AN ORDINANCE relating to rates and charges for sewage treatment and disposal; and amending Ordinance 12353, Section 2, as amended, and K.C.C. 4A.670.100, Ordinance 18745, Section 2, and Ordinance 11398, Section 1, as amended, and K.C.C. 28.84.055.
Thank you. All right. See no further discussion on this item today. We will look forward to taking it up further. And that takes us to item seven on our agenda. Finally, the proposed ordinance 2020 186 with rates and charges related to sewer disposal. That would go into effect in 2021. We been like read of council staff with us to brief us and answer questions. Mr. Reed, the meeting is yours. Thank you, Mr. Chair. Mike reached out for the council. So this is on begins on page 317 of your packet of about a little bit of context first. So the slower rate pays for the operations of the wastewater treatment division and for capital construction as well as for the repayment of debt of past capital construction. So a rate is actually set in coordination with the 34 cities and school districts or partners in the system. Those entities actually collect the school rate from ratepayers and forwarded to the county. They also assess a local rate. In addition to the county's rate, the sewer rate for 2021 is proposed at $47.37 per residential customer equivalent or RC, which is basically just a flow volume measure that is the expected amount that the average single family residence will generate in a month. So the $47.37 is about 4.5% higher than the 2020 rate of $45.33. Now, this rate is actually revised downward from the rate that was initially proposed when the agency first surfaced. The rate proposal, which was that rate proposal, had been 9.5%. And some of you may have heard about on it, refer to table one on in the packet and that's on page 318. That shows the pattern of rate increases in recent years and the projected increases in coming years. So in the bright water years, so bright water actually completed construction, I believe in 2012. So in those years and the years immediately afterwards, the rates were averaging in the 10% and higher range. And the last few years they've been quite modest. So 2.5% increase for 2019 and 20 0% in 2020. 2021 is a 4.5% increase and you'll see that on the table that it's projected that we're going to be returning to the 10.5% or 10.25% and higher rate increases in 2023 and forward. Those are ultimate increases. So the second year of the two year rates would be a 0% increase. So very briefly that the increases in in the current year and future years are driven by a couple of key factors. One is there is a management asset inventory that needs to be addressed because of the aging physical plant that the agency manages. And then secondly, there's a need to complete the combined school overflow projects by 2030, and that's a deadline that's mandated by court. A court mandated consent decree referred to table two on page 319. That's the capacity charge table. So the capacity charge is assessed for new connections to the sewer system. The proposed increase is 3%, up from $66.35 per RC to $68.34 per RC per month. That level is consistent with increases in recent years and our future projections are at the same level. So the staff report also notes that that ratepayers are people, the county and the local city or school district rates. So I included in the staff report some select some examples of selected rates for local agencies and they range and these are just examples but they range from $13.97 per seat per month to $35.70 for those selected examples. I've got a table for on page 321 of your packet and table. Table four provides information on the revenues of the wastewater treatment division. So those revenues are increasing by about 4.1% in the coming rate period, the 2021 rate period. It's important to note that because we are facing the COVID 19 emergency and the economic impacts related to that emergency, there are potential for impacting the the revenues for the agency. So the potential impact could could include the fact that the flow volumes will be coming more from industrial and commercial accounts I'm sorry, less from industrial commercial accounts with the shutdown of businesses and. And much of commerce of the region. And more. More from residential accounts. Residents. Your accounts are at a flat rate, whereas industrial and commercial accounts are at a rate based on volume. And so we're going to see a rate or revenue impact from that. Also, you heard director Dave Lee mentioned the impact of lower interest rates. Lower interest interest rates naturally mean lower return on investment income for the agency, but it may be offset by lower interest rates on bond issuance that the agency initiates. Thirdly, there is, as you know, a decline in building permit applications and construction activity, and those declines may result in fewer new connections, meaning lesser lesser revenues from capacity charge or if not lesser than lesser, a lesser increase in growth. These changes will play out over time. They have not had enough time yet to incorporate those into these rate projections, and so we will see those over time. I would refer you to table six on six and seven on page 332, which shows the upgrading in capital expenditures. I'll note that those are that while there are some notable increases in operating structures, capital expenditures are more erratic, with increases up as much as 33% and 26 2026 and decreases in 2024 and 2025. Those capital expenditures are heavily driven by the status of individual capital projects, whether they are in the planning, design or construction stages. Now the staff report does list a number of major capital projects that are underway. I'll take you to table eight now and it's on page 324. So that table highlights a difference in rate projections from last year versus this year. You'll see, for instance, that and I to take you forward to 2030. So last year, the rate projections indicated that the rate for 2030 would be 61.80 $0.04 this year. The 2030 rate projection is projected at $74.83. So significant difference in the rate projections for the future. The executive has noted one key driver of the rate increases is the inventory, as indicated earlier, of asset management projects that need to be undertaken. So just for