Recommendation to conduct a Budget Hearing to receive and discuss an Overview of the Proposed Fiscal Year 2016 Budget for the following: Harbor Department; Water Department.
Okay. Thank you. Next, we're on to our final hearing of the night, which is the continuation of the budget hearing. Some turn this over now to Mr. West. Report from City Manager and Financial Management. Recommendation to conduct a budget hearing to receive and discuss an overview of the proposed fiscal year 2016 budget for the following Harbor Department and Water Department. Mr. West. Thank you, Mayor. Mr. Council members. This is our series of budget hearings. So tonight we're hearing from our Harvard Department and from our water department. So I see our executive director, John Sanger, up in the audience. So I'm going to turn it over to Mr. Belanger up and we'll do the Harvard Department first. Good afternoon, Mayor Garcia and members of the City Council. My name is John Slinger up. I am the chief executive officer of the harbor department. With me here today is Steven Rubin, our managing director and chief financial officer, as well as Betsy Christie, who is our director of finance. Thank you for this opportunity to present the Harbor Department's fiscal year 2016 budget. Our fiscal 2016 proposed budget is $829 million, a 3% decrease from the fiscal 2015 budget, primarily due to a decrease in capital spending. However, as in recent years, the budget continues to be driven by a significant investment in port infrastructure. In this case, $555 million is projected for next year, led by the continual, continual investments in Middle Harbor and the Gerald Desmond Bridge replacement projects. We continue to aggressively move forward with our ten year, $4 billion capital program, the largest, most ambitious port infrastructure program in the United States. In recent months, we have been encouraged by very strong container volume numbers and believe that the cargo diverted away from the port during our congestion crisis last year has now been recovered and that we're beginning to recapture market share we lost early this year. However, given global economic uncertainties in Asia and in Europe and the unknown impact of trade next year, we will remain financially prudent, which our budget reflects. The budget is the financial framework which supports our strategic plan, which was updated for 2016 and we are now working on our 2017 strategic plan. The budget reflects the new port organization that we put in place in 2014, which has allowed us to respond effectively to rapidly changing market and competitive forces within our industry. Both operating revenues and headcount remain flat for the coming year. As usual, the budget includes a tidelands transfer of 5% of gross operating revenues, which last year was $17.7 million. It uses conservative revenue projections. And we developed our budget in the context of forward looking ten year cash flow forecast. This ensures that the decisions we make today are affordable in the future and we remain focused on maintaining our very strong credit rating. Our budget reflects several key initiatives and priorities. First supply chain optimization is a joint Long Beach and Los Angeles Port Initiative to engage our stakeholders in improving the end to end marine supply chain system to avoid future cargo congestion and drive increased speed, efficiency and reliability of goods movement throughout our port complex. We also have an initiative called Energy Island, which we are evaluating as a means to create energy security, environmental sustainability and operational resiliency for the entire port, as well as essential services of the city. We need to ensure an ample supply of electricity, alternative fuels and renewable energy sources as the port moves towards a zero emission, electrically intensive future. We are investing in our team through newly developed Port Leadership Institute, creating strong bench strength and a culture of learning throughout the organization. We are also competing, completing a long term cargo forecast as part of our new strategic planning process, which is the first time we've done this since 2009. We have also initiated a land use study that will evaluate the highest and best use of port real estate assets as we continue to build our port of the future. The port continues to invest in the Long Beach community. Our Technology Advancement Program, which we call TAP for short funds, the testing of zero emission electric powered trucks and vessel emission reduction systems. As we expand tab, we envision working with the city and our local universities to develop a Long Beach Center for technology innovation that will bring together the common initiatives and goals of our Long Beach community in developing the next generation of talent, technology and jobs. This year. It's the 10th anniversary of our green port policy. We're updating our Clean Air Action Plan as a joint effort with the Port of Los Angeles. We continue our robust communications and community relations programs to inform residents about the port and how we're helping the community to thrive. As a board of Harvard commissioners has asked us to develop an extension