 So, if it's 5.30, it looks closer up by that point. It is 5.31, OK. I'd like to convene this meeting of the Board of Directors for the San Lorenzo Valley Water District for August 20th, 2023. I'll leave it to you. OK, on April, I'm sorry, April, thank you, Bob. You just made me think I missed my husband's birthday. It's not for the parents. It says April, I don't know why I'm deferred to him. How will you take the role? President Smalley. Here. Vice President Hill. Here. Director Fulse. Here. Director Mayhood. Here. And Director Ackman is absent, but she did email me on April 13th to let me know that she would not be here. Understood also that she had a business engagement conference this evening. Yes. I propose that we excuse her this evening. Very well, President Smalley. Yes. Vice President Hill. Yes. Director Fulse. Yes. Director Mayhood. Yes. District Council is attending virtually this evening. OK. Any additions or deletions to the closed session? Staff has none, Chair. OK. Oral communications. Regarding items in the closed session, did we have anybody from the public in attendance? Yeah. OK. Then with that, we can adjourn to the closed session. Vice President Hill. OK. So I'd like to reconvene this meeting with the Board of Directors for the San Lorenz Valley Water District for April 20th, 2023. Would you take roll again, please? President Smalley. Yes. Vice President Hill. Yes. Director Fulse. Yes. Director Mayhood. Yes. And Director Ackman is excused. OK. OK. Make any additions or deletions to the agenda? Staff has no additions or deletions. OK. Oral communications. Were there any actions taken during closed session that made the meeting? There were no actions taken to report out. Thank you for that question. Oral communications. For any member of the public who wish to address this, an item that's not on our agenda this evening. Now is the opportunity for you to be able to do that. Does anybody wish to speak? I don't see anyone. Moving on then to the President's report, I have nothing that I wish to report this evening. Unfinished business. We have none. New business. We have two items in front of us today under new business. The first is the vegetation and fuels management contractor award. Yes. Thank you. And the environmental planner is here tonight to present that as to the board. OK. Thank you. All right. So in 2021, the board of directors adopted the post fire recovery straight glass and hardening visitation and fuels management plan after adoption of the district-presued fire hardening and fuel reduction grant opportunities. You were awarded two grants after the California Coastal Commission. And to approve the award now is the time to put the mic on. So while I'm here, I just wanted to ask Carly to put the microphone. So you're a little hard to hear. I know Mark Wilson is channeling to me right now. Probably be texting the end of it. I know. Well, it's also making the background noise. OK. So after adoption of the district-presued fire hardening and fuel reduction grant opportunities, we were awarded two grants after the California Coastal Commission for an award amount of $200,000 and then a Cal Fire Grant and another $360,000. Both of those were awarded in this Leader 2021-22. The Postal Commission grant completed field reduction on nine sites in 2021. And the Cal Fire Grant is still underway due to the partnership with the Fire Safety Council of Santa Cruz County, who is leading the grant implementation. Funds for that grant, the Cal Fire Grant led through the Fire Safety Council should be available to us for implementation of this grant. But the District does have over 85 infrastructure sites, including tanks, pump houses, wells, and treatment facilities, which are all in need of field reduction. And currently only 12% of those sites have received these initial treatments. So the District is seeking to lay out all sites and take initial work and then maintain it annually. So in February 2023, the District released a request for qualifications for fire vegetation management maintenance work. And the RQ closed on February 19, 2023 and the qualifications were received from eight local, regional, and statewide contractors. District staff is recommending that the Board of Directors approve a contract with powers forestry for implementation of the fire and vegetation maintenance work. And powers was selected as they do have a registered professional forest around the staff. And they also have professional oversight experience combined with the prospect of labour grace. Compared to the other contractors who submitted SOQ's powers, has the ability to complete site layouts which includes marking property boundaries and sensitive biological resources. So it is recommended that the Board of Directors review this memo and direct the District Manager to enter into a contract with powers forestry and the amount not to exceed under $50,000 for the purposes of fire vegetation management maintenance in fiscal years 2022, 2023, and 2023, 2024 of staff's prepared answer questions. OK. I'd like to first make the comment that this contract was discussed at the Engineering Environmental Committee meeting on April 7th, and the committee concurred with the recommendation presented to us by staff on this contract. So with that, I'll open it up to questions from the Board. Jeff. A couple of questions. In your document here, you mentioned that the Cal Fire Grant is still underway due to partnership with the Fire Save Council. Does that mean that they haven't given the money out? What does it still underway mean? Right. So the Fire Save Council is actually awarded, I think it's almost $2.5 million for many different projects throughout a region, and unfortunately they're just pretty slow moving. I think they currently don't have a staff member as part of the agency, and they've been working to hire someone. So I think it's mostly just the administrative work that's happening. And I talked to Cal Fire. It sounds like they could be open to giving the money directly to our agency, so we can't get an implementation underway. But we're trying to work with the Council as well. So it's not that they're still evaluating whether they're going to give the money. It's administrative procedures. And similarly, you're asking for $150,000 here, and the Cal Fire grant looks like $360,000. What are we doing with the other? So this would be, like I said in the memo, there are 85 sites. So