context, you'll recall that the value of the wastewater physical plant or the treatment plants, the interceptor pipelines, the pump stations, regulated stations, is estimated at about $4 billion. And that's those are plants on the ground or in the ground. The staff report cites the code section that mandates that the agency keep up with needed repairs and upgrades to the system. A chart one on page 325 of the packet is a map of the sewer interceptor network by page. You'll see that the lines covered in red are the major interceptors that were put in about 50 years ago or in the 1960s. And you'll see colors of tan and yellow. Those were all preceding in 1970. So they are at or nearing 50 years of service life. Table nine shows on the next page shows that about 53% of the system is 40 years old or older. Well, there was, as you know, associated with the Lake Washington clean up and the start up of Metro. There was a construction boom. Both the treatment plants were in the early 1960s and many of these interceptor lines were built at the same time. And so they're aging at about the same rate and are going to require service in one way or the other at about the same time. So so chart number two on page 326, that shows that there's about a there's an inventory of about $700 million in priority asset management, unfunded inventory. The report notes that. So that's the other key piece. But there's one other major driver and that is that that and staff report discusses the need to meet the combined workflow overflow decree deadline of 2030. And there are a number of major projects remaining which are again addressed in staff report and those need to get underway pretty soon in order to meet the 2030 deadline. But I'm note that there is a letter from the Metropolitan Water Pollution Abatement Advisory Committee that's on page 37 of your packet that that new pack letter notes that the committee would have preferred a 0% rate increase for 2021 in light of the economic impacts of the COVID 19 emergency. And they also are requesting extensive consultation in preparation for the 2022 rate. A note about timing. So as noted by local agencies, the rate is required to be effective by June 30 of each year to accomplish that. A public hearing and possible action date is scheduled for the May 26 council meeting, with a fall back action date for June nine. I have talked with wastewater treatment division staff, noting that the committee may have questions this afternoon and they and I will attempt to answer as many of those as possible. We will take notes on the other ones, and I've indicated that they will need to turn those around rapidly if there is an intent to be ready for the May 26 Council meeting for action. And finally, I'll note that there is one technical amendment and that would correct an error in the financial plan. And that that's kind of one piece. 335 that that technical amendment was distributed to members and staff this morning. Mr. Chair. Thank you, Mr. Reed. Questions of Mr. Reed. Here. I might also note that that white lively paper check the financial manager and Mark Isaacson, the director of deputy, are also on the line and available to respond to questions. Councilmember Dombroski Oh, thank you, Mr. Chair. And Mike, thank you for the staff report and the excellent tables and graphs. This is a very complicated budget given the role of rates and debt service and policies. But you've mentioned two times in your staff report the need under the consent decree to complete the CSO facilities and the combined sewer overflow facilities have. Gone. Wildly over our estimated costs. And it was my recollection that we have put kind of a freeze on or were slowing down the construction of those to kind of reassess our strategy. With respect to complying with the consent decree to determine whether or not there weren't more cost effective ways that we can achieve our Clean Water Act goal and obligations, goals and obligations. And so I'm just wondering, is that still kind of our strategy? Do we still have to meet the 2030 deadline? Is there any effort underway to go back to the federal government and say, listen, we want to have more flexibility on how we meet it and also on the timing such that our cost profile to get there might be different. That may be a mark question or I don't know. It is my question, but let me say quickly. So. Yeah. There have been active communications between the wastewater treatment division and I believe the State Department of Ecology and of the federal EPA on exactly that question. That is, if we were to try and achieve the highest the highest impact on water pollution is the best way to heart hold to these hard dates or to move those out a little bit and potentially look to some some alternate approaches towards meeting those water pollution control goals. I'll let Mark add to that, Mark. Afternoon. Thanks. Good afternoon, Mr. Chair. Members of the community. Thank you for the question. Council Member Dombrowski. Yes, we are. Well, there's there's really two parts in an answer to that. First. We have briefed the RW QC and are working with New Pack and working with our community representatives around creating a clean water plan. We plan on transplanting, transmitting that to council by the end of 2021. And it will look at a an array of issues of which one of them would be the regulatory components. Around the CSO. Program. And just as Mike said, you alluded to not necessarily wanting to back away from the commitment for clean water, but. That those. Those requirements were put. In place around 2012. There may well be better technology. There may well be better strategies that achieve the outcome for less cost or for better costs that are better investment for that and the receiving water bodies. As to the adjustment to the 2030 timeframe, we do not have any provisions to adjust that time frame through that clean water planning. We are asking the question because it is the single largest component of our capital budget and is driving many of those upward costs that you see in the outyears, especially from 2025 to 2030. We are actively engaging in a negotiation process with the Department of Ecology, the Department of EPA, Environmental Protection Agency in the Department of Justice , who administers the federal consent