonoma Water. City of Sonoma with the Sonoma County Water Agency, Sonoma Water, so they are partnering together on a pilot study for aqua storage and recovery. They built the sort of regulatory framework working with the regional board to look at those options. And so if that is successful, there could be potential future additional options for other entities, including Santa Rosa and other contractors. They also did a study looking at three different geographical areas on sort of stormwater retention and recharge of the basin and looking at opportunities for projects that could provide both sort of stormwater benefit in terms of slowing, sinking the water into the basin and groundwater recharge. And so those studies have also been then looked at various things. And I think going forward, those will also be things that would help shape potentially where we're looking to go with the groundwater sustainability plan in relation to the GSA and kind of looking at the groundwater basin. So there's a couple different things that are being looked at and hopefully that kind of tied those together. Thank you. Any other questions? Thank you very much. Thank you. We have one item on the consent calendar. Does anybody wish to remove that item from the consent calendar? Do I have a motion to approve the consent calendar? Can move to second it. All in favor say aye. Aye. Opposed? Abstentions? Thank you. And that brings us to the riveting topic of bond refinancing. Don't be scared by the size of the attachments. The presentation is pretty brief and clear as you would expect for refinance. Great. Good afternoon, Vice Chairman Arnone and members of the board. I'm here just to introduce our financial advisors who will be giving the presentation for you today. Several months ago, the financial advisors came to us and said that there's a good opportunity for us to get some savings by refunding our bonds. And so we have been working at a fairly quick pace to try to get this taken care of before interest rates are rising and before the end of the year. And so with that, we have been working to gather all the data that's needed for that. And we will be moving forward if you recommend to the city council on the 27th of November. And so I'm going to pass it over to Sarah from PFM and she is going to provide all of the presentation information. Thank you. Good afternoon, thank you. Sarah Holland Beckham, I'm a managing director with PFM financial advisors and we've had the pleasure of working with the city for many years. So it's a pleasure to be before you again today. As was indicated, we have been working to capture what continues to be a very favorable rate environment to take advantage of an opportunity to generate savings, both with respect to water revenue bonds that the city has outstanding as well as a series of wastewater revenue bonds. The chart before you reflects both the current interest rate yield curve for the what's the benchmark in the municipal market, the MMD index. And that is the line on the graph, the yield curve ranging from years one through 30. And as you can see, well with the recent Fed action, the shorter end, so the one year interest rate has come up so that it's now about 2%, long-term rates continue to be very attractive at just about three and a half percent. So there is still an opportunity to save money in today's market. And the percentages, which is the left-hand axis shows the percentage of time that that municipal market benchmark index, the MMD index has been below the rate it is today. So as you can see, while the short-term rates are about half the time they've been lower since the historic, this index goes back to 1993, when you get out to 10 years and beyond, rates really haven't been lower than today, more than 20 to 30% of the time. So we're still in a very favorable market from a historic perspective. And that creates the opportunities we're gonna talk about to refinance and capture some savings. The proposed refunding transaction on the water system side is to refinance the outstanding series 2008 water revenue bonds that will allow us to achieve debt service savings. It's about a million, excuse me, $11 million of bonds that are outstanding and we would expect to be able to generate about 1.2 million of net present value savings, which translates into about 132,000 of cash flow savings on an annual basis. Part of what's generating this advantageous result is the fact that the investor marketplace with the ratings that you carry on this debt, which are AA plus from Standard & Poor's and AA two from Moody's, the investors no longer require utilities with these strong ratings to carry a reserve fund. So you're able to use the cash that's in the reserve fund to reduce the size of the refunding issuance, and that helps to enhance the savings, which relative to the benchmark in municipal finance of refinancing bonds that generate at least a minimum threshold of 3% savings, we're looking at about 11% here. So that's a very favorable outcome. And the final maturity is still going to stay the same, which is September 1 of 2038, and all the costs of executing the transaction are taken into account in estimating the savings before you. So in other words, they're rolled into what you're seeing there. There's not costs that are gonna be taken out of that savings figure. Moving on to the wastewater system, we have about 17.7 million of 2007 a wastewater revenue bonds that we could not refinance when we refinanced the rest of the 2007 a bonds in a prior, I think it was in 2016. And