* 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. [CALL TO ORDER] [00:00:04] MEETINGS CALLED TO ORDER [PLEDGE OF ALLEGIANCE] PLEDGE OF ALLEGIANCE, DANIEL GUTIERREZ. READY, BEGIN PLEDGE ALLEGIANCE TO THE OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS. STANDS. ONE NATION UNDERGRAD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. OKAY, THANK YOU, DANIEL. [ROLL CALL] OKAY, I CALL ANDINA FOR THE ROLL CALL PRESIDENT MCGUIRE. VICE PRESIDENT SCOTT PRESENT. SECRETARY CORDERO. HERE. COMMISSIONER SHANNON IS ABSENT AND COMMISSIONER RAINEY IS ABSENT. WE HAVE A QUORUM. THANK YOU FOR THE RECORD. COMMISSIONER SHANNON AND COMMISSIONER RAINEY ARE EXCUSED FROM THE JUNE 17TH BOARD MEETING. ARE THERE ANY OBJECTIONS BY THE BOARD, FROM THE BOARD? NO. SEEING NONE. WE'LL NOW MOVE ON TO THE REGULAR AGENDA. [1. 25-55572 Recommendation to approve May 15, 2025 Board meeting minutes.       Suggested Action: Approve recommendation.  ] OKAY. WE HAVE AN EXCITING MEETING TODAY. UM, WE'LL START WITH ITEM NUMBER ONE, APPROVING THE MINUTES FROM MAY 15TH, 2025. THE BOARD MINUTES. ARE THERE ANY PUBLIC COMMENTS? ANY COMMISSIONER COMMENTS? DO I HAVE A MOTION TO APPROVE? SO MOVED. THANK YOU. DO I HAVE A SECOND? THANK YOU. ALL THOSE IN FAVOR SAY AYE. AYE. AYE. ANY OPPOSED? THE MOTION CARRIES. WELL, VOTING'S GONNA BE VERY SIMPLE TODAY. . [2. 25-55628 Recommendation to authorize the General Manager to release Assembly Bill 32 (AB 32) Cap-and-Trade Program revenues generated through California’s Cap-and-Trade Consignment Auction in Fiscal Year 2025 for qualifying Greenhouse Gas reduction programs and projects in FY 2026, in compliance with the California Global Warming Solutions Act of 2006.       Suggested Action: Approve recommendation. ] OKAY. UM, ITEM NUMBER TWO IS TO AUTHORIZE THE GENERAL MANAGER TO RELEASE ASSEMBLY BILL 32 AB 32 CAP AND TRADE PROGRAM PROGRAM REVENUES GENERATED THROUGH CALIFORNIA'S CAP AND TRADE CONSIGNMENT AUCTION IN FISCAL YEAR 2025. DIANA TANG. GOOD MORNING, COMMISSIONER. TODAY WE HAVE FOR YOU, UM, A SUMMARY OF AB 32 AND, AND THE, AND THE PROGRAMS AND PROJECTS THAT THE CITY MANAGER'S OFFICE AND UTILITIES JOINTLY SELECTED FOR RECOMMENDATION TO THE BOARD. UM, THE LAST TIME WE TALKED ABOUT THIS WAS A YEAR AGO, SO WE'LL BRIEFLY GO OVER WHAT CAP AND TRADE IS, UM, AND WHAT THE DOLLAR AMOUNTS LOOK LIKE. SO THE PROGRAM, UH, WAS AUTHORIZED IN 20 2006. UM, IT'S CALLED CAP AND TRADE, MORE COMMONLY KNOWN AS CAP AND TRADE OR AB 32. AND IT BASICALLY ESTABLISHED A, UH, A MARKET FOR CLIMATE CREDITS TO REDUCE GREENHOUSE GAS EMISSIONS IN CALIFORNIA. IT APPLIES TO UTILITIES, IT APPLIES TO MANUFACTURING, TRANSPORTATION. A NUMBER OF SECTORS, UM, THAT ARE KNOWN TO, UM, HAVE AN IMPACT ON GREENHOUSE GAS EMISSIONS IN CALIFORNIA. UH, AGAIN, UM, SINCE THE PROGRAM'S INCEPTION, IT HAS HAD AN IMPACT IN REDUCING GREENHOUSE GAS EMISSIONS. UM, THAT MUCH IS UNDISPUTED. UM, THERE ARE SOME QUESTIONS ABOUT POLICY IMPLICATIONS, AFFORDABILITY AND, AND THAT SORT OF, UM, TOPIC. BUT WHETHER OR NOT IT HAS REDUCED GREENHOUSE GAS EMISSIONS, UM, IT, IT IS UN UNDENIABLE IN THAT RESPECT. SO HOW DOES CAP AND TRADE WORK? UM, THERE ARE TWO TYPES OF FREE ALLOWANCES. ONE, UH, AS YOU CAN SEE SORT OF INCREASES OVER TIME AND ONE WILL BE DECREASING. WHEN CAP AND TRADE WAS FIRST A APPROVED IN 2006, THERE WAS A CONCERN THAT IF, IF RATE PAYERS, UM, SO THE RESIDENTIAL COMMUNITY, THE COMMERCIAL COMMUNITY, ANYONE WHO PAYS A UTILITY RATE, UM, WOULD BE OVERLY BURDENED WITH THE COST OF, OF WE CALL COMPLIANCE WITH CAP AND TRADE PROGRAM OR THE COST, UM, OR OF ACTUALLY ASSIGNING A MONETARY VALUE TO THE GREENHOUSE GAS EMISSIONS THAT ARE, UM, CONSUMED REMITTED AS A PART OF, OF THOSE ACTIONS. AND AS A A GAS UTILITY, WE ACKNOWLEDGE THAT WE, UM, HAVE GREENHOUSE GAS EMISSION IMPACTS ON THE ENVIRONMENT, AND SO OUR RATE PAYERS PAY TO, TO MITIGATE THOSE TYPES OF, OF IMPACTS. WE ALSO HAVE AUCTION ALLOWANCES. AND AUCTION ALLOWANCES ARE GRANTED TO WHAT WE CALL OUS OR PUBLICLY OWNED UTILITIES AND ALSO IOUS OR INDEPENDENT OWNED UTILITIES. SO WHETHER YOU LIVE IN SOUTHERN CALIFORNIA AND YOU ARE SERVICED BY LONG BEACH UTILITIES AND SOUTHERN CALIFORNIA EDISON, OR YOU LIVE OUTSIDE OF THE LONG BEACH SERVICE AREA AND YOU'RE SERVICED BY SOCAL GAS, UM, AUCTION PROCEEDS ARE AVAILABLE TO HELP INDIVIDUAL RATE PAYERS OR INDIVIDUAL FAMILIES AND BUSINESSES REDUCE THEIR GREENHOUSE GAS EMISSIONS THEORETICALLY SO THAT THEY WOULD BE PAYING LESS COMPLIANCE ON THEIR MONTHLY BILLS. SO THAT'S WHY YOU SEE, UM, THOSE TWO TYPES OF FREE ALLOWANCES THERE AND THE COMPLIANCE, UH, FREE ALLOWANCE DECREASES OVER TIME BECAUSE THE IDEA IS THAT THE AUCTION, UM, ALLOWANCES ARE WHAT HELPS, UM, THE UTILITIES AND RATE PAYERS REDUCE OUR GREENHOUSE GAS EMISSIONS. SO THE COST OF GREENHOUSE GAS EMISSION ALLOWANCES HAS STEADILY INCREASED, UM, BUT VERY RECENTLY HA HAS DECREASED AND, UH, IT IS A MARKET BASED PROGRAM. AND SO THERE ARE A NUMBER OF FACTORS THAT COULD IMPACT [00:05:01] THAT. ONE OF WHICH, UM, IS THE SUNSET, UH, OF THE CAP AND TRADE PROGRAM CURRENTLY SCHEDULED FOR 2030. UM, THE PROGRAM HAS HAD SEVERAL EXPIRATION DATES OVER, UM, THE PERIOD OF TIME SINCE IT WAS ENACTED. AND, UM, WE'RE EXPECTING THAT IT BE REAUTHORIZED EITHER, UM, STARTING EITHER THIS YEAR OR SOMETIME IN THE NEXT COUPLE YEARS, BUT BEFORE 2030. UM, AND BECAUSE A MISSION ALLOWANCE, UM, I GUESS THE COST OF EACH EMISSION HAS GONE DOWN. OUR REVENUES THAT WE RECEIVE FROM THE AUCTION PROCEEDS HAVE ALSO, UM, GONE DOWN VERY RECENTLY. BUT AGAIN, THAT COULD CHANGE. UM, FROM 2015 TO 2023, LONG BEACH HAS SPENT $19.2 MILLION IN AB 32 FUNDING ON VARIOUS PROGRAMS. THE MAJORITY OF WHICH, UM, THIS BOARD AUTHORIZED IN 2023 FOR THE $45, UM, CREDIT THAT WAS APPLIED TO INDIVIDUAL BILL PAYMENTS, UM, TO HELP OFFSET THE HIGH COST OF NATURAL GAS BILLS IN IN 2023. WE'VE ALSO FUNDED A NUMBER OF, UM, OF ELECTRIC VEHICLE CHARGING PROJECTS. AND THEN THE CITY HAS A NUMBER OF CITY FACILITY, UM, ENERGY EFFICIENCY IMPROVEMENT PROGRAMS THAT HAVE BEEN DONE TO CITY BUILDINGS, UM, WITH THIS FUNDING IN, IN RECENT YEARS. SO FFY 26, THESE ARE THE, UH, PROGRAMS THAT WE ARE PROPOSING TO FUND. UM, FOR YOUR CONSIDERATION, THE UTILITY HAS PROPOSED A NUMBER OF, UH, REBATE PROGRAMS, VERY SIMILAR TO THE, TO LAWN, TO GARDEN, TO THE DIRECT INSTALL APPLIANCE PROGRAM PROJECTS. UM, JOEY CAN TALK A LITTLE BIT MORE ABOUT THESE, UM, IN, IN A BIT. UM, BUT WE'RE VERY EXCITED TO HAVE ESTABLISHED A NEW COMMERCIAL PROGRAM, UM, FOR COMMERCIAL REBATES AND ALSO, UM, CONTINUING OUR INVESTMENT IN MULTIFAMILY HOUSING. UM, THE CITY MANAGER'S OFFICE HAS PROPOSED A NUMBER OF PROJECTS AS WELL. UM, HERE WE HAVE, UM, MOBILE EV CHARGING, UM, TREE PLANTINGS AGAIN, UM, ROOF LIBRARY REPLACEMENTS, AND ALSO ADDITIONAL EV CHARGERS. UM, EV EVERY YEAR WE ARE REQUIRED AS A UTILITY, UM, AND AS THE BOARD RESPONSIBLE FOR ADMINISTERING THESE FUNDS, SUBMIT A REPORT TO CARB, UM, DETAILING OUR, UM, APPROVED EXPENDITURES. AND SO THESE PROJECTS HAVE NOT BEEN SUBMITTED TO CARB YET, BUT PROJECTS THAT HAVE BEEN AUTHORIZED, UM, BY THIS BOARD AND THEN FORMERLY THE CITY COUNCIL HAVE, SO IN TOTAL FOR FY 26, WE'RE PROPOSING TO ALLOCATE THE 9.4 MILLION. AND, UH, WITH THAT, I WILL TURN IT OVER TO JOEY TO GIVE YOU A LITTLE BIT MORE INFORMATION ON OUR UTILITY SPECIFIC PROJECTS. THANK YOU. GOOD MORNING COMMISSIONERS AND GENERAL MANAGER. UM, SO JUST A LITTLE QUICK BACKGROUND FOR YOU ALL THE THANK YOU . UM, A LITTLE QUICK BACKGROUND FOR YOU ALL THE THREE DIFFERENT POTENTIAL PROJECTS THAT WE HAVE, UM, AND CURRENT PROJECTS THAT WE HAVE FOR OUR DIRECT INSTALL APPLIANCE PROGRAM, OUR STANDARD REBATE PROGRAM, AND OUR CERTIFIED BLUE PROGRAM ALL FALL IN LINE WITH AB 32 FUNDING AND HOW IT COULD BE USED AND IS CURRENTLY BEING USED WITHIN THE CITY. UM, OUR DIRECT INSTALL APPLIANCE PROGRAM IS SOMETHING THAT SOMEONE CAN APPLY FOR, USE A CONTRACTOR, UH, THROUGH LONG BEACH UTILITIES. WE INSTALL THE APPLIANCES AND REMOVE THE OLD APPLIANCES AT A COMPLETE FREE OF CHARGE, UH, TO THE CUSTOMER. UM, THE REBATES, UH, AS YOU MAY HAVE, BE FAMILIAR WITH REBATES FOR TOILETS AND THINGS LIKE THAT, THIS IS MORE FOR YOUR, UM, UH, WATER HEATERS, YOUR POOL HEATERS, UM, YOUR, UH, UH, RANGES, YOUR STOVES, YOUR OVENS, THINGS LIKE THAT. UM, THOSE ARE ALL PART OF THE DO IT YOURSELF. SO IF THERE'S A CERTAIN MODEL OR A TYPE THAT YOU HAVE INTEREST IN AND IT'S MEETING A CERTAIN STANDARD, UH, FOR EFFICIENCY, THEN YOU CAN GO THROUGH OUR REBATE PROCESS AND APPLY THERE. THE THIRD IS OUR CERTIFIED BLUE PROGRAM. UM, WHAT THAT IS, WE CURRENTLY HAVE, UH, UH, STAFF THAT GO OUT TO DO AN AUDIT AT A COMMERCIAL PROPERTY. WE PROVIDE THEM WITH A LIST OF OPPORTUNITIES SO THEY CAN APPLY FOR REBATE PROGRAMS THROUGH INTERNALLY OR THROUGH OUR METROPOLITAN WATER DISTRICT, UH, REBATE OFFERINGS. AND THEN WE ALSO GIVE THEM, UH, THINGS LIKE, UH, PRESSURE REDUCING SPRAYER VALVES THAT GIVE THEM THE OPPORTUNITY TO REDUCE WATER CONSUMPTION. AND IF IT'S HEATED WATER, THEN, UH, HOT WATER CONSUMPTION AND ESSENTIALLY GAS CONSUMPTION. SO WITH THAT LITTLE BACKGROUND FOR ALL THOSE PROGRAMS, OUR DIRECT INSTALL APPLIANCE PROGRAM, AS I MENTIONED, IS, UH, WE'RE NOW GOING INTO, UM, SINGLE FAMILY, MULTI-FAMILY AND THEN MOVING INTO THE COMMERCIAL, INDUSTRIAL AND INSTITUTIONAL SECTORS THROUGHOUT THE CITY. SO THE HOPE THERE IS THAT WE CAN HAVE THE OPPORTUNITY TO WORK WITH SMALL BUSINESSES OR LARGE BUSINESSES IN TURN, BUT SMALL BUSINESSES IN, IN AREAS THAT, UM, HAVE NEVER BEEN ABLE TO APPLY FOR A GAS REBATE OR HAVE A DIRECTLY INSTALLED, UM, APPLIANCE