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I PLEASE CALL THE[CALL TO ORDER]
MEETING TO ORDER OF THE FINANCE COMMITTEE? MARCH 19TH.AND IF I COULD CALL ON DINA FOR THE,
[ROLL CALL]
UH, ROLL CALL.AND OUR FIRST ITEM OF BUSINESS IS TO
[REGULAR AGENDA]
APPROVE THE JANUARY 8TH, UH, 2026 FINANCE COMMITTEE MEETING.MAY I HAVE A MOTION? MOTION TO APPROVE? AND I'LL SECOND THAT.
ARE THERE ANY PUBLIC COMMENTS ON THE MINUTES FROM THAT PREVIOUS MEETING SCENE? NONE.
ANY COMMISSIONER COMMENTS? NONE.
ALL THOSE IN FAVOR, PLEASE SAY AYE.
ITEM TWO, WE ARE GONNA RECEIVE AND
[2. 26-54636 Recommendation to receive and file the Long Beach Public Utilities Department’s Preview of FY27 Budget Development. Suggested Action: Approve recommendation. ]
FILE THE LONG BEACH UTILITIES DEPARTMENT PREVIEW OF THE FY 27 BUDGET DEVELOPMENT.AND DO I HAVE A MOTION TO RECEIVE AND FILE? MOTION TO RECEIVE AND FILE? AND I'LL SECOND THAT AND I WILL TURN THE FLOOR OVER TO STEPHANIE.
UH, WE HAVE A PACKED HOUSE TODAY, SO THIS IS THE PARTY.
UH, BEFORE I GET STARTED, I ALSO, UM, I DIDN'T GET TO DO IT IN THE FULL BOARD.
SO YOU GUYS ARE, UM, WE'RE, WE'RE DOING A GRAND REVEAL RIGHT NOW.
UM, I GET TO INTRODUCE, UH, OUR, OUR DIRECTOR OF FINANCE, GERALDINE ALEJO.
SO SHE JUST STARTED ABOUT A WEEK AND A HALF AGO,
UM, GERALDINE CAME FROM, UH, THE CITY'S FINANCIAL MANAGEMENT BUDGET OFFICE.
SO SHE'S ALREADY VERY FAMILIAR WITH EVERYTHING.
THERE'S NO SKELETONS THAT WE CAN, WE CAN HIDE FROM HER.
UM, SHE IS TAKING OVER MY FORMER ROLE, WHICH, UM, I, IT'S BEEN ALMOST A YEAR SINCE I'VE BEEN PROMOTED, SO THIS IS REALLY GREAT TO HAVE SOME HELP.
UM, TODAY WE'RE PROVIDING AN EARLY PREVIEW OF THE FISCAL YEAR 2027 BUDGET DEVELOPMENT PROCESS.
WHILE FORMAL BUDGET NUMBERS WILL BE PRESENTED LATER THIS SPRING, STAFF HAS BEEN WORKING ACTIVELY ON THIS EFFORT SINCE DECEMBER.
THAT WAS, IT SEEMS LIKE FOREVER AGO, BUT, UM, IT'S SOMETHING THAT WE DO BEHIND THE SCENES AND SOMETIMES PEOPLE DON'T GET TO WITNESS THAT.
THE OBJECTIVE OF TODAY'S DISCUSSION, THOUGH, IS NOT TO FOCUS ON SPECIFIC FIGURES.
SO USUALLY WHEN WE COME TO YOU, YOU, YOU LOOK AT THE NUMBERS AND THEN WE HYPER FOCUS ON THOSE NUMBERS.
BUT WE'RE GOING TO, UH, WALK YOU THROUGH THE STORY BEHIND THE BUDGET.
AND THE KEY FACTOR IS SHAPING OUR FINANCIAL OUTLOOK.
WE BELIEVE THIS APPROACH PROVIDES IMPORTANT CONTEXT AHEAD OF THE DETAILED FINANCIAL PRESENTATIONS.
IT ALLOWS THE COMMITTEE TO UNDERSTAND WHY CERTAIN NEEDS ARE EMERGING BEFORE WE PRESENT, HOW THE THEY TRANSLATE INTO BUDGETARY IMPACTS.
WITH THAT, WE LOOK FORWARD TO WALKING YOU THROUGH THE KEY THEMES DRIVING THE FY 27 BUDGET.
AND, UM, WE HAVE A SERIES OF SPEAKERS TODAY, AND WE'RE GOING TO START IT OFF WITH DANIEL GUTIERREZ, OUR MANAGER OF BUDGET RATES.
SO, UM, AS STEPHANIE SAID, UH, TODAY WE'RE GONNA BE GO GOING THROUGH THE WALKTHROUGH OF THE KEY ELEMENTS, UH, THAT SHAPE THE DEVELOPMENT OF THE FY 27 UTILITIES BUDGET.
OUR GOAL IS TO PROVIDE A CLEAR OVERVIEW OF THE PROCESS, UH, THE MAJOR COST DRIVERS WE'RE FACING, AND HOW EACH OF THE DIVISIONS IS WORKING TOGETHER, UH, TO DELIVER RELIABLE WATER, SEWER, AND GAS, OUR NATURAL GAS SERVICES TO OUR COMMUNITY.
UH, FIRST WE'LL START WITH A QUICK OVERVIEW OF THE BUDGET DEVELOPMENT PROCESS AND TIMELINE, UH, WHICH OUTLINES MAJOR MILESTONES THAT GUIDE OUR WORK THROUGHOUT THE YEAR.
UH, NEXT WE'LL RECAP THE KEY CHALLENGES AND COST DRIVERS, UH, THAT CONTINUE TO IMPACT UTILITY OPERATIONS.
UH, THESE INCLUDE COMMODITY VOLATILITY, UH, REGULATORY REQUIREMENTS, WORKFORCE PRESSURES, AND MAINTAINING AGING INFRASTRUCTURE.
AFTER THAT, EACH DIVISION, UH, LEADER WILL WALK THROUGH HOW THEIR FY 27 BUDGET AND BUSINESS PLAN PRIORITIES SUPPORT OUR OVERALL MISSION.
UH, FINALLY WE'LL CLOSE WITH OUR BALANCED BUDGET COMMITMENT AND THE RECOMMENDATION TO RECEIVE AND FILE THE REPORT.
UH, WITH THAT OVERVIEW OF TODAY'S AGENDA, LET'S START BY LOOKING AT THE OVERALL TIMELINE THAT GUIDES HOW THE BUDGET IS DEVELOPED EACH YEAR.
SO THIS IS A TIMELINE THAT YOU'VE SEEN BEFORE BACK IN JANUARY.
THIS WAS DURING THE FY 27 BUDGET, UM, FRAMEWORK.
UH, THIS SLIDE PROVIDES A HIGH LEVEL OF VIEW OF THE TIMELINE WE FOLLOW EACH YEAR TO DEVELOP THE UTILITIES BUDGET.
UH, THE PROCESS IS A YEAR-ROUND EFFORT THAT BEGINS WITH EARLY FINANCIAL FORECASTING AND OPERATIONAL PLANNING ACROSS ALL DIVISIONS.
WE WORK THROUGH MULTIPLE STAGES OF REVIEW, REFINEMENT AND COORDINATION, ENSURING THAT OPERATIONAL NEEDS, CAPITAL PLANNING AND FINANCIAL SUSTAINABILITY ARE ALIGNED.
THE TIMELINE ALSO REFLECTS KEY INTERNAL MILESTONES, MILESTONES AND DECISION POINTS THAT ALLOW LEADERSHIP TO EVALUATE PRIORITIES, ADJUST PROJECTIONS, AND ENSURE THE FINAL BUDGET SUPPORTS RELIABLE UTILITY SERVICES.
SO DURING THE JANUARY THROUGH MARCH TIMEFRAME, WE ARE IN THE PROCESS OF DOING THE BUDGET DEVELOPMENT.
UH, TODAY WE ARE DOING THE FINANCE COMMITTEE MEETING, UH, MARCH THROUGH APRIL IS THE BUDGET PROCESS
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OUTREACH.UH, DURING APRIL, UH, WE WILL BE PRESENTING THE FY 25 YEAR END FINANCIALS.
UH, THE EXECUTIVE TEAM WILL ALSO BE REVIEWING THE FY 27 PROPOSED BUDGETS.
UH, DURING MAY, UH, AND JUNE, WE'LL BE HAVING THE FY 27 BUDGET PLANNING SESSIONS, AS WELL AS ADOPTING THE FY 27 BUDGET RATES FOR BUDGETING RATES.
IN JUNE, UH, WE'LL BE SENDING OUT THE PROP TWO 18 NOTICES, AND THE MAJORITY OF THE RESIDENTS WILL RECEIVE THEM BY JULY.
IN AUGUST, WE WILL HOST THE PROP TWO 18 HEARING, AND THEN SEPTEMBER CITY COUNCIL WILL APPROVE THE FY 27 BUDGET.
AND THEN WE GO INTO OCTOBER, WHICH WILL KICK OFF THE, UH, NEW FISCAL YEAR.
UH, WHILE THESE, WHILE THE PROCESS ITSELF IS STRUCTURED, THE ENVIRONMENT WE OPERATE IN CONTINUES TO EVOLVE.
UH, THE NEXT SLIDE HIGHLIGHTS SOME OF THE KEY CHALLENGES AND COST DRIVERS THAT SHAPE THIS YEAR'S BUDGET.
AS WE DEVELOPED THE FI 27 BUDGET, SEVERAL MAJOR FACTORS INFLUENCE BOTH OUR OPERATING AND CAPITAL PLANNING.
SO STARTING WITH THE COMMODITY, UH, UTILITY SERVICES DEPEND HEAVILY ON EXTERNAL SUPPLY CONDITIONS AND THE REGULATORY REQUIREMENTS.
MANAGING WATER SUPPLY, NATURAL GAS PROCUREMENT, AND RECYCLED WATER DEVELOPMENT REQUIRES CAREFUL PLANNING WHILE NAVIGATING AN EVOLVING REGULATORY LANDSCAPE.
OUR SYSTEM INCLUDES OVER 4,000 MILES OF WATER AND SEWER AND NATURAL GAS MAINS AND LATERALS.