decree. So we've just begun those negotiations. We want to conduct them in parallel, and we'll be briefing council on any changes to that goes what we are asking for. There is more flexibility to adjust our spending plan for some of our immediate milestones on at least one or two of our projects. But we are also asking to parallel that with. Some of the. Work we're doing on the Clean Water Plan regarding some flexibility and some adaptability regarding changes to climate conditions, adjusting for cost increases that have come into play, especially around construction and real estate as well as the new technology. So I hope that answers your question. I'd be happy to go any further detail that I can, but at this point, the 2030 deadline has not moved. I thank you, Mark. I understand it has a move, but do you expect that it will mean the negotiations have been going on for some time? I mean, we're only asking what are we asking the federal government as a as a as a local government to do in terms of time? Are we asking for five more years, ten more years? We have not specifically put this specific request on the table for them. We have specifically asked them through our initial letter these interim milestones, and we've got interim milestones for establishing a facility plan, going out the contract, having substantial completion for a couple of two of our big projects or two of our smaller projects down in the dual area. And the reason we want to actually move those out is because we've got one really big one that's due with by the end of 2030 and we think that we could achieve a better water quality outcome if we combine. Some of those projects. City of Seattle is also involved in those discussions at that table with us. They have projects in the area we may well be able to be more efficient with the public's dollars, have less impact to the community down there, and a better, better investment if we coordinate that through. But it would require some changes. We have mentioned the 2030 timeframe as something we want to look at. And. We got head nods around the table saying, we understand. That you would want to look at. That. But no commitment. Maybe if I might, Mr. Chair, one or two more follow ups, and I'm as I indicated in the Harbor View deal, I'm reluctant to at this time advance a rate hike on small businesses and renters and homeowners, as we would be hopefully in either getting through or maybe starting to come out of this. COVID induced recession with near 20% unemployment rates. And I know we have you're asking for 4.8% this year. The move back is recommended zero. I'm wondering what the impacts Mark would be of of going zero this year. And I know we were zero last year and doing the four and a half percent in 2022. And I know when I say this year, I mean 2020 one's rate because that's when this would apply. What is the status of our rate stabilization reserve? Don't get us through. As the department undertaken any cost cuts, what would the magnitude of those be? Could you get there if we wanted to? Instead of going zero in 2020 to go zero, 2021 and four and a half, 2022 or some hybrid. I know we like to keep it even for two years under. Our partnership program. Right. We have asked for. A one year rate. The executive is asked for a one year rate increase and then evaluate really what's going on with the asset management program, which is a big part of our drivers with our new pack agencies and with council and the RW QC. But your question, I'll take it a couple of fold. I didn't write notes, so if I didn't get to something, remind me, please. Okay. You know, the department is, as Dwight had mentioned early on, we are looking at all of our vacancies. You know, any cost cutting we can do, any discretionary spending, which is. Large. On our component, on our budget, our vacancies. I have to say, I'm hesitant to go a hiring freeze on that for for some reasons, I have virtually frozen all of the administrative positions that we have in the division that are vacant right now. But our but are. Maintenance and operators. I have. And. To keep a I. Would say a. Full deck or a. Full bench in place right there for reasons why we have weathered through the COVID crisis. And I'm crossing my fingers and my legs here that we have. Not suffered. Illnesses or in fact, our absentee rate is quite low. People are quite committed to it and taken the safety precautions. I cannot be a guarantee that and I want to keep that full bench to ensure that if we should get hit at the plants by some illnesses. Heaven forbid. We want to do our absolute best to keep it fully staffed so that we can protect the public health that we are in charge to do for the 24 seven operation. So that was that piece. And what we're looking at, we've also, you know, to do the work of my colleague Heidi and her team, they've done some interesting work around debt service, annual debt service savings rate. We put in $720,000 in savings just for refinancing. And then some interesting work on that. We've also gotten some grants, energy grants and such. But your second part of your question or maybe it was was the first part and what would be the impact of zero in 2021? One of the, you know, those charts that Mike had, I don't have them in front of me here, but they do show significant increases in the out years of investments in part to what we spoke about with the CSO program. In parts of what we haven't spoken about is we are also expecting some increased costs due to. Nutrient caps. Put on by the Department of Ecology on all 17 wastewater treatment plant operators into the go into the sound. That would be an extremely costly venture for us and hit us in those out years. We do not have cost estimates, nor do we have a definitive element of that from Department of Ecology. They started out with a five year planning effort and now have gotten down to actually planning to put into. A cap. The impact of zero. What would that mean? Our team has done some initial look at that. We would estimate the deferral of 12 about a dozen projects, I would say 10 to 12 capital projects that are currently going on. Our 4.5% rate increase is maintaining the status quo. It is not any additional new projects. We would have about a dozen. Projects that. Are about that would be delayed. I don't. We don't