seeing no one will start the meeting and the first item is the proposed rate increases for solid waste mister smart yes thank you mister chair members of the committee bobster mario finance director just real quick wanted to mention that the reason we're here is that we are planning on setting out what we call our proposition two hundred and eighteen notices to all of our ratepayers as you know we have a consolidated bill for water wastewater and trash and we typically in early april early march we send out notices advising them on the proposed rate increases effective july one and we also advise them that we have a public hearing in early june every year to discuss this with council so they have an opportunity at that meeting or in advance to communicate to city council there their  thoughts on the proposed rate increases so we've gotten in the habit over the last several years because of you know we've seen some larger rate increases over the last few years with the drought and things like that of coming to the finance committee in advance of those notices to make sure that the committee at least the fin gonna cover a solid waste and waste water and i'll start with a solid waste portion so with regard to solid waste the the rate increases that we come up with every years are driven by three factors or the fact that we have additional funds needed in three areas the first is that we have an increase to the compensation that we provide to marburg who is our contracted hauler and collection company and then the second part is the fact that we have every year we see an increase of tipping fees but they're a little more dramatic this year we'll talk about  that they're going up more dramatically because of our waste services agreement which is tied to the resource recovery project we'll talk about that of course and then as we talked about a few weeks ago we wanted to also include some funding for the proposed expansion of our neighborhood clean up services in part provided by barbara ganz in other parts by an unknown contractor you to be determined so with respect to the increasing cost for collection services this is marburg industries as you know we have an exclusive franchise with them for the collection of the trash as in all the materials and the hauling of those materials to the transfer station or two he goes landfill the franchise agreement that we have is a ten year agreement calls for an annual increase that's equal to the c and it's a specified cpi and we apply seventy percent of that cpi to their compensation the thought is that if you look at it a customer bill for the solid waste portion about seventy percent of that relates to the collection component and  thirty percent is the disposer portion so we take the cpi and multiply by seventeen percent and increase their compensation accordingly and then once once we get that in place that just built into the trash bill and the trash rates and we get the money from the ratepayers and then we remit that money to marburg on a monthly basis with regard to a new rate for expanding neighborhood cleanup again we've talked about this and there are four components one is to provide ten thousand dollars to marburg for the increased staffing as a result of shifting the calls that are currently going to street staff these division staff directly to marburg it's going to reduce the amount of time that that takes to get the clean of the dumpings picked up sometimes it's lost in the phone calls and translation and getting those that information to so this will be more efficient but it is gonna require marburg to staff up a little bit at a cost of ten thousand dollars we've also asked them and proposed that they increase the number of times they pick up these abandoned wast materials increase it from two thousand currently to two thousand five hundred way back when we before the previous or before the current franchise agreement they were picking up a thousand of these collection or wast that but is not compensation to marburg is we want to establish a budget of twenty thousand dollars to continue the cleanup of homeless encampments we think it's appropriate that it be within the solid waste fund and we'll have to do some kind of an rfp process to  figure out who actually does that work but we want to provide some funding for for that program and then lastly because we see some priotiy will see that there are legal dump beans occurring in certain locations and it occurs sometimes over a week or two and we're trying to address that through a targeted cleanup program where in addition to the two five hundred marber will do that they will we can call them and they'll go out to and address targeted areas on a daily basis as needed but it'll be stem from a call versus from us from city staff versus through the traditional phone line for its cousin where the resident calls in and ask for it to be picked up so we were to use this as a way to target areas where  an unusual number of illegal dumping and what we're asking for is thirty thousand dollars for that for that special service from marburg any questions on any of this  the woman put it the stupidest things happen where you know people practically will leave their business card attached to the material but is there i'd hate to lose at least an element of that in in this in this effort where okay it's privatized now and now there's no effort to at least give it a a cursory look for accountability remember white we will continue to do that to the extent as possible b almost in all cases it's it's a sofa a mattress or something like that there's that there's no identify identify and mark in there but to the extent that we see any evidence we'll certainly pursue that and we'll continue to do so just think it would be at least with there's an identifying you know there's a red flag here that they could that they make that they know about it that we are trying to close that loop and and just use that as a bit of a deterrent right  so the ten thousand dollars for increased staffing that's going to marburg it is so we can have a corresponding reduction in our cost in house so no the calls were coming in to the streets division staff and and so that they would take the calls and then they would be routed to  good afternoon finance committee members i'm rebecca bjork public works director we have a dispatch can we call it controls ham which is five four one three and it's actually only one third funded by streets it's one third funded by water and one third funded by  wastewater that does all the dispatch for the city for all all of the calls that we get including if we have an accident we need to put out road control or a water main break or anything like that so they do the consolidated street dispatch throughout the city they had been receiving and have been receiving these calls and then forwarding them to marburg the problem is that they don't necessarily know what information marburg needs so they wouldn't wouldn't necessarily have the information that marburg would need in order to follow up efficiently as my understanding the need for the dispatch doesn't go away with the reduction of these calls coming through that dispatch center so there is no because it doesn't make sense why we'd have to pay them more if they're not adding personnel if they just had a person answering the phone and now they have that same person answering the phone but we're cutting out the middleman it seems like their cost would go down not up afternoon finance knie matt for two things i would add to that one is that a number of calls used to come in on an answering machine at the city if it wasn't staffed it wasn't received that was one of the problems with incomplete information marburg