Apr 16, 2026 Utilities Commission - Planning Committee

RECEIVE AND FILE CAMPUS REALIGNMENT AND MODERNIZATION UPDATE.

THANK YOU SO MUCH.

UM, SO WITH THE, WITH MY COMMITTEE MEMBERS, UM, INDULGENCE, I WOULD LIKE TO SWITCH THE, UH, ORDER OF THE AGENDA, UM, JUST TO EXPEDITE ALLOWING SOME OF OUR GUESTS TO, UH, TO, TO DEPART.

SO I'D LIKE TO MOVE ITEM NUMBER THREE TO THE, UH, TO THE TOP OF THE AGENDA.

UH, IS THERE ANY OPPOSITION TO THAT? ALRIGHT, PERFECT.

SO, UH, JUMPING INTO ITEM NUMBER THREE,

[3. 26-54859 Recommendation to receive and file Campus Realignment and Modernization Update. Suggested Action: Approve recommendation. ]

PLEASE HAVE A MOTION, A MOTION TO APPROVE.

I'LL SECOND THAT.

UM, CALL KEVIN, PLEASE.

GOOD MORNING.

I THINK STILL.

GOOD MORNING, COMMISSIONERS.

GOOD MORNING.

UH, HERE FOR ANOTHER UPDATE ON THE CAMPUS REALIGNMENT AND MODERNIZATION.

UH, MAJORITY OF THIS PRE PRESENTATION IS GONNA BE DONE BY OUR CONSULTANT, JEFF, BUT BEFORE, UH, I HAND IT OVER TO HIM.

I WANTED, UH, TO SHARE KIND OF LIKE OUR HOPE HAS BEEN OUR FRAMEWORK FOR THIS PROJECT.

SO, UNDER THE DIRECTION OF OUR GENERAL MANAGER, UH, WE'VE DEVELOPED A THREE-PART STRATEGIC FRAMEWORK TO GUIDE THE CAMPUS PROJECT.

THESE PRINCIPLES HAVE SHAPED EVERYTHING THAT WE'VE PRESENTED TO YOU, UH, IN THE BEFORE, AND, UH, EVERYTHING WE'RE GONNA BE BRINGING TO THIS COMMITTEE AND TO THE BOARD.

THIS IS KIND OF OUR, UH, OUR NORTH STAR FOR, FOR THIS PROJECT.

SO, FIRST, WE ARE LOOKING AT THE, UH, DESIGN.

UH, AND THIS ISN'T JUST ABOUT AESTHETICS.

IT IS A RIGOROUS COST BENEFIT ANALYSIS.

WE ARE WEIGHING THE PRICE OF MAINTAINING OUR CURRENT AGING INFRASTRUCTURE, UH, VERSUS, UH, BUILDING SOMETHING NEW IN MODERN THAT TAKES INTO ACCOUNT, UH, COLLABORATION FOR OUR, FOR OUR UTILITY.

UH, WE'RE ALSO WEIGHING, UH, VARIOUS, UH, DESIGNS THAT YOU'VE SEEN, UH, CENTRAL HEADQUARTERS VERSUS, UH, UTILIZING, UH, MORE THAN ONE OF OUR, UH, FACILITIES.

UH, WE'RE ALSO CURRENTLY EVALUATING, EVALUATING WEATHER, UH, BUILDING, UH, A NEW STRUCTURE OR POTENTIALLY LEASING OR RENTING A PORTION OF OUR OFFICE NEEDS, UH, FROM THE PRIVATE SECTOR.

UH, SECOND IS LAND MANAGEMENT.

AND AS I MENTIONED, UH, I'LL BE HANDING THIS OVER TO JEFF.

HE'LL BE, A LOT OF HIS PRESENTATION WILL COVER THIS PORTION.

UM, BUT OUR FOCUS HERE IS TWOFOLD TO IDENTIFY REVENUE OPPORTUNITIES FROM OUR SURPLUS LAND, EITHER THROUGH POTENTIALLY SELLING OR, OR LEASING, AND ENSURING THAT WE REMAIN IN STRICT COMPLIANCE WITH THE SURPLUS LANDS ACT ON WHATEVER WE DO WITH OUR ADDITIONAL LAND.

AND THEN FINALLY, AND PERHAPS, UH, MOST IMPORTANTLY IS THE FISCAL IMPACT.

EVERY DECISION WE MAKE IS FILTERED THROUGH THE LENS OF AFFORDABILITY.

WE ARE HYPER-FOCUSED ON HOW THIS PROJECT IMPACTS OUR INTERNAL BUDGET AND CRUCIALLY WHAT THE LONG-TERM IMPLICATIONS WILL BE FOR WATER, SEWER, AND GAS RATE PAYERS.

SO WE WANNA ENSURE THIS FRAMEWORK ALIGNS FULLY WITH THE BOARD'S VISION FOR THIS PROJECT AND OUR UTILITY.

UM, ARE THERE OTHER STRATEGIC PILLARS WE SHOULD BE CONSIDERING OR ANY CONCERNS YOU HAVE REGARDING THE THREE ELEMENTS I JUST SHARED WITH YOU? I, I WENT OVER THIS BEFORE, UH, THE MEETING AND I WAS VERY EXCITED TO SEE THE ELEMENTS THAT YOU HAVE, THE FRAMEWORK, IT'S, UH, USING THIS AS A NORTH STAR IS GONNA BE VERY HELPFUL, NOT ONLY FOR THE, FOR THE COMMITTEE RIVERS, BUT ONCE WE GET TO THE, TO THE BOARD LEVEL AND, AND FOR EVERYONE WORKING ON THIS PROJECT.

SO I, I LOVE IT.

ANY COMMENTS? OKAY.

WHAT YOU KNOW CAN BE DONE, YOU'RE MUCH CLOSER TO BALANCING IN THE COST NEUTRAL EQUATION.

AND THEN WITH THAT, I'LL HAND IT OVER TO JEFF.

GREAT.

SO, UM, YEAH, SO JUST FOR THE AGENDA IN THIS PRESENTATION, I JUST WANTED TO GO THROUGH A FEW THINGS.

UH, YOU KNOW, THE WORK WE'VE DONE TO DATE SOME OF THE BACKGROUND RESEARCH AND, AND MARKET ANALYSIS ON THE, THE VALUE OF THE EXISTING SITES.

OBVIOUSLY THE UTILITY DEPARTMENT'S OPERATING OUT OF THREE CAMPUSES RIGHT NOW.

UM, LOOKING AT THE REDEVELOPMENT CONSIDERATIONS, UH, FOR THESE SITES.

AND THEN, AND THEN KIND OF THE NEXT STEPS IN TERMS OF WHERE WE GO, UH, AND, YOU KNOW, SAY OPTION REFINEMENT, PLAN OF FINANCE

[00:05:01]

AND PROCUREMENT.

LIKE ALL OF THOSE THINGS ARE VERY BIG TOPICS.

WE'RE GONNA BE MEATY AND WEIGHTY, AND I'M ALWAYS ANXIOUS ABOUT PRESENTING ANYTHING TO THE PUBLIC THAT HAS NUMBERS IN IT BEFORE THEY'RE FULLY BAKED.

UH, SO THAT IS MY HUGE DISCLAIMER.

OBVIOUSLY, THERE ARE A LOT OF ASSUMPTIONS, THERE ARE EDUCATED GUESSES, BUT, YOU KNOW, OUR GOAL OVER THE NEXT, UH, PERIOD OF TIME IS GOING TO BE TO GET DIRECTIONS FROM THE COMMITTEE AND THEN START TO REFINE STUFF DOWN, SHARPEN OUR PENCIL, GET MORE INPUTS AND, AND, UM, REFINE THOSE ESTIMATES AND, AND START TO CLOSE IN THE GAP OF WHAT, YOU KNOW, WE HAVE FROM AN ESTIMATE TO MORE REALISTIC NUMBERS, RIGHT? SO WORK TO DATE.

SO WE LOOK THROUGH THE CURRENT COSTS, LIKE WHAT'S IT COSTING YOU TO MAINTAIN YOUR CURRENT BUILDING, RIGHT? WENT BACK THROUGH THE NEEDS ASSESSMENT THAT YOU DID IN 2024, UM, AND HAVE REVISITED MAYBE SOME OF THAT WITH SOME MORE CURRENT PLANNING ASSUMPTIONS.

UH, WE LOOKED AT THE PROPERTY APPRAISALS THAT YOU HAD HERE AND THEN HAVE, YOU KNOW, UH, TOURED THE SITES AND ENGAGED SOME BROKERS AND, AND TALKED A LITTLE BIT WITH SOME FOLKS IN THE DEVELOPMENT COMMUNITY ABOUT WHAT COULD BE DONE TO SORT OF UNDERSTAND WHAT THE HIGHEST AND BEST USE FOR THE LAND MIGHT BE.

AND THEN INDEPENDENTLY WE'VE LOOKED AT THE SURPLUS, UH, LANDS ACT AND, AND THE CURRENT MARKET CONDITIONS.

UH, SO WITH THAT, SO OUR CURRENT OPERATING COSTS, SO THIS IS, YOU KNOW, UH, FROM THE COUNTY DEPARTMENT, OBVIOUSLY AT A PRESENTATION EARLIER TODAY ABOUT SOME OF THE CIP AND SOME THINGS YOU'RE GONNA NEED TO DO FOR THIS CURRENT CAMPUS.

AND, YOU KNOW, EVEN LOOKING AROUND THIS ROOM, YOU SEE SOME EVIDENCE OF WATER DAMAGE COMING THROUGH THE CEILING.

AND A FEW THINGS, YOU KNOW, OBVIOUSLY YOU CAN CONTINUE TO PATCH THAT STUFF, BUT IT DOES GET WORSE OVER TIME.

AND SO, YOU KNOW, THERE'S A BIG NUMBER IN HERE FOR DEFERRED CIP ESTIMATE, AND THAT IS REALLY BASED ON JUST A THUMBNAIL SKETCH OF THIS IS THE AGE OF THE BUILDINGS.

THIS MIGHT BE WHAT YOU WOULD TYPICALLY EXPECT, BUT NOT AN ENGINEERING ANALYSIS.

SO IF WE WANNA SHARPEN OUR PENCIL ON OUR CURRENT COSTS, THAT'S ONE BIG TICKET ITEM.

UM, BUT YOU HAVE ONGOING CIP THAT'S CURRENTLY BEEN IDENTIFIED IN YOUR PLAN.

YOU'VE GOT STAFF TIME THAT YOU'RE INVESTING IN THIS BUILDING.

YOU'VE GOT, YOU KNOW, CERTAIN UTILITIES THAT YOU'RE PAYING FOR AND, AND REPAIRS, YOU KNOW, GOING FORWARD, UM, YOU KNOW, YOU CAN IMPROVE YOUR UTILITY FOOTPRINT.

I THINK YOU CAN IMPROVE IT A LOT MORE THAN WHAT'S ON THIS SLIDE.

PART OF THAT WAS BASED ON THE CAMPUS PLANS THAT WE HAVE AND A, AN INCREASE IN THE AMOUNT OF SQUARE FOOTAGE, NOT A DECREASE IN THE AMOUNT OF SQUARE FOOTAGE.

SO WE'RE WORKING ON THAT WITH THE ARCHITECT.

UM, OBVIOUSLY SOFT SERVICES CIP TIME, AND THEN I'M ASSUMING, YOU KNOW, YOU WOULD MAINTAIN THE EXISTING AMOUNT OF STAFF TIME, WHICH AGAIN, I THINK IS A BIG, VERY LARGE ASSUMPTION.

SO THAT'S A LONG-WINDED WAY OF SAYING ON, ON THE SURFACE YOU COULD SAVE ALMOST $7 MILLION IN OPERATING COSTS.

I THINK THOSE, THOSE ARE VERY ROUND NUMBERS, BUT THEY'RE VERY ACHIEVABLE BASED ON, YOU KNOW, THE THINGS THAT COULD GO ON EITHER SIDE OF THE LEDGER.

UM, NEEDS ASSESSMENT.

SO THIS IS BASED ON, AGAIN, THE NEEDS ASSESSMENT THAT WAS DONE IN 2024.

THERE WAS A VERY LOOSE ALLOCATION BETWEEN THE DIFFERENT FUNDS ABOUT, YOU KNOW, WHAT STAFF WAS GONNA BE AWARE WHO WAS OPERATING A SHOP OR WAREHOUSE.

WE THINK THERE'S GREAT OPPORTUNITIES FOR CONSOLIDATION OF SPACE FOR MORE COLLABORATION BETWEEN THE FUNDS.

UM, BUT THIS WAS JUST, YOU KNOW, THE ROUGH ASSESSMENT BETWEEN THE DIFFERENT DIFFERENT SITES AND YOUR, YOU KNOW, YOU HAVE, UH, A TOTAL OF ABOUT, YOU KNOW, UM, 220,000 SQUARE FEET OF BUILDING ABOUT HALF SPLIT BETWEEN OFFICE AND WAREHOUSE AND INDUSTRIAL SPACE.

OBVIOUSLY OFFICE IS MORE EXPENSIVE TO BUILD AND MORE EXPENSIVE TO MAINTAIN, BUT IT'S IMPORTANT TO THINK ABOUT THE SYNERGIES THAT COULD INCUR IN THE YARD TOO.

SO, YOU KNOW, HERE'S THE THREE PLANS JUST TO KIND OF REFRESH OUR, OUR MEMORY OF WHERE THEY WERE.

UM, AGAIN, THE SO PLAN ONES, BUT A $225 MILLION COST, UH, AND INCLUDES A PARKING STRUCTURE, UM, USES, UTILIZES SOME OF THE WATER TREATMENT PLANT SITE ON REDONDO, SOME OF THE WATER, SOME OF THE SITE ON, ON SPRING STREET FOR THE GAS DEPARTMENT, AND THEN WOULD SURPLUS THIS, UH, SITE THAT WE'RE AT TODAY.

CAMPUS PLAN NUMBER TWO, UM, AGAIN, UTILIZES BOTH OF THOSE TWO SITES, BUT PUTS MORE, UH, ONTO THE, UH, WATER TREATMENT PLANT SITE AND A LITTLE LESS ONTO THE CURRENT GAS SITE.

UM, AND, BUT CAMPUS PLAN NUMBER THREE TAKES ADVANTAGE OF BEING ABLE TO POTENTIALLY SURPLUS BOTH THOSE SITES.

OBVIOUSLY PUTS A LOT MORE INTENSITY ONTO THE REDONDO SITE.

UH, AND AS A RESULT HAS A LITTLE BIT MORE ESTIMATED COST.

A LOT OF THAT COMES FROM THE PARKING STRUCTURE AND THE SIZE OF THE OFFICE BUILDING THERE.

AND WE THINK THERE ARE A COUPLE OPPORTUNITIES THAT WE'LL CHAT ABOUT IN A, IN A BIT TO REDUCE THAT.

SO WITH THAT, WE CAME UP WITH SOME FINANCIAL MODELING, RIGHT? SO, UM, YOU KNOW, THE GOAL IS REALLY TO, WAS, YOU KNOW, WE GET ALL KINDS OF MOVING VARIABLES HERE.

NOW.

I WAS TRY TO LIKE TO SOLVE THESE PROBLEMS BY, YOU KNOW, ISOLATING IT DOWN TO ONE VARIABLE AT A TIME.

'CAUSE MULTI-VARIABLE CALCULUS WAS NEVER MY STRENGTH.

