* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:02] SO GOOD [CALL TO ORDER] MORNING EVERYONE. I'D LIKE TO CALL TO ORDER THE, UH, MEETING OF THE FINANCE COMMITTEE, OUR SECOND MEETING OF THE YEAR. UM, AND BEFORE I ASK DINA FOR ROLL CALL, I JUST HAVE, UH, JUST A QUICK, QUICK, UH, RECOGNITION. SO IN 1975, MY GRANDMA, UH, RUBY SCOTT WAS AWARDED SECRETARY OF THE YEAR, UH, BY HER LOCAL PROFESSIONAL CHAPTER IN, IN BILLINGS, MONTANA. THIS WEEK WE CELEBRATE ADMINISTRATIVE PROFESSIONALS WEEK, UH, WHERE WE RECOGNIZE THE WORK OF SECRETARIES, EXECUTIVE ASSISTANTS, RECEPTIONISTS, AND OTHER ADMINISTRATIVE SUPPORT PROFESSIONALS. DURING WORLD, WORLD WAR II, THERE WAS A SHORTAGE OF SKILLED ADMINISTRATIVE PERSONNEL IN THE UNITED STATES. UH, THE NATIONAL SECRETARY'S WEEK WAS FOUNDED IN 1942 TO RECOGNIZE THE CONTRIBUTIONS OF ADMINISTRATIVE PERSONNEL IN THE WORKPLACE, ECONOMY, AND SOCIETY. IN 1981, THE NAME WAS CHANGED TO PROFESSIONAL SECRETARIES WEEK, AND IN 2000 BECAME ADMINISTRATIVE PROFESSIONAL WEEK TO ENCOMPASS THE EXPANDING RESPONSIBILITIES AND WIDE RANGING JOB TITLES OF ADMINISTRATIVE SUPPORT STAFF IN OUR MODERN ECONOMY. LIKE OTHER ORGANIZATIONS, ADMINISTRATIVE PROFESSIONALS, UH, ARE THE BACKBONE OF LONG BEACH UTILITIES. THEY KEEP US ORGANIZED ON TIME, THEY INFORM US AND SUPPORT US, AND, UH, NONE OF US COULD DO OUR JOBS WITHOUT THEIR EXCELLING, WITHOUT THEM EXCELLING AT THEIRS. UH, SO I'D LIKE TO RECOGNIZE ALL OF OUR ADMINISTRATIVE PROFESSIONALS, AND MOST ESPECIALLY OUR VERY OWN EXECUTIVE ASSISTANT, UH, TO THE, UH, TO THE BOARD AND GENERAL MANAGER. DINA LONG THANK YOU, DINA. WE COULDN'T DO ANY OF THIS WITHOUT, SO WITH THAT, COULD [ROLL CALL] I ASK FOR ROLL CALL PLEASE? CHAIR SCOTT. PRESENT. MEMBER SHANNON. THANK YOU. WE HAVE A QUORUM. THANK YOU. SO MOVING ON TO OUR REGULAR AGENDA, [1. 25-55059 Recommendation to approve March 13, 2025 Finance Committee meeting minutes.       Suggested Action: Approve recommendation. ] UH, I'D LIKE TO, UH, REFER TO ANNA TO, TO INTRODUCE AGENDA. YES. SO ITEM ONE WILL BE APPROVING THE FINANCE COMMITTEE MEETING MINUTES. OH, I'M SORRY. I'M OKAY. YEAH, LET'S DO THAT. SO, UH, ITEM NUMBER ONE, FINANCE COMMITTEE MEETING MINUTES. DO WE HAVE ANY PUBLIC COMMENTS AND ANY COMMISSIONER CO? DO I HAVE A, WELL, I WILL MAKE A MOTION, UH, TO APPROVE THE FINANCE COMMITTEE MEETING. MINUTES 13TH, 2025. ALL THOSE IN FAVOR SAY AYE. AYE. AN OPPOSED PASSES. [2. 25-55061 Recommendation to receive and file the Fiscal Year 2025 Mid-Year Outlook and Fiscal Year 2026 Budget Preview.       Suggested Action: Receive and file. ] BUT NOW I'D LIKE TO REFER TO ANNA TO THANK YOU, COMMISSIONER SCOTT. UM, ONE OF THE THINGS, UH, FOR TODAY AT THE FINANCE COMMITTEE IS WHAT WE, BY THE TITLE CALL THE MID-YEAR OUTLOOK AND THE PREVIEW. AND STEPHANIE AND, AND DANIEL ARE GONNA WALK YOU THROUGH THE PRESENTATION. I WANTED TO HIGHLIGHT FOR BOTH OF YOU HERE THIS MORNING THAT IN TERMS OF THE BUDGET AND THE WORKSHOPS THAT YOU HAVE YET AHEAD OF YOU ON MAY 1ST AND MAY 15TH, THIS IS A PREVIEW. AND IN DOING SO, WE TRIED TO CAPTURE A SENSE OF HOW THE BUDGET STANDS TODAY IN LIGHT OF WHERE YOU WERE A YEAR AGO. SO IN LIGHT OF WHERE YOU WERE A YEAR AGO, HOW HAS THIS YEAR'S BUDGET UNFOLDED? WHERE DO WE THINK IT'S GOING TO GO? WE'RE ESSENTIALLY AT THE MID-YEAR MARK, KNOWING WHERE IT'S GOING TO GO. WHAT DOES THAT SET US UP FOR? FISCAL YEAR 26, WE HAVE BEGUN ASSEMBLING THE BUDGET. WE HAVE ALL OF THOSE BASIC DETAILS PRESENT, AND ALSO TO CONTRAST THAT WITH WHAT WERE THE UNDERSTANDINGS OF THE BUDGET WHEN IT WAS DONE A YEAR AGO, AS TO WHAT FISCAL YEAR 26 WOULD LOOK LIKE. SO WE, WE CAPTURED IT IN THAT WAY. THERE IS YET IN THE WORKSHOPS THE NEED TO GO THROUGH VARIOUS ACTIONS, MECHANISMS THAT WE WOULD DO, WHICH WERE APPROPRIATE BUDGET MECHANISMS TO ULTIMATELY WIND OURSELVES UP WITH YOUR GUIDANCE TO GIVE US BY JUNE ON