MAINTAINING AND REHABILITATING THIS INFRASTRUCTURE REQUIRES CONSISTENT INVESTMENT, ESPECIALLY AS INFLATION CONTINUES TO IMPACT MATERIALS, EQUIPMENT AND CONSTRUCTION COSTS FOR LABOR.
LIKE MANY UTILITIES ACROSS THE COUNTRY, WE ARE FACING INCREASED COMPETITION FOR SKILLED WORKERS, SHIFTING WORKFORCE DEMOGRAPHICS AND GROWING SERVICE EXPECTATIONS FROM OUR COMMUNITY.
ENSURING WE ATTRACT AND RETAIN QUALIFIED STAFF IS CRITICAL TO MAINTAINING RELIABLE OPERATIONS INFRASTRUCTURE IMPROVEMENTS.
UH, WE ARE CONTINUING TO IMPLEMENT MULTIPLE UTILITIES MASTER PLANS TO ENSURE LONG-TERM SYSTEM RELIABILITY, WHILE ALSO PREPARING INFRASTRUCTURE IMPROVEMENTS THAT SUPPORT REGIONAL INITIATIVES SUCH AS THE LA 28 OLYMPICS.
WITH THAT CONTEXT IN MIND, WE'LL BE, WE WILL HIGHLIGHT HOW EACH DIVISION INCORPORATED THESE CHALLENGES INTO THEIR FY 27 BUDGET PLANNING AND BUSINESS PLAN PRIORITIES.
UH, YOU'RE HERE ABOUT WATER RESOURCES, GAS, COMMODITY, CAPITAL IMPROVEMENT PROJECTS, OPERATIONS AND MAINTENANCE AND LABOR.
AND TO GET US STARTED, WE'RE GONNA START WITH THE WATER RESOURCES WITH, UH, DEAN WING.
ALRIGHT, GOOD MORNING COMMISSIONERS.
SO, AS DANIEL MENTIONED, ALL THE DIFFERENT, UH, COST DRIVERS GOING TO THE BUDGET, WATER RESOURCES AND GAS RESOURCES AS TONY FOSTER WILL PRESENT LATER, UM, REALLY HIT BOTH SIDES OF THE BUDGET AS FAR AS BOTH REVENUE, UH, HOW MUCH, UH, WATER AND GAS WE SELL TO OUR CUSTOMERS, AS WELL AS ON THE COST SIDE.
UH, IT'S THE COMMODITY THAT WE SELL AND MANAGING THE COSTS OF THOSE RESOURCES IS, UM, OF UTMOST IMPORTANCE.
SO STARTING WITH THE, THE DEMAND SIDE, UH, THE LONG HISTORY OF, OF WATER USE IN LONG BEACH HAS BEEN A PRETTY QUICK DECLINE SINCE THE, THE LATE 1980S.
UH, GOING INTO, UH, 2025, UH, VARIOUS DROUGHTS HAVE CAUSED OUR, OUR DEMAND TO DECREASE OVER TIME.
AND AS I PRESENTED, UH, AT THE BOARD, UH, FROM OUR LATEST WATER RESOURCES PLANNING UPDATE, UH, THE DEMAND FORECAST IS EXPECTED TO CONTINUE TO DECLINE, UH, SOMEWHAT MORE GRADUALLY, BUT NONETHELESS, UH, DECLINE OVER TIME.
AND THEN THE IMPORTANT PART, UH, AS DIANA PRESENTED IN THE EARLIER PRESENTATION, IS THERE ARE A LOT OF REGULATORY REQUIREMENTS, BOTH ON THE WATER AND GAS SIDE FOR US TO REDUCE OUR WATER USE.
AND SO, AS I PRESENTED AT, UM, TO BOARD PREVIOUSLY, UH, WE HAVE STATE REQUIREMENTS THAT WILL, UH, MANDATE US TO REDUCE OUR WATER USAGE BEYOND WHAT IS EVEN, UH, PROJECTED RIGHT NOW, UH, AS A NATURAL DECLINE IN OUR WATER USE.
AND SO IMPORTANTLY FOR US AS UTILITIES, THAT WE WILL HAVE TO FUND, UH, DIFFERENT CONSERVATION MEASURES TO REDUCE OUR DEMAND, UH, RELATED TO BUDGET, THAT WILL MEAN THAT, UM, WE WILL HAVE TO COLLECT REVENUE TO MAKE UP FOR ESSENTIALLY A LOT OF THE, THE SAME FIXED COSTS OVER A SMALLER, UH, SALES BASE OF, OF WATER SALES.
SO, AS FAR AS ON THE COST SIDE, UH, WE LOOK AT OUR TWO MAIN WATER SUPPLIES, UH, WHICH ARE POTABLE WATER SUPPLIES, WHICH ARE GROUNDWATER IN THE BLUE AND, UH, IMPORTED WATER IN THE ORANGE FOR FY 27.
UH, THE FORECAST IS THAT WE WILL GET TO ABOUT 74% ON GROUNDWATER.
AND IF, UH, THE BOARD MAY REMEMBER, UH, WE, WE NORMALLY COMMUNICATE, COMMUNICATE TO OUR CUSTOMERS THAT WE HAVE ABOUT 60% GROUNDWATER.
AND SO WHAT THIS, UH, REPRESENTS IS ACTUALLY, UM, ALL THE HARD WORK THAT OPERATIONS ENG
[00:10:01]
ENGINEERING HAS BEEN DOING TO CONSTRUCT NEW WELLS, REHABILITATE WELLS, OPERATE OUR WELLS, AND OPERATE OUR SYSTEM TO THE MAXIMUM EXTENT THAT WE CAN TO TAKE ADVANTAGE OF OUR GROUNDWATER SUPPLIES.AND, UH, NEXT YEAR IS, IS REALLY THE FIRST YEAR THAT WE'LL BE GETTING PRETTY CLOSE TO THE LIMITS OF WHAT WE CAN ACTUALLY DELIVER, UH, GROUNDWATER WISE TO THE, THE PORTIONS OF OUR SYSTEM THAT CAN TAKE GROUNDWATER.
AND SO, UH, YOU KNOW, THAT THAT'S THE WAY IN WHICH WE'RE TRYING TO MANAGE OUR WATER SUPPLY COSTS AND FOR NEXT YEAR, ONLY DOWN TO 26% OF, OF, UH, IMPORTER WATER TO OUR OVERALL SYSTEM.
AND THE MAJORITY OF THAT WILL BE IN, IN THE ZONE THAT, UM, UH, EXCLUSIVELY ABLE TO TAKE METROPOLITAN WATER.
SO, UH, IMPORTANTLY FOR, FOR THE RATES, UH, TO OUR CUSTOMERS, OUR MOST EXPENSIVE, UH, RESOURCES THAT IMPORTED WATER I JUST MENTIONED.
AND, UH, PREVIOUSLY EARLIER IN THE BUDGETING CYCLE, UH, METROPOLITAN HAD BEEN FORECASTING, UH, 12% RATE INCREASES FOR THE NEXT TWO YEARS, AND THEN NOW YEARS, UH, UH, 4%, UH, RATE INCREASES.
WELL, THE GOOD NEWS IS THEY'VE COME DOWN IN THE RECENT YEARS TO, TO DROP THEIR RECENT YEAR, UH, BUDGET DOWN TO NINE, UH, NINE AND HALF PERCENT.
UH, THE BAD NEWS IS THEIR FORECASTING OUT INTO THE FUTURE 9%.
SO, UH, YEAH, I THINK THE MATH WORKS OUT THAT, THAT THAT IS NOT A GOOD UPDATE FOR OUR FORECAST FOR IMPORTED WATER RATES, BUT ALL THE MORE IMPORTANCE FOR US TO LOOK TOWARDS SOLUTIONS TO INCREASE OUR, OUR LOCAL GROUNDWATER PRODUCTION AND NOT BE SO TIED TO THE COST OF IMPORTED WATER.
SO I'LL PASS IT TO TONY FOSTER TO TALK ABOUT GAS COMMODITY.
ALRIGHT, GOOD MORNING, COMMISSIONERS.
SO THIS SECTION, UH, SHIFTS THE FOCUS FROM WATER RESOURCES TO THE GAS COMMODITY PORTFOLIO, WHICH REPRESENTS ONE OF THE MOST DYNAMIC AND EXTERNALLY INFLUENCED COMPONENTS OF THE FISCAL YEAR 27 BUDGET.
UNLIKE FIXED INFRASTRUCTURE INVESTMENTS, GAS COSTS ARE HIGHLY SENSITIVE MARKET CONDITIONS, REGULATORY DEVELOPMENTS, AND CONSUMPTION PATTERNS.
AS WE MOVE INTO THIS SECTION, THE OBJECTIVE IS TO PROVIDE A FORWARD-LOOKING VIEW OF DEMAND, PRICING PRESSURES, AND PROCUREMENT STRATEGIES.
THESE ELEMENTS COLLECTIVELY INFORM HOW WE MANAGE GAS COST EXPOSURE WHILE MAINTAINING RELIABILITY AND AFFORDABILITY FOR OUR CUSTOMERS.
SO, TAKING A CUE FROM, UH, DEAN'S FORECAST SLIDE, THIS SLIDE PRESENTS THE LONG-TERM NATURAL GAS DEMAND OUTLOOK UNDER HIGH EXPECTED AND LOW FORECAST SCENARIOS.
THE OVERALL TRENDS REFLECTS GRADUAL DEMAND DECLINE OVER TIME, DRIVEN BY EFFICIENCY IMPROVEMENTS, ELECTRIFICATION POLICIES, AND CHANGING CONSUMPTION BEHAVIOR.
HOWEVER, THE RANGE BETWEEN THE SCENARIOS HIGHLIGHTS ONGOING UNCERTAINTY TIED TO ECONOMIC CONDITIONS, WEATHER VARIABILITY, AND REGULATORY DIRECTION.
FISCAL YEAR 27, BUDGETING THE EXPECTED FORECAST SERVES AS THE BASELINE, WHILE THE HIGH AND LOW CASES HELP STRESS TEST, PROCUREMENT AND FINANCIAL ASSUMPTIONS.
THIS APPROACH ASSURES WE REMAIN ADAPTABLE IN THE TRANSITIONING ENERGY LANDSCAPE.
