 Good afternoon. I'd like to call the meeting of the Board of Public Utilities for the city of Santa Rosa to order May we have a roll call, please? Board Member Walsh here Board Member Watts is absent Board Member Wright Here Board Member Barthelot here Board Member Batenfort here Vice Chair Arnone here and Chair Galvin here All right, let the record reflect that all board members are present with the exception of Board Member Watts Thank you. Good afternoon again Item number two on our agenda is a statement of abstention by board members or member Barthelot. Yes Before we begin discussion on item 3.2, which is the regional budget I will be recusing myself from participating in the discussion on the matter to avoid any actual or perceived Conflicts of interest stemming from my employment at Sonoma County Farm Bureau The Farm Bureau advocates on behalf of its members and some of our members Contract with Santa Rosa water for delivery of recycled water So because the reasonable but regional budget Includes operations and maintenance costs and capital expenditures for the geysers pipeline and Santa Rosa waters Agricultural reclamation system or generally out of an abundance of caution I will be stepping out from the days and exiting council chambers when item 3.2 comes up Thank You board member Barthelot any other statements of abstention by board members All right, we will move to our study for study session item 3.1 director Burke Thank You chair Galvin and members of the board our first study session is on our fiscal year 2023-24 local wastewater water and stormwater and creeks funds operation maintenance and capital expenditure requests and Making the presentation will be Kimberly Zanino our deputy director of administration Nick Harvey our budget and financial analysis manager and Lori Urbana our deputy director of engineering resources Okay, good afternoon chair Galvin and members of the board We are here as director Burke said to talk about the proposed fiscal year 2023-24 CIP and O&M budgets for water wastewater stormwater and creeks and later on the regional budget So to begin with I'm going to start by giving you an overview of all of our enterprise funds Because this year the City Charter changed and now the BPU is responsible for reviewing and Proposed or proposing a recommendation to the city council We wanted to talk a little bit about our various enterprise funds So that you could get some more detail on the stormwater and creek enterprise I will be going over all of them just because we thought it would be a good refresher So first we'll talk about water wastewater in regional and then I will go into the details about the stormwater and creeks enterprise So I will begin with the water enterprise funds The water enterprise is funded primarily by ratepayers We have approximately 54,000 water accounts Those customers pay for both a water use and a water fix charge and they pay for those Depending on the type of customer either a single tier or a multi-tier rate Our residential customers pay in a two-tier rate as well as our irrigation customers and our commercial and Multifamily pay at a single commodity rate per thousand gallons For context here we are providing you with the total amount of rate revenue that was collected in fiscal year 2021-22 You may recall that on a bi-monthly basis you actually get a report from me It's a memo that memo is providing you with Details on the collection of that revenue and how we are trending From our projections to the collection of that revenue We also collect fees that are demand fees or connection fees As well as miscellaneous fees and those are the other revenue sources in our water enterprise The miscellaneous fees are for anything from a meter fee to a fine To an inspection fee and those fees are charged for Services that we provide that do not go across the entire rate payer base Next we will talk about the wastewater enterprise This enterprise is also funded primarily by ratepayers. We have approximately 50,000 accounts that have sewer We also charge them a sewer usage and a sewer fixed charge There is not however a tiered system on the sewer side, but there are varying charges So there are different rates for different customers depends on the type of customer and it also depends on the strength of the wastewater that they produce In addition, we also collect demand fees for connecting to our sewer system And then we also collect other miscellaneous fees as well on the wastewater enterprise I did add one additional revenue source here the South Park sanitation district Those customers pay their sewer fees to South Park sanitation through their taxes However, they do not maintain that collection system We maintain that collection system for them and so we pay or they pay us a fee in order to do that I'm also showing you here rates or that were collected from 2021-22 both from the sewer and Usage and fixed charges and then those other miscellaneous fees that we collect as for the regional enterprise It is funded by our five partners All of the cost for the regional system operating and maintaining that system are distributed between those five partners Based on various factors You can see here that the operating costs are distributed by actual flow into the plant debt service payments are calculated based on when debt was incurred and the type of project it was incurred for CIP costs are distributed per the percentages defined in the partner agreement And then Santa Rosa water share is paid by our waste wastewater or our sewer customers So as I said because of the change in the city charter And now having the board of public utilities review the stormwater and creeks funding and their budget We wanted to give you some detail on that enterprise fund So the enterprise fund was developed in 1990 or 1996 when the city council added title 16 to the city charter Those fees are used for regulatory compliance It is an annual fee that is charged per parcel those Fees are also or that that funding is also supplemented by a small amount of general funds And then their cip is actually funded by various development fees that we collect gas tax and grants Unlike in the water funds where we have a defined amount of funding that goes to cip and it's increased annually Unfortunately on the stormwater and creek side Their funding is very limited and their cip is developed and prioritized based on the funding that is available to them The revenue that is collected as I said is primarily for state and federal regulatory requirements and meeting those requirements It is not sufficient to cover infrastructure improvements If we were to cover infrastructure improvements, there would need to be an increase in that And it would have to be fairly significant The funding split on the the revenue that's collected from them is Typically 47 of that funding goes to stormwater and 53 goes to creeks There is an annual escalator on it. It's based on the consumer price index, which is called out in the city charter as well And we are providing for you here a look at what the cost is per equivalent residential unit For 2022 23 Those fees are billed on the property taxes by the Sonoma county assessor So because Each of our enterprises funds are slightly different as as far as their regulatory