of our community mitigation grants program. We have, to date awarded $17.4 million for 170 projects to improve public health. Let me provide some more details of the budget. The proposed 2016 budget is 829 million. This is 3.3% less than last year, primarily due to lower capital expenditures. Although we plan to spend slightly less, our capital expenditures are still the highest the highest investment infrastructure of any port in the nation at 550 million capital expenditures drive our budget. As we move forward with Middle Harbor, the Gerald Desmond Bridge replacement and critical rail rail expansion. This slide actually shows how we spend our money. The capital expenditures are clearly focused on the Gerald Desmond Bridge and Middle Harbor projects, but we do many, many other things that amount for hundreds of millions of dollars that are crucial to our port infrastructure. Now let me turn to the funding sources. Our fiscal 2016 operating revenue is forecast at $376.4 million. This is 8.5% higher than last year's adopted budget. The fiscal 2016 non operating revenue is $149.1 million and is related to grant reimbursements for the Gerald Desmond Bridge. The other significant source of funds is from our borrowing. As you can see, we have very exciting plans for building what we call the Port of the Future, which is well underway. In closing, I want to thank our customers and our partners, our mayor, our commissioners and city council members. And last but not least, our incredible port staff for the exceptional cooperation and support we receive on an ongoing basis. Together we are driving innovation, operational excellence and environmental, environmental and economic sustainability. As we remain committed to partnering with the city, serving our community and investing in long beaches, bright, bright future we stand ready to serve. Thank you very much. Thank you very much, Mr. Schlanger. As always, the port is doing a phenomenal job. I know you didn't add it, but I know you're having. We're having record numbers at the port for cargo this year. So congratulations to you and your team for that. Councilwoman Price. Thank you. I want to thank the port team and Mr. Slinger for that presentation. I did have the opportunity to receive a briefing from your financial team. I don't have my notes, but my recollection from the meeting is that I was very impressed with the presentation that the team provided. You have a fiscally prudent approach to your finances and a very impressive reserve that you carry year to year, despite some unforeseen circumstances and things that have happened in recent times. I think your leadership, in terms of what you've brought to the table with supply chain optimization and other things that you've brought from your past experience to port operations, have allowed you guys to stay fiscally prudent with an eye towards the future. What I'm most impressed about is how you're able to maintain a fiscally prudent stance in policy and daily operation, while at the same time continuing to invest in community programs which are critical to our city and critical to the fabric of everything that we do for our residents. I appreciate that and also the investment that you have in your staff. Frankly, the management training program that you have available to your team that that I was briefed on during my presentation is very impressive. And the fact that you're able to do that and invest in your your department and the members of your department and still stay within budget and continue to maintain the reserves that you have and continue to plan for the changes in the industry that the port and ports around the world are seeing is very impressive. So I want to thank you for taking a fiscally conservative approach to the finances and making sure that the port always has positives to report in terms of finances. That's very welcomed and consistently we can rely on your team to deliver that. So thank you. Thank you. Thank you, Councilmember Richardson. Thank you, Mr. Mayor. So I want to take this moment to just offer a few comments. I want to congratulate Mr. Singh, slinger of his staff and our Harbor Commission on a great budget presentation. I want to acknowledge also your efforts to improve your sponsorship program in order to ensure that it has a makes a broader impact on our larger community. We did pay attention to that and we're very, very glad to see the outcome of that. I want to continue to encourage you to keep going. Think broad thinking, broad thinking and being innovative, but also to make sure that, as I know that we're flat this year, but as we continue to to bring in talent into our city, we make sure that we really hire folks that reflect the diversity and the talent of Long Beach. And so, that said, I look forward to partnering with you to continue to partner with you on Fed Pledge, advocating for a dedicated freight program ongoing from our federal government. Because I know it's important to Long Beach, particularly our port and goods movement, that we have the infrastructure available to move our freight quickly. So thank you so much on your presentation. Thank you. Thank you, Councilwoman Gonzales. I just want to say thank