cancel. Projects. We delay them. I have canceled them. When the subject matter, experts say we no longer need this, we can achieve it another way. But that's not often we've got projects. That was mentioned by Mike regarding our. 4 to $5 billion in assets. We've got over 55,000 pieces of equipment in that asset program. And so we're continually upgrading, refurbishing and replacing that equipment. Those 12 projects, we're not in the budgeting phase yet. And once we have our direction from council, the policy direction on the reg, we will do that budgeting. But those projects are on the. Books and ready to go or in either engineering or for construction. They are all projects that are. Critical towards. Preserving the integrity of the system, whether it be a conveyance project or whether it be a pump station or whether it be a facility at the plant. I've got several projects that I think it was mentioned, the seismic upgrades to the hospital with that seismic upgrades that would be delayed both at South and West Point should they be hit by a large earthquake. Would make those both those plants. Inoperable without getting those projects. Underway and going. Those are quite. Important. So those are. The kinds. Of projects that we're looking at. We've got a number of. Of. Generator replacements that need to be done on. We all know during the storm events, many of you. Have experienced this in your districts. Where major storm events and the power outages, our power plants at I mean, our treatment or our pump stations and sorry are all run on backup generators for major projects is to upgrade the aging backup generators as well as the electrical systems. And finally and I can get into more detail, people ask questions about that one. But finally, I'd like to say on the operating side, early estimates are about somewhere between five and $6 million of operating costs would have to be reduced. I, I, I would not be able to necessarily find that in travel expenses, of course, but or vacancy positions. And so we would be likely reducing some positions could well be staff positions on the operations and maintenance side on that, depending on somebody had mentioned the voluntary program for early retirement, it would be something we would be looking at. We would of course be looking. At vacancy positions, but we. Haven't done that detailed budgeting. I think I saw an estimate where 5.8 million results in about if you were just to take it in positions about 30 or 35 positions. So that's a a thumbnail on my. Impacts of zero. Which is why we want to go to 4.5. Mark, thanks. Just real quickly. 12 projects out of how many projects how many capital projects would. 12 would be great. I'm going to hazard a guess on this one. And, you. Know, I would say half of about. 65 projects and how many haven't? How many millions of dollars would be delayed? I'd say about a year out of millions on the books. Give me a give me a magnitude here. I'd like to give you back. I'd like to get back to you with that magnitude. We better. I think we're estimating somewhere between 50 and $100 million in projects would have to be delayed for 2021. We spend what is what is four and a half percent generate in terms of revenue. Yeah. And that, Heidi is on the line and she'll show respect to that. I see her smiling on that one. I would say our capital program spends somewhere between 250 to 300 to 350, depending on where the projects are in their staging. We spend more during during the course having trouble understanding how because it's not a $100 million of rate hike, how that delays $100 million of projects by year. And then finally, I don't want to take too much more time here. Someone I would like them to address the status of the rate stabilization reserve to be able to kick it a year. Right. We've got some real reserves. I think Heidi's prepared to talk about that. Yes. Thank you, Mark, and thank you, Councilmember and asking for your questions. Heidi. Papa Chuck Wastewater Treatment Division Financial Services Manager So with the Rate Stabilization Reserve, we've historically have maintained a $46 million threshold. And as Mike mentioned in his staff report or Mr. Read, we don't know what the COGAT impacts would be far as our revenues to the utility we're monitoring as that information comes in. And and mind you, with our billing methodology, we are delayed by for the fourth quarter rolling average of how we build our contracts to our agencies. So we won't see the real impact of the COVID 19 impacts until next year. Some time, however, we have formed a project team with NWT to closely monitor those impacts as they come in from when just working with the sewer agencies and just understanding the impacts that are working that are happening with them at this time . And then your other question, it was released on the operating side for me just to confirm. Well. I'm not sure, Heidi. Nice to see. And thank you for the answers. But I'm trying to understand the four and a half percent just real. Basically, how much money does it generate? Oh, that's this for the first year? Yeah, for the first year, it's about $20 million. Got it. And the starter and the range that was reserved, known as 46 and a half million in it. 46 in a quarter. 46 and a quarter. Okay. All right. And we don't it's a final very interesting point. I assume we've talked to some of our larger partners like Seattle Public Utilities or the Red Wastewater Treatment Utility. They must know here, March, April, they've had a couple of billing cycles. They must know, say, on commercial accounts, whether or not they're not, you know, whether or not the volumes are down and to what degree. I mean, do we have any intel on that? Because you're concerned, if I understand you, about just direct revenue reduction from the current account base and what that means. Correct. And yeah, so we should have that information coming in since it's, you know, May 19th. So we'll we can certainly get back to you regarding what that looks like. Okay, Mike. I mean, seems like that would be interesting and whether it's a blip or whatnot. So my concern is, colleagues, that these are unprecedented times that these things are going on. And I don't I think we should take a hard look at this and determine whether or not it's an absolute must do or