that just had to do with the tax required, some tax restrictions on those bonds, without getting into the particulars. It wasn't something we had an opportunity to do then, but we knew we would want to do it in the future. And we're now back to recommend refinancing the remaining portion of the 2007 a bonds. We expect that this will generate about 850, almost 1000 of net present value savings. So it's not as robust, but it's primarily because we've already refinanced the rest of those bonds that were very attractive from a savings perspective, but it does generate about 54,000 on an annual cash flow basis and is achieving about 4.8% savings. So while we're in the market and while we're putting your staff through all the trials and tribulations of pulling together a bond financing, it seemed to be advantageous to go ahead and generate these savings because we do know that every bit counts and there are significant capital projects coming forward. So the better position we can put the city in to be able to potentially finance those projects or some portion of those projects in the future seem to be the right thing to suggest that you would do. I would note that the savings reflected here do assume we're in a process of seeking and discussing some small changes to the outstanding debt service surety bond, which is currently satisfying the reserve requirement with respect to the outstanding 2007 bonds in the reserve fund and the bond insurer and back we expect will agree to certain changes to the reserve surety bond language that are needed to be able to effectuate this transaction. So we are wanted to just bring your attention to the fact that that's a process that's ongoing. We expect a favorable result. We just haven't gotten them to move as quickly as we would have liked. We do expect that that will be wrapped up prior to the council action on this item. And if you wanna know more details about that process Chris Lynch from Jones Hall, who's the city's bond council is also here and could share more details with you. Again, the final maturity on these bonds is not changing. These bonds do mature nine one of 2037 and that isn't changing. And again, the costs associated with the completion of this refinancing are taken into account in their savings numbers that you see before you. So just to run through the next steps that we will be taking as I mentioned should the board choose to forward this to the city council, we would anticipate bringing both of these items to the council on November 27th. We have a rating call scheduled with standard and pours next week. We are only seeking one rating from standard and pours for each of these. The enterprises do have outstanding ratings from both standard and pours and Moody's but given the size of these transactions and the fact that the market does not require multiple ratings the way that it used to, particularly for smaller transactions like this it's simply not cost effective to pay for another $20 to $25,000 rating. So investors it's very common in the current market to see transactions of this size and this size range with a single rating from standard and pours. And to be honest with you Moody's while they don't like it, they understand. The ratings are split and you have a higher rating from S&P on each of these credits and we've had the conversation with Moody's they don't take it personally and they're not gonna do anything to your existing outstanding rating as a result of you not seeking a rating on these refunding bonds. However, it just is an additional cost that would offset diminish the savings. So it doesn't preclude a decision you might make on a future transaction that might be larger to go ahead and seek multiple ratings again but it's just the most efficient way to proceed with these transactions. So with that being said, we would anticipate receiving that rating the week of the 26th and then hope to price the bonds the first week of December to be closed in early January. And we'd be happy to respond to any questions you might have. Great, thank you very much. And that was the presentation of both items 7.1 and 7.2 covering both of those items. Good, any board member questions? There are resolutions associated with each item. I guess we should take those up individually. Do you want me to read out the recommendation first and then you can take each item separately? Sure. Okay, so 7.1. So it is recommended by the finance department and the water department that the board of public utilities by resolution recommend that the center as a city council authorize the issuance of wastewater revenue refunding bonds series 2018A and all related actions in order to redeem certain outstanding waste water revenue bonds for debt service savings. So moved. So moved. I second. Okay, it's been moved and seconded. Need further discussion? I don't believe we need a roll call for this. So all in favor say aye. Aye. Opposed? Abstaining. So item 7.2 then. So the recommendation is? So item 7.2, it is recommended by the finance department and the water department that the board of public utilities by resolution recommend that the center as a city council authorize the issuance of water revenue refunding bond series 2018 and all related actions in order to redeem the city's outstanding water revenue bonds for debt service savings. So moved. Second. It's been moved and seconded. Discussion? All in favor say aye. Aye. Opposed? Abstaining. Passes unanimously. Thank you very much. So do we have any public comments on non-agenda items? Seeing no one rise. I