Jun 04, 2026 Utilities Commission

WE HAVE A QUORUM.

AND, UH, COMMISSIONER, I'M, I'M GONNA, I SHOULD SAY VICE PRESIDENT CORDERO IS ABSENT TODAY.

UM, I DON'T HAVE A SCRIPT, BUT, UH, WE WOULD LIKE TO, UH, WITH THE BOARD'S PERMISSION, EXCUSE FOR ABSENCE, PROPER LANGUAGE.

ALL RIGHT.

HEARING FOLLOWED BY THE REGULAR AGENDA AND THEN THE CONSENT CALENDAR.

UH, LET'S SEE.

UH, SO SLIGHT CHANGE TODAY, WE'RE GOING TO START WITH THE PUBLIC

[PUBLIC HEARING]

SO, ITEM NUMBER ONE ON THE REGULAR AGENDA IS OUR, UH, PUBLIC HEARING FOR URBAN WATER MANAGEMENT PLAN.

UH, THE PUBLIC HEARING FOR THAT IS NOW OPEN.

UH, THIS PUBLIC HEARING IS TO ALLOW THE COMMUNITY INPUT REGARDING THE LONG BEACH PUBLIC UTILITIES 2025 URBAN WATER MANAGEMENT PLAN UPDATE IN ACCORDANCE WITH STATE WATER CODE SECTION 1 0 6 1 0 3 1 0 6 5 6 OF THE URBAN WATER MANAGEMENT PLANNING ACT.

UH, DEAN WANG IS AVAILABLE FOR A STAFF REPORT.

GOOD MORNING.

GOOD MORNING, COMMISSIONERS.

UH, SO, UH, I, I GAVE THIS PRESENTATION AT OUR RESOURCES COMMITTEE, UH, MAY, BUT, UM, FOR THE PURPOSES OF THE PUBLIC HEARING, I DON'T SEE ANYONE FROM THE PUBLIC HERE.

UH, BUT I CAN, I CAN GO OVER THE PRESENTATION FOR THE, UH, THE REST OF THE BOARD THAT WASN'T PRESENT AT THE COMMITTEE.

UH, BUT BASICALLY, THE URBAN WATER MANAGEMENT PLAN IS A STATE, UH, REPORTING REQUIREMENT, UH, REQUIRED BY THE 1983 URBAN WATER MANAGEMENT PLANNING ACT.

IT MANDATES THAT, UH, URBAN WATER AGENCIES REPORT, UH, EVERY FIVE YEARS.

AND SO THIS IS THE 2025 URBAN WATER MANAGEMENT PLAN.

WE ARE NOT LATE IN SUBMITTING IT.

UH, WE'RE SUBMITTING IN 2026 BECAUSE IT ALLOWS US TO REPORT, UH, ALL THE INFORMATION THROUGH THE 2025, UH, YEAR.

SO, UH, AS, UH, THE YEARS HAVE GONE ON SINCE 1983, UH, THE STATE HAS REQUIRED MORE AND MORE INFORMATION TO BE REPORTED, UH, IN THIS URBAN WATER MANAGEMENT PLAN.

UH, AND SO, YOU KNOW, THE, THE EFFORT HAS, HAS CONTINUED TO GROW AS THIS REPORTING, UH, REQUIREMENT, UH, GETS MORE AND MORE COMPLEX.

IT IS DIFFERENT THAN OUR WATER RESOURCES PLAN.

I WANTED TO CLARIFY, UH, I'VE MENTIONED THIS IS A REGULATORY REPORTING REQUIREMENT, WHEREAS OUR, UH, URBAN, OUR WATER RESOURCES PLAN IS MORE OF A STRATEGIC PLANNING DOCUMENT.

SO, WITHIN THIS URBAN WATER MANAGEMENT PLAN, UH, IS A 25 YEAR SUPPLY RELIABILITY ANALYSIS, ESSENTIALLY LOOKING AT WHETHER OR NOT WE HAVE RELIABLE WATER SUPPLIES FOR THE NEXT 25 YEARS.

AND IT WILL EVALUATE, UH, OR HAS EVALUATED, UH, NORMAL YEAR CONDITIONS, SINGLE DRY YEAR CONDITIONS, AND MULTIPLE CONSECUTIVE DRY YEAR CONDITIONS.

AND THEN IT, UH, PROVIDES FOR, UH, OR REQUIRES, UH, WATER AGENCIES TO CONSIDER A WATER SHORTAGE CONTINGENCY PLAN.

SO, WHAT, WHAT WILL OUR WATER AGENCY DO IN THE CASE OF A WATER SHORTAGE? AND THEN FINALLY, UH, ALL THIS WORK NEEDS TO BE SUBMITTED TO THE DEPARTMENT OF WATER RESOURCES BY JULY 1ST OF THIS YEAR.

SO I'LL QUICKLY COVER THE, THE TABLE OF CONTENTS.

THE, UH, THE ENTIRETY OF THE URBAN WATER MANAGEMENT PLAN, UH, IS AVAILABLE ONLINE.

WE DIDN'T, UH, PROVIDE THE, THE MANY, MANY PAGES, UH, IN YOUR PACKET, BUT IT'S AVAILABLE, UH, FOR THE PUBLIC AS WELL.

UH, SO WITHIN THAT, THERE'S AN INTRODUCTION IN CHAPTER ONE.

UH, CHAPTER TWO, IT TALKS ABOUT HOW WE PREPARED THE PLAN.

CHAPTER THREE GOES OVER OUR WATER SYSTEM, UH, WHAT, WHAT THAT SETUP IS, UH, AND THEN CHAPTER FOUR LOOKS AT OUR WATER USES FOR OUR CUSTOMERS THAT PROJECTED OUT IN THE FUTURE.

CHAPTER FIVE, UH, TALKS ABOUT OUR, UH, STATE REQUIRED, UH, WATER CONSERVATION TARGETS.

CHAPTER SIX LOOKS AT, UH, OUR AVAILABLE WATER SYSTEM SUPPLIES.

AND THEN, UH, CHAPTER SEVEN, UH, COMBINES THAT, UH, THE SUPPLY AND DEMAND INTO A WATER SYSTEM RELIABILITY ASSESSMENT.

AND THAT'S WHAT I'LL COVER IN A LITTLE BIT MORE DETAIL HERE SHORTLY.

UH, AND THEN CHAPTER EIGHT IS A WATER SHORTAGE CONTINGENCY PLAN.

CHAPTER NINE IS DEMAND MANAGEMENT MEASURES, WHICH IS A FANCY WAY OF SAYING, UH, CONSERVATION, WHAT DO WE DO INTO REDUCE OUR WATER USE? AND THEN CHAPTER 10 IS, UH, THE LOGISTICS OF HOW WE WILL ADOPT THE PLAN, UH, LIKE TODAY AND, UH, SUBMIT AND, UH, IMPLEMENT THE URBAN WATER MANAGEMENT PLAN.

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SO, TO, TO COVER A LITTLE BIT MORE IN DETAIL OUR, OUR, UH, WATER SUPPLY RELIABILITY ASSESSMENT, WE FIRST LOOK AT OUR CUSTOMER WATER USE.

UH, AND SO IN, UM, OUR WATER RESOURCES PLANNING EFFORT, WE DID A, A VERY, UH, STATISTICALLY ROBUST ASSESSMENT, UH, MULTIPLE SCENARIOS OF WHAT OUR FUTURE DEMAND COULD LOOK LIKE, UH, FOR URBAN WATER MANAGEMENT PLANNING, UH, PURPOSES.

ESSENTIALLY, THE, THE, THE PRINCIPLE IS TO BE CONSERVATIVE.

YOU DON'T WANT TO OVER, UM, BE OVERCONFIDENT IN YOUR SUPPLY RELIABILITY.

AND SO, UH, FROM THE WATER RESOURCES PLAN, UH, EFFORTS, WE TOOK THE HIGHEST, UH, PLANNING, UH, ESTIMATE FOR OUR, OUR WATER DEMAND.

AND THAT'S WHAT YOU'LL SEE HERE.

UH, AND, AND SO THE NEXT STEP IN THE HERBAL WATER MANAGEMENT PLAN IS TO LOOK AT, UH, WHAT, WHAT YOU WOULD EXPECT IN A SINGLE DRY YEAR.

AND FOR, AGAIN, CONSERVATIVE PLANNING, SE UM, UH, PURPOSES, UH, THE, THE FIRST YEAR OF A A DROUGHT, UH, TYPICALLY WE HAVE NOT SEEN ANY, UH, DECREASE IN WATER USE, UM, IN THE FIRST YEAR OF A DROUGHT.

AND THEN IN A MULTIPLE YEAR DROUGHT, TYPICALLY WHAT YOU'LL SEE IS CUSTOMERS WILL NATURALLY TEND TO CONSERVE WATER, USE LESS WATER AS THEY SEE AND HEAR IN THE NEWS THAT THE STATE'S GOING TO A DROUGHT.

UH, BUT AGAIN, FOR CONSERVATIVE PLANNING PURPOSES, FOR URBAN WATER MANAGEMENT PLAN, WE'RE GONNA ASSUME THAT THERE IS NO REDUCTION IN WATER USE IN A FIVE CONSECUTIVE DRY YEAR SCENARIO.

SO WHAT THAT MEANS IS, UM, YOU KNOW, UNDER NORMAL SINGLE YEAR END, UH, MULTIPLE DRY YEAR SCENARIOS, WE HAVE A SINGLE, UH, SUPPLY FORECAST I ANTICIPATED.

AND SO NOW WE COMPARE THAT TO WHAT OUR ANTICIPATED, UH, SORRY, THAT WE HAVE A SINGLE, UH, LINE FOR OUR DEMANDS FORECASTED.

AND NOW WE COMPARE THAT TO OUR, UH, PROJECTED SUPPLIES.

SO, UH, WE LOOK AT ALL THESE YEARS, 2025 LOOKS A LITTLE BIT HIGHER, UH, JUST GIVEN SOME OF THE ASSUMPTIONS AND THE REALITY OF HOW MUCH SUPPLY WAS AVAILABLE IN 2025.

UH, BUT AS YOU LOOK FORWARD TO THE THE OUT YEARS, UH, WE STILL HAVE, UM, UH, MORE SUPPLY THAN DEMAND.

THE, THE BAR IS HIGHER THAN THE LINE, UH, UNDER A NORMAL YEAR, UNDER A SINGLE DRY YEAR.

UH, OUR RELIABILITY IS HIGHLY DEPENDENT OR ENTIRELY DEPENDENT ON METROPOLITAN WATER IMPORT WATER SUPPLIES.

AND SO WE'VE COORDINATED WITH THEIR URBAN WATER MANAGEMENT PLANNING EFFORT, AND IN THE METROPOLITAN'S URBAN WATER MANAGEMENT PLAN, THEY HAVE FORECASTED THAT THEY WILL HAVE SUPPLY RELIABILITY IN A SINGLE DRY YEAR.

AND SO, UH, NO DECREASE IN AVAILABLE SUPPLY.

AND YOU MIGHT WONDER WITH ALL OF THE, UH, CONCERNS ABOUT CLIMATE CHANGE IN THE COLORADO RIVER, HOW THAT'S POSSIBLE, UH, BUT ESSENTIALLY, UH, HOW THE URBAN WATER MANAGEMENT PLAN WORKS AND WHAT YOU'RE REPORTING AND WHAT METROPOLITAN'S REPORTING IS, UH, THEIR AVAILABILITY TO DELIVER, UH, WATER IN THE SENSE THAT THEY HAVE STORAGE AVAILABLE.

UH, THEY, RIGHT NOW, THEY'RE SITTING ON RECORD LEVELS OF STORAGE.

AND SO IT'S, IT'S NOT WHETHER OR NOT THEY'RE GONNA BE SHORT ON SUPPLY IN ANY SINGLE GIVEN YEAR.

IT'S MORE THEY'RE, UH, UM, THEIR, UH, CAPABILITY TO DELIVER WATER SUPPLIES THROUGH A FIVE YEAR, UH, DRY YEAR SCENARIO AND METROPOLITAN'S, UM, REPORTING THAT THEY WILL HAVE, UH, ADEQUATE IMPORTED WATER RELIABILITY.

AND HENCE, YOU KNOW, THAT TRICKLES DOWN TO LONG BEACH.

WE ARE FORECASTING RELIABILITY THROUGH THE YEAR 2050.

AND SO, AS I POINTED OUT, BECAUSE THE SUPPLY BARS ARE HIGHER THAN THE DEMAND BARS WE'RE, UH, FORECASTING RELIABILITY.

UH, THAT'S THE KEY TAKEAWAY FROM THIS URBAN WATER MANAGEMENT PLAN, IS THAT, UH, WE'RE FORECASTING RELIABLE, UH, SUPPLIES THROUGH THE YEAR 2050.

I MENTIONED, UH, THE REQUIREMENT TO HAVE A WATER SHORTAGE CONTINGENCY CONTINGENCY PLAN.

SO IN THE CASE THAT WE DO HAVE A SHORTAGE OF SUPPLY IN ANY GIVEN YEAR, UH, THE STATE WANTS TO KNOW THAT EVERY AGENCY'S PREPARED WITH A PLAN OF WHAT TO DO AND HOW TO HANDLE THAT TO REDUCE THEIR WATER USAGE TO ESSENTIALLY MATCH THE LOWER THE DEMAND TO MEET THE AVAILABLE SUPPLIES.

AND SO, UH, AS FAR AS REDUCING DEMAND GOES, UH, THE, THE, THE BIGGEST CHUNK OF WATER SAVINGS COMES FROM OUR, OUR OUTDOOR WATER USAGE.

SO THERE ARE MANY OTHER, UH, RULES INVOLVED IN EACH STAGE OF OUR WATER SHORTAGE CONTINGENCY PLAN.

BUT I JUST WANNA HIGHLIGHT THE IRRIGATION FOCUSED, UH, MEASURES.

UH, SO STAGE ONE IS EQUIVALENT TO A 10% REDUCTION, AND THAT WOULD SEE US REDUCING WATERING, UH, TO TUESDAY, THURSDAY, SATURDAYS, THREE DAYS, UH, 10, 10 MINUTES PER STATION.

STAGE TWO REDUCES SUMMER IRRIGATION, UH, TO THE SAME THREE DAYS.

BUT THEN WINTER IRRIGATION CUTS GETS CUT DOWN TO TWO.

AND STAGE THREE, UH, SEES US AT TWO WATERING DAYS YEAR ROUND.

AND THEN GOLF COURSES, PARKS, SCHOOLS, UH, ARE ASKED TO REDUCE THEIR WATER USAGE BY 10%.

UH, AND SO, UH, BEYOND STAGE THREE, STAGE THREE IS THE MOST SEVERE, UH, SHORTAGE THAT WE'VE EVER HAD TO INVOKE HERE IN LONG BEACH.

UH, AND, UH, AT THE TIME WHEN WE WERE ADOPTING THIS PLAN, UH, THE BOARD, UH, DECIDED THAT, UM, SHOULD WE NEED ADDITIONAL STAGES, THEY WOULD CONSIDER THE MEASURES, UH, AT THAT TIME.

AND SO, STAGES FOUR OR FIVE AND SIX ARE, UM, UNDE UNDEFINED AT THIS POINT.

BUT, UH, IT WOULD BE THE BOARD'S PREROGATIVE, YOU KNOW, WHAT SPECIFIC MEASURES TO IMPLEMENT.

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SO, LOOKING FORWARD, UH, OR LOOKING BACK A LITTLE BIT IS, UH, MAY 14TH, WE PRESENTED THIS SAME PRESENTATION TO THE RESOURCES COMMITTEE.

UH, MAY 18TH, THE PUBLIC, UH, DRAFT, UH, WAS MADE THE, THE DRAFT WAS MADE AVAILABLE FOR PUBLIC REVIEW.

UH, SO ACTUALLY THANK YOU TO PUBLIC AFFAIRS, UH, JOY AND JESSE AND MCKAYLA AND, AND, UH, DELISE FOR THEIR HARD WORK IN PUTTING TOGETHER AND MAKING THIS DOCUMENT.

LOOK, LOOK, ONE OF THE BEST, UH, URBAN WATER MANAGEMENT PLANS OUT THERE.

UH, TODAY IS THE, THE BOARD MEETING A PUBLIC HEARING.

AND IT, IT'S POSSIBLE IF THERE ARE NO PUBLIC COMMENTS, THAT WE COULD, UH, ADOPT THE PLAN.

IF THERE ARE, UH, BOARD COMMENTS OR PUBLIC COMMENTS THAT WE WOULD NEED TO ADDRESS, WE'VE ACTUALLY LEFT TIME IN THE SCHEDULE TO COME BACK TO BOARD, UH, MAKE THOSE CHANGES, COME BACK TO BOARD ON JUNE 18TH AND ADOPT, UH, AND ALL THAT IS, UH, WITH THE GOAL IN MIND TO SUBMIT THIS PLAN TO THE DEPARTMENT OF WATER RESOURCES BY JULY 1ST.

SO WITH THAT, I CONCLUDE MY PRESENTATION AND OPEN IT UP TO COMMENTS FROM PUBLIC OR THE BOARD.

THANK YOU, DEAN.

UH, SO THE PUBLIC COMMENT PERIOD WILL NOW BE OPEN.

UH, IS THERE ANYONE WISHING TO SPEAK REGARDING THE PUBLIC HEARING ITEM? UH, ALL RIGHT.

SO THE PUBLIC COMMENT PERIOD IS NOW CLOSED.

UH, ARE THERE ANY, UH, BOARD, UH, COMMENTS OR QUESTIONS? JUST THAT IT'S WAS VERY CLEARLY PRESENTED.

AND WE'VE SEEN THIS BEFORE AND IT LOOKS VERY CONSISTENT WITH WHAT WE'VE HEARD IN THE PAST AND THE PLANS THAT WE HAVE IN PLACE, THE THINGS THAT HAVE WORKED IN THE PAST.

AND IT'S REALLY GREAT NEWS ABOUT THE STORAGE, YOU KNOW, IN TERMS OF HELPING US MITIGATE THE SHORTAGES IN THE FUTURE.

SO THAT, THAT'S A QUESTION WE GET A LOT FROM THE PUBLIC ABOUT WHAT ARE WE DOING ABOUT STORAGE? SO THANK YOU.

THAT'S A REALLY IMPORTANT MESSAGE, I THINK, FOR THE COMMUNITY.

ABSOLUTELY.

YES.