SO WEATHER REMAINS ONE OF THE MOST SIGNIFICANT DRIVERS OF NATURAL GAS DEMAND AND COST VOLATILITY.
COLDER TEMPERATURES INCREASE HEATING DEMAND LEADING TO OTHER CONSUMPTION AND POTENTIAL PRICE SPIKES, WHILE WARMER CONDITIONS HAVE THE OPPOSITE EFFECT.
TO MANAGE THIS VARIABILITY, WE INCORPORATE A 10 YEAR HISTORICAL TEMPERATURE DATA SET, PRIOR WINTER TRENDS AND SEASONAL FORECASTS INTO OUR DEMAND MODELING.
THIS ENABLES US TO ESTIMATE HOW TEMPERATURE FLUCTUATIONS TRANSLATE INTO CHANGES IN THE DEMAND STORAGE UTILIZATION, AND MARKET PURCHASES.
ULTIMATELY, THIS ANALYSIS ANALYSIS STRENGTHENS BUDGET ACCURACY AND REDUCES EXPOSURE TO EXTREME WEATHER DRIVEN COSTS SWINGS.
SO HERE'S ANOTHER TOOL, UH, TO MITIGATE MARKET VOLATILITY.
DEPARTMENT EMPLOYEES A STRUCTURED HEDGING STRATEGY USING FINANCIAL INSTRUMENTS SUCH AS PRICE SWAPS AND OPTIONS.
PRICE SWAPS ALLOW US TO LOCK IN FIXED COSTS FOR A PORTION OF OUR GAS SUPPLY, WHILE OPTIONS PROVIDE PROTECTION AGAINST EXTREME PRICE WIPES.
THESE TOOLS ARE INFORMED BY KEY MARKET INDICATORS, PARTICULARLY THE SOCAL GAS BORDER FORWARD PRICE CURVE.
THE BUDGET IS THEN BUILT ON A WEIGHTED AVERAGE OF HEDGED VOLUMES AND FORECASTED MARKET PRICES.
THIS DISCIPLINED APPROACH STABILIZES COSTS, IMPROVES PREDICTABILITY, AND PROTECTS CUSTOMERS FROM SUDDEN RATE IMPACTS.
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SO, BENCHMARKING TO SOCAL GAS BENCHMARKING AGAINST THE SOUTHERN CALIFORNIA GAS COMPANY PROVIDES AN EXTERNAL VALIDATION OF OUR PROCUREMENT PERFORMANCE BY COMPARING LONG BEACH UTILITIES, WEIGHTED AVERAGE COMMODITY COST OF REGIONAL INDICES SUCH AS SOCAL GAS PROCUREMENT PRICES, BORDER INDEX VALUES, AND CITY GATE PRICES.WE CONFIRM ALIGNMENT WITH PREVAILING MARKET CONDITIONS.
IN ADDITION TO PRICE COMPARISONS, THIS BENCHMARKING EVALUATES PROCUREMENT STRATEGY INCLUDES HEDGING LEVELS, INCLUDING HEDGING LEVELS, STORAGE UTILIZATION, AND TIMING DECISIONS.
THE RESULT IS A COMPREHENSIVE CHECK THAT OUR APPROACH REMAINS COMPETITIVE, TRANSPARENT, AND CONSISTENT WITH THE INDUSTRY BEST PRACTICES IN SOUTHERN CALIFORNIA.
I CAN ANSWER QUESTIONS NOW OR PASS IT ON TO THE NEXT PRESENTER.
TONY, UH, JUST REAL QUICK QUESTION ON, ON THE PREVIOUS SLIDE, CAN YOU JUST TALK A LITTLE BIT ABOUT THE GAS FUND RESERVE FUND, AND DOES THAT COME INTO PLAY WHEN WE'RE TALKING ABOUT OUR PRICING, WE, WE CAN'T PRICE ABOVE SOCAL GAS, IS THAT CORRECT? THERE'S NO FORMAL PROHIBITION AGAINST IT.
IN THE CITY CHARTER, WE'RE SUPPOSED TO BE COMPAT COMPARABLE TO THE MARKET, SO THAT DOES NOT PRECLUDE US BEING A LITTLE BIT OVER OR A LITTLE BIT UNDER.
THE GOAL IS TO HIT IT JUST RIGHT.
SO WE'RE COMPETITIVE WITH, AND CONSISTENTLY WE'VE BEEN A LITTLE BIT BELOW.
SO CONSISTENTLY WE'VE BEEN BELOW, THAT'S, THAT'S OUR INTERNAL BENCHMARK.
BUT AS YOU KNOW, AS DEAN ALLUDED TO, AS CONSUMPTION DECLINES AND WE'RE FORCED TO SET, SPREAD OUR COSTS OVER A SMALLER BASE THAT HAS AN UPPER DRIVER TO COST.
UM, ONE OF THE MAJOR FUNCTIONS OF THE ENGINEERING DEPARTMENT IS THIS CONCEPT OF, YOU KNOW, PLANNING AND IMPLEMENTATION OF CAPITAL IMPROVEMENT PROJECTS.
SO I THINK TYPICALLY, YOU KNOW, THE WAY WE WE GO ABOUT THESE PROJECTS, THERE ARE SEVERAL DOCUMENTS DEPENDING ON WHICH SUBDIVISION YOU'RE LOOKING AT.
FOR WATER, FOR EXAMPLE, WE HAVE THE WATER DISTRIBUTION PLAN, WATER MASTER PLAN, OPTIMIZATION STUDY, AUGMENTATION STUDY.
ALL OF THESE, UH, COME, COME WITH A LIST OF CAPITAL IMPROVEMENT PROJECTS THAT WE CATEGORIZE AND PRIORITIZE ACCORDINGLY.
AND FOR SEWER, WE HAVE A SEWER MASTER PLAN, HOURS AND HOURS OF, UM, CCTV STUDY THAT ALSO RESULT IN, IN A LIST OF CAPITAL IMPROVEMENT PROJECTS GAS.
SIMILARLY, WE HAVE THE DISTRIBUTION INTEGRATION MASTER PLAN.
UH, WE HAVE OUR LEAK DETECTION DATA, UH, CATHODIC PROTECTION, AGAIN, LIST OF CAPITAL IMPROVEMENT PROJECTS THAT WE CONTINUOUSLY HAVE TO PRIORITIZE AND IMPLEMENT.
SO STARTING WITH WATER, YOU KNOW, WE, WE HAVE THIS PIE CHART THAT, UM, YOU KNOW, FOR OUR FORECAST FOR 2027, UH, THE ONE THING THAT MAKES OUR CAPITAL IMPROVEMENT PROJECT LIST OR DISTRIBUTION DIFFERENT IN 2027 THAN PRIOR YEARS IS THIS CONCEPT OF US, UH, FOCUSING MAINLY ON WATER RESOURCE OR FACILITY TYPE OF PROJECTS.
WE, WHEN I, WHEN I SAY FACILITY OR WATER RESOURCE, WE FOCUS PRIMARILY ON WELL, UH, TREATMENT PLANT, UM, TYPE OF PROJECTS.
USUALLY IN PREVIOUS YEARS, YOU'LL SEE OUR PIPELINE, UH, CAPITAL IMPROVEMENT PROJECTS, UH, HAVING A LARGER SECTION OF THE PIE.
SO TO GIVE YOU AN EXAMPLE, FOR EXAMPLE, IN 2020, UH, SEVEN, WE PLAN TO START, UM, COMMISSION 23, WHICH IS CURRENTLY UNDER ADVERTISEMENT OR UNDER BIDDING.
UM, RIGHT NOW WE ARE UNDER CONSTRUCTION FOR ALAMITOS NINE A AND ALAMITOS, UH, 14, UM, WHICH ARE BOTH IN STEARNS PARK.
THESE PROJECTS RANGE FROM SEVEN TO $3 MILLION.
AND THEN WE HAVE OTHER, UH, SMALLER PROJECTS LIKE CITIZEN 10 AND A FEW OTHERS THAT WILL STILL BE IN CONSTRUCTION DURING THAT TIME.
SO THAT OCCUPIES A LARGER SECTION OF THE PIE.
UH, AND THEN WE HAVE, YOU KNOW, OTHER PROJECTS, TYPICAL PIPELINE TYPE OF PROJECTS.
FOR EXAMPLE, THE HANES, UH, POWER PLANT.
AS YOU KNOW, WE ARE PROVIDING RECYCLED WATER FOR HAYES POWER PLANT IN SEAL BEACH.
UM, YOU KNOW, THE, THE PIPELINE, THE POINT OF CONNECTION THERE STARTS FROM ATHERTON AND STUDEBAKER AND GOING ALL THE WAY TO THE HAYES POWER PLANT IN SEAL BEACH.
THAT'S ABOUT A THREE MILE STRETCH, ABOUT $20 MILLION OF PROJECT THAT WE'RE STARTING THIS YEAR.
UH, THE BOARD AWARDED THE CONTRACT, I BELIEVE IN NOVEMBER TIMEFRAME, SO WE'LL BE IN CONSTRUCTION FOR THAT PROJECT, UH, IN 2026 AS WELL AS 2027.
WE HAVE, WE ALSO HAVE ANOTHER AIRPORT PROJECT, UM, UH, RIGHT JUST SOUTH OF THE AIRPORT ON SPRING STREET, ABOUT $7 MILLION.
SO THOSE ARE THE TWO MAIN, UH, PROJECTS THAT
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WE'LL BE FOCUSING ON.AND THEN WE ALSO HAVE OTHER MAINTENANCE TYPE OF PROJECTS WHERE WE BUY METER AND PROVIDE TO OUR OPERATIONS TEAM, AND THEY'LL BE INSTALLING THOSE.
UH, PART OF THE PROCUREMENT FOR THAT IS ALSO CLASSIFIED AS, UH, CIP, UH, FOR GAS.
IT'S, IT'S SIMILAR TO WHAT YOU'VE SEEN IN PAST YEARS WHERE THE FOCUS IS PRIMARILY ON PIPELINE REPLACEMENT.
UH, GAS, UH, GAS DEPARTMENT USUALLY GO OUT AND, UH, DO THESE CATHODIC PROTECTION, UH, SURVEYS AND A FEW OTHER STUDIES THAT RESULTS IN, YOU KNOW, A LIST OF CAPITAL PROJECTS THAT WE PRIORITIZE.