WITHIN, UH, THEIR COMMERCIAL KITCHEN, FOR EXAMPLE. UM, POTENTIALLY THEIR POOL. UM, ANYTHING THAT THEY MAY USE, [00:10:01] UH, HOT WATER FOR ANYTHING THAT THEY MAY USE NATURAL GAS FOR. UH, THE INSTITUTIONAL SIDE OF THINGS IS THIS IS, UH, GOING TO BE OFFERED ALSO TO, YOU CAN IMAGINE, UH, LONG BEACH UNIFIED SCHOOL DISTRICTS OR ANYTHING THAT'S, UH, PART OF THE, UH, GOVERNMENT ENTITY OR A, UH, A PUBLIC FUNDED AREA. UM, AND THEN ANY, UH, UH, INDUSTRIAL PLACE. UH, SO WE KNOW WE HAVE PLENTY OF INDUSTRIAL PROCESS NEAR THE PORT. UM, ANYBODY THAT NEEDS IMPROVEMENTS THERE. UM, WE'RE GOING TO BE WORKING WITH, UH, SOCAL GAS TO UNDERSTAND THE IDEAL INDUSTRIAL TYPES OF PROCESS THAT COULD BE BENEFICIAL FOR THESE TYPES OF CUSTOMERS RATHER THAN JUST WINGING IT AND HOPING FOR THE BEST. WE WANNA SPEAK WITH SOMEBODY THAT'S BEEN DOING THIS FOR A LONG TIME, SO WE'RE GONNA GET A GOOD UNDERSTANDING FROM THEM. WHEN I, WHEN I MENTIONED THAT WE'RE PRI PRIORITIZING AREAS, THERE IS A REQUIREMENT THAT WE SPEND 35% OF THESE FUNDS BASED OFF OF AB 1550 AND SB 5 35, UH, WITHIN ZONES, UH, OF THE CITY. SO YOU CAN SEE ON THE, UH, WEST SIDE OF THE CITY, UH, THERE IS DIFFERENT SHADES OF BLUE AND AQUA AND, UH, DARKER COLORS. THESE ARE IDENTIFYING AREAS THAT ARE EITHER LOW INCOME OR DISADVANTAGED AREAS WITHIN THE CITY. WE'RE PRIORITIZING ALL OF OUR MARKETING FOR OUR DIRECT INSTALL APPLIANCE PROGRAMS WITHIN THESE AREAS FIRST SO THAT WE CAN BE SURE TO MEET 35% THAT'S REQUIRED BY AB 1550 AND SB 5 35. AND THEN IF THERE'S THE POSSIBILITY THAT, UH, WE DON'T USE THOSE FUNDINGS WITHIN THOSE AREAS, WE STILL HAVE THE OPPORTUNITY FOR EVERYONE OUTSIDE OF THOSE AREAS WITHIN THE CITY OF LONG BEACH TO APPLY FOR THESE DIRECT INSTALL PROGRAMS, AS WELL AS FOR THE NATURAL GAS APPLIANCE REBATES. UM, WE'RE ALSO, UH, EXTENDING THESE REBATES NOW TO CII COMMERCIAL, INDUSTRIAL AND INSTITUTIONAL, UH, INCENTIVES. UM, THIS OF COURSE IS THE DO IT YOURSELF APPROACH AS WELL. UM, THIS YEAR, UH, WE HAVE BEEN ABLE TO PROVIDE REBATES FOR, UH, SINGLE FAMILY AND MULTIFAMILY. UM, WE'RE LOOKING AT A LITTLE BIT OVER 40,000 RIGHT NOW FOR THE, FOR THE CLOSEOUT FOR THE FISCAL YEAR OF 2025. UM, AND I THINK THE REASONING BEHIND THE, THE DECREASE, I GUESS YOU CAN SAY FOR A COMPARISON TO 2023 IS BECAUSE OF THE, UH, DIRECT INSTALL APPLIANCE PROGRAM. UM, SINCE PEOPLE HAVE THE OPPORTUNITY TO HAVE SOMETHING COMPLETELY FREE AND INSTALLED AND REMOVE THE OLD PRODUCT, THAT, UH, IS KIND OF THE SHIFT AS WE'RE SEEING. BUT IF PEOPLE WANT THE OPPORTUNITY TO PURCHASE SOMETHING THAT IS ON THE LIST OF DEBATABLE, UH, PRODUCTS AND INCENTIVE INCENTIVIZED PRODUCTS, THEN THEY'RE MORE THAN WELCOME TO GO THROUGH THIS ROUTE AS WELL. AND THEN FINALLY, OUR CERTIFIED BLUE, UM, PROGRAM, UH, THIS IS GOING TO BE EX EXPANDED FROM OUR, UH, RESTAURANT PROGRAM IS WHAT IT MAINLY IS CURRENTLY. UM, WE'RE LOOKING TO EXPAND THAT TO ARE, UH, OUTSIDE OF COMMERCIAL. SO WE'RE LOOKING AT HOTELS, UM, AS A WHOLE, UM, INDUSTRIAL PROCESS, AS I MENTIONED IN INSTITUTIONS, SO SCHOOLS AND BUILDINGS THAT ARE ON THE, THE PUBLICLY OWNED SIDE. UM, THIS IS A, UH, A GREAT OPPORTUNITY FOR US TO WORK WITH SMALL BUSINESSES INSIDE OF THE COMMUNITY, UM, GET THEM AN AUDIT, UNDERSTAND WHAT THEY HAVE INSIDE OF THEIR PROPERTY, AND THEN PROVIDE THEM ALL THE NECESSARY REBATES OR THE DIRECT INSTALL APPROACHES THAT WE CAN PROVIDE THEM. SO WITH THAT, I WILL GIVE THAT BACK TO DANA. THANK YOU, JOEY. AND SO THE RECOMMENDATION TODAY IS, UM, FOR THE BOARD TO AUTHORIZE THE GENERAL MANAGER TO RELEASE AB 32 CAP AND TRADE PROGRAM REVENUES GENERATED THROUGH, UM, THIS CURRENT YEAR, I'M SORRY, THE NEXT FISCAL YEAR'S, UM, PROGRAM AND IN COMPLIANCE WITH THE CALIFORNIA GLOBAL WARMING SOLUTIONS ACT OF 2006. WITH THAT, I'M AVAILABLE TO ANSWER ANY QUESTIONS. THANK YOU, DIANA. THANKS FOR YOUR TEAM FOR ALL OF THIS, ALL OF THIS WORK. DO I HAVE ANY PUBLIC COMMENT? ANY COMMISSIONER COMMENT? YEAH, GLORIA, THANK YOU. UM, YOU GUYS DO SUCH A GREAT JOB OF ON EXPLAINING THIS. I GREATLY APPRECIATE IT. UM, HOW DO WE MARKET THIS IN OUR COMMUNITIES? SO JOEY AND HIS TEAM AND DEAN'S TEAM ACTUALLY DO A LOT OF COMMUNITY OUTREACH, AND PARTICULARLY THE DISADVANTAGED, UM, AREAS OF OUR COMMUNITY. AGAIN, ANYONE IS ELIGIBLE TO APPLY, BUT WE DO TARGET, UM, MORE SPECIFICALLY THE DISADVANTAGED AREAS THROUGH SOCIAL MEDIA. UM, ACTUALLY WHEN THEY'RE OUT THERE DOING WORK ON SOMEONE'S HOME, THE NEIGHBORS WILL OFTEN COME OUT AND, AND ASK QUESTIONS. AND SO WE HAVE MATERIALS THAT WE'RE ABLE TO PROVIDE, UM, ONSITE TO KIND OF SPREAD THE WORD AS WORK IS HAPPENING. YEAH. AND WE'RE ALSO DOING THAT AT COMMUNITY EVENTS. I, WHEN, WHEN YOU SEND OUT THE SPEAKER, YES. MM-HMM . UM, OKAY, BECAUSE I THINK, UM, I WAS ASKING, IT WAS KIND OF RHETORICAL 'CAUSE I KNOW YOU GUYS DO SUCH A GREAT JOB AND YOU'RE OUT THERE. UM, I WOULD ASSUME THAT IT'D BE A LITTLE MORE DIFFICULT IN SOME OF THE DISADVANTAGED COMMUNITIES TO GET THE WORD OUT AND NOT ASSUME THAT THEY ALL LOOK AT SOCIAL MEDIA OR THAT SORT OF THING. DO WE WORK WITH ANY LOCAL AGENCIES THAT ARE IN THE AREA? [00:15:01] WE ARE, UM, CONNECTING MORE WITH COMMUNITY-BASED, UM, ORGANIZATIONS, UM, ON THIS WORK AND SHARING WITH THEM THE OPPORTUNITIES THAT ARE AVAILABLE. UM, WE ARE ALSO ON TRACK TO EXPEND IF ALL, IF NOT, UM, ALMOST ALL AB 32 FUNDS THAT HAVE BEEN ALLOCATED FOR THE UTILITIES REBATE PROGRAMS BY THE END OF THE NEXT FISCAL YEAR. COVID WAS A, A SORT OF A, AN ODD TIME FOR US, UM, IN TERMS OF OUTREACH AND, AND ALSO, UM, SUPPLY CHAIN. BUT THAT HAS, UM, THAT'S PASSED US NOW. AND THE OUTREACH HAS, HAS REALLY RAMPED UP, UM, THROUGH JOEY'S TEAM, THE WORK THAT'S HAPPENING IN THE FIELD THROUGH CET, THROUGH OUR COMMUNITY BASED ORGANIZATIONAL OUTREACH. UM, AND SO ALL FUNDS, WHETHER, UM, IT BE THROUGH AB 32 OR, UM, METROPOLITAN OR KIND OF THE, THE, UM, DIFFERENT FUNDING SOURCES THAT GO INTO PROVIDING THE RESOURCES FOR THESE TYPES OF REBATES, WE ARE, UM, ON TRACK TO EXPEND ALL, IF NOT ALL, BY THE END OF NEXT FISCAL YEAR. SO CORRECT ME IF I'M WRONG, BUT ALL OF THE CAP AND TRADE MONEY GOES BACK INTO OUR COMMUNITIES TO, UM, INFLUENCE AND BETTER IMPACT OUR, OUR LOCAL COMMUNITIES WHO NEED THEM. YES. ALL THE FUNDS ARE INVESTED BACK, UM, WITHIN THE CITY OF LONG BEACH PROPER. OKAY. GREAT. THANK YOU GUYS. GOOD JOB. GREAT QUESTION. THANK YOU. ANY OTHER COMMISSIONER COMMENT? OKAY, DO I HAVE A MOTION TO APPROVE? MOTION TO APPROVE. AND SECOND AND A SECOND. THANK YOU SO MUCH. UH, ALL IN FAVOR SAY AYE. AYE. AYE. AYE. ANY OPPOSED? THE MOTION CARRIES. [3. 25-55629 Recommendation to authorize the General Manager to support FY 26 State budget trailer bill language that aims to fund studies to inform future decisions relating to the Delta Conveyance Project and streamline project processes.       Suggested Action: Approve recommendation. ] OKAY. ITEM NUMBER THREE IS TO AUTHORIZE THE GENERAL MANAGER TO SUPPORT FISCAL YEAR 26 STATE BUDGET TRAILER BILL LANGUAGE THAT AIMS TO FUND STUDIES TO INFORM FUTURE DECISIONS RELATING TO THE DELTA CONVEYANCE PROJECT AND STREAMLINE PROJECT PROCEDURES. DIANA, GOOD MORNING. UM, PRESIDENT MCGUIRE AND UTILITIES COMMISSION BEFORE YOU TODAY, WE HAVE A RECOMMENDATION TO SUPPORT THE FY 26 STATE BUDGET TRAILER BILL IN SUPPORT OF THE DELTA CONVEYANCE PROJECT. UM, JUST AN OVERVIEW OF WHAT THIS PROJECT IS. YOU'VE PROBABLY HEARD OF IT. IT'S BEEN CALLED, UH, MANY THINGS OVER THE LAST 50 TO SIX YEARS, CALIFORNIA WATER FIX THE TWIN TUNNELS, AND IT WAS ONE TUNNEL. IT IS STILL ONE TUNNEL, UM, AND NOW CALLED THE DELTA CONVEYANCE PROJECT. SO THIS PROJECT, UM, IS INTENDED TO BE INFRASTRUCTURE THAT PROVIDES, UM, INFRASTRUCTURE REDUNDANCY TO THE STATE WATER PROJECT, WHICH IS IN NORTHERN CALIFORNIA, AND ALSO SUPPORTS, UM, MUCH OF AGRICULTURAL, UM, CENTRAL CALIFORNIA. UM, LONG BEACH RECEIVES, UM, SOME STATE WATER PROJECT FUND, OR I'M SORRY, SOME STATE WATER PROJECT WATERS THROUGH METROPOLITAN, UM, AS IMPORTED WATER. PRIMARILY OUR IMPORTED WATER COMES FROM THE COLORADO RIVER, BUT DEPENDING ON HOW THE WEATHER IS THAT YEAR AND WATER RESOURCES THAT ARE AVAILABLE METROPOLITAN MAY CHOOSE TO, UM, SWITCH BETWEEN THE DIFFERENT IMPORTED WATER SOURCES. AND OF COURSE, THE TWO PRIMARY ONES THAT THEY USE ARE COLORADO RIVER AND STATE WATER PROJECT. SO AGAIN, UM, LONG BEACH, UM, IN THE LAST DECADE OR TWO HAS MADE SIGNIFICANT PROGRESS ON WATER CONSERVATION. AND WE WERE PREVIOUSLY USING ABOUT 71,000 ACRE FEET OF WATER PER YEAR. UM, WE'RE DOWN TO CLOSER TO 50, UH, AND IN, IN INCREASINGLY USING MORE RECYCLED WATER THAN WE HAVE IN THE PAST. AND THAT CONTINUES TO BE OUR GOAL, UM, AS WELL AS MORE LOCAL GROUNDWATER. SO WHILE WE ARE REDUCING OUR LOCAL RELIANCE ON IMPORTED WATER, IMPORTED WATER, WE'LL CONTINUE TO BE A PART OF OUR WATER RESOURCES PORTFOLIO AS A, AS A, A MEASURE OF RESILIENCE. AND, UM, AND IN PARTNERSHIP WITH THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, UM, AGAIN, METROPOLITAN GETS THEIR IMPORTED WATER FROM TWO MAIN SOURCES. UM, ONE IS THE COLORADO RIVER, WHICH THERE'S BEEN MUCH TALK ABOUT. AND THEN ALSO, UM, MORE SPECIFIC TO CALIFORNIA, THE STATE WATER PROJECT, WHICH COMES FROM NORTHERN CALIFORNIA. AND THEN YOU SEE THE NETWORK OF PIPELINES THERE ON THIS MAP. THE STATE WATER PROJECT, UM, HAS BEEN, UM, QUITE VOLATILE IN THE AMOUNT OF WATER IT'S BEEN ABLE TO PROVIDE TO OUR, OUR STATE AND OUR REGION OVER THE YEARS. AND SO FOR THAT REASON, A NUMBER OF DIFFERENT PROPOSALS BETWEEN, UM, WHAT WAS CALLED CALIFORNIA WATER FIX, THE TWIN TUNNELS AND NOW DELTA CONVEYANCE HAVE BEEN PROPOSED OVER THE YEARS. UM, THE, THE