we're hoping to have this budget on top of the grant just so we can get through a bulk of the sites this year and allow for us to just maintain from there on out. Okay. Because the initial work is probably going to be the largest push. And then from there, we hope they can maintain it even with our own staff. So we'll get the money and then we'll parcel it out as we work our way through the sites. Okay. Thank you very much. So I think actually, you sort of answered the questions I had the same ones as Jess, but what my concern was is will we be back doing this every two or three years? Or... This will be ongoing. And so we have more staff and operations, especially that you could potentially do in-house. But right now, we're probably looking at something like this every two years with outside contractors. We can probably not back the budget as we get through one site just because it'll be easier to work every year. Yeah. The first round is going to be a heavy lift. Yeah. And then after that, it'll be maintenance, which will be less work to where we'll be able to take it on ourselves in-house. Okay. Or is it cost effective just to have them do it? I don't know. I mean, have you sort of tried to figure that out? Like, you know, what their greater costs are? We will. Okay. Thank you. During the discussion, I recall that we hadn't settled on what we were going to do with that money. So what you're recommending now is that we actually add the 150 to the grant to get up to whatever it is, 510,000 in total. Right. Okay. So that was still a question mark, I think, during the committee meeting. One is obviously budgeted. The other would have to be budgeted into the budget cycle. Okay. So that was question one. Question two is, you know, we're coming up on three years after the fire. And my concern is, is that, you know, we get dropped off the list at some point of, you know, because there's other people that have been impacted by fire now. Right. How many more grants do you think we can get for this? And are we actively pursuing a bunch to finish out the remaining 85? Yeah. So right now, I don't believe there's any that are currently open directly for this kind of work. So CalHire does our most grant for permit cycles. Right. But we should continue to pursue these every year. I mean, there's no reason for us not to. Like you mentioned, you know, once as we move away from our, lessen our risk, maybe we don't have as a competitive above the proposal. Right. But, you know, it's still work going after. And regrettably, the state of California is not flush with money at this point. And there's going to be a lot of things that are going to get cut that they consider non-essential. I mean, the question I have about who does this work, remediation ongoing, I guess I would ask the question why we would have trained skilled water agency workers doing this work. I just, for the life of me, can't imagine why we would want to do that. There's lots of other things that skilled trained people need to be doing on our district. And doing brush reduction is not at the top of my list. So I would really encourage us to look at that one really, really closely given all the other activities that we need our people to be doing. The director of operations I've talked about, you know, this work seems to be very expensive. And once we get the heavy lift done, we're going to try to see if we can get out and send a bit, because there's a lot of local landscape time that can do this work and do do this work a lot less expensive. I mean, Robert used to do it over the... Yeah, the post-soulless, right? You know, James and I have talked about that. We get a list of sites, we put on an R&P, see what we can find out there that's local and reasonable. This work has turned out to be, I don't know, it's because it's grant funding or after this issue, but it is a very expensive work. Yeah, it's all of that. Plus the preparation work. Right, and then it's environmental background, and the work that Carly has to do to be able to go out on this property. A lot of it's got a dangerous species on it, and it has issues with sense of habitat. But, you know, we've got meters, we've got pipes, we've got... Well, it's totally... Yeah, so, okay, thanks. So if to about the point, it sounds like it's not necessarily internal staff, but us managing a different contractor than in order to be able to do that work. It's creating a... That's not what I heard, but I'm glad that was clear. It's probably less skilled contractor to be able to come in, to be able to do that work then. I'm cutting it by... I ride there, you know, on my side of the road, right? So I have visions in my mind that this scenario that we're starting with here is chain saws, and after we're done with that, when we do it on a regular basis, we have weed backers instead, or something like that. Okay. So with this motion, we're authorizing, moving ahead with powers for the $50,000. If we get the Cal Fire grant, are you coming back to us then with another proposal, another contract award? That wasn't the plan. If that's the board infection, we can do that. I think we... So both James and I have put the $100,000 that's on funding fiscal year into our budgets. So we're ready to report. That's a really interesting idea. I just want to know what their plan is for that. You know, things are going to be different economically in a year, but... So just to clarify, you've already included the $100,000 in the 2023-24 budget. It's already in there. Okay. Right. The question they're asking is the board, do we want to just do the $150,000 and ask for them to come back on the... On the remaining balance. Or was your plan just to continue to extend powers then well beyond that $150,000 to whatever the Cal Fire grant is? So because that Cal Fire grant is being implemented by the Fire State Council, they would actually contract all the work themselves and we'd give them the permission to work on it and we'd tell them which sites we'd target. Okay. So we wouldn't have any of the contract. We could, but it would complicate things. So ideally... Okay. So we're not managing that contract. That's correct. Okay. That clarifies the question on that contract. Okay. Any comments from members of the public on this item? Then I will go ahead and make the motion that the Board of Directors direct the District Manager to enter into a contract with powers forestry in the amount not to exceed $150,000 for the purposes of fire vegetation management maintenance in fiscal years 2022-23 and 23-24. I'll second that. Okay. So, Holly, would you take a roll call with me? President Smalley. Yes. Vice President Hill. Yes. Director Falls. Yes. Director Mayhood. Yes. Motion passed. Okay. Moving on then to the second item of the biennial draft budget for fiscal year 23-25. Thank you. And we have the Director of Finance here to present a presentation and the draft budget to the Board. Okay. So this item is the first round of operating revenue and expenses for the fiscal years 23-24 through 24-25. So the schedule is April. We do the first round of operating revenue and expenses. Internally, we're working on the capital budget and non-off revenue and expenses. Come May, we'll bring the second round draft of the operating revenue and expenses and we'll include input from the Board. And then we'll also bring the capital budget and the non-off revenue and expenses to the budget and finance and board meetings. And then internally in May, we are working on putting the full budget packet together. Then come June, we'll bring the full budget packet package, including revisions from the May Committee and Board meetings. And ideally we would like to have this adopted prior to the meeting. So depending on how many revisions and changes are being requested or needed, some special meetings may be needed. Next slide. So high-level operating summaries for the 23-24 through 24-25. Operating income for 23-24 compared to 22-23, which is the current fiscal year we're in, decreased 848,000 or 23.5%. Operating income for fiscal year 24-25 compared to 23-24 decreased 177,000 or 6.4%. So these next slides will go more into detail on the revenue and expenses. So next slide, Scott. Thank you. This slide is going over the current fiscal year we're in 22-23 estimated actuals for revenue. So the estimated actuals are coming in 402,000 or 3% unfavorable to budget, meaning lower than what we're budgeted. Consumption is estimated at 609,000 units. This is based on actual consumption through March plus a three-year average for April through June, which is 1.1% lower than prior year and 6.6% lower than budgeted units of 650,000. The basic charge, estimated actuals are slightly higher due to a difference in assumptions to how many CZU homes would be back online. And then we have the extra 200,000 in there for the operating consumption services. Next slide. This is the 22-23 estimated actuals for expenses. So these came in 933,000 or 9.85% favorable to budget, meaning lower than what was budgeted. The main factors of those are salaries and benefits and facilities. Salaries and benefits came in 832,000 or 12.6% favorable to budget, primarily due to vacant positions and differences in the budgeted positions versus lower cost new hires. And then facilities is 105,000 favorable, primarily due to utility costs coming in lower than what was budgeted. And then the other categories just had smaller variances that essentially met each other out. Next slide. So the fiscal year 23-24 through 24-25 revenue projections. 23-24 compared to the current fiscal year, we're in decreased 480,000 or 3.6%. We're projecting consumption at 610 units. And fiscal year 24-25 compared to 23-24 increased 286,000 or 2%. The basic fee includes bracken gray and forest spring homes. And we're assuming all CZU homes are back online. And consumption is projected at 625,000 units. This also includes bracken gray, forest spring consumption and all of the CZU home consumption. And this budget does not include any estimated rate increases. So it's being budgeted out what the current rates are right now. Offenses. So the expenses, sorry, next slide. The expenses for fiscal year 23-24 through 24-25. 23-24 compared to the current fiscal year increased 368,000 or 3.9%. 24-25 compared to 23-24 increased 463,000 or 4.7%. So those are the high-level changes. Each individual category and department was listed part of the agenda package and the items were listed in the memo. So if anyone, I figured we could talk at the end about all of those if anyone had questions. Important items to note. Next slide. So the rate study and cost of service analysis. We are obviously currently conducting a rate study cost of service analysis. The outcome of the rate study will require further analysis of the budget after it is completed. We're also going through negotiations. If these are completed prior to June, any necessary revisions will be included on the next drafts. And then just another item that doesn't directly affect like the operating revenue but FEMA projects, we have, you know, many large projects that have not been obligated. These are still ones from the CZU fire and obviously most recently the store ones. The district is going to have to go through all of those. And then we're going to have to go through all of those before receiving final reimbursement. And we'll have to fund our cost share as well. So more to follow on that when the capital budget is presented but I figured that's kind of an important item to go over now. And next steps. So the next steps will be May. In May we'll bring to the budget and finance and the capital budget will include any feedback from tonight's meeting and any other revision staff will have that will be bringing the capital budget which will highlight the planned projects and funding sources for each. And then the non-operated revenue expenses. So property tax and a death assessment district revenue, interest income and then our non-operating expenses which are basically our debt principle in May will begin compiling the full budget package document. And last slide. Any questions? Thank you, Kendra. Is chair of the budget and finance committee? I'll just make a quick comment. And that obviously this in many ways this operating budget is kind of has many placeholders in it because there are so many changes in terms of labor costs in terms of at least for 2023-2024 potentially the results of a new rate schedule. And I think at the meeting that the district, the budget and finance committee had we also thought that we may need to revise some of the consumption numbers because we think they may be optimistic about when Forest Springs and Greenland line and we all doubt that all of the CCU houses should be rebuilt and even if 50% of them are rebuilt they certainly won't be by 2024-2024 so that number has to be adjusted. And