you. I think you've covered everything. My colleagues covered quite a bit, too. But your vision for environmental stewardship is really to be commended. And also the organizational restructuring of the port and just boosting the morale of the employees, I think is just tremendous. So I just want to thank you, John, as well. Thank you. Thank you, Councilmember Ringo. Thank you, Mayor. How long you've been with us now? A year. A little more. Little more than a year. Well, congratulations. You passed probation. Thank you. Barely. Yeah. No. Yeah. I want to add my voice to all the kudos that have been passed on doing your work with the. With the harbor, especially with the Clean Trucks program, continuing that and all the efforts you're doing to keep our air clean. On page or eight, where you have your capital expenditures that you have right there, the Middle Harbor, if I recall correctly. It's a is it a three phase project program or is it to where are we with with the Middle Harbor at this point? Middle Harbor is primarily a two phase project. We've released phase one this month, and it'll go through a six month testing period and be operational in the first quarter of next year. So it'll be a revenue producing phase of Middle Harbor beginning next year. Moreover, phase two will extend the Middle Harbor complex, adding another 10% capacity. Phase one adds 10% phase two as another 10% for a total capacity increase for the port container business by 20%. There is a phase three and it's concurrent with phase two and is a small part of the project related to Infilling, part of the the waterway that is is currently under underway. So it's really a two phase with a little tiny phase three related to two part of the extension of the pier. Thank you for that update. And along those lines, this is $111 million at the total costs for the all three phases. I'm sorry, what was a number? The 100. You have $111 million here. No, that's just that's just for fiscal 2016. The total project value is about $1.4 billion. And we have spent how much so far? About half approaching, approaching $800 million. So we're we're well through it, but we still have a complete phase two expansion to to yet complete. Is there a projection in regards to what the income that we might be receiving once the project is completed? Absolutely. The this is a project that will that has resulted in a 40 year, four and a half billion dollar lease to the port. So over over the 40 year term of the lease, we will receive four and a half billion dollars in income. Thank you. And what I really like about this project, obviously, is that it's very green, all electrical, and it's going to be one hell of a project. Thank you very much. Thank you, Councilman Andrews. Yes, thank you, Mayor. John, I think it's the exception what you've been doing, because the fact that these kind of trying times that, you know, you guys came upon you this year. But I think because of your staff and your commissioners and the way you guys have work together has really made our city of Long Beach is really look good. You know, I just have one question and I really want to applaud the port for their recent update, you know, to the community sponsorship guidelines to make process more transparent and acceptable. But how are you to ensure the organizations throughout the city are being notified about the new process? Thank you for the question. Well, our team is working extremely hard to reach out to the community and communicate the guidelines that we've come up with on a number of fronts. First of all, obviously, we're sending letters to all all the people that have requested a sponsorship support over the last 18 months. We're also doing press releases, social media and outreach to nonprofit groups and networks. We've also hosted a lunch and learn with with our staff meeting with a number of the council offices. So we are doing everything we can to reach out and personally touch our community members. You know, thank you, John. And one thing I hope you guys never, ever, you know, take out the put to it, because the fact for my community, that's just like taking a trip to Italy, you know? So keep up that, please. All right. Don't take that out of the budget. Thank you again. Councilwoman Mango. I echo Councilmember Andrew's comments. I know that this year is one of the first years where we had over 300 requests to go on the port tour. And I think that that speaks a lot to your leadership at the port and the leadership of the council to re bring life back to downtown for the neighbors of the fifth District to venture down this way for an evening and spend time learning about the port. There are lots of questions. And Commissioner Dynes did an excellent job of. Differentiating the funds that stay at the port and why they can't be used to fix our streets and sidewalks. And he also did give credit to the amount of funding that comes over from the gross amount that you mentioned earlier in your presentation. So thank you again for all that you do. Thank you for the $400 billion of trade and transportation and travel that you bring to the United States and keep doing a great job. Thank you. Your staff continue to rave about having you in