see no referrals, no written communications, any subcommittee reports from board members? Seeing none. Any board member reports? And that takes us to a drum roll with our final director's report. I do have a few items today to share with you. We're gonna be meeting with the ag user group on November 26. Based on the feedback we've received from them generally and from the ad hoc committee when we looked at various rate structures. For this meeting we're gonna be narrowing down focusing on a specific rate structure with uniform rates, no tiers, or the allocation base rates and see how that goes. The city attorney's office is also working with us in parallel on a draft agreement that would be standard for all users with the expectation that unlike now with the rates in all of the different contracts, a new contract would be uniform in point to a rate schedule. And that is beneficial for a number of reasons. Uniformity, giving ability to change rates as needed during the life of the contract and that sort of stuff. So together, what we think in the sense is that this may go a bit smoother than, you know, hope for the best plan for the worst. But what we're feeling relatively positive about the direction we're going and the level of lift we're asking for those customers, there may be a couple other pieces that will continue to work with the ad customers on including frost protection. We've been thinking about something like a fee for service for frost protection because as you may know, when they need frost protection is not the irrigation season. And Murphy's law typically happens in the middle of the night on a weekend, not necessarily, but it does take quite an effort and scramble from staff and the benefit to the rate base is relatively low because there's not much water consumed or utilized for all that effort. But we'll be bringing more of these details back to the ad hoc and the full BPU. And then also thinking about equipment that we provide to support irrigation that again is to some extent a legacy issue back when we were doing everything possible to support the customers to use a maximum amount of water. And now we do find ourselves in a place where some customers get equipment from us, some don't and moving to a more uniform approach and possibly a fee for service for equipment rental or us providing equipment and maintaining it, something like that. Moving on, an update on where we are on water supply and down the road, Ms. Burke, will be giving more detailed updates. Finally, the forecast does have some rain there, but before I get there, water levels in both Lake Mendocino and Lake Sonoma are in very good condition with Lake Mendocino at 100.7% of the target water supply curve in Lake Sonoma at 76% of the water supply pool yet we do know it's been a relatively dry winter. So that really speaks well for our conservation efforts in just our general position in water supply. Since October 1st, which is the start of the water year, we've received 1.23 inches of rainfall compared to our average of 3.14, so. But with the forecast, it's still 50% but over multiple days, we do expect that we'll get some rain. Also wanted to share with you is you probably expect with the air quality, there's been a lot of coordination with staff in terms of limiting outside work and wearing protective gear as necessary. So that work is continuing and of course the expectation with the storm coming in will get some dispersion of the pollutant load that we're all living with. Lastly, I wanted to share that the microgrid project that you've over time been hearing quite a bit about and it is such an attractive project is struggling a bit and it's probably premature for me to say this, I just didn't wanna leave without giving you the latest update and letting someone else share the lesson, great news. What we're still confident it's gonna move forward but the confidence has decreased from 100% confidence in that a number of issues, including train overall, what we aren't sure if it's where with all or relative priorities or resources but we are escalating through their organization to get their attention on this project. What's really driving it is there's a fairly tight time schedule from the California Energy Commission grant that funded this in its entirety and there's questions from them in terms of can they provide another extension and they're starting to question is train really gonna be able to do this in the timeframe that they're able to provide not just in terms of the construction and startup of this project but also in terms of the intertie with PG and E that not for lack of our prompting but they've left for the rather last minute and PG and E is not historically known as turning on a dime in terms of responsiveness. So collectively, there's just question marks that I did wanna share and certainly staff will be providing updates as this move forward. Personally, I believe it will happen. It's too good of a project. I believe we'll be able to ratchet up the attention with train, with PG and E and have it all come together but it is gonna take considerable staff attention and resources to do this. Thank you and Dr. Ornstein, this is your last report. I just wanted to express my appreciation for what's been a difficult year for you and the whole city but I think we've all come through this together and largely from the leadership and of course the rest of the Santa Rosa water has taken us through this crisis effectively and wish you the best in your future endeavors. Thank you. Meeting adjourned.