GOAL IS TO RECOGNIZE CLIMATE CHANGE AND PROVIDE A MEASURE OF REDUNDANCY RESILIENCE AND ALSO STABILITY IN THE AMOUNT OF WATER THAT WE CAN EXPECT TO RECEIVE FROM THIS, UM, THIS INFRASTRUCTURE. UM, THE GOALS, UM, WITH THE DELTA CONVEYANCE PROJECT IS TO CAPTURE WATER FROM BIGGER BUT INFREQUENT STORMS LIKE WE'VE SEEN IN IN VERY RECENT YEARS. UM, ADDRESS RESILIENCY AND DESIGN AGAIN WITH THE AGING STATE WATER PROJECT. UM, IF WE ARE TO CONTINUE RELYING ON NORTHERN CALIFORNIA WATER AS WE DO, [00:20:01] UM, TO SOME EXTENT HERE IN SOUTHERN CALIFORNIA, THERE DOES NEED TO BE IMPROVEMENTS, NEED, NEED, UM, IMPROVEMENTS TO THE SYSTEM UP, UP IN, UM, THE REGION. AND THE DELTA CONVEYANCE PROJECT IS THAT PROPOSED SOLUTION AND THEN PROTECTION AGAINST SEA LEVEL RISE IN SEA AND SALT WATER INTRUSION BECAUSE OF THE MARSHLANDS AND, UM, OTHER, UM, THE, THE WAY THAT THE GEOGRAPHY AND THE TOPOGRAPHY IS SHAPED UP IN NORTHERN CALIFORNIA. UM, SO HERE'S THE MAP OF THE DELTA CONVEYANCE PROJECT. LET ME SEE IF I CAN ACTUALLY, OKAY, HERE WE GO. SO, ONE TUNNEL AGAIN, UM, IT STARTS, UM, UP NORTH HERE. THERE ARE TWO INTAKES CONNECTS BACK DOWN HERE. AND THEN AT THE BASE OF THE, THE PROJECT, IT WOULD CONNECT IN WITH THE EXISTING CALIFORNIA AQUEDUCT. AND, AND THE GOAL, UM, HAS BEEN TO HAVE AS LITTLE IMPACT TO, UM, THE ENVIRONMENT, UM, THE PROGRESS THAT'S REALLY BEEN MADE WITH RESTORING THE ENVIRONMENT UP IN NORTHERN CALIFORNIA WHILE PROVIDING US WITH THAT RESILIENCY THAT WE, UM, THAT WE NEED. UH, AND SO HERE'S A SNAPSHOT OF WHAT THE DELTA CONVEYANCE PROJECT WOULD HAVE BEEN ABLE TO DO IF IT WAS IN PLACE. UM, DURING THESE LAST COUPLE OF LARGER STORMS THAT WE'VE HAD IN RECENT YEARS. THIS IS DATA, UM, FROM THE STATE DEPARTMENT OF WATER RESOURCES SHOWING, UM, THE AMOUNT OF ACRE FEET OF WATER, UM, THE, THE AMOUNT OF WATER THAT IT WOULD BE ABLE TO PROVIDE IN TERMS OF, UM, SUPPORT TO INDIVIDUAL HOUSEHOLDS. AND THEN THE PERCENTAGE, WHICH I FIND, UM, QUITE STARK, UM, THE PERCENTAGE OF TOTAL VOLUME EXPORTED BY THE STATE WATER PROJECT PER YEAR. UM, IT WOULD HAVE A TREMENDOUS IMPACT ON THAT. UM, COST EFFECTNESS, UM, THERE'S BEEN GREAT DEBATE OVER WHETHER OR NOT WE NEED A $20 BILLION PROJECT, AS HAS BEEN THE ESTIMATE FOR THIS PROJECT. UM, IF WE LOOK AT THE, UM, AT THE OPTIONS HERE, WE HAVE DESAL, UM, ADVANCED TREATED RECYCLING, WATER, STORM WATER, AND THEN WATER CONSERVATION. THE DELTA CONVEYANCE PROJECT IS FAIRLY LOW COMPARED TO THESE OTHER OPTIONS, UM, FOR WATER RESOURCES IF WE WERE NOT TO CHOOSE THE STATE, UM, STATE WATER PROJECT AND, AND THE REDUNDANCY THAT THE DELTA CONVEYANCE PROJECT PROVIDES. SO, UM, STILL NOT, UM, STILL NOT A SMALL DOLLAR AMOUNT, BUT RELATIVELY SMALLER COMPARED TO DESAL OR EVEN ADVANCED TREATED, UM, RECYCLING DEPENDING ON HOW THAT PROJECT IS PHASED. SO, UM, IN DECEMBER, 2024, THE METROPOLITAN WATER DISTRICT BOARD VOTED TO APPROVE THEIR COST SHARE OF THE FINAL PLANNING STUDIES THAT ARE NEEDED TO HELP, UM, THE REGION DECIDE WHETHER OR NOT THIS PROJECT IS ONE THAT WE WANT TO ACTUALLY IMPLEMENT AND CONSTRUCT. GOING FORWARD. AT THIS POINT IN TIME, THE STATE LEGISLATURE IS CO CONSIDERING A COMPLIMENTARY STATE BUDGET TRAILER BILL THAT WOULD PROVIDE THE STATE PORTION OF FUNDS FOR THE PROJECT, AS WELL AS STREAMLINE A NUMBER OF PROJECT, UM, PROCESSES AND APPROVALS TO HELP, UM, TO HELP THE REGION AGAIN, MAKE AN INFORMED DECISION. AND, UM, IF THE PROJECT IS APPROVED TO MAY MOVE FORWARD WITH IT EXPEDITIOUSLY. UM, I'LL MENTION AS WELL, MAYOR, UM, MAYOR REX RICHARDSON, UM, HAS SIGNED ON AS A SUPPORTER OF THE PROJECT. UM, LABOR IS A BIG SUPPORTER OF THE PROJECT AND AS OF, I BELIEVE END OF LAST WEEK THERE WERE OVER A HUNDRED, UM, VARIOUS ORGANIZATIONS, CHAMBERS OF COMMERCE, UM, WATER DISTRICTS, UM, SOME CITIES AND, UH, A LOT OF SPECIAL DISTRICTS THAT ARE ALL IN SUPPORT OF, OF THIS BUDGET TRAILER BILL. UM, SO FOR THAT REASON WE ARE ASKING FOR LONG BEACH UTILITIES AND THIS BOARD TO CONSIDER A POSITION OF SUPPORT. UM, AND IF APPROVED, WE WOULD ADD OUR LOGO ALONG WITH A HUNDRED OR SO, UM, LOGOS THAT ARE ON THE BUDGET TRAILER BILL SUPPORT LETTER CIRCULATING IN THE STATE LEGISLATURE DURING THE BUDGET PROCESS. WITH THAT, I'M AVAILABLE TO ANSWER ANY QUESTIONS. THANK YOU. DIANA, ANY COMMISSIONER COMMENT? PARDON ME? ANY PUBLIC COMMENT NOW? COMMISSIONERS, ANYTHING? GO AHEAD. DO YOU HAVE ANYTHING? NO. OKAY, JANET, THANK YOU VERY MUCH. THIS, THIS HAS BEEN AROUND AS, AS YOU ALL KNOW, FOR A LONG, LONG TIME. AND, AND I HAVE TO BE HONEST, IN THE VERY BEGINNING, I, I HAD EVERYTHING IN FRONT OF ME A COUPLE YEARS AGO AND HAD SOME QUESTIONS BECAUSE PEOPLE WOULD, WOULD BRING THEM TO OUR ATTENTION. A LOT OF THE ENVIRONMENTAL GROUPS, SPECIFICALLY SOME OF THE TRIBAL GROUPS, UM, THAT I'VE HAD A LOT OF DISCUSSIONS WITH, AND I UNDERSTAND THOSE CONCERNS. UM, HAVING SAID THAT, UM, I DON'T, I DON'T KNOW IF WE WOULD WANNA BE ON THE END OF, OF NOT LOOKING AT SOMETHING THAT COULD BE BENEFICIAL IN TERMS OF THE RELIABILITY OF AND THE INTEGRITY OF, OF WHAT WE'RE TRYING TO DO IN THIS, IN, IN OUR INDUSTRY. UM, I KNOW IT'S A, IT'S A, A LARGE AMOUNT, UM, THIS RIGHT NOW, THIS IS NOT TO, UM, APPROVE THE PROJECT, CORRECT? THAT IS CORRECT. THIS IS JUST [00:25:01] TO APPROVE THE EXPEDITING OF THE PLANNING PROCESS, IS THAT CORRECT? THAT IS CORRECT. UM, AND, AND IF THE PROJECT DOES MOVE FORWARD, THEN THIS BUDGET TRAILER BILL WOULD ALSO STREAMLINE PROJECT APPROVALS. OKAY. SO STREAMLINE IS A REALLY IMPORTANT WORD. CAN YOU ANSWER DIANA THERE? THE, UM, THE ONE ON THE COST EFFECTIVENESS AND THE D CELL STORMWATER CAPTURE IS, IS IT THAT THAT'S MUCH MORE EXPENSIVE THAN I THOUGHT? IT DEPENDS ON WHAT TYPE OF, UM, CAPTURE YOU'RE TALKING ABOUT AND HOW YOU'RE TRYING TO USE IT. UH, THE RANGE IS PRETTY WIDE. UM, STORM WATER, I I IS A, IT'S, IT'S RUNOFF AND SO IF YOU'RE TRYING TO USE IT FOR DRINKING WATER, THEN THAT COULD HAVE, UM, SOME PRETTY HIGH COSTS ASSOCIATED WITH IT. IF YOU'RE JUST TRYING TO DIVERT IT, UM, THEN POTENTIALLY IT COULD BECOME DRINKING WATER, BUT YOU'RE NOT SURE. IT JUST ENDS UP, UM, INFILTRATING HOW, AND HOWEVER THAT WORKS OUT, THEN PERHAPS YOUR COSTS ARE, ARE LOWER. AND SO THE RANGE IS, IS PRETTY WIDE ON STORM WATER. SO IN IN THE WATER RESOURCES PLAN, WE HAD IDENTIFIED A DESCRIPTION OF WHAT LEADS TO SUCH A BIG DIMENSION OF COSTS IN STORMWATER. THERE, THERE'S THE STORMWATER CAPTURE THAT YOU ALL ARE FAMILIAR WITH, BUT PERHAPS DON'T CALL IT STORMWATER CAPTURE, WHERE YOU HAVE A DAM OR YOU HAVE A, A FLOOD CONTROL BASIN LIKE IN SAND DIMAS, WHERE THE RETENTION BASIN IS A WIDE OPEN AREA PROTECTED BY A BERM, AND WHEN IT RAINS, IT CAPTURES THE STORM WATER AND IT RELEASES IT INTO THE GROUNDWATER. THAT'S HIGHLY COST EFFECTIVE. THAT PROBABLY IS TOWARDS THE LOWER END OF THAT GRAPH THAT YOU SEE THERE. AT THE SAME TIME, MANY PEOPLE HAVE ARGUED THAT THERE COULD BE, UM, BUILDING STORM WATER CAPTURE THAT YOU COULD THEN USE TO IRRIGATE PLANTS AND THINGS LIKE THAT. THAT WOULD BE NON-DRINKING WATER SOURCES. AND IT WOULD REQUIRE BROAD INVESTMENT IN ALL KINDS OF INFRASTRUCTURE TO CAPTURE WATER LOCALLY FOR A VERY, VERY NARROW USE. HAVING SOMETHING THAT DISTRIBUTED MEANS THAT THERE'S NO ECONOMIES OF SCALE. SO PEOPLE INVEST OVER AND OVER AND OVER JUST TO SATISFY THEIR VERY NARROW NEEDS ON THEIR PROPERTY, AND THAT'S TOWARDS THE HIGHER END. SO STORM WATER CAPTURE IS DIANA POINTED OUT IS THIS BROAD RANGE OF, ARE YOU TRYING TO CAPTURE STORM WATER FROM THE MOUNTAINS AND STORE IT INTO THE GROUNDWATER BASIN TO BE OUR SOURCE OF DRINKING WATER? OR ARE YOU TRYING TO SAY THAT YOU'RE TRYING TO CAPTURE EVERY LAST DROP AND TRYING TO USE IT TO OFFSET DRINKING WATER, TO IRRIGATE SOME PLANTS IN THAT, IN THAT DISCUSSION THAT WE JUST SAID IS WHY THAT RANGE IS, IS SO BIG. 'CAUSE OFTEN IT'S WHAT WE HEAR FROM A LOT OF PEOPLE WHO WILL SAY, WHY DON'T YOU JUST CAPTURE THE WATER? WHY IS SO MUCH GOING OUT, YOU KNOW, TO THE OCEAN? UM, SO THANK YOU FOR THAT. I, I APPRECIATE THAT. UM, SOMEONE TOLD ME WHEN WE WERE TALKING ABOUT THIS, UH, I DON'T EVEN KNOW IF IT WAS SOMEONE FROM AN AGENCY, BUT SOMEONE SAID IN, IN ESSENCE TO THIS SORT OF A THING WITH THE ADULT TO CONVEYANCE, YOU CAN EITHER CONVINCE PEOPLE ON FACT OR FEAR. SO I'M KIND OF IN THE MIDDLE THERE BECAUSE I DO NOT WANT US TO HAVE AN EARTHQUAKE, WHICH WE POSSIBLY COULD THAT WILL HAVE SALINITY, INTRUSION WILL, YOU KNOW, OUR LEVIES ARE, ARE AT RISK, UM, WHICH IS A BIG CONCERN. SO, UM, THOSE ARE THE SORT, SORT OF THINGS THAT I, I LIKE TO LOOK AT AND I'M SURE OUR COMMISSION DOES TOO. UM, I THANK YOU FOR THAT. I, I REALLY APPRECIATE THAT. I, I, WITH THAT, I WOULD, I WOULD SUPPORT THE MOTION TO, UH, TO APPROVE THIS ITEM, PLEASE. I HAVE A SECOND. SECOND. THANK YOU. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? NO MOTION CARRIES. THANK YOU. DIANA, CAN I JUST, UH, ADD SOMETHING QUICKLY? I, I WAS, UM, I FELT VERY GOOD ABOUT THE FACT THAT WE'VE BEEN, UH, WE'VE DISCUSSED THE WHOLE TRIBAL ISSUE AND ENVIRONMENTAL ISSUES, BUT SPECIFICALLY WITH THE TRIBAL ISSUE, UM, AT METROPOLITAN, I'VE BEEN ASSURED THAT THE STATE IS LOOKING AT MITIGATION EFFORTS FOR TRIBES. UM, SO THAT, THAT ALSO MADE ME FEEL A LOT BETTER. THERE HAS BEEN A LOT OF DISCUSSION, A LOT OF MEETINGS WITH TRIBAL COMMUNITIES, AND I BELIEVE THAT THAT WILL CONTINUE AS WE MOVE FORWARD. SO THANK YOU. THANK YOU. THANKS FOR THAT COMMENT. OKAY. OUR, UM, [4. 25-55630 Recommendation to adopt Resolution UT-1536, a Resolution of the City of Long Beach Board of Utilities Commissioners fixing rates and charges for the gas services to all customers, subject to the approval of the City Council by Ordinance.       