UM, HOWEVER, THE, THE INVESTMENT FOR 2027 IS SIGNIFICANTLY HIGH BECAUSE OF THE HERE PROJECT THAT THE PORT, AS YOU KNOW, THE, THE PORT HAS EMBARKED ON THIS ENDEAVOR OF, YOU KNOW, UM, RESTRUCTURING THEIR RAILROAD TRACK SYSTEM, ABOUT 10,000 LINEAR FEET OF THAT.
SO DUE TO THAT PROCESS, WE'RE CONTINUOUSLY HAVING TO WORK WITH THE PORT AND ADJUSTING WHERE OUR PIPELINES ARE LOCATED AS WELL.
UH, SO THAT, THAT PROJECT WILL CONTINUE, UH, TO MOVE FORWARD IN 2027 AS WELL.
WE ESTIMATE ANOTHER FIVE TO $9 MILLION WORTH OF WORK, UH, IN THE PORT AREA.
LAST ONE I HAVE HERE IS OUR SEWER PROJECT, UM, SEWER PROJECT.
SIMILARLY TO PAST YEARS, AGAIN FOCUSED ON, YOU KNOW, PIPELINE REPLACEMENT TYPE OF PROJECT AND ALSO LA 28 OLYMPICS.
SO MOST OF THE LA 28 OLYMPIC PROJECTS THAT HAS TO DO WITH, UH, PIPELINE ENHANCEMENT, CAPACITY ENHANCEMENT TYPE OF PROJECTS WILL, UH, TAKE PLACE, UM, IN 2027 IN PREPARATION FOR THE LA 28, UH, OLYMPICS.
UM, THERE IS ALSO A COMPONENT OF, UH, WAISTLINE OR A SEWER LINE THAT WE NEED TO PROVIDE TO THE INS POWER PLANT THAT WILL ALSO TAKE PLACE IN 2027, UM, C UPGRADES AND, UH, LIFT STATIONS WERE ALSO BE A PART OF THE, OUR EFFORT IN 2027 FOR OUR, UH, SEWER, UH, CIP LIST.
UH, THE ONE THING THAT'S WORTH MENTIONING, YOU KNOW, BECAUSE OF THE OLYMPIC EFFORT, OUR SEWER CIP BUDGET HAS GONE UP SIGNIFICANTLY.
TYPICAL, HISTORICALLY, WE DO ABOUT 15 TO $16 MILLION OF, UH, PROJECT, BUT IN 2027, WE'RE LOOKING AT 32 MILLION WORTH OF TIP PROJECTS, UM, THAT WILL HAPPEN ON OUR, THAT WILL TAKE PLACE ON OUR SEWER SITE.
UH, WITH THAT BEING SAID, I WILL, UH, CONCLUDE, UH, MY SECTION OF THE PRESENTATION AND PASS ON TO PI 4 0 9.
THOMAS, REAL QUICK, IF I COULD, A COUPLE OF QUESTIONS ON THE CIP AND, AND THANK YOU FOR THE PRESENTATION.
AND, UH, YOU MAY NOT BE ABLE TO ANSWER THIS, BUT IT SEEMS LIKE SOME OF THE PROJECTS GET APPROVED BY US AND THEN GET DELAYED BECAUSE OF LEAD TIMES OR FACTORS BEYOND YOUR CONTROL OR OUR CONTROL.
AND HOW DOES THAT IMPACT WHEN YOU'RE DOING THE BUDGET? BECAUSE MAYBE YOU HAVEN'T, YOU THOUGHT YOU WERE GONNA BE DONE WITH A PROJECT AND YOU'VE GOT ANOTHER ONE IN THE PIPELINE, NO PUN INTENDED, AND THEN YOU'RE MOVING FORWARD WITH, YOU KNOW, THE NEXT PROJECT, BUT, BUT MAYBE THE REVENUE FROM THAT PROJECT DOESN'T COME IN OR THE EXPENSES AREN'T IN, AND THAT SEEMS TO IMPACT THE BUDGET.
WHEN WE WERE LOOKING AT THE NUMBERS, WHEN STEPHANIE WAS DOING THE CLOSING, WE SAW THE CIP BECAUSE OF DIFFERENT TIMING OF PROJECTS.
HOW DO YOU FACTOR THAT INTO PRESENTING YOUR BUDGET FOR 27 OR CLOSING 26? THAT'S, THAT'S A GREAT QUESTION AND A DIFFICULT ONE.
UM, THE, THE WAY TO PREDICT OR, YOU KNOW, UH, PLAN OUT THESE PROJECTS, YOUR FINANCIAL EXPENDITURE IS, IS, IS ALMOST AN ART, TO BE HONEST, BECAUSE IT'S VERY UNPREDICTABLE.
UM, YOU KNOW, A, A WELL PROJECT, FOR EXAMPLE, UM, UH, JUST TO, YOU KNOW, PICK ONE, UM, A BUMP HEAD.
IT HAS TYPICALLY A LONG LEAD TIME.
WE ASSUME THAT IT MAY TAKE, YOU KNOW, EIGHT MONTHS OR SO, BUT WHATEVER IS HAPPENING OUT THERE DUE TO, YOU KNOW, THE CURRENT POLITICAL ENVIRONMENT, UH, OR FOR WHATEVER REASON, WE MAY EXPERIENCE A DELAY.
SO WE TRY TO FACTOR THAT IN TO THE BEST OF OUR ABILITY.
BUT LATELY, YOU KNOW, WHAT WE HAVE EXPERIENCED IN THE PAST FIVE YEARS, OR, YOU KNOW, IN MY EXPERIENCE IN THE PAST FIVE YEARS, IT'S BEEN VERY CHALLENGING TO PREDICT.
UM, IN THIS SCENARIO, WHAT WE HAVE DONE, UH, WORKING WITH DIFFERENT PARTS OF OUR ENGINEERING GROUP IS WE TRY TO ACCOUNT FOR LONG LEAD TIME AS MUCH AS POSSIBLE.
IN SOME CASES, WE SPLIT PROJECTS, LIKE, FOR EXAMPLE, UM, IN OUR, IN OUR WELL PROJECTS, WE DO THE DRILLING FIRST, YOU KNOW, AND THEN THAT, THAT IS MORE PREDICTABLE.
AND THEN ONCE WE HAVE AN UNDERSTANDING OF THE EQUIPMENT AND WHEN IT COMES AND A FEW OTHER THINGS, WE CREATE ANOTHER PHASE CALLED EQUIPPING OF THE WELL.
AND THAT IS HOW THAT, THAT ENABLES US TO PROJECT, UM, OUR,
[00:25:01]
OUR, UH, TO PROJECT OUR EXPENSES ACCORDINGLY.UH, EVEN THEN, THERE'S STILL SOME CHALLENGES IN MAKING IT AS ACCURATE AS POSSIBLE, UH, BECAUSE THE ENVIRONMENT IS REALLY UNKNOWN AT THAT POINT.
AND, AND THEN, UH, MORE OF A SPECIFIC QUESTION.
YOU MENTIONED THE HAYNES PIPELINE FROM, I GUESS WARDLOW OR FROM THE REC RECLAMATION CENTER TO THE, FROM ATHER TO STUDEBAKER.
I NOTICED SINCE I LIVE ON THE EAST SIDE, THEY HAVE STARTED THE STUDEBAKER PROJECT AND HAVE TEARING UP THE STREET.
ARE WE ON SCHEDULE TO HAVE OUR LINE IN PLACE BEFORE THEY COMPLETE THE RECONSTRUCTION OF STUDEBAKER? CORRECT.
WE'RE CONTINUOUSLY COORDINATING WITH PUBLIC WORKS, UM, ON THEIR, ON THEIR PROJECTS.
UM, WE CURRENTLY STARTED THE PROJECT, IT'S PROBABLY US WHO ARE DOING SOME KIND OF EXCAVATION WORK AT THIS POINT.
UH, THE BOARD AWARDED THE CONTRACT IN NOVEMBER OR, UM, NOVEMBER OF LAST YEAR.
SO WE, WE'VE BEEN COORDINATING WITH PUBLIC WORKS, AND ONCE OUR PIPES ARE BURIED INTO THE GROUND, PUBLIC WORKS WILL COME IN, DO THE FINAL PAVING, IF I COULD ASK OR AT US GET AN UPDATE ON THAT PROJECT JUST TO, SO THAT WE CAN FORWARD, BECAUSE THE COUNCIL MEMBER FOR THAT DISTRICT HAS BEEN CALLING AND ASKING ME ABOUT IT, AND I'M, I SAID WE WOULD GET AN UPDATE FOR HIM, SO DEFINITELY GIVE THAT TO ME OR TO THE BOARD.
I'D ALSO, UM, JUST LIKE TO ADD THAT, UM, TO YOUR QUESTION ABOUT FORECASTING, THIS IS NOT UNIQUE TO LONG BEACH UTILITIES.
UM, I WENT TO A CONFERENCE A COUPLE OF WEEKS AGO, AND I'VE BEEN TO THIS CONFERENCE BEFORE.
UH, IT'S FOR FINANCE OFFICERS, AND WE ALL HAVE THE SAME STRUGGLE, WHICH IS BEING ABLE TO ACCURATELY FORECAST, UM, CIP SPECIFICALLY.
AND I THINK, UH, TO ANSWER YOUR QUESTION, WHEN WE SET THE BUDGET, FOR EXAMPLE, RIGHT NOW, AS WE'RE DEVELOPING IT THIS TIME NEXT YEAR WHEN WE'RE DEALING WITH THE ACTUALS, THE EVERYTHING CHANGES.
AND SO, UH, IT'S IMPORTANT TO US RATHER THAN MEASURING UP TO THE BUDGET, UH, FORECASTING.
SO WHERE ARE WE NOW? WHERE DO WE SEE OURSELVES GOING? AND WE'RE, UH, CURRENTLY, YOU KNOW, WE'VE BEEN WORKING TOGETHER THROUGH THIS MERGER, AND I THINK THIS IS ONE OF THE BENEFITS IS STRENGTHENING OUR RELATIONSHIP, UH, BETWEEN FINANCE AND ENGINEERING, UM, IN DEVELOPING A MORE STREAMLINED, MORE TECHNICAL APPROACH IN, IN GETTING ACCURACY AND FORECASTING.