requirements We wanted to provide you with a little bit of data about that Water and sewer rate payer funds are governed by proposition 218 There are some pretty strict Regulations that go along with that Things like they cannot intermingle funds. So we cannot use wastewater funding to pay for Water operations and we can't use water funding to pay for wastewater operations We are also not allowed to subsidize customers So we can't take rates that we collect from one set of customers and pay for another customer's charges with it We also are required to develop our rates and they must be based on the cost of providing those services to our customers Those rates have to go through as well a public hearing process As for the regional funding As I said, santa rosa water pays for our portion of the regional system and what it costs to operate and maintain it from our sewer rate payer funds And the distribution of those costs Is all governed by the sub regional agreement On the stormwater side, uh, they are allowed to use that funding for either stormwater or creeks So there isn't the intermingling issue going on there and also if we were to Propose an increase Anything above the approved cpi Would have to go to a citywide vote So now i'm going to hand off the presentation to mr. Harvey But I will be here at the end of the presentation and available if you have any questions about the information on the funds Thank you. Good afternoon. Uh, moving on to discuss the staff assumptions coming into play In consideration of our 23 24 budget Our revenue assumptions for 23 24 include an anticipated increase in water delivery volumes of approximately 5 percent Which is based on historical experience in years following drought We're expecting sewer use to remain essentially flat and to develop and development to remain stable And per our currently adopted rate structure. We're implementing three percent and two percent increases in water and sewer respectively And that will be effective july 1 2023 So here's a look at the onem line items where we're seeing increases that are generally affecting the water wastewater and stormwater prices equally I'm going to discuss a few of these items here and give more specifics on certain line items later in the presentation When we look at the more fund specific impacts First off, I'd like to point out that city overhead and vehicle costs are not discretionary items for our department Those items are actually allocated out by the finance department to pay for core city services and internal service funds And as such we're absorbing increases here in line with those being realized by other city departments We have a two and a half percent base salary increase across the board coming in july 2023 per currently adopted mo use And given the uncertainty around possible pg and a rate increases this year our cfo and budget team have Dictated that all departments citywide are to increase planned electricity budgets by 15 percent Over the fiscal year 22 23 adopted budgets With the understanding that if needed a separate line item will go to city council mid-year Requesting an increase to appropriations due to the pg and a rate impacts Okay, here's a high level glance our anticipated onem expenditure budget increases for the three enterprises under your consideration As mentioned earlier, I'll dive a bit into more of the detail and fund specific impacts later on But I thought this also serves as a great reminder the funding mix involved when we talk about stormwater increase Uh, so you can see it's a split between enterprise funding and general funding Approximately 37 and 63 respectively So here the onem expenditures by line item for the water fund A quick glance at this chart clearly indicates our largest year-over-year increase to water operating costs is the water purchase line item We'll be going into a bit more detail on that on a following slide We are increasing spending in the miscellaneous category due in large parts who recently adopted department policy of subsidizing certification costs For those who have such certifications as requirements of their positions And although we're seeing a sharp increase in a couple of line items here The net effect of those increases are being significantly offset by the large reduction in our budget requests for onem projects So the two main factors affecting our water purchase budget Are both water delivery volumes and changes to the Sonoma water wholesale rate Sonoma water as you all know is put forth a 10.56 percent wholesale water rate increase for next fiscal year And as I mentioned earlier, we're also assuming a rebound in the volume of water deliveries of about five percent Those two factors together contribute to the purchase of water being our highest increase in our water operating budget So here's a visual representation of the makeup of the budgeted costs and the water operations fund And this really highlights as you can see there the lion's share of that chart is our water purchase budget So it shows you just what an impact it has So moving on to our local wastewater budget the largest line item increase is miscellaneous expenditures at 17 and a half percent This is due primarily to the enterprise having 25 uso one employees who will all need certification next year Significant reductions and other line items however result in local wastewater only realizing a 1.6 percent net budget increase on the air And since we showed it to you for water We thought we'd share the graphical analysis of our onem costs for this wastewater side as well So when we look at our budgeted revenues versus expenditures for the water enterprise Now you can see that we're budgeting for for a small deficit in the water fund This is attributable to the increased water purchase budget we spoke about We're planning on absorbing this deficit with undesignated fund balance to avoid any direct impacts on our customers rates Similar to the water fund on the wastewater side. We're also planning to absorb a small budgetary deficit with undesignated fund balance As a reminder, we also see santa riz's contribution to The regional enterprise for operating costs here as well as deputy director zanino mentioned it is our Local wastewater rate structure that funds santa riz's contribution to the regional system So here's a look a look at our local reserve levels for each of the operating funds as of june 30 2022 And as we've seen historically we continue to see strong undesignated fund balances So looking at the stormwater and creeks onem line items overhead obviously sticks out with an almost 88 percent increase This is due to a one-time adjustment that was made last year And as such this isn't so much a budgetary increase as it is a return to normal with regard to that that line item in the budget They're also adding some debt service costs relating to the purchase of property for the lower colgan creek restoration phase three Uh cip project, which will be featured in the cip portion of our presentation a little later So here's a chart summarizing the stormwater and creeks proposed 3.3 million dollar onem budget for the year I wanted to touch on the stormwater and creeks reserve balances since we spoke about it on the water side They only carry undesignated fund balances With water and