WHAT ACTIONS TO TAKE ON BUDGET, WHAT ACTIONS TO TAKE ON RATES. BUT HERE AT THIS POINT IN TIME, IT'S MERELY JUST TO GIVE YOU A SNAPSHOT WHERE WE ARE AND TO REFLECT BACK ON THE INFORMATION THAT WE SHARED WITH YOU A YEAR AGO. SO, WITH THAT, I'M GONNA TURN IT OVER TO STEPHANIE. SHE'S GONNA GUIDE US THROUGH THE PRESENTATION. GOOD MORNING COMMISSIONERS. THANK YOU FOR ALLOWING US THE OPPORTUNITY TO PRESENT A MID-YEAR UPDATE ON FY 20 FIVE'S CURRENT FINANCIAL PERFORMANCE WITH A PREVIEW INTO NEXT YEAR'S FY 26 BUDGET. AS A REMINDER, OUR OFFICIAL TIMELINE FOR BUDGET WORKSHOPS COMMENCE AT OUR NEXT, UH, REGULAR BOARD MEETING ON MAY 1ST, UH, TO REVIEW FY 26 PROPOSED BUDGETS, PROJECTIONS, AND RESERVES. ON MAY 15TH, WE WILL CONTINUE THE DIALOGUE WITH THE INCORPORATION OF RATES. AND ON JUNE 12TH, WE'LL RECAP AND THE BOARD WILL ADOPT THE FY 26 BUDGET. [00:05:02] TO KICK THINGS OFF, I WILL PRESENT THE FINANCIAL OUTLOOK FOR GAS AND HAND OFF THE MIC TO OUR MANAGER OF BUDGETING RATES, DANIEL GUTIERREZ, TO PRESENT OUR WATER AND SEWER FUND. LET'S GET STARTED. LOOKING AT THIS SIMPLIFIED VIEW OF GAS, YOU CAN SEE TOTAL EXPENDITURES IN REVENUES FOR FFY 25 BUDGET ESTIMATES. TO CLOSE THAT, UH, ETC OR AS, UH, WE MAY ALSO REFER TO AS OUR, OUR FULL YEAR, END OF YEAR FORECAST, FY 26, PROPOSED BUDGET AND FY 26 PROPOSED BUDGET WITH RESPECT TO A 5% RATE, INCREASE RATE REVENUE INCREASE, WHICH IS THE PERCENTAGE THAT WE LEVERAGED IN LAST YEAR'S PRESENTATION OF BUDGET WORKSHOPS WHEN WE, UH, PRESENTED THE FI FIVE YEAR, UH, OUTLOOK. SO THAT'S NOT WHAT WE'RE PROPOSING, IT'S JUST, UH, JUST FOR PURPOSES. AT THE BOTTOM LINE, WE BUDGETED A STRUCTURAL DEFICIT, UH, FOR THIS YEAR, INCREMENTALLY RAISING TRANSMISSION RATES BASED ON SOCAL, SOCAL GAS'S MOST CURRENT RATE INCREASES AT THE TIME WITHOUT COMPROMISING AFFORDABILITY. ADDITIONALLY, ALTHOUGH WE ARE PROJECTING TO SPEND LESS THAN BUDGETED THIS YEAR, THE MARGIN OF NET REVENUE WIDENED IN AN UNFAVORABLE DIRECTION DUE TO INFLATIONARY COSTS, OUTPACING REVENUE. AND I ALSO WANNA SAY, IF YOU, YOU, THIS COULD BE MORE OF A DIALOGUE, SO IF YOU HAVE ANY QUESTIONS THROUGHOUT, FEEL FREE TO STOP ME AND, AND ASK. UM, SO LET'S DIVE INTO THE DETAILS. THIS YEAR, THE LARGEST DRIVER OF UNREALIZED OPERATIONAL REVENUE WAS DUE TO A WARMER WINTER THAN ANTICIPATED. ADDITIONAL REVENUE VARIANCES FOR FY 25 ARE FUNDING SOURCES FOR PASS THROUGH EXPENDITURES SUCH AS GAS, COMMODITY, AB 32, AND BILLABLE, CIP. IN REGARDS TO FY 26, WE SHOW A PROPOSED BUDGET MORE IN LINE WITH THE CURRENT YEAR'S FORECAST PROJECTIONS AND A 5% RATE INCREASE, WHICH DIRECTLY IMPACTS TRANSMISSION RATES, THE YEAR ONLY IMPACT THERE, UH, FOR VOLUMETRIC CONSUMPTION OR NON-COMMODITY. ANY QUESTIONS ON THIS SLIDE BEFORE I MOVE ON? OKAY. MOVING ON TO THE EXPENSE SIDE. MAJOR IMPACTS TO OPERATIONAL EXPENSES FOR BOTH THIS YEAR AND NEXT YEAR CONSIST OF RISING SOCAL GAS TRANSMISSION COSTS, LABOR INCREASES FOR PRIOR YEARS, LABOR NEGOTIATIONS, AND HIGHER VIP PROJECTIONS FOR PIPELINE INFRASTRUCTURE AND METER REPLACEMENT. ANY QUESTIONS HERE? YOU GUYS ARE TOO EASY. I'M GONNA NOW HAND THIS OFF TO, UH, DANIEL. OKAY. GETTING INTO THE WATER FUND, UM, UH, HERE, SIMILAR TO WHAT WE SHOWED YOU WITH GAS, WE'RE SHOWING YOU THE FY 25 BUDGET, UH, THE FY 25 ETC, THE FY 26 BUDGET WITHOUT A RATE INCREASE, AND ONE WITH AN 8% RATE INCREASE. UH, AND FY 25. THE ET SHOWS A MODEST REBOUND IN FUND BALANCE, UH, AIDED BY SOME CIP DEFERRALS FOR FY 26. UH, WE'RE PRESENTING TWO SCENARIOS, ONE, ASSUMING NO RATE INCREASE, AND ANOTHER ONE INCORPORATING, UH, 8% RATE INCREASE. THIS IS CONSISTENT AS, UH, WHAT STEPHANIE HAD SAID, UH, WITH THE FIVE-YEAR, UH, FORECAST SHARE DURING LAST YEAR'S BUDGET WORKSHOP, UH, WHICH INCLUDED THE PROJECTED RATE ADJUSTMENTS THROUGH THE . UH, HOWEVER, FACTOR IN LABOR INCREASES, UH, METROPOLITAN'S WHOLESALE RATE, HIKE AND INFLATIONARY PRESSURES, UH, WE'RE