Suggested Action: Approve recommendation. ] AGENDA ITEMS FOUR, FIVE, AND SIX. THESE WILL BE ONE PRESENTATION COVERING ALL THREE ITEMS, BUT WE WILL VOTE ON EACH ITEM SEPARATELY AFTER THE STAFF REPORT AND DISCUSSION, WE'LL PROCEED WITH INDIVIDUAL VOTES FOR EACH. ITEM NUMBER FOUR FOR TAKING IT FIRST IS TO ADOPT RESOLUTION UT 1536, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF UTILITIES COMMISSIONERS FIXING RATES AND CHARGES [00:30:01] FOR THE GAS SERVICES AND A TOGAN. YEAH, SO IT'S A, IT'S A LONG PRESENTATION THOUGHT, I THOUGHT I'D COME OVER HERE. SO BEING THERE. THANK YOU. UM, CAN YOU HEAR ME OKAY? YEAH, LIKE THIS? SO IT IS, UH, A BUDGET INFORMATION SESSION. IT IS NOW THE THIRD ONE. UM, I'VE WORKED WITH STAFF TO TRY TO TAKE A DIFFERENT APPROACH IN THIS ENTIRE PROCESS AND PERHAPS BEGIN TO GIVE YOU A SNAPSHOT OF THE TYPE OF CONTENT AND INFORMATION THAT WE'LL DELIVER IN COMMUNITY OUTREACH WHEN IT COMES TO BUDGET AND RATES. SO NOT THE BE ALL, END ALL OF A COMMUNITY PRESENTATION, BUT REALLY JUST TO START GIVING YOU A FLAVOR OF HOW TO CONNECT SOMETHING DIFFERENT. AND IN THAT CONNECTING SOMETHING DIFFERENT. I WANT TO CONVEY IN THE COMMUNITY PRESENTATIONS THAT YES, THE BUDGET IS DOLLARS, IT'S MONEY AND RATES IS THE CHARGES THAT WE PUT ON THAT IN ORDER TO COLLECT THE REVENUE FOR THOSE COSTS. BUT THE BUDGET IS MORE THAN THAT. THE BUDGET IS IN ESSENCE A REFLECTION OF THE SERVICES WE PROVIDE AND THE COSTS ASSOCIATED WITH THOSE SERVICES. AND THAT'S IMPORTANT TO CONNECT THAT THE COMMUNITY IS AWARE OF THE SERVICES WE'RE PROVIDING AND THAT THAT IS THE BUDGET. IT, IT'S CRITICAL, SIMPLE AND YET CRITICAL IN ITS DELIVERY. SO LET ME MOVE ON TO THE SLIDES AND KIND OF REINFORCE WHAT I JUST TOLD YOU. NEXT SLIDE. OH, AND I REALIZED, SORRY, GEORGE, I GOT IT HERE. UM, SO THIS IS THE THIRD SESSION. WE'VE GONE THROUGH TWO SESSIONS ALREADY GIVING YOU A SNAPSHOT AND BACKGROUND ON THE BUDGET ITSELF. IN THE SECOND SESSION ON MAY 15TH, WE GAVE YOU A SEQUENCE OF OPTIONS TO BEGIN TO GIVE YOU AN UNDERSTANDING THAT IF YOU TOOK ACTION IN ANY DIFFERENT COMBINATION, WHAT WOULD THOSE OPTIONS YIELD FOR YOU, BOTH IN TERMS OF REVENUE, HOW IT MATCHED UP THE COSTS, HOW WOULD WOULD DELIVER ON FUND BALANCE, AND WHAT WAS EMBEDDED WITHIN THOSE ACTIONS WITH REGARDS TO DEBT MANAGEMENT AND THINGS LIKE THAT. TODAY, THE GOAL IS NOW FOR THE DIRECTION THAT WE ASKED AND SOUGHT FROM YOU TO BRING YOU FORWARD THE RECOMMENDED OPTION FOR CONSIDERATION, AND AGAIN, SUMMARIZE FOR YOU THE DETAIL AND PROVIDE YOU MORE BACKGROUND ON THE ACTION THAT WE BRING TO YOU TODAY. AS I SAID, THE BUDGET IS A REFLECTION OF THE SERVICES WE PROVIDE, AND IT'S IMPORTANT TO UNDERSTAND THAT ALTHOUGH WE'RE TALKING ABOUT OURSELVES SPECIFICALLY AS A UTILITY IN SOUTHERN CALIFORNIA AND INDEED STATEWIDE, THE UTILITY INDUSTRY IS FACING A NUMBER OF CHALLENGES AND WE ARE NOT UNIQUE IN AVOIDING THEM. SO ACROSS THE BOARD, THE LABOR MARKET IS AN INCREDIBLY TIGHT AND COMPETITIVE LABOR MARKET FOR THE PROFESSIONAL SKILLS THAT WE HAVE. SO ACROSS THE BOARD, UTILITIES ARE ENGAGED IN COMPETITIVE WAGE INCREASES TO STRENGTHEN RECRUITMENT AND RETENTION OF EMPLOYEES. THE BUDGET REFLECTS THAT THERE'S CONTINUED INVESTMENT IN CRITICAL INFRASTRUCTURE TO DO WHAT UTILITIES DO, PROVIDING SAFE, RELIABLE, AND COST COMPETITIVE DELIVERY OF SERVICES. IN OUR CASE, WATER, NATURAL GAS AND SEWER SERVICE. AT THE SAME TIME, IN CREATING THE BUDGET, THERE'S ACTIONS THAT WE'RE TAKING TO ADDRESS THE INFLATIONARY PRESSURES THAT AFFECT EVERYBODY. EVERYBODY AND THE EFFECTS OF CLIMATE INITIATIVES AND THE EFFECTS OF CLIMATE HAS THAT VERY NATURAL REACTION, WHICH IS A REDUCTION IN DEMAND. AND THAT ALSO IS A REFLECTION OF THE BUDGET THAT WE BRING TO YOU. THERE ARE KNOWN FINANCIAL CHALLENGES AND POTENTIAL COST DRIVERS FOR US, SPECIFICALLY CONSERVATION AND DEMAND REDUCTION IS ONE, I JUST HIGHLIGHTED THAT. BUT ALSO IMPORTANT TO NOTE THAT AS OUR WATER RESOURCES PORTFOLIO, WE BRING A CERTAIN ELEMENT OF IMPORTED WATER AND THAT LEADS TO THE COST INCREASES THAT WE ABSORB COMING FROM THE METROPOLITAN WATER DISTRICT. AT THE SAME TIME, IN THE NATURAL GAS FUND, WE HAVE OUR ABILITY TO MANAGE OUR RATES BY MONITORING THE RATES THAT ARE COMING FROM SOCAL GAS AND THEIR SOCAL GAS INCREASES AS WELL. THE SOCAL GAS INCREASES IN RATES IS A REFLECTION OF THE GAS UTILITY INDUSTRY AND THE COST PRESSURES THAT IT FACES. AND AGAIN, WE ARE NOT UNIQUE IN THAT REGARD. THERE'S HIGHER CIP AND ADDITIONAL CIP IN IN EXPENDITURES THAT ARE DEALING WITH JUST BASIC REFURBISH AND REPLACEMENT. AND THE CONSTRUCTION INDUSTRY IS FACING SIGNIFICANT COST INDEX INCREASES IN THAT REGARD. AND WE NEED TO MAINTAIN THIS INFRASTRUCTURE. IT'S A FUNCTION OF THE SERVICES WE PROVIDE. WE ARE ON THE FRONT EDGE OF THE MUNICIPAL UTILITY INDUSTRY. OUR RESOURCES ARE AUTOMATICALLY METERED NOW. SO WE HAVE AUTOMATED METER INFRASTRUCTURE ACROSS THE BOARD, ALL HUNDRED 50,000 NATURAL GAS CONNECTIONS, ALL 90,000 WATER CONNECTIONS. BUT THAT LEADS TO AN INVESTMENT REQUIREMENT [00:35:01] IN ORDER TO MAINTAIN THE QUALITY OF THAT SERVICE. SO THE CIP CARRIES WITH IT METER REPLACEMENT PROJECTS THAT ARE NECESSARY TO SUSTAIN THAT NETWORK. AND FUNDING ZERO EMISSION VEHICLES IS A CONTINUING REQUIREMENT THAT WE SEEK TO MONITOR AND ADJUST TO. AND SO YOU SEE THOSE COSTS REFLECTED IN THE BUDGET AS WELL. I HAD OFFERED TO YOU AT THE START OF MY TENURE THAT THERE HAD TO BE A BUSINESS PLAN ASSOCIATED WITH THE BUDGET AND SLOWLY BUT SURELY WE'RE WORKING OUR WAY TO HAVE THAT CLOSE ALIGNMENT. THE BUSINESS PLAN FOR FISCAL YEAR 26 IS BEING BUILT AS WE SPEAK, TO ALIGN TO THE COSTS THAT WE'RE FACING AND THE BUDGET THAT WE'VE PROPOSED. AND THAT CARRIES WITH IT OBJECTIVES AND INITIATIVES. AND IN THE CUSTOMER SECTOR WITH THAT OBJECTIVE, YOU SEE WHAT IS PERHAPS THE OUTWARD FACING ELEMENT OF OUR UTILITY, AN EFFORT TO PROVIDE AFFORDABLE RATES FOR THE SERVICES WE PROVIDE TO DELIVER RELIABLE AND RESILIENT INFRASTRUCTURE, TO HAVE INNOVATIVE POLICIES AND PROGRAMS LIKE BILL ASSISTANCE PROGRAMS TO, IN THE END DELIVER SAFE WATER AND GAS AND IN DELIVERING SAFE WATER TO PROVIDE CLEAN AND RELIABLE SEWER SERVICE AS WELL. IN ORDER TO DO THAT, THERE HAS TO BE A COMMITMENT TO SUSTAINABLE FINANCES MEASURED LONG-TERM FINANCIAL SUSTAINABILITY IS CRITICAL TO PROVIDING THESE SERVICES. WITH THAT COMES A COMMITMENT TO A LONG RANGE FINANCE PLAN AND A COST OF SERVICE EMPHASIS IN THE BUDGET. AT ITS CORE, INTERNAL OPERATIONS HAS TO HAVE A COMMITMENT TO EXCELLENCE AND IMPROVEMENT IN THIS BUDGET. AND IT'S REFLECTED IN THERE POSITIVE COLLABORATION ACROSS THE BOARD, BEING PROACTIVE AND INNOVATIVE IN THE PROGRAMS AND THE DESIGN OF OUR OPERATIONS AND THE COMMITMENT TO INFORMATION SYSTEMS AND DATA. I JUST MENTIONED, THE COMMITMENT TO A MI TO YOU RIGHT THERE AT ITS FOUNDATION, THE EMPLOYEES OF YOUR UTILITY IN PROVIDING THIS SERVICE REPRESENT THE FOUNDATION OF EVERYTHING THAT I JUST COMMUNICATED TO YOU. IN THAT SENSE, THE BUDGET IS ALSO REFLECTIVE OF HAVING A COMMITMENT TO CAREER DEVELOPMENT AND STAFF COMPETENCIES CRITICAL, AS I HIGHLIGHTED TO YOU ACROSS THE BOARD IN THE INDUSTRY, IS A DESIRE FOR EMPLOYEE RETENTION EQUITY ACROSS ALL ELEMENTS OF OUR WORKPLACE. AND AN AWARENESS AND UNDERSTANDING FOR THE WORKERS OF WHAT IT IS AND THE ENVIRONMENT THAT THEY HAVE, WHAT ARE THE BENEFITS AND HOW DO THEY MAKE A DIFFERENCE IN THE UTILITY ITSELF? AND IN DOING WHAT I JUST TOLD YOU, I JUST COMMUNICATED THE BUSINESS PLAN ITSELF, RIGHT? WHETHER YOU LOOK AT THE TOP AND GO DOWN AND YOU ASK YOURSELF QUESTIONS ABOUT HOW DO YOU PROVIDE AFFORDABLE RATES, RELIABLE AND RESILIENT INFRASTRUCTURE, YOU'RE WORK YOUR WAY DOWN THROUGH THE FINANCIAL AND INTERNAL ASPECTS OF IT DOWN TO THE WORKPLACE CULTURE. THAT IS THE CORE THAT DRIVES THIS. WHERE IF YOU ASK YOURSELF, WHAT IF YOU DO THIS IN THE BUDGET AND COMMIT TO THESE EFFORTS AND WORK YOUR WAY UP AND COMMUNICATE THAT IF YOU MAKE THIS KEY CONNECTION TO THESE EFFORTS, YOU WILL LEAD TO A CUSTOMER FACING UTILITY THAT DELIVERS ON THE TOP. THE BUDGET IS ALL OF THESE THINGS. THAT BEING SAID, THE ACT OF BRINGING THE BUDGET TO YOU CARRIES ALREADY WITH IT. ALL OF THESE EFFORTS, AN EFFORT TO CONTROL COSTS, IN FACT, DEALING WITH THE COST PRESSURES THAT WE'RE DEALING AND ABILITY TO MANAGE THEM AND DELIVER TO YOU A BUDGET THAT ALREADY REFLECTS COST CONTROL MEASURES TO IMPROVE EFFICIENCY. A CONSOLIDATED UTILITY IS SUPPOSED TO DRIVE EFFICIENCIES. AND WE ASKED FOR PATIENTS IN DEVELOPING THOSE. AND INDEED THAT PATIENCE CONTINUES TO YIELD TO US RESULTS. AND I'M GONNA GIVE YOU A SNAPSHOT, A QUALITATIVE SNAPSHOT OF THOSE HERE. MANAGING DEBT, MANAGING DEBT IS CRITICAL IN THE FACE OF THESE COST PRESSURES BECAUSE IN MANAGING DEBT, WE'RE ABLE TO SPREAD OUT OUR COSTS OVER TIME AND REDUCE THE NEED FOR INCREASED REVENUE. AND THAT REPRESENTS THE FOURTH AND FINAL PIECE THAT WE BRING THIS TO YOU NOW WITH PROPOSED BUDGET, WITH PROPOSED RATES, KNOWING THAT WE'VE GONE THROUGH THIS ENTIRE PROCESS TO BRING TO YOU THE FINAL PIECE OF THE NECESSARY REVENUE INCREASES, MATCHING UP TO THE POLICIES THAT YOU'VE SET FOR FUND BALANCE AND LONG-TERM FINANCING. AND THAT IS THE RATE DECISION IN FRONT OF YOU TODAY. WHEN YOU TALK ABOUT THE CHANGES AFFECTING THE INDUSTRY, AND WE TALK ABOUT CLIMATE CHANGES AND THERE IS A DEMAND REDUCTION, THERE IS A PRESSURE TO USE LESS AND LESS OF THE RESOURCE THAT DOES HAVE A BUDGETARY EFFECT. THERE IS A LOWER COST IN THE BUDGET ASSOCIATED WITH THAT. SO WE HAVE FACTORED INTO THE BUDGET, THOSE COST REDUCTIONS, AND