wastewater being utilities with Stakeholders and outstanding debt issuances. There are several required reserves set aside in those operating funds They aren't required here as stormwater and creeks is not a utility Okay, moving on to our cip funding water is appropriating a little over 14 and a half million dollars for projects next year Here we see the category breakdown Oh, sorry This is a high level summary, but we're planning to invest in capital projects next year for the three enterprises We're discussing today And we'll spend the rest of this presentation offering a more detailed look at our proposed to cip programming Okay, here we see the water is appropriating a little over 14 and a half million dollars for projects next year We like to show the category breakdown by both percentage of the total and the dollar amounts involved We're continuing to invest our cip dollars in key water delivery infrastructure And bolstering potential future groundwater supplies On the local wastewater side, we're planning we're programming 13 and a half million for next year with the bulk of the funding Being invested in sewer trunk infrastructure, which has become a higher priority for us in recent years And moving on to the stormwater cip budget Stormwater and creeks is programming a little over 1.6 million in projects next year A little under a quarter of their total cip investment is going towards programmatic projects Which are crucial to the stormwater and creeks team It's it's this it's the funding of these types of projects that gives them the organizational agility to react to things such as Dumping and creeks hazardous spills without having any major disruptions to their budget And the remainder of their cip funding being spread across the lower four projects there on the slide So before we get into any project specifics, I wanted to give you a brief overview of how our cip funding sheet works We've left a copy for each of you at the dais So high level The way these sheets work is essentially for any given enterprise The headers on the left and anything under a gray header Represents past or present Cip programming So those are appropriations that were given in some prior year and still exist within each of the projects And anything to the right with a bold color header represents Those amounts having to do with our proposed five-year cip budget As a reminder, we're only ever asking you to formally approve year one of the cip budget But we always like to display the full five-year look as a planning tool And i'll briefly touch on the different funding types of projects There are new projects Which are projects that have never received any programming in Either currently or in the past and are slated to receive their first cip dollars in the five-year cip plan There's carryover projects Which represent projects that have existing appropriations from some prior year and are not Planned to have any dollars programmed in the next five years There's continuing projects, which are projects that have Existing funding or have had some funding in the past and are continuing to receive funding in the five-year look And the canceled project status Which you'll see is is not very widely represented on the sheet Because those represent projects that we either know are going to be completed by the end of this fiscal year Or have been de or reprioritized based on other needs in the organization Okay, and with that i'm going to introduce laurea bannock deputy director of engineering resources with santa rosa water to speak to the cip Thank you. So this is a basic overview of what i'll be talking a little bit about Primarily, we're just going to highlight year one funding and a couple of these various Separate enterprise funds such as water sewer and storm water. You'll notice that We are going to talk a little bit about, you know, the water mains and services Which is pretty typical on the water projects groundwater program And with a high focus on our pump station as part of our backbone infrastructures I'll be highlighting some of that And correspondingly on the sewer side We'll talk a lot about some of the major projects on trunks And storm water one of our favorite projects Is the lower colgan creek restoration project phase three Next slide So the salem avenue and clement avenue sewer and water replacement project is one of those typical projects that we used to do a number of And we don't do that many now This is in a commercial area near mendicino and we're upsizing the sewer and water main This is found in the water funding sheet And you'll find also a corresponding PID of the same project on your sewer sheets as well So this is the water estimate for the project of $850,000 And we expect to move into design and anticipate construction to occur or be ready to commence in year two On the groundwater program. This is the leet well rehabilitation and it's part of The water groundwater master plan one of the recommendation is to increase and provide emergency water supply The estimated project cost is 2.9 million dollars And we've completed the assessment And we're going to have a meeting here soon to talk about which parts we're going to do But we're really focusing on a rehabilitation not a reconstruction Design will occur in year one and construction. Hopefully we'll proceed in year two Water pump stations again, this is some of our backbone infrastructure And we're doing a significant amount of work on the pump stations on pump station 10 We're going to expand the building to install a third dedicated high flow pump And in station 14 Similar type of activities where we're going to remove and replace the pumps there with high flow pumps And for my engineering friends out there The we're replacing 800 gallon flows to 1500 gpms gallons per minute. So a significant increase in flow volume Again another pump station. This one is sort of near and dear to our operations folks Station four which is on Sonoma and farmers lane extension. I'm sure you're all familiar with that We had a condition assessment done And evaluated the structural and operational needs of our crews And so we're anticipating design to commence this coming year And we estimate the total project cost at about 1.4 million dollars and that may vary depending on Which items in the assessment that we decide to take on? And then hopefully we'll follow with construction in year two Here is the corresponding wastewater For the Salem and Clement Avenue sewer and water replacement project again very similar The sewer estimate is close to a million dollars and will the design will occur concurrently with the water, of course And as I mentioned We are doing a significant number of projects as far as the linings go And the rehabilitation this happens to be one of our replacement projects and It's getting very near to construction Actually really near because we opened bids recently on this project And we'll be back before the board likely at the next meeting for an anticipated construction award This first phase of a multi-phase replacement is from stream side to a lane drive And the year one funding here. I do have to Admit to a mistake. It shows the total project estimated cost at four million dollars That's an error That is the year one funding. So my apologies The