THAT'S THE MOST IMPORTANT FINDING OF THIS PLAN, IS THAT, UM, THE PUBLIC CAN REST ASSURED THAT, UH, WE'RE HARD AT WORK PLANNING TO MAKING SURE WE HAVE SOME RELIABLE SUPPLIES FOR THE FUTURE.

THANK YOU, DEAN.

ANY OTHER COMMENTS? ALRIGHT.

UH, SO IN THAT CASE, UH, THANK YOU DEAN.

UH, THE PUBLIC HEARING IS NOW ADJOURNED.

ADOPT RESOLUTION NUMBER UT 1 5 5 8 5 5 8, EXCUSE ME, ADOPTING THE LONG BEACH PUBLIC UTILITIES DEPARTMENT 2025 URBAN WATER MANAGEMENT PLAN AND AUTHORIZING ITS SUBMITTAL TO THE DEPARTMENT OF WATER RESOURCES.

ALRIGHT, MOVING ALONG.

AGENDA ITEM NUMBER TWO,

[2. 26-55301 Recommendation to adopt Resolution No. UT-1558 adopting the Long Beach Public Utilities Department 2025 Urban Water Management Plan and authorizing its submittal to the Department of Water Resources. Suggested Action: Approve recommendation. ]

UH, MAY I PLEASE HAVE A MOTION? THANK YOU.

UH, ARE THERE ANY PUBLIC COMMENTS? ARE THERE ANY COMMISSIONER COMMENTS? ALL RIGHT.

UH, DINA, MAY WE PLEASE HAVE A ROLL CALL VOTE ON THE RESOLUTION.

VICE PRESIDENT CORDERO IS ABSENT.

SECRETARY PARKIN AYE.

COMMISSIONER MCGUIRE? YES.

AGENDA ITEM NUMBER THREE.

[3. 26-55302 Recommendation to adopt Specifications WD-19-24 and award a contract to Southwest Pipeline and Trenchless Corp., for the Sanitary Sewer Rehabilitation and Replacement Program (SSRRP) Project 11 (SC-0453), in a total amount not to exceed $1,595,750.00; and authorize the General Manager to execute all documents necessary to enter into the contract, including any amendments. Suggested Action: Approve recommendation. ]

UH, LET'S SEE.

ADOPT SPECIFICATIONS WD 9 24 AND AWARD A CONTRACT TO SOUTHWEST PIPELINE AND TRENCHLESS CORP FOR THE SANITARY SEWER REHABILITATION AND REPLACEMENT PROGRAM.

UH, MAY PLEASE HAVE A MOTION TO ADOPT.

UM, SO THIS ITEM IS BEFORE US WITH A STAFF RECOMMENDATION.

IN THE INTEREST OF TIME.

AND UNLESS THERE IS AN OBJECTION FROM THE COMMISSION, THE CHAIR WOULD ENTERTAIN PROCEEDING TO APPROVE THE STAFF RECOMMENDATION WITHOUT A STAFF PRESENTATION.

UH, HEARING NO REQUEST FOR PRESENTATION IS THERE.

UH, LET'S SEE.

WE'VE GOT A MOTION AND A SECOND.

UH, ALL THOSE IN FAVOR SAY AYE.

ANY OPPOSED? PERFECT.

THE GENERAL MANAGER TO EXECUTE A CONTRACT AND ANY NECESSARY DOCUMENTS, INCLUDING ANY AMENDMENTS WITH TALENT AND ACQUISITION L-L-C-E-B-A STAND EIGHT FOR ONGOING SYSTEM ANALYSIS, REMEDIATION IMPLEMENTATION, AND PROJECT MANAGEMENT SERVICES.

MOVING ON, AGENDA ITEM NUMBER FOUR, AUTHORIZE

[4. 26-55303 Recommendation to authorize the General Manager to execute a contract and any necessary documents, including any amendments, with Talent & Acquisition LLC, dba Stand 8, for ongoing system analysis, remediation, implementation, and project management services, in an annual amount not to exceed $150,000, for a period of one year, with the option to renew for one additional year, at the discretion of the General Manager. Suggested Action: Approve recommendation. ]

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

UH, AND AGAIN, THIS ITEM IS BEFORE US WITH A STAFF RECOMMENDATION.

UM, IN THE INTEREST OF TIME, UNLESS THERE'S A OBJECTION FROM THE COMMISSION, THE CHAIR WOULD ENTERTAIN PROCEEDING TO APPROVE THE STAFF RECOMMENDATION WITHOUT A PRESENTATION.

ALRIGHT, SEEING NONE GOT A MOTION AND A SECOND.

IS THERE ANY PUBLIC COMMENT? UH, I ASSUME THERE'S NO COMMISSIONER COMMENTS.

UH, ALL THOSE IN FAVOR SAY AYE.

ADOPT RESOLUTION NUMBER UT 1 5 5 9.

OPPOSED? THANK YOU.

FIVE.

[5. 26-55304 Recommendation to adopt Resolution No. UT-1559 authorizing the General Manager to execute a contract and any necessary documents, including any amendments, with Sonsray Machinery LLC, as the authorized dealer of CASE Construction Equipment, for the purchase and delivery of two CASE Construction wheel loaders on the same terms and conditions afforded to Sourcewell (Contract No. 011723-CNH), in a total amount not to exceed $601,436.34, until the Sourcewell contract expires on April 14, 2027, with the option to renew for as long as the Sourcewell contract is in effect, at the discretion of the General Manager. Suggested Action: Approve recommendation. ]

AUTHORIZING THE GENERAL MANAGER TO EXECUTE A CONTRACT IN ANY NECESSARY DOCUMENTS, INCLUDING ANY

[00:15:01]

AMENDMENTS WITH SUNS RAY MACHINERY, LLC AS THE AUTHORIZED DEALER OF CASE CONSTRUCTION EQUIPMENT FOR THE PURCHASE AND DELIVERY OF TWO CASE CONSTRUCTION WHEEL LOADERS.

UH, MAY I PLEASE HAVE A MOTION TO ADOPT? A SECOND? THANK YOU.

UH, UH, AGAIN, ON THIS ITEM, UH, IT'S BEFORE US WITH A STAFF RECOMMENDATION.

IN THE INTEREST OF TIME.

AND UNLESS THERE'S AN OBJECTION FROM THE COMMISSION, THE CHAIR WOULD ENTERTAIN PROCEEDING TO APPROVE THE STAFF RECOMMENDATION WITHOUT A STAFF PRESENTATION.

UH, ARE THERE ANY PUBLIC COMMENTS AND ANY COMMISSIONER COMMENTS OR REQUESTS FOR A PRESENTATION? YES, SIR.

THESE NEW, NEW EQUIPMENT AND EQUIPMENT, MORNING COMMISSIONERS.

SO THESE TWO WHEEL LOADERS ARE REPLACING, UH, OLDER MODELS.

AND SO THOSE WILL BE RETIRED AND PUT OUT FOR AUCTION, CORRECT? YES, WE CAN ACKNOWLEDGE THAT, BUT WE DON'T USUALLY TRACK THE ACTUAL INDIVIDUAL REVENUE FOR EACH INDIVIDUAL ITEM.

THERE'S A HUGE ITEM OF RETIREMENT ORDERS THAT THEN GOES TO SALVAGE, AND THEN IN THAT SALVAGE PROCESS, REVENUE IS RECOVERED BACK TO THE BOARD.

WE CAN COMMENT ABOUT THE RECOVERY OF THE REVENUE IN GENERAL.

UH, THAT'S CERTAINLY WHAT WE CAN DO.

GOT IT.

THANK YOU FOR THAT.

UH, DINA, MAY WE PLEASE HAVE A ROLL CALL? VOTE SECRETARY PARKMAN.

COMMISSIONER MCGUIRE.

COMMISSIONER AUSTIN AND PRESIDENT SCOTT.

SIX, ADOPT RESOLUTION NUMBER UT 1 5 6 0 AUTHORIZING THE GENERAL MANAGER TO EXECUTE A CONTRACT IN ANY NECESSARY DOCUMENTS, INCLUDING ANY AMENDMENTS WITH MARCO INDUSTRIES D MARCO EQUIPMENT COMPANY AS THE AUTHORIZED DEALER FOR TIMCO REGENERATIVE AIR SWEEPERS.

UH, ITEM NUMBER

[6. 26-55305 Recommendation to adopt Resolution No. UT-1560 authorizing the General Manager to execute a contract and any necessary documents, including any amendments, with Marco Industries Inc., dba Mar-co Equipment Company, as the authorized dealer for TYMCO Regenerative Air Sweepers, for the purchase and delivery of one TYMCO Model 500X Sweeper on the same terms and conditions afforded to Sourcewell (Contract No. 111522-TYM), in a total amount not to exceed $581,472.00, until the Sourcewell contract expires on February 3, 2027, with the option to renew for as long as the Sourcewell contract is in effect, at the discretion of the General Manager. Suggested Action: Approve recommendation. ]

UH, MAY PLEASE HAVE A MOTION TO ADOPT.

UH, AND THIS IS THE LAST ITEM BEFORE US WITH A STAFF RECOMMENDATION, UH, THAT WE WOULD ENTERTAIN PROCEEDING WITHOUT THE PRESENTATION.

UH, ARE THERE ANY PUBLIC COMMENTS AND, UH, ANY COMMISSIONER COMMENTS OR REQUESTS FOR PRESENTATION? ALRIGHT, SO WE'VE GOT A MOTION.

AND SECOND, UH, DINA, MAY WE PLEASE HAVE ROLL CALL VOTE SECRETARY PARKIN.

COMMISSIONER MCGUIRE.

COMMISSIONER AUSTIN, PRESIDENT SCOTT.

UH, WILL BE COVERED ALL TOGETHER WITH ONE PRESENTATION.

THANK YOU VERY MUCH.

MOVING ON, UH, AGENDA ITEMS NUMBER SEVEN, EIGHT,

[7. 26-55306 Recommendation to adopt Resolution No. UT-1561, a Resolution of the City of Long Beach Board of Public Utilities Commissioners fixing rates and charges for the gas services to all customers, subject to the approval of the City Council by Resolution. Suggested Action: Approve recommendation. ]

AND NINE,

[8. 26-55307 Recommendation to adopt Resolution No. UT-1562, a Resolution of the City of Long Beach Board of Public Utilities Commissioners fixing rates and charges for water and sewer services to all customers, subject to the approval of the City Council by Resolution, and subject to a public protest hearing as provided for in the California Constitution Article XIII. Suggested Action: Approve recommendation. ]

[9. 26-55308 Recommendation to adopt Resolution UT-1563 adopting the annual budget for the Long Beach Utilities Department for the fiscal year 2026-2027 and authorize staff to transmit the Resolution and the budget to the City Manager, Mayor, and City Council. Suggested Action: Approve recommendation. ]

UH, THEY ARE RESOLUTION, SO WE WILL NEED A ROLL CALL VOTE ON EACH ITEM.

UH, SO ITEM NUMBER SEVEN, ADOPT RESOLUTION NUMBER UT 1 5 6 1 RESOLUTION OF THE CITY OF LONG BEACH BOARD OF PUBLIC UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR THE GAS SERVICES TO ALL CUSTOMERS SUBJECT TO THE APPROVAL OF THE CITY COUNCIL BY RESOLUTION.

UM, WE'LL START WITH THAT AND WE'LL ASK, UH, WELL ACTUALLY, LEMME READ ALL THREE OF THESE AND WE'LL DO A MOTION IN A SECOND ON, UH, ON EACH OF THEM.

SO, UH, FOR ITEM NUMBER SEVEN, MAY PLEASE HAVE A MOTION TO ADOPT.

MOTION TO ADOPT.

AND SECOND.

ALRIGHT, THANK YOU.

AND THEN, UH, I'M JUST GONNA READ THE NEXT TWO AGENDA ITEMS AND THEN GERALDINE WILL MOVE ON TO YOU FOR THE, UH, PRESENTATION.

SO ITEM NUMBER EIGHT, ADOPT RESOLUTION NUMBER UT 1 5 6 2 RESOLUTION OF THE CITY OF LONG BEACH BOARD OF PUBLIC UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR WATER AND SEWER SERVICES TO ALL CUSTOMERS, SUBJECT TO THE APPROVAL OF CITY COUNCIL BY RESOLUTION AND SUBJECT TO A PUBLIC PROTEST HEARING AS PROVIDED FOR IN THE CALIFORNIA CONSTITUTION.

ARTICLE 13.

UH, MAY I HAVE A MOTION ON AGENDA ITEM NUMBER EIGHT, PLEASE? THANK YOU.

AND A SECOND.

AND FINALLY, ITEM NUMBER NINE, ADOPT RESOLUTION UT 1 15 63, ADOPTING THE ANNUAL BUDGET FOR THE LONG BEACH UTILITIES DEPARTMENT FOR THE FISCAL YEAR 2026 THROUGH 2027.

AND AUTHORIZE STAFF TO TRANSMIT THE RESOLUTION AND BUDGET.

CITY MANAGER, MAYOR AND CITY COUNCIL.

MAY I PLEASE HAVE A MOTION TO ADOPT? MOTION TO ADOPT.

GOOD MORNING COMMISSIONERS.

ALRIGHT, THAT BEING SAID, GERALDINE ALEJO FLOOR IS YOURS.

FOLLOWING MONTHS OF REVIEW, TODAY IS OUR THIRD

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AND FINAL SCHEDULED BUDGET PLANNING SESSION TODAY.

WE WILL ALSO BE PROVIDING AN UPDATE ON OUR COMMUNITY OUTREACH EFFORTS AND THEN REVIEW RATE RECOMMENDATIONS FOR EACH FUND.

THIS INCLUDES THE TOTAL ESTIMATED RESIDENTIAL RATE IMPACTS, WHICH WILL BE REVIEWED TOWARDS THE END OF THE PRESENTATION.

SO OUR BUDGET PROCESS TIMELINE STARTED IN JANUARY, AND TODAY THE BOARD WILL BE REVIEWING THE FISCAL YEAR 27 BUDGET, ALONG WITH THE RATE ADJUSTMENTS FOLLOWING TODAY, PROP TWO 18 NOTICES FOR WATER AND SEWER WILL THEN BE SENT OUT AROUND MID-JUNE.

THEN IN SEPTEMBER, THE UTILITY DEPARTMENT'S BUDGET AND RATES WILL BE FORWARDED TO CITY COUNCIL FOR APPROVAL ALONG WITH THE REST OF THE CITYWIDE BUDGET.

SO THIS YEAR'S PROCESS INCLUDES A ROBUST COMMUNITY ENGAGEMENT EFFORT, WHICH STARTED BACK IN APRIL.

AND THIS SLIDE HERE HIGHLIGHTS COUNCIL DISTRICTS, NEIGHBORHOOD ASSOCIATIONS, COMMUNITY-BASED ORGANIZATIONS WHO HAVE RECEIVED PRESENTATIONS OR SCHEDULED TO BECAUSE PROPOSED RATES WERE NOT, UM, WERE STILL UNDER REVIEW RATE ADJUSTMENTS WERE NOT INCLUDED IN THESE INITIAL OUTREACH EFFORTS.

RATHER, THE EARLY COMMUNITY ENGAGEMENT PRESENTATIONS FOCUSED ON INFORMING THE COMMUNITY ABOUT HOW THEIR BILL SUPPORTS OPERATIONS AND CRITICAL INFRASTRUCTURE.

IN ADDITION, WE ALSO HAD THE OPPORTUNITY TO HIGHLIGHT OUR UTILITY PROGRAMS, INCLUDING OUR WATER AND ENERGY EFFICIENCY PROGRAMS. AFTER TODAY, THE COMMUNITY OUTREACH STRATEGY.

MOVING FORWARD, WE'LL BE TO INTRODUCE THE PROPOSED RATES AND INVITE THE COMMUNITY TO PROP TWO 18, HEARING THE, TO THE PROP TWO 18 HEARING ON AUGUST 27TH.

AND HERE ARE THE FIVE COMPLETED PRESENTATIONS WITH COUNCIL DISTRICTS FOUR AND EIGHT, AS WELL AS RAMONA PARK NEIGHBORHOOD ASSOCIATIONS SOUTH OF CONANT, NEIGHBORHOOD WATCH, AND THE COUNCIL OF BUSINESS ASSOCIATIONS.

THUS FAR, PRESENTATIONS HAVE BEEN WELL RECEIVED WITH ACTIVE AUDIENCE ENGAGEMENT, AND THIS INCLUDES QUESTIONS TO STAFF AS WELL AS POSITIVE FEEDBACK FOR OUR TEAM FOR SERVICES PROVIDED.

AND WITH THAT, I'LL TURN IT OVER TO DANIEL GUTIERREZ FOR A REVIEW OF EACH FUND'S RATE, RECOMMENDATIONS, AND IMPACT.

GOOD MORNING COMMISSIONERS.

UH, SO WE'RE GONNA START OFF WITH THE WATER FUND.

UH, HERE WE HAVE THE 198 MILLION IN TOTAL EXPENDITURES FOR FY 27 AND THE REVENUE PROJECTION OF 199 MILLION, UH, WHICH INCLUDES THE 6% RATE INCREASE.

UH, THIS GIVES US THE $780,000 IN FUND BALANCE GAIN HERE WE HAVE THE WATER FUND, UH, FORECAST FOR THE NEXT FIVE YEARS WITH THE, UH, SUGGESTED RATE INCREASE AS WELL AS THE, UM, ILLUSTRATIVE RATE INCREASES FOR THE OUT YEARS.

UH, DURING THE PREVIOUS PLANNING SESSIONS, UH, QUESTIONS WERE RAISED REGARDING THE IMPACT OF LOWER OR NO RATE INCREASES.

UH, THOSE CONCERNS ARE UNDERSTANDABLE AS RATE INCREASES DIRECTLY AFFECT OUR CUSTOMERS AND ARE NOT CONSIDERED LIGHTLY.

AT THE SAME TIME, REVENUE SHORTFALLS COMPOUND OVER TIME MAKE IT MORE DIFFICULT TO MAINTAIN FINANCIAL STABILITY, RESERVE ADEQUATE FUND BALANCES, AND INVEST IN CRITICAL INFRASTRUCTURE.

THE PROPOSED RATE INCREASES PROVIDE THE REVENUE NEEDED TO SUPPORT THESE OBJECTIVES AND HELP REDUCE RELIANCE ON DEBT FINANCING OVER TIME.