UM, WITH THAT, UH, WE SIMPLIFIED AND WE JUST COMPARED EACH, EACH PLAN TO THE PLANNING O OPTIONS AND THEN COMPARED DIFFERENT LAND USE, UH, USES SUCH AS SALE, LIKE A LONG-TERM GROUND LEASE, THE RELEASE OF THE EXISTING BUILDING CAMPUS.

UM, AND THEN WE CONSIDERED AS, AS AN ALTERNATIVE OPTION THAT HASN'T BEEN EXPLORED TO DATE, IS LEASING SOME OF THAT ADMINISTRATIVE,

[00:10:01]

UH, OFFSITE.

SO LOOKING AT LEASE, LEASE SPACE.

AND WITH THAT, YOU KNOW, THE BEST RESULT WAS REALLY THE, TO GET TO A COST NEUTRAL 'CAUSE THAT'S OBVIOUSLY OUR GOAL HERE IS TO TRY TO NOT COST THE RATE PAYERS ANYTHING BY THIS PLAN.

UH, THE CLOSEST WE'RE GETTING RIGHT NOW IS THE PLAN THREE, WHERE WE PUT EVERYTHING ONTO THE REDONDO SITE AND THEN LEASE SOME SPACE OFFSITE, LIKELY ACROSS THE STREET AT KILROY OR ELSE AT THE ADMIN OFFICE BUILDING.

WE'LL GET INTO THAT IN A SECOND.

AND THEN WE WOULD U UTILIZE THIS SITE.

AND THE SPRING STREET SITE IS LARGELY A GROUND LEASE OPPORTUNITY FOR MORE MODERN R AND D INDUSTRIAL, UM, WHICH WE THINK THERE'S A GREAT MARKET FOR.

SO THIS IS A LOT OF NUMBERS, BUT JUST TO SORT OF PROVE THAT WE RAN A BUNCH OF DIFFERENT SCENARIOS AND I THINK WE'VE RUN 10 OR 15 MORE AFTER, UH, AFTER PRODUCING THIS PRESENTATION.

WE'RE REALLY TRYING TO OPTIMIZE DOWN TO WHAT GETS TO COST NEUTRAL.

AND, UH, YOU KNOW, THE SCENARIO NINE HERE, WHICH IS WHAT I JUST DESCRIBED, IS GETTING AS CLOSE AS WE, WE HAVE TO DATE.

UM, AND YOU KNOW, THERE'S, THERE'S A LOT OF STUFF IN HERE, BUT BASICALLY, YOU KNOW, OVER THE 45 YEARS PERIOD, THE WAY WE LOOK AT AN OPERATING TERM HERE, YOU'D ACTUALLY BE SAVING MONEY BY DOING THIS PROJECT, AND YOU'RE VERY CLOSE TO COST NEUTRAL IN IN YEAR ONE.

AGAIN, LOTS OF BIG ASSUMPTIONS IN THESE NUMBERS.

THEY'RE VERY, VERY ROUGH, BUT WE THINK DIRECTIONALLY CORRECT 'CAUSE YOU KNOW, WE'RE TRYING TO SOLVE ONE VARIABLE AT A TIME.

JEFF, REAL QUICK, UH, WHAT IS THE PLUS AIRPORT? WHAT IS THE AIRPORT COMPONENT OF THAT THAT WOULD BE LEASING, UH, SOME OF THE OFFICE SPACE, SPACE AT, AT AIR, RIGHT? WE'LL, WE'LL GO THROUGH WHICH THOSE OPTIONS ARE IN MORE DETAIL HERE IN A SECOND.

UM, YOU KNOW, AGAIN, THIS IS REALLY JUST MEANT AS A SNAPSHOT FOR THOSE OF US WHO ARE A LITTLE MORE VISUAL THAN MAYBE NUMBERS ORIENTATED.

LIKE, LIKE I KNOW KEVIN LIKES THE NUMBERS, BUT YOU KNOW, IF YOU'RE A MORE VISUAL PERSON HERE, YOU, YOU SEE THAT THE NEW REVENUE, WHICH IS REALLY THE LEASE OF THE, OF THE SURPLUS LANDS, UH, IS THE BLACK LINE.

AND WHAT WE'RE TRYING TO DO IS KEEP OPERATING COSTS AND OPERATIONS UNDERNEATH THAT LINE.

SO AGAIN, YOU CAN SEE HERE THERE'S A COUPLE LITTLE SPIKES, BUT IN THE LONG TERM AFTER, YOU KNOW, THE, IF YOU BORROWED MONEY TO REPAY, ONCE THAT DEBT WAS REPAID, YOU'D BE MAKING MONEY IN THE SORT OF TAIL END OF THE CURVE HERE.

AND, YOU KNOW, AND YOU VERY CLOSE TO COST NEUTRAL THROUGHOUT THE TERM OF THE DEBT.

AND LOTS OF WORK TO DO HERE YET, YOU KNOW, AGAIN, FINALIZE THOSE PLANS, TRY TO MOVE THAT REVENUE LINE UP A LITTLE BIT, TRY TO MOVE YOUR COST LINE DOWN, THEN COME UP WITH A PLAN OF FINANCE THAT REALLY, REALLY SMOOTHS AND MATCHES THAT CURVE.

UM, SO I MENTIONED WE GET INTO A COUPLE OF OPTIONS.

SO THESE ARE A COUPLE OF OPTIONS THAT ARE IN THE MARKET RIGHT NOW AND COULD HOVER ABOUT 60,000 SQUARE FEET OF YOUR OFFICE NEED.

SO YOU'VE GOT ABOUT A HUNDRED THOUSAND SQUARE FOOT OR SO IDENTIFIED IN THE PLAN.

SOME OF THAT OFFICE REALLY DOES WANT TO BE WITHIN THE SITE.

YOU KNOW, THERE'S SOME, THERE'S SOME COMMON AREAS, THERE'S SOME WORK ROOMS, THERE'S SOME THINGS THAT REALLY NEED TO BE, UH, IN THE YARD, IF YOU WILL.

BUT THERE'S SOME THINGS LIKE WHAT WE'RE DOING HERE TODAY THAT COULD POTENTIALLY BE ACROSS THE STREET OR IN A MORE OFFICE TYPE AND FORMAT, MUCH LIKE YOU'RE OPERATING HERE AT THIS CAMPUS TODAY.

UM, SO WITH THAT, YOU KNOW, THE KI RUNOFF IS BUILDING ACROSS THE STREET.

UH, THIS IS KIND OF A, A ROUGH, UM, ESTIMATE OF WHAT THEY MIGHT CHARGE FOR.

UM, YOU KNOW, BOTH THIS SPACE, WHICH IS IMPORTANT FOR A COUPLE OF REASONS.

ONE, THIS IS A FULL GROSS LEASE.

AND SO THERE'S, IT COMES WITH AN OPERATING COST.

THERE WILL BE OPERATING COST INCREASES OVER TIME.

IF YOU DID THIS.

THERE'S ALSO, YOU KNOW, THE ABILITY TO RENT PARKING.

AND ONE OF THE BIGGEST CHALLENGES WITH PLAN NUMBER THREE RIGHT NOW IS YOU'RE BUILDING A 720 SPACE PARKING STALL.

LIKE THAT'S A BIG SIX STORY PARKING STRUCTURE.

IT'S VERY, VERY EXPENSIVE.

SO IF YOU CAN LEASE PARKING ACROSS THE STREET AND YOU CAN LEASE SPACE ACROSS THE STREET, IT TURNS OUT IN THIS MARKET IT'S BETTER TO LEASE THAN TO BUY.

AND YOU KNOW, AS YOU KNOW, EVEN BEING A HOMEOWNER, THAT THAT EQUATION IS GOING TO CHANGE FROM TIME TO TIME.

THERE'S CERTAINLY BENEFITS TO OWNING IT.

IT'S A MORE PERMANENT STRUCTURE.

IT'S A MORE PERMANENT COST.

BUT IN, YOU KNOW, JUST FROM A MATH STANDPOINT, TODAY, IT IS CHEAPER TO RENT THAN TO BUY.

SO TO THE EXTENT WE CAN MOVE, UM, SOME OF THE ADMINISTRATION OFFSITE, IT IS COST POSITIVE TO THE PROJECT.

UM, A LITTLE LESS EXPENSIVE OPTION IS THE, UH, AIRPORT BUILDING.

IT'S CURRENTLY OWNED BY LONG BEACH TRANSIT.

SO ONE OF THE ADVANTAGES HERE IS THAT IT'S, YOU KNOW, A GOVERNMENT TO GOVERNMENT PARTNERSHIP, IF YOU WILL.

IT'S ALL WITHIN THE CITY FAMILY.

UM, AND, UH, MAYBE HAS A LITTLE BIT MORE, HAS FREE PARKING, WHICH IS SUPER HELPFUL.

AND THEN IT'S ALSO, YOU KNOW, POTENTIALLY HAS, AGAIN, WITHIN THE FAMILY, A LITTLE BIT LESS LONG-TERM RISK IN TERMS OF RENT COST ESCALATIONS.

UM, SO WITH THAT, JUST COMPARING AGAIN, BACK TO MY, YOU KNOW, UH, BUILDING VERSUS, UH, RENTING SCENARIO.

SO THIS IS THE LONG-TERM, UH, PLAN.

ON, ON THE, ON THE LEFT HAND SIDE, YOU'LL SEE IF YOU TOOK THE SURPLUS LANDS AND YOU SOLD THEM, YOU GET THAT BIG SPIKE UP THERE, IT REDUCES THE OVERALL PROJECT COST, BUT YOU DON'T HAVE A LONG-TERM REVENUE LINE TO, TO COME AGAINST.

SO YOU'RE ABLE TO REDUCE THE PROJECT COST TO SOME EXTENT.

BUT STILL, AT THE END OF THE DAY, YOUR, YOUR NET IMPACTS ARE NOT COST NEUTRAL.

IN FACT, THEY'RE, THEY'RE QUITE EXPENSIVE.

IF YOU'RE RENTING OFFSITE AND YOU'RE LEASING THE LAND HERE JUST WITH, YOU KNOW, SOME INFLATION ASSUMPTIONS AND LOOKING AT

[00:15:01]

SO WE KIND OF THINK THAT'S THE RIGHT DIRECTION.

UM, ADDING TO THAT, UH, FOR THE SITE REDEVELOPMENT IS A SURPLUS LANDS ACT CONSIDERATIONS.

SO, YOU KNOW, IF, UH, I DON'T KNOW HOW FOLKS ARE FAMILIAR WITH THE SURPLUS LANDS ACT, BUT THE STATE OF CALIFORNIA SAID, HEY, WE'VE GOT AN AFFORDABLE HOUSING PROBLEM.

SO ANY SUBDIVISION OF THE STATE, INCLUDING, YOU KNOW, THE CITY OR A DEPARTMENT OF THE CITY, IF YOU HAVE ANY LAND THAT YOU DECLARE SURPLUS, YOU MUST FIRST OFFER IT TO ANY GOVERNMENTAL AGENCY OR ANY NOT-FOR-PROFIT THAT WOULD LIKE TO BUILD HOUSING.

UM, SO IT DOESN'T SAY YOU HAVE TO TAKE LESS THAN FAIR MARKET VALUE FOR IT, BUT IF YOU GO THROUGH THAT PROCESS, YOU HAVE TO DEED RESTRICT THAT ANY AFFORDABLE HOUSING WOULD AT A MINIMUM BE 15%.

ANY NEW HOUSING THAT WAS BUILT WOULD BE A MINIMUM 15% AFFORDABLE, WHICH, YOU KNOW, IMPACTS THE VALUE OF THE LAND FAIRLY SIGNIFICANTLY.

UM, A COUPLE OF EXEMPTIONS TO THAT LEASES LESS THAN 15 YEARS LEASES OF EXISTING BUILDINGS.

UH, AGAIN, REDEVELOPMENT, IF YOU JUST, IF YOU JUST BITE THE BULLET AND SAY, WE'RE GONNA HAVE 25% AFFORDABLE OR MORE, OR OTHER VALID LEGAL RESTRICTIONS AND EXCHANGES.

SO WE'RE REALLY KEYING ON, ON THE FIRST ONE.

AND THAT IS, THAT IS, AGAIN, WITH AN INDUSTRIAL REDEVELOPMENT AND THE LEASE TERMS THAT YOU TYPICALLY SEE IN INDUSTRIAL LEASES, WE THINK WE COULD REDEVELOP THIS SITE, UH, UNDER, WITH AN UNDER 15 YEAR LEASE IN THIS PARTICULAR LOCATION.

AND THE LOCATION OF SPRING STREET OFFICE AND INDUSTRIAL TEND, YOU KNOW, WHEN I SAY OFFICE LIKE R AND D, YOU KNOW, YOUR SPACE BEACH TYPE USERS, THOSE TEND TO BE GETTING KIND OF PRETTY GOOD RENTS AND THEY HAVE A LIMITED CONSTRUCTION BUDGET.

SO YOUR ACTUAL LAND RESIDUAL IS PROBABLY AS HIGH OR HIGHER WITH, WITH, UM, INDUSTRIAL IN THESE LOCATIONS THAN IT IS WITH RESIDENTIAL, WHICH IS GOOD NEWS RELATIVE TO THE SURPLUS LANDS ACT.

EVEN IF YOU SOLD IT AGAIN, THAT DEED RESTRICTION MAY NOT BE AS IMPACTFUL AS IT WOULD BE IF YOU'RE SELLING IT TO RESIDENTIAL.

YES, GO AHEAD.

UM, LOSING MY VOICE, UM, THIS IS SUCH A CONFUSING ISSUE AND HOW IT RELATES TO IF WE SELL THE PROPERTY VERSUS IF WE LEASE IT.

CORRECT.

SO UNDER BOTH SCENARIOS, WE STILL HAVE AN OBLIGATION FOR AFFORDABLE HOUSING IT, BUT IF IT'S UNDER 15 YEARS ON THE LEASE, WE DON'T, I JUST HELP ME.

SO IF YOU SELL THE PROPERTY OR YOU LEASE IT FOR A LONG TERM, LIKE A LONG TERM LAND LEASE, LIKE A 99 YEAR GROUND LEASE, WHICH WOULD BE A TYPICAL SCENARIO THAT SAY A MULTIFAMILY DEVELOPER WOULD BE LOOKING FOR, BECAUSE THEY'RE GONNA PUT A SIGNIFICANT AMOUNT OF, OF, OF INVESTMENT INTO THE IMPROVEMENTS, RIGHT? SO YOU DON'T, THEY WOULDN'T WANT A SHORT TERM LEASE 'CAUSE THEY WOULDN'T BE ABLE TO AMORTIZE THE FINANCING OVER THAT PERIOD OF TIME.

RIGHT.

SO UNDER THOSE SCENARIOS, THE STATE CONSIDERS THAT A SALE, AND IF YOU'RE SELLING IT, YOU HAVE TO GO THROUGH A PROCESS, YOU HAVE TO DECLARE IT, YOU KNOW, A SURPLUS LANDS, AND THAT MEANS YOU HAVE TO THEN PUT OUT A 60 DAY NOTICE TO ALL, NOT-FOR-PROFITS, NOT, I MEAN HOUSING DEVELOPERS, BUT ALSO LIKE SCHOOL DISTRICTS OR ANYBODY ELSE WHO COULD POTENTIALLY WANT THE LAND.

YOU HAVE TO THEN ENTER INTO, IF ANY OF THEM EXPRESS INTEREST, ENTER INTO GOOD FAITH NEGOTIATION WITH THEM.

AND THAT COULD TAKE UP TO 90 DAYS.

AGAIN, THERE'S NOTHING IN THE ACT THAT SAYS YOU HAVE TO SELL IT FOR LESS THAN FAIR MARKET VALUE, BUT YOU DO HAVE TO GO THROUGH THE PROCESS.