anticipated total project cost is about 14 million dollars And again on the wastewater side A master plan revealed that we have some significant deficiencies in our sewer siphons So this project will take on a number of those siphons and rehabilitate them with utilizing trenchless technology Such as cipp cure in place Pipe That'll eliminate the need for a lot of open trenching as some of these siphons occur in creeks We do have a a significant amount of environmental mental work to take care of before we get into construction activities We're hoping that this will uh go through design in year one and constructions will occur probably We know for sure two to three phases. So the subsequent years years two and three In addition, we oh, that's okay. Um, we are installing doing some modifications for operation staff while we do this siphon rehabilitation Um, we'll be installing um grit chambers upstream and for those of you that don't know what those are They're like a manhole with a drop inlet where the elevation has to bubble up and it allows sediment and other materials that could clog the siphons to settle out before we go It also provides an easy location for operation staff to then vacuum out and clean the siphons And one more trunk that we're working on this is the robeless trunk and this will be another trenchless technology situation with a cipp lining We anticipate this project to cost about total about 5.3 million dollars This is also in an area where we anticipate some environmental issues and mitigation that we may have to come up with We're anticipating year one And design and again, hopefully construction in the subsequent years And here's one of our favorite projects I get to highlight So, um, we have completed storm water has done a fantastic job completing phase one and phase two This is phase three that will connect to those two other phases And this really is an amazing project that the community appreciates One as we are sewer and water, they don't really have an appreciation sometimes for What's buried underground. They don't see but this is a very visible project for them It restores this particular phase will restore 2,500 feet of creek floodline channel There'll be multiple plantings of native riparian trees and shrubs shrubs And it'll also as we all have been noticing have received a lot of rain So this will also increase the flood capacity from a 25 year event to a 100 year level, which will be significant for the community Um, it also has other amenities such as paved bicycle paths and pedestrian pathways and a bridge And the other good news is that they were able to get 5.8 million dollars worth of grant funding so far for land acquisition design and construction So it's a great project And with that i'll turn it back over to nick Thank you a quick review of our remaining budget schedule As you know, we'll be back before you on april 20th a couple weeks here Are requesting your formal recommendation of the department budgets to city council 25th we'll be taking the regional budget to city council requesting Their preliminary approval of the regional budget for the purposes of notifying our partner agencies of their allocations By may 1st, which is when we like to provide that information Uh city council study sessions. I believe are actually may 9th and 10th Um, is that correct? Okay. Yeah may 9th and 10th. I apologize for the error there And uh formal budget budget adoption by city council on june 20th And with that we're happy to address any questions or comments you may have Thank you to all three of you for your presentations. I know it's a lot of work that's gone into these budgets and Very complicated charts and everything but Pulled it off. So great. I'll open it up now for any board member questions or comments board member right Yes, thank you for the presentation simple question a station for what We're going to retrofit that what are we going to do the station for Station for there's a lot of suggestions As you know, it's it's located very close to the rogers creek fault line So the evaluation did a significant seismic evaluation And there are a number of recommendations for the department to consider as far as Driving peers through the foundation And it starts to become If we initiated every Activity that the assessment evaluated one of the recommendations is to build an augment station next to it And start to do the significant rehabilitation, which almost is a tear down and a rebuild of the existing station Just because the structure itself has so many Different things along with the seismic inefficiencies in the building and others You probably know very well that one of our the most significant place in the seismic activity for a failure to occur Is at that connection point with the pump stations and the underlying plumbing that goes underground Along with the building those are other things that would be done There's also hazardous materials located in the building such as asbestos that needs to be removed and cleaned out So you can understand Just on those two assessments alone that there's a quite a bit of work that needs to be done If you'd like some additional detail, I'd have to Um Go back and read the report a little bit clearer, but those are the major components Of that project So the work is not for the pumps and things like that. It's basically for this structure itself, which I do believe That was built in the 30s or something like that. I know the fire department moved out in the 60s So it's it's an old building That's my only question. Thank you Other board member questions or comments Or member walsh Um, I certainly appreciate the uh, the explanation for some of the projects not being an engineer I appreciate the presentation And then as far as the the finance just the navigation of such a big budget overall such a big issue overall So I appreciate that and the education you give us every time Just also wanted to point out the the 5.8 million dollars in grants for the colgan creek restoration project There's a lot of agencies are funding that project takes a lot of coordination I appreciate the help from the city manager's office from the water and sewer There's a lot of that social navigation going on and uh and requests for help and I appreciate people getting that project together Thank you for your comments board member walsh any other questions or comments Board member bartholome Thank you for this great presentation so much information. Um um my question is around staff assumptions and um One of them was that water use is projected to increase by five percent And the other one was wastewater use will remain flat So It seems like if more water is being used there would be more Waste water is it because it's as a result of landscaping and things like that where the water is So we took a look at the historical rebound from drought And we projected based on that historical rebound that we've seen typically that first year We've rebounded by about five percent more use in volume And that's what we're projecting on the wastewater side the difference is that uh our residential customers all have what's called a sewer cap So sewer caps aren't really affected by water use Other than the winter water use so they don't pay on irrigation So we don't expect to see an