PROJECTING HIGHER RATE INCREASES, UH, THAN THE 8% PROVIDED FROM LAST YEAR. UH, WHY RIGHT SIZING REVENUE MATTERS? UH, EXPENSE PRESSURES ARE STRUCTURAL, UH, NOT TEMPORARY. UH, AN 8% INCREASE WOULD HELP ALIGN REVENUE WITH RISING OUT SPECIFICALLY WITH LABOR, UH, IMPORTED WATER VEHICLE ELECTRIFICATION MANDATES AND DEBT SERVICE, SAME CATEGORIES THAT, UH, WE SHOWED YOU WITH GAS. WE'RE LOOKING AT PERSONAL SERVICES, UH, CIPO AND M, UH, PUMPED AND PURCHASE AT DEBT SERVICE AND THE GENERAL FUND TRANSFER, UH, UH, FOR THE FY 25 COST DRIVERS, UH, LABOR WE'RE EXPER, UH, WE'RE EXPECTING A $2 MILLION, UH, SAVINGS, UH, RELATED TO VACANCIES, AND WE'RE SHOWING A MODEST INCREASE FOR FY 26. FOR THE CIP. UH, WE HAVE 50 MILLION BUDGETED FOR FY 25, AND WE'RE EXPECTING A 38 AND A HALF MILLION DOLLARS ETC, UH, FOR THE CIP, UH, WHICH IS CURRENTLY FUNDED, UH, USING $21 MILLION FUNDED VIA THE NEW 2024 BOND. UH, THE 11 AND A HALF MILLION DEFERRED, CIP AND FY 25 IS, UH, PARTIALLY REFLECTED IN THE INCREASE IN THE FY 26 BUDGET. SO THIS ADJUSTMENT ALSO CORRELATES WITH THE REDUCED USE OF DEBT PROCEEDS AS SHOWN IN THE NEXT SLIDE. ESSENTIALLY, WE'RE RESERVING OUR, OUR, UM, ESSENTIALLY WE'RE RESERVING OUR ALLOCATION DRAWDOWN TO PRESERVE FUNDING CAPACITY FOR THE FOLLOWING YEAR, ONNO AND M HEALTH, UH, FLAT, UH, DESPITE INFLATION, UH, THROUGHOUT BELT TIGHTEN OR THROUGH BELT [00:10:01] TIGHTEN AND LOWER DEMAND WATER PURCHASES. ALTHOUGH WATER PURCHASES HAVE EXPERIENCED DOUBLE DIGIT RATE INCREASES, WE'RE PROJECTING LOWER, LOWER OVERALL COST. THIS IS DUE TO A COMBINATION OF REDUCED DEMAND AND A MORE FAVORABLE SUPPLY MIX WITH INCREASED RESILIENCE ON PUMPING OR PUMPED WATER OVER PURCHASE WATER AND APPROACH, SORRY, AN APPROACH THAT SUPPORTS BOTH OUR LONG-TERM GOALS AND ALIGNS WITH OUR BUSINESS. UH, THE DEBT SERVICE TAKES INTO ACCOUNT THE NEW 2024 BONDS AND OUR NEW DEBT POTABLE WATER, OR SORRY, THE, UH, WATER REVENUE. UH, WE HAVE OUR CATEGORIES FOR POTABLE WATER CELLS, UH, RECLAIMED WATER CELLS, UH, MISCELLANEOUS REVENUE LINE OF CREDIT, UH, DEBT PROCEEDS, AND THE REIMBURSABLE CIP. UH, AGAIN, THE 8%, UH, INCREASE IS FOR DISCUSSION ONLY. UH, WE'RE NOT PROPOSING OR, UH, TAKING ANY FORMAL ACTION TODAY. THE 8% RE INCREASE IS FOR ILLUSTRATIVE AND PLANNING PURPOSES ONLY, AND TO PROVIDE CONTINUITY FROM THE PREVIOUS BUDGET WORKSHOPS HELPING US UNDERSTAND LONG TERM IMPACTS. UH, THE DEBT PROCEEDS, UH, IN 21 MILLION FY 26, UH, 13 POINT A HALF IS A CONTINUED DRAWDOWN FROM THE FFY 24 BONDS, AND THE ADDITIONAL SEVEN AND A HALF MILLION LINE OF CREDIT, UH, THIS AMOUNT IS LESS THAN THE ORIGINAL ANTICIPATED AMOUNT, UH, THAT WAS INCORPORATED IN LAST YEAR'S FIVE YEAR FINANCIAL SUPER FUND. DID ANYONE HAVE ANY QUESTIONS ON THE WATER FUND BEFORE I MOVE ON? JUST REAL QUICK, THE, UH, THE DEBT PROCEEDS, WHY IS IT LESS THAN 26TH THAN WE ANTICIPATED? UM, FOR, UH, IT WAS, UH, PART OF LAST YEAR'S FORECAST, WE HAD PLUGGED IN, UH, AN AMOUNT, ASSUMED AMOUNT FOR THE LINE OF CREDIT, AND IT LOOKS LIKE WE WERE ANTICIPATING LESS. IT'S A COMBINATION OF A REDUCED OR DEFERRED, UH, DRAW DOWN ON OUR 2024 BOND. SO ORIGINALLY WE ANTICIPATED SPENDING THE 34 POINT A HALF MILLION IN THE CURRENT YEAR, AND NOW WE'RE LOOKING AT ABOUT 29 AND A HALF, UH, DEFERRING ABOUT 5 MILLION, UH, WHICH IS THEN REDUCING THE ORIGINAL AMOUNT ANTICIPATED. SO ESSENTIALLY RESERVING THAT ALLOCATION, 2026, DANIEL, SO, SO IN THE, IN THE BOND DOCUMENTS, I'M GOING TO TRY TO, AND THEN YOU CORRECT ME IF I GET IT WRONG. SO IN THE BOND DOCUMENTS AND THE FIVE YEAR FORECAST, THE ASSUMPTION IN THE MOD DOCUMENTS WAS ABOUT A 50% PEGO. SO 50% FUNDED THROUGH DEBT, 50% FUNDED THROUGH CASH. SO THEN WE'VE HAD A REDUCTION IN THE CIP IN FISCAL YEAR 25 ON A PERFORMANCE BASIS. THAT'S SHIFTING INTO FISCAL YEAR 26. SO IF WE STICK WITH A 50% PAYGO, THEN BOTH CASH AND DEBT MOVE THEMSELVES INTO FISCAL YEAR 