leadership and it really means a lot to all of us. Thank you. Thank you. And with that, Mr. Singer, I think we're going to go on to the next budget presentation. Thanks again for that. Next up, we're going to have the water department's presentation. That's item 25. So Mayor council members, we have one of his final presentations as a Long Beach employee. Executive Director Kevin Walker. Well, the final one to the council, probably after after after the next agenda item. And so thank you. We'll get a chance to think in a minute, but go ahead. Thank you, Mayor Garcia, council members, for the opportunity to present the Water Department's 2016 budget. Let me begin by acknowledging the commission President Harry Salts gave her, who's patiently sitting here waiting for me to talk fast so we can get back to work. And also my incoming replacement, Chris Gardner. If if if the commission had acted a couple weeks quicker, he could be giving a presentation tonight, not me. But anyway, let me also introduce my two staff here with me, Anatole Fallon's our assistant general manager, and then Paul Fujita, who who's our finance manager and has our budget. So here we go. The right one in the water department. We have two unique two different funds and they're discrete and kept separate. The water fund is our largest fund accounts for about 85% of our expenditures. And then so I'll talk about that first and then later I'll talk about the sewer fund. It's what we call an infrastructure driven fund. About 70 million of the 106 million in the water fund is non-personal services. A lot of that has to do with purchasing water. And I'll go over some of those costs in a minute. Our personnel, our personal services, about 23 million, and then our capital improvement program, about 13.4 million. And I'll talk about each one of those areas in a bit. This shows you we get 40% of our water from the Metropolitan Water District, which we purchase from them, and 60% of our water we pump from our local groundwater aquifer . And when we do that, we pay a what's called a replenishment assessment to the water replenishment district. So this shows you the costs that we've absorbed in the last since from 2009 to 2016. From those two entities, the metropolitan water districts, rates have gone up, compounded 85% during that time period. And the water replenishment district's rates have gone up 87%. And during that same time period, we've raised our rates 50%. So we've been absorbing those costs for many years now, running a deficit budget for many years now and spending down our reserves. Obviously, you can't continue to do that forever. So a few years ago, we developed a five year plan to realign our costs and our revenues. And so fiscal year 2016 is the third year of that five year plan. The five year plan anticipated 4% per year water rate increases to bring the budget into balance. You can see in 2016 that even with a 4% rate increase, which is what we're recommending, we're still running a deficit budget of about $6.2 million. But then you can see how possibly as early as 17, but certainly by fiscal year 18, which is the fifth year of the five year plan with continued 4% rate increase as we come into balance. So we're right on track. In fact, it looks like we're on track to complete the five year plan in the fourth year. And so hopefully Mr. Garner will follow through on that next year. But anyway, that's good news that we're tracking hopefully a year ahead of getting back into a balanced budget situation. One of the programs we're very proud of and that we don't get up in the don't end up in the newspapers very often about is our pipe replacement program. We've had a very extensive pipe replacement program in the water department for over 20 years now. And the red line is the the success of that program. The red line is our main breaks. You can see that we used to regularly have 100 to 150 main breaks per year. And for the last several years we've been hovering around 30 main breaks a year, and that's due to the investment that we've been making. About 6.2 million of that $13 million capital program is replacing old cast iron pipe and the green bars. There you can see that we've now replaced over half of our cast iron pipe, but we still have a lot to go, lots of work to do. And we'll be replacing Pipe for many, many years to go to come. But again, our main breaks have been reduced by from 100, 150 to running about 30 for the last several years. Moving on to our summer of fun. We're again, this is our smaller fun. I get to clarify, this is the sanitary sewers. It's not the storm drains or storm sewers. Those are managed by our public works department. We the water department is responsible for the sanitary sewer system. 