WITHOUT SUFFICIENT RATE GROWTH, THE UTILITY WOULD LIKELY NEED TO INCREASE BORROWING OR DEFER CAPITAL INVESTMENTS, WHICH CAN LEAD TO HIGHER COSTS AND GREATER FINANCIAL CHALLENGES IN THE FUTURE.

HERE WE HAVE THE RATE SCHEDULE THAT WAS INCLUDED IN YOUR PACKET.

ON THE LEFT SIDE, WE HAVE THE RECOMMENDED CHANGES FOR THE VOLUMETRIC FOR BOTH POTABLE AND RECLAIMED.

AND ON THE RIGHT SIDE WE HAVE THE DAILY SERVICE CHARGES.

SWITCHING OVER TO THE GAS FUND, UH, HERE WE HAVE THE TOTAL EXPENDITURES OF 145 MILLION AND THE TOTAL REVENUES OF 148 MILLION.

WE ALSO INCLUDED THE RELEASE OF THE 3 MILLION FROM THE HUNTINGTON BEACH, UH, PIPELINE PROJECT.

HERE WE HAVE THE GAS FUND FORECAST WITH THE 6% ILLUSTRATED REVENUE ADJUSTMENTS.

AND THEN HERE ARE THE ADJUSTMENTS WITH THE FIRST COLUMN BEING THE PERCENTAGE CHANGES WITHIN THE RATES,

[00:25:01]

AND THEN THE SECOND ONE BEING THE PERCENTAGE CHANGE IN THE TOTAL BILL, WHICH INCLUDES THE COMMODITY.

AND THEN JUST A REMINDER, WE ARE NOT ADJUSTING, UH, SCHEDULES FIVE, SIX, AND EIGHT, ALSO, INCLUDING IN YOUR PACKET WAS THE, UH, RATE CHANGES FOR THE GAS.

SO HERE WE HAVE SCHEDULES ONE, TWO, AND THREE.

NOW ON THIS SLIDE WE HAVE SCHEDULES FOUR, SEVEN, AND NINE.

HERE WE HAVE THE TOTAL APPROPRIATION, WHICH INCLUDES ALL GAS FUND ACTIVITIES INCLUDING THE GAS, PREPAY, AND AB 32.

'CAUSE THESE PROGRAMS ARE PART OF THE GAS FUND GROUP.

UH, THEY'RE ASSOCIATED REVENUES AND EXPENDITURES ARE INCLUDED IN THE TOTAL APPROPRIATION AND ARE GENERALLY OFFSET BY CORRESPONDING REVENUES.

SWITCHING OVER TO THE SEWER FUND HERE WE HAVE THE TOTAL EXPENDITURES OF 62 MILLION AND THE TOTAL REVENUES OF 67 MILLION.

AND WITH THAT, UH, AND WHICH ALSO INCLUDES THE 8% INCREASE.

AND WITH THAT, WE ARE ABLE TO HAVE THE FUND BALANCE GAIN OF 4.7 MILLION.

HERE IS OUR FIVE YEAR FORECAST, WHICH SHOWS THE SUGGESTED 8% RATE INCREASE AND THE ILLUSTRATIVE RATE INCREASES IN THE OUT YEARS.

ALSO INCLUDED IN YOUR PACKET WAS THE RATE RECOMMENDATIONS FOR THE SEWER, WHICH INCLUDES ON THE LEFT SIDE, UH, THE VOLUMETRIC AND ON THE RIGHT SIDE THE DAILY SERVICE CHARGES FOR RATE COMPARISONS AND NEXT STEPS.

UH, HERE WE HAVE THE RECOMMENDED 6% RATE INCREASE FOR THE SINGLE FAMILY AVERAGE RESIDENTIAL BILL, UH, WHICH IS $4 AND 64 CENTS.

UH, FOR THE SEWER BILL FOR THE 8% INCREASE, WE GET THE $1 AND 10 CENTS.

AND THEN WITH THE 2% RATE INCREASE, UH, WE HAVE 59 CENTS FROM THE GAS FUND.

UH, THE TOTAL IMPACT ON THE BILL WOULD BE $6 AND 33 CENTS.

HERE WE HAVE THE CITY COMPARISON GRAPHS, WHICH, UH, KEEP US IN LINE WITH PREVIOUS, UM, YEARS.

WE INCLUDED THE CURRENT LONG BEACH RATE AS WELL AS THE PROPOSED RATE.

HERE WE HAVE THE RESIDENTIAL MONTHLY GAS BILL COMPARISON.

SO, UM, THE FIRST SET OF COLUMNS IS FROM THE CURRENT, UM, AVERAGE BILL.

THE, THE SECOND SET OF COLUMN OR THE SECOND GROUPS IS THE PROPOSED.

AND THEN THE LAST IS THE SOCAL GAS COMPARISON WITH THE BLUE BEING THE WINTER AND THE ORANGE BEING THE SUMMER.

NEXT STEPS.

SO SPRING, WE'RE GONNA CONTINUE TO, UH, CONTINUE OUR COMMUNITY OUTREACH.

UH, IN THE SUMMER, UH, WE HAVE THE AB, UH, 2, 2 5 7 PROCESS AS WELL AS THE PROP TWO 18 HEARING.

IN THE FALL, WE HAVE THE FY 27 CITY COUNCIL BUDGET ADOPTION WITH THAT STAFF IS RECOMMENDING, UH, TO ADOPT RESOLUTION NUMBER UT 5 1 5 6 1, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF VIEW PUBLIC UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR THE GAS SERVICES TO ALL CUSTOMERS, SUBJECT TO THE APPROVAL OF CITY COUNCIL BY RESOLUTION.

THE SECOND ITEM, UH, AGENDA ITEM NUMBER EIGHT IS TO ADOPT RESOLUTION NUMBER UT 1 5 6 2, A RESOLUTION OF THE CITY OF LONG BEACH BOARD OF PUBLIC UTILITIES COMMISSIONERS FIXING RATES AND CHARGES FOR WATER AND SEWER SERVICES TO ALL CUSTOMERS, SUBJECT TO THE APPROVAL OF THE CITY COUNCIL BY RESOLUTION AND SUBJECT TO THE PUBLIC PROTEST HEARING AS PROVIDED FOR IN THE CITY, UH, IN IN THE CALIFORNIA CONSTITUTION ARTICLE.

THE NEXT ONE IS TO ADOPT AGENDA ITEM NUMBER NINE, UH, WHICH IS UT 1 5 6 3, ADOPTING THE ANNUAL BUDGET FOR THE LONG BEACH UTILITIES DEPARTMENT FOR THE FISCAL YEAR 20, UH, SIX OR FOR 27, AND AUTHORIZED STAFF TO TRANSMIT THE RESOLUTION AND THE BUDGET TO THE CITY MANAGER, UH, MAYOR AND THE CITY COUNCIL.

WITH THAT, I CAN TAKE ANY QUESTIONS.

UM, OR PUT INTO CONTEXT THE RATE INCREASES AS I READ IT.

DANIEL, ARE THERE ANY PUBLIC COMMENTS? GREAT.

ARE THERE ANY COMMISSION? ALL RIGHT.

FIR, FIRST GERALDINE DANIEL.

THANK YOU GUYS FOR ALL YOUR WORK.

IT, IT'S A TON OF INFORMATION.

I APPRECIATE IT.

UM, I, I DO HAVE SOME CONCERNS OR, YES.

UM, QUESTIONS ON NUMBER SEVEN.

AND IT'S THE GAS RATES.

AND FIRST OF ALL, THE, THE, UM, PRESENTATION PROVIDED A LOT OF INFORMATION THAT WAS, THAT'S VERY HELPFUL.

I THINK, AND MY, I GUESS DISAPPOINTMENT IN THE LETTER IS THAT, UM, THIS IS THE, THAT WE APPROVE WAS WHAT WE APPROVE ON THE LETTER AND IT DOESN'T CONTAIN,

[00:30:01]

UM, SO IT'S, I GUESS IT'S MORE TO THE GENERAL MANAGER, BUT THE, UM, AND I'LL JUST START WHERE, WHERE IT'S CONFUSING TO ME THE RESOLUTION UT 5 61 AMENDS THE EXISTING RATES AND IT INCLUDES INCREASES TO THE GAS RATES EFFECTIVE OCTOBER 1ST.

AND THEN THE ONLY SCHEDULE THAT'S ON THE LETTER IS THE ACTUAL PERCENTAGE INCREASE TO THE TRANSMISSION RATE, WHICH ON YOUR SLIDE 14, THERE'S A COMPARISON THAT SHOWS THE EFFECTIVE, I GUESS, UH, RATE INCREASE TO THE VARIOUS CATEGORIES.

SO IF I'M A SMALL BUSINESS PERSON AND I ONLY GET THIS LETTER WITHOUT FURTHER HAVING TO DO MY OWN RESEARCH, I AM NOW LOOKING AT, WELL, MY SMALL COMMERCIAL INDUSTRIAL RATE'S GOING UP 24% WHEN IT'S NOT REALLY GOING UP 24%, WE'RE INCREASING THE TRANSMISSION RATE BY 24%.

AND I, AND I THINK WE COULD SAY THAT CLEAR IN THE LETTER, IT, IT DOESN'T, THERE'S NO CONTEXT TO THE 24%, 23%, NINE, 29%.

WHEN I LOOK AT THAT OTHER GRAPH, IT'S, IT EQUATES TO A PERCENTAGE INCREASE IN THE BILL OF 1 14, 12 11.

AND I THINK THAT'S IMPORTANT TO COMMUNICATE TO THE PUBLIC IN THE LETTER THAT WE ACTUALLY, THEY ASKED THE COMMISSION TO ADOPT BECAUSE IT LOOKS LIKE I'M ADOPTING A 24% INCREASE AND, AND WE'RE GONNA TAKE HEAT FOR THAT.

UM, RIGHTFULLY SO.

IT IT'S OUR DECISION, BUT WE HAVE A BETTER STORY TO TELL AND WE'RE NOT TELLING IT.

THE OTHER THING THAT'S CONFUSING TO ME THAT I DON'T LIKE IN THIS LETTER IS WE HAVE THE SCHEDULE THERE AND IT SAYS SCHEDULE 1, 2, 3, 4, 7, 9.

I HAVE NOW LEARNED THERE'S 10 SCHEDULES, UM, FIVE WE SHOULD HAVE IN THERE THAT SAYS NO CHANGE.

AND THEN AS FAR AS I UNDERSTAND IT, SIX, EIGHT AND 10 ARE NO LONGER USED.

WHY WOULDN'T WE JUST LIST ALL 10 AND PUT THAT IN THERE? SO IT HAS CONTEXT.

IT DOESN'T, WE'RE JUST THESE NUMBERS ARE JUMPING AROUND AND IT'S NOT THERE.

AND THEN THE NEXT PARAGRAPH, AND I'M SORRY FOR JUST GOING ON HERE, BUT, UM, IT, IT TALKS ABOUT IN ACCORDANCE WITH THE RATE PROVISIONS THAT THE PERIODIC MOVEMENT UP AND DOWN TO THE NATURAL GAS RATES AND THE THERMAL ALLOWANCES CAN BE CHANGED TO BE COMPATIBLE WITH SOCAL GAS.

I THINK IT'S COMPATIBLE WITH OTHER PUBLIC OR PRIVATE UTILITIES, IS WHAT THE LANGUAGE IS.

I'M NOT SURE WHY WE COMPARE IT TO A SPECIFIC PRIVATE ENTITY.

AND I, AND I ALSO THINK YOU CAN'T DO THAT, AND MAYBE I'M WRONG WITHOUT BOARD APPROVAL.

SO I THINK IT SHOULD SAY WITH THE APPROVAL OF THE COMMISSION, YOU CAN MAKE THESE ADJUSTMENTS ON A GO FORWARD BASIS.

IF I'M WRONG, PLEASE SOMEBODY TELL ME.

AND THEN, UM, I THINK IT ALSO, THE LETTER, UM, AS I TALKED ABOUT THE CHART, WE NEED TO, TO DO THAT.

I ALSO NOTICED THAT IN THE GAS RATE RESIDENTIAL TIER ONE, TIER TWO, THERE'S ACTUALLY A DECREASE IN THE ONE TIER.

AND I'M NOT SURE WE EVER WERE TOLD OR TALKED ABOUT THE DECREASE IN THE ONE TIER AND WHY WOULD WE DECREASE THAT IN THE ONE TIER? AND IF WE DON'T DECREASE THAT, MY QUESTION IS WHAT, WHAT'S THE REVENUE INCREASE AND WHAT'S THE IMPACT ON OUR RE WE'RE SAYING 2%.

THEN YOU LOOK AT TIER ONE AND TIER TWO, AND I HAVE IT HERE.

I THINK I DID, I HAD TO LOOK IT UP, BUT I DID LOOK IT UP.

I FOUND IT.

SO IT'S GOING FROM 1.5179 TO 1.4956 ON TIER TWO.

AND I'M NOT SURE WHAT THE THERMAL ALLOWANCE IS FOR TIER ONE.

I'D BE INTERESTED TO KNOW WHAT THAT IS, BUT WHY, WHY WOULD WE, WHY IS THAT DECISION MADE AND WHY DID WE DO THAT WITHOUT THE BOARD? AND THEN, UM, HOLD ON, LOST MY PLACE HERE.

AND THEN I THINK ALSO IT WOULD BE HELPFUL AS IS IN THE LETTER NUMBER, UH, NUMBER EIGHT, WHERE WE HAVE A PARAGRAPH THERE THAT TALKS ABOUT THE TYPICAL MONTHLY BILL FOR A SINGLE FAMILY RESIDENT.

AND ON THE UTILITY COMMISSION'S WEBSITE, THERE IS A, UM, A PRESS RELEASE, WHICH IS GREAT JOY AND EVERYBODY THANK YOU.

BUT THERE'S A 20 FROM 23 THAT HAS LANGUAGE IN THERE THAT'S SPECIFICALLY IS KIND OF WHAT I'M LOOKING FOR.

AND IT WOULD BE LOOKING FOR IN A LETTER LIKE THIS THAT SAYS, HEY, YOU ARE THE AVERAGE SINGLE FAMILY, CUSTOMER USES 30, THE, AND YOUR BILL IS CURRENTLY X, IT'S GOING TO Y, SOUTHERN CALIFORNIA GAS IS THIS, AND THEN GOES TO THIS AND HERE'S THE DIFFERENCE AND HERE'S YOUR IMPACT.

AND IT WAS IN THAT CHART.

SO, SO THE INFORMATION'S HERE, IT'S JUST NONE OF IT MADE IT INTO THIS LETTER AND WE'RE APPROVING A LETTER THAT TO ME, I DON'T THINK IS CLEAR ENOUGH FOR THE PUBLIC TO UNDERSTAND WHAT WE'RE DOING.

AND THEN, SORRY, I KEEP GOING HERE, BUT ON SCHEDULE SEVEN, WE HAVE A $3 MILLION USE, AND THEN THERE'S NO, THERE'S A SURCHARGE.

I DON'T REALLY UNDERSTAND THAT SURCHARGE.

MAYBE IT'S BEEN THERE FOREVER.

AND THAT'S SOMETHING I NEED TO MAYBE LEARN ABOUT LATER.

DENNIS, YOU

[00:35:01]

GUYS COULD PROBABLY EXPLAIN IT TO ME.

AND THEN, UM, SO THAT, THOSE ARE KIND OF MY CONCERNS WITH THE LETTER.

I MEAN THE PROCESS WORKED.

THE, THE INFORMATION'S ALL THERE.

I JUST DON'T THINK IT WAS WELL REPRESENTED IN WHAT YOU'RE ASKING US TO APPROVE.

AND THEN BEFORE I FINISH HERE, BUT UM, ON THE WATER AND SEWER, THE FUND BALANCE ON THE GRAFT GOES UP AND UP WITH THAT ASSUMED RATE INCREASE OF SIX, WHATEVER, IT'S, I THINK I WOULD LOOK FOR AS WE APPROACH, WHETHER IT SAYS ON THE CHART A MAXIMUM THAT'S OUR TARGET.

I CERTAINLY WOULDN'T WANT TO GO ABOVE THAT AND CONTINUE TO INCREASE RATES.

I I THINK THERE'S GOTTA BE A CONVERSATION MAYBE AT STRATEGIC MEDIA GOING FORWARD WHERE IN THAT RANGE, THE STAFF, THE GENERAL MANAGER COMFORTABLE AND WE CAN EASE THE PRESSURE ON CONTINUING RATE INCREASES TO, TO EXCEED THAT FUND BALANCE WITH THE GAS.

WE HAVE NO FUND BALANCE.

WE, WE'VE GOT A PROBLEM, WE HAVE NO FUND.

UM, SO I UNDERSTAND WHY WE, WE NEED TO CONTINUE TO GROW THAT THE GAS AND SEWER LOOKS PRETTY HEALTHY AND MAYBE THOSE NUMBERS NEED TO BE REVISITED.

BUT IF YOU DISAGREE, LET ME KNOW.

BUT I THINK I, I DON'T WANT TO CONTINUE, YOU KNOW, IT, IT JUST HAS THIS PROJECTION UP, UP, UP WITH THE HIGHER AND HIGHER FUND BALANCE.

I'M NOT SURE THAT I WOULD SUPPORT CONTINUING TO RAISE RATES WHEN OUR FUND BALANCE IS VERY HEALTHY IN A GOOD SPOT.

SO, UM, WITH THAT I'LL, SORRY, UH, YOU, I CAN COMMENT AND ADDRESS COMMISSIONER PARKIN'S COMMENTS.

I CAN WAIT TO SEE A SENSE OF THE BOARD AND THEN RESPOND.

I, I BEEN TAKING NOTES, UH, I'LL HOLD OFF AND SEE IF THERE'S ADDITIONAL COMMENTS.

I THINK I WOULD APPRECIATE ADDRESSING THESE FIRST.

SURE.

SO I'LL GO, I WAS TRYING TO JO DOWN NOTES.

I THINK, YOU KNOW, FROM, FROM YOUR COMMENTS WHEN WE TALK ABOUT THE INFORMATION PRESENTED, I THINK IT HIGHLIGHTS NOT, NOT ALL BOARD LETTERS ARE TRANSACTIONAL.

SO I THINK IT IS AN ADMISSION ON MY PART THAT IN TERMS OF MANAGING THE BOARD LETTER CONTENT WITH THE BOARD, TRANSACTIONS ARE TRANSACTIONS, BUT A BUDGET PROCESS AND THE RATES GO BEYOND THE TRANSACTION.