increase in that because they still use about the same amount Internally inside their houses, which is being discharged to the sewer system So that revenue source is always very stable and doesn't have a lot of up and down Like the water side does because water side they will they'll start irrigating outside and that's going to go up But they don't pay sewer charges on that other board member questions or comments All right, I will open it up now for public comment 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 Montoya Yes, um, it looks like we have one person in chamber wishing to make a public comment and um No one on zoom and no email and voicemail public comments were received Sir if you would like to go ahead We'll pull the timer up for you And if you would like to begin by stating your name for the record, please Hi, my name is bob harder 93 27 lakewood drive winds are Some of you would know me as the previous deputy director for engineering and cip for santa rosa Years ago 1800 or something I was kind of doing what lori does now Development engineering and cip If my voice sounds scratchy it's because i'm a Scratchy record playing the same song from two years ago Maybe if you could move your microphone a little closer Is that any better? Yes. Thank you I appreciate you wanting to hear more from me Um, so you've got an update. I want to update my critique from two years ago and from a year ago and It's a critical critique and it won't be new to some of you Two years ago by happenstance, I found out that um, the city backlog Which is the amount of funds that were previously approved by the bpu and the council For water and wastewater not the treatment plant. It's kind of its own animal Had risen to about 65 million dollars When I was hired by the city it was 35 million. We did some changes. We got it back to 10 I had a stroke. Um, we've gone 15 years So looking into it. I thought to myself does anybody know the backlog of 65 million and does anybody care And by care what I mean is care enough To do something about it Not care enough to be concerned and disappointed So a year ago You understood you knew But in my measure Didn't care enough to do something staff, uh, jason was, um With you all then You know structurally and he presented through an update to the cip. I think maybe andy allen presented big picture Way out future wives It showed the 65 million, but it wasn't talked about But they had two good ideas to what could we do And one was to get more staff because um, that's largely part of the problem um And two maybe we can bring on some consultants To act like our staff a cip team like our staff to give us more manpower you might say um Staffing today is down less than it was then The cip teams there are two of them They're staffed less than 50 of their authorized levels And the development contract teams I think are maybe being used at the plant And the lorry introduced a concept new to the city which was a design build Which I think is going to be successful on the trunk sewer however Now the backlog is over 90 million dollars I haven't staffed we haven't got Mr. Harder. I'm going to need you to wrap up shortly, please. Yes, so I would say Now you know Now does the bpu care enough to direct Change Rather than just acknowledge a report. Thank you Thank you for your comments City manager Thank you very much chair galvin and uh, mr. Harder. We have talked just Some of the things that the departments And I say departments both public works and water are doing in an effort to try to address actually a lot of the things that mr. Harder mentioned We have gone out and solicited for consultants in an effort to try to bolster staff We do have three consultants two that are identified for water services and one identified for the general fund or non-enterprise We are still trying to figure out the best way of implementing those Because as we're digging in there's some nuances within the cut within the Agreements that we need to navigate around in order to make sure that we're not duplicating effort And we're not creating conflicts of interest through the 1099 procedures And so that work is proceeding in fact I do believe we have one of those that are actively doing project management on one of the groups of projects On the non-enterprise side. We are about to launch that in the next month As director Burke and I have talked over the last several months There are other options for us when it comes to utilizing consultants And we are actively working on developing program to get out on the street so that we can look for A kind of a different type of consultant than we've used in the past We just recently secured a company to provide project management and construction management oversight only for The herring community hub project, which is about an 80 million dollar Civic facility being built down off of herron avenue And their only and sole job is to act on staff's behalf We've been informed that those companies like that actually also Provide those services for linear and flat projects or linear and horizontal Which we weren't aware of previously and so trying to create the type of documentation that will set us up to be able to Qualify those companies to perform those services. Again, it's a different approach than what we've done previously A lot of the companies that are doing project management and construction management for us today are also design firms doing work The firm like the one we hired for the herring community hub is not a design firm They don't do that level of work. They only provide project management services So so it is an area that we're continuing to look at And trying to get that ready and out on the street so that we can start to understand who may be interested in more of the Traditional public works type of aspects that we're looking at From a hiring perspective, we've actually seen quite a bit of success We have a new class that we're interviewing right now With the hope of starting to fill even more of our vacancies The market's actually starting to trend in the right direction for us. We're starting to see more and more interest So we're hopeful that we'll be able to begin to fill some of those seats Our biggest challenge there is as most of the individuals we're bringing in are younger With less experience and we've seen an attrition of some of our more experienced senior individuals Out into retirement over the last year So our our effort at the moment is to try to create a mentoring program Which is actively in place to try to help those younger newer individuals understand the procedures that we're working within the organization So that we can be more efficient and effective at delivering projects and a greater volume of projects Over the course of the next couple of years so that we can begin to chip away at that backlog And chair galvin if I could just add Just a couple other things one is that um as was noted by mr. Harder We actually have taken advantage of design build and i'm excited to let the board know that our first Uh design build rfq was published today for the lano trunk lining. So that's great A lot of work and effort by staff to put that together And we're really excited about this process and we hope that's going to be the template for sewer lining going