whether there are some things we could do to to ease the burden on our businesses coming back online and our homeowners and renters who are paying the utility bills. So I don't want to do anything that would damage the finances in a way that they can't be repaired. But we've got a pretty. Know, we've got reserves and there's timing issues. And when you pack, as our partners are saying, go zero. I mean, that's a knowledgeable base and we've got to step up here because this has not been referred to the Regional Air Quality Committee because of the stand down. So I think it's important we take our time and make sure we get this right. Mr. Chair. I'm sorry, Mr. Titley. Are you raising a hand of the suspect? Yes. If I had a final thought for a council member. Dombrowski, if that's appropriate, please. So one other consideration to think about is wastewater is going to be going to the bond market this summer. Both the refunding is to save money and to borrow new money. And if you read the rating agency reports, one of the most important factors in the current very high bond rating that the wastewater utility has is the council's demonstrated willingness to raise rates. And so, A, they will see four and a half percent this year and 0% next year, very differently than 0% this year and maybe four and a half percent next year, particularly given all the financial uncertainty around the revenue that wastewater will get from commercial accounts. So, you know, if there's a if there are thoughts about doing something that's significantly less than four and a half percent for 2021, I'd just encourage you to think about how the bond market will react to that. Just coincidentally, last Thursday, we had a meeting with our county financial advisor and he was talking about this very thing . And so it might be of interest to some council members to hear from Mr. Shelley about this issue. If if you would like to add or you or I'm happy to discuss it more, but I do want you to be aware that that's another consideration you need to keep in mind as we go into this. All right. Thank you for that. I appreciate that. That's those are I'll remind colleagues the same financial advisors who are about a year ago said we've got to speed up paying cash for our capital projects because we're on our watch. And that was going to lead to a 10% hike in rates, which was the original proposal. I do credit revision with dialing that back in recognition of this, but I don't know, Dwight. I know there are jurisdictions around the country right now that can't sell municipal bonds, that the market just won't have them. And I think there's going to be an appetite for now. I'm not I'm not in the my business every day, but I have a sense that we are well rated and that doesn't seem like a deal killer to me. But anyway. So it's a helpful thing to keep in mind. I mean, let me be clear. I'm not implying that if there were no rate increase, the bond market would not purchase wastewater debt. But I think you would see a change in the rating very likely, and therefore higher costs that are not confined just to the near term. As you know, once you have your rating go down, it's really hard to get it back up. So I just want council members to be aware that that is another factor in this. Again, not to the point where you would say, well, the market will close this out, but it would have potentially some long term impacts . And we also have a bond coverage, a separate account for for almost like insurance. They're right. In addition to the rate stabilization reserve. Yeah, you're right. We have to maintain a coverage ratio. And one of the things that rates were like two and a half times the service amount or something. Yeah. With if I remember I is one and a quarter is the issue and they've done some work about that. But one of the concerns again about doing a zero rate increase or a much smaller rate increase is you lose that revenue from that calculation. And if some of the more you know, if like the hotels they shut down for another three months or the commercial office buildings are largely out of operation and water volumes really go down that much and therefore the revenue for the division goes down that much. You can get very close to those ratios, which would be very problematic. That's that's where you might not be able to access the debt market. So that's why I'm surprised we don't have some quick reads on that from our big utilities ready to go now so we can understand that. I mean, that's a big that that would be important. So I would appreciate it as possible. This is your recommendation. I know, but what are the options that the council has move back to recommend the zero. But a chart that says if you did this, these are the pluses and minuses. You know, we're we're now faced with just your recommendation and surrounding facts and rationale. But we may it's a difference between saying approve or make a decision on options. And right now it's approve or don't approve it. So I think that's a fair request. And conceptually, what we might be able to bring back to you is if you're approved to rate proposals now one for 21 and one for 22, what would that look like? Lambert. Lambert Thank you. As you know, I'm the committee, the Regional Water Quality Committee that oversees this. So prior to the pandemic, we were very deeply involved in the very questions that Councilmember Dombrowski was asking. And the rate that was coming over at that time was 9%. So when we got pushback from our partners, the amount was cut in half to four and a half. So I think it's important for us to know that. I'd like for Heidi Pepitone to come back on Monday and answer two questions. What is the the amount of money per month that you're talking about? And just 2 hours and $0.36. But I want Heidi said what the correct answer is. And then also, Heidi did a very extensive research on what really would need to be done to be very prudent in making sure that we're keeping up with the maintenance of our pipes. And we've had a number of issues with some of our pipes that because of corrosion, have actually asked. And we had an issue last year and often where we had a 20 to 30 foot drop in the road and we had to go in and redo 172 feet. So luckily nobody was in the road at that point. But if Heidi would tell us those two