IF AT THE END OF THAT PROCESS YOU ARE NOT COMING TO TERMS, THEN YOU CAN OFFER THE LAND FOR SALE AND MARKET.

HOWEVER, IT HAS A DEED RESTRICTION THAT ANY FUTURE RESIDENTIAL IS AT LEAST 15% AFFORDABLE.

SO THAT'S WHAT THE RULES SAY.

SO THEN THAT WOULD LIMIT THE NUMBER OF PEOPLE THAT WANNA BUY THAT LAND, CORRECT? YEAH.

THE VALUE AT WHICH THEY WOULD BUY IT, RIGHT? HAS, YOU KNOW, YOU'RE TAKING A 15% HIT OFF THE TOP LINE RELATIVE TO, YOU KNOW, YOUR, YOUR RENTS.

IT'S NOT QUITE THAT SIMPLISTIC, BUT IT DOES DRAMATICALLY REDUCE THE LAND RESIDUAL THAT YOU WOULD GET.

RIGHT.

NOW IF YOU KEEP IT AS WAREHOUSES, THERE'S ZERO HOUSING, SO THEREFORE, YOU KNOW, THAT IS, IT'S LESS IMPACTFUL, BUT YOU COULD DECLARE IT EXEMPT SURPLUS LAND, WHICH MEANS THE LEAST THAT YOU'RE GONNA ENTER INTO IS LESS 15 YEARS OR LESS.

WELL, THAT WOULD REQUIRE SOME TYPE OF A PARTNERSHIP, EITHER IMPROVING THE BUILDINGS THAT YOU HAVE OR DEMOLISHING 'EM AND BUILDING A NEW CLASS A WAREHOUSE.

AND IT IS GONNA BE A LITTLE BIT MORE COMPLEX FROM WHAT THE PARTNERSHIP LOOKS LIKE, BUT IT WOULD GET YOU OUT OF THE SURPLUS LANDS ACT REQUIREMENTS.

THAT'S GREAT.

SINCE WE'RE TALKING ABOUT IT, THAT, THAT WAS MY QUESTION IS, UH, WHETHER OR NOT WE WOULD BE ON THE HOOK TO REDEVELOP, UH, THE SURPLUS LAND OR WOULD WE HAVE AN AGREEMENT IN PLACE BEFORE WE EVEN START THIS WHOLE PROCESS WITH SOMEONE WHO WOULD WANT TO TAKE THIS LAND AND DO SOMETHING TO THEIR, TO THEIR SPECIFICATIONS? RIGHT.

I THINK BECAUSE YOU WOULD, YOU, YOUR FIRST DECISION WILL BE, DO WE DECLARE IT SURPLUS OR EXEMPT SURPLUS? IF YOU DECLARE IT EXEMPT SURPLUS, YOU CANNOT GO TO THE MARKET WITH A LEASE OF LESS TERM OF LESS OF MORE

[00:20:01]

THAN 15 YEARS.

RIGHT.

SO WOULD WE IDENTIFY THOSE FOLKS AT THAT TIME? WE WOULD, WE WOULD, WE WOULD DO SOME, YOU KNOW, WE WOULD IDENTIFY THOSE FOLKS BEFORE WE WOULD MAKE THAT DECLARATION, BUT WE WOULDN'T GO THROUGH A FORMAL PROCESS.

THE FORMAL PROCESS WOULD BE AFTER YOU MAKE THAT DECLARATION, THE NUMBERS THAT WE'VE SEEN THUS FAR, UM, DO THOSE INCLUDE PUTTING UH, PUTTING THIS, LET'S SAY THIS, WE GO WITH THE EXEMPT, UH, ON, ON THIS CAMPUS HERE.

UM, DOES THAT INCLUDE REDEVELOPING THIS OR, OR DEMOLISHING EVERYTHING OR ARE THOSE NUMBERS NOT INCLUDED IN THE ROUGH NUMBERS THAT WE'VE SEEN? YEAH, THERE AREN'T DEMO DEMOLITION COSTS INCLUDED RIGHT THERE, OR THE REDEVELOPMENT COSTS.

THAT'S GONNA BE A NEXT LEVEL OF LIKE, WHAT IS THE BEST WAY TO APPROACH IT? AND THERE ARE A NUMBER OF USES THAT, THAT COULD BE, UM, PROFITABLE FOR THIS SITE.

WE JUST NEED TO SET THAT OUT A LITTLE MORE DETAIL.

UM, YEAH, BUT THE BASIC CONCLUSION WAS, LOOK, IT'S BETTER TO JUST LEASE YOUR LAND THAN TRY TO LEASE THESE EXISTING BUILDINGS.

UM, OKAY.

SO THIS WAS A LITTLE, ANOTHER MORE DETAIL ON THE, ON THE PROCESS, BUT AGAIN, AS I EXPLAINED, IT'S NOT JUST AFFORDABLE HOUSING DEPARTMENTS, IT'S PARKS DEPARTMENTS, IT'S SCHOOLS, THE 90 DAY NEGOTIATION, AND THEN YOU THE FUTURE DEED RESTRICTION IF THOSE FAIL.

UM, OKAY, SO ECONOMICS RELATIVE TO THE LAND.

SO BASE CASE WAS SALE AGAIN, YOU HAD AN APPRAISAL DONE IN 2024 THAT WAS, UH, THAT SHOWED ABOUT $110 MILLION BETWEEN THE TWO SITES.

UM, AND, YOU KNOW, THEN WE TESTED THAT AGAINST SOME MORE CURRENT LAND RESIDUALS.

AS YOU CAN SEE, WHEN YOU CONSIDER IT 15 TO 25% AFFORDABLE RESTRICTIONS, IT HAS A FAIRLY DRAMATIC, UH, IMPACT IN THE LAND RESIDUALS.

AND AGAIN, THIS IS, THIS IS JUST BACK OF THE ENVELOPE MATH, YOU KNOW, NOT REALLY MARKET TESTED, BUT THE INDUSTRIAL, UH, IS, SEEMS TO BE THE HIGHEST AND BEST USE FROM OUR ANALYSIS.

UM, AND AGAIN, YOU KNOW, THE SALE PROCESS WOULD, WOULD COME AFTER A NEW BUILDING INTRODUCED DEATH.

SO, SO YOU HAVE SOME TIMELINE ASSOCIATED WITH THIS RIGHT AS WELL, BECAUSE YOU'RE GONNA BE IN THIS HERE FOR A WHILE, SO WE'RE MAKING PREDICTIONS OF WHAT THE MARKET IS GONNA LOOK LIKE IN THREE YEARS.

THAT'S ANOTHER SORT OF, YOU KNOW, PART OF THE ASSUMPTIONS.

UM, SO THEN WE LOOKED AT THE GROUND LEASE SCENARIOS.

AND THIS IS JUST REALLY, AGAIN, VERY BASED ON AN MORE ACADEMIC LIKE ANALYSIS OF WHAT THE GROUND LEASE WOULD DO, NOT A TRUE JV REDEVELOPMENT, BUT THERE ARE MAYBE AS WE, AS WE GO THROUGH THE NEXT STEP, WE WILL IDENTIFY WHAT JV ECONOMICS COULD START TO LOOK LIKE THROUGH SOME TYPE OF A PUBLIC PRIVATE PARTNERSHIP.

AND, UM, YOU KNOW, THE, THE 40 YEAR CASH FLOW AFTER DEBT LOOKS PRETTY GOOD, RIGHT? IT STARTS TO LOOK LIKE THAT MIGHT BE THE RIGHT WAY TO GO, UM, AS OPPOSED TO JUST A LONG, A LONGER TERM, YOU KNOW, GROUND LEASE TO A DEVELOPER.

AND WE THINK THERE'S MAYBE SOME CREATIVE PARTNERSHIPS THERE.

UH, THE CONSIDERATIONS OBVIOUSLY WITH THE GROUND LEASES, YOU KNOW, AS I SHOWED THAT CURVE EARLIER, THE RATE KIND OF CAN GO UP OVER TIME.

AND CERTAINLY THAT IS SOMETHING YOU WOULD SEE PRETTY TYPICAL IN A, IN A GROUND LEASE.

AND IT DOES PROVIDE OPTIONS ALSO WITH THE 15 YEARS OR LESS FOR THE CITY TO COME BACK TO THE PROPERTY IF YOU'VE, YOU KNOW, OUTGROWN IT OR YOU HAVE OTHER NEEDS.

I MEAN, ONE OF THE CONCERNS ABOUT SELLING THE PROPERTY IS YOU, YOU NEVER CAN GET IT BACK.

AND IN A 99 YEAR LEASE THAT, THAT, THAT IS EQUIVALENT TO SALE, IT'S A LONG TIME BEFORE YOU CAN ACCESS THAT PROPERTY.

THERE, THERE ARE JV STRUCTURES THAT WOULD ALLOW YOU TO HAVE EARLIER RIGHTS TO COME BACK TO THE PROPERTY.

SHOULD, SHOULD THAT BE SOMETHING THE DEPARTMENT WANTS TO DO.

UM, YEAH, AND AS WE MENTIONED, IT DOESN'T INCLUDE THE DEMO COST.

UM, AND THE SHORTER TERM LEASES ARE OBVIOUSLY RELATIVE TO THE SA, UH, AND THEN OPTION C WE LOOKED AT IS, WELL, CAN WE MAKE USE OF THE EXISTING BUILDINGS? BECAUSE OBVIOUSLY THAT'S, YOU KNOW, FROM AN ENVIRONMENTAL STANDPOINT, YOU WOULD, WOULD LOVE TO MAKE USE OF THE EXISTING BUILDINGS, UM, YOU KNOW, IF, IF IT'S CHEAPER FOR YOU TO GO RENT, UH, OFFICE SPACE THAN TO DEVELOP IT, THEN BEING, BEING IN THE BUSINESS OF BEING AN OFFICE DEVELOPER, MAYBE NOT THE BEST.

AND THAT CERTAINLY PROVES OUT IN THE MATH.

UM, THERE MAY BE SOME OPPORTUNITIES WITH THE YARD AND THE WAREHOUSE KIND OF, ESPECIALLY AT THIS SITE THAT'S GOT A FAIR BIT OF VALUE IN THE IMPROVEMENTS.

WE NEED TO VET THAT A LITTLE BIT FURTHER.

BUT AT THE END OF THE DAY, YOU KNOW, THE ESTIMATED RENT AND, AND WHEN YOU CONSIDER THE AMOUNT OF INVESTMENT YOU'D HAVE TO MAKE IN THESE BUILDINGS TO MAKE THEM LEASEABLE, YOU WOULD HAVE TO FIX THE DEFERRED MAINTENANCE THAT YOU'RE TRYING TO AVOID IN THE BEGINNING.

UH, AND YOU'D HAVE TO SORT, YOU KNOW, TURN THEM INTO WHITE SPACE AND THEN INVEST IN THETIS AND THEN YOU'RE RENTING TO PEOPLE IN THE MARKET THAT ARE SHORT TERM BY NATURE.

SO, YOU KNOW, YOU'RE, YOU'RE GOING INTO A BUSINESS THAT YOU MAY OR MAY NOT WANT TO BE IN.

UM, SO THAT IS, YOU KNOW, WHEN WE, WHEN WE KIND OF LOOK THROUGH THAT PROCESS, IT SEEMED LIKE AT A MINIMUM YOU GET YOURSELF BACK TO THE IDEA OF A JV LIKE WORKING WITH A DEVELOPER TO SAY, HOW MUCH OF THESE SITES DO WE WANNA USE? WHAT CAN WE SAVE? WHAT'S THE HIGHEST AND BEST USE FOR IT? UH, WHAT ARE OUR TRUE CONSTRUCTION AND DEMO COSTS? AND THEN WE KIND OF RERUN THESE ECONOMICS AND SEE WHERE, WHERE DO WE LOOK FROM A GROUND LEASE STANDPOINT.

[00:25:01]

SO YOU PROBABLY HAVE MORE VALUE IN THE INHERENT LAND THAN YOU DO IN THE STRUCTURES THAT ARE HERE TODAY.

AND THAT'S HOW IT GETS US TO OPTION D REALLY, WHICH IS OUR KIND OF P 3D DEVELOPMENT, IF YOU WILL.

SO IT WILL BE, YOU KNOW, FINDING THE RIGHT DEVELOPER THROUGH, THROUGH A PROCESS AT SOME POINT IN TIME, AGAIN, AFTER WE'VE MADE THESE DECISIONS TO DECLARE IT, THIS PROJECT WANTS TO GO FORWARD AND YOU'VE DECLARED IT EXEMPT SURPLUS AND THERE'S A LONG TIMELINE BETWEEN NOW AND, YOU KNOW, START OF CONSTRUCTION.

UH, THE BASIC PREMISE WOULD BE THE DEVELOPER WOULD FINANCE THE VERTICAL CONSTRUCTION, SO THE DEMO AND THE, THE BUILDING OF THE NEWBUILDING FACILITIES.

AND THEN THE DEVELOPER AND CITY WOULD SHARE IN THE PROFITS THROUGH SOME SORT OF A WATERFALL, UM, ALL TO BE NEGOTIATED, ALL TO BE FOUND WITH THE RIGHT PARTNER.

ALL A LOT OF PROCESS BETWEEN HERE AND THERE, BUT, YOU KNOW, THE BACK OF THE ENVELOPE, VERY ROUGH ECONOMICS AS I HAVE OVER THERE ON THE LEFT, DO LOOK, YOU KNOW, GOOD OVER TIME, UH, IN TERMS OF HAVING INCREASED RENTS AND CASH FLOWS.

SO JUST TO BACK UP FOR ONE SECOND, I WANNA SAY NONE OF THAT JV STUFF IS IN THIS ANALYSIS THAT IS A WAY TO IMPROVE THIS CURVE.

THIS CURVE IS JUST ASSUMING THE APPRAISED VALUE, WHAT LAND IS WORTH GOING FORWARD OVER TIME.

UM, SO P THREE, I WANTED TO JUST SPEND A MINUTE ON WHAT, WHAT P THREE IS.

'CAUSE I KNOW THAT WAS PART OF OUR LAST CONVERSATION.

AND OBVIOUSLY THE LONG BEACH CIVIC CENTER WAS A GREAT P THREE.

UM, YOU HAVE OTHERS IN THE CITY.

UM, AND I THINK THERE'S, THERE REALLY ARE KIND OF TWO TYPES, AS I'VE SEEN OVER TIME.

ONE IS, YOU KNOW, A PERFORMANCE BASE, LIKE HOW DO WE LEVERAGE PRIVATE SECTOR RESOURCES TO GET OUR ASSETS BUILT QUICKLY, TO BE HAVE THEM MAINTAINED WELL, YOU'RE REALLY CONTRACTING FOR A SERVICE AND TRYING TO DO THAT IN THE MOST EFFICIENT WAY POSSIBLE.

AND THERE'S ANOTHER WAY YOU'RE TRYING TO LEVERAGE PRIVATE SECTOR RESOURCES TO GET THE MOST OUTTA ASSETS IN THIS CASE, YOU KNOW, LAND THAT YOU'RE LOOKING FOR.

AND THAT REALLY, IF YOU LOOK AT THE RDA SITES, YOU LOOK AT DOUGLAS PARK, THOSE ARE TYPES OF PUBLIC PRIVATE PARTNERSHIPS THAT YOU'VE SEEN IN THE CITY THAT HAVE BEEN MORE ON THAT LADDER.