then another is that the cost of our contribution to Santa Margarita is right now not on the operating budget is on non-operating but I think the budget and finance group felt that it should be on the operating budget because the sort of base level costs of our contribution to that is not for doing projects not for capital costs or just running the administration like that. So I think these will evolve with time and so I think that both Rick and Kendra wanted to get this beginning in front of the committee. We can take comments and she can respond to those in the next iteration but they fully understand that there's a lot of things that are going to change. OK. So do you have any comments from this point? No, I just made them. OK. Between what you've shared with us here. I think that's one of those things. But at the policy level, as we start looking at the proposed rate increase and all the work that's going around that, this budget still meets only the minimum standard for multiyear. It really needs to be extended to whatever the rate increase horizon is going to be so that the community knows exactly where the money is going and where it's going to in 2017 where it was promised on capital and two-thirds of it went to operating. So that's at a policy level, that's something that I think really needs to be considered. I'm also a little disturbed by the fact that we continue to not separate out the fire surcharge number in the summary information that we're provided. You have to go all the way and that is something that we said as a board. We wanted to make sure it got separated out as a matter of policy as part of getting that surcharge through. This is not the first time that's happened. And I'm very troubled by the fact that it keeps happening because if you take that out, our operating margins are not 22 and 20%, where it's much lower, I would say 7 million and 1.5 million. That is not a sustainable operating margin to be able to apply any kind of capital contribution to the repair and maintenance of our system, which requires a minimum of 5 million a year and we're currently spending about 3.5 a year. So we're not even catching up on the, and that doesn't count what we have to do in terms of deferred maintenance in terms of things that are not being maintained at all. So these are serious issues that I see with this. And as it stands right now, this is a very troubling budget. It basically goes back to the bad old days where we started compressing what money we were going to put into capital because all the money was going to operate. Just on the consumption of that drop. Is that right in consumption? And so this year was basically flat with last year. OK. Our experience with, this sort of is on Gale's comment earlier, our experience is the numbers don't come back that fast once you get people to, unless you're going to go out with a marketing campaign that says, hey, use a lot of water. Water your lawn. And then we go down a little bit as people get into different habits. So I think we have way optimistic numbers on that, particularly in the second year. Let's see here. I am not convinced that the operating expense number, I mean, last year's estimated for this year seems really good because it's artificially depressed due to open positions, right? But it is amazing what kind of leverage you get when you control your operating expenses. The operating margins go way up. I don't see that happening in the out years. I think the community needs to know that I think these numbers are extremely optimistic and I just, I think this whole budget is basically a placeholder. We have the past one by June 30th, but it's basically a placeholder. And the community, we need to have an entire new set of discussions around budgets once some of these things get clarified a little bit. I was not following your discussion about the non-operating and capital budgets, are those coming back to the board in May? So the second meeting in May, okay, that'd be great. And then that, the debt coverage ratio and the reserve account levels, because right now I'm feeling with a $1.7 million margin projected for next year, I'm feeling the reserve is not going to be robust. And certainly nowhere close to what our policy calls were. I just hope it's not going down from last year. It'd be nice to compare it to last year's relative to the assumptions. Putting things in a table, the numbers in a table with the explanation below makes it a lot easier to grasp the trends. And really when it comes to these budgets, because we're a static community in that there's really no growth here, it's more the trend line that's important, not so much the absolute numbers as well. You need to speak up a little more your trailing office at every time. OK, the other thing, I think I heard in the presentation, you say that the budget for both years does not include a rate increase assumption. But I think in your discussion here, you did talk about a increase. But if it's the way she's budgeted it's just black in terms of the rate score. What part where I was talking about the rate study in the memo here, you're talking about a rate increase for 24-25. You said the basic fee includes black and gray basic fee increase. So that's just me saying that the reason it increased from 23-24 to 24-25 is because we now have black and gray in four springs as customers. So we'll be getting that increased. So I think you're incredibly optimistic about that. And the poor people that lost their homes in the fire, they're in the county torture chamber. They're not getting out of that any time soon. Consumption or basic fee? Basic fee is projected at what our current rates are. I understand that, but in terms of in that time period, if we do, that's great. But we haven't really met a lot of schedules because of materials and all that. And in terms of the people being able to build from the fire, they're not getting out of the county torture chamber for a long time. If some of them ever get out. On just a point on consumption on four springs, they're now on our master meter. They're not getting, they're getting charged for a two inch master meter and they're using water through it. We don't have the individual meters and that'll go in with the improvements. But we already are starting up last month, two months ago on serving them full-time consumption. OK. So they are paying the $10 amount. I mean, I just... I just don't think the