forward And also we've secured or we've secured an authorization From the water resources development act for 19.4 million We're working really hard right now on getting some appropriations And if we're able to do that we're going to put that towards our sewer trunk lining to get those projects done by the core The army core of engineers. So that's going to help us with getting those projects done We've also been Recognizing that this issue in terms of staffing is not just in our engineering group. Although that is one of our big Issues that we do have it is um department wide and city wide in the water department alone. We're seeing Unfortunately the last couple years have been seeing about a 10 percent Year over year vacancy rate and we'll hire some folks and then Some folks move on pretty much at a pretty consistent rate. So We have been working very hard as an exact staff and very grateful to our leadership in our city manager an assistant city manager that we're actually able to now use some retention and retention bonuses recruitment and retention bonuses And those have just been put out for the engineering positions. So we're really looking at it from all angles Of really how to get more staff how to get more throughput To get this work done. I think Every one of us in the water department is extremely concerned We do care and we've explored many many options to try and get as much work out as we can And so I I just have to really applaud the team because they've been very hampered in terms of not having a lot of staff But have still been doing an excellent job getting as much work out as they can And we do recognize and it falls on jason and I To continue to look for creative ways that we can get more work out. So we understand we care We are very concerned and we're continuing to explore creative options to try and get as much work out as we can Thank you to both of you for that response I believe that will conclude item 3.1. We'll now move to item 3.2 Director Burke Thank you chair galvin and members of the board item 3.2 is our fiscal year 2023-24 regional fund operation maintenance capital and debt service expenditure request And we will have the same team Kimberly Zanino our deputy director of administration Nick Harvey our budget and financial analysis Manager and lori or bannock our deputy director of engineering resources Presenting for this item Hi chair galvin members of the board As we just did with our local enterprises We'll take a similar look at what we're planning for the fiscal year 2023-24 regional o and m and cip budgets Today we'll be taking a look at the proposed budget for fiscal year 2023-24 And we'll start with the o and m budget then we'll go over proposed Partner agency allocations and cip specific to our regional system So the same general o and m increases discussed for other enterprise funds are also impacting the regional operating budget However, the effects of increases for chemicals and electricity are more pronounced for regional operations As a treatment plan is our department's largest consumer of both chemicals and electricity We'll discuss these in more detail during our look at the line item budget Okay, so the treatment plan as I just mentioned is our largest consumer of electricity As you can see here, we we've budgeted for an over 36 percent increase In electricity consumption This may seem to fly in the face of the comments I made during the last presentation that we're increasing by 15 percent per cfo direction The reason for that is because in addition to the 15 percent rate increase budget We are also anticipating an increase in the quantity of electricity consumed at the plant So that's why we're seeing a much higher figure there We're also seeing an increase in projected miscellaneous costs due to our recently implemented policy of subsidizing training and certification Just like we saw in the local enterprises And the increases in operational Supplies for the regional operation are primarily driven by increased chemical costs at the plant in particular sodium hypochlorite and allan prices Are expected to continue to see cost increases due to Increased demand and continued market and supply chain volatility And we're seeing the same general increases in our uncontrolled cost line items similar to the local enterprises And on the bottom line basis there, we are increasing 8 percent in the aggregate for a projected on them budget So here's a chart reflecting the entirety of regionals proposed budget for next year including both cip and debt service appropriations We also like to include the miscellaneous Revenue figure in red at the top there the 5.3 million Because that is part of the financial picture in that the way we figure The regional budget and the ensuing cost allocations to the partner agencies as we we take our total budget All inclusive and we subtract out the miscellaneous revenues So that we're only billing for the net total Those miscellaneous revenues as reflected on the slides for 23 24 is 5.3 million So here's a look at the reserve levels for the regional fund as of june 30th 2022 We're continuing to hold our operating reserve at 15 percent of actual annual operating costs You'll notice that we don't have an undesignated reserve balance as we have in our other operating funds in the water department As a reminder any excess reserves in the regional are held in the reserve refund reserve on behalf of our partner agencies And applied to partner allocations as requested for rate smoothing purposes So in contrast to our other operations in the water department santa rosa does not own the totality of the reserves The partner agency refund reserve Is parsed out to each agency based on their share and they are free to do what that is they like Including what we commonly see is applying some or all of that amount to smooth their effective rate increases And speaking of the refund reserve, uh, here's uh table showing the history of our refund reserve With each agency's respective share of that Fund at the bottom row there Our budget and miscellaneous revenues for the plant are declining slightly From from last year Primarily due to the expiration of the dairy waste loan program as well as the end of our payments from calpine for their letter of credit A strong demand for our high strength waste program and contractual increases in revenues from the town of winzer Are expected to significantly mitigate mitigate the effects of other revenue declines So as usual, we like to show you how we arrive at the net figure for agency on m and cip contributions in the regional enterprise So as you can see we start with the total budgeted o and m and capital budgets for the year And add the difference in operating reserve needed to maintain that target balance of 15 percent We then and we then net anticipated revenues against these costs to arrive at the net to be contributed by the agencies Which comes in at just over 49 million projected for 23 24 As a note that said debt service figures are allocated separately and are not included in this calculation So now we'll take a look at our preliminary partner allocations for fiscal year 23 24 Each agency has allocated their pro-rout of share of budgeted o and m cip and debt service costs I wanted to touch a little bit