THE BUDGET DOES HAVE WITHIN IT THESE [00:40:01] REDUCTIONS. AND THE GAS SIDE, YOU HAVE ABOUT $10.7 MILLION IN COST REDUCTIONS. ONE OF THE KEY ELEMENTS, NO DOUBT, IS THE REDUCTION IN THE GAS COMMODITY CHARGES BY VIRTUE OF HAVING A FORECASTED LOWER DEMAND, NOTWITHSTANDING THAT YOU HAVE ALL THESE OTHER ELEMENTS OF COST REDUCTIONS ASSOCIATED WITH THE BUDGET ON THE WATER FUND. SAME THING, NOT BUYING IMPORTED WATER LEADS TO A COST REDUCTION IN THE BUDGET AND THEN ALL THE OTHER SERVICES AS WELL. SO THERE'S ABOUT $3.6 MILLION IN COST CONTROL INITIATIVES WITHIN THE BUDGET THAT HAS BEEN BROUGHT TO YOU. SEWER FUND, ALBEIT SMALLER, BUT NO LESS, NO LESS IMPORTANT IS ABOUT 378,000. WE ASK THE MANAGERS TO LOOK BACK ON THE CHANGES THAT THEY'VE INSTITUTED AND UNDOUBTEDLY THE CHANGES THAT THEY'VE INSTITUTED IN THE AREAS OF EFFICIENCY ARE GENERATING THEMSELVES IN THE FORM OF LESS TIME OR MORE TIME AVAILABLE TO DO OTHER THINGS. AND THAT REPRESENTS A VALUE WITHIN THE BUDGET ITSELF. IT'S QUALITATIVE AT THIS POINT, BUT IT'S MY GOAL TO BRING BACK TO THE BOARD IN A MORE LONGER RANGE FOCUS. WHAT ARE THESE EFFICIENCIES THAT ARE COMING FORWARD? HOW MANY OF THEM ARE DUE TO CONSOLIDATION? AND THEN WHAT DO THEY YIELD DOWN THE ROAD? IT'S AN IMPORTANT CRITICAL ELEMENT, AND I THINK IT'S AN IMPORTANT CRITICAL ELEMENT IN COMMUNICATING TO THE COMMUNITY WHAT'S EMBEDDED WITHIN THIS BUDGET ITSELF. THIS IS JUST A SNAPSHOT, A SURVEY OF THE VARIOUS EFFORTS THAT HAVE DRIVEN EFFICIENCIES WITHIN THE BUDGET, STREAMLINED OPERATIONS, COST REDUCTIONS, TIME SAVINGS, AND BETTER CUSTOMER SERVICE SIT AT THE TOP OF THESE IMPROVEMENTS THAT HAVE BEEN DONE. LIKE I SAID, IT'S OUR GOAL TO BRING THEM FORWARD IN A MORE COMPREHENSIVE MANNER AND TO DISCUSS THEM AND THEN HAVE THEM PART OF THE COMMUNICATION STRATEGY TO THE COMMUNITY AS WELL. AS I POINTED OUT TO YOU IN THIS ASPECT OF COMMUNICATING THE BUDGET, DEBT MANAGEMENT IS ONE OF THOSE KEY ELEMENTS THAT YOU TAKE INTO ACCOUNT BEFORE DELIVERING A FINAL BUDGET. AND THIS IS A BASIC RUNDOWN OF WHAT DEBT FINANCING DOES, RIGHT? IT'S THE BORROWING OF MONEY TO PAY FOR BIG PROJECTS. BENEFITS INCLUDE COVERING LARGE UPFRONT COSTS BY SPREADING THEM OUT OVER TIME. AND THAT'S IMPORTANT BECAUSE FUTURE RATE PAYERS WHO BENEFIT FROM THE PROJECT ALSO HELP PAY FOR IT. AND IT'S A CRITICAL ELEMENT OF KNOWING THE KINDS OF PROJECT THAT YOU PUT FORWARD FOR DEBT MANAGEMENT. THAT FINANCING HELPS INVEST THE UTILITIES CRITICAL, INVEST IN THE CRITICAL INFRASTRUCTURE WITHOUT NEEDING ALL THAT CASH UPFRONT. AS I POINTED OUT TO YOU IN THE CYCLE, ONE OF THE KEY ELEMENTS IN TERMS OF ACHIEVING A BALANCED BUDGET AND HAVING THE RATE PROJECTIONS THAT WE'RE GOING TO HAVE, THE FINAL PIECE IS INCREASING REVENUE. AND THAT'S THE RATE, THE RATE CHARGES THAT WE BRING BEFORE YOU. THE RATE INCREASES. THE RATES THEMSELVES PROVIDE THE GENERATION OF REVENUE, WHICH IS THE ABILITY TO ABSORB UNFORESEEN EVENTS, DEMAND FLUCTUATIONS, INFLATIONARY PRESSURES, AND REGULATORY IMPACTS. AND I SPENT THE TIME OUTLINING THAT FIRST BULLET POINT BECAUSE THAT AT ITS CORE IS THE ASPECT OF RAISING REVENUE, RAISING RATES. IT'S NOT JUST TO MATCH UP THE COSTS, IT'S SO MANY OTHER ELEMENTS INCLUDING FUND BALANCE MANAGEMENT AND LONG-TERM FINANCIAL SUSTAINABILITY. SO WE HAVE USED RESERVES IN THE PAST TO KEEP RATE INCREASES AS LOW AS POSSIBLE TO MAINTAIN OPERATIONS IN THE CURRENT FISCAL YEAR. AND IT IS IMPORTANT THAT RAISING REVENUE HAS A, AS A CO-EQUAL GOAL, THE SUSTAINABILITY OF RESERVES CONSISTENT WITH THE BOARD'S RESERVE POLICY. SO AS WE THINK ABOUT THE LONG-TERM PROJECTION OF RATES, WHERE LONG-TERM RATES ARE GOING TO GO, IT'S IMPORTANT TO UNDERSTAND THAT THAT'S A CRITICAL COMPONENT. THE FUND BALANCE THE LONG-TERM HEALTH OF THAT FUND BALANCE. SO IN THE PREVIOUS SESSION, WE BROUGHT TO YOU A DISCUSSION OF THREE OPTIONS. OPTION ONE HAD 15 AND 12 FOR THE GAS, AND THEN 12 AND 12 FOR WATER AND SEWER. WE SHOWED YOU THE EFFECTS IN THE LONG RANGE PROJECTIONS AND THE FIVE YEAR PROJECTIONS. SORRY FOR OPTIONS TWO AND THREE IN OPTION ONE. IT'S A TWO STEP INCREASE THAT WE'RE GOING TO AFFECT IN AUGUST OF FISCAL YEAR 25 AT 15%, AND THEN APRIL 20 APRIL IN 2026, FISCAL YEAR 26 WOULD HAVE AN EFFECTIVE DATE, UH, FOR THE, FOR THE GAS RATE INCREASE. AND AT THAT TIME, WHEN WE BROUGHT YOU THIS IN THE INFORMATION SESSION ON MAY 15TH, WE ASKED FOR YOUR CONCURRENCE THAT AS A DIRECTION WE WOULD BRING THIS RECOMMENDED OPTION. AND WE TOOK THAT CONCURRENCE. AND WHAT YOU'RE GONNA SEE NOW IS THE MORE DETAILED DISCUSSION OF OPTION ONE. SO YOU WILL SEE IN THE PRESENTATION THAT FOLLOWS INFORMATION RELATED TO THIS, AN ADDITIONAL 15% RATE INCREASE ON THE GAS FUND FOR AUGUST 20, 25 AND 12% RATE INCREASE FOR APRIL, 2026. THAT WOULD BE [00:45:01] EFFECTIVE AUGUST 1ST AND APRIL 1ST, AND IT WOULD GENERATE REVENUES EARLIER AND LIMIT THE DRAWS FROM UNRESTRICTED RESERVES, RESULTING FROM LOW GAS TRANSACTIONS. WATER AND SEWER IS A 12% RATE INCREASE IN OCTOBER 25. THAT EFFECT, THAT WOULD BE EFFECTIVE OCTOBER 1ST. SO LIKE I TOLD YOU, NOT THE TYPICAL BUDGET PRESENTATION, HERE'S THE NUMBERS, HERE'S THE RATES, BUT RATHER A TASTE OF THINGS TO COME. RIGHT. THERE'S BEEN A NUMBER OF DIFFERENT COMMENTS RECEIVED FROM THE PUBLIC AND ALL OF THEM HAVE BEEN INSIGHTFUL AND ALL OF THEM HAVE BEEN USEFUL. FOR EXAMPLE, ON A SLIGHTLY HUMOROUS NOTE, I'VE SPENT THE BETTER PART OF CLOSE TO 20 YEARS HERE WONDERING WHAT PERSONAL SERVICES WAS. AND I THOUGHT THAT IS SIMPLY THE CITY MAKING ME DO IT. IT TURNS OUT THAT I SHOULD HAVE ASKED A LITTLE MORE AGGRESSIVELY, MAYBE A DECADE OR SO AGO, RIGHT? BECAUSE PERSONAL SERVICES IS SIMPLY AN ACCOUNTING CHOICE THAT WE MAKE AS A NONPROFIT TO IDENTIFY WAGES. IT'S ACCEPTABLE AS A NONPROFIT TO USE THE ACCOUNTING TERM PERSONAL SERVICES, BUT IN THE PUBLIC COMMENT, WE COULD TELL THAT PEOPLE DON'T UNDERSTAND WHAT IT IS. WHEN I GOT HERE IN 2005, I DIDN'T UNDERSTAND WHAT IT WAS EITHER. SO GOING FORWARD, WE CALL IT WAGES, SALARIES, AND BENEFITS, ACRONYMS BE DEVIL, ANYBODY. AND SO THE PRESENTATION NOW, AS WE WORK WITH STAFF, WE'RE GONNA TRY TO MAKE AN EFFORT TO HAVE LESS AND LESS ACRONYMS, OR IF WE STATE ACRONYMS, WE'LL AT LEAST EXPLAIN THEM BEFORE WE JUST STARTED USING THEM REPEATEDLY, RIGHT? AND THEN FINALLY, I THINK A COMMITMENT TO, EVEN IF IT'S REPETITIVE, TO HAVE A MORE DETAILED UNDERSTANDING OF THE BUDGET IN PRESENTATION AS WE DO THE INFORMATION SESSIONS WITH THE BOARD. THAT WAY ANYBODY LOOKING AT THE HISTORY OF THE PRESENTATION AND INFORMATION TO THE BOARD HAS A SENSE OF THE DETAIL ASSOCIATED WITH THE BUDGET AND THE DETAIL ASSOCIATED WITH THE ACTIONS OR THE DESCRIPTIONS THAT WE'RE PROVIDING. THAT'S THE HOPE, AND THAT'S THE GUIDE. SO I'M GONNA TURN IT OVER TO STEPHANIE. STEPHANIE IS GONNA LEAD US INTO THE GAS FUND. I ALSO WANT TO, UM, OH, DO YOU NEED A BREAK? DO YOU WANNA TAKE A A RECESS? I DIDN'T WANT BE THIS VISIBLE . WELL, WE'RE, WE'RE DOWN TO THREE, SO IT'S, IT'S LIKE THREE. WAIT, WE'LL TAKE, WE'LL TAKE A FIVE MINUTE BREAK. OKAY. LET'S TAKE A FIVE MINUTE BREAK IN THE ABSENCE OF A QUORUM , [00:51:19] I THINK WE'RE READY, READY TO, UH, RECONVENE? EVERYBODY HAVE A SEAT. IT'S A NICE BREAK. THANK YOU, . OKAY, STEPHANIE, WE'LL TURN IT, TURN IT OVER TO YOU. ACTUALLY, I'M GONNA DO A, A SHORT INTRO BECAUSE I, I WANTED TO TAKE A MOMENT AND LET THE BOARD KNOW THAT I HAD SELECTED STEPHANIE AS THE SENIOR DIRECTOR OF FINANCE AND INFORMATION SERVICES. SO I WANTED TO WISH HER CONGRATULATIONS. AND INSTEAD OF ME DOING THE BIO, OF COURSE SHE SHOULD INTRODUCE HERSELF. SO, STEPHANIE, YOU THANK YOU. CONGRATULATIONS. , YOU ARE GONNA MAKE ME CRY. I'VE ALREADY CRIED A LOT IN AL'S OFFICE. . UM, I, MY NAME IS STEPHANIE CLARE. I HAVE WORKED IN THE CITY OF LONG BEACH FOR ABOUT THREE AND A HALF YEARS. SO VERY QUICKLY, I HAVE GOTTEN TO KNOW SO MANY FAMILIAR FACES NOW, AND I'M VERY GRATEFUL. I, I KNOW A**L WANTED ME TO GIVE A BIO, BUT YOU GUYS CAN PROBABLY FIND ME ON LINKEDIN. UH, FOR THAT, I, I WANTED TO TAKE THIS OPPORTUNITY TO THANK A**L AND ALL OF THE MENTORSHIP I'VE HAD IN THE CITY FROM BEING ON THE ENERGY RESOURCES SIDE WITH BOB DOWELL, THEN TO CHRIS AND THE MERGER AND BRANDON, UM, MENTORS I'VE HAD THROUGHOUT THE CITY AND MY, MY COLLEAGUES HERE WHO'VE SUPPORTED ME. AND LAST BUT NOT LEAST, MY STAFF. THEY ARE EXTREMELY TALENTED AND DEDICATED. AND WITHOUT THEIR SUPPORT, I WOULDN'T BE WHERE I AM TODAY. SO THANK YOU ALL AND YOU GUYS TOO, COMMISSIONERS . AND BECAUSE HR IS HERE, I DO, I DO NOT MAKE MY STAFF CRY . I JUST, HERE'S A HAPPINESS AND GRATITUDE . ALL RIGHT, LET'S GET STARTED WITH THE GAS FUND. SO WHAT WE HAVE FOR YOU ARE THE PROPOSAL, UH, FOR OPTION ONE. AND THIS FOR THE GAS IS A 15%, UH, INCREASE IN AUGUST OF THIS YEAR, AND A 12% INCREASE IN APRIL OF NEXT FISCAL YEAR. WE'RE GOING TO START WITH A HIGH LEVEL OVERVIEW OF THE TOTAL EXPENDITURES, TOTAL REVENUE, AND THE IMPACT TO THE FUND BALANCE. SO AS YOU CAN SEE, YOU CAN GO FROM LEFT TO RIGHT, THE EVOLUTION OF WHERE WE WERE, WHERE WE'RE GOING, AND WHERE WE'RE PLANNING TO BE. SO WE HAVE FY 25 BUDGET WHERE WE HAD GONE INTO A FUND BALANCE LOSS, AND WE KNEW THAT WE PLANNED FOR THAT. THAT WAS GOING TO DIP INTO OUR, UH, FUND BALANCE. UNFORTUNATELY, FOR, UH, IN THIS FISCAL YEAR, WE WERE FACED WITH SOME CHALLENGES BASED ON, UH, LOWER DEMAND THAN ANTICIPATED. AND SO NOW MOVING INTO FY 26, WE'RE PROPOSING TO BALANCE OUR BUDGET AS A**L EXPLAINED IN ALL OF THE EFFORTS THAT WE'VE GOTTEN TO TODAY. DIVING INTO THE DETAILS OF THE REVENUE, SAME CONCEPT, WE HAVE THE FY 25 BUDGET, FY 25 ET CS, WHICH ARE OUR ESTIMATES TO