county is going to step up and do the right thing anytime soon. So it's tragic and they have a real case, I think, that they can make. Our average is over our average is somewhere between three and four units per dwelling, but you were assuming six units. Did you actually look at the distribution for those accounts that where the homes were lost and they were all in that six unit range? Yeah, they were in, yeah, the six unit range. I think I took the last three year average. Wow, that's, I mean, that's much higher. OK, they probably have lawns. Well, or agriculture. I mean, maybe that's... OK. OK. OK. OK, given that the historical average for our expense, operating expense increase is closer to 6%, and in fact, the last couple years has consumed 100% of the rate increase, why do we think we can get away with 3.9 and 4.7% increases in operating expenses? What is going to happen to make me believe that number? I mean, so those, the operating expenses were all the department heads, you know, put in their requests and that's the sum total of all of those. So, I mean, you'd have to look into the detailed account, totals by account to see what's involved in those, what makes up the... Salaries. Because we've had a lot of retirees that went out at top steps and we're bringing new hires in at step one or whatever, so that's why we're a lot lower. I mean, it's a big drop just in salary. That might actually be something to quantify and document something. For retirement from the classic... Yeah, exactly. These are all from a numbers point of view. Those are good things, but to quantify it, because, you know, again, I'm looking at trends. The trend line is not in our favor over the last 20 years. It's been roughly about 5.7% over 25 years. Operating expense increase, average, right? Obviously fluctuates from year to year. So, I got to see some numbers of the account details in the budget. I understand that. If you provide me with a spreadsheet, I can actually do something with it, but otherwise I have to try to manually do things and that doesn't... I don't have time for that. So, what are you trying to get? You're trying to get the percentage increase? I'm trying to understand why we believe we can manage the 3.9% and 4.7% operating expense increase. Wait, we're not giving Bob a spreadsheet. This is not the way... I didn't ask for that, but I did say that if you provide something in paper that I can't copy and paste into a spreadsheet because it's not set up that way, then I can't use it. So, that means that we have to have some other way of communicating why we believe these numbers. Because at this point in time, I don't see how we manage that. OK, Bob, I feel... Mark, I feel I have to break in here because they just explained why it's 3.9% versus 5.7%. Bob, on the trend line, I agree with you. You have to communicate this to the public. If they've been running, and I don't know whether, you know, what he's providing is correct or not. But if he is, if it's been running at 6%, and why do we think we're simply addressing that? I don't know if he needs the data. If you address this question. If you address this question. With some numbers. All the numbers are on the spreadsheet. OK, fine. We're looking at just numbers in a... If I could copy and paste that I might be able to do something with it. I can't do that. We're looking at two different ways to make a budget. One way is bottom-up, and the other way is... I'm not necessarily going to say top-down, but it's a historical trend. Bob, what I want you to do is compare the two for a sanity check and say, OK, you went to the department heads and they said this is what they were going to spend. And now I look back over the last five years that it's gone up this much. I'm going to go back to the department heads and say, why do you think that's so? Because that's what we're looking for. It sounds like there is justification for this, but without delving into considerable detail I don't understand it, but I understand James' explanation pretty clearly. And what Rick is saying about lower-solid staff now. I think our accounts will change considerably this year because we're going from well-watered to surface-watered predominant this year. Electrical costs go down, or chemical costs go down. There is a shift in operational cost, and the director of operation went down. All department heads went down. Each line item is expensive and tried to adjust those. Now, we shouldn't have prior years that historically the COLA's been at 3%. And our operating expense increases have been at a multiple of that, like almost 2x. So I would look and see how the well-staff did to stay within those numbers, and so they've got a pretty good track record of the gains you want on our expenses. And I especially have the question given that we're assuming a 5% COLA. Because again, historically the operating expense increase has been above the COLA. Above the what? The COLA, sorry, the cost of living. Yeah. So I think what this really is is some suggestion for Carly to do a more thorough job of challenging these guys on their numbers when they give them to you and to give us a comparison with historical so we can see whether we think it makes sense. I think what it's also saying too, Jeff, is that given where we are on inflation and given what that is going to mean relative to overall operating costs and given the fact that there's going to be a proposal for a rate increase going to our community we need to be able to justify what it is that we're saying because in the 2017 rate study they put in operating expense increases at 2.9%. We didn't make that, I don't think any here except maybe one. Most of the years were 2x. So the historical value given to those rate study finances that put in from my point of view are virtually zero unless they're backed up with real quantitative analysis that I don't know was done in 2017. And that's the sale that has to be made to the community in order for them basically to not vote no. Because again it's a backwards vote they have to vote yes they have to vote no. So this is all getting prepared for that and I don't, I'm certainly not comfortable with where we are right now with that with that number. OK, thank you for listening. OK, Jeff. I have a lot of little nits here and I'm not going to bother with them right now because there are larger issues to be dealt with I think. So. Jeff if you have a question do you want to