15% of our budget. The breakdown between the three components percentagewise is very similar. But what we're dealing with here, it's a little bit different situation. There were new regulations passed by the state several years ago that required us to increase our both our operations and maintenance responsibilities and also our capital improvement work in our our sanitary sewer fund. So we did that primarily through issuing a line of credit, in essence, a credit card. And we've been using that line of credit for several years now. We've extended it as long as we can, but unfortunately, we we won't be able to extend it again. So we have to plan now to take it out in fiscal year 2017 and convert it to a long term debt issuance. So the primary driver we have here in our sewer fund is the conversion of that debt in 2017. And you see how our expenditures increase from 19 19.5 million to 20.6 million. A million of that is is due to now having to convert that and pay both principal and interest on that, which is now we're just paying interest only in a very low interest rate so that additional million dollars is converting that line of credit to date to debt. But again, we're in we're in a multiyear plan here for percent rate increases. And again, you see how we come into balance in about 2018 or 2019 with 4% rate increases on our on our sewer fund. One of the things I want to talk about, one of our biggest driver really on the sewer funded sewer operation is preventing sewer overflows. Those are what we don't like to happen. It results in if if it's not contained can result in, you know, getting to our recreational waterways. So we take that very seriously. We have a very progressive fats, oil and grease program working with our restaurants that's been very successful, very pleased with with that and the cooperation and the way we work jointly with our health department. We're on that program. It's a very successful program. Unfortunately, we have had some increases in sewer overflows this year in residential areas. So we're going to have to work work hard to get out the word this year and hopefully work with the council and the city manager and others, too, to make sure that our that our residents understand that it's not acceptable to discharge a grease into our sanitary sewers, because it's almost always grease that's causing these sewer overflows. It's almost always grease. And again, almost all the ones we're having now are in residential neighborhoods as opposed to where they used to be primarily in restaurant areas. We have implemented some technology, what's called smart manhole covers. And through that technology we've averted we we estimated 56 or 58 sewer overflows over the last six years. So we're using technology to avert sewer overflows. And it's been very successful. We've greatly increased the inspection of our sewers as we inspect the sewers. Using closed circuit television, this both drives our cleaning program, which is mainly an on M expense. But it also is what then becomes the input to our capital program, because it's through these inspections that we determine which sewers need to be either realigned to replace . So we as you can see, we do a lot more inspection of our sewers than we used to. We also do a lot of cleaning. We go through the whole system about on a two year cycle of cleaning the system. Some areas require a lot more frequent cleaning than that in areas that are heavily impacted, particularly by grease again. But we spend a lot of time and money inspecting and cleaning the sewers. This is a before and after picture of a sewer that was cracked that we identified in inspection and and how we realigned it. Whenever we can, we realign a sewer rather than dig it up and replace replace it. Not only is that better for the community, less traffic congestion, but also it's much more cost effective to rely on a sewer working from manhole to manhole rather than tear up the whole street. So this is what we do, if at all possible, is realign relining as shown here, getting to the you know, what are the rate increases? Again, our recommendation is 4% for water and 4% per sewer. What does that mean on the typical monthly bill? This shows you what the typical monthly bill would bill would do for a single family home in Long Beach using 12 billing units per month, which is what our typical single family home uses. It's a combined increase of $2.20 under the water and sewer bill. I believe it's $0.44 on the sewer bill and a dollar 76 on the water bill. How does that compare to our peers and the rest of large cities in California and our neighbors? This graph not only includes the payment that our customers make to us, but it also includes the payment that our customers make to the L.A. County Sanitation District through their property tax bill. So you can see that when you add those together, we are the lowest combined water and sewer bill of any large city in California, or what's called the L.A. County Average, which is a grouping of several of the cities in Los Angeles County. And then also one private operator, Golden State Water, which does provide service in a small part of Long Beach. And we have another one, Cal Water Service, which has similar rates to Golden State. So our our combined water and sewer rates are some of the lowest of any large city in California. And that completes my presentation. We have answered the questions. Well, thank you, Councilwoman Mongo. I know this doesn't sound exciting, but the idea that we have done such a remarkable job of maintaining the assets that we have underground is really remarkable. Because if if we did spend all the money that we are allocating millions of dollars