things, I think that would be very helpful information for people to have. Heidi. There still is. Council Member So I will speak to the monthly the monthly amount that you asked about for the sewer rate and then I'll defer to my colleague, Director Isaacson, regarding the other question on that. So with the executor's proposed sewer rate, the monthly rate will be $47.37, and that's a $2 and four cent increase. And that our contract sewer agencies would see, since we are the wholesaler, we will charge those to our contract sewer agencies. And they will then pass it on to their customers. So there's a few cents. So that's $2. And $0.04 is what we're talking about different from what people are paying today. And while I realize there's a lot of stress going on in the life cycle of not doing what needs to be done and letting it get worse and causing more damage, that is very helpful. I know you said to pass it on to the director, but the list that you showed me, the top projects that needed to be done and. Do you remember how many projects were on that list? Just remember. Are you referencing our asset management? Yes. Yes. So I will defer that question to Director Isaacson. Okay. Okay. And the asset management program, I think we had a list that we wanted to start beginning the initiation of our projects in 2021. And that was the original proposal, the 9.5 that included about 40 projects to initiate. That is not the complete asset management program of 700 million. Those are the most critical ones. And there were 17 in the conveyance program, six projects at our offsite facilities and about, I would say 19 to 20 different projects at our treatment plants , West Point and South Plant. Now a little bit on those are you know, you referenced the project, the emergency project that we did down in Auburn, I believe, on M Street in the downtown area of Auburn. That is a part of our is a part of our ongoing asset management program. Asset management is really part of a it's got a maintenance component that's done every single day from our staff that work on our. Projects as well as a capital. Program. On the maintenance side of that, we have an inspection crew that goes out and they take our conveyance facilities and they look for essentially they look for what I like to say. They look for facilities that are degraded. It's a highly toxic environment down there. And this was a part of one of our older facilities and I think it was the hydrogen sulfide had built up enough that degraded it enough. They did an emergency repair. I think you referenced about 90 feet of that. We will go in and do a further repair on that about 2 to 3000 feet later this summer. I would minor correction. We didn't see the drop yet. This TV crew saw that it was about to and we placed a steel plate over the intersection until we could make that repair. But that's the part of this that a good example of our program. That program, I would say, has been significantly upgraded under the council's leadership. They asked us to after the West Point flood, we really took. A look hard look. At our strategic asset management plan, and that really came out with a completed inventory accurate condition assessment and then a framework for the refurbishment and replacement and repair of our of those 55,000 assets that I spoke of since that 2018 work since West Point, we started that list, the vast majority of the initial. High priority. Projects were completed. We still have that list that you see today or what we've included in that $700 million component. I would say that we evaluated the projects that came through by a series of teams under our US and our advanced teams. As well as our. Maintenance folks, as well as our planners and our operators. And they prepared a risk portfolio based on four factors, which I think are really important. The condition, the reliability, meaning, is it within two years of its expected life, the risk of failure and that consequence of that failure? That's a bit of a judgment call on that. But then we have the professionals on that. The one that's intriguing to me the most that caught my attention is obsolescence. Those initial projects that we identified were all projects that either. Had the most wear and tear on their conveyance system or the. Parts for the the pumps in the facilities that are plants. Were obsolete. In fact, that their parts could not be purchased. And so that we were trying to make maintenance repairs on something that we needed to replace the entire piece. Because as time goes on. The parts are hard to repair. And sometimes when. You bring in a new part, it isn't compatible or copacetic with the rest of the. Facility or the rest of the. Piece that it's working. From. And then finally, this one's interesting to me, as well as from an operations guy, is that it's the demands on staffing. We have key performance indicators for our maintenance crews. We have targets and what we expect them to accomplish on maintenance. We also measure a planned work versus break in work or. Versus unplanned. Work, and that's when we have a lot of unplanned work on a piece of equipment that is called break in work. I mean, is taken away from our preventative maintenance work. We start to see that that piece of equipment needs to be replaced or repaired, and we have a reliability engineer. So that's the that's the essence. Of of the program and what's generated that list that you speak of and why we wanted to initially get that going under the 4.5 in 2021, we would delay them and start really delay them by a year depending on our work. I would also say we look forward to working with our new component agencies. They were aware of asset management. They were not aware of. The details behind that. And for that, they should be and they have every right to know that. So I hope that answers your question. Thank you. So I think what I'd like to say is that this total would be less than $25 a year increase. And what it would accomplish, if you look at part two on the backlog of the asset management inventory that is unfunded, that needs to be completed. I think it's really important. And from my opinion, you know the thing anyways, Tom Bush and I would adopt that in this situation say pennywise ton foolish because we absolutely have to get this taken care of and