WE, WE WILL PROBABLY HAVE SOMETHING OF A HYBRID HERE BETWEEN THE TWO, BUT I JUST WANTED TO MAKE THAT DISTINCTION THAT THOSE ARE REALLY, YOU REALLY, BEFORE WE WOULD GO FOR PROCUREMENT, HAVE TO DEFINE VERY WELL WHAT IT IS WE WANT FROM A PRIVATE SECTOR PARTNER IN TERMS OF PERFORMANCE AND OR, YOU KNOW, UM, INCOME.

UM, THERE ARE SEVERAL PRECEDENTS, OF COURSE IN CALIFORNIA.

UM, THE DESIGN BUILD, FINANCE, OPERATE AND MAINTAIN MODEL, WHICH WAS LONG BEACH CIVIC CENTER, LONG BEACH COURTHOUSE.

SEVERAL OTHER PROJECTS HAVE BEEN INVOLVED WITH.

UM, THEY USE PRIVATE EQUITY.

THEY'RE VERY MUCH ABOUT PERFORMANCE BASED CONTRACTS.

IT'S, IT'S VERY MUCH, UH, TRYING TO MINIMIZE WHAT THE PUBLIC AGENCY IS GOING TO PAY A PRIVATE CONTRACTOR DEVELOPER FOR THEIR EXISTING ASSETS.

UM, YOU CAN THEN ADD, YOU CAN TAKE SOME OF THE PRIVATE EQUITY OUT OF IT TO REDUCE YOUR FINANCING COSTS USING A TAX EXEMPT STRUCTURE.

AND WE'VE SEEN THAT DONE MANY TIMES.

IT REDUCES THE AMOUNT OF RISK TRANSFER A LITTLE BIT AND THE PERFORMANCE GUARANTEES YOU CAN GET.

BUT, UM, THERE'S A, THERE'S A PLETHORA OF PROJECTS THAT HAVE DONE THAT, THAT MODEL.

AND IF YOU, WE DID WANT TO ENTER INTO PERFORMANCE BASED CONTRACTING, YOU KNOW, I THINK WE WOULD, WE WOULD LOOK HARD AT WHAT THE RISK TRANSFER THAT WE'RE LOOKING TO ACHIEVE HERE IS AND WHAT PERFORMANCE WE'RE LOOKING TO ACHIEVE AND SAY, CAN WE ACCESS THAT WITH TAX EXEMPT FINANCING TO LOWER THE OVERALL PROJECT COST.

UM, SO WITH THAT, OUR NEXT STEPS, AGAIN, WE'RE GONNA REFINE THE PROGRAM AND COST ESTIMATES.

SO WE'RE WORKING WITH THE ARCHITECT NOW TO SAY, DO WE REALLY NEED 250,000 SQUARE FEET? I MEAN, IN 2024, THAT WAS A ASK FROM ALL THE DEPARTMENTS.

IT INCLUDED A GROWTH FACTOR, IT INCLUDED YOUR EXISTING OFFICE STANDARDS, IT INCLUDED, YOU KNOW, SEPARATE WAREHOUSING COMPONENTS FOR EACH OF THE FUNDS, YOU KNOW, OR EACH OF THE DEPARTMENTS.

SO YOU ARE NOW ONE CONSOLIDATED DEPARTMENT.

IF YOU'RE GONNA BE ON ONE CAMPUS, HOW CAN WE START TO REALIZE SOME OF THOSE EFFICIENCIES? UM, WE'RE LOOKING HARDER AT THE REUSE PLANS.

SO, YOU KNOW, AGAIN, AS I MENTIONED, WE COME UP WITH A JV OPTION, REALLY, WHAT DO THOSE ECONOMICS START TO LOOK LIKE? UH, WHAT IS THE HIGHEST AND BEST USE? AND THEN FROM THOSE TWO THINGS, WE CAN ESTABLISH AFFORDABILITY LIMITS.

SO NOW WE WOULD SAY, OKAY, THIS IS WHAT IS COST NEUTRAL.

THIS IS WHAT YOU CAN AFFORD AS A PROJECT.

WE HAVE TO THEN WORK ON WHAT'S THE RIGHT FUND ALLOCATION METHODOLOGY.

SO ONE FUND ISN'T SUBSIDIZING THE OTHER.

AND THEN WORKSHOP THE PROCUREMENT ALTERNATIVES WITH, WITH THIS GROUP AND WITH THE FULL BOARD, UH, AND THE STEPS, THE NUMBER ONE STEP REFINING THE PROGRAM AND THE COST ESTIMATES.

UM, I'M GLAD THAT WE'RE REVISITING THAT BECAUSE, UH, UH, YOU SPEND ANY TIME DOWN AT THE NEW CIVIC CENTER AND, AND UH, WALK, WALK THE HALLS AND IT FEELS LIKE A GHOST TOWN.

IT FEELS LIKE THERE'S WAY MORE SPACE THAN ANYBODY COULD EVER POSSIBLY USE IN ANY SORT OF EXPANSION,

[00:30:01]

UH, MODEL.

SO HOPEFULLY WE ARE RIGHT SIZING, NOT, UH, MAX SIZING.

YEAH, I MEAN, AND IT'S INTERESTING YOU SAY THAT.

'CAUSE I HEAR FROM CITY STAFF THAT THEY'RE NEEDING TO LEASE SPACE OFF CAMPUS 'CAUSE THERE ISN'T ENOUGH ROOM.

SO , YOU WOULDN'T KNOW IT BY WALKING THE HALLS.

IT'S CRAZY.

APPRECIATE THAT.

OKAY, TURN IT BACK TO KEVIN.

JEFF, DO YOU HAVE ANY QUESTIONS, JEFF? NO.

ALRIGHT.

OH, I WAS JUST GONNA TO ADD ON TO SOME OF WHAT JEFF WAS SAYING.

YOU KNOW, UM, HE, HE PRESENTED, UH, WAS ANY HE CAVEATED VERY MUCH.

THESE ARE, THESE ARE ESTIMATES AT THIS POINT.

WE HAVEN'T DUG REALLY HARD INTO THESE NUMBERS, BUT IT IS, UH, YOU KNOW, LOOKING LIKE THERE'S OPTIONS THAT COULD BE COST NEUTRAL.

SO THAT'S, UH, A VERY BIG POSITIVE.

UM, I WOULD SAY ALSO THAT AS WE DISCUSS THIS AND, AND WORK WITH OUR TEAM AND WORK WITH YOU AS THE BOARD, YOU KNOW, IT, IT'S, THERE'S COST EFFICIENCY AND THEN THERE WE HAVE TO ALSO LOOK AT WHAT'S THE MOST OPERATIONAL EFFICIENT.

SO RUNNING SPACE MAY BE, UH, THE MOST COST EFFECTIVE WAY OF, OF HANDLING IT, BUT I DON'T KNOW IF OPERATIONALLY THAT MAKES THE MOST SENSE.

AND THEN KIND OF PIGGYBACK ON YOUR COMMENT THERE, YOU KNOW, 45 YEARS IS A LONG TIME.

I HAVE NO IDEA WHAT THE OFFICE WORK ENVIRONMENT WILL LOOK LIKE IN 10, 15 YEARS FROM NOW.

SO ONE OF THE IDEAS OF LEASING AND THE FACT THAT WE HOLD ONTO OUR LAND AND MAYBE RENT, UH, OFFICE SPACE, IT GIVES US FLEXIBILITY DOWN THE ROAD IF WE HOLD ONTO THOSE PROPERTIES.

SO MAYBE, YOU KNOW, AFTER THOSE 15 YEARS, IF WE NEED TO BUILD, UH, ADDITIONAL OFFICE SPACE, THAT OPTION STILL IS AVAILABLE TO US.

JUST WANTED TO THROW THAT IN AT THE END.

AND, UH, IF YOU GUYS HAVE ANY COMMENTS, JEFF AND I ARE HERE TO, I REALLY LIKE WHAT YOU'RE SAYING, UM, WHAT YOU JUST SAID RECAPPING, ERIC, THANK YOU FOR THAT.

IT'S JUST SO IMPORTANT.

45 YEARS IS A REALLY LONG TIME, AND I LIKE THE IDEA OF KEEPING, KEEPING OUR LAND AS AN OPTION, BUT LEASING IT OUT FOR, YOU KNOW, FINANCING OR WHATEVER TO, TO HELP US WITH ALL THESE EXPENSES.

BUT SO MANY THINGS TO CONSIDER.

I KNOW THAT IT'S VERY, VERY FUZZY IN TERMS OF THE PREMISES THAT ARE MADE.

I APPRECIATE HEARING THOUGH WHAT THOSE PREMISES ARE AND HOW THEY'RE BEING REFINED AND NARROWED TO BE AS ACCURATE AS POSSIBLE, WHICH IS NOT EASY.

I, UM, BUT, BUT IT DOES POINT IN A DIRECTION AND IT'S HELPING US TO NARROW THE FIELD AND UNDERSTAND WHAT IS THE MOST PRUDENT THING TO DO TO MEET OUR NEEDS.

SO THANK YOU KEVIN.

THANKS TO THE TEAM.

THANK YOU FOR ALL YOUR WORK.

THERE'S A LOT OF WORK HERE.

THERE'S A LOT.

I FEEL LIKE WE'RE IN CAPABLE HANDS.

UM, I JUST WANNA NEEDLESSLY REMIND EVERYONE THAT THE, THE GOAL, UH, WITHIN THIS FISCAL YEAR, UH, FROM THE, UH, DIRECTION FROM THE BOARD WAS, UH, GET US TO A POINT WHERE WE CAN, WE CAN DECIDE ON A FRAMEWORK, UM, NOT, YOU KNOW, UM, HOW MANY OFFICES AND, AND HOW MANY PARKING SPACES, BUT THE GENERAL FRAMEWORK.

SO, UM, THAT IN MIND, I, I SEE WHAT THE NEXT STEPS ARE.

UM, I BELIEVE WE HAVE TWO MORE MEETINGS BEFORE THE END OF THE YEAR.

IS THAT RIGHT? UM, SO CAN YOU JUST SPEAK REAL QUICKLY TO WHAT THE, WHAT THE TEAM'S GOALS ARE TO PRESENT TO THE COMMITTEE AND WHEN WE, UH, MIGHT GO TO THE, THE OVERALL BOARD FOR APPROVAL? THAT'S, UH, THAT'S ACTUALLY ONE OF THE GOALS OF THIS, UH, EXCUSE ME, OF THIS PRESENTATION.

UM, IS IF THE COMMISSION, IF THE, UH, IF THE COMMISSION IS READY, WE WOULD LIKE TO PRESENT THIS ITEM TO THE FULL BOARD AND GET ADDITIONAL INPUT.

UH, 'CAUSE MAYBE SOME OF THE BOARD MEMBERS MAY NOT BE AS, AS AWARE AS WE HAVE, UH, IN, IN THE PROCESS.

UM, SO WE, WE ARE TRYING TO POSSIBLY SCHEDULE, UH, THIS MEETING TO THE SECOND MEETING IN MAY FOR THE FULL BOARD TO, TO HEAR THE UPDATE.

UM, THE OTHER THING THAT, YOU KNOW, WE WILL WORK, UH, QUITE EXTENSIVELY ON IS, YOU KNOW, ITEM NUMBER THREE, ESTABLISHING AN AFFORDABILITY LIMIT.

UM, THAT, THAT PLAYS A KEY ROLE INTO ALL OF THIS.

YOU KNOW, BECAUSE WE HAVE THREE DIFFERENT UTILITIES, GAS, WATER, AND SEWER.

YOU KNOW, SEWER AND WATER ARE DETECTED BY PROP TWO 18 AND GAS, YOU KNOW, FROM THE PRIOR PRESENTATION YOU'VE SEEN HAS SOME FINANCIAL LIMITATIONS.

SO THAT'S AN ANALYSIS THAT WE WOULD HAVE TO THOROUGHLY SEE WORKING WITH OUR FINANCE GROUP AS TO HOW THIS CAN POSSIBLY, YOU KNOW, BE ACHIEVED.

SO WE, WE PLAN TO BRING THIS ITEM TO THE BOARD.

AND DURING THE MAY MEETING MEETING, UH, SO FAR WE ARE ALSO THINKING OF THINK, UH, BRINGING THIS ITEM ORIGINALLY WE HAVE IT SCHEDULED FOR THE JUNE FINANCE MEETING AS

[00:35:01]

WELL.

UM, AND WE HAVE ONE MORE PLANNING MEETING THAT WE CAN PRESENT THIS ITEM.

UH, SO WE'LL, YOU'LL GET AT LEAST TWO COMMITTEE MEETINGS THAT WILL COME BACK WITH AN UPDATE AND AT LEAST TWO MORE BOARD MEETINGS WHERE WE WILL, YOU KNOW, UH, PRESENT THIS ITEM.

ITEM NUMBER ONE, UH, APPROVE THE FEBRUARY 5TH, 2026 PLANNING COMMITTEE MEETING MINUTES.

GREAT.

UM, SO I'M ASSUMING THE, UH, PRESENTATION TO THE BOARD MEETING AT THE SECOND MEETING IN MAY WILL BE, UH, EDUCATION ONLY WITHOUT YET RECOMMENDATIONS? CORRECT.

OR, OR EVEN IT'S MORE EDUCATIONAL.

UH, SUE, ARE THERE ANY PUBLIC COMMENTS? RIGHT? UM, ANY COMMISSIONER COMMENTS? NO, UH, SO ON THE MOTION, ALL THOSE IN FAVOR SAY AYE.

AYE.

AND NONE OPPOSED.

THANK YOU VERY MUCH APPRECIATE ALL THE WORK THAT THE TEAM IS DOING AND KEEP IT UP.

UH, OKAY.

SO LET'S JUMP BACK INTO ORDER OF THE REGULAR AGENDA

[1. 26-54857 Recommendation to approve February 5, 2026 Planning Committee meeting minutes. Suggested Action: Approve recommendation. ]

UH, MAY I PLEASE HAVE A MOTION? SO MOVED.

SECOND.

ANY PUBLIC COMMENTS? ANY COMMISSIONER COMMENTS? ALL THOSE IN FAVOR, PLEASE SAY AYE.

AYE.

UH, SO APPROVE, UH, ITEM NUMBER ONE.

ITEM NUMBER TWO, RECEIVE

[2. 26-54858 Recommendation to receive and file Orange Avenue Pipeline Replacement Project Update. Suggested Action: Approve recommendation. ]

AND FILE THE ORANGE AVENUE PIPELINE REPLACEMENT PROJECT UPDATE.

UH, MAY I HAVE A MOTION TO RECEIVE AND FILE? SO MOVED.

AND A SECOND, UH, CALL ON ROB IES, PLEASE.

GOOD AFTERNOON.

UH, .

THERE IS SHERIFF SCOTT, AND GOOD AFTERNOON, MEMBER OF MCGUIRE.

UM, ROBERT ELLIS.

I'M THE DIRECTOR OF WATER AND SEW ENGINEERING FOR THE DEPARTMENT.

AND I HAVE A SHORT PRESENTATION HERE FOR YOU TO PROVIDE AN UPDATE ON OUR EFFORTS TO ADDRESS THE ORANGE AVENUE TRANSMISSION MAIN.

SO WITH THAT, I'LL JUMP RIGHT IN SOME BACKGROUND INFORMATION.

UH, THE ORANGE AVENUE TRANSMISSION MAIN IS LOCATED BETWEEN BIXBY ROAD NORTH AND WARDLOW ROAD ON SOUTH.

UH, WE HAVE AN EXISTING 20 INCH, UH, CAST IRON MAIN, AND IT HAS A THIN LAYER OF CEMENT MORTAR IN THE INTERIOR CEMENT MORTAR LINE.