CLOSE ARE FORECAST AND FY 26 PROPOSED. THE LARGEST TAKEAWAYS HERE ARE FOR GAS TRANSMISSION REVENUE, WHICH IS THE INCREASE, UH, THAT WE'RE PROPOSING AS WELL AS DEBT PROCEEDS. SO AS YOU CAN SEE, THERE ISN'T ANYTHING FOR FY 25 BUDGET BECAUSE THE GAS FUND HAS NOT PREVIOUSLY HAD, UM, BONDS IN THE PAST. TO ILLUSTRATE THE LARGE AREAS OF THE, UM, OR TO ILLUSTRATE WHAT FACTORS INTO THE TOTAL AMOUNT OF THE $161 MILLION FOR TOTAL REVENUE, WE HAVE GAS TRANSMISSION REVENUE AT $60.2 MILLION AND FOLLOWED BY TWO PASS THROUGHS FOR GAS COMMODITY, WHICH ARE THE PURCHASE OF GAS 30 AT $33.8 MILLION. [00:55:03] AB 32 AT $21.3 MILLION GAS SERVICE FEES AND PREPAY AT $17.1 MILLION, AND THE DEBT PROCEEDS AT 10 AND A HALF MILLION DOLLARS. THEN THAT'S FOLLOWED BY CIP BILLABLE REVENUE, WHICH IS MONEY THAT WE RECUPERATE FROM DOING CIP WORK. AND THE LARGEST AREA OF SUPPORT WE'VE BEEN GIVEN GIVING SO FAR IS FOR THE PORT. WE ALSO HAVE MOUS AT $4.6 MILLION IN MISCELLANEOUS REVENUE AT 7.4 MILLION. MOVING ON TO EXPENDITURES OF THE, THE DETAILS HERE ARE HIGHLIGHTING THE SAME CONCEPTS AS WHAT WE DID FOR REVENUE. AND THE LARGEST TAKEAWAYS ARE THE LOWER DEMAND THAT WE'RE PROJECTING FOR GAS COMMODITY LABOR, MOUS FOR THE SALARIES, WAGES, AND BENEFITS WITH A SLIGHT UPTICK IN NEXT FISCAL YEAR, O AND M FOR A CONSERVATION PROJECT, AS JOEY HAD PRESENTED EARLIER TODAY, AND CIP BILLABLE, WHICH YOU CAN SEE THIS FISCAL YEAR WE'RE ESTIMATING HIGHER, BUT WE'LL BE RETURNING BACK TO OUR, UM, OUR NORMAL AMOUNT. ULTIMATELY, THE STORY HERE IS THAT WE'RE RIGHT SIZING OUR BUDGET. YOU CAN SEE THE DECREASED BUDGET OVER BUDGET, BUT WE ARE RIGHT SIZING ACCORDINGLY TO WHAT WE'RE PROJECTING FOR THIS FISCAL YEAR, FACTORING IN SOME CERTAIN AREAS. THEN WE HAVE THE ILLUSTRATION FOR THIS, AGAIN, IF YOU START COUNTER OR CLOCKWISE, WE HAVE SALARIES, WAGES, AND BENEFITS AT 37.4 MILLION. GAS COMMODITY AT 35.5 AND AB 32 AT 21.3, WHICH BOTH OF THOSE, AGAIN ARE THE PASSERS THAT YOU SAW IN THE REVENUE, UH, PORTION O AND M AT 14.8 MILLION CIP AND COMPLIANCE AT 10 POINT A HALF MILLION MOUS AT 14.3 MILLION. THE GENERAL FUND TRANSFER AT 13.8 AND CIP BILLABLE, WHICH IS THE COST FOR US TO DO THAT BILLABLE WORK AT 6.1 MILLION AND GAS TRANSMISSION AT 5.8. SO WE, WE PAY A PORTION OF TE SOCAL GAS FOR TRANSMISSION. HERE IS A SNAPSHOT OF THE RATE SCHEDULE FOR THE THREE, UH, RATES SCHEDULES, UH, FOR OUR CORE CUSTOMERS, WHICH ARE RESIDENTIAL, SMALL, COMMERCIAL INDUSTRIAL, AND COMMERCIAL INDUSTRIAL. UH, YOU HAVE THE FULL RATE SCHEDULE IN YOUR ATTACHMENT IN, IN THE RESOLUTION, BUT WHAT WE'RE SHOWING HERE ARE THE IMPACTS TO THE 15% INCREASE COMPARED TO CURRENT RATES AS OF TODAY. AND APRIL, 2026 IS INCREASED AT 12%. WE SHOW THIS TO YOU IN OUR LAST MEETING, AND IT, IT'S VERY, UH, IT'S TELLING THE STORY OF, UM, OUR EFFECTIVE BILL, OUR MONTHLY EFFECTIVE BILL BASED ON SEASONALITY. SO WE HAVE SUMMER AND WINTER, AND WE'RE SHOWING OUR CURRENT RATES COMPARED TO WHAT WE WOULD END AT FOR THIS FISCAL YEAR OF EFFECTIVE AUGUST, 2025 WITH THE 15% INCREASE. AND THERE'S NO IMPACT FOR WINTER, FOR CURRENT RATES FOR THIS FISCAL YEAR BECAUSE WINTER HAS ALREADY PASSED. BUT FOR SUMMER, WE HAVE JUST A SLIGHT, UM, UPTICK IN THE MONTHLY BILL. AND THEN MOVING INTO FY 26, WE HAVE, UH, 33 POINT OR $33 AND 83 CENTS FOR SUMMER, $74 AND 25 CENTS FOR WINTER, AND BOTH OF WHICH ARE STILL BELOW SOCAL GAS. AND THAT IS ACCORDING TO OUR CHARTER. NOW, TO COMPARE THE LARGER LANDSCAPE OF CALIFORNIA AND THE, UH, GAS INDUSTRY, WE ARE, WE WOULD BE THE LOWEST WE'RE SHOWING OUR CURRENT RATES, THE PROPOSED FOR FY 25, PROPOSED FOR FY 26, AND WE WOULD END UP AT $54 PER MONTH ON THE MONTHLY BILL COMPARED TO SOCAL GAS, WHICH IS WOULD BE 57 SAN DIEGO GAS AND ELECTRIC AT 82 PALO ALTO AT 70, SOUTHWEST GAS AT 74 AND PG E AT 87. HERE WE HAVE OUR FIVE YEAR FUND BALANCE, AND THE FOCUS FOR TODAY IS JUST THE FY 25 AND FY 26. THE OUTER YEARS ARE JUST ESTIMATES AT THIS TIME, AND WE WILL EVALUATE AS WE GO, GO ALONG IN THE FUTURE. BUT THIS IS FOR ILLUSTRATIVE PURPOSES. OUR FUND BALANCE IS ARE THE BLUE BARS AND THE ORANGE LINE IS OUR MINIMUM, UH, RESERVE, AND OUR MAXIMUM IS THE GRAY LINE. AND THESE ARE ACCORDING TO OUR CURRENT RESERVE POLICY. ULTIMATELY WHAT WE'RE LOOKING AT IS ABOUT $700,000 IN INCREASED REVENUE FOR INCREASING RATES BY 15% THIS FISCAL YEAR AND $7.9 MILLION FOR NEXT YEAR. AND AGAIN, THE ESTIMATES ARE THERE FOR FUTURE YEARS. AND THE REASON WHY WE, UH, PUT THAT IN THERE IS BECAUSE WE'RE BASING IT OFF OF OUR CIP UH, FIVE YEAR PROJECTIONS. THE BOTTOM LINE IS THE PAYGO, AND THAT'S A CASH FUNDED PORTION OF CIP. SO AS YOU CAN SEE, THERE ARE NO NUMBERS FOR UNTIL, UH, F FY 29. AND THE REASON FOR THAT IS WE'RE [01:00:01] PLANNING TO GO AFTER A $40 MILLION BOND THAT SHOULD CARRY US THROUGH THE NEXT THREE AND A HALF YEARS OR SO. AND WE ARE STILL BELOW THE MINIMUM, BUT WE'RE GROWING. AND LASTLY, FOR, UH, TO INTRODUCE SOMETHING NEW TO YOU, WE HAVE OUR GAS PREPAID DEBT FUND. UH, IT WAS ESTABLISHED IN 2007. IT IS NOT PART OF OUR OPERATING INCOME, BUT WE ARE RESPONSIBLE FOR THE ACCOUNTING TRANSACTIONS THAT TAKE PLACE. UM, IT IS OVERSEEN BY THE CITY CONTROLLER'S OFFICE. UM, AND MOVING FORWARD FOR TRANSPARENCY, WE'D LIKE TO PROCESS THIS AS PART OF OUR BUDGET TO PREPAY, TO ACCOUNT FOR THE PREPAY APPROPRIATIONS, WHICH WE'LL BE ASSUMING ULTIMATELY, THERE IS A NET NEUTRAL EFFECT BY ACCOUNTING FOR THE EXPENDITURES AND TOTAL REVENUE IN THE BUDGET. SO WHEN I SHOWED YOU EARLIER, THE FY 26 PROPOSED, THAT IS THE SECTION RIGHT HERE, THE 159, UH, MILLION DOLLARS, AND THE 1 61, AND THE PREPAY ACCOUNTS FOR ABOUT $13.6 MILLION. SO OUR TOTAL APPROPRIATIONS IN REVENUE WOULD BE 173,000,100 74 MILLION. AND OUR FUND BAL NO EFFECT TO THE FUND BALANCE. AGAIN, THIS IS JUST STRICTLY AN ACCOUNTING, UH, METHODOLOGY. IT HAS, THERE IS NO IN INCOME THAT WE EARN, UH, FROM THIS AND OR, OR LOSE FROM IT. SO WITH THAT, I WILL PASS THIS OFF TO DANIEL. GOOD MORNING COMMISSIONERS. UH, SO WE'RE GONNA GET STARTED WITH THE WATER FUND. UH, SIMILAR STRUCTURE TO WHAT WE JUST SHOWN IN THE GAS FUND. UH, WE HAVE THE FFY 25 BUDGET, UH, FY 25 ETC, AND THE FY 26, UH, PROPOSED RATE INCREASE OR THE FFY 26 PROPOSED, UH, TOTAL EXPENDITURES FOR FFY 26 ARE COMING IN AT 187 MILLION AND TOTAL REVENUES AT 193 MILLION WITH A, UH, BUDGETED GAIN OF 6.2 MILLION. UH, SO THIS IS THE, UH, REVENUE BY CATEGORY, UH, SIMILAR TO WHAT WE JUST SAW IN GAS. UM, UH, THE PORTABLE WATER CELLS AND RECLAIMED WATER CELLS, UH, INCLUDE THE 12% INCREASE. UM, THE MISCELLANEOUS REVENUE WE'RE SHOWING A SLIGHT, UH, INCREASE FOR 14.6 MILLION. UH, THE LINE OF CREDIT FOR THE DEBT PROCEEDS IS 21 MILLION WITH, UH, 13 POINT A HALF MILLION, UH, BEING UTILIZED FROM THE PREVIOUS 2024 BONDS, UH, ROUGHLY 13 POINT A HALF MILLION. AND THEN, SO AN ADDITIONAL 7 MILLION FOR THE ADDITIONAL DEBT. UH, REIMBURSABLE CIP IS, UH, 10 POINT A HALF MILLION. AND HERE WE HAVE THE PIE CHART, STARTING WITH, UH, ROUGHLY THREE QUARTERS OF THE PIE AT, UH, 141 MILLION FOR POTABLE WATER CELLS. UH, LINE OF CREDIT IS THE 21 MILLION. MISCELLANEOUS REVENUE IS THE 14.6 MILLION. AND THE REIMBURSABLE CIP IS THE 10 POINT HALF MILLION. AND THEN WITH THE RECLAIMED WATER CELLS BEING THE 5.8 MILLION, UH, FOR THE EXPENDITURE SIDE, UM, SALARIES AND WAGES COMING AT 38 AND A HALF MILLION. SO SLIGHT UPTICK FROM THE FY 25 BUDGET. UH, CIP IS THE LARGEST IN TERMS OF GROWTH THAT WE'RE SEEING. SO AN ADDITIONAL 6.6 MILLION FOR THE CIP AND FFY 26 O NET, WE'RE SEEING A SLIGHT INCREASE. UM, THIS IS A COMBINATION OF, UH, ITEMS, UH, A LOT OF THEM COMING FROM THE MAJOR ITEM COSTS CATEGORY, WHICH IS OUR POWER, UH, CHEMICALS FOR THE PUMPED IN PURCHASE, WE'RE SEEING A DECREASE TO 43 POINT, UH, 3 MILLION OR, UH, 43.4 MILLION. AND THAT IS, UH, RELATED TO THE REDUCED CONSUMPTION, UH, DEBT SERVICE. WE'RE SEEING AN INCREASE IN THE DEBT SERVICE FOR THE INCREASE IN DEBT THAT WE'RE TAKING OUT. AND THEN THE GENERAL FUND TRANSFER IS REMAINING FLAT AT THE 2.1 MILLION. AND THAT'S, UH, ALSO JUST WANTED TO POINT OUT THAT THIS IS THE, UH, 2017 NEXUS STUDY. UH, FOR THE RIGHT OF WAY MAINTENANCE EXPENSES. HERE IS THE PIE CHART OF THOSE COSTS. SO THE CIP, UH, BEING THE LARGEST PORTION AT THE 56.6 MILLION, UH, PUMPED IN PURCHASE AT 43.3 MILLION SALARIES, WAGES, AND BENEFITS AT 38 POINT A HALF MILLION L AND M AT 38.2 MILLION, AND DEBT SERVICE AT 8.7 MILLION. AND THEN WITH THE GENERAL FUND TRANSFER BEING THE SMALLEST PORTION AT THE 2.1 MILLION. SO HERE WE'RE SHOWING THE, UH, FUND BALANCE, UH, FOR THE OPTION ONE SCENARIO, WHICH IS THE 12% RATE INCREASE IN FY 26, AND THEN THE OUT YEARS WE'RE SHOWING, UH, AN ESTIMATE OF 6%, 6%, AND THEN F FOR FY 29 AND FY 30, WE'RE SHOWING THE, UH, 4%. UH, BENEATH THAT WE'RE SHOWING THE, UH, CIP. UH, SO AS YOU CAN SEE, WE HAVE THE 56.7 MILLION [01:05:01] FOR THE CIP WITH 35.7 MILLION FOR THE PAYGO FOR THE CASH, UH, FUNDED PORTION OF THAT CIP. UH, ONE THING WE ALSO WANTED TO POINT OUT ARE THE OUT YEARS FOR THE CIP. SO WE HAVE, UH, TWO YEARS FOR FY 27 28, WHERE WE'RE IN THE $40 MILLION RANGE BEFORE WE RETURN TO OUR, UH, MORE, UH, CORE SERVICES OF OUR CIP BEFORE WE GET INTO THE $30 MILLION RANGE. UH, MOVING ON TO THE SEWER FUND. SO SAME STRUCTURE AS BEFORE. UH, WE'RE SHOWING THE, UH, FY 25 BUDGET, UH, FY 25 ATCS AND THE FY 26, UH, PROPOSED. UH, ON THE EXPENSE SIDE, WE'RE GOING FROM 32 POINT A HALF MILLION TO 36 MILLION, OR 36.7 MILLION. UH, FOR THE TOTAL REVENUES, WE'RE GOING FROM 26 MILLION TO THE 34.8 MILLION. SO ORIGINALLY IN FFY 25, WE HAD A BUDGETED DEFICIT OF 6.5 MILLION, AND NOW WE'RE LOOKING AT A $1.9 