26. AND THEN YOU CAN SEE THOSE EFFECTS OCCURRING BOTH ON THE PREVIOUS CHART AND ON THIS CHART. IS THAT YEAH, ABOUT RIGHT. WILL THAT SAY ARTIFICIALLY, BUT WILL, WILL THAT INCREASE THE FY 20 FIVES YEAR END FUND BALANCE, UH, ABOVE WHAT IT WOULD'VE BEEN HAD WE COMPLETED ALL OF OUR CFP? WELL, IT HAS THE, IT HAS THE OPPORTUNITY TO DO THAT, NOT WITHSTANDING ALL THE OTHER THINGS THAT ARE MOVING IN THE BUDGET, BUT THE NET EFFECT OF THAT WOULD BE A CONTRIBUTION TO THE FUND BALANCE, BUT IT WOULD BE TEMPORARY BECAUSE WE'D BE SHOWING YOU THAT THE SHIFT IS COMING AS YOU FACE THE RATE DECISIONS THAT YOU FACE IN THE FISCAL YEAR 26, YOU'D HAVE TO TAKE THAT INTO ACCOUNT, RIGHT? UM, AND THEN NOT WITHSTANDING THE LINE OF CREDIT AND THE REASON FOR THE LINE OF CREDIT, WHICH WAS ALSO EXPRESSED IN, IN THE BOND DOCUMENTS, HAVING LOWER AMOUNTS NOW HELPS YOU, BUT IT DOESN'T ELIMINATE THE NEED FOR AN INITIAL PHASE OF A LINE OF CREDIT IN THESE YEARS, IN THESE NEXT FEW YEARS. MOVING ON TO BACK TO THE, UH, GAS FUND, AND I'LL APOLOGIZE, STEPHANIE SAID IT'S MEANT TO BE A DIALOGUE, SO BY ALL MEANS GO THE WHOLE THING. OKAY. UH, SEWER FUND, UH, SAME STRUCTURE AS BEFORE. UM, THE SEWER FUND IS ROUGHLY ONE FIFTH THE SIZE OF THE WATER FUND. WHILE THE DOLLAR FIGURES ARE SMALLER, THE SAME UNDERLYING PRESSURES ARE FA RISING LABOR COSTS, INFLATIONARY TRENDS, AND CAPITAL . THE FY 25 E TCS SHOWS A MODEST REBOUND IN FUND BALANCE AIDED BY SOME CIP DEFERRALS AND OFFSET BY CIP REIMBURSEMENTS FOR FY 26. AGAIN, WE'RE PRESENTING TWO SCENARIOS, UH, ONE ASSUMING NO RATE INCREASE, AND ANOTHER INCORPORATING A 7% RATE INCREASE, UH, CONSISTENT AGAIN WITH THE FIVE-YEAR FORECAST SHARE DURING LAST YEAR'S BUDGET WORKSHOP. PUT THIS IN PERSPECTIVE, UH, BECAUSE OF SEWER FUND IS MUCH SMALLER, IT'S MORE VULNERABLE TO VOLATILITY. UH, [00:15:01] THE DIFFERENCE BETWEEN THE MINIMUM AND MAXIMUM RESERVE LEVELS IS ABOUT $5 MILLION. UH, SO ROUGHLY THE COST OF ONE AND A HALF CAPITAL PROJECTS, THAT MEANS EVEN A SMALL INCREASE IN EXPENSE OR A DIP IN REVENUE CAN HAVE A BIG IMPACT. AND AS WE MOVE FROM FY 26, THAT'S EXACTLY WHAT WE'RE SEEING. REDUCED REVENUE, UH, NEW PROJECTS COMING ONLINE AND OUR FUND BALANCE DROP INTO THE AS PREVIOUSLY STATED, UH, WE BUILT A 7%, UH, RATE INCREASE, UH, INTO THE PREVIOUS YEAR FORECAST. AND WE'RE JUST SHOWING YOU HERE WHAT THAT WOULD LOOK LIKE. UH, STARTING WITH THE DAILY SERVICE CHARGES, UH, AND VOLUMETRIC CHARGES, IT'S SIMILAR TO WHAT WE OBSERVED IN THE WATER REVENUE, UH, WHERE AGAIN, WE'RE PROJECTING TO END THE YEAR VERY CLOSE TO THE BUDGET. SO LET'S, GOOD NEWS. SEWER CAPACITY FEES ARE EXPECTED TO REMAIN FLAT FY 26 TO ACCOMMODATE IN THE, TO ACCOMMODATE THE INCREASE IN CIP. UH, WE'RE PLANNING THE $8 MILLION LINE OF CREDIT. AND AS FOR A MISCELLANEOUS REVENUE, THE DROP IS DUE TO DEFERRED, UH, REIMBURSABLE PROJECTS, WHICH HAS NOW BEEN SHIFTED TO FFY 26 CALL. UH, THIS WILL ALSO BE REFLECTED IN THE NEXT SLIDE. AND CIP QUESTION ON THE PLAN OF CREDIT? YEAH. UH, IS THAT JUST DIRECTLY RELATED TO THE LARGE PROJECT THAT WE'RE ANTICIPATING? CORRECT. AND IS THAT JUST A ONE YEAR? UM, NO, IT'S A FEW YEARS ACTUALLY, UH, TO GET US THROUGH THE FY 28. 28, YEAH. UH, WILL THIS 8 MILLION COVER US THROUGH THAT ENTIRE PERIOD, OR NO, THIS IS JUST FOR THE FY 26 PERIOD? YES, WE EXPENDITURE, UH, SAME CATEGORIES, UH, PERSONAL SERVICES, O-N-M-C-I-P TRANSFER, UH, ON THE PERSONAL SERVICES. WE'RE ANTICIPATING A SMALL AMOUNT OF SAVINGS. IT LOOKS LIKE WE'RE GONNA HIT OUR TARGET, UH, FOR THE BUDGETED AMOUNT. AND THEN WE'RE SHOWING A MODEST, UH, INCREASE IN FY 26. UM, OH, AND NOW STAYING RELATIVELY FLAT, WE HAVE INCREASED DEAD SERVICE COSTS ON THE CIP, UH, WE'RE FORECASTING 12 AND A HALF. WE WERE FORECASTING 12 AND A 12.4 MILLION FOR THE BUDGETED AMOUNT. AND NOW WE ARE SHOWING, SORRY. UH, HOWEVER, THE ETC INCLUDES, UH, $6.5 MILLION DEFERRED, UH, DEFERRALS