a year to repave our streets and then to have to go back and deal with those issues later. You've done a remarkable job, and we really appreciate that. Thank you for the presentation you gave to my office the other day. I thought it was quite informative. I also want to take a moment to appreciate the technology that you have deployed recently. I know we discussed that I was one of your pilot programs and you quickly sent me a letter letting me know that I had a leak I didn't know about. And that leak caused me to immediately call a plumber. And we did a quite a extensive investigation to find out that just a tiny bit of water was leaking every single day through a flap in the back of the toilet. And so to be able to see this technology in action firsthand has been remarkable. And I really appreciate the innovative things that you've done. You will be missed greatly. We are looking forward to the leadership of Mr. Gardner, but you have some very, very large shoes to fill. So thank you very much for all you've done for us. And thank you to the commission that has been a leader along the way, because without a board of interested neighbors who are looking out for everyone, we wouldn't be in the position we are. You guys have been just such a group of financially conservative individuals that have put us in a remarkable place. So thank you. Thank you. Very much. Councilor Richardson. Thank you. I just wanted to chime in and just say that although, you know, these things may not be in the newspaper, it's a good thing when your own water department is not in the newspaper. Secondly, if you're not in the newspaper, maybe you should talk to your board member. Harry Salts gave or about that. But in all seriousness, thank you so much for your for your presentation. And we do have this conversation every year. It's great to see you're making the investments in our water mains. We would hate to see water main breaks in our community. These are important to our residents. They're important to the safety, the health and safety of our community. So we're glad to have you here and we're sorry to see you go. Thank you, Councilman Pryce. Thank you. I want to echo all of those comments. I'm curious, in the time that you've been with the water department, have you ever had a water situation such as we have now in the state of California? And how how has it been for you in terms of your leadership in these times? Because, you know, we get a lot of concerns from residents and whether we're using reclaimed water and our parks and that kind of thing. I'm just curious in terms of how that experience has been for you. Well, there's no question that this is that when you consider the the impacts of the drought we're in, this is the most serious that anybody has ever lived through in California history. But hydrological, it's not that much more severe than other droughts. But when you consider the population increase that we've had, I mean, the last drought that we had was. Perhaps similar to this, we have, I think, about 9 million more people living in California than we did. Now that we did anything but that, that's more than two cities in Los Angeles that we've added to our population. And since the last drought, that's fairly similar to this hydrological. The other thing is, you know, we've had additional endangered species restrictions put on our imported water supplies. So those imported water supplies are under a lot more restrictive conditions than they were in any previous drought. So there's no question this is the most significant drought in terms of impact that California's ever experienced. And it's it's been exciting. We'll talk about that later. But I mean, Long Beach has just stepped up and done a tremendous job. And it's been a tremendous pleasure for me to be able to help lead Long Beach and provide the leadership that Long Beach has provided for the whole state. Well, you've done a tremendous job, and I appreciate the budget report that you've given us. And again, similar to the comments made with the harbor department, I appreciate the attention to to responsibility and and proceeding prudently. And I think that that's appreciated by council. And I share the sentiments of Councilman Richardson in saying that it is it is a good thing when your water department is not in the press in this day and age. So thank you. Thanks to your team. Thank you, Councilman. Well, thank you. I'd like to join my colleagues in complimenting the water department, Mr. Guardia and your entire staff for great work. It shows here that we are being very fiscally responsible. It's well-planned out. The rate increases, I believe, are fair. And we still remain a leader in the state. I'm concerned. Understanding that this is your last budget presentation, I'm a little concerned about the brain drain, no pun intended, from the department, from the top level, but also from its labor force as well. I see that there. Is there any significant change in terms of personnel, the personnel situation over at the water department today? No, our staffing numbers have been flat for several years. But as as you are correct, we are in a increasingly competitive market and retaining staff is becoming a