UH, AND THE PIPE WAS INSTALLED IN 1946.

I'M HAVING TROUBLE HEARING YOU, ROB.

SORRY.

UH, THE PIPE WAS INSTALLED IN 1946, SO IT'S AN 80-YEAR-OLD PIPE.

UH, WE DID LOOK UP THE BRAKE HISTORY FOR THE PIPE.

UH, WE DID HAVE A BRAKE THAT OCCURRED IN OCTOBER OF 2010, WHICH ARE IN-HOUSE CREWS, UH, REPAIRED.

UH, MORE RECENTLY, WE HAD A BREAK IN 2024 OCTOBER.

SO APPARENTLY THE PIPE DOES NOT LIKE THE MONTH OF OCTOBER.

SO, BUT THE 2024 BREAK WAS ACTUALLY TWO BREAKS.

UH, AFTER THE FIRST BREAK WAS REPAIRED, A SECOND BREAK OCCURRED NORTH OF THE ORIGINAL BREAK LOCATION.

SO, AND BOTH OF THOSE SECTIONS WERE REPAIRED WITH NEW DUCTILE IRON PIPE.

SO, ON MAY 1ST OF LAST YEAR, UH, THIS BOARD HAD APPROVED AN AGREEMENT WITH ICK, WHICH IS AN ENGINEERING CONSULTANT TO ADDRESS THE DESIGN OF THE PIPELINE.

MM-HMM .

SO HERE'S A MAP OF, UH, WHERE THE PIPE IS LOCATED.

UH, THE XS SHOW WHERE THE BRAKES OCCURRED, UH, THE 2010 BREAK, AND THE SECOND BREAK IN 2024, PRETTY MUCH OCCURRED AT THE SAME LOCATION NEAR 37TH STREET.

AND THE FIRST BREAK IN 2024, UH, OCCURRED CLOSER TO WORKLOAD.

NOW THE METHOD OF REPLACEMENT THAT WE'RE GOING TO UTILIZE IS PIPE BURSTING.

WE'RE GONNA PIPE BURST APPROXIMATELY, UH, 2,770 LINEAR FEET OF EXISTING CAST IRON PIPE WITH HIGH DENSITY POLYETHYLENE PIPE, HT PIPE.

SO THAT'S, UH, A PLASTIC PIPE.

UM, WE EXPECT TO, UH, BID THIS PROJECT OUT, UH, IN EARLY MAY, UH, NEXT MONTH.

AND CONSTRUCTION IS TENTATIVELY PLANNED FOR SEPTEMBER THROUGH NOVEMBER OF THIS YEAR, RELATIVELY SHORT TIME.

SO SOME TIME FOR OCTOBER.

YES, , THE PIPE WILL BE OUTTA SERVICE, UH, IN OCTOBER.

SO PERFECT.

NO BREAKS.

WHAT HAPPENED?

[00:40:07]

SO, PIPE BURSTING IS CONSIDERED A TRENCHLESS TECHNOLOGY.

NOW, WE'RE NOT GONNA HAVE EXTENSIVE EXCAVATION WORK, BUT THERE WILL BE PITS ALONG THE PIPE ALIGNMENT.

UH, I BELIEVE FOR THIS PROJECT WE WILL HAVE SIX PITS.

UH, THEY'RE PAIRED TOGETHER.

WE HAVE ONE INSERTION PIT AND ONE RECEIVING PIT.

UH, FOR EACH SEGMENT, UH, PIPE BURSTING, UH, INVOLVES BREAKING THE OLD PIPE IN THE GROUND AND PULLING A NEW PIPE THROUGH.

AND I HAVE A LITTLE, UH, ANIMATED VIDEO CLIP TO SHOW YOU, UH, HOW THAT'S DONE.

I WAS GONNA HAVE TO GO TO YOUTUBE FOR THIS.

, UH, PIPE BURSTING CAN EXTEND THE SERVICE LIFE OF A PIPE UP TO 80 YEARS.

SO, CONSIDERING WE'RE USING HTPE PIPE, IT IS PLASTIC AND IT IS RESISTANT TO CORROSION.

UH, THAT PIPE SHOULD LAST AT LEAST 80 YEARS.

UH, AND COMPARED TO FULL PIPELINE REPLACEMENT, WHICH MEANS IF WE OPEN UP A TRENCH THAT ENTIRE LENGTH OF, UH, OF ORANGE AVENUE, UH, AND PUT A NEW PIPE IN, IT'S GONNA BE COSTLY.

UH, PIPE BURSTING OFFERS A FASTER INSULATION.

SO FOR COMPARISON PURPOSES, PIPE BURSTING WILL THE PROJECT WILL, YOU KNOW, LAST ANYWHERE FROM TWO TO THREE MONTHS.

IF WE WERE TO OPEN CUT, YOU KNOW, UH, THIS PROJECT, IT WOULD TAKE ABOUT FIVE TO SIX MONTHS.

UH, UH, IT'S LESS DISRUPTIVE CONSTRUCTION BECAUSE THERE'S MINIMAL EXCAVATION WORK, AND THERE'S A DEFINITE COST SAVINGS.

SO OUR LATEST ESTIMATE FROM OUR CONSULTANT PIPE BURSTEIN, WILL RUN ABOUT $2.1 MILLION.

UH, IF WE WERE TO OPEN CUT, IT WOULD BE ANYWHERE BETWEEN 3.7 TO 4 MILLION.

NOW WHAT'S DRIVING THAT PRICE UP IS, UH, THE AMOUNT OF CONCRETE THAT NEEDS TO BE REPLACED, BECAUSE ORANGE AVENUE, UH, BETWEEN THOSE TWO STREETS IS CONCRETE.

SO, SO HERE'S THE VIDEO CLIP.

SO ALL PIPE BURSTING SETUPS WILL HAVE A SIMILAR, UM, CONTROL CENTER LIKE THIS IN THE RECEIVING.

NOW THIS, FOR, FOR THIS PARTICULAR VIDEO, UH, YOU HAVE A PIPE GUIDE, A PIPE BURSTING GUIDE, AND TO THAT GUIDE WILL BE ATTACHED PIPE BURSTING RODS.

AND THAT SETUP WILL BE PUSHED THROUGH ALL THE WAY TO THE INSERTION PIT.

ONCE INSIDE THE INSERTION PIT, YOU'LL HAVE A PIPE CUTTER AND AN EXPANDER, WHICH WILL BREAK THE PIPE AND PUSH IT OUTWARDS, AND IT WILL PULL THE NEW PIPE THROUGH.

SO AGAIN, WE'RE NOW OPENING UP A LONG TRENCH IN THE STREET.

IT WILL HAVE TWO PITS.

AND LIKE I SAID, UH, FOR THIS PROJECT, WE'RE LOOKING AT APPROXIMATELY SIX PITS.

SO, CONSTRUCTION IMPACT MITIGATION, UH, WE'RE GONNA BE TAKING OUT A PARKING LANE, UH, FROM THE TRAFFIC CONTROL PLANTS.

UH, OUR PIPE IS LOCATED ON THE EAST SIDE OF ORANGE.

SO, UH, ORANGE AVENUE IS, UM, ONE DIRECTION, UM, ONE DIRECTION IN BOTH FOR BOTH LANES PLUS PARKING.

SO WE'RE DEFINITELY GONNA BE TAKING PARKING OUT.

UH, THERE WILL BE STRICT PLATING AND SAFETY REQUIREMENTS, AND WE ARE COGNIZANT THAT THERE ARE DRIVEWAYS, UH, LOCATED OFF OF ORANGE.

UH, SO WE WILL HAVE ACCESS, UH, FOR THE RESIDENTS, UH, DURING CONSTRUCTION.

NOW, WE'VE ALSO BEEN COORDINATING WITH PUBLIC WORKS.

UH, PUBLIC WORKS HAS A BACKBONE BIKE PROJECT SCHEDULED, UH, FOR LATER THIS YEAR.

UM, SO WE'VE HAD EXTENSIVE CONVERSATIONS WITH PUBLIC WORKS.

THEY ACTUALLY PUT LANGUAGE INTO THEIR PROJECT SPECS THAT OUR PROJECT NEEDS TO BE COMPLETED FIRST BEFORE THEY CAN GO IN AND DO THEIR WORK.

SO NOW PUBLIC OUTREACH IS GONNA BE A BIG COMPONENT OF THIS PROJECT.

UH, WE'VE BEEN WORKING DILIGENTLY WITH OUR PUBLIC INFORMATION OFFICER, JOY CONTRERAS, UH, TO ADDRESS ALL THESE ISSUES.

UH, WE WILL HAVE, UH, OUR USUAL PROJECT INFORMATION SIGNS, UM, AT BOTH ENDS OF THE PROJECT AND POTENTIALLY ON SOME OF THE SIDE STREETS.

UH, AND WE'LL PROBABLY HAVE SOME ELECTRONIC MESSAGE BOARDS AS WELL.

UH, WE WILL SEND OUT OUR TYPICAL, UH, NOTIFICATIONS, UH, 45 DAY, 21 DAY AND SEVEN DAY NOTICE, AND 48

[00:45:01]

HOURS AS APPROPRIATE.

UH, WE WILL COORDINATE, UH, WITH THE COUNCIL D DISTRICT OFFICE, UM, COMMUNITY MEETING AS NEEDED.

WE KNOW WE'RE GONNA NEED A COMMUNITY MEETING.

SO, UH, AGAIN, WE'RE WORKING, WORKING WITH JOY ON THAT, AND WE'LL LOOK INTO A PROJECT HOTLINE.

BUT THE HOTLINE RIGHT NOW IS GOING TO GO TO OUR TWO PROJECT ENGINEERS.

UH, THEIR NUMBERS WILL BE MADE AVAILABLE, UH, TO THE RESIDENTS IF THERE ARE ANY ISSUES.

AND I DO WANNA ACKNOWLEDGE, UM, OUR PROJECT TEAM.

WE HAVE MR. THOMAS CASSIDY AND MATTHEW CRUZ, UH, IN THE BACK.

UH, THEY'RE OUR PROJECT ENGINEERS, UH, AND THEY'VE SHEPHERDED THIS PROJECT TO THIS POINT.

AND SO THEY PLAY A VERY CRITICAL ROLE IN IN THIS PROJECT.

AND THAT CONCLUDES MY PRESENTATION COMMISSIONERS.

UH, I'D BE HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE.

I, I DO.

UH, ARE THERE ANY PUBLIC COMMENTS? UM, OKAY, MAYBE I MISSED IT, BUT FROM START TO FINISH FROM FIRST DISRUPTION TO COMPLETION? WELL, THE TOTAL TIMELINE PROCESS WILL TAKE ABOUT TWO TO THREE MONTHS.

TWO TO THREE MONTHS.

WOW.

SO CONSTRUCTION .

WELL, BUT I MEAN, WHEN THEY, WHEN THEY DISRUPT EVERYTHING IN THE NEIGHBORHOOD TO WHEN, SO WE'RE PROBABLY GONNA, THE ACTUAL CONSTRUCTION WAR WILL PROBABLY TAKE ABOUT A MONTH.

STILL HAVE TO, THE CONTRACTOR STILL HAS TO PROCURE THE MATERIALS AND EQUIPMENT.

SURE.

THERE'S A LOT MORE.

AND JUST OUTTA CURIOSITY, UM, IS THIS RELATIVELY NEW TECHNOLOGY? NO, IT'S NOT, BUT IT'S, IT'S NOT, NO.

BUT IS THIS THE FIRST TIME WE'RE USING IT? THE FIRST TIME WE'VE USED IT HERE IN LONG BEACH.

WOW.

IT SOUNDS LIKE A GREAT OPTION.

VERY EXCITED.

UH, IT WAS A GOOD CANDIDATE THAT, BECAUSE THE PIPELINE ITSELF, IT'S A STRAIGHT SHOT.

STRAIGHT.

IT DOESN'T HAVE ANY SERVICES CONNECTED MM-HMM .

MM-HMM.

OR ANY FIRE HYDRANTS.

SO IT'S JUST STRAIGHT PIPE.

SO THERE'S A LOT OF A PIPE THAT IT WOULDN'T WORK ON, BUT IT WORKS ON ORANGE AVENUE.

THAT'S GREAT.

WE'LL SEE WHAT HAPPENS, HUH? .

GREAT PRESENTATION.

I'VE, I'VE GOT NO QUESTIONS.

AUGMENTATION STUDY UPDATE, UH, MAY PLEASE HAVE A MOTION TO RECEIVE AND FILE.

THANKS.

UH, ON THE MOTION TO RECEIVE AND FILE ALL THOSE IN FAVOR.

UH, SO THAT PASSES.

UH, SO OUR FINAL ITEM, UH, ITEM NUMBER FOUR, RECEIVE AND FILE GROUNDWATER

[4. 26-54860 Recommendation to receive and file Groundwater Augmentation Study Update. Suggested Action: Approve recommendation. ]

SO, SO MOVED.

AND SECOND THAT MOTION.

UH, CALL ON NICK BY CALL.

UH, GOOD AFTERNOON COMMISSIONERS, OR, UH, PRESIDENT SCOTT, COMMISSIONER MCGUIRE.

MY NAME'S NICK BAY HALL.

I'M AN ENGINEER HERE AT THE WATER AND SEWER SIDE.

GREAT TO SEE YOU GUYS AGAIN.

UH, SO TODAY I'LL BE, UH, TALKING ABOUT THE GROUNDWATER AUGMENTATION GROUNDWATER COLLECTION, UH, SYSTEM AND NEW WELL CITING STUDY.

GIVE YOU GUYS A LITTLE PROJECT BACKGROUND.

THIS SLIDE MAY LOOK A LITTLE FAMILIAR.

I BELIEVE IT WAS PRESENTED, UH, AT THE LAST PLANNING COMMITTEE FOR THE, UH, GROUNDWATER RESILIENCE PROGRAM.

SO 2019, THERE WAS WATER RESOURCES PLAN THAT CAME OUT, AND, UH, RECOMMENDATIONS, UH, INCLUDED, UH, FURTHER ANALYSIS, UH, TO LOOK AT OTHER, UH, RESOURCES, WATER RESOURCES FOR US.

UH, SO WE, UH, EMBARKED ON THE OPTIMIZATION STUDY, WHICH IDENTIFIED, UM, SOME ADDITIONAL INFRASTRUCTURE.

AND, UH, YOU CAN SEE NOW WE'RE ON THE AUGMENTATION STUDY.

UH, THE GROUNDWATER RESILIENCE PROGRAM WAS, UH, PRESENTED IN THE LAST COMMITTEE MEETING, UH, WHERE WE TALKED ABOUT ALL THE INFRASTRUCTURE IMPROVEMENTS THAT WOULD BE NECESSARY.

SO THE GROUNDWATER AUGMENTATION STUDY, UH, YOU MAY SAY, HOW DOES THIS FIT IN, UH, GROUNDWATER AUGMENTATION STUDY? SO WHAT WE'RE DOING, AND I'LL GO INTO MORE DETAIL ABOUT THIS, BUT THE BOTTOM LINE IS WE'RE LOOKING TO CITE A NEW WELLS, EXTRACTION WELLS, BUT ALSO INJECTION WELLS, TALKING ABOUT NEW SOURCES OF WATER.

SO LOOKING AT, UH, INCREASING OUR, UH, GROUNDWATER PRODUCTION, BUT ALSO LOOKING AT EVENTS, UH, RE ADVANCED TREE TO RECYCLE WATER TO POTENTIALLY INJECT, REPLENISH OUR AQUIFERS.