AND PROJECTS FOR FY 26. UH, ROB'S ENGINEERING TEAM RECENTLY COMPLETED A SEWER MASTER PLAN, WHICH NOW INCLUDES SHIFTING OF PROJECTS TO ACCOMMODATE THE, UH, 28 OLYMPICS. AND THAT'S DRIVING A MORE STRATEGIC FORWARD LOOKING APPROACH TO OUR INFRASTRUCTURE. THE GENERAL FUND, UH, WE'RE SHOWING A SLIGHT INCREASE, UH, DUE TO AN INCREASE IN RECENT ACTIVITY. UH, SO WE'RE JUST RIGHT SIZING THAT. AND THAT CONCLUDES, ACTUALLY, I'M GONNA HAND IT BACK OVER TO STEPHANIE. THE, IS THERE ANY QUESTIONS, UH, REGARDING STEWART? OKAY. THANK YOU, DANIEL. COMMISSIONER SHANNON, WOULD YOU LIKE TO ASK YOUR QUESTION? YEAH, , UH, YES. I'LL LEARN IT WHEN I LEAVE. CAN YOU, CAN YOU BRING THAT? YEAH, PLEASE CONTINUE. COMMISSIONER SEAN? YEAH. IS THIS THE ISSUE THAT CHRIS HAD, UM, THAT WE WOULD NOT BE ABLE TO TRANSFER THE SAME AMOUNT IN, UH, 26 THAT WE WERE IN 25? I, I THINK IT'S, IT IS IN PART RELATED TO THAT DISCUSSION. I, I THINK IN THE, IN THE INFORMATION SESSIONS THAT I TRIED TO HAVE PRESENTED TO THE BOARD, AND THEN WHEN WE HAD THE DISCUSSION IN THE RETREAT ON THE STRATEGIC CHALLENGES, THERE IS THAT ELEMENT OF BUDGETARY PRESSURES COMING FORWARD. AND THEN AT THE SAME TIME, THE LANGUAGE IN THE CHARTER THAT PROVIDES GUIDANCE ON THE TRANSFER. AND THEN AT THE SAME TIME, IS YOUR ABILITY TO ADJUST RATES ON THE GAS FUND, WHICH IS DIFFERENT THAN YOUR ABILITY TO ADJUST RATES ON THE WATER SIDE. AND SO THAT COMBINATION OF PRESSURES COMES FORWARD AND YOU CAN BEGIN TO SEE IT IN PART, YOU CAN BEGIN TO SEE IT THIS YEAR, BUT IT IS WHY THERE NEEDS TO BE A COMPREHENSIVE PLANNING AND FORWARD LOOKING DISCUSSION WITH THE CITY, GIVEN THE BUDGETARY PRESSURES THAT WE FACE, WHAT DOES THE LONG TERM LOOK LIKE? AND TO HAVE A COMMON UNDERSTANDING OF WHAT THE YEARS AHEAD NEED TO NEED TO BE. SO YES, IN PART, IT IS [00:20:01] ONE ASPECT OF WHAT YOU'RE SEEING. AND THEN ON THE OTHER HAND, THERE'S ALSO THE NEED TO DO MORE COMPREHENSIVE PLANNING TO HAVE THAT DISCUSSION AND SAY, WHAT SHOULD IT BE IN THE YEARS AHEAD? UM, YOU USE THE LANGUAGE OF THE LAKE. GREAT. UH, MAYOR, UH, BOB FOSTER, ARE WE JUST DOWN THE ROAD HERE? I, I DON'T BELIEVE SO. I, I THINK ONE OF THE ASPECTS OF CONSOLIDATION IS TO BRING TO NOW A GOVERNING BODY LIKE THE BOARD, THE ABILITY TO TRANSACT ON THE TRANSFER, TRANSACT ON THE BUDGET, AND TRANSACT ON THE RATES IN A WAY THAT THE CITY HAD NOT EXPERIENCED BEFORE. SO PREVIOUSLY THERE WAS ALL KINDS OF INTERACTIONS WITH THE REFLECTION THAT THE GAS DEPARTMENT ENERGY RESOURCES WAS SIMPLY PART AND PARCEL OF THE CITY'S OVERALL BUDGET PROCESS. CONSEQUENTLY, SETTING UP RATES, GUIDANCE ON CIP, GUIDANCE ON DEBT, FINANCING, GUIDANCE ON SO MANY THINGS WAS KIND OF ENMESHED WITHIN THE CITY'S GOVERNANCE STRUCTURE. BUT IT IS A UTILITY, AND AS A UTILITY, YOU FACE PRESSURES THAT ARE DIFFERENT THAN OTHER CITY DEPARTMENTS. AND SO THEREFORE, NOW I THINK IS AN OPPORTUNITY, IT'S A CHALLENGE, BUT IT'S ALSO AN OPPORTUNITY TO NOW AS A GOVERNING BOARD FOCUSED ON THE PRESSURES THAT UTILITIES FACE TO NOW SAY, THIS IS THE CHALLENGES GOING AHEAD, AND THIS IS HOW WE WORK ON THEM TOGETHER. WELL, AS YOU KNOW, RIGHT, CHRIS IS VERY FORCEFUL, UH, AND I DON'T KNOW THAT YOU FEEL THE SAME WAY, BUT, UH, CHRIS IS VERY FORCEFUL ABOUT IT, FEELINGS ABOUT OUR INABILITY TO KEEP, UH, GOING GREAT. UM, , BUT, UM, VERY CONCERNED THAT, FIRST OF ALL, LET ME ASK YOU, HAVE WE BEGUN TO NEGOTIATE? HAVE WE TALKED TO THE CITY ABOUT, HEY, WE CAN'T KEEP DOING THIS. I HAVE STARTED THAT CONVERSATION. SO THE STARTING CONVERSATION CON STARTING CONVERSATION STARTS WITH WHERE ARE WE AT THIS MOMENT AND WHAT ARE THE EXPECTATIONS AT THIS MOMENT? AND HAVING THAT GROUNDING, THEN WHAT IS THE CONVERSATION THAT NEEDS TO BE HAD GOING FORWARD? SO THAT HAS ALREADY STARTED. I STARTED THAT PROCESS A FEW MONTHS AGO WITH, UH, CITY GOVERNANCE, TALKING TO THEM ABOUT HOW THIS NEEDED TO GO FORWARD. SO