very serious issue for us. I appreciate that. And I because we talked about this in our present briefing a week or so ago. Can can you just elaborate on what the competitive market means and how that is impacting staffing at the water? Well, it's interesting. I didn't want to brag, but I've use this as a lead in. You know, we talked about our water main breaks. And, of course, you always read about one other very large city in Los Angeles County in the newspaper that has a lot of water main breaks. Well, they have five times as many water main breaks per mile of pipe line in that city as we do in Long Beach. Well, they've apparently decided that it's time that they should do something about that. And one of the things they're doing about that is they're in a very extensive hiring binge to hire employees who know how to install and fix water mains and. We're the victim of that hiring thing that they're on. We've lost several of our best rank and file employees to them, and we have a number of a large number that are apparently on the next round that they're going to be making offers to us. So they're they're rating us. Yeah. Okay. So thank you. I don't need 25% more than we do, so there's only so much we can do. Did you say 20 to 25% more? Yes. Well, that's pretty significant. I know we have a we just hired a new h.r. Director, and so I know that that'll just be on the list of challenges for for that individual to deal with. Thank you very much. I always appreciate your candor. Thank you, Councilman Andrew. Yes, thank you. You know, first of all, I'd like to thank you and your department because of the fact that, you know, with the parks I have in my district, they still are green. I don't know where the water is coming from, but they still are green. And so I would just like to say it's one. Yeah. Know, one question is what about the impact, you know, to your long term rate outlook? Yes, thank you for that, because that's a question we get all the time. You read about it all, all the time in the paper that with conservation and reduced sales, that water utilities are going to have to raise their rates. And of course, the public hates that that you're raising rates when you're forcing them to conserve. But again, we're right on track. We're right on track. In fact, it looks like we may complete this five year plan in four years. So there's been no changes to our proposed five year financial plan in those 4% per year rate increases as a result of of all the things we're doing with conservation and in addressing this drought. Thank you. Thank you. Councilmember Rank. Thank you, Mayor. Brain drain. Yes. Mr. Garner is going to have a challenge there with the making of some of that brainpower, as well as some of that some of the employees that are leaving. All joking aside, Mr. Worry, I want to thank you for your leadership with the water department. That was very pleasing. I know it was said about keeping the water department out of the out of the press, but out of the press that I saw was always very positive in that Long Beach was ahead in its conservation of water with other municipalities up and down the state. So that was due mainly because of your leadership on that. And I want to extend my congratulations to you and being very prudent with our water resources, with being very prudent with their rates, keeping the the enterprise that we had that we call the water department balanced and working forward. So I guess I sort of contributed to that too as as well as I see my front lawn getting browner and browner. So I guess, you know, I have contributed to that to that to that concern conservation. So I want to thank you again and I wish you well in your retirement. Thank you very much, sir. Thank you, Councilwoman Gonzales. Just a congratulations on. Your retirement as well. You've left us in a really great place. And seeing the budget, as my colleagues mentioned, even with a little increase, it still looks great. And again, you've left us in a in a wonderful place. So I just wanted to thank you for that. And also the steps we're taking internally as a city I think is is wonderful and reducing our water usage. So thank you. Thank you. Thank you. Vice Mayor Lowenthal. Thank you, Mr. Mayor. And I wanted to thank heaven not just for his presentation tonight, but really for his years of service. How long have you been with. Let me try to lower 14. Okay. So I've known Kevin before. Long Beach Water from early, early days of consulting and Metropolitan Water District. And so many of you heard me talk about us having the finest general manager, water general manager, and not just in the region, I think in the entire state. And what we lose when Kevin leaves, which I know we have a great person coming in, Chris Garner. There's something about the industry that it's very difficult to have that kind of institutional knowledge, and so I will definitely miss that. On the budget piece, I think you covered how we have kept our rates low and kept our increases minimal. And I know you don't like to toot your own horn or even that of your entire department, but during the years, during the three years, the metropolitan raised rates by 20%. We actually did not raise our residents