AND THAT WAS NOT THOMAS, I DIDN'T MEAN TO PUT YOU ON THE SPOT, BUT IT'S JUST A DIFFICULT THING I, I KNOW.
SO I JUST WANNA HIGHLIGHT THANK YOU MORNING COMMISSIONERS, AND IF YOU HAVE MORE DIFFICULT QUESTIONS, WE'D BE HAPPY TO BRING THOMAS BACK UP SO THAT YOU CAN PUT HIM BACK ON THE SPOT.
UM, AND, AND TO KIND OF CONTINUE THE THEME OF, I GUESS, BAD FORECASTING,
UM, WE ARE STILL, AND WE CONTINUE TO FACE MARKET PRESSURES ON PRICING.
UM, SO FOR INFRASTRUCTURE MATERIALS, UM, WE TRY TO LOOK AT LONG-TERM AND HOW IT'S PROGRESSING IN, IN THE LONG-TERM PERIOD.
UM, AND SO WE'RE SEEING IN TERMS OF, UM, OUR LAB SUPPLIES, IT'S GONE UP BY 13% SINCE 2025.
UM, IN TERMS OF CONTRACT LABOR, IT'S ALSO GONE UP BY 36%, UM, IN SOME OF THE AREAS.
UM, IN TERMS OF LAB INSTRUMENTATION MAINTENANCE, UM, WE'RE SEEING A LOT OF PRESSURES ON FLEET VEHICLES, ESPECIALLY AS IT RELATES TO, UM, ADVANCED CLEAN FLEET ELECTRIFICATION AS WELL AS THE LARGE FLEETS.
UM, JUST A LOT OF COMPETITION AND A LOT OF MATERIAL SUPPLY, UM, LIMITATIONS.
AND SO THAT'S DRIVING A LOT OF THE COST UP.
UM, SO ANOTHER EXAMPLE IS SOME OF OUR HEAVY DUTY TRUCKS, UM, OUR ORIGINAL ESTIMATE WAS 400,000 AND THE BID CAME IN AT 550,000.
AND THEN FUEL SUPPLY CHAIN, WE, WE ARE FACING THAT.
SOME OF THESE ARE, WE ARE ABLE TO FORECAST.
SO WE DERIVE OUR BUDGET BASED ON WHAT WE BELIEVE WE'RE GONNA PUMP AND WHAT WE'RE GONNA BUY.
THAT'S, THAT'S KIND OF THE, THE, THAT GROUNDS WHERE WE START OUR BUDGET BASED ON WHAT WE'RE GONNA PUMP, WE FIGURE OUT WHAT WE NEED TO DO TO IN ORDER TO DO THAT.
UM, IN TERMS OF MATERIALS, WE'LL TRY TO GO AND GET LONG-TERM CONTRACTS AT LEAST ONE YEAR WITH MULTI-YEAR EXTENSIONS AND ASKING WHAT KIND OF PRICE INCREASES THEY MAY, UM, EXPECT TO APPLY ON US.
AND THEN WE'RE ABLE TO TAKE THOSE FIXED ONE YEAR PRICING AND APPLY IT TO, UM, A FORECAST OF OUR NEEDS AND PROJECT IT THAT WAY.
THERE ARE SOME STUFF THAT WE CANNOT, UM, FORECAST BECAUSE THEY'RE, THEY'RE MARKET PRICING AND, AND ONE OF THE BIG ONES IS FUEL.
UM, WE'RE UNABLE TO DO A LONG-TERM FUEL CONTRACT, KIND OF LIKE GAS.
[00:30:01]
THEY HAVE TO SET THEIR GAS PRICE EVERY MONTH BECAUSE THE COMMODITY MOVES AROUND.SO FUEL PRICES ALSO MOVE AROUND.
SO THE WAY OUR CONTRACT WORKS FOR THAT IS WE HAVE A FIXED DISCOUNT OFF OF WHATEVER THE MARKET PRICE IS, DEPENDING ON HOW MUCH WE ORDER IN TERMS OF FUEL.
AND TO KIND OF ANSWER THE QUESTION EARLIER, ARE WE SEEING SOME IMPACTS RELATED TO WHAT'S GOING ON GLOBALLY? ON THE FUEL SIDE, WE'RE, UM, IN FEBRUARY, OUR COST PER GALLON FOR GASOLINE, UNLIMITED GASOLINE WAS AROUND $3 A GALLON.
RIGHT NOW, WE JUST GOT A QUOTE, IF WE GO OUT AND GET A GALLON, GASOLINE'S GONNA BE $5.
SO WE'RE SEEING A 60% INCREASE IN GASOLINE PRICES RIGHT NOW, AND WE'RE NOT SURE HOW LONG IT'S GONNA STAY UP THERE, BUT THOSE ARE MORE MONTHLY VARIATIONS THAT WE HAVE TO DEAL WITH.
WE TRY TO PUT IN A LITTLE BIT OF A BUFFER IN OUR BUDGET FORECASTING BASED ON THE AMOUNT OF WORK WE PLAN ON DUE FOR THE FORECAST FOR THE YEAR.
SO FOCUSING ON, UM, SOME, SOME KEY COST DRIVERS FOR, UM, WATER OPERATIONS.
UM, THERE ARE FOUR MAJOR BUDGET ITEMS, AND WHEN WE DEVELOP THE BUDGET FOR OPERATIONS, UM, ONE IS WATER PURCHASE FOR METROPOLITAN, RIGHT? SO DEAN SHARED WITH YOU THAT METROPOLITAN PLANS ON INCREASING RATES, AND THAT WILL GIVE US A CERTAIN BUDGET.
THE NEXT ONE IS THE REPLENISHMENT ASSESSMENT, AND THAT'S WHAT WRD CHARGES US WHENEVER WE PUMP OUT GROUNDWATER AND THEN ELECTRICAL AND CHEMICALS.
THOSE FOUR MAJOR ITEMS CONSTITUTE ROUGHLY LIKE 30% TO 40% THE OVERALL WATER BUDGET.
UM, AND SO WE TRIED TO REALLY HONE IN ON, ON SOME OF THIS SO THAT WE CAN TRY TO CONTROL, UM, AND SEE WHAT WE CAN DO TO MAKE SURE WE ACCURATELY FORECAST THAT.
IN TERMS OF ELECTRICAL, UM, WE ARE SEEING A STEADY INCREASE IN ELECTRICAL COSTS.
PRE COVID, WE WERE LOOKING AT AN AVERAGE RATE OF 11 CENTS PER KW.
POST COVID, WE RAN ALL THE WAY UP TO 20 CENTS A KW.
UM, IT CAME BACK DOWN A LITTLE BIT AND IT HAS TO DO WITH SOME OF THE TARIFF ADJUSTMENTS, BUT I, I, I DO BELIEVE THAT IT WILL CONTINUE TO GO BACK UP IN THE TREND.
NOW, WE DID SAY THAT THIS IS WATER O AND M, BUT ELECTRICAL IS ELECTRICAL.
SO THE ELECTRICAL O AND M COST IS GOING TO IMPACT THE GAS FUND AS WELL AS THE SEWER FUND.
THE PUMP STATIONS FOR SEWER STATIONS, WE'RE GONNA SEE INCREASES IN ELECTRICITY IN THAT, UM, TO OPERATE THE SPRING CAMPUS WHERE GAS MAJORITY RESIDES, WE'RE GONNA SEE INCREASES IN ELECTRICAL COSTS TO THAT AS WELL.
AND SO THOSE, THE ELECTRICAL PRICING DRIVERS IS GONNA BE APPLIED ACROSS ALL THE FUNDS, NOT JUST THE WATER.
AND THEN CHEMICAL COSTS WE'RE SEEING, UM, INCREASES.
PRE COVID, WE WERE SUB $40 AN ACRE FOOT FOR CHEMICALS.
UM, POST COVID, IT'S OVER $80 MORE THAN DOUBLED FOR CHEMICALS.
UM, AN EXTREME EXAMPLE IS CHLORINE PRE COVID, LOOKING AT $350 PER TON FOR CHLORINE GAS.
AND THEN POST COVID, RIGHT NOW WE'RE PLAYING PAYING CLOSE TO $2,000 A TON FOR CHLORINE GAS.
SO SOME STUFF DIDN'T GO UP, SOME STUFF WENT UP A LOT.
AND SO ON AVERAGE WE'RE LOOKING AT A LITTLE OVER $80.
UM, AND WE USE THAT, WE TRY TO LOCK IN AN ANNUAL PRICE SO THAT WE CAN THEN BE ABLE TO FORECAST AND PROVIDE A BUDGET TO, TO YOU FOR APPROVAL.
SO THAT'S KIND OF THE GOOD NEWS I HAVE TO PRESENT
SO FOR AS FAR AS LABOR'S CONCERNED WITH THE BUDGET, WE WERE LOOKING TO HAVE A DYNAMIC APPROACH AND, AND KIND OF RELATING TO THESE FOUR KEY FACTORS THAT YOU CAN SEE ON THE SCREEN IN FRONT OF YOU.
OPERATIONAL EXCELLENCE, REGULATORY COMPLIANCE, AND PUBLIC SAFETY, RELIABLE INFRASTRUCTURE AND SERVICE DELIVERY AND FINANCIAL STEWARDSHIP AND ORGANIZATIONAL SUSTAINABILITY.
ADDRESSING EACH OF THESE FACTORS WE'RE LOOKING AT, YOU KNOW, SPECIFICALLY AS FAR AS OPERATIONAL EXCELLENCE IS CONCERNED, EXPANDING IN-HOUSE CAPABILITIES THROUGH STAFF DEVELOPMENT, INCREASING TRAINING, ENCOURAGING, UM, HIGHER LEVELS OF CERTIFICATION.
AND THEN ALSO, UH, YOU KNOW, HAVING THAT RELATE TO A REDUCTION IN RELIANCE ON OVERTIME AND EXTERNAL CONTRACTORS.
THIS WILL HELP, YOU KNOW, IMPROVE OUR SUPERVISION CAPABILITIES, OUR REPORTING STRUCTURE, AND THEN THE COORDINATION OF OUR DIVISIONS ACROSS THE DEPARTMENT FOR REGULATORY COMPLIANCE AND PUBLIC SAFETY.