IN THAT CONVERSATION HAS BEEN THE DISCUSSION THAT I WANT TO BE CLEAR THAT UNLESS THERE'S CERTAIN ACTIONS TAKEN, THIS IS NOT SUSTAINABLE. AND SO THAT'S BEEN MADE CLEAR TO THEM AS WELL. THEY ARE AWAITING THE LONG RANGE PLANNING THAT WE'RE DOING, AND I TOLD THEM THAT THAT WILL BE THE FOCAL POINT TO HAVE A DISCUSSION ON WHAT THE YEARS AHEAD OR 10. SO IT IS A NEGOTIATION. IT IS A DISCUSSION. I FIRMLY BELIEVE THAT YOU NEED DATA AND INFORMATION FOR WHAT THE YEARS AHEAD LOOK LIKE. I THINK CHRIS WAS DILIGENT AND ESTABLISHING WHAT THE CURRENT SITUATION IS AND HOW THAT WITH AN EXPECTATION GOING FORWARD IS PERHAPS DIFFICULT. BUT YOU NEED THE OTHER DATA TO COME FORWARD IN A PLAN TO SAY, LET ME SHOW YOU HOW DIFFICULT IT ACTUALLY IS TO THEN HAVE A NEGOTIATED DISCUSSION AS TO WHAT IT SHOULD BE. AND, AND THAT IS WHAT LIES AHEAD. I TOLD YOU OUT OF THE RETREAT, PROBABLY IN JULY TIMEFRAME, WE'LL HAVE THE MODEL. AND INHERENTLY THAT'S ONE OF THE USES OF THE MODEL TO HAVE AN INFORMED DISCUSSION WITH THE CITY ON WHAT IT NEEDS TO BE . BUT WE WILL HAVE, WE WILL HAVE YOUR KNOWLEDGE AND YOUR GUIDANCE TO SUPPORT US. IT'S, UH, IT'S SITTING IN HERE AND IT DOESN'T GO AWAY. KEVIN, BUDDY, HOW DO YOU FEEL ABOUT THIS? UH, SO I APPRECIATE YOUR COMMENTS, BOB. UM, I, I COMPLETELY UNDERSTAND WHERE YOU'RE COMING FROM. I LOOK FORWARD TO GETTING TO THE POINT WHERE WE ARE LOOKING AT THIS FROM A LONG TERM PERSPECTIVE AND NOT ON AN ANNUAL FYFY YEAR TO YEAR. I THINK THE ULTIMATE ANSWER, WHATEVER IS LANDED ON IT NEEDS TO BE MEASURABLE. IT NEEDS TO BE ATTAINABLE, IT NEEDS TO BE PREDICTABLE THAT WE CAN, AS A UTILITY FORECAST FIVE YEARS, 10 YEARS DOWN THE ROAD, YOU KNOW EXACTLY WHAT, WHAT THIS GENERAL FUND TRANSFER IS GOING BE. I AGREE. I I THINK WE NEED A STANDARD TO KNOW, WE NEED TO KNOW WHERE WE'RE GOING. THAT ISN'T, IT ISN'T THIS WAY ONE YEAR THAT WAY WHEN I, I UNDERSTAND UNFORESEEN CIRCUMSTANCES, BUT A TO CITY, BUT WE NEED TO TRY TO STANDARD KNOW AND SOME IDEA WHERE WE'RE GOING OTHERWISE. I AGREE. [00:25:03] I I WAS CLEAR AND DIRECT TO THEM IN THE, WITH THIS ADDED DIMENSION. I, I THINK THAT AS YOU WORK WITH US AND STAFF WORKS WITH YOU TO ESTABLISH THIS PLAN, THERE ARE THESE INHERENT ELEMENTS, AGAIN, OF BEING A UTILITY. YOU AT TIMES DEAL WITH STRUCTURAL BUDGET DEFICITS. YOU MAKE RATE DECISIONS THAT AFFECT FUND BALANCE. SO IF YOU ALLOW FUND BALANCE TO MOVE, YOU ALLOW YOUR RATE DECISIONS TO FLUCTUATE, THEN I WOULD SAY IT'S A FAIR DISCUSSION AND A DIRECT DISCUSSION AS TO WHY A COMPONENT LIKE THE FUND TRANSFER DOES NOT ALSO FLUCTUATE. IF EVERYTHING ELSE IS MOVING, WHY DOES THAT NOT MOVE? NOW? I THINK THAT IS PART OF THE DISCUSSION. I THINK THAT IS PART OF THE NEGOTIATION THAT IS PART OF THE LONG RANGE PLANNING. BUT TO CONCLUDE MY COMMENTS, I WAS DIRECT TO THEM THAT, TO BUILD ON WHAT YOU WERE SAYING, COMMISSIONER SHANNON, THERE IT IS IN NOBODY'S INTEREST TO HAVE THIS BE AN ANNUAL DISCUSSION AND JUST SIMPLY CONSTANTLY TALKING ABOUT IT EVERY YEAR. IT'S IN EVERYBODY'S INTEREST TO HAVE AN UNDERSTANDING GOING FORWARD OF WHAT IT SHOULD BE COMMONLY, AND THEN DEAL WITH THE YEAR TO YEAR CHANGES THAT MIGHT OCCUR, WHICH IS, AS ALWAYS, LIFE DEALS, US UNEXPECTED SITUATIONS. I THINK THIS IS A GOOD TIME TO TRANSITION TO OUR FINAL SLIDE. AS MENTIONED AT THE BOARD RETREAT EARLIER THIS MONTH, WE, UH, CONVEYED A STRONG COMMITMENT AND FOCUS TO PROVIDE RELIABLE AND AFFORDABLE UTILITIES TO ALL RATE PAYERS WHILE MAINTAINING CRITICAL INFRASTRUCTURE AND SUSTAINABLE FINANCIAL COMMENTS TO ALIGN OUR BUSINESS PLAN WITH THE BUDGET, WE, WE CAN LEVERAGE SPECIFIC , UM, TO BALANCE OUR BUDGET WHILE AIMING TO ACHIEVE AFFORDABLE RATES. THESE TOOLS ARE CONTROLLING COSTS, IMPROVING OPERATIONAL EFFICIENCY, MANAGING DEBT, AND INCREASING EACH OF THESE TOOLS CAN BE INCORPORATED IN A NUMBER OF WAYS, WHICH WE WILL DIVE INTO FURTHER THROUGHOUT THE COURSE OF OUR