I THINK AS YOU NOTED, AS YOU NOTED, COMMISSIONER PARKIN, THESE OFTENTIMES BECOME SEPARATE DOCUMENTS.

THEY'RE NOT KEPT TOGETHER, THEY'RE NOT HELD TOGETHER.

BOARD LETTERS HAVE A WAY OF MAKING THEIR WAY OUT WITHOUT THE PRESENTATION, WITHOUT THE BOARD RECORDING.

UM, AND SO IN THAT REGARD, WE WILL ENDEAVOR TO DO A BETTER EFFORT TO MAKE SURE THAT WE HAVE THE INFORMATION CONTAINED IN A WAY THAT YOU POINTED OUT, UH, HELPS THE LETTER STAND ON ITS OWN, UH, AS IT SHOULD.

UH, WE IN THE PAST HAVE RELIED ON THE PRESENTATIONS TO GIVE ADDITIONAL DETAIL, BUT I THINK WHAT YOU POINTED OUT IS THAT THERE HAS TO BE SOME CARE AND EFFORT TO HAVE A NARRATIVE IN ESSENCE TO TELL A STORY IN THE BOARD LETTER THAT INFORMS, UM, YOU POINTED OUT THAT DIFFERENT FROM THE WATER SCHEDULES, THERE'S A LOT OF DETAIL IN THE WATER SCHEDULES IN CERTAIN ASPECTS.

THE GAS RATES CONTAIN A HEALTHY AMOUNT OF DETAIL WITH REGARDS TO RATE SCHEDULES, WHICH IS A LITTLE BIT DIFFERENT THAN THE WATER SIDE IN LEARNING HOW THE UTILITIES BOARD NOW DEALS WITH THIS ISSUE, WHICH PERHAPS WAS NOT CLEAR OR TRANSPARENT WHEN IT WAS THE GUEST DEPARTMENT AND ADMITTEDLY NOT NECESSARILY A CONCERN APPARENTLY.

UM, IT'S IMPORTANT TO NOTE THAT ADJUSTMENTS CAN OCCUR TO SOME SCHEDULES AND NOT TO OTHERS.

AND SO WHEN SCHEDULES ARE GOING TO BE ADJUSTED, WHETHER THEY'RE ADJUSTED OR NOT, IT SHOULD BE PUBLISHED COMPREHENSIVELY TOGETHER.

I THINK THAT'S A FAIR COMMENT.

WE'LL ENDEAVOR TO MAKE SURE THAT THAT IS PART OF THE NARRATIVE GOING FORWARD IN THE ENTIRE PROCESS WHEN WE DISCUSS RATES BEFORE THE BOARD AND WHEN WE DISCUSS RATES WITH THE COMMUNITY.

YOU ALSO TALKED ABOUT THIS ASPECT OF WHAT I THINK IS I WOULD CALL AN INSTITUTIONAL MEMORY.

SO THERE'S AN INSTITUTIONAL MEMORY OF THE GAS DEPARTMENT BEING IN THE CITY MANAGER DEPARTMENT, WORKING WITH THE CITY COUNCIL WITH WHAT IS AN INSTITUTIONAL INTERPRETATION OF THE CHARTER LANGUAGE.

AND YOU ARE CORRECT, NOWHERE IN THE CHARTER LANGUAGE HAS A SINGLE UTILITY BE IDENTIFIED AS THE COMPARABLE.

IT'S SIMPLY AN INSTITUTIONAL MEMORY AS TO HOW GO, HOW TO GO ABOUT FROM STAFF ACTIVITIES TO MEET THE INTENT OF THE CHARTER LANGUAGE AS A CONSOLIDATED UTILITY.

AND THAT WAS ONE OF THE BENEFITS OF DOING THIS.

THE GOVERNING BOARD NOW HAS INCREASED OVERSIGHT AND INCREASED SCRUTINY, AND I THINK IT'S A HEALTHY SCRUTINY AS TO HOW EXACTLY IS THE CHARTER LANGUAGE FULFILLED.

YOUR COMMENTS AND QUESTIONS TODAY POINT OUT THAT

[00:40:01]

EVEN WITHIN THE LANGUAGE OF THE RATE SCHEDULES, IF I THINK IF I UNDERSTAND CORRECTLY, THAT'S WHAT YOU WERE POINTING TO, EVEN WITHIN THE LANGUAGE OF THE RATE SCHEDULES, IS THIS INSTITUTIONAL MEMORY EMBEDDED WITHIN IT AND IT DESERVES TO BE CHANGED AND IT DESERVES TO HAVE YOUR PROPER GUIDE AND DIRECTION GIVEN I KNOW THAT I WEAR MYSELF OUT TALKING ABOUT THE STRATEGIC PLAN, BUT I THINK IF I REFLECT BACK ON THE COMMENTS I RECEIVED WHEN I WAS HIRED BY THIS BOARD, YOU WANTED A STRATEGIC PLAN TO BE ABLE TO WEIGH IN ON A NUMBER OF DIFFERENT ISSUES.

I THINK YOUR COMMENTS TODAY MAKE IT EVIDENT THAT THIS IS ONE OF THOSE AREAS WHERE THE BOARD MUST WEIGH IN, UH, WITH REGARDS AT LEAST TO THESE SERIES OF QUESTIONS ABOUT THE RATES.

I'M GONNA CONTINUE.

UM, YOU TALKED ABOUT THE DECREASE IN SCHEDULE ONE, TIER TWO AND WHY DID IT DECREASE ESSENTIALLY BY JUST A FEW PENNIES.

AND SO I DON'T HAVE A PERFECT ANSWER FOR THAT.

UM, THAT IS AN OVERSIGHT ON MY PART.

IT IS THE INSTITUTIONAL MEMORY.

UH, IT IS CORRECT THAT IN BRIEFINGS THERE WAS A COMMENT ABOUT, FOR EXAMPLE, ONE OF THE OTHER SCHEDULES WITH THAT POTENTIAL DECREASE, WHY WAS IN LOCKSTEP A DECREASE GOING TO BE GIVEN? UH, WE MADE THAT ADJUSTMENT.

THAT'S CORRECT.

I FAILED TO CHECK OUT ALL THE OTHER RATES AND DIDN'T REALIZE THAT, THAT WE WERE MAKING THAT ADJUSTMENT.

IT IS A MINIMAL ADJUSTMENT, BUT WITH PROPER BOARD DIRECTION, WE CAN MAKE THAT ADJUSTMENT.

UH, WE HAVE THE AVAILABILITY TO MAKE THAT CHANGE TODAY IF YOU WISH TO PROCEED AND WE CAN HAVE THE RESOLUTIONS AMENDED, UM, PER YOUR DIRECTION.

UM, BUT AGAIN, THAT, THAT REFLECTS AGAIN, THIS NEED FOR BOARD POLICY AND DIRECTION IN A NUMBER OF DIFFERENT ELEMENTS.

WITH REGARDS TO RATE PLANNING.

WITH REGARDS TO RATE SETTING, UM, WE TALKED ABOUT, I'M GONNA REFER BACK TO NOW WHAT I'M GONNA PIVOT TO THE LONG RANGE FINANCE PLAN.

SO THE LONG RANGE FINANCE PLAN HERE STAFF IS SHOWING YOU JUST A SNAPSHOT ONLY FIVE YEARS.

IN ACTUALITY, A LONG RANGE FINANCE PLAN GOES AS LONG AS 10 YEARS AND PROVIDES GUIDANCE.

AND YOU ARE CORRECT THAT IN THE PAST, IN TERMS OF RESERVE POLICY, IT WAS IDENTIFIED TO THE BOARD AS A MAX.

AND MY EXPERIENCE IN THE UTILITY INDUSTRY IS THAT UTILITIES HAVE BACKED AWAY FROM THAT.

'CAUSE THE GUIDANCE IS ACTUALLY A TARGET.

IT'S A TARGET IN THE SENSE THAT THAT IS GOVERNING BOARDS AND UTILITIES SHOULD FIND THEMSELVES STRIVING TO BE AT THAT TARGET AND HOLDING IT.

AND IT'S BECAUSE BEYOND THE 90 DAYS CASH, THERE ARE ANY NUMBER OF EMERGENCIES OR ISSUES THAT SHOULD BE ADDRESSED BY THE BOARD WITH ITS RESERVES.

AND I THINK IT'S HEALTHY FOR THIS BOARD TO KNOW THAT THERE ARE A NUMBER OF WEIGHTY DECISIONS AHEAD OF YOU IN TERMS OF THE GROUNDWATER RESILIENCY PLAN IN TERMS OF CAMPUS REALIGNMENT, EVEN PERHAPS IN ISSUES AFFECTING GAS AND LONG RANGE PLANNING THAT MIGHT INVOLVE AN EXPANSION OF THE CIP, UH, AND LIMITED ABILITIES FOR DEBT FUNDING.

SO IT'S TRUE THAT IN THE FIFTH YEAR YOU MIGHT SEE YOURSELF REACHING THE MAX, BUT IT'S NOT A GUARANTEE.

IT'S SIMPLY AN ASSURANCE THAT IF YOU CAN PROGRESS YOURSELF WITH A SERIES OF RATE INCREASES, YOU WILL GET CLOSE TO THAT MAX.

ALL THINGS BEING EQUAL AS YOU KNOW TODAY.

IF YOU CAN HAVE THAT COMFORT AND PEACE OF MIND THAT YOU CAN GET YOURSELF THERE, THEN IN THE NEXT FIVE YEARS, I THINK WE'RE TRYING TO GIVE YOU THE ASSURANCES THAT YOU CAN WITHSTAND A HEALTHY NUMBER OF UNKNOWN CONSEQUENCES THAT WOULD CAUSE YOU TO REVAMP OR NEED ADDITIONAL RATE INCREASES OR DEAL WITH A HIT TO THOSE RESERVES.

FOR EXAMPLE, STAFF HAS ALREADY IDENTIFIED TO YOU ON THE GAS FUND, WE DID ADD THE $3 MILLION FOR THE HUNTINGTON BEACH PIPELINE, UH, WITHDRAWAL OR RETIREMENT.

ADMITTEDLY, WE DON'T KNOW WHAT THAT TOTAL COST IS JUST YET.

WE BELIEVE WITH THE ENVIRONMENTAL REVIEW AND PERMIT PROCESS AND SO FORTH, THAT WILL UNDOUBTEDLY TAKE MORE THAN A YEAR, LIKELY UP TO THREE FISCAL YEARS OF PLANNING.

SO THE FACT THAT A UTILITY FUND MAY FIND ITSELF IN THE FOURTH AND THE FIFTH YEAR APPROACHING THE MAX IS SIMPLY A PERSPECTIVE THAT ALL THINGS BEING EQUAL.

WITH THE RATE INCREASES YOU HAVE, YOU CAN GET YOURSELF TO A HEALTHY RESERVE AND YOU ARE NOW PREPARED TO WITHSTAND THE UNKNOWN.

THAT THAT IS THE ADVICE I WOULD PASS ALONG IN TERMS OF LONG RANGE FINANCE PLANNING.

IRRESPECTIVE OF THAT, IRRESPECTIVE OF MY COMMENTS IN THE STRATEGIC PLAN PROCESS, IT WOULD BE INCUMBENT UPON THE BOARD TO GIVE GUIDANCE WHETHER IT IS COMFORTABLE WITH THAT OR IF IT CHOOSES TO HAVE A DIFFERENT APPROACH TO MANAGING THE FUNDS IN BETWEEN A MINIMUM AND A TARGET.

UM, I'M SORRY, YOU MADE A COMMENT ABOUT SCHEDULE SEVEN AND I DIDN'T, I WAS JOTTING THAT DOWN QUICKLY.

YOU MENTIONED IT.

NO USE BUT A SURCHARGE AND I DIDN'T FOLLOW ALL THAT.

I APOLOGIZE.

WHAT WERE YOU REFERRING TO?

[00:45:02]

IT JUST, UM, SO I I THERE'S A NON-CORE COMMODITY CHARGE PLUS A SURCHARGE OF 0.05 AND I I JUST DIDN'T SEE THAT ON OTHERS AND I DIDN'T REALLY UNDERSTAND IT.

AND, AND THAT WAS, I MEAN, IT'S NOT, IT DOESN'T BEAR ON THE RATES OR ANYTHING, IT'S JUST KIND OF A QUESTION I HAD FOR ME ON WHAT THAT IS AND WHY WE CHARGE THAT AND WHEN WE DON'T, BECAUSE IT LOOKS LIKE, AND IT, THE 3 MILLION SEEMS TO BE THERE'S A DAILY SERVICE CHARGE IF THEY USE LESS THAN 3 MILLION THERMS AND THEN THERE'S NO CHARGE DAILY SERVICE CHARGE IF THEY MOVE, USE MORE THAN 3 MILLION THERMS. AND I DON'T KNOW IF THAT'S JUST HOW THE OTHER INDUSTRIES SET IT UP AND THAT'S WHAT WE JUST FOLLOWED TRACK THAT WE CAN LOOK INTO THAT THE, THE NATURE OF SCHEDULE VII IS SPECIFICALLY FOR ELECTRIC GENERATION.

SO IT IS SIMPLY SOME OF THE LARGEST CUSTOMERS AROUND.

AND I BELIEVE IT ALSO REPRESENTS AN ASPECT WHERE IN THESE CASES THEY HAVE PER PURCHASED THEIR OWN COMMODITY.

MY UNDERSTANDING THAT CORRECTLY, TONY? YEAH.

SO IT, IT IS A SLIGHTLY DIFFERENT SCHEDULE AND IT APPLIES TO A SLIGHTLY DIFFERENT TYPE OF CUSTOMER, RATHER UNIQUE WITHIN THE SERVICE AREA.

AND SO THAT'S WHY IT'S STRUCTURED THAT WAY.

IT SAYS HERE, ELECTRIC GENERATION, IT'S APPLICABLE TO SERVICE OF CUSTOMERS, GAS USED FOR THE PRODUCTION OF ELECTRICAL ENERGY.

THAT'S THE BUT TO, TO YOUR POINT AGAIN, UM, I DON'T KNOW THAT I HAVE AN EQUIVALENT ON THE WATER SIDE.

AND SO THIS DETAIL AND THE, AND THIS COMPLEXITY IS DIFFERENT ON THE GAS AND I BELIEVE THAT IN THE PAST WE HAVE NOT GIVEN IT THE DUE THAT IS NECESSARY IN ORDER TO COMMUNICATE TO THIS WIDE VARIETY OF CUSTOMERS WHAT IS HAPPENING.

WE HAVE LARGE WATER CUSTOMERS, IT'S NOT THAT WE DON'T, WE DO, BUT THEY'RE ALL IN A SINGLE TIER AND THEY'RE SIMPLY IDENTIFIED AS A LARGE WATER CUSTOMER.

THERE'S NO SPECIAL PROVISIONS FOR THEM OR ISSUES LIKE THAT.

THEY JUST SIMPLY PAY THE SAME RATE AS ANY OF THE OTHER SMALL BUSINESSES MIGHT PAY.

AND IT'S THAT DISTINCTION THAT YOU POINTED OUT IN YOUR COMMENTS TODAY THAT I THINK IS INCUMBENT UPON US TO RESPOND TO AND AND PROVIDE THAT DETAIL IN THAT NARRATIVE, IF I MAY.

YES, ABSOLUTELY.

UM, SO GOING FORWARD, THE, UM, GAS RATES ARE NOT SUBJECT TO THE PROP TWO 18 HEARING, SO THERE'S NO OPPORTUNITY AFTER TODAY FOR THE PUBLIC TO TALK ABOUT THESE UNTIL THEY GO TO CITY COUNCIL FOR APPROVAL.

AND, AND I THINK THE CHALLENGE MAYBE FOR THE FOLKS JOY AND YOUR STAFF IS HOW DO WE COMMUNICATE TO THESE GROUPS? BECAUSE THERE IS NO NARRATIVE THAT SHOWS, HEY, THE AVERAGE BILL FOR A SMALL COMMERCIAL INDUSTRIAL PERSON ISN'T REALLY GOING UP 24%.

MAYBE IT IT'S A 14% TOTAL ON THE BILL OR HOWEVER THAT WORKS OUT.

UM, I'D BE CURIOUS TO KNOW HOW ON OUR OUTREACH, HOW WE OUTREACH TO THOSE IN THESE OTHER SCHEDULES, NOT THE RESIDENTIAL.

WE COULD PUT A NARRATIVE IN THIS LETTER TOO ON A MAYBE NEXT YEAR ON A GO FORWARD ON WHAT, WHAT THE MEETING, WHAT THE AVERAGE IS.

I MEAN, AND I GET IT, AN AVERAGE ISN'T A GREAT NUMBER FOR CERTAIN SCHEDULES BECAUSE OF, THEY'RE SO DIFFERENT IN HOW THEY OPERATE A RESTAURANT VERSUS A HOSPITAL VERSUS WHATEVER.

BUT THEY'RE SOPHISTICATED ENOUGH TO KNOW THAT AN AVERAGE INCREASE OF 14%, HOW THAT IMPACTS THEM, WHETHER IT'S SUMMER OR WINTER.

AND, AND WE DON'T GIVE ANY OF THAT CONTEXT.

AND I, AND I THINK WE MISS AN OPPORTUNITY TO HELP EXPLAIN WHAT WE'RE DOING AND WHY WE'RE DOING IT.

AND I THINK THAT DOESN'T REFLECT WELL ON THE COMMISSION OR THE UTILITIES.

SO I JUST THINK WE NEED TO DO A BETTER JOB.

PROBABLY TALK ABOUT THIS MORE, WHEN THEY SEE THESE NUMBERS, THEY HAVE NO CONTEXT FOR THEM UNLESS YOU HAND THEM THE POWERPOINT PRESENTATION AND ASK THEM TO SIT THROUGH AND LISTEN TO ALL OF THAT INFORMATION.

I WHOLEHEARTEDLY AGREE.

SO YOU'VE POINTED OUT ANOTHER ELEMENT WHICH IS IN THE PROP TWO 18 PROCESS.

PUBLIC AVAILABILITY OF INFORMATION AND THE ABILITY TO RESPOND TO IT IS DIFFERENT THAN THE GAS RATES, AND YOU ARE CORRECT IN THAT SENSE.