WE'RE LOOKING AT, YOU KNOW, STRENGTHENING OUR SAFETY PROGRAM, REDUCING THE COSTS AND THE IMPACT THAT INJURIES HAVE ON THE DEPARTMENT AND ON OUR STAFF.
AND THEN SUBSEQUENTLY, HOW LONG STAFF MEMBERS MAY BE OUT DUE TO WORK, UH, WORKERS' COMPENSATION ISSUES.
WE'RE ALSO LOOKING AT ENHANCING, UH, OUR EMERGENCY PREPAREDNESS AND INFRASTRUCTURE PROTECTION SO THAT WAY WE CAN PROVIDE BETTER FACILITIES FOR OUR
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STAFF TO WORK IN.UH, WE'RE ALSO WORKING WITH MIS AND THE FINANCE TEAM TO IMPROVE CYBERSECURITY AND OPERATIONAL TECHNO TECHNOLOGIC TECHNOLOGICAL OVERSIGHT.
SO THAT MEANS, YOU KNOW, FINDING BETTER, UH, SYSTEMS THAT WE CAN UTILIZE, BETTER DELIVERY THAT WE CAN OPTIMIZE, AND THEN APPLYING THAT ACROSS THE DEPARTMENT.
AND THE LAST TWO, RELIABLE INFRASTRUCTURE AND SERVICE DELIVERY, WE'RE LOOKING AT CONTINUING TO, YOU KNOW, PROVIDE THE EXEMPLARY CUSTOMER SERVICE THAT THE DEPARTMENT ALREADY DOES.
IMPROVING THAT EVEN FURTHER, WHETHER THAT'S THROUGH TECHNOLOGICAL MEANS, YOU KNOW, UH, ADDRESSING WHERE WE CAN PROVIDE LABOR AND WHERE WHERE THEY CAN MAKE A, MAKE A BIGGER IMPACT.
AND THEN ALSO, UM, FINALLY, FINANCIAL STEWARDSHIP AND ORGANIZATIONAL SUSTAINABILITY.
WE WANT TO REDUCE OUR CONTRACTOR COSTS OVERALL, AND THAT AGAIN, TIES BACK TO THE FIRST POINT IN REGARDS TO, YOU KNOW, OPTIMIZING OUR STAFF, ENCOURAGING, UM, CERTIFICATIONS, AND THEN ALSO SUPPORTING EDUCATION.
ALRIGHT, AND THEN WANTED TO BRING TO YOUR ATTENTION AB 25 61.
THIS LAW CAME INTO EFFECT JANUARY 1ST, 2025, AND ESTABLISHED A PUBLIC HEARING COMPONENT TO REPORTING ON, UM, VACANCIES WITHIN A DEPARTMENT OR WITHIN A PUBLIC SECTOR AGENCY, SPECIFICALLY BY BARGAINING UNIT BREAKDOWN.
SO, AS YOU CAN SEE ON THE SCREEN, THESE ARE THE BARGAINING UNITS THAT WE HAVE WITHIN THE UTILITIES, WHICH INCLUDE THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, IVEW, THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, IAM, THE LONG BEACH MANAGEMENT ASSOCIATION, WHICH REPRESENTS ALL OF OUR MANAGERS IN UNDERREPRESENTED MANAGEMENT.
AND THEN A EE, THE AMERICAN, UH, ENGINEERS.
I CAN'T REMEMBER WHAT THE LAST USE STANDS FOR, I APOLOGIZE.
SO PERTAINING TO AB 25 61, THIS IS THE WAY THAT WE ARE GONNA BE SHOWING AND SHARING THE INFORMATION AS IT RELATES TO THE VACANCIES ACROSS THE BARGAINING UNITS.
BARGAINING ALLOCATIONS MEANS THE NUMBER OF POSITIONS THAT WE CURRENTLY HAVE ASSIGNED TO EACH OF THESE BARGAINING UNITS.
SO AS YOU CAN SEE, THE MAJORITY OF OUR DEPARTMENT IS COMPRISED OF IBEW, AND THE REASON FOR THE DISPARITY IN TERMS OF THE VACANCY RATES RELATES DIRECTLY TO THE POSITIONS THAT RESIDE SPECIFIC TO THE UTILITIES DEPARTMENT.
SO, IBEW REPRESENTS POSITIONS LIKE GAS CONSTRUCTION WORKER, WATER, UTILITY, MECHANIC, WATER TREATMENT OPERATOR, AND THOSE POSITIONS ARE SPECIFIC TO THE UTILITIES, WHICH ALLOWS US THE DEPARTMENT AND YOURSELF, THE COMMISSION MORE CONTROL OVER HOW WE BASICALLY ARE ABLE TO RECRUIT AND SUBSEQUENTLY FILL AND THEN RETAIN LABOR.
IM REPRESENTS MOST OF THE POSITIONS THAT ARE, YOU KNOW, SPREAD ACROSS THE CITY.
SO IF YOU THINK ABOUT LIKE GENERAL ANALYST POSITIONS, UM, STAFF SUPPORT POSITIONS WITHIN EACH DIVISION, THIS MEANS THAT WE HAVE A LOT OF COMPETITION ACROSS THE ENTIRE CITY FOR THOSE POSITIONS.
AND THE WORK IS, YOU KNOW, BASICALLY MORE GENERAL A EE AGAIN, UM, NOT AS MUCH OF AN IMPACT HERE, BUT AGAIN, THE NUMBER OF VACANCIES DOES, YOU KNOW, RELATE TO A HIGHER VACANCY RATE RELATIVE TO THE NUMBER OF POSITIONS WE HAVE OVERALL.
LBMA, UM, SITTING AT 21%, BUT SOME OF THE VACANT POSITIONS THERE, YOU KNOW, WE JUST HAVE TO WORK WITH MANAGERS TO IDENTIFY, YOU KNOW, WHAT'S CURRENTLY STILL NEEDED, HOW TO ACTION THEM, AND THEN HOW TO FILL THEM.
FINALLY, THIS ALL RELATES TO, UH, HOW PERSONAL SERVICES WITHIN THE UTILITIES DEPARTMENT, YOU KNOW, SUPPORTS OUR DIVISIONS AND, UH, WORKS TOWARDS A RECRUITMENT STRATEGY THAT FITS AND SUPPORTS ALL OF THE DIVISION'S NEEDS.
I, YOU KNOW, IN ORDER TO DO THIS AND ACCOMPLISH THIS PERSONNEL ESTABLISHED, UH, DEDICATED BUSINESS UNIT, BUSINESS UNIT ANALYSTS, AND THEN SUPPORT STAFF TO ASSIGN TO EACH OF THE BUSINESS UNITS.
SO WE HAVE ONE FOR OR TWO STAFF MEMBERS FOR EACH BUSINESS UNIT, AND THEY BASICALLY MEET AND SUPPORT EACH OF THE, THE DIVISIONS IN ORDER TO ACCOMPLISH THE RECRUITMENT GOALS.
THEY DO THIS BY, YOU KNOW, ADDRESSING FLEXIBILITY, UM, IN THE, IN THE RECRUITMENT PROCESS, IDENTIFYING, YOU KNOW, ANY OPPORTUNITY THAT WE CAN TO OPTIMIZE THE RECRUITMENT STYLES, METHODS OR WHICH POSITIONS WE'RE LOOKING FOR IS THERE'S A LOT OF OPPORTUNITY TO BASICALLY, YOU KNOW, FIND ALTERNATIVE SOLUTIONS IF SOMETHING ISN'T, YOU KNOW, WORKING OUT IDEALLY FOR US AT THE MOMENT.
UH, WE ALSO LOOK TO ESTABLISH OUR CONSISTENT COORDINATION WITH CITY PARTNERS.
WE HAVE AND HOLD MEETINGS WITH TALENT MANAGEMENT LEADERSHIP, UH, ON A MONTHLY BASIS, AND THEN ROUTINELY MEET WITH OUR DEDICATED SUPPORT FROM HRS TALENT MANAGEMENT DIVISION.
UH, WE ALSO HAVE PARTNERED WITH PUBLIC AFFAIRS AND THEN ALSO CERTAIN DIVISIONS, UH, WHO CONDUCT AND ATTEND COLLEGE JOB FAIRS, UH, YOU KNOW, WORK WITH SOCIAL MEDIA AND POSTING THE POSITIONS THERE.
AND THEN ALSO POSTING OUR JOBS TO LONG BEACH.GOV, LONG BEACH.GOV/JOBS, AND THEN ALSO TO LOCAL SCHOOLS AS WELL.
AND THAT CONCLUDES MY REPORT, AND I'M HAPPY TO ANSWER ANY QUESTIONS.
UM, SO THE VACANCY SUMMARY, UM, WE HAVE, IT LOOKS LIKE ROUGHLY 500 EMPLOYEES, UH, AND WE'VE GOT ABOUT 80 VACANCIES.
IS THAT A, IS THAT A STANDARD, IS THAT NORMAL
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FOR US? UH, DO WE TYPICALLY HAVE THAT NUMBER OF VACANCIES? THANK YOU, COMMISSIONER SCOTT.UH, SO YES, THAT'S ACTUALLY, UH, I SHOULD HAVE MENTIONED THAT AND I APPRECIATE YOU ASKING THE QUESTION.
THIS DATA IS, UH, IS AS OF SEPTEMBER, 2025, SO IT IS A LITTLE BIT OUT OF DATE.
WE DO, UM, AND TYPICALLY HAVE FOR THE LAST AT LEAST THREE YEARS, HAVE HOVERED BETWEEN A 15% AND 17% VACANCY RATE.
UM, WHERE THOSE VACANCIES LIE DO TEND TO CHANGE, BUT IN REGARDS TO LIKE SPECIFICALLY HOW WE'VE ADDRESSED SOME OF THE VA MAJOR VACANCIES THAT EXISTED MAYBE FOUR YEARS AGO, WE'RE SEEING A LOT MORE, UH, YOU KNOW, CONSISTENT FILL RATE IN POSITIONS THAT WE'VE HAD THAT WERE HARDER TO FILL OR THAT GENERALLY CARRIED VACANCIES YEAR OVER YEAR.