UPCOMING BUDGET WORKSHOP. THIS CONCLUDES OUR PRESENTATION. IF YOU HAVE ANY ADDITIONAL QUESTIONS OR FEEDBACK IN PREPARATION OF NEXT WEEK'S FIRST BUDGET WORKSHOP, BE HAPPY TO, UH, RESPOND. THANK YOU. SO I'LL JUMP IN. UH, I THINK IT WOULD BE HELPFUL TO THE BOARD, UM, WHEN YOU'RE, UH, ROLLING OUT THE PROPOSED, UH, RATES AND, AND FY 26 BUDGET, UH, TO BE KEENLY AWARE OF, OF SHOWING THE IMPACTS TO THE RESERVES BALANCE. I KNOW THE BOARD IS, IS PARTICULARLY CONCERNED ABOUT THE FACT THAT WE CONSISTENTLY HAVE NOT REACHED WHAT, WHAT THIS BOARD VOTED ON WAS, UH, MINIMUM RESERVES. AND, UH, I THINK IT WOULD BE HELPFUL TO, TO SHOW ILLUSTRATIVELY WHAT IT WOULD TAKE TO GET TO FULLY FUNDED RESERVES, UH, IF THAT IS AT ALL POSSIBLE. ABSOLUTELY. THAT IS OUR GOAL. AND AS, UM, WE'VE BEEN FOCUSING ON THESE, THESE TOOLS, THESE LEVERS, AS I CALL THEM, UM, RAISING RATES IS ONE, IS JUST ONE WAY, BUT IT, IT IS NOT THE ONLY WAY THAT WE CAN MANAGE OUR, OUR RESERVES. UM, I DON'T KNOW IF I'M SHARING TOO MUCH AND GIVING AWAY TOO MUCH FOR NEXT WEEK, BUT ONE OF THE THINGS ON THE GAS SIDE PARTICULARLY IS, UH, EXPLORING BONDS. SO ISSUING DEBT, LOOKING AT, UH, SIMILAR TO WATER AND SEWER, HOW, UM, THE ORGANIZATION HAS LEVERAGED THOSE TOOLS FOR HISTORICALLY DECADES. UH, GAS HAS NOT, AND IT'S MAINLY BEEN ON A PAY GO BASIS. THE ONE OF THE BENEFITS HAS BEEN THE, UH, PREPAID DEAL, WHICH ALLOWED, UH, 30 YEARS OF A BENEFIT TO, TO FUND, UM, SOME OF OUR EXPENSES. BUT WE'RE NOW IN A POSITION WHERE I THINK SOMETIMES BUILDING DEBT IS BAD, AND I THINK WE THINK ABOUT THAT IN OUR PERSONAL FINANCES, BUT ACTUALLY DEBT IS SOME, IS A TOOL TO ALLOW US TO SMOOTH OUT OUR RATES AND IMPACTS TO, TO RATE PAYERS. SO WE ARE LOOKING AT THOSE THINGS. UM, OUTSIDE OF JUST, I COULDN'T AGREE MORE WITH KEVIN. UH, I WAS GONNA WITHHOLD THIS COMMENT, COMMENT UNTIL WE ACTUALLY GET INTO THE . SO I THINK WE NEED TO MEASURE THESE TRANSFERS IN TERMS OF AT LEAST PARTIALLY IN TERMS OF NUMBER OF, AMOUNT OF RESERVES WE, UH, SET ASIDE. [00:30:01] WE SPENT A LOT OF TIME TALKING ABOUT ABOUT HOW PREVIOUS BOARDS HAD DICTATED THAT CONTRARY TO EARLIER BOARD HAD DICTATED THAT WE HAVE MINIMUM AMOUNT OF VERY LARGE RISK AND, UM, WE SEEM TO HAVE DEPARTED VERY SUBSTANTIALLY FROM THAT. I THINK THERE NEEDS TO, I, AND I AGREE WITH YOU BECAUSE ONE OF THE THINGS WE DISCUSSED INTERNALLY WITH STAFF IS THE OPPORTUNITY TO REVISIT OUR RESERVE POLICY AND GETTING BACK TO A PLACE THAT IS MORE SUSTAINABLE. I'D LIKE TO GET TO, I THINK WE ALL WOULD LIKE TO GET TO A PLACE WHERE WE HAVE STABLE RESERVES AND THAT WE MAINTAIN THE MINIMUM AND THAT IS OUR PRIORITY AND OUR, AND OUR VEHICLE TO CONVEY THIS TO, TO OUR PARTNERS IN THE CITY. AND SO BUILDING ON WHAT STEPHANIE SHARED WITH YOU AND, AND HOW I SEE THINGS COMING IN THE WORKSHOPS AHEAD, I THINK IT WILL BE INSTRUCTIVE NOT JUST TO THE BOARD, BUT ALSO ANY MEMBER OF THE PUBLIC THAT IS PRESENT OR PERHAPS ANYBODY WHO THEN WISHES TO TAKE THE PRESENTATION THAT IT, IT IS INDEED THESE FOUR ELEMENTS THAT WILL COME FORWARD IN THE BUDGET PROCESS. AND WE'RE GOING TO BE TRYING TO DO OUR VERY BEST TO CONVEY TO YOU THIS ASPECT OF CONTROLLING COSTS AND THE EFFORT THAT THE BUDGET PROCESS ITSELF ENTAILS TO CONTROL COSTS TO BRING YOU THE BUDGET IN THE FIRST PLACE. THAT THAT IS INCREDIBLY IMPORTANT IN TERMS OF EFFICIENCY. I KNOW THAT IT IS OUT THERE IN TERMS OF WHAT CONSOLIDATION HAS OR HAS NOT DONE. I THINK IT'S INSTRUCTIVE FOR THE BOARD AND IT'LL BE UPON US TO COMMUNICATE THAT WHEN WE TALK ABOUT EFFICIENCIES, IT RELATES TO THE PUBLIC'S PERSPECTIVE THAT IF FOUR YEARS AGO THE NUMBER WAS A HUNDRED, THEN NOW FOUR YEARS LATER, I EXPECT YOU TO SHOW ME 85 WHEN IN REALITY WHAT WAS 104 YEARS AGO IS NOW 135. AND GIVEN THAT IT'S A HUNDRED AND THIRTY FIVE FOUR YEARS LATER, AND I SHOW YOU SOMETHING IN THE MID ONE TWENTIES THAT YOU UNDERSTAND THAT THERE WAS EFFICIENCIES