the sooner the better. And I think looking at all the projects and I just want to call out the great work that Heidi did. If you would like to know more specifics, the chart that she did was awesome. And of course, we won't say it was that she was trained in our department, but she was good before and great still. So anyway, I think that that is very insightful of what it is that needs to be completed. And when you see what it is, the sooner we can get started, the cheaper it will be. It will only get more expensive. And we are talking about $2.04 a month. And well, I realize we are in tough economic times. We just talked about putting up a $68 a year bond. So and then something needs to be done. It needs to be done. And as again, this is less than $25 and it is very different than what was originally proposed at 9%. And because part of this will be a clean water management study, which will be, what, two years and completion? So how long will be about two years. The end of 2021. We expect to have it transmitted to council, so we'll have lots of discussions going on. But this is a baby step and getting to the right place because we have lots of other questions that are very extensive that we will be needing to get into. So this is an exciting time to be dealing with this, but it's also a lot of work ahead. So thank you for bringing this forward and I look forward to working on it more. Thank you. Further questions. Mr. Chair. We're done. Go ahead, Councilmember Dunn. Thank you, Mr. Chair. Market share and Councilmember Dabrowski his comments and concerns and and I want to see some scenarios that look at more of a flat rate or nearly a flat rate and then look at cost pushing back to year to and beyond. I am also very concerned about any kind of a rate increase this year. So I'd like to see those scenarios as well. Thank you. You know. You know. Who's our. I'm sorry. Councilmember Bell to Jake. Thank you, Mr. Chair. I could have just gone ahead, but I wasn't sure if you were okay. But I just want to I want to ask, I guess a similar make a similar. Request to. What's already been made. And that is I sitting here today couldn't really articulate the crisp, like full list of things that are what this rate is buying us. This rate proposal is buying us versus says if we did a different rate proposal, I heard a lot of different things and it all kind of but I heard like sort of long term stuff mixed in with short term stuff. And it would be really it would be much easier to address the concerns that we're hearing if we could get a better explanation for the difference between, you know, the real difference between 4.5% and some lesser number. I'm not sure that that's been well communicated. And, you know, the the contrary argument, it's a financial crisis that people are seeing. How could we put even a couple of dollars a month on to them more? Is that's really compelling argument. Right. So we need to explain what our proposal, as you know, as a wastewater treatment division is, why that's compelling. And I'm just not quite hear that. And it might you might need to follow up with that. But that's the ask I have. Thank you. All right. So we've heard that from we've heard a couple of concerns and series of questions, more information from our colleagues. We have legislation in committee now and would have noticed and would anticipate bringing it to full council next week. We? Instead of moving it to full council or being open to the idea of council relieving it. Of well, just believe in it from this committee next week. Council member You're the prime sponsor and you've got your camera and your microphone askew. Thank you, Mr. Chairman. I'm prepared to make a motion, if you so wish. Waiting to hear the pleasure of the chair and the body. The chair is one guy in this committee. The chair? You have to make a motion. They say you want to chime in? Yeah. Just from the perspective of council action. My understanding is that while we are scheduled to get scheduled, time to take this up next week if if members feel it really could use some more briefing and explanation. I understand that it is possible to do one more round of committee meetings and still pass it on time at council, and I'm not recommending that I would be fine. Based on what I understand of our meeting next week to move it forward to next week. But I understand it's not a drop dead thing to get it out of committee today. Look. They'll do it. You might read. That is correct. So you have the option of either acting on May 26, I should say that a public hearing is scheduled for May 26. You could either act then or you could act basically two weeks from that date, which is the June 9th meeting. That would be the last date that you would have to look forward on with a regular schedule. Mr. Chair. Captain America was. Another option would be to lose it without recommendation to the Council. I think you're right. And if we were in chambers now, I might see heads nod or heads not nod in that I only see a couple of head as I saw him nodded. And I'm not sure how if I if we should read that ism kind of the body count remember Caldwell's or not to bull by the horns and see what happens. I'm saying the same thing you are. I can go ahead and make that motion. Okay. With that, I'm the proposed ordinance 2020. There are when they think they're going to rates and charge for sewage treatment and disposal. I've been given been passed to the council with a recommendation. Council closes when we map ordinance 2020 186 out of committee without recommendation. Is there a discussion member? Mr. Chair, we do have an amendment. Which is technical, regarding the Financial Planning Council. Oh, well. Thank you, Mr. Chair. I move Amendment eight, which would swap out the incorrect financial plan for a revised one, is we were. Alerted this. Morning. It needs to be done. Thank you. Councilman Michael Wells. Is the move to adoption of the amendment a see? No discussion. All those in favor, please. As I say, I. I opposed nay. The ayes have it. The amendment is adopted. Discussion that the motion as amended. The ordinance as amended. Councilmember Lambert. Thank you. I just wanted to point out that the water department, wastewater department has put a very long time of work and effort into analyzing exactly their needs