rates by any amount we held at zero for those three years. We felt that it was important to recognize our residents for the work that they're doing, the conservation efforts that they're making. And really, they our residents are the leaders in certainly, I believe in the Metropolitan Water Districts Service area of all those counties and entities and cities within that service area, six county service area. And many times we look to Long Beach residents and ask other communities to follow suit. I wanted to touch on the sewer fund a little bit, and I know that you have created a plan to ensure that our pipeline replacement is on track. I think many of us read the article this morning about how the decreased use of water and decreased amounts going through these pipes causes cracks and and surges and all those other things end up being really costly. Can you address that here for us and how that might be different here? Because we've been conserving for a very long time. Yeah, I read the article. I think I've for the most part, I think I agree with Lester Snow's comment, which was most of that was a bunch of nonsense. Yes. But, you know, I was. Hoping you'd be direct. I always like to be direct, but I think, you know, it may be first of all, we're not seeing the tree root issue that some others claim they're seeing. We're not seeing septic water in our sewers that others claim they're seeing. But it could be that the accumulation of Greece that we are seeing is related to lower flows and that the grease isn't getting flushed out. So we do need to ramp up our public outreach and make sure that the residents know that they need to properly dispose of grease and not dump it down the sewer so that that may be happening. There may be a little accumulation of grease that otherwise would have gotten flushed down and not accumulated in the sewer. And that's the greater problem, not the unintended consequence of conservation. It just it illuminates what that original problem is. So thank you for that. I too want to bemoan our losing key staff members to other agencies. It is a salaries. War of the salaries. And when other agencies pay more for the same level of work, that's it's difficult to stay competitive. So I will look to our new H.R. director and really this council to take a look at various positions and and see how we can ensure that our investment stays in Long Beach for Long Beach residents to benefit from with this kind of expertize. And Councilmember Your Honor, letting our we used to say that Brown is the new Green, but it's really the California gold. We don't say Brown. If you look at your grass, it's really golden on the yellow side. So that's that's what that's what our state slogan is. California gold. Thank you. Thank you. Council member, supermom. Thank you. I just wanted to say thank you for your service to the community and congratulations on their retirement. And thank you for all your presentations to committees and commissions that I've been on before because you do a lot of duty other than prison. The council here. Years ago you had an outreach program on fog. And I guess that's probably your option that you can do. Now, just just to get the word out there again on this. Yeah. But I think, you know, we want to work through the council offices and city manager offices. You know, we want to use every opportunity we can to get to get that message out there to the residents about proper disposal of grease. So it wouldn't be a water. I mean, it wouldn't just be the water department. We need to work through all those venues. Okay. Thank you. Thank you. I appreciate that. But your presentation, that concludes the budget. But we're going to go straight into item 20 because I believe it's a continuation of that. Mr. Parker, did you have an announcement. Public comment on the budget? I was know I was going to do it after this, but we should probably do it in between public comment on either the budget presentations we just heard. Please come forward. I just want to address you directly. What a resident should do when in their apartment, the shower and the bath continues to run. Code Enforcement Per Amy Burdick, Craig Wong, Carmelo Baca. They did an expression on June 23rd. They were in the bathroom with me physically. Over a month ago they did witness the water wasting and it's been over a month and it's still running. They've done nothing about it. Her Stone Community Foundation, the apartment owners have yet to remedy it. I don't know why they're being exempt from compliance. They do own five complexes in Long Beach, so it would be high impactful to have it investigated. I've come to as many people as I can, including council Robert and is still running is still waiting today. If you go to right now, 600 hours of the windows are boarded up with wood over 90% boarded up. The water is in there running and no one has done anything about it. Again, the address is 1600 words of a9004 apartment. Number six, Craig Wong told me, Well, you're the only one to complain, so please, if you can look into that for me, for the community. Thank you. Thank you. Any other public comment saying I'm going to go directly into I believe it's item 20? Madam Clerk. 25.