submit to Kendra? So I'll just leave you feel free. I mean I've got a bunch of little questions to answer. Some of which relates to some of Bob's questions but I think we'll send those out to the full board or any questions. Some other board members. Questions that I have then. Under professional services I didn't see the cost for the rate study from Jeff Kellis. Did I miss that? This current budget we're in. It's already been budgeted. OK. It was included in last years by the budget. It's not part of this upcoming budget. But we paid that when? Well depending on when they invoice us. It gets coded in the year it gets coded but I mean we're a little behind on it so it might filter into. It's going to filter into and that would just be a carry over. Yeah it's going to be a carry over into next year's budget. OK. I know that the board members have said I need to say it also. The optimistic views on CZU fire recovery. You're assuming 85% of the homes are going to come back online? Well so... That's not going to happen. So let me make a comment about that about the basic waiver policy. We... They receive a three year waiver from being billed the basic and consumption charges. After the three years is up we automatically start billing them again. But we are going... Hang on. We are bringing to budget and finance and the board we are trying to come up with something to grant an extension just given the nature of all of that. So that was based on the current policy that we have now. So that could also change given whatever the board decides to do with granting an extension on that basic waiver. Right. I think for the purposes of budget assuming consumption from those homes at the rate that it's overly optimistic. And before I heard from Rick that we're selling water before spring my comment was going to be the same on them. I thought that the combination of those two were optimistic. And the assumption that we're going to increase water sales after we've been under the restrictions, after we've seen the conservation that we've had on average to what it was I think you said it was on a three-year average. We're not going to see more realism into that number also I think it's overly optimistic. And you mentioned FEMA just as a one-line item. FEMA is being one of the issues. The other two were the rate study and the labor negotiations. And we know projects that we're spending on. We know where we're projected to be spending. What's their either reimbursement time frame, cash flow? How is that happening? Because we've been working with FEMA on reimbursements now. Is it going on three years? Oh, keep in mind a lot of our projects have not even been obligated yet. We have a long ways to go. And as you all know not only California, but the United States has had one disaster after another. They're totally swamped. We're getting emails back that we're just totally swamped. We're treaching through it very slowly, but it may be and that's a concern to the district that we put this money out first before we even get to know one if it's going to be obligated and the cost to be reimbursed to the district. As long as it's appropriately reflected in the budget. That's correct. That we're spending that money now. Our estimate is that we would be reimbursed three years from now. But we're trying to tie FEMA down to get some dates. It's almost impossible. Doesn't that go in the capital budget? Yes. And Jeff, I will say it's been very good about always reminding us about this cash flow budget. Bugging them up out from the day one. So we're aware of it and we will address it when we return to the capital budget. But it really doesn't come up so much in the future. And the surcharge is only for the CZU. It's not for FEMA or disaster in general. That is tied strictly by resolution by this board to CZU. Right. On the question though about cash flow I don't think in the past we've done a cash flow statement as part of the budget. Are you planning and doing this year? Certainly. We've got a vulnerable situation now that we've done in the past. Yes, we definitely need one because we're going to have a lot of obligations with contractors and we don't know when FEMA's going to... and we can find ourselves with no cash. We did take out 15 million specifically for this. I wanted to go 25 but we didn't have the ability to carry that. So that helps. But hopefully we don't need that. Yeah. I'm just looking at this and saying lots and lots of construction work going on and lots of contractors who want to get paid now and who knows when FEMA will get there. The biggest risk I think in that is the raw water pipelines because that's the biggest number and if you don't have enough cash to cover doing that simultaneous with everything else is going to be very economical this time around. And the lion access road repair regardless what project we pick multiple millions of dollars. Hopefully not 15. You've heard from all board. I'd like to hear from anybody. Any members of the public that wish to comment on this item, the draft budget for the fiscal year from 2023 to 2025 seeing none. I hope the public can pass. Mr. Dawson can you comment if you can hear us appropriately? Hi, yes. Are you able to hear me now? We can. So yeah, I've tried to text an email a few people just to provide them with updates. I would say that in general the situation is much improved. I'm very appreciative of that. The people that I can hear clearly and consistently are Mark, Bob, Kendra, Holly. People that I can and some most of the time I think Jeff I have an idea of what you're saying. Gail, I hear a little of what you're saying. Rick, I hear a little of what you're saying maybe 50% of each. Carly, I could make out virtually nothing. So that's just to let you know how things stand right now. If you can hear me. Okay. Thank you for that. So there's no motion that we need to discuss on this. This was a discussion. We provided comments and we can move on then from that item. Okay. Does anybody want to pull anything from the consent agenda? Yes. Okay. Thank you for this meeting. Comments on those? Well, yeah. I mean, you know, this was a pretty substantive topic that, you know, the minutes here talk about bringing the item. It wasn't really clear what the item was. And then it said I explained my position. Well, okay. But this is one of those where there are specific things that are important to us. And I'd like to get some of my position in