SO THAT'S HOW THE GROUNDWATER AUGMENTATION STUDY CONNECTS TO THIS WATER RESOURCES PLAN OPTIMIZATION STUDY.

AND, AND IT ALL TIES IN, FEEDS INTO THE GROUNDWATER RESILIENCE PROGRAM.

SO YOU MAY ASK, HEY, WHAT, WHAT WATER SUPPLIES WILL BEST MEET FUTURE DEMANDS, GROUNDWATER, UH, BUT ALSO ADVANCED TREATED RECYCLED WATER? WHAT INFRASTRUCTURE IMPROVEMENTS ARE NEEDED TO OPTIMIZE OUR SYSTEM TO USE GROUNDWATER? SOME OF THOSE I, UM, INFRASTRUCTURE

[00:50:01]

IMPROVEMENTS WERE IDENTIFIED IN THE OPTIMIZATION STUDY AND ARE SHOWN, UH, HERE WITH THE GROUNDWATER RESILIENCE PROGRAM, ADDITIONAL TREATMENT PLANT, AND SOME ADDITIONAL, UH, PIPELINES TO CONNECT OUR SYSTEM.

WHERE WILL THE, UH, THE ADVANCED TREATED RECYCLED WATER BE INJECTED? GREAT QUESTION.

THAT'S WHAT WE'RE, UH, CURRENTLY, UH, STUDYING RIGHT NOW AND EVALUATING.

YOU GUYS MAY ALSO RECOGNIZE THIS SLIDE TALKS ABOUT OUR PAST SUPPLY AND DEMAND, UH, CURRENT SUPPLIES AND DEMAND AND FUTURE.

YOU CAN SEE THAT WE ANTICIPATE DEMAND GOING DOWN IN THE FUTURE.

UH, WE ARE, UM, AIMING TO INCREASE OUR LOCAL GROUNDWATER PRODUCTION, UH, TO EVENTUALLY GET TO A POINT WHERE 75% OF OUR WATER COMES FROM GROUNDWATER, UH, LOCAL GROUNDWATER SOURCES, MAKING US MORE, UH, RESILIENT, UM, BE ABLE TO PROVIDE MORE STABLE RATES TO OUR CUSTOMERS.

AS WE KNOW, THE, UH, RATES FOR IMPORTED WATER ARE CONTINUING TO INCREASE.

SO THE MORE WE CAN DO LOCALLY, UH, TO PROVIDE, UM, RELIABLE SOURCES OF WATER, UM, IS GREAT FOR US AS A WATER DEPARTMENT, BUT ALSO FOR THE COMMUNITY.

JUST WANNA GO OVER THE PROJECT TIMELINE THUS FAR.

SO, I WAS HERE A COUPLE YEARS AGO, UH, TO PRESENT THE AWARD OF CONTRACT TO THE CONSULTANT HDR IN THE AMOUNT OF $1.86 MILLION.

AT THE SAME BOARD MEETING, UH, WE ENTERED AN MOU WITH WRD, THE WATER REPLENISHMENT DISTRICT TO COST SHARE.

UH, SOME OF THESE EXPENSES, WRD IF YOU ARE NOT FAMILIAR AS OUR WATER MASTER, THEY, UH, OVERSEE THE WEST COAST BASIN AND CENTRAL BASIN.

UH, THEY HAVE INTEREST IN THIS STUDY AS IF WE WERE TO LOOK TO REPLENISH THE AQUIFER, THEY WOULD BE, UH, DIRECTLY, UH, IN, THEY WOULD BE INVOLVED, UH, AS THEY ARE THE WATER MASTER.

WE ISSUED A NOTICE TO PROCEED TO HDR IN, UH, IN MAY.

AND IN NOVEMBER OF THE SAME YEAR, WE RECEIVED SOME GRANT FUNDING FROM METROPOLITAN, ABOUT $500,000, UH, FOR THIS STUDY.

THEY SEE VALUE IN THESE EFFORTS.

AND IF WE WERE TO CONSIDER ADVANCED TREATED RECYCLED WATER, THE MWD PURE WATER PROJECT COULD BE A, UH, VIABLE SOURCE, UH, OF THE ADVANCED TREATY, RECYCLED WATER.

LOOKING AT THE FINANCIALS TO DATE, WE SPENT JUST UNDER A MILLION DOLLARS ON THIS PROJECT.

SO OUTTA THE 1.859 COST OF LONG BEACH UTILITIES THUS FAR HAS BEEN 480,000, 48%, 48.7% OF THE TOTAL COST.

SO, UH, THIS IS JUST, UH, A, A GREAT TEAM EFFORT.

YOU KNOW, WE'RE ALSO WORKING WITH, UH, LOCAL AGENCIES, UH, THAT BELIEVE IN, YOU KNOW, THESE SAME EFFORTS.

AND, UH, WE ARE ALSO ABLE TO, UH, EXPERIENCE SIGNIFICANT COST SAVINGS, UH, IN LOOKING TO THESE, UH, ADDITIONAL SOURCES.

UH, AND LASTLY, UH, WE EXPECT THIS PROJECT, UH, OR THIS STUDY TO BE COMPLETED IN THIS SUMMER.

UH, AND THE GROUNDWATER RESILIENCE PROGRAM WILL PICK UP WHERE WE'VE LEFT OFF AND CONTINUE THIS EFFORT.

SO I WANNA GIVE YOU GUYS A BRIEF OVERVIEW OF THIS STUDY.

UH, THE, THE TASK, WE HAVE 12 TASKS IN THIS STUDY, BUT FOR THE SAKE OF MAKING IT MORE DIGESTIBLE FOR EVERYBODY, WE'VE BROKEN IT DOWN INTO FIVE UH, CATEGORIES.

FIRST IS A LOCAL GROUNDWATER MODEL UPDATE.

WE NEED TO REFINE OUR GROUND MODEL UP OUR GROUNDWATER MODEL UPDATE IN ORDER TO CITE, UH, PROVIDE THE MOST IDEAL SITES FOR BOTH INJECTION AND EXTRACTION.

SO, FOLLOWING THE GROUNDWATER MODEL UPDATE IS THE WELL CITING STUDY IN BOTH BASINS.

UH, SIMULTANEOUS.

UH, IN PARALLEL, UH, WE ARE LOOKING AT OUR EXISTING COLLECTION SYSTEM, REFINING, RECALIBRATING, AND UPDATING OUR HYDRAULIC MODEL, UH, AND ALSO PERFORMING, UH, LOOKING AT THE, UM, CONDITION OF THAT PIPELINE.

MANY, UH, MANY SEGMENTS OF THAT PIPE ARE, UM, WERE INSTALLED LONG AGO.

AND SO DOING A CONDITION ASSESSMENT AND IDENTIFYING, UH, IMPROVEMENT PROJECTS, UH, TO ENSURE THAT WE CAN CONTINUE DELIVERING GROUNDWATER TO OUR TREATMENT PLANT.

UH, AND LASTLY, UH, THE, UH, THIS GROUNDWATER AUGMENTATION STUDY, A REPORT WILL PRE-PRODUCED, UM, TO DISCUSS THIS NEW PROGRAM THAT WE WOULD BE EMBARKING IN, WHICH WOULD BE GROUNDWATER AUGMENTATION.

SO DEVELOPING THE PROGRAM, IDENTIFYING SOME GUIDELINES, UM, AND, AND PUTTING A REPORT TOGETHER TO, UM, MEMORIALIZE THE DECISIONS AND, AND, UH, THAT WE'VE MADE DURING THIS STUDY.

JUST WANNA TALK ABOUT OUR GROUNDWATER SOURCES.

SO LONG BEACH WHERE WE SIT ON TWO BASINS, CENTRAL BASIN AND WEST COAST BASIN,

[00:55:01]

WE HAVE WATER RIGHTS IN BOAST BASINS.

YOU CAN SEE WE HAVE, UH, JUST UNDER 33,000 ACRE FEET OF RIGHTS IN THE CENTRAL BASIN.

AND THAT IS WHERE WE PUMP WEST COAST BASIN.

WE HAVE JUST UNDER ONE ACRE FOOT OF WATER RIGHTS.

UH, WE DO NOT CURRENTLY PUMP, UH, WE DO NOT HAVE ANY ACTIVE PRODUCTION WELLS IN THE WEST COAST BASIN, BUT YOU CAN SEE THAT, UM, WE SIT ON BOTH BASINS.

SO THERE'S OPPORTUNITY, YOU KNOW, I'M SORRY.

I WANTED TO, UH, ELABORATE A LITTLE BIT MORE ON THIS SLIDE.

SO WE TALKED ABOUT OUR ALLOCATION, CALL IT 33,000 ACRE FEET.

IN A PREVIOUS SLIDE WE TALKED ABOUT, UH, IN THE FUTURE, WE WANT TO, UH, HAVE OUR SOURCE WATER, 75% BE GROUNDWATER.

UM, 75% OF 58,000 ACRE FEET IS 43,500 ACRE FEET.

SO WE'RE LOOKING, UH, AT A DIFFERENCE OF 10,000 ACRE FEET THAT WE NEED TO FIND A, A NEW SOURCE FOR THIS WATER.

SO, UH, JUST WANTED TO PUT THOSE NUMBERS OUT THERE JUST TO HIGHLIGHT, UM, WHAT WE ARE TRYING TO ACHIEVE.

YOU KNOW, WE'RE WORKING TOWARDS, YOU KNOW, FUTURE, UH, RESILIENCE.

SO WE TALKED ABOUT THE, UH, THE FIVE MAJOR TASKS AS PART OF THIS PROJECT.

UH, THE FIRST BEING THE GROUNDWATER MODEL UPDATE, USGS.

THEY HAVE A ON, THEY RECENTLY UPDATED THEIR GROUNDWATER MODEL.

SO OUR CONSULTANT TOOK THE REGIONAL MODEL MODEL, WHICH YOU CAN SEE OUTLINED IN BLUE.

UH, THEY FOCUSED ON AN AREA AROUND LONG BEACH, WHICH YOU CAN SEE, UH, THE SQUARE IN BLACK.

UH, THE UPDATE, IT WAS REALLY, UM, LET'S SEE.

SO THE FOCUS AREA CAPTURES EXISTING OUR EXISTING, UH, COLLECTION SYSTEM.

YOU CAN SEE ALL OF OUR WELL COLLECTION SYSTEM RIGHT HERE.

SO, AND I WANT TO GO INTO SOME DETAILS AS TO HOW THIS MODEL WAS UPDATED.

SO THIS SLIDE, I'M SURE IS A BIT OVERWHELMING, BUT I'M GONNA ATTEMPT TO, UH, WRITE THIS DOWN.

UH, FOR THE GROUNDWATER MODEL CALIBRATION, WE COLLABORATED WITH WRD TO INSTALL TRANSDUCERS IN LONG, IN INACTIVE WELLS ACROSS LONG BEACH.

MAY SAY, WHAT'S A TRANSDUCER? IT'S A PIECE OF EQUIPMENT THAT GOES DOWN INTO A, WELL, IT MEASURES THE WATER LEVEL.

AND SO THIS IS IMPORTANT.

WHEN WE TURN WELLS ON AND OFF, THERE'S A REACTION IN THE AQUIFER.

AND, UH, IF WE CAN MEASURE THESE REACTIONS, WE CAN BETTER REFINE THE LOCAL MODEL.

SO YOU CAN SEE IN THIS FIGURE HERE, THERE ARE MANY LONG BEACH WELLS, BUT WRD ALSO HAS MANY MONITORING WELLS IN THIS AREA.

SO WE COLLABORATED WITH WRD INSERTED MONITOR, UH, TRANSDUCERS INTO OUR INACTIVE WELLS.

THEY INCREASED THE FREQUENCY OF READS IN SOME OF THEIR MONITORING WELLS NEARBY TO COLLECT ADDITIONAL DATA.

WE COLLECTED WATER LEVEL DATA OVER SIX MONTHS.

WE ALSO CAPTURE OUR, OUR WATER LEVEL DATA AT OUR ACTIVE WELLS.

SO THAT DATA WAS ALSO FED INTO THE MODEL.

UM, THESE OTHER, THESE OTHER CHARTS OR THESE OTHER FIGURES HERE, UH, IT'S MORE OF, UH, JUST WANT TO SHOW HOW WE WERE ABLE TO VALIDATE SOME OF THE, UH, MODELING RESULTS THAT, THAT WERE PRODUCED.

SO THE BLUE LINE HERE IS THE STIMULATED RESULTS AT VARIOUS WELL SITES.

THE RED LINE IS THE OBSERVED RESPONSE.

SO YOU CAN SEE THERE WAS A STRONG CORRELATION FROM WHAT WAS MODELED TO WHAT, WHAT WE ACTUALLY OBSERVED IN THE FIELD.

AND YOU CAN SEE WHILE THERE ARE SOME DISCREPANCIES, THERE'S STRONG CORRELATION BETWEEN, UH, SIMULATION, UH, THE, THE OBSERVED AND THE MODEL.

SO I'LL BE TALKING A LITTLE MORE IN IN SOME FUTURE SLIDES.

UH, WE WORKED WITH OUR, WELL, OUR, OUR TREATMENT PLAN, OUR OPERATIONS GROUP TO ADJUST WELL OPERATIONS DURING THIS PERIOD TOO, BECAUSE WHEN WE TURN WELLS ON AND OFF, WE GET GOOD REACTIONS.

AND SO WE WERE ABLE TO CAPTURE ALL OF THAT DATA SIMULTANEOUSLY.

AND I'LL GO INTO THIS, UH, A LITTLE, A LITTLE MORE DETAIL ON SOME FUTURE SLIDES.

WE INSTALLED PRESSURE LOGGERS ACROSS OUR COLLECTION SYSTEM TO CAPTURE THE PRESSURE, UH, DIFFERENCES WHEN WE TURN WELLS ON AND OFF.

AND THAT'S GONNA HELP US WITH THE, UH, HYDRAULIC MODEL UPDATE.

AND I'LL BE GOING INTO THAT, UH, SHORTLY.

SO, SOME OF THE CONCLUSIONS FROM THE GROUNDWATER MODEL UPDATE, WE SEE THAT CONDUCTIVITIES WERE HIGH IN THE UPPER LAYERS AND DECREASED WITH DEPTHS DEPTH.

SO VERTICAL HYDRAULIC CONDUCTIVITY DETERMINES HOW EASILY WATER MOVES ACROSS RATHER THAN A LONG GEOLOGICAL STRATA.

YOU THINK ABOUT A SANDBOX, YOU PUT SOME WATER IN THERE, IT'S GONNA GO RIGHT TO THE BOTTOM.

YOU PUT A WHOLE BUNCH OF WATER ON A CLAY

[01:00:01]

GONNA, IT'S NOT GONNA, UH, PERMEATE AS QUICKLY.

SO THAT'S WHAT WE'RE TALKING ABOUT WHEN WE LOOK AT CONDUCTIVITY.

SO WE ALSO NOTICED A LOW LEAKAGE VALUES BETWEEN LAYERS SUGGESTING LIMITED VERTICAL FLOW.

WHAT DOES THAT MEAN? WHAT HAVE CLAY LAYERS IN BETWEEN THESE SANDY SILTY LAYERS? AND WHAT THE MODEL IS TELLING US IS THAT THERE'S NOT MUCH MOVEMENT BETWEEN THOSE CLAY LAYERS.

SO THERE'S, UM, UH, THERE'S LIMITED VERTICAL FLOW BETWEEN THESE LAYERS.

UH, I HAVE A PICTURE HERE OF ONE OF OUR AS-BUILT WELL PROFILES.