MILLION DEFICIT FOR THE SEWER FUND. WHAT DOES THAT MEAN IN TERMS OF SEWER REVENUE? SO FOR FY 25, UH, WE HAVE THE, UH, SORRY, FOR THE Y 25, WE HAVE 13.3 MILLION FOR THE DAILY SERVICE CHARGE. IN OUR VOLUMETRIC CHARGES, UH, THESE ARE NOW INCLUDING THE 12% RATE INCREASE. SO FOR THE PROPOSED FY 26, WE'RE SHOWING THE 14.7 MILLION FOR DAILY SERVICE CHARGE. AND THEN FOR VOLUMETRIC CHARGES, WE'RE SHOWING THE, UH, 6.8 MILLION SEWER CAPACITY. CHARGES ARE REMAINING FLAT AROUND 2.2 MILLION. UH, THE LINE OF CREDIT, UH, WHICH IS THE, THE NEW ADDITION, UH, IS $8 MILLION. AND THEN FOR MISCELLANEOUS REVENUE, UH, WE'RE PROJECTED TO END THE YEAR OR WE'RE PROJECTING FY 26 TO BE AROUND 3.2 MILLION. SO FROM THE PIE CHART, UH, WE'RE STARTING WITH THE DAILY SERVICE CHARGE, WHICH REPRESENTS THE LARGEST PORTION AT 14.6 MILLION. UH, WE THEN HAVE THE LINE OF CREDIT FOR 8 MILLION. UH, VOLUMETRIC CHARGES ARE COMING IN AT 6.8 MILLION WITH MISCELLANEOUS REVENUE COMING AT 3.1 MILLION AND SEWER CAPACITY CHARGES COMING IN AT THE 2.2 MILLION. SO ON THE EXPENSE SIDE, UH, FOR SALARIES, WAGES, AND BENEFITS, WE'RE SEEING A SLIGHT UPTICK, UH, TO $8 MILLION. O AND M, WE'RE SEEING AN INCREASE FOR THE 12.2 MILLION. THIS IS GENERAL INCREASES ACROSS THE BOARD. UH, FOR THE CIP, UH, WE ARE SEEING AN INCREASE AS WELL. SO FROM 12.4 MILLION, UH, TO 14.1 MILLION, UH, THE GENERAL FUND, THE GENERAL FUND TRANSFER, UH, WE ARE INCREASING IT SLIGHTLY FROM THE 2.1 MILLION OR FROM THE, SORRY, FROM THE 2.2 MILLION TO THE 2.3 MILLION. UH, THIS WAS RELATED TO THE INCREASED ACTIVITY THAT WE'VE SEEN LATELY AND LATELY. AND AGAIN, THIS IS, UH, RELATED TO THE 2017 NEXUS STUDY. SO FROM A, FROM THE PIE CHART, WE'RE STARTING OFF WITH THE 14.1 MILLION FOR THE CIP, UH, O AND M IS COMING IN AT THE 12.2 MILLION SALARIES, WAGES AND BENEFITS ARE COMING IN 8 MILLION, AND THE GENERAL FUND TRANSFER AT 2.3 MILLION. SO FOR THE FIVE YEAR FUND BALANCE, UH, WE'RE SHOWING THE 12%. SO OPTION ONE 12% RATE INCREASE FOR FY 26. UH, THE CIP IS THE 14.1 MILLION, AND THEN THE CASH FUNDED PORTION FOR THE PEGO IS THE 6.1 MILLION. UH, ONE THING WE WANTED TO NOTE IS THE OUT YEARS THAT WE'RE ANTICIPATING FOR FY 27 AND 28 DO HAVE LARGER THAN NORMALLY OUR, OUR NORMAL CIP. TYPICALLY OUR CIP IS AROUND $6 MILLION. SO, UH, FOR FY 27, UH, WE HAVE 30 MILLION. AND THEN FOR FY 28, WE'RE SHOWING THE 10.6 WITH ROUGHLY HALF OF IT BEING CASH FUNDED. AND THEN AN FY 29 FY 30, UH, WE'RE GOING BACK TO THE, UH, FULLY CASH FUNDED CIP. HERE WE HAVE A RESIDENTIAL BILL COMPARISON LOOKING AT OUR WATER AND SEWER BILLS COMBINED. SO CURRENTLY IT'S ROUGHLY AROUND A HUNDRED DOLLARS A MONTH. AND THEN WE'RE SHOWING THAT INCREASE, UH, FOR THE PROPOSED LONG BEACH, UH, INCREASE. IT'S IMPORTANT TO NOTE TOO, THAT A LOT OF THESE CITIES WERE USING THEIR CURRENT, UH, RATES THAT THEY HAVE, UH, AND THEY'RE ALSO GOING THROUGH THE SAME PROCESS FOR THEIR RATE INCREASES AS WELL. SO WE'RE ANTICIPATING THEY'RE ALSO GONNA BE RAISING THEIR BILLS AS WELL. AND THEN, BEFORE I HAND IT OFF, ARE THERE ANY QUESTIONS REGARDING THE WATER AND SEWER? NO. OKAY. I'LL GO AHEAD AND HAND THIS BACK OFF TO STEPHANIE. THANK YOU, DANIEL. SO, HERE WE ARE. YOU'VE SEEN EVERYTHING AND, UH, EVERYTHING WE'RE PROPOSING. WE UNDERSTAND THAT THESE ARE VERY DIFFICULT TIMES FOR HOUSEHOLDS AND BUSINESSES AND THE DECISIONS THAT WE'VE COME TO, UH, WE DON'T TAKE LIGHTLY. AND WE WOULD LIKE TO BE ABLE TO CONTINUE TO [01:10:01] THE COMMUNICATION WITH OUR BOARD AND WITH THE PUBLIC. AND, UH, WE WANTED TO TAKE THIS OPPORTUNITY TO PROVIDE, UH, INFORMATION ON OUR EXISTING ASSISTANCE PROGRAMS AND RESOURCES, SOME OF WHICH, UH, JOEY SHARED EARLIER ABOUT CONSERVATION. BUT WE ALSO WANTED TO HIGHLIGHT, UM, THIS FLYER. UM, THERE'S SOME OUTSIDE, UM, AT THE LOBBY, UH, HOUSEHOLD WATER ASSISTANCE PROGRAM, GAS DISCOUNT PROGRAM, SENIOR OR DISABILITY DISCOUNT PROGRAM, HOME ENERGY ASSISTANCE PROGRAM, MEDICAL HEATING ALLOWANCE AND LEAK REPAIR PROGRAM FOR INCOME ELIGIBLE HOMEOWNERS. WE ALSO HAVE, UH, A RESOURCE FOR FLEXIBLE PAYMENT PLANS TO LEVELIZE, UH, PAYMENTS, UH, TO AVOID SEASONAL INCREASES AND, AND SWINGS. AND WE ALSO HAVE, UH, A CUSTOMER PORTAL BILL BUDGETING TOOL THAT WILL BE COMING IN A FEW MONTHS. AND THIS WILL ALLOW RATE PAYERS TO BE ABLE TO BUDGET THEIR WITHIN THEIR HOUSEHOLD, UM, UH, EXPENSES. NOW FOR OUR BUDGET APPROVAL PROCESS. TODAY, WE ARE ADOPTING THE FY 26 BUDGETING RATES. NEXT MONTH, WE WILL BE GOING TO CITY COUNCIL FOR COUNCIL TO ADOPT THE GAS RATES FROM JULY TO AUGUST. BUDGET BRIEFINGS WITH THE MAYOR AND CITY COUNCIL WILL TAKE PLACE IN AUGUST. THE GAS RATE INCREASE WILL GO INTO EFFECT, AND WE'LL HAVE THE PROP TWO 18 HEARING FOR WATER AND SEWER RATE INCREASES. IN SEPTEMBER. CITY COUNCIL WILL ADOPT THE FY 26 BUDGET AND WATER AND SEWER RATES, AND IN OCTOBER, THE FY 26 BUDGET AS WELL AS THE WATER AND SEWER RATES WILL BECOME EFFECTIVE. WITH THAT, WE ARE RECOMMENDING THREE ITEMS TO BE A ADOPTED. THE FIRST ONE IS ITEM NUMBER FOUR FOR THE BOARD TO ADOPT RESOLUTION UT 1536, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF UTILITIES COMMISSIONERS, FIXING RATES AND CHARGES FOR THE GAS SERVICES TO ALL CUSTOMERS, SUBJECT TO THE APPROVAL OF THE CITY COUNCIL BY ORDINANCE. AGENDA ITEM NUMBER FIVE, ADOPT RESOLUTION UT 1537, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR WATER AND SEWER SERVICES TO ALL CUSTOMERS, SUBJECT TO THEIR APPROVAL OF THE CITY COUNCIL BY ORDINANCE AND SUBJECT TO A PUBLIC PROTEST HEARING AS PROVIDED FOR, AS PROVIDED FOR IN THE CALIFORNIA CONSTITUTION, ARTICLE 13. AND LASTLY, AGENDA ITEM NUMBER SIX, ADOPT RESOLUTION UT 1538, ADOPTING THE ANNUAL BUDGET FOR THE LONG BEACH PUBLIC UTILITIES DEPARTMENT FOR THE FISCAL YEAR 2025 TO 2026, AND AUTHORIZE STAFF TO TRANSMIT THE RESOLUTION AND BUDGET TO THE CITY MANAGER, MAYOR, AND CITY COUNCIL. THAT CONCLUDES OUR BUDGET WORKSHOP PRESENTATION, AND WE'D BE HAPPY TO ADDRESS ANY QUESTIONS YOU MIGHT HAVE. OKAY, WELL, THAT, THAT'S AN AMAZING PROCESS. UH, THANK YOU FOR, GOSH, A YEAR PLUS OF WORK LEADING UP TO TODAY. VERY STUDIED, VERY THOUGHTFUL, LOTS OF RESEARCH AND EVALUATION, AND I LIKE YOUR COMMENTS ABOUT IT NOT BEING TAKEN LIGHTLY AND, AND THE EQUITY AND INCLUSION THAT WE SEE AS PART OF THIS PROCESS TO TRY TO MAKE IT AS AFFORDABLE AS POSSIBLE WHILE WE'RE STILL ACHIEVING OUR GOALS AND OUR PUBLIC TRUST. SO THANK YOU STEPHANIE, AND CONGRATULATIONS AGAIN. YOU HAVE OUR SUPPORT. UM, I'D LIKE TO, UH, ITEM NUMBER FOUR, WE'RE GOING TO TAKE EACH OF THESE SEPARATELY, UH, IS TO ADOPT RESOLUTION UT 1536, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF UTILITIES COMMISSIONERS, FIXING RATES AND CHARGES FOR THE GAS SERVICES. AND, UH, DO I HAVE ANY PUBLIC COMMENT? ANY COMMISSIONER COMMENT? I, I JUST WANNA ECHO WHAT OUR PRESIDENT, UH, JUST SAID. I, I THINK WE APPRECIATE THAT YOU'VE ALL TAKEN THIS VERY SERIOUSLY. IT'S NOT SOMETHING THAT COMES LIGHTLY, NOT JUST THE PEOPLE THAT PRESENTED, BUT THOSE WHO SUPPORTED THE PRESENTATIONS, I'M SURE. SO THANK YOU FOR THAT. UM, I KNOW WE'VE RECEIVED SOME, UH, COMMENTS FROM THE COMMUNITY, UM, WHICH I WISH WE COULD GIVE THEM AND MAKE THEM FEEL SELF ASSURED THAT WE ARE TURNING OVER EVERY ROCK TO MAKE SURE THAT WE DO THE BEST THAT WE CAN TO KEEP THOSE COS COSTS DOWN. BUT NOW I KNOW WE HAVE A COMMITMENT TO GO OUT INTO THE COMMUNITY, WHICH I THINK IS GREAT. I THINK WE'VE DONE A LOT OF THAT. WE'VE TRIED TO REACH OUT AND HOPEFULLY, WE'LL, WE'LL BE ABLE TO, IN THEIR MINDS, DO A BETTER JOB, UM, CHANGE THE NAME OF THE BUDGET WORKSHOP. IT DOESN'T SEEM TO GEL WITH SOME PEOPLE THINKING THAT IT'S REALLY NOT A WORKSHOP. A WORKSHOP IS WHEN WE SIT AROUND AND DISCUSS, BUT MAYBE IT'S A BRIEFING OR WHATEVER, BUT I KNOW ANTO IS DOING A GOOD JOB ON THAT. UM, THE ONE THING THAT, THAT I, IT WASN'T, UM, A SLIDE HERE WHERE I THINK IT WAS THE ANTO WHEN YOU WERE [01:15:01] SPEAKING, AND IT WAS THOSE YELLOW BOXES ALIGNING BUDGET TO THE BUSINESS PLAN. THE VERY FIRST ONE ON THE TOP LEFT WAS AFFORDABLE RATES. THEN IT WENT TO RELIABLE AND RESILIENT, INNOVATIVE POLICY AND SAFE WATER AND GAS FOR THE CUSTOMER. THEN THE FINANCIAL, THEN THE INTERNAL, THEN THE WORKPLACE CULTURE. I, I WANT, I, I THINK THE CONNECTION FOR PROBABLY A LOT OF OUR COMMUNITIES IS TO LOOK AT THE AFFORDABLE RATE BOX AND THEY FOCUS ON THAT, BUT THEN WE HAVE THE COST OF SERVICE. AND SO I THINK THAT'S WHERE THE DISCONNECT FOR A LOT OF PEOPLE IS, IS, YOU KNOW, SO WE WANNA KEEP RATES AFFORDABLE, AND THEN WHAT IS THE COST OF SERVICE? AND SOMETIMES I THINK THEY DON'T TRUST US THAT THEY THINK THAT WE ARE INFLATING THOSE. I DON'T BELIEVE WE ARE. I THINK WE'VE DONE A REALLY GOOD JOB ON, ON TRYING TO BRING AND ALIGN THIS BUDGET TO, TO THE BUSINESS PLAN. SO MAYBE THAT'S ONE OF THE THINGS THAT WE CAN BRING TO THEM, IS TO REALLY TELL THEM WHAT THE COST OF SERVICE IS. IT'S NOT, I MEAN, THERE'S SO MUCH YOU HAVE ALL GONE THROUGH HERE, SO I APPRECIATE THAT. UM, THE CONSOLIDATION, I KNOW THAT WAS BROUGHT UP ALSO WAS WHERE ARE THE EFFICIENCIES? AND I THINK YOU'VE DONE DONE A GOOD JOB ON ADDRESSING THAT AS WELL. UM, THE RESERVE, UH, PEOPLE NEED TO UNDERSTAND, AND I'M SPEAKING, PREACHING TO THE CHOIR HERE, ALL OF US, THAT THE RESERVE IS, HAS TO BE, UH, SOMETHING THAT'S SOLID SO THAT WE CAN MEET THE CHALLENGES, UH, AND AS WELL AS CLIMATE CHANGE TOO. UM, DO WE DO ANYTHING WITH THE NEIGHBORHOOD RESOURCE CENTER WITH REGARDS TO THE UTILITY ASSISTANCE PROGRAM? DO THEY, ARE THEY AWARE OF THIS? OUR NEIGHBORHOOD RESOURCE CENTER? DO WE HAVE A LINK WITH THEM AT ALL? JOY, WOULD YOU HAPPEN TO KNOW? I I DON'T HAVE