and came out with a number. And then when things started happening, they with our partners, they kept that in her and said that that's what they thought was prudent. If you look at their work, I believe that it is prudent and we've had two of our budget experts talk about that. That's what they believe is prudent. So I think that when we go against the people who have studied something for years and believe that this is the best, it's it's worth our time to get into that the numbers. And so I definitely support the idea that I am very thankful that experts have done this good work and have been willing to present it. So if you haven't had the presentation privately to get into that, please do, because I think it will be very insightful. Thank you, Mr. Chair. Further discussion. Councilmember Dombrowski I am as chair and I understand this is without recommendation, but I believe there are too many unanswered questions and not enough choices to be advancing this today. I appreciate all of the excellent work that the wastewater treatment division has done, but their mission is to look at the waste water disposal and clean water needs and financing what they need to run their program. Our job is different. Our job is to do that, but to also account for the other public factors such as the economy, the need for businesses to recover. We're not talking just about $2 a month on a on a residential unit, although that's not insignificant. We have we have no data before us on the impact to small businesses, restaurants, coffee shops, manufacturing plants that need to pay the bill and what it would mean to them. I'm just I just don't think we should be advancing this at this time without options to realize the other issues that this council should take into account. And so I'm not going to be able to be supportive today. Maybe those questions will be answered between now and the election at the Council. Thank you. Council Member Further discussion. Can someone recall? What? Now. All right. But I would ask the court to please call the wrong. Thank you, Mr. Chair. Councilmember, about reaching. I can't remember. Dombrowski. No. Remember. Done. No. Member Coel's I was a member, Lambeth Council member of the Grove. I was a member of our North Tower. Councilmember Bond my car. Couple some members online. Hi. Mr. Chair. Hi. Mr. chairman about a six I's council members Tim Volsky and done know and councilmember number one right now are excused. Councilmember Dunn are you online at the moment. As one makes our. Favorite color. I see him in the Zoom meeting. All right. By your by your vote. We have advanced ordinance 2020 186 as amended to full council without recommendation. Thank you, my. I'm looking to Councilmember Bell duty here and maybe Councilmember Caldwell's regarding the need to expedited to full council next week. Chair. Thank you. Please come to my rebellion sheet. I have a. Question and then I'll defer to Councilmember Colwell. I heard Mike Reid say that we have a public hearing scheduled for next week. Yes. That's correct. We are required to give a ten day notice of a hearing that's published that we've done, that the public hearing that we targeted was the May 26th date. Does the item need to be on the agenda in order to have that public hearing? I believe you could you could pull it from a cow to do a public hearing and then return to Cal. He chose to. But yes, it has to be, I believe. Well, that's my legal question. So I'm going to defer to the legal staff. My rough understanding does need to be in council before a public hearing. But I would again look for final answer from the legal staff. So I'm guessing that it might have to be expedited in order to make the public hearing be legitimate. That was my the reason for my question, Mr. Chair. Thank you, Councilmember Balducci, because one day I will see if I can move it out. Today, I believe you would want to expedite it, otherwise you would not be able to take action until that following mid-June council meeting. Right. I mean, we might we might end up doing that. Anyway, my question is really about the right. So there's two issues. I'm sorry. Let me say the state is definitely issue. One is whether we need to expedite to have the public hearing. And I'm hearing that may be the case. Issue number two is if we don't expedite, we lose the opportunity to act next week. We don't have to act next week, but we will lose the opportunity to act next week if we chose to. Right. Get the facts out there. Councilmember Caldwell's in Mr. Chair I move that we expedite proposed ordinance took us 0186 to the council for its May 26 meeting. Without objection. We will we will expedite to preserve the legislation being in full council for the public hearing on the 26. See? No objection. So ordered. What if that is Councilmember one? Right. So are you unmuted? I received a text from Councilmember Von Bauer that he was working to unmute on his end. Councilmember. Mr. Chair, this is what he again and I will just note again that you do have the ability, under the council rules, to email the clerk an affirmative vote in favor of the majority recommendation. If we computer. Technical difficulties. I have a I have just received an email from Councilmember van gelder addressed to me, Melanie Pedroza, the clerk of the council, and then Angelica Calderon, one of the clerks for the committee that was paid. Please record my vote as know for the vote that has happened. Additionally, please make sure that I'm unmuted and you're in as I am unmuted on my end, but apparently can't be heard. And remember, I'm right there with you. You are not muted on our end. But we have received your email and recorded that information, Madam Clerk. But beyond that, it at the conclusion of our agenda. We wanted to make sure that technical difficulties didn't stop any council members from voting. Were there any members excused from books? No, Mr. Chair, there were not. Very well done. Then having nothing else on our agenda, I want to thank everyone who participated. I particularly thank our council and committee staff who make running online meetings virtually seamless for members. And I know there's a lot of behind the scenes work, particularly managing public comment and the logistics of organizing and hosting the meeting itself virtually