THEN IN TERMS OF COMMUNITY OUTREACH, THERE WOULD NEED TO BE AN ANGLE WHERE THESE CUSTOMERS ARE IN FORUMS, ORGANIZATIONS, UH, IN WHICH THEY PARTICIPATE, AND THOSE WOULD BE THE FORUMS THAT WE WOULD TARGET BECAUSE IT'S NOT A QUESTION OF PROP TO 18, BUT IT IS A RATE CHANGE THAT'S GONNA AFFECT THEM.

AND SO I KNOW THAT WE DID HAVE ONE OF THE IDENTIFICATION OF A BUSINESS ASSOCIATION AS ONE OF THE FIRST MEETINGS WE STARTED TO HAVE WITH REGARDS TO THAT.

NOW THAT IF THE BOARD GOES THROUGH THIS PROCESS TODAY AND DOESN'T FACT ADOPT THE GAS RATES, THEN WE WOULD BE FOLLOWING THROUGH WITH ADDITIONAL BUSINESS ORGANIZATIONS AND REACHING OUT TO THEM TO COMMUNICATE THE NATURE OF THESE INCREASES IN SO MANY DIFFERENT DIMENSIONS THAT YOU POINTED OUT TODAY.

AND, AND JUST MY FINAL COMMENT HERE IS WE, IF THIS LETTER, AS WE APPROVED IS SUBMITTED TO THE MAYOR AND COUNCIL FOR APPROVAL, AND AL COMMISSIONER AUSTIN COULD

[00:50:01]

AND I THINK THAT'S WHERE WE'RE MISSING THE OPPORTUNITY TO BETTER COMMUNICATE BECAUSE THE COUNCIL MEMBERS ARE GONNA TAKE THESE CALLS FROM THESE BUSINESSES AND THEY'RE GONNA BE YELLING AND SCREAMING AND THEY'RE GONNA CALL PROBABLY THE PRESIDENT AND SAY, WHAT ARE YOU GUYS DOING? AND THEN WE NEED TO HAVE AN EXPLANATION FOR THEM AND, AND YOU KNOW, IT'S HARD TO TELL 'EM ONCE THEY'VE SEEN THESE NUMBERS.

IT'S NOT REALLY THAT BAD.

DON'T WORRY ABOUT YOU, YOU KNOW, SO MY CONCERN IS GOING FORWARD HOW WE PRESENT INFORMATION AND HOW WE ARE PRESENTED INFORMATION.

THIS IS THE THIRD BUDGET HEARING AND SOME OF THIS INFORMATION'S GETTING PRESENTED TO US FOR THE FIRST TIME, RIGHT? SO IT'S, IT SHOULD BE IN THE FIRST MEETING.

WE SHOULD SEE THAT GRAPH THAT SAYS, WHAT'S THE IMPACT ON OUR RATE PAYERS IF WE DO THESE VARIOUS SCENARIOS, WHAT'S THE ZERO IMPACT? HOW IS THAT EXPLAINED? WHAT'S GOING ON? SO I THINK IT, AND I GET IT, IT'S A TON OF WORK AND I RECOGNIZE EVERYBODY, GAS FOLKS, IT'S PROBABLY EVEN HARDER.

BUT, UM, IT'S JUST SOMETHING I'M ASKING IF WE CAN DO IN THE FUTURE.

IT IS NOT A QUESTION OF ASKING IF WE CAN DO IT.

IT'S, UH, A QUESTION OF YOU ARE THE BOARD AND YOU HAVE THE ABILITY TO GUIDE.

YOU'VE BEEN VERY GRACIOUS WITH YOUR COMMENTS, YOU'VE BEEN VERY GRACIOUS WITH IDENTIFYING THE DETAILS.

UM, YOUR STATEMENT TO ME IS, I INTERPRET IT IS CORRECT.

CAN WE DO BETTER? YES.

CAN WE DO MUCH BETTER? ABSOLUTELY.

AND THAT'S ONE OF THE THINGS THAT I WAS HOPING IN WORKING WITH YOU AS A WORKING BOARD INSTEAD OF A TRANSACTIONAL BOARD, THAT YOU WOULD INDEED GIVE THIS KIND OF FEEDBACK AND GIVE THIS KIND OF DIRECTION BECAUSE FROM TIME TO TIME WE GET COMFORTABLE.

I DON'T HAVE ANY OTHER WAY OF SAYING IT.

YOU KNOW, I'VE BEEN IN THIS BUSINESS FOR A LONG TIME.

I'VE SEEN WHAT HAPPENS WITH COMFORT WITH PROCESSES, WHEN WITH A LITTLE BIT OF INSIGHT, A LITTLE BIT OF GUIDANCE PROCESSES CAN BE INVESTIGATED, ASSESSED, AND DEEMED FOR IMPROVEMENT.

AND SO YOUR COMMENTS ARE ALL EXTREMELY WELL RECEIVED TODAY, AND WE WILL ENDEAVOR TO DO BETTER.

UH, AND I WILL MAKE SURE THAT THIS IS A POINT, UH, FOR THE STRATEGIC PLANNING PROCESS SO THAT WE GET WITH YOU THE DIRECTION THAT I BELIEVE YOU SHOULD BE GIVING IN THIS AREA.

WE CAN THEN USE THAT DIRECTION, THAT POLICY AS A GUIDE, AS WE MOVE THROUGH SOME OF THE DETAILS OF NOT HOW TO WRITE THE BOARD LETTER, BUT THROUGH SOME OF THE DETAILS OF OKAY, WHEN CONFRONTED WITH THE DATA ON GAS RATES AND SO FORTH, THE BOARD POLICY HAS SAID THAT IT NEEDS TO CONSIDER THE FOLLOWING THINGS IF IT'S GOING TO BE PRESENTED WITH A RATE CASE.

AND I, I THINK THAT'S A VERY HEALTHY SITUATION FOR THE BOARD TO BE IN.

UH, BEFORE WE MOVE ON, DANIEL OR ANYONE ELSE WHO HAS PARTICIPATED IN THIS PROCESS, IF YOU WANNA ADDRESS ANY OF THE QUESTIONS THAT SECRETARY PARKIN HAS ASKED, I THINK WE'RE OKAY.

UM, AND, AND EXPECTATIONS.

UH, OTHER COMMISSIONER COMMENTS? UH, I'LL JUST SAY THANK YOU TO STAFF FOR THE PRESENTATION AND EXCUSE ME, AND ALL THE WORK THAT WENT INTO, UH, GETTING TO THIS POINT.

UM, THIS IS ARGUABLY THE MOST DIFFICULT PART OF SERVING, UM, IN A PUBLIC ROLE, UM, WHEN WE TALK ABOUT RATES AND TAXES AND IMPACTS ON CONSTITUENTS AND RESIDENTS THAT, THAT WE, WE ALL SERVE, RIGHT? UM, I DO APPRECIATE MY COLLEAGUE, UH, COMMISSIONER PARKIN.

THERE'S GREAT QUESTIONS.

UM, HE'S ARTICULATED, YOU KNOW, SOME OF MY CONCERNS IN A WAY THAT, THAT I WASN'T PREPARED TO DO.

UM, I THINK I BROUGHT SOME OF THEM UP LAST WEEK.

IT'S ONLY BEEN A WEEK.

USUALLY YOU GUYS GIVE US TWO WEEKS.

, IT'S ONLY BEEN A WEEK.

UM, UM, AND, AND I DO APPRECIATE, UM, THE, THE EFFORT TO, TO, UM, TO SIMPLIFY THE, THE COMMUNICATION TO TELL US EXACTLY HOW MUCH AN AVERAGE ON WHAT RATE PAYERS WOULD PAY WITH ALL FUNDS WITH THE PROPOSED, UM, INCREASES.

IT'S NOT ALSO LOST ON ME THAT, UM, YOU KNOW, IN MY WORLD, YOU KNOW, I'M, I'M LOOKING AT NOT CIP, BUT CPI, RIGHT? UH, AND COLAS AND THE COST OF LIVING AND CPI ARE GENERALLY AROUND TWO AND A HALF AND 3%, RIGHT? THAT'S WHAT EVERYDAY RESIDENTS ARE DEALING WITH IN TERMS OF GROWTH, THEIR SALARIES, SOME ARE NOT.

[00:55:01]

SO WHEN WE COME AND SAY, HEY, WE ARE PROJECTING, AND I'LL TELL YOU, IT'S TERRIFYING WHEN YOU LOOK AT THE FIVE YEAR, AND PLEASE DON'T GIVE US A 10 YEAR, UM, OUTLOOK WHERE, YOU KNOW, IT'S 6, 6, 6, 6, 6, 6, 6, AND WE KNOW THAT, YOU KNOW, WAGES ARE PRETTY FLAT.

UM, HOUSEHOLD BUDGETS ARE FLATTENING.

IT DOES HAVE AN IMPACT AND IT DOES HAVE A STAIN.

UM, AND IT'S, YOU MAY MAY BE TALKING TO THE, THE COBRA FOLKS AND THEY'RE FAMILIAR AND THAT THAT'S GREAT.

UM, OUR RESIDENTS, THEY'LL, THEY'LL, THEY'LL ACCEPT IT, RIGHT? BUT THERE IS A BREAKING POINT AND, AND I I MENTIONED JUST THE SELECTION TWO DAYS AGO, RIGHT? JUST ABOUT EVERY, EVERY REVENUE ENHANCEMENT MEASURE FAILED.

AND I, I LOOK AT ELECTIONS AND I'M INVOLVED IN MUNICIPALITIES, COUNTIES, CITIES ACROSS THE STATE, EVERYONE FAILED.

AND SO I WOULD ASK THAT IF THIS WERE TO GO BEFORE THE VOTERS, WHAT DO YOU THINK THAT THE, THAT THE REACTION WOULD BE? WE'RE THE VOTERS TODAY.

SO, UM, AND THEN BEYOND THAT, THE CITY COUNCIL IS GOING TO HAVE TO SUB REALLY TAKE THE BIG HIT WHEN WE BRING THIS FORWARD.

UH, I AM, UH, CONFIDENT THAT OUR, THAT OUR STAFF GENERAL MANAGER, UM, BRINGING US GOOD FACTUAL INFORMATION.

UM, CHARLIE, YOU MENTIONED SOMETHING THAT, THAT I THINK, THINK WAS, WAS POIGNANT, UM, FROM THE STANDPOINT OF, YOU KNOW, THE FUND BALANCE BEING HEALTHY, RIGHT? UM, AND, AND I ASKED THE QUESTION, WHAT DOES, WHAT DOES ZERO LOOK LIKE? RIGHT? NOT TO THE POINT WHERE I BELIEVE THAT ZERO IS SHOULD BE RECOMMENDED, BUT WHAT WOULD THAT IMPACT LOOK LIKE? IS IT GONNA BREAK THE UTILITY? MY QUESTION, AND I GUESS I, THESE ARE MY COMMENTS, BUT I DO HAVE A QUESTION.

WE TALK ABOUT THE, I KNOW THERE NEEDS TO BE SOME LEVEL OF RESERVE TO DEAL WITH, UM, UNEXPECTED HAPPENINGS.

UM, WE DEALT WITH COVID A FEW YEARS AGO.

UM, THERE ARE, THERE ARE NATURAL DISASTERS THAT HAPPEN, BUT IF, IF YOU WERE DEALING WITH A BALANCED OPERATIONAL FUND THAT HAD NO SIGNIFICANT RESERVE TODAY AND A CRISIS WERE TO OCCUR AS A MANAGER, AND MAYBE, I DON'T KNOW IF THIS IS A FAIR QUESTION AT THIS POINT, HOW WOULD YOU, YOU, YOU DEAL WITH SUCH A FINANCIAL CHALLENGE, WOULD YOU, WOULD YOU COME TO THE BOARD AND MAKE A, AN EMERGENCY REQUEST? 'CAUSE IT SEEMS TO ME THAT, YOU KNOW, TO, TO CHARLIE'S POINT, THAT IF, IF WE ARE SAYING WE WANNA RAISE RATES AND WE WANT TO KEEP CONSISTENCY TO KEEP A, A FUND BALANCE TO A CERTAIN DEGREE, TO PROJECT OR TAKE INTO CONSIDERATION THE POSSIBILITY FOR AN UNEXPECTED HAPPENING, IT'S, IT'S LIKE WE'RE, WE'RE PUTTING INTO A SAVINGS ACCOUNT THAT IS NOT NECESSARILY AN OPERATIONAL NEED, RIGHT? AND, AND FOR ME, I, I'M MORE IN, IN, IN, IN INCLINED TO SUPPORT WHAT IS NECESSARY FOR DAY-TO-DAY OPERATIONS IN THE PLANTS.

NOW, AGAIN, CCIP AND I GET THOSE CONFUSED SOMETIMES CIP IS IMPORTANT, YOU KNOW, WE HAVE PROJECTS, WE HAVE INFRASTRUCTURE HAS TO HAPPEN AND THAT, THAT'S PART OF THE OPERATIONS.

I WANT TO ACKNOWLEDGE THAT.

BUT TO, TO, TO CREATE A, A RAINY DAY FUND FOR THE POSSIBILITY OF, OF, UH, CALAMITY, UH, I THINK, I THINK THERE MIGHT BE OTHER TOOLS AND OPTIONS THAT I, I THINK, RIGHT, AND I'M, I'M GONNA ASK YOU, UM, THAT, THAT WE COULD EMPLOY EMPLOYEE TO, TO, TO TAKE INTO CONSIDERATION, UM, FOR THAT.

SO THOSE ARE, THOSE ARE MY COMMENTS.

UM, YOU KNOW, I I, THIS, THIS IS NOT A, NOT AN EASY, EASY DECISION, UH, NOT AN EASY SUBJECT TO, TO NECESSARILY TALK ABOUT, BUT IT'S FASCINATING NONETHELESS.

UH, I DO THANK STAFF, UH, FOR, FOR ALL OF YOUR WORK.

UM, AND I DON'T WANT TO BE THE CONTRARIAN HERE IN ANY WAY.

I JUST WANNA MAKE SURE THAT, THAT WE WE'RE MAKING REALISTIC DECISIONS, DECISIONS THAT ARE GONNA BE, UM, PALATABLE FOR, FOR OUR MAYOR AND CITY COUNCIL.

UM, BUT ALSO MOST IMPORTANTLY, OUR,

[01:00:01]

OUR, THE PUBLIC THAT WE SERVE.

THOSE ARE MY COMMENTS.

AND IF YOU CAN HELP ME WITH UNDERSTANDING CRISIS MANAGEMENT AND FINANCING, PUBLIC FINANCING, HOW WE WOULD GET AROUND SUCH A SCENARIO IF THERE WASN'T A RAINY DAY FUND THAT WE COULD JUST GO TO, RIGHT? BECAUSE WE, I WOULD LOVE TO BE ABLE TO, IN MY HOUSEHOLD JUST SAY, YOU KNOW WHAT, THESE ARE DAY-TO-DAY OPERATIONS.

I'M PAYING MY BILLS, I'M DEALING WITH IT.

AND THEN, YOU KNOW, THERE'S ALWAYS THIS OPTION FOR, YOU KNOW, A 20, 30%, YOU KNOW, FUND FOR ME TO, TO DEAL WITH.

UM, I WOULD SAY THAT MOST, MOST HOUSEHOLDS ARE NOT OPERATING THAT WAY.

UM, AND POSSIBLY MOST BUSINESSES AREN'T OPERATING THAT WAY.

SO ONE OF THE DIFFICULTIES IN THE UTILITY INDUSTRY IS THAT THE ONLY SOURCE OF REVENUE IS FROM THE MONTHLY BILLS.

THERE IS NO OTHER WAY TO GENERATE REVENUE OR THE OPERATIONS OF A UTILITY.

UM, WHEN IT COMES TO DEBT FUNDING, DEBT FUNDING IS ACCESSIBLE, BUT IT'S ONLY ACCESSIBLE TO THE EXTENT THAT THE DEBT IS EVALUATED AND RATED.

AND THE RATING HAS TO DO WITH AN AGENCY'S ABILITY TO RAISE RATES AND GENERATE THE REVENUE TO PAY THAT DEBT.

IN DOING SO, IT HAS RESERVE OBLIGATIONS, SORRY, IT HAS DEBT SERVICE RATIO OBLIGATIONS THAT SAYS YOU'RE GENERATING ENOUGH CASH EVERY YEAR THAT YOU HAVE AT LEAST 1.25 TIMES COVERAGE OF CASH AVAILABLE TO PAY DEBT.

AND HOPEFULLY IN ORDER TO GET A VERY GOOD DEBT RATING, YOU HAVE SUBSTANTIALLY MORE AVAILABLE CASH EACH AND EVERY YEAR TO PAY DEBT.

IF YOU WERE TO WORK OFF OF AN OPERATIONAL RESERVE, WHICH IS THE 90 DAYS MINIMUM CASH AND CONSTRUCT A POLICY THAT NO AMOUNT OVER THE 90 DAYS MINIMUM CASH WOULD BE AN OBLIGATION OF THE BOARD AND THE UTILITY, AND INSTEAD IT WOULD SIMPLY DEAL WITH EMERGENCIES ON AN AS NEEDED BASIS.

THERE WOULD BE NO OTHER SOURCE OF EMERGENCY REVENUE TO DO THAT.

YOU COULD NOT RAISE RATES IMMEDIATELY BECAUSE YOU'RE SUBJECT TO ACTION BY YOUR BOARD ACTION BY CITY COUNCIL AND A PROP TWO 18 HEARING, IT HAS TO GO WITH ANY EMERGENCY ACTIVATION OF A NEW RATE.

YOU WOULD NOT BE ABLE TO ISSUE DEBT BECAUSE IN ORDER TO SECURE THE DEBT, YOU WOULD HAVE TO GO THROUGH ALL THE PROPER BOND COUNCIL.

AND WE ARE NOT IN THE POSITION TO ISSUE DEBT OURSELVES.

WE ISSUED DEBT THROUGH THE CITY TREASURER, GENERALLY SPEAKING, BETWEEN 90 DAYS TO SIX MONTHS TO CREATE THE PROPER, UH, INDENTURES AND LIENS TO BE ABLE TO GENERATE THAT.

SOMETIMES YOU CAN SHORTEN IT TO A LINE OF CREDIT, UH, THE LINE OF CREDIT, GENERALLY IN 90 DAYS AND IN THE 90 DAYS YOU SUFFER CONSEQUENCES IN WHICH YOU DO NOT HAVE AN ABILITY TO DO WHAT THEY CALL CLAWBACK.

SO IT TOOK YOU 90 DAYS TO GET THE LINE OF CREDIT.