THAT CAME FORWARD AND DELIVERED THOSE SAVINGS. IT'S NOT THAT IT WENT DOWN BECAUSE AS YOU KNOW NOW FROM THE INFORMATION SESSIONS IN THE RETREAT, THE UTILITIES BUDGET PRESSURES HAVE TO DO WITH AN INCREDIBLE AMOUNT OF FIXED COSTS THAT ARE RISING REGARDLESS OF THE AMOUNT OF THE COMMODITY SOLD. I THINK IT'S INCREDIBLY IMPORTANT AS WE DELIVER THE BUDGET THAT WE CONVEY THE EFFORT THAT STAFF UNDERGOES EACH AND EVERY YEAR TO CONTROL COSTS AND TO BRING EFFICIENCIES INTO THE BUDGET PROCESS THAT YOU ULTIMATELY SEE. AFTER THAT, THERE WILL BE THIS ASPECT OF MANAGING DEBT FOR ANY NUMBER OF REASONS. AND I THINK WITH THE INFORMATION SESSIONS AND THE RETREAT, YOU ARE NOW WELL PREPARED TO UNDERSTAND THE DRIVERS IN EACH OF THOSE CATEGORIES. IN THE GAS FUND, IT'LL BE PARTICULARLY IMPORTANT BECAUSE WE IN ESSENCE, DON'T HAVE A LARGE DEBT LOAD IN THE GAS FUND, WHICH MEANS THAT THERE'S INCREDIBLE OPPORTUNITY TO HAVE DEBT FINANCING, ALBEIT WITH THE UNDERSTANDING OF WHAT DEBT FINANCING IS INTENDED TO ACHIEVE. YOU'VE MADE THE COMMENT, COMMISSIONER SHANNON, ABOUT THE FUND BALANCE AND RESERVES AND THINGS LIKE THAT. AS WE GO FORWARD AND ENGAGE IN DEBT FINANCING, THERE IS A NEED TO COMMUNICATE WHAT IS THE EFFECTS OF THAT AND WHAT DO THEY REPRESENT AS AN OPPORTUNITY FOR YOU AS A GOVERNING BOARD TO ENGAGE IN. SO YOU WILL SEE THAT. I WANT TO HIGHLIGHT FOR YOU THAT ON THE SEWER, UH, PREVIEW THAT YOU SAW TODAY, IT HAS AN ELEMENT THAT IS INDEED SOMETHING OUTTA THE RETREAT. I TOLD YOU THAT IT WAS A CONTRAST WITH WHAT YOU, UH, HAD EXPERIENCED THE YEAR BEFORE. AND AT THE SAME TIME IN THE RETREAT THAT I TOLD YOU BECAUSE OF THE LA 28 OLYMPICS, THERE WOULD BE THIS NEED IN THIS CURRENT QUARTER TO BEGIN DIALOGUING WITH YOU ON WHAT THE CHANGES WERE THAT WERE NEEDED. AND SO THAT'S WHY YOU SEE THAT IN THERE. IT, OTHER THINGS I TOLD YOU WOULD COME IN THE THIRD QUARTER OF THE YEAR, BUT THIS STUFF ALREADY IS AFFECTING US AND WE NEEDED TO ENGAGE IN INTO IT NOW. THAT'S WHY YOU'RE GONNA SEE IT THERE. AFTER WE'VE DONE ALL THAT, THEN YOU'LL SEE THE RATE PROPOSALS THAT CAN NOW BEGIN TO IMPACT THE REMAINDER OF THE BUDGET PRESSURES AND FUND BALANCE PRESSURES. AND TO CONCLUDE MY COMMENTS, SORRY FOR BEING LONG ON THIS, BUT COMMISSIONER SHANNON, YOU HAD MADE THE COMMENT AND, AND IT IS INSTRUCTIVE [00:35:01] GIVEN EVERYTHING THAT WE'VE EXPERIENCED AS A UTILITY IN THIS PAST YEAR, THE NEED TO REEVALUATE OUR FINANCIAL RESERVE POLICIES AND THE DRIVERS OF IT, AND THE ACTIONS THAT THE BOARD WILL TAKE IN RESPONSE TO FLUCTUATIONS IN THE, IN THE RESERVES, IT'S INCREDIBLY IMPORTANT TO TAKE THAT ON AS A POLICY MATTER FOR THE BOARD. AND I IMAGINE THAT COMING OUT OF THE BUDGET AND RATE DISCUSSIONS WILL BE AN ENGAGEMENT WITH THE BOARD TO SET A NEW FINANCIAL RESERVE POLICY TO INFORM EVERYTHING, INCLUDING THE GAS FUND AS WELL. THANK YOU. THANK YOU FOR THOSE COMMENTS. IS THERE ANY PUBLIC COMMENTS? AND COMMISSIONER SHANNON, DO YOU HAVE ANY ION I I TRIED THAT AND, AND IT DIDN'T GET ME ANYWHERE. UH, THANK YOU VERY MUCH FOR THE PRESENTATION. THANKS TO TO ALL THE FINANCE FOLKS. UH, LOOKING FORWARD TO SEEING THE BUDGET ROLLOUT. UM, I'D LIKE TO MAKE A MOTION TO RECEIVE AND FILE THE FISCAL YEAR 2025 MID-YEAR OUTLOOK AND FISCAL YEAR 2026 BUDGET PREVIEW. THANK YOU. ALL THOSE IN FAVOR SAY AYE. AYE. AND THOSE OPPOSED? UH, OKAY. FINALLY, [PUBLIC COMMENT Opportunity to address the Committee of the Utilities Commissioners concerning the subject matter. Each speaker is limited to three minutes to make their comments unless extended by the committee chair.] PUBLIC COMMENTS. IS THERE ANYONE WISHING TO SPEAK ON A NON AGENDA ITEM? SEEING NONE. THE PUBLIC COMMENT PERIOD IS NOW CLOSED. AND [ANNOUNCEMENTS] ARE THERE ANY ADDITIONAL ANNOUNCEMENTS? WELL, THEN THE MEETING IS ADJOURNED. [ADJOURNMENT] THANK YOU EVERYONE. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.