THE ANSWER OFF THE TOP OF MY HEAD. YEAH. YES, WE DO. OKAY. BECAUSE I KNOW THEY'RE PRETTY EFFECTIVE IN DEALING WITH COMMUNITIES, AND I THINK THEY HAVE A DIRECT RELATIONSHIP WITH, UM, THE CHIEF OF STAFFS FROM THE COUNCIL. OKAY, GOOD. SO I, I KNOW WE'RE, AGAIN, TURNING OVER EVERY ROCK. I DON'T HAVE ANY QUESTIONS. UM, I KNOW THIS IS A REALLY TOUGH TIME FOR EVERYBODY. AND, AND, AND I KNOW WHENEVER WE LOOK AT DOUBLE DIGIT INCREASES, IT'S REALLY DIFFICULT. UM, BUT I HOPE THE PUBLIC UNDERSTANDS THAT WE'RE DEALING WITH DECLINING REVENUES AND INCREASING COSTS AND TRYING TO MAINTAIN THE INTEGRITY OF THE PROGRAM. WE ALSO HAVE TO DEAL WITH THE FACT THAT METROPOLITAN, YOU KNOW, HAS GONE THROUGH THE SAME THING. SO ACROSS THE STATE, THERE'S PEOPLE LIKE US SITTING IN A ROOM AND DOING THE EXACT SAME THING. YOU WOULD THEN ASSUME THAT THEY ARE LOOKING AT THE SAME EXACT THINGS THAT WE ARE. THE DEMAND IS DOWN REVENUE, YOU KNOW, REVENUES POSSIBLY NEED TO, TO NOT TO MEET THAT. AND, UM, AND THEN ALSO, UM, DEALING WITH SUSTAINABILITY AND CLIMATE CHANGE. CORRECT. THANK YOU FOR THAT FEEDBACK. YES. OKAY. THANK YOU SO MUCH. UM, I THINK I'M TALKING TOO LONG, BUT THANK YOU VERY MUCH, EVERYONE. I APPRECIATE THAT. AND, UH, I'LL MAKE A MOTION TO APPROVE. GREAT. THAT'S ITEM NUMBER FOUR. ITEM NUMBER FOUR. AND WE HAVE A SECOND. SECOND. THANK YOU. I CALL ANDINA FOR THE ROLL CALL VOTE. PRESIDENT MCGUIRE. YES. VICE PRESIDENT SCOTT. AYE. SECRETARY CORDERO? YES. COMMISSIONER SHANNON AND COMMISSIONER RAINEY ARE ABSENT. THANK YOU. THANK YOU. THE VOTE CARRIES ITEM NUMBER FIVE [5. 25-55631 Recommendation to adopt Resolution UT-1537, a Resolution of the City of Long Beach Board of Utilities Commissioners fixing rates and charges for water and sewer services to all customers, subject to the approval of the City Council by Ordinance, and subject to a public protest hearing as provided for in the California Constitution Article XIII.       Suggested Action: Approve recommendation. ] TO ADOPT RESOLUTION UT 1537, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR WATER AND SEWER SERVICES. DO I HAVE ANY PUBLIC COMMENT? COMMISSIONER COMMENT? DO I HAVE A MOTION TO APPROVE? I, I HAVE A QUICK QUESTION. YOU DO? OKAY. YEAH, I DO. UM, I THINK THAT ONE OF THE THINGS THAT, THAT, THAT COMES UP IS THE GAS TRANSFER. CAN YOU HELP US UNDERSTAND, SO WE CAN HELP OTHERS UNDERSTAND HOW GAS TRANSFERS COME ABOUT AND HOW WHAT THE CITY, YOU KNOW, I KNOW THE RIGHT OF WAY. IS THAT WHAT IT IS? IT'S TIED TO THE, THE RIGHT OF WAY STUDY. SO FOR, FOR THE, FOR THE GAS TRANSFER, THE RIGHT OF WAY WAS REFERENCED FOR THE WATER AND SEWER ACCORDING TO THE 2017 NEXUS STUDY. OKAY. SO IT HAS NOTHING TO DO WITH THE GAS. SO THEN HOW IS THE GAS TRANSFER, HOW DID WE COME UP WITH THAT? AND WHAT IS THAT USED FOR? THAT AS A RESULT OF MEASURE M IS WRITTEN INTO THE CHARTER, AND SO THERE IS A CAP, UH, OF 12%. THE TRANSFER HAS BEEN KEPT IN THIS PROPOSAL TO YOU CONSISTENT WITH THE PREVIOUS YEARS. IT'S HELD FLAT. SO IN THE FACE OF RISING COSTS, IT IS NOW, WELL, UH, WITHIN THE, THE CAP OF 12%, UH, BELOW THAT. OKAY, GREAT. THE ONLY ONE THAT WENT UP A LITTLE WAS THE SEWER. THE, THE SEWER WENT UP SLIGHTLY. THAT'S A RESULT OF A CALCULATION EMBEDDED WITHIN THE 2017 NEXUS STUDY THAT CALCULATES THE RIGHT OF WAY IMPACTS, GIVEN THE LENGTH OF PIPELINES. OKAY. [01:20:01] AND GIVEN THEIR DIMENSIONS. OKAY. PERFECT. THAT'S WHAT I NEEDED. OKAY, THANK YOU. AND, AND JUST FOR EVERYONE, ANATO, COULD YOU EXPLAIN BRIEFLY THE NEXUS STUDY, THE IMPACT ON THE TRANSFER? YES, I WILL. AND, AND, AND SOMEWHERE I WISH MARSHA WAS NEXT TO ME, SO SHE SHOULD KICK ME IF I, IF I SAY SOMETHING WRONG. UM, BUT I THINK SHE, SHE WILL REGARDLESS, UH, THE, THE HISTORY OF THE NATURE OF UTILITY TRANSFERS TO CITY FUNDS IS WELL DOCUMENTED. IT HAS THIS ENTIRE LENGTHY LEGAL HISTORY. BUT AT ITS VERY CORE, THE VERY CORE OF THE NATURE OF THE LITIGATION THAT HAS TAKEN PLACE ACROSS THE STATE IS FUNDAMENTALLY IF THERE'S GOING TO BE A TRANSFER BASED ON PROPOSITION TWO 18 BETWEEN WATER OR SEWER SERVICES, WHICH HAVE EMBEDDED WITHIN A PROPERTY. RIGHT. NEXUS, IS THERE AN ACTUAL DOCUMENTED CALCULATION THAT THE REASON FOR THE TRANSFER IS AN ASSOCIATED IMPACT THAT IS DOCUMENTED, UNDERSTOOD, AND ABLE TO CALCULATE. AND SO THAT'S THE VERY FUNDAMENTAL BASIS FOR THE FACT THAT THERE WAS A 2017 NEXUS STUDY. THIS NEXUS STUDY WAS A STUDY THAT BY ITS VERY STRUCTURE WAS DONE CONSISTENT WITH OTHER STUDIES THAT WERE DONE IN OTHER COMMUNITIES THROUGHOUT CALIFORNIA. THOSE STUDIES ASSESSED THAT FOR, UM, PIPELINE UTILITIES THAT EXIST IN STREETS FOR THE SIZE OF THE DIAMETER OF THE PIPELINE, THERE IS AN ASSOCIATED LONG TERM LIFE TERM IMPACT OF THAT, UH, OF THAT PIPELINE. IN THAT RIGHT OF WAY, IT CAN BE CALCULATED, IT CAN BE DOCUMENTED, AND IT CAN BE QUANTIFIED. AND THAT'S THE VERY ESSENCE, SORRY FOR BELABORING. THE POINT, THAT'S THE VERY ESSENCE OF THE 2017 STUDY THAT FORMS THE BASIS OF THIS FORMULA. AND THE FORMULA IS USED TO ASSESS WHETHER THERE NEEDS TO BE AN INCREASE OR NOT, AND THAT THAT'S THE VERY FOUNDATION. AND I HAVEN'T BEEN KICKED YET, SO I THINK I DID A GOOD JOB. YEAH. SO, EXCUSE ME. SO THE PIPELINE IS AN EXAMPLE OF A POINT OF NEXUS, CORRECT? YES. PIPE PIPELINE IS THE POINT OF NEXUS. AND THE FACT THAT THE PIPELINE EXISTS IN THE STREET, IT HAS A LIFETIME IMPACT ON THE LONGEVITY OF THE PAVEMENT. AND SO CONSEQUENTLY, THE CITY'S EFFORTS TO MAINTAIN PAVEMENT IN THE LONG TERM ARE REFLECTED IN THE ASSESSMENT OF THIS COST. OKAY. AND THAT, IN SUMMARY, IS THE EXACT REASON FOR THE WORD NEXUS. PERFECT. AS TO WHY THE TRANSFER IS ALLOWED. GOOD. OKAY. IT'S COMPLEX. THANK YOU. THANK YOU FOR THAT. DO I HAVE ANY OTHER COMMISSIONER COMMENTS? UM, DINA FOR THE ROLL CALL. VOTE VICE PRESIDENT SCOTT. PARDON ME? I DIDN'T, I DIDN'T GET A MOTION. OH, MOTION. DO I HAVE A MOTION TO APPROVE? THIS IS ON FIVE, THIS IS ITEM NUMBER FIVE FOR THE WATER AND SEWER. OKAY. MOTION TO APPROVE. SECOND. THANK YOU. I HAVE A FIRST AND A SECOND. UM, DINA? YES. VICE PRESIDENT SCOTT AYE. SECRETARY CORDERO? YES. PRESIDENT MCGUIRE? YES. COMMISSIONER SHANNON AND COMMISSIONER RAINEY ARE ABSENT. GREAT. THE VOTE CARRIES ITEM NUMBER [6. 25-55632 Recommendation to adopt Resolution UT-1538 adopting the annual budget for the Long Beach Public Utilities Department for the fiscal year 2025-2026 and authorize staff to transmit the Resolution and the budget to the City Manager, Mayor, and City Council.       Suggested Action: Approve recommendation. ] SIX TO ADOPT RESOLUTION UT 1538, ADOPTING THE ANNUAL BUDGET FOR LONG BEACH UTILITIES. LONG BEACH PUBLIC UTILITIES DEPARTMENT FOR THE FISCAL YEAR 2025 THROUGH 2026. AND I WILL NOTE THAT FOR THE RECORD, WE RECEIVED THREE FEE, THREE EMAIL PUBLIC COMMENTS FOR THIS ITEM. DO I HAVE ANY ADDITIONAL PUBLIC COMMENT? SEEING NONE, DO I HAVE ANY COMMISSIONER COMMENT? UM, YES. THANK YOU. UM, WE ARE IN RECEIPT OF, OF WHAT HAS BEEN SUBMITTED, UH, BY SOMEONE IN OUR COMMUNITY. AND I WANNA ASSURE THEM THAT IT'S, UM, TAKEN VERY SERIOUSLY. AND I, I ACTUALLY WANNA THANK HER, UH, FOR THE TIME AND THE EFFORT THAT IT TAKES TO, UM, TO STAY ON TOP OF THIS. UM, I, I GREATLY APPRECIATE IT. THERE'S A LOT OF GOOD INFORMATION IN HERE. UM, HOPEFULLY THERE'S SOME THINGS THAT WE CAN'T ADDRESS AND WE'RE NOT GONNA BE ABLE TO, TO FIX BECAUSE IT IS WHAT IT IS IN TERMS OF OUR, OUR EXPENSES OF RUN OUR, OUR REVENUE. BUT, UM, THERE ARE SOME, SOME GOOD THINGS. AND I HOPE WE CAN, UM, SOMEDAY I'D LOVE TO HAVE A CONVERSATION WITH HER ON THIS. SO, AGAIN, I, I THINK WE TAKE IT VERY SERIOUSLY. WE ALL DO. AND I'M SURE YOU ALL DO TOO. SO, UH, WITH THAT, THANK YOU GLORIA. DO I HAVE A MOTION TO APPROVE? MOTION TO APPROVE. ITEM FIVE. ITEM ITEM SIX, SIX. DO I HAVE A SECOND? SECOND. THANK YOU. DINA. ROLL CALL. VOTE VICE PRESIDENT. SCOTT. AYE. SECRETARY CORDERO? YES. PRESIDENT MCGUIRE? YES. COMMISSIONER RAINEY AND COMMISSIONER SHANNON ARE ABSENT. THANK YOU. OKAY. THANK YOU EVERYONE. THANK YOU VERY MUCH, STEPHANIE. THANK YOU. UH, THIS IS [PUBLIC COMMENT Opportunity to address the Utilities Commission on non-agenda items. Each speaker is limited to three minutes to make their comments unless extended by the Board.] [01:25:01] THE PUBLIC COMMENT PERIOD. IS THERE ANYONE WISHING TO SPEAK ON A NON AGENDA ITEM? SEEING NONE. THE PUBLIC COMMENT PERIOD IS CLOSED. AND IN TERMS OF ANNOUNCEMENTS, I DO HAVE A COUPLE OF REMINDERS. UM, A FEW CALENDAR DATES JUST TO MAKE SURE WE HAVE OUR CALENDARS IN ORDER. 'CAUSE THERE HAVE BEEN A FEW CHANGES THIS SUMMER. AS WE'RE LOOKING AT OUR SCHEDULES IN JULY, WE'RE MEETING ON JULY 10TH AND 24TH. AND THEN IN AUGUST, WE'RE MEETING AUGUST 7TH. AUGUST 27TH IS OUR PROP TWO 18 HEARING AT SEVEN O'CLOCK IN THE EVENING IN THIS ROOM, I BELIEVE. AND THE AUGUST 21ST BOARD MEETING IS CANCELED BECAUSE WE ARE ATTENDING THE, UM, URBAN WATER INSTITUTE CONFERENCE IN SAN DIEGO THAT WEEK. SO I CALL ANTO FOR HIS REPORT. GO AHEAD. PARDON ME? ARE THERE ANY OTHER ANNOUNCEMENTS? OKAY, A**L. SORRY. YEAH, NO, THANK YOU PRESIDENT MCGUIRE. I'LL, I'LL BE BRIEF. I KNOW THAT, UH, THAT WE WERE TRYING TO MANAGE TIME. UM, I HAVE, UH, NOT GIVEN A REPORT THIS MONTH AND I'LL JUST POSTPONE SOME OF THE DETAIL AND PROVIDE THAT IN THE JULY REPORT AT OUR NEXT MEETING. OKAY. UM, I BELIEVE THAT'S IT FOR TODAY. THANK YOU ALL FOR YOUR PATIENCE. THANKS FOR ALL THE WORK THAT WENT INTO THIS, AND WE'LL SEE YOU ACTUALLY NEXT THURSDAY FOR OUR, UM, OUR SECOND MEETING IN JULY OR JUNE. PARDON ME. OKAY. THE MEETING IS ADJOURNED. * 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.