LO AND BEHOLD, YOU NOW HAVE THE CREDIT CARD, YOU'RE READY TO CHARGE.

AND YOU SAY, WELL, I JUST ACCUMULATED 90 DAYS OF RAZOR THIN EXPENSES AND I REALLY WOULD LIKE TO CONSIDER THAT.

AND THEY SAY, OH NO, THAT'S NOT, THAT'S NOT WHAT WE'RE DOING.

IF YOU WANT THE CLAW BACK, WE HAVE A SUBSTANTIALLY DIFFERENT STRUCTURE.

IF YOU WANT TO ACKNOWLEDGE THINGS THAT YOU HAD BEFORE AND NOW YOU'RE DESPERATE TO FINANCE, THIS IS NOT A DIFF NOT AN EASY ANSWER FOR ME TO GIVE YOU.

UM, IT IS THE REALITY OF THE UTILITY INDUSTRY.

IT IS A RESOURCE THAT IS NECESSARY FOR THE PUBLIC IN REGARDS TO SANITATION, IN REGARDS TO PUBLIC HEALTH, NATURAL GAS HAS A CONNECTION TO PUBLIC HEALTH IN TERMS OF HEATING, FOOD AND HEATING SPACES FOR PEOPLE TO LIVE.

AND THE PROVISION OF THAT RESOURCE MUST COME THROUGH THE SERVICE PROVIDED BY THE PEOPLE IN THE INFRASTRUCTURE NECESSARY TO DELIVER IT.

SO OPERATIONALLY, THERE IS A MINIMUM OPERATIONAL DAY'S CASH.

THAT OPERATIONAL DAY'S CASH WAS TESTED MOST RECENTLY FROM A CYBERSECURITY EVENT.

THAT IS PERHAPS YOUR GREATEST INDICATOR OF YOUR NEED FOR RESERVES IS THAT IT HAS NOTHING TO DO WITH A SUSPENSION OF SERVICE DUE TO A NATURAL DISASTER.

IT'S ACTUALLY THE OPPOSITE.

YOUR NEED TO CONTINUE TO PROVIDE SERVICE IN AN ENVIRONMENT IN WHICH YOU MUST SUSPEND COLLECTING REVENUE.

SO IN THE CYBERSECURITY EVENT, OUT OF AN ABUNDANCE OF CAUTION, UTILITY BILLING SYSTEM WAS SHUT DOWN FOR A MONTH.

AND DEPENDING ON THE TIMING OF THAT, AND DEPENDING ON WHETHER IT'S OCCURRING IN SUMMER OR WINTER, THAT CAN HAVE GRAVE CONSEQUENCES FOR THE CASH FLOW OF THE UTILITY.

I WANNA POINT OUT THAT AS MUCH AS THE GAS FUND IS ON, RAISE THIN MARGINS, EVEN IF IT HAD A HEALTHY

[01:05:01]

MARGIN, I POINTED OUT THE HUNTINGTON BEACH, UH, PIPELINE ISN'T UNKNOWN.

I DO NOT KNOW WHAT CAN HAPPEN.

THE SEWER FUND HAS RELATIVELY HEALTHY MARGINS ABOVE OPERATIONAL, BUT THE SEWER FUND HAS OTHER CHALLENGES, UH, WHICH IS THAT MANY OF ITS INFRASTRUCTURE PIECES ARE SEWER PUMP STATIONS AND SEWER PUMP STATIONS, IF THEY ACTUALLY GO DOWN AND NEED REPAIRS, TEND TO BE VERY PRICEY INVESTMENTS.

SO THE GAP BETWEEN MINIMUM AND MAXIMUM CAN EVAPORATE, UH, RATHER RAPIDLY WITH A SEWER PUMP STATION PROJECT.

ON THE WATER SIDE, IT'S IMPORTANT TO NOTE THAT GIVEN THE EXPERIENCE THE UTILITY HAD WITH THE CONSEQUENCES OF THE BIXBY HILL MAIN BREAK, WE CONTINUE TO HAVE OPTIONS AHEAD OF US THAT WILL CAUSE A SIGNIFICANT IMPACT TO THOSE RESERVE FUNDS.

AT THE SAME TIME, THE GRP, THE GROUNDWATER RESILIENCE PROGRAM IS A MAJOR CAPITAL EXPANSION, UH, THAT IS GOING TO OCCUR OVER THE NEXT 12 YEARS, AND WE HAVE YET TO SEE HOW EXACTLY THAT WILL PLAN OUT IN TERMS OF NEEDS FOR RATES AND DEBT FINANCING.

THOSE NEEDS FOR RATES AND DEBT FINANCING ARE OVER AND ABOVE WHAT YOU'RE SEEING HERE.

I THINK ALSO, AGAIN, WITH MY APOLOGIES TO REFER TO THE STRATEGIC PLAN IN THE STRATEGIC PLANNING PROCESS, WE CAN TALK ABOUT THIS ELEMENT OF LONG RANGE RATE PLANNING AND HOW TIME, AND AGAIN, THE TRUE APPROACH FOR UTILITIES IS IF YOU FOREGO A RATE INCREASE IN THE SHORT TERM, YOU ARE COMPOUNDING THE SHORTFALL FOR THE FUTURE YEARS AND NOW RAISING THE PROSPECT THAT THOSE AHEAD OF YOU WILL FACE DRAMATICALLY LARGE RATE INCREASES TO MEET SOMETHING THAT COULD HAVE BEEN AVOIDED WITH A MORE STEADY BALANCE OF RATE INCREASES OVER TIME.

I APOLOGIZE FOR THE LONG-WINDED ANSWER.

I HOPE THAT GIVES YOU SOME BOUNDARIES.

I THINK IT'S HEALTHY THOUGH, IN THE COMMENTS THAT YOU MADE TODAY AND THE COMMENTS OF COMMISSIONER PARKIN THAT IN MANY WAYS I SHOULD NOT FIND MYSELF HAVING TO MAKE THIS COMMENT HERE TODAY AT THE BOARD AND THEN WONDERING HOW ON EARTH THAT WILL GET OUT TO THE COMMUNITY OR HOW IT WILL GET OUT TO COMMUNITY PRESENTATIONS.

BECAUSE I THINK IN ESSENCE, YOU'RE ASKING ME, NOT FOR YOURSELF, BUT AS A PROXY FOR THE BROADER COMMUNITY THAT HAS THESE QUESTIONS.

SO IT'S ONE THING FOR ME TO ANSWER IT HERE.

IT'S AN ENTIRELY DIFFERENT PROPOSAL TO SAY, HOW ARE YOU TALKING TO THE COMMUNITY ABOUT THESE THINGS? IT HELPS THEM UNDERSTAND.

SO THANK YOU FOR THE OPPORTUNITY TO RESPOND.

IMPORTANT PART OF THE NARRATIVE THAT HAS TO BE COMMUNICATED.

AND I DO APPRECIATE THE EXAMPLE OF, UH, THE CYBER ATTACK THAT, THAT WE, WE, WE WERE UNDER.

UH, I REMEMBER THAT VERY WELL.

AND, AND, UH, THAT, THAT THE IMPACTS OF THAT ARE, ARE REAL.

UM, I THINK COMMUNICATING INCIDENTS, UM, AND IN FACTS LIKE THAT ARE, ARE, ARE VERY, VERY IMPORTANT FOR NOT JUST ME AND THIS, THIS, THIS BOARD COMMISSIONS OF COMMISSIONERS, BUT ALSO, UH, TO THE PUBLIC.

UM, BECAUSE THAT IS OFTENTIMES LOST ON EVERYDAY FOLKS.

THEY DON'T, THEY DON'T SEE THE, THE OPERATIONS, THEY DON'T UNDERSTAND THE, THE CHALLENGES THAT, THAT YOU AND YOUR TEAM DEAL WITH SERVICES EVERY DAY.

SO I DO APPRECIATE, UH, THE CLARITY ON THAT.

UM, I SAID THE REALITIES ARE, ARE THE REALITIES.

RATES ARE GOING UP, WAGES, BUDGETS ARE FLAT.

ONE, ONE ADDITIONAL COMMENT BECAUSE YOUR, YOUR POINT ABOUT CPI, I ACTUALLY LIKE THAT.

CIP AND CPI, I'M GONNA KEEP THAT ONE.

UM, YOUR, YOUR POINT IS EXCELLENT.

THERE, THERE IS A CONTRAST THAT EXISTS OUT IN THE COMMUNITY.

THEY KNOW VERY WELL CERTAIN THINGS THAT ARE IN THE HEADLINES AND ON THEIR PAYCHECKS EACH AND EVERY DAY.

THE ONE THING THAT'S NOT THERE EACH AND EVERY DAY IS THE ANNUAL ADJUSTMENT OF RATES ON THE MONTHLY UTILITY BILL.

AND SO WHEN THEY TRY TO UNDERSTAND WHAT'S HAPPENING TO THEM, AND THEY HAVE THESE OTHER MARKETS THAT ARE CONSTANTLY THERE, THEY ASK THEMSELVES THE QUESTION, HOW ON EARTH COULD YOU DO THIS? KNOWING WHAT'S HAPPENING TO ME? AND SO IT'S IMPORTANT TO KNOW THAT WE ARE UNDERTAKING AN EFFORT WITH UC RIVERSIDE, THEY'VE DONE A NUMBER OF AFFORDABILITY STUDIES.

ONE OF THEM WAS AT THE URBAN WATER INSTITUTE, UH, CONFERENCE THAT YOU ATTENDED.

AND THEY PRESENTED HOW, HOW WATER UTILITY BILLS CONTINUED TO BE A VERY AFFORDABLE ASPECT OF MONTHLY HOUSEHOLD BUDGETS.

NOTWITHSTANDING THAT, BECAUSE THAT'S NOT WHAT I WANNA FOCUS ON RIGHT NOW, WE ARE MINDFUL OF THAT.

AND SO WE ARE GOING TO PARTNER WITH UC RIVERSIDE, IN ORDER TO USE OUR A MI, OUR A MI DATA, OUR BILLING DATA, AND WORK WITH THEM TO GET A BETTER UNDERSTANDING OF HOW OUR SITUATION PLAYS INTO THESE ISSUES OF AFFORDABILITY AND CPI AND THE GROWTH IN MONTHLY UTILITY BILLS.

BECAUSE I THINK IT, IT, IT IS AN

[01:10:01]

I, I DIDN'T WANT TO MISS THAT OPPORTUNITY 'CAUSE YOU HAD RAISED THAT QUESTION.

THANK YOU FOR THAT.

UH, COMMISSIONER MCGUIRE, ANYTHING? OKAY, GOOD.

UH, SO I GOT A COUPLE THINGS.

UM, FIRST OF ALL, COMPLIMENTS TO SECRETARY HARKIN.

I APPRECIATE YOU DIGGING SO DEEPLY AND BEING SUCH A GOOD STUDENT AND, UH, UH, DOING YOUR HOMEWORK.

AND, UH, IT'S, IT, IT IS ALL WELL INTENTIONED AND, AND I APPRECIATE IT A LOT.

UM, APPRECIATE ALSO, COMMISSIONER AUSTIN, YOUR, YOUR QUESTIONS ARE SPOT ON.

UH, YOU'VE, YOU'VE GOT YOUR FINGER ON THE PULSE OF THE PUBLIC YOU'VE BEEN IN THE PUBLIC EYE FOR, FOR A LONG TIME.

AND SO YOU'RE, YOU'RE WELL AWARE OF THESE THINGS.

UM, GENERAL MANAGER FAGAN, YOUR, YOUR RESPONSES SPOT ON AS USUAL.

I APPRECIATE THAT AS WELL.

UM, I THINK ONE OF THE, AND, AND, UH, ANTO, YOU JUST TOUCHED ON IT, THE, ONE OF THE BIG TASKS AHEAD OF US IS, IS TO DIS DISCUSS THE IDEA OF THE VALUE OF WHAT WE PROVIDE, THE VALUE OF WATER, THE VALUE OF NATURAL GAS, THE VALUE OF SEWER.

UM, WE DON'T DO A GREAT JOB.

WE, WE TALK ABOUT THE NICKELS AND DIMES ON, ON RATES AND ADJUSTMENTS AND, UM, YOU KNOW, THERE'S, THERE'S THE CONCEPT THAT, UH, YOU KNOW, YOU TURN YOUR TAP ON IN THE MORNING AND, AND THE WATER FLOWS.

UM, BUT THAT'S, THAT'S JUST A GIVEN.

UM, WHAT WE ARE NOT TA UH, TALKING ABOUT, AND I THINK THE INDUSTRY, UH, AT LEAST THE WATER PORTION OF THE INDUSTRY IS HEADED THIS WAY, IS, IS TALKING ABOUT WHERE THE WATER COMES FROM, HOW FAR IT TRAVELS, HOW MANY HUNDREDS OF THOUSANDS OF PEOPLE ARE WORKING ON THE SIMPLE FACT THAT YOU TURN YOUR FAUCET ON IN THE MORNING AND, AND WATER COMES OUT.

UM, AND THE FACT THAT, UH, IT IS STILL EXTRAORDINARILY AFFORDABLE, UM, FOR ALL THREE OF THOSE SERVICES.

AND, AND THAT'S, THAT'S A BIG TASK THAT I THINK AS AN ORGANIZATION, WE'RE GOING TO NEED TO PRESS HARDER, UH, IN THE FUTURE AND, AND REALLY PAVE THE WAY FOR THESE, UH, RATE ADJUSTMENTS SO THAT FOLKS, UH, WHO, LET'S BE HONEST, THEY'RE, THEY'RE NOT FOCUSED ON THIS EVERY DAY.

LIKE WE'RE, UH, THEY, THEY READ A HEADLINE ONCE A YEAR THAT WE RAISE RATES AND, AND, AND THEY SEE THE PERCENTAGE OF THE RATE INCREASE.

AND IT SEEMS INSANE.

UH, 6%, 8%, UH, THESE COMMERCIAL CUSTOMERS, 36%.

UM, BUT IT, IT'S THE, THE CONCEPT THAT WE'RE NOT CONVEYING TO FOLKS IS THE VALUE OF WHAT THAT IS.

AND, AND WE'VE GOT TO DO A BETTER JOB.

AND, UM, UH, I'M GONNA TIE A BOW ON THIS, UH, EVENTUALLY, UM, WITH THE STRATEGIC PLAN AND, AND TONY AND, AND HIS GROUP AND, UH, I, I FEEL FORTUNATE AS THE AD HOC COMMITTEE MEMBER TYING IN WITH THE, WITH THE STRATEGIC PLANNING FOLKS, UH, THAT WE CAN, WE CAN DRAW SOME OF THESE CONCEPTS INTO THE STRATEGIC PLAN.

UM, ANOTHER ISSUE I WANTED TO TOUCH ON WAS OUR CHARTER.

SO THIS BOARD IS, IS, UH, WE'RE NOT, UH, WE DON'T GET TO JUST DO WHATEVER WE WANT.

UM, WE ARE GOVERNED BY OUR CONSTITUTION, OUR CHARTER CITY CHARTER TELLS US, AND ESPECIALLY WITH REGARDS TO GAS RATES THAT WE SHALL REMAIN COMPETITIVE, COMPARABLE, UH, IN LINE WITH, UH, WHATEVER PHRASEOLOGY YOU WANT TO USE WITH, UH, THE OTHER AREA.

NATURAL GAS SUPPLIERS.

WELL, WE ALL KNOW OUR, THE ONLY AREA NATURAL GAS SUPPLIER IS SOCAL GAS.

UM, SO WE WE'RE, WE ARE TIED TO DOING THAT.

UM, WHAT WE ARE NOT TIED TO DOING THOUGH IS, IS BEING BELOW SOCAL GAS COMPARABLE COMPETITIVE, UH, DOES NOT MEAN BELOW.

IT DOES NOT MEAN THAT WE ARE ALWAYS THROW A NUMBER OUT, 1%, 2%, A DOLLAR 50 CENTS, WHATEVER IT IS.

WE ARE NOT THAT AMOUNT BELOW WHAT THEY'RE CHARGING.

SOMETIMES BEING COMPETITIVE AND COMPARABLE, YOU'RE GONNA BE SLIGHTLY HIGHER.

SOMETIMES YOU'RE GONNA BE EVEN MORE THAN A LITTLE SLIGHTLY HIGHER.

BUT THAT DIFFERENCE IS PROBABLY ONLY GOING TO BE TRANSITORY.

UH, BECAUSE WE, UH, OUR BOARD DOES NOT ALIGN EXACTLY WITH SOCAL GAS'S BOARD.

UH, SO WE DON'T GET TO COMPARE NOTES ON EXACTLY WHAT THEIR RATES ARE AND WHAT OUR RATES ARE.

WE ARE BASICALLY CHASING THEM.

UH, SO THE, THE IDEA THAT WE ALWAYS HAVE TO BE BELOW SOCAL GAS, UH, IT IS, UH, I THINK DATED.

I THINK IT'S SOMETHING, UH, THAT WE WILL NEED TO ADDRESS IN THE STRATEGIC STRATEGIC PLAN.

UM, AND, AND WE NEED TO GET BEYOND THE IDEA THAT THAT IS THE MANTRA THAT HAS TO BE DONE, OR THAT'S THE BOARD'S DIRECTION.

UH, THE BOARD, UH, TO MY KNOWLEDGE, HAS NEVER DIRECTED ANYONE, UH, TO ENSURE THAT OUR RATES ARE ALWAYS BELOW SOCAL GAS.

UM, AND THEN THAT LEADS ME TO MY THIRD AND FINAL, UH, LARGER POINT.

UH, AND THAT IS, UH, SECRETARY PARKIN POINTED IT OUT.

UH, IT

[01:15:01]

SEEMS LIKE THE PROCESS THAT WE TOOK TO GET HERE, UH, THE GAS RATES AND WATER RATES SEEM TO HAVE BEEN EVOLVED BY, BY TWO DIFFERENT, UH, ORGANIZATIONS.

UH, IT'S LIKE WE HAVE AN INDEPENDENT GAS COMPANY AND AN INDEPENDENT WATER COMPANY.

AND, AND THOSE TWO THINGS, UH, BOTH RAISED, UH, RATES, UH, OR, OR, OR DID THE RATE ANALYSIS AND CAME UP WITH, UH, UH, TWO INDEPENDENT THINGS.

WHILE THOSE ARE INDEPENDENT DIFFERENT UTILITIES, WE ARE ONE MERGED COMBINED UTILITY.