on the fact that each of those three categories o and m cip contributions and debt service are actually allocated On three different bases. So the budgeted o and m figures are actually Allocated based on the full The last full previous years Flows into the plant. We have flow meters to track that and we allocate the costs accordingly. So those are being Allocated based on the flows for the completed year fiscal year 21 22 The cip contributions are allocated based on terms stipulated in the sub regional agreement And the debt service figures are actually allocated on a per debt service basis. Uh, and the The nexus on that is really What each debt service was issued to pay for So for example, um, we might issue bonds to pay for something that increases overall capacity at the plant And one of our partner agencies if they're not in a growth mode And they're not planning on growing. Well, they don't necessarily want to contribute extra money because while there's overall growth in the regional system They're not anticipating their portion to grow So here's a breakdown by category of our proposed 10 million dollar cip budget for the regional enterprise The majority of our funding is being invested directly into the improvement of our plant and the geysers infrastructure With the remainder supporting ongoing planning efforts I'm now going to hand it back over to laury urbannock deputy director engineering services Uh, with senator as a water to discuss some cip project highlights So again, um, much as I did with the local side funding, I'll talk about if you could just go to the next slide Thank you Um, talk a little bit about some of the key projects that were, um, initiating out at the plant Although I will warn you that none of these are as cool as the uv project Which is under construction currently so, um, but they are equally important because as you all know Each of our process units has a unique and distinct element of contribution in cleansing And producing recycled water So this first project is the filter valve replacement phase two and um, this this, uh, particular project is replacing one half of the cells nine through 14 The um, the other half was replaced back in I believe 19 The cells were built in 1968. Oh shoot. I thought I had that down, but I don't but it's been a while since we replaced those and so That particular system filters out particulates out of the wastewater before it continues on through the treatment The project is estimated about uh, 1.4 and it is going to design and construction in the first year The next, um Project that we're highlighting here is the aeration basin improvements This is a significant project and one part of that is because of the The need to bypass this system and work through each of these channels in multiple years to get the work done and The proper assessments completed. Um, the total project is looking at somewhere around 2.3 million dollars. We're anticipating design in year one and um, hopefully Will be in construction year Three or four. So that's we that's as far as we're looking ahead on this one But it is an important project that we get done and I know it's one of operations. Um, primary goals is to get this work done and then the geysers so As some of you know, this is one of the coolest big projects that the city ever built and um, it's nearly 20 years old And this project is really going to address the aging electrical infrastructure that's out there Um, some of us think that like pipe, this is going to last for 40 or 50 years Maybe 60 but unfortunately, um, some of these electrical systems don't last nearly as long and so they're very overdue for some significant upgrades So this initial work Is um completing a condition assessment and do some design, um in in year one But um in talking with operation staff, um, they do have a desire to want to, um Purchase some equipment early on to ensure that we don't um exhibit any kind of failure This is a critical system and must be kept live Um all year round And it's it's really important that we keep it operational. So, um Definitely want to avoid any, um potential shutdowns or failures on this system And that project is estimated to be about 5 million dollars with design and as I mentioned some procurement of equipment in year one Okay, and we're back to the remaining budget schedule. Um As I mentioned in the last presentation april 20th, so we'll be here to secure your budget recommendation to city council of particular interest on this item However, is the april 25th city council meeting where we'll be formally requesting council's Approval the preliminary regional budget for the purposes of notifying the partner agencies Again, the city council study sessions will be main ninth intense and city Council should be formally adopting the budget at their meeting on june 20th And we'll open it up to questions Thank you very much again open it up for board member questions or comments board member right When one question again, um, I didn't realize that the geysers $300,000 had a sunset clause. Is that what that is? Is it gone? I see in next it's gone forever or just for one year Those fees are actually paid per an agreement where we provided a letter of credit to the geysers And there was a sunset on that agreement. It wasn't for the original geysers project or flows It was just for that letter of credit and it ended this last year and it will not continue Thank you. I didn't realize that Other board member questions or comments All right, I'll open it up for public comment on item 3.2 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 montoya Okay, I'm seeing no one in chamber for public comment. No hands are raised on zoom And no voicemail or email public comment was received Very good. That'll take care of item 3.2 if you wouldn't mind Getting board member barthelot. Thank you. All right, we will now move to uh item 4.1 Which is the approval of the minutes for the meeting I held on march 16 2023 I'll open it up for public comment on that item 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 montoya Okay, there's no one in chamber wishing to make public comment. No hands are raised on zoom And no voicemail or email public comment was received Very good. That'll take care of the minutes. They'll be approved and entered We'll now move to item 5.1. Which is a staff briefing director Burke Thank you chair gavin and members of the board item 5.1 is our 2023 Earth Day event in courthouse square staff briefing And alicia Cuiliche our research and program coordinator will be presenting Thank you director Burke Good afternoon chair galvin and members of the board. My name is alicia cuiliche And I am the research and program coordinator in santa rosa waters energy and sustainability division I'm very excited To be here today to formally invite you all to santa rosa's 14th annual earth day onstage festival This year the event will take place on april 22nd from noon to 4 p.m. At courthouse square Earth Day is onstage is a free family friendly festival that brings our community together through fun activities Live performing arts great food and inspiring exhibits that raise environmental awareness This year we're proud to host several workshops that hope to provide resources for our community members Those workshops