this as well. May I say that I was waiting for something to come up about this simply because I could not hear anything. Nothing came through. I was going by Braille and the few notes that I had written down. I normally count very heavily on recordings for specifics and because I did not have any information. I did go to the community TV website and listen to the section and I was able to actually pick up. It wasn't complete, but it was enough to be able to get the gist of what I was saying. Well, you knew what you had said. I didn't. I could not pick it up. I'm sorry. There were big holes. What I picked up was actually there were sections of it that were very clear about what I was saying. At any rate, there's also a error in here. The discussion was not by board and staff. It was community members. I don't believe there was any staff comments on the topic. So if what you're saying is it because you couldn't pick anything up, nothing could go in here. Did we pick up what Mr. Mosher said? Very well. But there's a very specific statement. I heard a specific statement that he said I didn't hear everything he said. Yeah, but there were things that I said in there that were able to be picked up as well. So what would you propose at this point? Well, I could provide like a three or four line summary that we can include in there. Which basically states my position reflects what you can get from the recording. I would support that. I'm okay with that. I can either, I can read it here and then I can provide it by email for update. I'm good with the email. If he's going to do that, I'm going to do something. Mark. That's fine. Mark, hear me? It would be important for us that the changes are going to be made to the minutes read into the record here so the board can approve them because the board does need to approve the minutes and it would be irregular to add things after the fact that directors email, but the full board hadn't seen. We could bring it back to the next meeting. We can review those. We're not approving those minutes now. We'll approve those minutes at another meeting. Okay. So then the board members that want to add things would email Holly and she'll put them in the minutes and then bring it back to the next board meeting. Yes. Okay. Gail has said that she wants to submit something also. Yeah, makes perfect sense. Yes. Okay. What about can the people from the public that I couldn't understand what they were saying, can they add something to it as well? If it's if it is appropriate, I'd like to keep that to the directors. So I'd just like to add that I think if we're going to email things to Holly, then Holly ought to be able to you know, take what's provided and summarize it in a way that's consistent with how the minutes are typically prepared. Okay. Moving on and the district I'm sorry to interject again. We do have a hand up from a member of the public and because the item was pulled it should also be open to discussion during the public. Does anybody from the public want to comment on this? I do see Jim Mosier's head up. Jim. Can you hear me? We can. I just want to say that if there's going to be something put in the minutes about something I said I'd prefer not being included unless I can also review it and I have no no need to have it put into the minutes. Thank you. I'm not sure I understand that. So if it's a if it was said during public session and it's hearable, legible through the recording and he commented why would it not go into the minutes? I think it has to be in there. I think it has to be in there. If you're going to put Mr. Moran and Mrs. Moran in there Jim and it isn't there already actually. And I think it adequately reflects what he said about this. He just asked him not to be changed. I thought he said excluded. No. He just said don't change it without being changed. No, that's fine. I wasn't reflecting that anybody was going to change. Further comments on this on these minutes? Otherwise we'll move on to district reports. District managers report. I have two short items. The first under community project funding Congressman Peronetta has submitted his funding request for important community projects in the California 19th congressional district to the House appropriation committee. Each congressman I do believe is allowed to submit up to 15 projects for their community for fiscal year 2023. One of the 15 projects was $1.5 million for the Forest Springs Brackenbury water storage tank. I guess what's commonly known as earmarks I do believe. That would be the earmarks. That used to be gone that came back a couple years ago. That's not a guaranteed funding but that's something that we made to congressman's list. And then the second one we released today, the request for proposal for district manager recruitment was released today. Okay. Department status reports Bob. Do you want to start? Yeah, and we just go through them all, right? Sure. This one would be for Carly. Carly in the two grants that are ongoing the $494k and $360k when were those awarded? Those were awarded in fiscal year 21. And they're for your grant program periods. Got it. So they were awarded before June 21, right? Okay. I thought they were earlier because but I remember. What is the schedule again for this HCP? So right now it does look like we are going to wrap it up by the end of the year. It's currently in review internally with our staff. Our feedback from our staff here and then as soon as we get that back to the consultant we'll be able to move ahead. Once you give her the feedback what why would it take from now until the end of the year? It's just pretty much finishing out the whole plan. So there are draft chapters but it's not the full draft document at this point. Still? So right now our staff are working through determining exactly how many projects and what we'll need as part of the HCP program. And as soon as we have that she'll be able to hopefully round it out. I'm hoping to bring an update to the committee either in May or June at the latest and that will also put some information on a potential mitigation credit sale as well. Has she stubbed out these chapters? They're just not written. But she stubbed them out. Okay, yeah, I mean this is I think year 7. Okay, so on the water conservation we've been in stage 2 since 2014 I believe. So we are talking and so really the 10% that we asked customers to do was actually really a stage 3 even though we didn't