FOR EXAMPLE, UH, WATER UTILITY MECHANIC, GAS CONSTR, GAS FIELD SERVICE REP AND GAS CONSTRUCTION WORKER.
WE'VE HAD A LOT OF, YOU KNOW, WE'RE KEEPING THOSE FILLED AT A HIGHER RATE AND A, AND A QUICKER RATE OVERALL.
SO THIS IS, I'D SAY, YOU KNOW, A, A PRETTY ACCURATE SUMMARY IN TERMS OF WHERE OUR VACANCIES LIE, GENERALLY SPEAKING.
BUT YEAH, OVERALL, UH, THE AVERAGE IS 15 TO 17%.
AND SO WITH THESE NUMBERS, WE'RE RIGHT AT 16%, SO WE'RE RIGHT WITHIN THE HISTORICAL AVERAGE.
UH, IS THAT, IS THAT A CONDITION THAT IS, IS IDEAL FOR OUR OPERATIONS? IS IT, IS IT, ARE WE TOO HEAVY? ARE WE TOO LIGHT? ARE WE SUFFERING FROM THE VACANCIES, OR IS THIS SOMETHING THAT WE ARE ACTUALLY AT PEAK PERFORMANCE? THAT'S A GREAT QUESTION, AND I THINK THAT, UM, YOU KNOW, AFTER HAVING BEEN HERE NOW FOR THE LAST THREE YEARS AND WORKING WITH THE DIVISION MANAGERS THAT I HAVE, AND THEN SEEING THE WORK THAT STILL NEEDS TO BE DONE, WHERE WE'VE HAD HISTORICAL CHALLENGES AND SOME OF THOSE POSITIONS STILL ARE, YOU KNOW, HISTORICALLY CHALLENGING TO FILL.
FOR EXAMPLE, UH, YOU KNOW, WE HAD SOME POSITIONS THAT STILL ARE, HAVE BEEN VACANT FOR THE ENTIRE TIME THAT I'VE BEEN HERE, SO DIFFICULT TO HISTORICALLY FIND PEOPLE THAT ARE TALENTED OR THAT ARE INTERESTED IN THAT POSITION.
AND THAT COULD BE DUE TO A VARIETY OF FACTORS, YOU KNOW, MARKET COMPENSATION CONSIDERATIONS, UH, THE FACT THAT THE, YOU KNOW, POSITIONS MIGHT BE TOO BROAD IN TERMS OF LIKE, THEY'RE NOT SPECIFIC ENOUGH.
SO WE'RE WORKING TO ADDRESS THOSE AND THEN FILL THE VACANCIES THAT DO EXIST BECAUSE THERE'S DEMONSTRATED AND, YOU KNOW, COMMUNICATED NEED THAT SOME OF THESE VACANCIES ARE, YOU KNOW, THEY'RE, THEY'RE KEY.
THEY CAN, LIKE, WE'RE OPERATING AND SPREADING WORK TO POSITIONS OR PEOPLE THAT, YOU KNOW, DON'T NECESSARILY HAVE THAT OR SHOULDN'T HAVE BE DOING THAT NECESSARILY, BUT THEY'RE, UM, BUT THAT, THAT, THAT POSITION IS NEEDED, THOSE POSITIONS ARE NEEDED.
SO WITH THOSE UNIQUE KEY POSITIONS, ARE WE USING CONSULTANTS TO FILL THOSE ROLES? IF I COULD JUMP IN HERE FOR A QUICK SECOND.
UM, THE, THE, THE VACANCY RATE THAT YOU SEE HERE IS SLIGHTLY DIFFERENT THAN THE WAY I, I SUPPOSE VACANCY IS CONSIDERED ON THE, ON THE CITY SIDE OR WITH CITY MANAGED DEPARTMENTS AT LONG BEACH UTILITIES.
EVEN IF WE HAVE A VACANT POSITION FOR A NUMBER OF YEARS, IF WE NEED THE POSITION, WE DON'T ELIMINATE IT.
WHEREAS, UM, TYPICALLY IN MANY CITY MANAGER DEPARTMENTS, IF THERE'S A VACANCY THAT HAS, HAS REMAINED VACANT FOR TWO OR MORE YEARS, IT TYPICALLY GETS ELIMINATED FROM THE BUDGET.
UM, I'LL USE SEWER AS AN EXAMPLE.
IN OUR SEWER DIVISION, A COUPLE YEARS AGO, WE AS A DEPARTMENT MET AND CONFERRED WITH THE LABOR UNION TO ESTABLISH CERTIFICATION REQUIREMENTS FOR EACH OF THE, UM, GRADES WITHIN THE WATER UTILITY MECHANIC POSITION.
SO GRADE ONE YOU HAD A CERTAIN LEVEL OF CERTIFICATION, GRADE TWO, INCREASING GRADE THREE, WHICH IS THE LEAD POSITION OF COURSE, HAS THE HIGHEST LEVEL OF CERTIFICATION.
WE'VE HAD SIGNIFICANT CHALLENGES WITH ENCOURAGING EMPLOYEES TO, UM, INCREASE THEIR CERTIFICATION WITHIN THAT WORK GROUP.
UM, THERE'S BEEN SOME MOVEMENT, BUT NOT AS QUICKLY AS WE WOULD NEED IN ORDER FOR THE POSITIONS AT EACH GRADE LEVEL TO BE FILLED.
SO THAT 11% VACANCY THAT YOU SEE IN IBWA SIGNIFICANT AMOUNT OF THOSE POSITIONS ARE ACTUALLY, UM, IN OUR SEWER DIVISION.
BUT WE WOULDN'T ELIMINATE THE POSITIONS IN SEWER BECAUSE WE DO NEED THEM TO PERFORM OPERATIONS AND OUR HOPE IS TO FILL THEM IN THE FUTURE.
AND, BUT WE HAVE NOT, WE HAVE NOT, UM, BROUGHT IN CONTRACTORS TO DO THAT WORK.
THE EXISTING EMPLOYEES ARE ABLE TO DO SO.
UM, IN IEM, THE VACANCY RATE IS SLIGHTLY HIGHER.
UM, AND IN THOSE POSITIONS, THIS, THIS BOARD APPROVED A CONTRACT WITH SAL, WHICH IS A CLASSIFICATION COMPENSATION FIRM FOR US TO TRY AND ESTABLISH UTILITY SPECIFIC POSITIONS FOR SOME OF THE POSITIONS THAT, THAT ARE VACANT IN.
IM, UM, BECAUSE WE HAVEN'T BEEN ABLE TO FILL THEM EITHER BECAUSE OF SALARY REASONS OR BECAUSE THE GENERAL, UM, LET'S USE ADMINISTRATIVE ANALYST COST BACK IS TOO GENERAL FOR SOME OF OUR MORE UTILITY EITHER RESOURCE OR BILLING TYPE WORK THAT WE NEED DONE.
UM, AND SO THAT'S HOW WE'RE TRYING TO SOLVE THAT.
BUT AGAIN, DOING THE BEST WE CAN, WE'LL PUT WE HAVE.
AND THEN, UM, AE THOMAS JUST RECENTLY JOINED LA BEACH UTILITIES AND IS LOOKING AT, UM, KIND OF REORGANIZING HIS TEAM IN A WAY THAT WOULD BLEND THE WATER, SEWER AND GAS MERGER,
[00:45:01]
UM, IN A WAY THAT MIGHT BE MORE EFFICIENT.BUT AGAIN, UM, A FAIRLY COMPARABLE VACANCY RATE.
AND THEN OF COURSE, LBMA WE'RE THE LAST TO FILL OURSELVES BECAUSE AS MANAGERS WE JUST DO THE WORK.
IF I ALSO MAY ADD, UH, TO ANSWER YOUR QUESTION ABOUT ARE WE OKAY, UM, I WOULD SAY WE DO THE BEST THAT WE CAN TO ENSURE THE CONTINUED OPERATIONS AND INTEGRITY OF, OF THE WORK.
EACH OF THESE, UM, BARGAINING UNITS HAVE TO PERFORM.
I'LL SAY IN THAT IAM BUCKET THERE, THERE WERE 34 VACANT POSITIONS IN SEPTEMBER, LAST JANUARY WAS RUNNING 16 RECRUITMENTS.
AND SO WHAT MY, AND I CAN SPEAK FOR MY TEAM IS WE'VE LEVERAGED, UM, THE CITY HAS, I THINK, THREE DIFFERENT CONTRACTS, RIGHT? FOR, UM, TEMPORARY STAFFING FOR CERTAIN, UH, CLASSIFICATIONS.
SO WE'VE HAD TO AUGMENT STAFF IN THAT WAY.
WE'VE LEVERAGED, UM, INTERNSHIPS WHERE POSSIBLE TO GIVE FOLKS, UM, AN OPPORTUNITY LIKE STUDENTS, UM, OR THOSE ENTERING THE JOB MARKET.
UM, OTHER THINGS THAT I TELL MY TEAM, AND I HAVE SOME OF THEM HERE TODAY, SO NOW THEY GET TO HEAR IT.
UH, I PREACH IT ALL THE TIME WHEN THERE'S A CHALLENGE OR AN OBSTACLE, LET'S TURN THAT INTO AN OPPORTUNITY AND LOOK AT HOW WE DO THINGS.
SO WHEN PEOPLE LEAVE, WE'VE SEEN SEVERAL RETIREMENTS.
WE CAN TRY TO, YOU KNOW, WORK SMARTER AND NOT HARDER.
IF WE CAN OPTIMIZE WHAT WE DO AND HOW WE DO IT AND LOOK AT IT FROM A DIFFERENT LENS, UM, WE TRY TO BE CREATIVE IN THAT ASPECT, BUT IT'S NOT NECESSARILY TO REMOVE JOBS.
WE WE'RE JUST TRYING TO, UM, YOU KNOW, ADD VALUE TO THE WORK THAT FOLKS HAVE, HAVE DONE.
UM, IN OTHER SPACES, I'M NOT OUT IN THE FIELD, BUT I HAVE SEEN ALSO IN ENGINEERING, WE'VE HAD SOME AUGMENTED STAFF FOR ON-CALL NEEDS.
UM, WHAT HAS BEEN A NEW CHALLENGE IS AB 3 39, WHICH JUST WENT INTO EFFECT IN JANUARY.