include a honey bee demonstration by kiss the flower honey a composting of urban culture demonstration by uc master gardeners A coca dama demonstration by plantify a zero waste demo and bike maintenance demonstration by community bikes and a program your irrigation controller Workshop that needs to be registered for As usually our as usual our stage will provide a showcase of santa rosa's performing art scene sponsored by the recreation and parks department performances include sonoma county taiko japanese drumming The pomo dancers the shilo irish step dancers and the true lyric band Our mobile hydration station will provide ice cold santa rosa water to vent goers and storm water and creek staff Provide pollution prevention tip tips our water use efficiency team will be on hand with water smart tips rebates and programs Classroom safari will return again this year to provide education about wild animals and conservation There will be several animals there including a sloth and a hedgehog very excited for that On earth day, there will be free public transit on city bus sonoma county transit and pedaluma transit In addition to these great offerings, there'll be eco-friendly activities for everybody including the always popular kids section that will feature Button making seed planting and relay races and a lot more We hope you'll be able to join us for a fun filled day for more information You can visit srcity.org slash earth day and i also brought bill inserts and seed packets for you all And now i will take any questions from the board. Thank you Thank you very much for the presentation. I always enjoy going to the earth day celebration And fortunately i'm going to be on a plane on my way to a meeting in st. Louis that day So I won't make it this year, but I hope you have a successful day Board member questions or comments says board member walsh Comment. Thank you, mr. Chair. Um, I wish this could be earth year Just the one day, but um, we can't have the celebration every day for every year, right? That would take a lot of resources, but I really appreciate that You know, especially the seed packet to get somebody what to do I'm planning. I'm planning on scattering mine around the front yard not telling my wife and see what happens Every day is earth day at my house because I get told what to do as far as recycling planning things. We've had bees Chickens all sorts of things that we You know take care of the pollinator gardens. It sounds like a little thing, but it makes a big difference overall I really appreciate your presentation and I'm not coming to the party. Thank you Vice chair, anoni My only question is I want to make sure you have the face painter there again this year because my grandkids Love the face painter. Yes, the popo the clown will be there for sure. All right. That's all Thank you Other board member questions or comments All right, we will open it up for public comment on item 5.1 If you wish to make a comment via zoom, please raise your hand If you're dialing in via telephone, please dial star 9 to raise your hand Okay, secretary montoya And there's no one in chamber wishing to make public comment No hands are raised on zoom and no voicemail or email public comment was received Thank you. All right. Well, we have no consent items. We have no report items Item number 8 is public comment on non-agenda matters. If you wish to make a comment Please raise your hand. If you're dialing in via telephone, please dial star 9 to raise your hand Secretary montoya And there are no There's no one in chamber wishing to make public comment. No hands raised on zoom And no voicemail or email public comments were received. Thank you. That'll take care of item 8 We have no referrals. No written communications. Do we have any subcommittee reports? Very well. Do we have any board member reports? And we will move to the director's report director Burke Thank you chair gavin and members of the board. I have a few items to report out to you all First I wanted to let you know In regards to the sonoma water rates and budget The city council did support the board of public utilities recommendation To not support the proposed sonoma water budget and rates Um earlier this week on monday on april 3rd the water advisory committee did meet And the water advisory committee did vote Ultimately in favor to recommend sonoma waters budget and rates The vote was uh six of the WAC members in favor One uh not in favor, which was santa rosa and then one absent. So that did pass Um and then the sonoma water board of directors will be considering the budget and rates on April 18th at their board meeting So I wanted to let the board know about that Also wanted to provide a quick update. Uh, just we have seen a significant amount of rainfall as you all aware Which has led to a significant amount of water Supply but also water to the treatment plant And want to just give a shout out to the treatment plant operators for all their great work in keeping treatment going But also we saw a significant increase in trucked waste that came into the treatment plant Um during the month of march we did receive four thousand and eighty trucks hauling hauling in 17.6 million gallons of waste Which was the biggest month we've ever seen and it's provided us $572,000 in revenue So that's really a great news I do also want to mention that With that much waste coming in we have seen some slight impacts to our treatment Plant and our ability to keep the plant in the condition we would like to So we are continuing to monitor the types of waste that are coming in And really trying best to determine Where we can maybe reduce some areas from certain waste streams to allow for other waste streams to come in so that we keep As I refer to it, we keep our bugs happy They are the the worker bees in the treatment system And so we need to make sure that that balance is not upset Um, and then I also wanted to let the board know that um on The third saturday, which is this coming no next saturday saturday april 15th We will be holding our uh creek cleanup at the prince memorial greenway Along with the russian river keeper and again that'll be on saturday april 15th from 10 a.m. To noon The group meets at the bridge at olive park So we are always asking any and all who are interested to come on out And help us with our creek cleanups again. That'll be saturday april 15th from 10 to noon And then last I just want to wish someone In the audience a very very happy birthday. It's easter ladesmas birthday So happy birthday and thank you for all the work you do and that's my report name It's and a very happy birthday to vice chair arnone. I didn't even know it was your birthday today So two very happy birthdays And that's my report and i'm happy to answer any questions you might have I think he's got a couple years on you though Any questions for the director? All right, if not, we'll open it up for public comments on item number 13 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 Atre Montoya There's no one in chamber wishing to make public comment No hands raised on zoom and no email or voicemail public comment was received All right, that concludes the agenda We will adjourn in honor of the two birthday boy and girl And uh happy birthday to both of you. We're adjourned