designate it as stage 3 because we were already in stage 2. So we are formally now going to remove stage 2 and go back to stage 1. We're we're slow working that right now just to be sure that we don't jeopardize any of our drought grants and we move back too soon and to make sure that we follow any type of procedures that grant funding would require. But that is our intention to go to the voluntary conservation. Okay, I think sending clear messages to the community is a good thing. Because we don't want to continue our customers have to conserve they don't have to. We need to let them reward themselves and get out of the strict conservation because our customers have responded very well. Yeah, and I think also when the drought does come that it makes it clear if you're already in stage 2 you're going to stage 3. If you're in stage 1 you're going to stage 2. And we didn't do that this last time we gave a mixed message to people when we asked for an additional conservation. You tried just to target the outdoor water use because our customers do such a fantastic job on their indoor that it was a tough message. That came down from the state also. The percentage number came down from the state but it didn't meet our stage 3. It did actually. Just that did. The rest of what we're asked for is to make it clear. I understand exactly. Because it's a better press release for getting people's attention if you're saying we're going to stage 3 in order to make that happen. OK. The 68 inches is a good number. I have seen I think on Facebook there's a guy that posts rainfall. He's at like 120. Right in that moment. I'd like to recognize this is one of the drier spots in the valley for rain gauges. On the green business program what's involved with that and how much staff time. In 2017 when we were certified it probably took maybe two days, a few hours over a couple months to work with the program coordinator at the green business. Pretty much it's just looking through our different purchasing that we do for recycled papers or in types of light bulbs. Looking for places to cut back on energy use. And if you go through a checklist and then once you go through that checklist and then confirm everything they sort of buy in the green business. So we're spending staff time on light bulbs and paper. Well the ordinary rate occurs anyway. So it's just making sure we're buying the information. If we buy new pumps do we get are they more efficient electrically than the things we could get when we do buy new pumps? Some of them. If they're in legacy then we'll replace them. I mean that's the thing, right? I mean my new furnace is half the size. But like for our paper products that's just all the invoices she's got to show because we already do that. I know we do. And engineering, sorry on business and finance. We use the late fees continue to accumulate though, right? So if there are people that aren't paying them because they just don't want to, they are paying a premium for that. Do we need to look at those late fees in light of the inflation that is going to be with us for some time? We could probably revisit it. That's something like that to the list. And would it be possible to do a different late fee for people on the rate reduction program versus those that are not? I'll look into it. That's a legal question. Well, that's why I ask. Because I know all the late fees or penalties have to be actual costs too. And we don't go out and do the tagging anymore so there may be immediate reductions. They have to be justified based on cost or they'd have to be subsidized via the same funds that provide for the customers that have great reductions. Okay, operations we did a lot more well water than I was expecting. Yeah, we had our service water treatment plans laid down due to turbidities during the storms. So we had to go to well water because we couldn't run them and couldn't get them back online. But April we're going back on. We're already back on. We've been back on but this report does not show. And engineering sorry scrolling down here okay any news on the elimination of the Ecclid pump station and tank? Are we? No changes there yet. Estimated completion date for Altavia and are we coordinating with the residents proactively? Signage is going up next week. Project start should be the 8th and we're looking at project completion in mid to late November. And letters are also going out to prior? Letters will go out next week as well. Excellent. The on the on the pvine path that says here tree survey and clearing work is underway when do we think we'd be able to be able to go out and walk that again once that is done? Has Mike said anything to you Carly about when he's going to be done? I think they're just doing the initial walk through and actually they're not doing the work just yet. So TBD. Okay so this is perspective. Yes. Let us know when that clearing starts right because I want to get back out there as soon as possible. When does the investigation work start for the Felton Heights tank project? As soon as we're working with legal and getting the agreements together to Mr. Erickson to allow contractors on his property to do that work. So I imagine that's one of our high priorities with legal and that should be happening very shortly probably within this next month. So sometime in May. Yeah. Redwood part tank project, when is the estimated completion date for the pipeline? We're looking at a project start the 1st of May. So completion is going to be approximately two months after that. Okay. Early July. So disruptive for about two months then. Somewhere in there. Okay. Thank you all. Okay, great. Thank you all. Oh, by accident. I think it's just hyped over though. I don't know. Let me go through. Thank you for that. I want to hear from the rest of the directors to sit with them. Questions? No questions. Yes. I don't have any questions. Jim Moser, did you have a comment or question on these? All the reports. No, I don't. We saw the hand up signal. So thank you. Okay. Moving on then. I don't see anything else. We need to go ahead. Just one last thing. I'd like to thank Kendra and the management team for their budget work. Kendra especially has been this is her first fully solo bi-annual budget. She has spent a lot of time put together a lot of good work and so has the management team supporting her efforts. I just want to thank them. Thank you. Okay. Further comments? Meeting is adjourned.