AND I THINK THAT THE PERCEPTION THAT HE TOUCHED ON IS, IS ACCURATE.

UM, I HAVE, FOR ANYBODY THAT HAS TALKED TO ME AT, AT ALL ABOUT, UH, THE, OUR STRUCTURE, OUR ORGANIZATION, UM, I FEEL STRONGLY THAT OUR ORG CHART IS, IS NOT REFLECTIVE OF THE BEST THAT WE CAN BE.

IT'S, IT'S NOT REFLECTIVE OF, OF BEING ABLE TO PUT FOLKS IN POSITIONS, UH, THAT WE ARE ABLE TO ACT IN A COMBINED MERGED FASHION AND IN A, UH, UH, AN EFFICIENT AND EFFECTIVE MANNER.

UM, I STRONGLY BELIEVE THAT OUR ORG CHART NEEDS TO BE SIGNIFICANTLY REHABBED.

UH, AND I I, I'LL GO BACK TO THE STRATEGIC STRATEGIC PLAN AGAIN.

I THINK THERE'S OPPORTUNITIES WITHIN THE STRATEGIC PLAN, UH, AND, AND ELSEWHERE THAT WE CAN ADDRESS THESE STRUCTURAL, UM, ISSUES THAT, THAT WE HAVE AS AN ENTERPRISE.

UH, I THINK WE'RE DOING A REALLY GREAT JOB WITH REGARDS TO, UH, OUR CAMPUS REALIGNMENT.

UM, WE, WE'VE RECOGNIZED THAT, THAT THAT IS PHYSICAL STRUCTURES THAT ARE NOT SERVING US WELL, AND WE NEED TO, WE NEED TO MOVE INTO THE 21ST CENTURY WITH THAT AND, AND WITH A, A COMBINED CAMPUS AND, AND, UH, GETTING RID OF, UH, ASSETS THAT ARE, THAT ARE BEYOND THEIR USEFUL LIFE AND COSTING US AN ARM AND A LEG TO MAINTAIN.

UM, THAT'S THE PHYSICAL STRUCTURE THAT WE NEED TO FIX.

UM, THE ORG STRUCTURE NEEDS TO BE FIXED AS WELL.

UM, AND THEN MY LAST POINT, UH, I JUST WANT TO SAY THAT AS CHAIR, UM, MY POSITION HERE IS TRANSITORY.

I, I, I DON'T GET TO SIT IN THIS SPOT FOREVER, BUT, UM, UH, I CAME INTO THIS POSITION HOPING FOR THIS EXACT THING THAT'S HAPPENED TODAY.

UM, ENGAGEMENT, UH, AN ENGAGED BOARD, AN ACTIVE BOARD, UM, A BOARD THAT IS NOT JUST HERE TO RUBBER STAMP, UH, IS NOT JUST HERE TO, UH, ACCEPT WHAT'S, WHAT'S BROUGHT BY STAFF, BUT TO CHALLENGE IT IN A PROFESSIONAL WAY, UH, AND ENSURE THAT, UH, THE FOLKS THAT ARE RECEIVING OUR SERVICES AND PAYING OUR RATES ARE GETTING EVERYTHING THAT THEY, THAT THEY DESERVE.

SO I WANNA COMPLIMENT THE BOARD.

I WANNA COMPLIMENT A**L, UH, UH, AND, AND STAFF, UH, AS WELL FOR SUPPORTING THIS IDEA OF AN ENGAGED, ACTIVE BOARD.

UH, AND I'M, I'M HOPING THAT THIS CAN CONTINUE IN THE FUTURE.

I HOPE THIS DOESN'T, UH, I HOPE NO ONE FEELS LIKE THESE QUESTIONS ARE TAMPING DOWN, UH, UH, WHAT STAFF IS TRYING TO DO WHAT THE GENERAL MANAGER IS TRYING TO DO.

UH, IT'S QUITE THE OPPOSITE.

IT'S, IT'S LIFTING UP THE ORGANIZATION AND ENSURING THAT THE THE ENTERPRISE IS THE BEST THAT IT CAN BE.

AND WE'RE ALL JUST TRYING TO LEAVE THIS PLACE BETTER THAN WE FOUND IT.

I THINK I'VE COVERED IT ENOUGH.

YES, SIR.

I DIDN'T, UM, I UNDERSTAND YOUR COMMENTS, SO THIS COMMENT HAS NOT TO THAT, BUT I KNOW IN CONVERSATIONS THAT WE'VE HAD, AND I'VE HAD CONVERSATIONS WITH METROPOLITAN, WE TALK ABOUT THE VALUE OF WATER.

AND I JUST, IN LISTENING TO IT, I WAS JOTTING DOWN HERE, I DIDN'T WANNA MISS THIS INSIGHT TO SHARE WITH YOU THAT IN MANY CASES, THE VALUE OF WATER IS USED WHEN WE TRY TO COMPARE WITH BOTTLED WATER FOR DRINKING.

MANY A TIME.

I'VE FOUND MYSELF IN MY CAREER, THE DIFFICULT PROPOSITION OF BOTTLED WATER FOR DRINKING, BECAUSE THE CHOICE OF BOTTLED WATER FOR DRINKING MANY TIMES HAS TO DO WITH TASTE, ALBEIT, NOTWITHSTANDING, CERTAIN COMMUNITIES OFTEN VIEW IT AS A QUESTION OF QUALITY.

BUT I WAS JOTTING DOWN TO YOUR COMMENTS, I WAS JOING JOTTING DOWN SOMETHING THAT PERHAPS REPRESENTS AN OPPORTUNITY, UH, FOR MESSAGE DEVELOPMENT AND COMMUNICATION, WHICH IS, IT'S ACTUALLY THE OPPOSITE.

COMMUNITIES ALL OVER THE WORLD, COMMUNITIES IN THE CENTRAL VALLEY IN OUR OWN STATE, DO NOT HAVE ACCESS TO SAFE, CLEAN, AND RELIABLE WATER.

THEY LITERALLY USE JUGS OF WATER FOR THE BASIC NECESSITIES OF LIFE, BATHING,

[01:20:01]

BRUSHING YOUR TEETH, AND SO MANY OTHER ASPECTS.

THESE ASPECTS, INCLUDING COOKING, RIGHT, IS REALLY THE VALUE OF WATER.

THE FACT THAT YOU CAN USE THESE ENORMOUS QUANTITIES OF WATER FOR YOUR BASIC DAILY NECESSITIES, AND THE FACT THAT ITS COST IS A DRAMATIC DIFFERENCE THAT I THINK REPRESENTS AN OPPORTUNITY TO COMMUNICATE THE VALUE OF WATER TO COMMUNITIES AND THE VALUABLE SERVICE THAT WE PROVIDE.

AND SO, I, I DIDN'T WANNA LOSE THAT.

I WAS JOTTING THAT DOWN AS YOU WERE COMMENTING ON THAT, AND THAT REPRESENTS YET ANOTHER AVENUE OF US TO EXPLORE WITH THE COMMUNITY.

SO APOLOGIES, BUT I DIDN'T WANNA MISS THAT OPPORTUNITY.

I APPRECIATE THAT.

AND LET'S NOT LOSE SIGHT OF, UH, NATURAL GAS AND SEWER.

IT'S, IT'S THE SAME CONCEPT.

IT'S THE EXACT SAME CONCEPT.

SO I, I JUST WANNA HIGHLIGHT FOR YOU AGAIN THAT AS YOU UNDERTAKE THE ITEMS BEFORE YOU AND DECIDE HOW YOU WANT TO GO ABOUT THIS, I, I DID NOTE FOR SECRETARY PARKIN'S COMMENT, SAF HAD REVISED THE RATE RESOLUTION FOR GAS TO MAKE THAT ADJUSTMENT TO TIER TWO ON SCHEDULE ONE FOR RESIDENTIAL, THE CORRESPONDING REVENUE CHANGES ARE MINIMAL.

NOTWITHSTANDING THAT STAFF DID UNDERTAKE THE EFFORT WITH CITY ATTORNEY'S OFFICE, WE REVISED THE BUDGET, UH, RESOLUTION AS WELL TO REFLECT THE SLIGHT ADJUSTMENT IN REVENUE THAT WOULD OCCUR FROM THAT.

THE OTHER ELEMENTS, NOTWITHSTANDING THE MORE DETAILED NECESSARY, SECRETARY PARKIN, THE OTHER ELEMENTS ESSENTIALLY STILL REMAIN THE SAME ON ON THE SCHEDULE ITSELF.

THE RATE IS ESSENTIALLY STILL A 2% CHANGE.

THE ACTUAL NET DIFFERENCE ON THE BILL IS STILL ESSENTIALLY A 1%.

NONE OF THOSE DETAILS CHANGE.

I JUST WANNA HIGHLIGHT FOR YOU WHAT STAFF HAS MADE ITSELF AVAILABLE TO DO, UH, ALL NOTWITHSTANDING PER YOUR DIRECTION AND THE VOTE THAT YOU MIGHT WISH TO TAKE TODAY.

UM, THANK YOU FOR THAT.

UH, AND, AND DANIEL, JUST A QUESTION.

WHAT, WHAT WAS THE GAS RATE INCREASE ON RESIDENTIAL LAST YEAR? THE GAS RATE INCREASE, UH, LAST YEAR WAS A TWO STAGE APPROACH.

SO IT WAS, UH, 15% IN AUGUST AND 12% IN APRIL, I'M SORRY, 15 AND 12, 15% IN AUGUST AND 12% IN APRIL.

SO IT WAS A HUGE INCREASE IN THIS YEAR, 2%.

IF WE MAKE THAT PROPOSED CHANGE IS THE CHANGE.

WHAT ABOUT SCHEDULES TWO? AND I'M JUST GONNA SAY TWO THROUGH 10, WHAT WAS THE RATE INCREASE LAST YEAR? THERE WAS NO INCREASE LAST YEAR TO THOSE RATE SCHEDULES.

SO IN ESSENCE, WE'RE CATCHING UP WITH WHAT WE, WE THE COMMISSION APPROVED LAST YEAR TO RESIDENTIAL WITH THESE NUMBERS.

CORRECT.

AND CAN YOU TELL ME WHY WE DIDN'T DO IT LAST YEAR? I WOULD'VE BEEN HAPPIER BECAUSE YOU WEREN'T HERE.

I WASN'T HERE.

, I AGREE.

I I DON'T DISAGREE WITH THAT.

YOU KNOW, MY EARLIER COMMENTS ABOUT THE INSTITUTIONAL MEMORY, IF YOU THINK ABOUT, IT'S NOT A CLEAR ANSWER, SECRETARY PARKIN.

SO LET ME TRY AND THEN YOU, YOU GUIDE ME.

IF, IF YOU THINK ABOUT WHAT I SAID WAS THE INSTITUTIONAL MEMORY, THEN THE BELIEF WAS THAT FOR A BUDGET AND A NEED TO GENERATE REVENUE, THIS WOULD BE ENOUGH.

KINDA LIKE ON THE WATER AND SEWER, IF WE'RE GOING TO GO FOR A RATE INCREASE, WE'LL DECIDE A RATE INCREASE.

IF I COULD INTERRUPT YOU, I, I JUST THINK I AGREE WITH YOU.

UH, I'M JUST TRYING TO POINT OUT THIS LARGE INCREASE TO THESE OTHER SCHEDULES, CORRECT? UM, I THINK WE'RE OPEN TO CRITICISM THAT WE PUT OUR RATE INCREASE LAST YEAR ON THE BACK OF OUR RESIDENTIAL, THE BENEFIT OF OUR COMMERCIAL, BUT THIS YEAR WE'RE CATCHING UP AS ALL, AS ALL THE POINT I'M TRYING TO MAKE SO THAT THESE RATE INCREASES.

WE'RE NOT TWO TIERING THEM, WE'RE NOT DOUBLE, YOU KNOW, WE'RE NOT BREAKING IT DOWN BECAUSE IT'S, I THINK 14, 12, 11, 6 AND THE TRANSPORTATION EXCHANGE OF NATURAL GAS IS GONNA BE A NET OF ABOUT 31.

UM, IT'S ANOTHER STORY OR A, AN, I DUNNO, THAT STORY.

OH, I SEE.

BUT AN EXPLAN EXPLAN, I UNDERSTAND TO, TO DO THAT.

SO WITH THAT, I WOULD OFFER A FRIENDLY AMENDMENT TO, UM, RESOLUTION UT 50 61 THAT WE DO, UH, CHANGE RES SCHEDULE ONE RESIDENTIAL TO, UM, AS, AS DESCRIBED BY THE GENERAL MANAGER THAT TIER ONE AND TIER TWO OR THE TIER TWO IS NOT REDUCED.

IT REMAINS AT WHAT IT WAS, UM, AND THAT THE REST OF THE SCHEDULE IS APPROVED.

DINA, DO YOU HAVE QUESTIONS ON THAT? CERTAINLY.

UM, SO I'LL JUST REPEAT MY MOTION.

DINA.

OH DINA, COULD YOU REPEAT WHAT YOU HAVE FOR SECRETARY PARKIN, YOU DON'T.

OKAY, SO, UM, AS SUBMITTED, IT HAD, UH, SCHEDULE ONE TIER TWO RATE AT 1.4956, I BELIEVE IS RIGHT.

SO SECRETARY PARKIN, JUST FOR CLARITY ON MY END, SO WHAT IS THE MODIFICATION YOU'RE PROPOSING FOR THE TIER ONE RATE?

[01:25:01]

AND I THINK WHAT I'M PROPOSING IS THAT IT GOES TO WHAT THE PREV LAST YEAR'S RATE IT, IT, SO WE DON'T CHANGE IT, REDUCING IT.

AND THE NEW, THE RATE WOULD REMAIN AT 1.5179.

AND I'LL ASK DENNIS OR TONY IF THAT'S RIGHT, CAN YOU GO TO THE TABLE, DANIEL, WHERE YOU HAD SCHEDULED ONE? THERE IT IS NON BASE CURRENT RATE, 1.5179.

I WOULD SAY WE JUST MOVE THAT OVER TO THE PROPOSED RATE.

AND, AND I WOULD ASK DENNIS OR OR TONY, IT, ALL OF THESE RATE INCREASES FOR ALL OF THE SCHEDULES REMAIN CONSISTENT WITH SOCAL? YES.

UH, SO THE MOTION IS MY UNDERSTANDING AND PLEASE CONFIRM SECRETARY PARKIN IS TO AMEND, UH, LEMME GET THE RESOLUTION NUMBER HERE.

ADAM, I HAVE, I APOLOGIZE, THIS IS THE CITY ATTORNEY'S AREA, BUT I'M GONNA WEIGH IN.

SURE.

SO THE MAKER AND THE MOTION WAS COMMISSIONER MAGUIRE.

UH, APOLOGIES.

AND SO THE SECONDER, MR. BARKIN HAS PROPOSED A FRIENDLY AMENDMENT, THEY SHOULD PROPOSE IT TO THE MAKER OF THE MOTION.

ARE THEY WILLING TO ENTERTAIN THAT AMENDMENT? IS THAT HOW THAT WORKS? THAT IS ACCURATE.

I JUST WANNA MAKE SURE FOR THE RECORD.

OH MY GOSH, I WAS JUST TOLD I WAS RIGHT BY AN ATTORNEY.

NO, YOU'RE TOTALLY RIGHT.

YOU'RE GOOD.

UM, I JUST WANNA MAKE SURE THAT FOR THE RECORD, WE'RE ACCURATELY, UM, DEFINING WHAT THE RATE CHANGE IS.

SO THAT'S THE BIGGEST THING THAT I'M CONCERNED ABOUT.

UM, SO THAT PROCESS IS CORRECT.

UM, AND I THINK WE'VE PROPERLY IDENTIFIED THE RESOLUTION AND TIER RATE THAT'S BEING MODIFIED.

UM, IT'S MY UNDERSTANDING THAT WE WILL, THAT A MODIFICATION TO THE BUDGET ITEM NINE, UM, WILL ALSO BE REQUIRED.

UM, I JUST WANTED TO FLAG THAT FOR THE BOARD.

UM, AND WE CAN CROSS THAT BRIDGE ONCE WE SHORTLY GET THERE.

AND, AND IF I MAY, I, I'M NOT SURE THAT AMENDMENT ITEM NINE AND MAYBE GERALDINE OR DANIEL, YOU CAN TELL ME, BUT THAT CHANGE IS DE MINIMIS IN YOUR REVENUE OR IS IT NECESSARY TO AMEND NINE? IT'S, OH, I WAS JUST GONNA GIVE HIM THE NUMBER OF THE 112,000, SO THE, THE RESOLUTION WILL CHANGE.

SO AN AMENDMENT, REGARDLESS WHETHER IT'S DI MINIMIS, WILL, WILL BE APPROPRIATE.

GOOD.

MM-HMM .

AND, AND COMMISSIONER MCGUIRE, YOU'RE OPEN TO THE FRIENDLY? I'M OPEN TO THE CHANGE.

AND, UH, ITEM NUMBER NINE, UH, PARDON ME, I DON'T KNOW WHO MOTIONED FOR THAT.

MCGUIRE.

SO YOU'RE OPEN TO A FRIENDLY YES, I AM.

HAVE THE SAME SCHEDULE 2, 3, 9 THAT WE HAVE.

UM, ALRIGHT.

ARE THERE ANY OTHER COMMISSIONER COMMENTS? ANY COMMENTS ON THE FRIENDLIES? RIGHT, UH, HESITATING.

'CAUSE I, I DON'T WANNA BEAT A DEAD HORSE, BUT, ALRIGHT.

WE MIGHT AS WELL.

UH, SO GOING BACK TO SCHEDULES ONE THROUGH NINE, UH, UH, SECRETARY PARKIN WAS ASKING, UH, DID WE DID THIS, DID THIS BOARD INCREASE THOSE LAST YEAR? WE DID NOT ON SCHEDULES TWO, I'M SORRY, TWO THROUGH NINE ON SCHEDULES TWO THROUGH NINE, WE DID NOT PROPOSE AN INCREASE ON THOSE.

SO THIS WOULD BE THE FIRST INCREASE SINCE 2023.

I'M LOOKING AT DENNIS AND, AND TONY IN, IN 2023, WE INCREASED SCHEDULES TWO THROUGH NINE OR NOT ONLY, BUT THEY WERE AFFECTED IN 2023.

BUT SINCE THAT TIME, WE HAVE NOT MADE ANY CHANGES.