SO IT'S SIMILAR TO THE PROP L THAT WE'VE HAD WHERE, UM, IF WE WERE TO, UM, HAVE A NEED THAT TO FILL POSITIONS THAT, UM, WE HAVE CLASSIFICATIONS FOR NOW, WE HAVE TO NOTICE THE BARGAINING UNITS 45 DAYS IN ADVANCE.
SO THESE ARE ALL SOME OF THE CHALLENGES THAT WE HAVE, AND I THINK WE'RE IN A VERY DIFFERENT LANDSCAPE WHEN IT COMES TO, UM, THE JOB MARKET, THE LABOR MARKET.
WE ARE NOT AS COMPETITIVE AS THE PRIVATE SECTOR.
A LOT OF PEOPLE WHO HAVE BEEN HERE AND HAVE BEEN LOYALISTS TO, YOU KNOW, THE CITY, THE DEPARTMENT, THEY'RE LEAVING WITH INSTITUTIONAL KNOWLEDGE.
SO WE HAVE HAD TO, UM, FIND WAYS TO MAKE THIS DEPARTMENT ATTRACTIVE, UM, AND PARTNERING WITH, WITH EACH OTHER AND UNDERSTANDING WHAT WILL HELP US BE SUCCESSFUL IN THOSE ROLES.
UM, COULD YOU TALK ABOUT WHERE ARE WE WITH THESE BARGAINING UNITS AND NEGOTIATIONS? WILL THOSE BE GOING ON THIS YEAR OR ARE WE STILL IN A CONTRACT, OR HOW DOES IT, HOW IS THAT IMPACTING NEXT YEAR'S BUDGET? YEAH, SO THIS IS, UH, BARGAINING SEASON HAS BEGUN.
UH, CITY HR LABOR RELATIONS IS CURRENTLY BARGAINING, AND THEY, UH, ARE STARTING WITH I AM, SO IAM IS CURRENTLY IN NEGOTIATIONS NOW.
UH, I BELIEVE THE NEXT FOLLOWING, UM, BARGAINING UNITS WILL BE IBEW.
AND THEN, UH, AND THEN DOWN THE LINE.
SO WITH FINISHING WITH LBMA, THEY USUALLY FINISH WITH LBMA LAST, UH, BUT THERE'S NO, LIKE, THEY HAVEN'T GIVEN US A TIMELINE.
THEY'RE CURRENTLY JUST BUSY WITH MEET AND CONFERS AND THEN NEGOTIATIONS, BUT THAT'S, THAT'S THE PROGRESSION.
SO IT'S GONNA BE IB, I AM FIRST IBW AND THEN FINISHING WITH LBMA AE WILL BE SOMEWHERE IN BETWEEN THERE.
AND THEN THE END HAS PUBLIC SAFETY ALREADY GONE FORWARD.
UM, UNFORTUNATELY WE AREN'T GONNA KNOW THE FINANCIAL IMPACT OF BARGAINING BEFORE WE COMPLETE OUR BUDGET PROCESS.
AND THAT JUST, UM, HAS BEEN THE WAY THAT IT'S GONE.
THE CURRENT MOU EXPIRES, UM, SEPTEMBER 30TH OF THIS YEAR.
AND SO WE DO EXPECT THAT THERE WILL BE A NEW BARGAINING, UM, MOU IN PLACE EITHER PRIOR TO THAT OR SOON AFTER.
UM, BUT AGAIN, UNKNOWN ON FISCAL IMPACT.
SO I GUESS FOR STEPHANIE, HOW, HOW DO YOU FACTOR SOMETHING LIKE THAT INTO THE BUDGET? WE DON'T, WE DON'T KNOW.
AND I, I'M ASSUMING YOU DON'T WANNA PUT A NUMBER IN BECAUSE WE'RE IN NEGOTIATIONS, BUT IT'S GONNA IMPACT THE TOTAL BUDGET, I WOULD ASSUME.
WE ALWAYS FACTOR IN, UM, JUST A FLAT, UM, INCREASE ON AN ANNUAL BASIS.
I BELIEVE, DANIEL, DO WE USE 3% OR 3%, UH, JUST FOR THE UNKNOWN? YEAH.
SO, UH, AS WE CONCLUDE, I WANT TO EMPHASIZE, UH, THAT THE FY 27 UTILITIES BUDGET REFLECTS A CONTINUED COMMITMENT TO MAINTAINING A BALANCE AND FINANCIALLY RESPONSIBLE APPROACH.
[00:50:01]
ON CONTROLLING COSTS AND IMPROVING OPERATIONAL EFFICIENCIES WHEREVER POSSIBLE.AT THE SAME TIME, WE ARE IDENTIFYING OPPORTUNITIES TO STRENGTHEN REVENUE STABILITY WHILE RESPONSIBLY MANAGING OUR DEBT OBLIGATIONS.
MOST IMPORTANTLY, UH, THIS BUDGET REPRESENTS THE COLLECTIVE WORK OF ALL OF OUR DIVISIONS ALL WORKING TOGETHER TO MAINTAIN RELIABLE UTILITY SERVICES FOR OUR COMMUNITY.
AND WITH THAT, WE RECOMMEND THAT THE BOARD RECEIVE AND FILE THE REPORT.
AND WE APPRECIATE YOUR, YOUR TIME AND ATTENTION TODAY.
UH, STEPHANIE, ANYTHING ELSE? I WOULD JUST LIKE TO TAKE THIS OPPORTUNITY TO THANK ALL OF MY COLLEAGUES WHO HELPED PUT THIS ALL, ALL TOGETHER.
UM, I THINK YOU CAN TELL HOPEFULLY NOW THAT THIS IS A LABOR OF LOVE AND WHAT HAPPENS YEAR OVER YEAR.
UM, AND THIS IS THE FIRST TIME WE'VE EVER DONE ANYTHING LIKE THIS, IS THAT, UH, FINANCE HAS TO PARTNER WITH EACH AND EVERY DIVISION IN THE DEPARTMENT TO UNDERSTAND OPERATIONS AND HOW THAT TRANSLATES INTO, UH, BUDGETARY IMPACT.
SO THANK YOU ALL FOR, FOR YOUR CONTRIBUTIONS.
UM, I ALSO THINK IT'S IMPORTANT FOR US TO LIKE, TAKE A STEP BACK AND, AND THINK ABOUT WHERE WE WERE, WHERE WE'VE BEEN IN THE PAST AND WHERE WE'RE GOING, UH, FROM A MACRO ECONOMIC STANDPOINT.
I THINK THAT FINANCIAL, UM, PROJECTIONS HAVE BEEN BASED ON SUPPLY AND DEMAND, AND THAT'S NOT WHERE WE ARE ANYMORE.
THERE'S A HEIGHTENED REGULATIONS SEVERELY IMPACT ALL OF THE ORGANIZATION, UM, IN EVERY ONE OF THOSE CATEGORIES.
AND SO WITH THOSE REGULATIONS COME, THEY COME AT A COST.
AND AS I ALREADY MENTIONED, THE LABOR MARKET IS SOMETHING THAT, UM, WE CAN'T DO ANY OF THIS WORK WITHOUT, I, YOU CAN HAVE ALL THE AI YOU WANT, BUT TO HAVE CUSTOMER SERVICE, BECAUSE UTILITIES ISN'T JUST THE COMMODITY.
IT'S A SERVICE THAT WE PROVIDE.
UM, AND WE WANT QUALITY TALENT.
SO I THINK IT, IT'S, IT'S IMPORTANT TO HIGHLIGHT THAT IT'S NOT JUST ABOUT THE COMMODITY ITSELF.
IT'S NOT JUST ABOUT, UM, THE GAS AND THE WATER AND BEING ABLE TO PROVIDE SEWER.
IT'S, IT'S THE PEOPLE AND, AND IT'S NAVIGATING, UM, THE CHALLENGES OF BEING IN A CITY IN CALIFORNIA.
JUST REAL QUICK, SO, UH, BRAVO TO THE ALL-STAR, UH, UH, CAST THAT YOU'VE, YOU YOU'VE ASSEMBLED.
UM, IT, IT'S, IT'S, UH, REALLY IMPRESSIVE TO SEE EVERYBODY GET TOGETHER AND, AND, AND DO THIS IT, AND I SAY THAT FROM AN ACCOUNTANT'S POINT OF VIEW BECAUSE IT, IT, IT REALLY, UH, BRINGS HOME THE IDEA THAT WHAT EVERYBODY IS DOING IS SUPER IMPORTANT, UM, IN EACH OF OUR SILOS.
UM, BUT TO SHARE THAT KNOWLEDGE WITH, WITH THE FINANCE FOLKS AND WITH THE, WITH THE, UH, ORGANIZATION AS A WHOLE, UM, IT'S OBVIOUS WHEN I, WHEN I HEAR FOLKS LIKE DEAN SPEAKING, UM, IT, IT'S THE SAME WORK THAT HE IS DOING, RIGHT? HE IS DOING THAT SAME WORK IN A SILO, BUT NOW IT BRINGS THAT WORK INTO THE BUDGET, IT BRINGS THAT WORK INTO THE, THE FINANCIAL WORLD, AND IT, IT, IT MAKES FOR A MORE HOLISTIC ORGANIZATION, MORE HOLISTIC ENTERPRISE.
AND I, I APPRECIATE YOU BRINGING ALL THOSE FOLKS TOGETHER.
THANK YOU FOR ALL BEING HERE SITTING THROUGH THIS.
I, I THINK IT IS REALLY IMPORTANT THAT, AND WE ARE REALLY HAPPY TO SEE EVERYONE WORKING TOGETHER ON THIS BUDGET.
I THINK HOPEFULLY WITH THE ITEM WE APPROVED TODAY, THERE'S MORE EFFICIENCY.
I DON'T THINK IT GETS ANY EASIER, BUT, UH, IT'S, UH, IT'S CERTAINLY APPRECIATED.
ANY PUBLIC COMMENTS? ANYBODY MEMBER OF
[PUBLIC COMMENT Opportunity to address the Finance Committee on non-agenda items. Each speaker is limited to three minutes to make their comments unless extended by the Chair.]
THE PUBLIC WANNA SPEAK ON THIS? SEEING NONE,[ANNOUNCEMENTS]
ANY COMMISSIONER.