UM, WHAT IS MEASURED WHEN WE ACTUALLY INSERT THESE, UH, TOOLS INTO A, WELL, WHEN WE ARE DESIGNING OR DRILLING THESE WELLS, WE, UH, WE LOOK AT RESISTIVITY AND, UH, RESISTIVITY IS THE INVERSE OF CON CONDUCTIVITY IS, IS GETTING INTO THE WEEDS.

BUT ULTIMATELY, I JUST WANNA SHOW YOU GUYS THIS RIGHT HERE.

WHEN WE SEE CLAY LAYERS, WE SEE LOW RESISTIVITY.

WHEN WE SEE SANDY LAYERS, THOSE ARE TYPICALLY WHERE WE WANNA HAVE OUR SCREENS, WHERE, WHERE WE SEE WATER, RIGHT? THAT, THAT'S WHERE WE WANNA PULL WATER FROM.

SO YOU CAN SEE TYPICALLY IN THE HIGHER LAYERS, WE'RE NOT GONNA PULL WATER FROM THERE.

UM, BUT WE GO DEEPER.

YOU CAN SEE THERE'S A NICE BIG CLAY LAYER, WHICH ACTS AS THE KIND OF A BARRIER.

AND BELOW THAT, YOU'VE GOT A WHOLE BUNCH OF WATER, RIGHT? YOU CAN SEE ALL THE, THE RESISTIVITY IS MUCH HIGHER OVER HERE.

UM, SO ANYWAYS, THE, THE GROUNDWATER MODEL, THESE ARE SOME OF THE, UH, CONCLUSIONS THAT CAME FROM THE GROUNDWATER MODEL UPDATE.

SO NOW I WANNA MOVE ON TO, WELL, SIDING.

WE NEEDED TO UPDATE THE MODEL BEFORE WE STARTED, UM, MOVING FORWARD WITH WELL SIDING.

WE WANTED TO ENSURE THAT WE WERE HAPPY AND COMFORTABLE WITH THE MODEL MOVING FORWARD BEFORE MOVING FORWARD.

SO WE APPLIED A SIMULATION OPTIMIZATION APPROACH TO FIND THE MOST COST EFFECTIVE LOCATIONS FOR INJECTION AND EXTRACTION WELLS.

SO WE SET A, WE ESTABLISHED SOME CONSTRAINTS, HARD CONSTRAINTS, AND SOFT CONSTRAINTS.

ULTIMATELY, IT ALWAYS COMES DOWN TO MONEY.

UH, BUT THERE'S ALSO OTHER ITEMS THAT I'M GONNA GO INTO, UM, THAT WERE U THE CONSTRAINTS THAT WERE IDENTIFIED.

SO THIS IS JUST KIND OF A FLOW CHART AS TO WHAT THE SIMULATION OPTIMIZATION FRAMEWORKS LOOK LIKE.

SO SOME DECISION VARIABLES.

HOW MANY NUMBER, HOW MANY INJECTION WALLS ARE WE LOOKING FOR? ARE WE EXCLUDING ANY LOCATIONS? WHAT ARE THE RATE? WHAT IS THE RATE OF INJECTION THAT WE'RE LOOKING AT? UH, AND THEN OF COURSE, AN OBJECTIVE FUNCTION COST.

WHERE CAN WE DO THIS AT THE MOST COST, UH, AND BE COST EFFECTIVE? AND THEN THERE WERE SOME CONSTRAINTS.

THERE ARE ENVIRONMENTAL SITES.

THERE ARE SETBACKS FROM PIPELINES, UH, LIKE PETROLEUM LINES, SEWER LINES.

THERE'S CERTAIN REGULATIONS THAT YOU NEED TO FOLLOW.

SO THERE ARE MANY AREAS THAT ARE EXCLUDED.

SO THEN THE MODEL WILL, UH, WILL RUN AND IT PRODUCES THE, UH, YOU HAVE ALL THESE INPUTS AND THEN IT PRODUCES, UH, THE WELL SITING LOCATIONS.

I JUST WANT TO GO FORWARD REAL QUICK TO, UH, OUR INITIAL INJECTION RESULTS.

SO OUR INITIAL INJECTION RESULTS, YOU'LL NOTICE THAT THE INJECTION WELLS ARE BEING SHOWN OUTSIDE OF OUR SERVICE AREA.

SO THIS WAS A GREAT, UH, EXERCISE.

'CAUSE WE SAID, HEY, WHAT'S, WHAT'S GOING ON? HOW IS THIS GOING TO BENEFIT LONG BEACH IF WE'RE PUTTING INJECTION WELLS, SOMEONE ELSE'S BACKYARD? SO WE GOT TOGETHER AS A, AS AN AGENCY, UH, AND WE LOOKED AT SOME OF THE CONSTRAINTS THAT WE HAD ESTABLISHED, AND WE NEEDED TO MAKE SOME ADJUSTMENTS TO MAKE THESE, UH, TO HAVE THE MODEL PRODUCE SITES THAT WERE, THAT MADE SENSE FOR US.

SO SOME OF THE SITING CRITERIA, LAND AVAILABILITY, YOU NEED A MINIMUM DIMENSIONS FOR A SITE TO ACTUALLY BE ABLE TO WORK.

WE ALSO NEEDED TO LOOK AT WATER QUALITY, LIKE WE TALKED ABOUT THE ENVIRONMENTAL CONCERNS.

WHAT TREATMENT WOULD BE NEEDED? THIS IS FOR EXTRACTION WELLS.

WHAT ARE THE REGULATORY, UM, ISSUES THAT WE NEED TO, UH, CONSIDER? UH, AND WE ALSO HAVE TO CONSIDER OUR EXISTING INFRASTRUCTURE AND FUTURE INFRASTRUCTURE.

UH, THEN THERE'S REDUNDANCY AND, AND, AND COST AND, AND SOURCE WATER.

BUT THESE ARE SOME OF THE, UH, CRITERIA THAT, THAT WERE USED.

SO, UM, AFTER OUR FIRST RESULTS CAME BACK, WE NEEDED TO REVISIT THE CONSTRAINTS THAT WE HAD IDENTIFIED.

WE WANTED TO LIMIT ANALYSIS TO, UH, LAYER SEVEN.

SO THE LAYERS ARE, THINK OF IT AS A CAKE.

YOU START, LAYER ONE IS NEAR THE TOP AND YOU GO DEEPER.

I BELIEVE IT GOES ALL THE WAY DOWN TO LIKE LAYER 12.

UM, BUT WE WANTED TO CONSTRAIN, UH, AREAS LIKE WE DIDN'T WANT TO GO TOO SHALLOW.

UM, AND WE WANTED TO EXPAND OUR BOUNDARIES TO INCLUDE,

[01:05:01]

UH, POTENTIAL LOCATION OF OUR NEW TREATMENT PLANT.

WE WANTED TO MAKE SURE THAT WE CONSIDERED THAT.

UM, THERE WERE MANY OTHER ADJUSTMENTS THAT NEEDED TO BE MADE.

BUT ULTIMATELY, UM, THIS IS A CURRENT ITERATION OF THE INJECTION WALL SITES.

AND, UM, SO YOU CAN SEE WE'VE IDENTIFIED FIVE FEASIBLE LOCATIONS WITHIN THE LONG BEACH AND LAKEWOOD AREA, THE BLUE LINE OR, SO.

FIRST LET ME TALK ABOUT THE RED LINE.

THIS IS OUR EXISTING COLLECTION SYSTEM FOR EXTRACTION WELLS.

THE YELLOW LINE HERE IS WHAT WAS BEING DISCUSSED IN THE GROUNDWATER RESILIENCE PROGRAM.

ONE OF THE UNIFICATION LINES GOING TO JWJ, THE BLUE LINE IS METROPOLITAN'S PLAN, PURE WATER ALIGNMENT.

SO IT'S IMPORTANT FOR US WHEN WE'RE LOOKING AT INJECTION WELLS TO THINK ABOUT THE SOURCE WATER, WHERE IS IT GONNA COME FROM, AND HOW DO WE CONVEY WATER FROM THAT LINE TO THE PROPOSED INJECTION WELLS.

SO YOU CAN SEE MANY OF THESE INJECTION WELLS ARE BEING CITED IMMEDIATELY ADJACENT TO THE PLANNED PURE WATER LINE.

THIS IS STILL AN ONGOING ITERATION, UH, BUT YOU CAN SEE HOW THE RESULTS HAVE BEEN REFINED FROM OUR FIRST ITERATION SHOWING LOCATIONS IN SANTA FE, SPRING NORWALK AREA.

NOW WE'RE, UH, ACTUALLY SEEN LOCATIONS IN LONG BEACH AND LAKEWOOD.

AND, UM, I'D ALSO LIKE TO, UH, MENTION THAT, YOU KNOW, WE HAVE BEEN IN CONSTANT CONTACT WITH LAKEWOOD, UH, AS THEY, UM, HAVE BEEN VERY RECEPTIVE TO US CITING, UM, OR, OR CONSIDERING INJECTION WELLS EVEN WITHIN THEIR SERVICE AREA.

SO THAT HAS BEEN, UH, ANOTHER GREAT PARTNERSHIP THAT WE'VE, UH, CONTINUED TO GROW AS PART OF THIS STUDY.

THERE'S JUST ANOTHER, UH, A CLOSEUP OF THE APPROXIMATE LOCATIONS OF WHERE THESE INJECTION WELLS ARE BEING CITED FOR EXTRACTION WALL SITING.

SOME OF OUR OBJECTIVES, AS YOU GUYS ARE WELL AWARE, IS, UH, WE'RE LOOKING TO CITE IN THE WEST COAST BASIN.

WE HAVE FEW RIGHTS, BUT, UH, THERE ARE OPPORTUNITIES TO LEASE RIGHTS.

AND, AND, UM, CONSIDERING THAT WE'RE, UH, LOOKING AT CITING A TREATMENT PLAN AT THE, UH, NEAR THE J WILL JOHNSON TANK FARM, UH, IT MAKES SENSE TO, UH, C SITE EXTRACTION WELLS IN THAT PROXIMITY.

UH, THIS FIGURE HERE, UH, WAS PULLED FROM THE OPTIMIZATION STUDY WHERE WE HAD CITED SOME, UH, EXTRACTION WELLS ON THE WEST SIDE, A LITTLE FURTHER NORTH AS WELL.

UM, BUT THIS IS AN ONGOING, ONGOING EFFORT.

A COUPLE OTHER THINGS I WANTED TO SAY ABOUT THE EXTRACTION WELLS.

SO, EXTRACTION WELLS MUST BE CITED AWAY FROM INJECTION WELLS.

PER STATE REGULATIONS, THERE'S A MINIMUM SIX MONTH TRAVEL TIME, UH, RE REQUIRED FROM AN INJECTION WELL TO THE NEAREST EXTRACTION.

WELL, SO WHAT DID THAT MEAN? THE WATER, WHEN IT'S INJECTED INTO THE GROUND, IT MUST TRAVEL FOR AT LEAST SIX MONTHS BEFORE IT'S EXTRACTED.

OTHERWISE, THE STATE WILL NOT ALLOW YOU TO, UH, TO CITE IN AN INJECTION WELL IF IT DOESN'T MEET THAT MINIMUM CRITERIA.

SO IN LONG BEACH, OUR PUMPING IS PRETTY CONCENTRATED, UH, ON IN THE MORE EASTERLY PORTION OF OUR CITY.

CURRENTLY, GROUNDWATER IS TREATED AND SENT UP TO THE ALAMITOS TANK FARM.

UH, THE SOUTHERLY AND EASTERLY PORTIONS OF OUR AREA, UH, RECEIVE A, A BULK OF OUR GROUNDWATER.

SO OUR GOAL IS TO CITE WELLS FURTHER NORTH WEST, UM, TO ALSO PROVIDE, YOU KNOW, TO BE ABLE TO INCREASE THE GROUNDWATER PRODUCTION AND, UM, BE ABLE TO DISTRIBUTE THE GROUNDWATER, UH, ACROSS THE ENTIRE SERVICE AREA.

I WANNA MOVE ON NOW TO THE WELL COLLECTION SYSTEM.

SO PART OF THE WELL COLLECTION SYSTEM, THERE WERE THREE ASPECTS THAT, UH, THREE LARGER ASPECTS THAT WE ARE, ARE FOCUSED ON.

HYDRAULIC MODEL UPDATE CONDITION ASSESSMENT, AND CAPITAL IMPROVEMENT PRO, UH, PROGRAM DEVELOPMENT.

HERE'S A PICTURE, UH, AN IMAGE OF A PREVIOUS, UH, HYDRAULIC MODEL, UM, UM, TABLE THAT, THAT WAS PUT TOGETHER.

UH, YOU CAN SEE HERE WE HAVE, UH, WE'RE SEEING PRESSURES RANGE FROM ZERO TO 30 PSI IN OUR COLLECTION SYSTEM.

AND ALL OF THE, OUR EXISTING COLLECTION SYSTEM, EVERYTHING GETS ROUTED TO OUR TREATMENT PLANT FOR, UH, TO BE TREATED BEFORE PUSHED OUT TO DISTRIBUTION.

SO WE ARE CURRENTLY WRAPPING UP THE CALIBRATION OF OUR EXISTING SYSTEM MODEL.

WE WILL THEN LOOK AT THE NEW WELLS COMING ONLINE TO UNDERSTAND IMPACTS TO THE COLLECTION SYSTEM.

AND ONCE NEW EXTRACTION WELLS ARE CITED, ADDITIONAL SCENARIO SCENARIOS WILL BE CREATED, UH, TO DETERMINE WHERE ADDITIONAL IMPROVEMENTS ARE NEEDED.

[01:10:02]

SO THE HYDRAULIC MODEL UPDATE WILL BE USED TO HELP SITE NEW WELLS.

AND I JUST WANTED TO, UH, I TALKED EARLIER ABOUT ALL THE, UH, FIELD, UH, RECON THAT WE DID EARLY ON IN THE STUDY, THE COORDINATION WITH WORD.

SO WE WORK VERY CLOSELY WITH OUR TREATMENT AND OPERATIONS GROUP TO INSTALL PRESSURE OR LOGGERS ACROSS OUR COLLECTION SYSTEM.

UH, WHILE WE WERE, UH, RIGHT BEFORE WE STARTED ADJUSTING THE OPERATIONS OF OUR WELLS, UH, WE CITED 10 LOCATIONS FOR A PERIOD.

WE, WE INSTALLED THESE LOGGERS AT 10 LOCATIONS FOR A PERIOD OF TWO WEEKS.

WE THEN GRABBED SIX OF THOSE, UH, PRESSURE LOGGERS AND MOVED THEM TO OTHER LOCATIONS.

AND THIS IS VERY STRATEGIC AS TO HOW WE WERE OPERATING OUR WELLS.

WE WANTED TO CAPTURE AS MUCH DATA BY TURNING THE WELLS ON AND OFF AS POSSIBLE.

AND THIS IS JUST AN IMAGE AS TO WHERE THE PRESSURE LOCKERS WERE, WERE PLACED DURING THIS EXERCISE.

SO THE FIRST SIX MONTHS OF THE STUDY, THERE WAS JUST A, A LOT OF COORDINATION AND A LOT OF DATA GATHERING, UM, RECORDS, BUT ALSO TRYING TO CAPTURE ACTUAL FIELD DATA.

THIS IS A PICTURE OF ONE OF THE VAULTS THAT, A COUPLE OF THE VAULTS THAT WE WENT IN TO INSTALL.

AND THIS IS WHAT, UH, ONE OF THE PRESSURE LOCKERS LOOKS LIKE.

UH, WELL, THIS YELLOW THING RIGHT HERE.