AND AT THAT TIME, I'M ASSUMING BECAUSE OF THIS, BECAUSE OF THESE LARGE PERCENTAGE INCREASES THAT WE DID NOT, UH, AS, AS THE CHARTER SAYS, WE DID NOT, UH, MATCH OUR RATES OR COMPETITIVELY, UH, PLACE OUR RATES FOR SCHEDULES TWO THROUGH NINE.

UH, WITH SOCALGAS, I DON'T, I DON'T BELIEVE THAT WE UNDERTOOK THAT METHODOLOGY.

WE GOT CLOSE.

WE WEREN'T NECESSARILY TRYING TO, IN THE CONCEPTS THAT I'VE DISCUSSED WITH YOU IN THE PAST ABOUT THIS NEW ELEMENT OF RATE CAPACITY, WE DID NOT TRY TO CONSIDER RATE CAPACITY AND USE IT.

WE INSTEAD TO THE DISCUSSION THAT HAS BEEN AT THE DA IS TODAY, WE TRIED TO MAKE AN ASSUMPTION OF HOW THAT WOULD LOOK COMPARED TO SOCALGAS.

SO AN ENTIRELY DIFFERENT TYPE OF POSTURING TO SET THE RATES.

SO THESE, UH, SOCAL GAS DOES NOT

[01:30:01]

RIGHT? TONY, CAN YOU GO TO THE PODIUM AND, AND ANSWER? THANK YOU.

SO I GUESS MY QUESTION IS, IF IF I, IF MY BUSINESS WERE IN HUNTINGTON BEACH WITH SOCAL GAS, WOULD, IF I WAS A LARGE COMMERCIAL AND INDUSTRIAL, WOULD, WOULD I FALL UNDER SOCALGAS SCHEDULE FOUR? CORRECT? YES.

THESE RATES NOW MATCH SOCALGAS WE HAVE THE SAME DEFINITIONS AND, AND AND WHATNOT.

SO IN THE, IN THE RATE RESOLUTION, THOSE RATE SCHEDULES ARE IDENTICAL RATE SCHEDULES AND DESCRIPTION TO SOCAL GAS'S RATE SCHEDULES, IS THAT WHAT YOU WERE ASKING? YES.

WITH THE EXCEPTION OF SCHEDULE ONE, RIGHT.

TIER TWO, CORRECT.

YES.

COMMISSIONER MCGUIRE? AYE.

SO, SO IT IS FAIR TO TELL OUR INDUSTRIAL COMMERCIAL, UH, UH, CUSTOMERS THAT THESE RATES ARE NOT ABOVE OR BEYOND OR ANTI-COMPETITIVE FROM SOCAL GAS.

THEY'RE, THEY'RE NOT THE RATE THEMSELVES.

NO.

RECALL THAT THE BILL TO, AS SECRETARY PARKER POINTED OUT, YOUR BILL MAY VARY DEPENDING ON THE COMMODITY COSTS ASSOCIATED WITH IT AND DEPENDING ON THE TRANSMISSION.

UH, SORRY.

UM, APOLOGIES ON ANY HEDGING OR PRICE SWAPS OR STORAGE THAT YOUR UTILITY MAY USE.

YOUR UTILITY MAY USE PRICING STRATEGIES TO ADJUST THE BILL, BUT IN TERMS OF THE RATE ITSELF, THERE IS NO DIFFERENCE.

TONY, DID I SAY THAT MORE OR LESS? THAT IS CORRECT.

ALRIGHT, I THINK WE HAVE REACHED A POINT WHERE WE CAN VOTE.

UM, PRESIDENT SCOTT, I'M SORRY.

SORRY.

DID WE TAKE PUBLIC COMMENT OR ASK FOR PUBLIC COMMENT? WE DID.

WE DID.

UM, YES.

JUST WANTED TO MAKE SURE.

APOLOGIES THERE'S A LOT OF DISCUSSION.

UH, OKAY.

SO IN REGARDS TO AGENDA ITEM NUMBER SEVEN, RESOLUTION UT 1 5 6 1 AS A REMINDER, THIS IS FOR THE GAS RATES.

UH, WE HAVE A MOTION AND A SECOND AND A FRIENDLY, UM, WE'LL ASK UH, DINA FOR A ROLL CALL.

VOTE SECRETARY PARKIN AYE.

AND COMMISSIONER AUSTIN.

PRESIDENT .

UH, AGENDA ITEM NUMBER EIGHT, UH, RESOLUTION UT 1 5 6 2.

WE HAVE A MOTION AND A SECOND.

UH, DINA PLEASE ROLL CALL SECRETARY PARKIN.

COMMISSIONER MCGUIRE? AYE.

COMMISSIONER AUSTIN AND PRESIDENT SCOTT.

AND AGENDA ITEM NUMBER NINE, UH, UT RESOLUTION UT 1 5 6 3.

UH, AGAIN, WE HAVE A MOTION, A SECOND AND A FRIENDLY AND WE PLEASE HAVE A ROLL CALL.

SECRETARY PARKING.

COMMISSIONER MCGUIRE? AYE.

COMMISSIONER AUSTIN AND PRESIDENT SCOTT.

THANK YOU GENERAL MANAGER.

ALRIGHT, MOVING ON.

AGENDA ITEM NUMBER 10,

[10. 26-55309 Recommendation to receive and file May 28, 2026 Infrastructure Committee Report. Suggested Action: Approve recommendation. ]

RECEIVE AND FILE MAY 28TH, 2026 INFRASTRUCTURE REPORT.

UH, MAY I PLEASE HAVE A MOTION TO RECEIVE AND FILE SECOND.

PROJECTS IN ONE OF THE PO IN ONE POTABLE WATER PROJECT.

UH, CALL ON COMMISSIONER AUSTIN FOR A REPORT.

OKAY, WELL, UM, MANY DAYS AGO WE HELD A INFRASTRUCTURE COMMITTEE MEETING ACTUALLY LAST WEEK.

UM, AND UH, WE MET ON MAY 28TH, UM, FOLLOWING THE REGULAR MEETING OF THE BOARD OF UTILITIES COMMISSIONERS TO RECEIVE INFORMATION IN A PRESENTATION REGARDING THE 2028 OLYMPIC AND PARALYMPIC GAMES CIP PROGRAM.

UH, THE COMMITTEE RECEIVED AND FILED A PRESENTATION ON THE 28 20 28 OLYMPIC AND PARALYMPIC GAMES.

UM, THE PROGRAM UPDATE STAFF PROVIDED AN OVERVIEW OF SEVERAL SEWER AND WATER CAPITAL IMPROVEMENT PROJECTS LOCATED WITHIN OR NEAR OLYMPIC VENUES.

AREAS OF EXPECTED HIGH TOURISM, UM, AND MAJOR TRAVEL CORRIDORS.

STAFF DID CLARIFY THAT THE PROJECTS ARE NOT BEING INITIATED BECAUSE OF THE 2028 OLYMPICS AND PARALYMPIC GAMES.

RATHER, THE PROJECTS WERE PREVIOUSLY IDENTIFIED AND KIND OF FAST TRACKED TO DEAL WITH THE, UM, EXPECT EXPECTED, UH, TRAFFIC AND, UM, POPULATION AROUND THE VENUES TO TO DEAL WITH ANY DIRECT DISRUPTIONS, AVOID ANY DISRUPTION DURING THE OLYMPIC GAMES.

THAT PRESENTED AN OVERVIEW OF THE PROPOSED SEWER

[01:35:01]

UH, THE WORK, UM, INCLUDED IN STRUCTURAL IMPROVEMENTS, NEW VALVE VAULTS AND WET WELLS ELECTRICAL UPGRADES, UM, FORCE MAIN REHABILITATION OR RELOC RELOCATION DECOMMISSIONING OF LIFT STATION S 29 FORCE MAIN PLACEMENT REPLACEMENT, UM, WITH FUSION BONDED PIPE AND SEWER MAIN UPSIZING PORTABLE WATER PROJECTS INCLUDED, UM, REPLACING AND UPSIZING AGING WATER MAINS ALONG QUEENSWAY DRIVE AND TO IMPROVE FIRE FLOW.

UM, I DID ASK STAKE ABOUT STAKEHOLDER NOTIFICATION, UM, INCLUDING OUTREACH TO NEARBY REGI RESIDENTS BUSINESSES AND MARINAS.

STAFF RESPONDED THAT, UH, OUTREACH WILL OCCUR CLOSER TO THE CONSTRUCTIONS, UH, PROJECTS AND WILL INCLUDE COORDINATION WITH APPLICABLE COUNCIL DISTRICTS TO INCLUDE, UH, TO DEVELOP AN APPROPRIATE OUTREACH PLAN.

STAFF ALSO NOTED THAT TEMPORARY BYPASS SYSTEMS WILL BE USED DURING CONSTRUCTION DOMAIN TO MAINTAIN SEWER SERVICES FOR AFFECTED BUSINESSES.

UH, THE COMMITTEE DID RECEIVE AND FILE A PRESENTATION WELL DONE BY, UM, TY AND AND TEAM.

UH, AND, UH, THANK, I WANT TO THANK COMMISSIONER PARKIN FOR, UM, BEING A CO-PILOT ON THE COMMITTEE.

THAT IS THE REPORT.

THANK YOU VERY MUCH.

UH, ARE THERE ANY PUBLIC COMMENTS? ANY COMMISSIONER COMMENTS? SO WE'VE GOT A MOTION TO RECEIVE AND FILE ALL THOSE IN FAVOR SAY AYE.

UH, RECEIVE AND FILE THE GENERAL MANAGER'S REPORT.

ANY OPPOSED? THANK YOU.

AGENDA ITEM NUMBER 11,

[11. 26-55310 Recommendation to receive and file the General Manager’s Report. Suggested Action: Approve recommendation. ]

UM, AND PLEASE HAVE A MOTION TO RECEIVE AND FILE.

A SECOND.

BUT THE ELIMINATION OF THAT MODEL AS A PATTERN IN AND OF ITSELF DOES NOT TAKE AWAY A LOT OF DRAMATIC AND IMPORTANT FACTS.

AND CALL ON GENERAL MANAGER GAN.

THANK YOU PRESIDENT SCOTT.

UH, JUST IN THE GENERAL MANAGER REPORT, JUST THREE BRIEF ARTICLES, UM, ACTUALLY TWO ARTICLES AND ONE PRESENTATION FOR YOU TO REVIEW.

UH, COMMISSIONER SECRETARY PARKIN, YOU ASKED ME, UH, BEFORE THE BOARD MEETING ABOUT ALL THE WATER GOING OUT THE GOLDEN GATE BRIDGE.

AND I THINK THE ARTICLE THAT I EMBEDDED WITHIN THE GENERAL MANAGERS REPORT, THAT FIRST ONE HIGHLIGHTS THE DIFFICULTY IN DISCUSSING ELEMENTS LIKE THAT.

UH, GOING FORWARD.

THE, THE NET EFFECT OF LOCAL PRECIPITATION HAS NOT CHANGED IN AND OF ITSELF, BUT THE PATTERNS HAVE.

AND SO THE ARTICLE POINTS OUT HOW CHANGING PATTERNS THEMSELVES AFFECT FUTURE WATER SUPPLY PLANNING.

IN ESSENCE, THE GREATER VOLATILITY MEANS THAT THE FIRST STAGE OF THESE EFFECTS OF THE PRECIPITATION PATTERNS IS TO PROTECT LIFE AND PROPERTY, AND THEREFORE FLOOD CONTROL BECOMES THE PARAMOUNT THING.

SO WHEN YOU SEE THE LA RIVER AND THE SAN GABRIEL RIVER AND RAINSTORMS GOING OUT, UM, THAT IS ALL RIGHT AND WELL DONE BECAUSE IT FLOOD CONTROL IS WHAT GIVES SOUTHERN CALIFORNIA ITS GREAT PROPERTY VALUES.

BUT AT THE SAME TIME, BECAUSE THIS IS HAPPENING MORE AND MORE FREQUENTLY, UH, AND MORE INTENSELY, THAT WATER WOULD'VE BEEN SLOWLY DEVELOPING OVER TIME AND WOULD'VE BEEN PERCOLATING INTO THE GROUNDWATER.

AND SO THEY REPRESENT LOST OPPORTUNITIES.

THE SECOND ARTICLE IS A BIT WONKY AND A BIT NERDY.

UM, IT REFLECTS THE NEW YORK TIMES ARTICLE THAT TALKED ABOUT A MAJOR CHANGE TO A CLIMATE MODELING SCENARIO.

THE ACRONYM IS RCP 8.5.

UM, IN TERMS OF CLIMATE MODELING, GENERALLY WHAT HAPPENS IS THAT THESE LARGE SCALE, LONG RANGE, UH, CLIMATE MODELS, UH, DEEPLY, DEEPLY FOCUS ON GLOBAL TEMPERATURES AND THE CAUSES OF THOSE GLOBAL TEMPERATURE INCREASES.

THE WORD IMPLAUSIBLE HAS NOW BEEN ASSOCIATED WITH RCPA 0.5 AND THE REASON BEING THAT RCPA 0.5 HAD IT AT ITS CORE LARGE AMOUNTS OF COAL BURNING, UH, FOSSIL FUEL CONSUMPTION FOR ELECTRICITY PRODUCTION.

UH, IT TURNS OUT THAT NOW THOSE FORECASTS SEEM TO BE DRAMATICALLY SHIFTING.

I THINK SOME OF THE EFFECTS IN THE PEOPLE'S REPUBLIC OF CHINA IS HAVING AN EFFECT ON THAT AS THEY SWITCH OVER TO RENEWABLES ON A MORE DRAMATIC SCALE.

WHY DOES THAT MATTER FOR WATER? IT MATTERS FOR WATER IN THE SENSE THAT LONG RANGE FORECASTING OF GLOBAL CLIMATE PATTERNS FOR TEMPERATURE HAVE THE ABILITY TO THEN MONITOR AND PREDICT THE CONVERS OF SNOWPACK TO RAINFALL.

UH, THAT IMPACT LEADS TO GREATER VEGETATION GROWTH, GIVEN GREATER SUNLIGHT AND GREATER HEAT.

AND THEN THAT LEADS TO EVAPORATION OF THE WATER THAT YOU ONCE ANTICIPATED WOULD JUST SIMPLY MELT FROM SNOW AND RUN OFF INTO THE COLORADO RIVER.

FOR EXAMPLE.

UH, TEMPERATURES HAVE THE ABILITY TO AFFECT EL NINO PATTERNS, WHICH CAN THEN AFFECT STORMS AND PRECIPITATION IN SOUTHERN CALIFORNIA AND PRECIPITATION IN SNOWPACK IN THE STATE WATER PROJECT.

THAT BEING SAID, IT'S IMPORTANT TO NOTE THAT THAT'S ALL WELL AND GOOD,

[01:40:01]

AND THAT'S THE THIRD ARTICLE THAT I HAD ATTACHED FOR YOU.

UH, IT IS A FAIRLY HEFTY DOCUMENT, I THINK IT'S AVAILABLE FOR YOU ELECTRONICALLY, BUT METROPOLITAN PUBLISHED ITS CAMP FOR WATER, WHICH IS ITS LONG RANGE RESOURCES PLAN, IT'S ANNUAL REPORT DATA.

THE ANNUAL REPORT DATA HAS A NUMBER OF IMPORTANT FACTS THERE ABOUT IMPACTS TO WATER SUPPLY THAT HAVE OCCURRED BOTH LOCALLY AND IMPORTED.

AND TO CAP THESE THREE ARTICLES, IT'S IMPORTANT TO NOTE AS YOU LOOK THROUGH THAT AND IF YOU SEE SOME OF THE STATEMENTS OF FACT THERE, NOT A SINGLE ONE OF THOSE HAS ANYTHING TO DO WITH RCP 8.5 AND YET THEY'RE DRAMATIC IMPACTS TO THE WATER SUPPLY PICTURE AFFECTING SOUTHERN CALIFORNIA.

THAT'S IT.

I'LL LEAVE YOU WITH THAT AND UH, I CAN ENTERTAIN ANY QUESTIONS YOU MIGHT HAVE.

THANK YOU FOR THAT.

ARE THERE ANY PUBLIC COMMENTS? ANY COMMISSIONER COMMENTS? ALRIGHT, THANK YOU FOR THAT REPORT.

UH, WE'VE GOT A MOTION TO RECEIVE AND FILE ALL THOSE IN FAVOR SAY AYE.

GOT, UH, CONSENT CALENDARS, UH, CONSENT CALENDAR.

ANY OPPOSED? THANK YOU.

AND, UH, LAST AND FINAL ITEM NUMBER 12.

UH, WE'VE

[12. 26-55279 Recommendation to approve May 28, 2026 Board meeting minutes. Suggested Action: Approve recommendation. ]

UH, MAY I PLEASE HAVE A MOTION TO APPROVE CONSENT CALENDAR ITEM NUMBER 12.

SECOND, THANK YOU.

ANY PUBLIC COMMENTS ON CONSENT? UH, ALL THOSE IN FAVOR SAY AYE.

SO THE PUBLIC COMMENT PERIOD IS NOW OPEN.

ANY YOU OPPOSED? THANK YOU.

UH, IS THERE, UH,

[PUBLIC COMMENT Opportunity to address the Utilities Commission on non-agenda items. Each speaker is limited to three minutes to make their comments unless extended by the Board.]

UH, IS THERE ANYONE WISHING TO SPEAK ON A NON AGENDA ITEM? ALRIGHT, SEEING NONE PUBLIC COMMENT PERIOD IS NOW CLOSED.

UH, ARE THERE ANY

[ANNOUNCEMENTS]

ANNOUNCEMENTS ON THE BOARD? YES, SIR.

JUST HAVE TWO QUICK QUESTIONS.

MAYBE, UH, THE GENERAL MANAGER CAN JUST GIVE US AN UPDATE AT THE NEXT MEETING.

I NOTICED SOME ACTIVITY ON THE WALL AT, UH, BIXBY HILL, ALONG STUDEBAKER.

I'M JUST KIND OF CURIOUS AS TO WHAT, WHAT'S GOING ON THERE.

AND THEN ALSO IF I CAN GET AN UPDATE ON THE STUDEBAKER CONSTRUCTION WITH OUR PIPELINE AND THE CITY'S CONSTRUCTION.

IT'S STUDEBAKER'S ALL TORE UP RIGHT NOW.

JUST A BRIEF UPDATE MAYBE FROM YOU AND THE GENERAL MANAGER.

YES, WE'LL DO THAT.