SO THUS FAR ON THE HYDRAULIC MODEL UPDATE, UM, SAY PROBABLY 95% OF THE RESULTS ARE WITHIN 10% OF THE OBSERVED OF THE OBSERVED PRESSURE LOGGER DATA.

SO WHEN WE LOOK AT THE MODEL, WE SIMULATE WHAT WE ACTUALLY SAW IN THE FIELD.

WE'RE SEEING A STRONG CORRESPONDENCE, UH, BETWEEN THE MODEL AND ACTUAL FIELD DATA.

WE'RE CONTINUING TO REFINE THAT TO SEE IF WE CAN GET EVEN, UH, EVEN MORE REFINEMENT.

SO WE DID SEE SOME PRESSURE DISCREPANCIES DURING THIS EXERCISE.

WE OBSERVED SOME, UH, SOME STRANGE VALUES AND, AND WE DETERMINED THAT THERE IS A PARTIALLY CLOSED VALVE IN OUR COLLECTION SYSTEM, UH, AND ARE WORKING, UH, WITH WITHIN THE ENGINEERING GROUP AND TREATMENT AND OPERATIONS GROUP TO, UH, HAVE THAT RESOLVED.

UH, WE ALSO OBSERVED A CHANGE OF CONDITIONS ONCE WE BROUGHT TWO NEW WELLS ONLINE, NORTH LONG BEACH, 13 AND 14.

AND, UH, ONCE THE WELLS CAME ONLINE, WE ACTUALLY WENT BACK OUT IN THE FIELD, REINSTALLED SOME DATA LOGGERS, UH, TO CAPTURE MORE, MORE DATA SO THAT WE COULD FURTHER REFINE THE, UH, HYDRAULIC MODEL UPDATE.

UH, THIS IS JUST ANOTHER IMAGE OF OUR COLLECTION LINE, THE WESTERN REACH OF OUR COLLECTION LINE.

AND SO NEXT IS THE, UH, CONDITION ASSESSMENT.

SO WE STARTED WITH THE DESKTOP ASSESSMENT WHERE WE REVIEWED ALL THE AS-BUILTS, AND WE PUT TOGETHER, UH, OUR CONSULTANT PUT TOGETHER A CONDITION ASSESSMENT WORK PLAN.

WE LOOKED AT SOME PHASE ONE AND TWO SCREENING ASSESSMENT.

SO, UH, THESE ARE LOWER COST, UH, EVALUATIONS.

UH, AND I'LL GO INTO, UH, A LITTLE MORE DETAIL ABOUT THAT IN THE FOLLOWING SLIDES.

THERE WERE ALSO SOME OPPORTUNITIES, UH, OR SOME OPTIONS FOR US TO LOOK AT, UM, DIRECT ASSESSMENT BY PUTTING TOOLS INTO, INTO PIPES.

UM, BUT THERE WERE SOME RISKS ASSOCIATED WITH THAT.

AND, UH, WE HAVE NOT PROCEEDED WITH THE, UH, DIRECT ASSESSMENTS AT THIS TIME.

UH, BUT TO ASSIST WITH THE DECISION MAKING WE HAVE COME UP, UH, OR WE ARE WORKING WITH OUR CONSULTANT TO, UH, CREATE A RISK REGISTER.

AND I'LL BE GOING INTO SOME MORE DETAIL ON THAT.

SO ONE THING WE DID WAS LOOK AT OUR CATHODIC PROTECTION TEST STATIONS ACROSS OUR COLLECTION SYSTEM.

WE HAVE MANY CATHODIC TE PROTECTION TEST STATIONS ACROSS THE COLLECTION SYSTEM.

WE HIRED A, UH, CONSULTANT TO GO OUT TO THESE VARIOUS SITES.

AND, UH, THEY COLLECTED READINGS SOME OF THE RECOMMENDATIONS THAT CAME OUT OF THEIR SURVEY INSTALLATIONS AND CONDUCT ADDITIONAL TESTING ONCE NEW STATIONS ARE INSTALLED.

WE ALSO OBSERVED SOME, UH, STRAY CURRENT, LIKELY FROM ANOTHER NEARBY PIPELINE AT SOME OF OUR, UH, SOME OF OUR CONDITION ASSESS, OR SOME OF OUR CATHARTIC PROTECTION TEST STATIONS.

SO TO, UH, INVESTIGATE SOME OF THOSE, UM, STRAY CURRENTS THAT WE'RE OBSERVING AS THEY COULD, UM, CONTRIBUTE TO ANY CORROSION ON OUR PIPELINE.

WE ALSO DID A SOIL CORROSIVITY SURVEY.

UH, WHAT THAT IS, IS WE LOOK AT HOW CORROSIVE THE SOIL IS, UM, ALONG THE PIPELINE ALIGNMENT.

THIS WAS, UH, A PRETTY COOL VISUAL IF YOU ASK ME.

SO, UH, THEIR, UH, CONSULTANT, THEY BASICALLY WALK

[01:15:01]

THE ALIGNMENT AND THEY'RE ABLE TO CAPTURE READS TO SEE HOW CORROSIVE THE SOIL IS.

AND SO YOU CAN SEE AT SOME OF OUR PIPE SEGMENTS, WE'VE GOT MODERATELY CORROSIVE SOILS, BUT THEN AT OTHER AREAS, YOU CAN SEE THAT YOU'VE GOT SOME HOTSPOTS.

AND SO THIS IS VERY INFORMATIVE.

IT IT ENABLES US TO, UM, FOCUS MORE ON, ON THE HOTSPOTS AND, AND UNDERSTAND, OKAY, CORROSION'S LIKELY GONNA BE MORE SEVERE AROUND HERE AS OPPOSED TO UP HERE.

SO THE PART OF THE CONDITION ASSESSMENT, A LOT OF THE, THERE WERE MANY RECOMMENDATIONS, UH, THAT WILL BE PRE, UH, PRESENTED AFTER THE COMPLETION OF ALL OF THESE TASKS.

AND AGAIN, THIS IS, UH, AN UPDATE.

WE'RE STILL IN THE MIDST OF THIS, SO, UH, DON'T HAVE ANY FINAL RECOMMENDATIONS, BUT THE, UH, THE LIST IS BEING COMPILED.

AND ANOTHER, UM, ASPECT OF THE CONDITION ASSESSMENT IS THE, UH, RISK AND PRIORITI PRIORITIZATION, UH, APPROACH WHERE WE'RE LOOKING AT LIKELIHOOD, UH, EVALUATING LIKELIHOOD OF FAILURE AND CONSEQUENCE OF FAILURE OF OUR PIPELINES.

SO WE, UH, IDENTIFIED FACTORS THAT CONTRIBUTE TO THE LIKELIHOOD OF FAILURE, LIKE BREAK COUNT MATERIAL, VINTAGE, AGE, DIAMETER, SOIL CORROSIVITY.

WE ALSO LOOKED AT THE, UH, CONSEQUENCE OF FAILURE FACTORS SUCH AS, UH, CRITICAL AREAS, UH, CRITICAL LOCATIONS, SUCH AS WHERE ARE THERE HARD TO REACH AREAS SUCH AS THE AIRPORT, UH, AREAS WHERE WE CROSS, UH, A BRIDGE OR A FREEWAY CROSSING THAT WOULD BE DIFFICULT TO ACT, DIFFICULT TO ACCESS IN THE EVENT OF AN EMERGENCY.

ALSO, LAND USE, IS IT WITHIN THE PUBLIC RIGHT OF WAY? IS IT IN A PARK? IS IT ON PRIVATE PROPERTY? UH, SO THAT'S A CONSIDERATION, DIAMETER AND ALSO REDUNDANCY.

SO YOU CAN SEE THAT THE SCORES ARE, UH, BASICALLY A, A A, THERE'S A POINT VALUE THAT IS ASSESSED, ASSESSED, UH, ON EACH ONE OF THESE CATEGORIES.

AND WHAT HAPPENS IS A PROJECT RISK SCORE IS EVALUATED FOR EVERY SEGMENT OF PIPELINE.

UM, WE'VE BROKEN DOWN THE ENTIRE 22 MILES OF OUR COLLECTION SYSTEM INTO APPROXIMATELY A HUNDRED PIPE SEGMENTS AND ARE WORKING TO, UM, SCORE EACH OF THOSE PIPE SEGMENTS TO, UH, ENABLE US TO PRIORITIZE, UH, THE PROJECTS THAT COME OUT OF THIS STUDY.

AND SO YOU CAN SEE HERE, THIS WAS ONE OF THE PRELIMINARY, UH, RESULTS THAT WE, UH, THAT WE RECEIVED.

WE ACTUALLY HAVE A, UH, DESIGN PROJECT RIGHT NOW FOR THIS SEGMENT OF PIPELINE, UH, WHICH IS OUR WESTERN REACH.

WE HAVE A LOT OF OUR HIGH PRODUCING WELLS IN THIS AREA.

UM, BUT YOU CAN ALSO SEE THAT THERE ARE SOME OTHER AREAS, UH, SUCH AS THE PIPELINE THAT FEEDS, UH, OUR ALAMITOS WELLS, AND THEN THIS PIPELINE ALONG SPRING HERE THAT WE'RE ALSO IDENTIFIED AS THE, UH, HAVE THE HIGHEST PROJECT RISK SCORE.

UM, ALL OF THESE, UH, OTHER FOUR PARTS THAT WE'VE DISCUSSED ARE ALL GONNA FEED INTO THE GROUNDWATER AUGMENTATION PROGRAM, WHERE WE LOOK AT, UM, ALL OF THE PERMITTING AND REGULATION REQUIREMENTS, UM, RESOURCE NEEDS ASSESSMENT AND ALTERNATIVES ANALYSIS.

AND, AND THAT MEANS, UH, WHERE ARE WE GONNA GET THE, UH, THE SOURCE WATER, PURE WATER, WRD ALTERNATIVES ANALYSIS? DO WE DO NOTHING, UH, IMPACTS TO THE GROUNDWATER COLLECTION SYSTEM? UM, WHEN WE ADD NEW WELLS, HOW DOES THAT IMPACT OUR EXISTING INFRASTRUCTURE? WHAT ARE THE IMPACTS TO WATER QUALITY AND TREATMENT PROCESSES WHEN WE DRILL NEW WELLS? ARE WE GONNA BE SEEING NEW CONSTITUENTS IN THE WATER THAT WE NEED TO CONSIDER? WHAT HAPPENS WHEN WE START INJECTING ADVANCED TREATED RECYCLED WATER INTO OUR AQUIFER? UH, THOSE ARE ALL THINGS THAT NEED TO BE CONSIDERED AND NEED TO BE, UH, DOCUMENTED.

UH, PUTTING TOGETHER THE, UH, PROJECT IMPLEMENTATION PLAN, UH, DOING A RISK MANAGEMENT ANALYSIS, COST ESTIMATES, UH, WORKING WITH REGULATORS.

UH, IT WILL ALL BE COMPILED INTO A, UH, FINAL AUGMENTATION REPORT.

UH, I'M SURE THIS IS A LOT TO DIGEST.

UM, BUT THAT'S WHERE WE'RE AT.

WE ANTICIPATE THE STUDY WILL BE WRAPPED UP, UM, THIS SUMMER, AND WE LOOK FORWARD TO, YOU KNOW, PROVIDING ALL OF OUR FINDINGS TO THE TEAM.

IN THE MEANWHILE, HAPPY TO TAKE ANY QUESTIONS.

THANK YOU, NICK.

THAT WAS A, THAT WAS A VERY DEEP DIVE.

IT WAS GOOD STUFF.

[01:20:01]

SORRY.

UH, IT'S BEEN A LONG DAY.

, UH, DO WE HAVE ANY PUBLIC COMMENTS?

[PUBLIC COMMENT]

GO AHEAD.

SO, LIKE THE PRESIDENT, UH, KEVIN SCOTCH HAD SAID, NICK, THAT WAS A VERY INSIGHTFUL PRESENTATION.

I TOOK COPIOUS AMOUNTS OF NOTES.

UM, ONE THING THAT I WOULD LIKE TO ADD, UH, FOR THE PURPOSE OF THE PUBLIC IS, UM, HOW MUCH TIME PRIOR TO THESE AMAZING PRESENTATIONS THAT I'VE SEEN THROUGHOUT THE DAY ARE THESE POSTED SO THAT THE PUBLIC HAS TIME TO REVIEW? SO, FROM A CITY'S PERSPECTIVE, THE CITY HAS 72 HOURS THAT THEY MUST HAVE ANY PRESENTATION AVAILABLE TO THE PUBLIC TO REVIEW.

I JUST WANTED TO POINT THAT OUT.

UM, GREAT USE OF GRAPHICS WHEN IT COMES TO PERCENTAGES.

'CAUSE GRAPHICS ARE A LOT EASIER FOR SOMEONE TO DIGEST FROM A VISUAL PERSPECTIVE WHEN IT COMES TO OUR WELLS.

UM, I DIDN'T KNOW HOW MANY WELLS WE ACTUALLY HAD, NOR THAT WE HAD TWO TYPES.

SO WHEN IT COMES TO THE WELLS, I THINK WHAT WOULD BE GOOD AND USEFUL INFORMATION WOULD BE, UM, ARE THESE WELLS? ARE THE PUMPS, UM, REDUNDANT? MEANING ARE THEY SPARED? UM, AND, AND IDENTIFYING WHICH WELLS HAVE A SPARE PUMP, AND WHICH WELLS DO NOT HAVE SPARE PUMPS.

UM, MANY OF YOU MIGHT NOT KNOW, BUT CLAY IS USED IN THE REFINING PROCESS TO REMOVE MOISTURE FROM JET FUEL.

SO I'M NOT SURE IF THE CLAY THAT WAS MENTIONED IS OF THE QUALITY WHERE WE CAN ACTUALLY EXTRACT SOME OF THAT CLAY AND MONETIZE THE CLAY TO THE REFINERIES IN SOUTHERN CALIFORNIA, THE SCREENING WAS MENTIONED, WHICH MEANS IT'S PART OF THE PREVENTATIVE MAINTENANCE TO MAKE SURE THAT THE PUMP IS NOT DAMAGED BY DEBRIS.

ON THE SUCTION SIDE, YOU MENTIONED SHARE THAT WE ACTUALLY HAVE SOME WELLS THAT WE SHARE.

SO AS A MEMBER OF THE PUBLIC, I'D LIKE TO KNOW WHICH WELLS IN PARTICULAR WE SHARE AND WHO WE SHARE THAT WATER WITH.

YOU DID IDENTIFY DIFFERENCE IN PRESSURES, BUT, UM, I WOULD LIKE TO KNOW WHAT IS THE OPTIMUM PRESSURE, UH, FOR OUR MECHANICAL SYSTEMS WHEN IT COMES TO SOIL COR UH, CORROSIVENESS? UM, IS THERE TECHNOLOGIES WHERE WE CAN SLOW DOWN THE CORROSIVITY, UM, OR NEUTRALIZE IT? BECAUSE OBVIOUSLY, UM, THE LEVEL OF CORROSION THAT THE SO HAS WILL EAT OUR, UH, SYSTEMS. AND UNFORTUNATELY, YOU'VE REACHED THE END OF YOUR THREE MINUTES.

GOTCHA.

YOU WANNA SUMMARIZE REAL QUICK? THAT'D BE FINE.

THINK WE HAVE ANY QUESTIONS FOR YOU.

UH, ARE THERE ANY COMMISSIONER COME.

NICK, I THINK YOU'VE DONE A, A, A GOOD ENOUGH JOB THAT, UH, I DON'T

[01:25:01]

THANK YOU VERY MUCH.