got notified by a number of means one would be a list you know we would maintain a list or a spreadsheet of calls that would come in on a periodic basis there might be some phone calls there were some emails it was really a combination of all three methods and then what would happen to those lists are those emails we would send them over to marburg and they would cut work orders but that was part of the delay those all contributed to the delay of getting the information to mar work so it was actionable so they could go pick up the abandoned waste so where we didn't call them we w just send them via email we did both we would call them in some cases we would send them lists if it was over a weekend or something and we had messages that piled up there were a number of communication means that we used well this really worries me how  need in terms of additional revenues relates to the tipping fees and as i mentioned these are the tipping fees we pay for to the county of santa barbara to manage the south coast transfer station as well as the ego's landfill and we have recently executed or entered into an agreement with them it's called the waste services agreement which relates to the resource recovery project and within that waste service agreement we have agreed to e stepped up increase to what we pay them in the tipping fees  fy eighteen next year we agreed that it would go to ninety nine dollars a ton for all materials so for paying eighty three dollars for example at the us we would be paying ninety nine dollars for those materials and for other materials such as recyclables and the like whatever those fees are we're gonna they're all going to be at ninety nine dollars per ton and in two thousand and nineteen we are estimated that those tipping fees would be at one hundred and twenty one dollars a ton we expect that they are in originally planning that the resource recovery project would be online in late  thousand and nineteen summer around march or april you may be later than that so these are but this is an estimated amount of what they're gonna need in two thousand and nineteen but we have committed to going to ninety nine dollars per ton next year and the reason  i think his hand went forward first i'm not sure and i read something that there were some something was slowing down the development because of land right issues or property boundaries being misconstrued what can you  yeah committee member dominguez my understanding is that there was some there were some documents that seemed to be never conflicting as to where the were the responsibilities relate to were the the coast and the coastal commission versus that was not part of the area that would be subject to coastal commission review the the understanding from the county was that this project was not was outside of that area but there was a document apparently that came to surface that indicated that maybe it's not it's the word they thought it was and that it doesn't quote into the coastal commission area so they're trying to resolve that they believe that the original understanding is correct but it is they have to do some research and that's going to delay the project and the financing and as i mentioned initially it was planned for somewhere around march or april two thousand and nineteen my guess is that it'll slip now into fiscal year two thousand and twenty s so the tipping fee requirement in two thousand and nineteen estimated at one twenty one may change based on that but we are committed to the two thousand and eighteen amount of ninety nine dollars per ton and can you explain that the basis tell us about that absolutely that's the second bullet or set of bullets so when when the county was working with her financial advisors in bond counsel and and for the bond sale they recognized that it was important for not just the county but the jurisdictions that are participated in the project to to commit to a rate increase over a over a two year period versus waiting until two thousand and nineteen to go all the way to one hundred and twenty one they thought it demonstrated a better credit and and and more commitment by the jurisdictions so all jurisdictions are involved agreed to raise tipping fees starting next year two  dollars a year in advance of when the project is expected to be operational again it was so again to strengthen the bond offering from the county which is still pending and then secondarily to that that we also agreed to und our share of that is one two and so what this ninety nine dollars a ton will help us do is to fund that next year which i'll talk about in the next slide a little more detail but that's that was the purpose of raising fees to ninety nine dollars a ton for the bond purposes and also to create a rate stabilization fund so wouldn't it be possible to push back the rate increase proportionally to the delay i think that that would be more more in play when we get to fiscal year 's rates setting for next year we have locked in a ninety nine dollars increase again to demonstrate that we're making progress toward the one hundred and twenty one and whatever that dollar needs to be it's going to be more than ninety nine dollars a ton in two thousand nineteen just like what it's gonna be when you say we're locked in we've signed a contract we it's contractually obligated now to get to ninety nine dollars a ton next year so what would happen if we didn't vote to increase increase these hypothetically speaking well we've  contractually obligated the full council said that we will do this so it would be contrary to the contract of what we counsel approved a few months ago so why didn't we do the tipping fee increase back then before we sign the contract because we have enough time to do all the noticing we typically do all the noticing and we wanted to make sure that counsel was supportive that but all the noticing and all the rate discussion occurs post january and we signed that way service agreement back and i think november or december okay thank you sure and my recollection is that the tipping fee first of all first question of mine is what's the tipping fee now so it varies but for disposal trash it's somewhere around eighty three dollars a ton nathan that's sounds about right eighty seven dollars a ton so eighty seven was right for everything if you were to put it all together that word for trash for recyclables it's less than that but everything will be set at ninety nine dollars   and i do recall that the the tipping fee estimates were part of it the conversation that that occurred around the the resource recovery facility that that was definitely baked into to that effort  so and i appreciate that i was on losing into that vote but and and and we're seeing once again the major increase in tipping fee here and we will be hearing back i presume in the next couple of so just to kind of you know kind of get to the little bit of the punchline we did talk about this when we had that out committee we mentioned that well we're gonna have see these large rate increases or at least tipping fee increases that we were gonna try to use our reserves that we built up in the solid waste fund to help mitigate or minimize those impacts and which will talk about that a moment and wasn't there also a piece where there was there's a rebate that occurs or something they've got you're getting to that so this is what i mentioned so the jurisdiction array stabilization fund again three million dollars we established next fiscal year and our portion is one two million dollars a forty percent represents our share of overall the waste that's disposed of currently so are sure that the rate stabilization plan will be about one two million dollars the ninety nine dollars a ton that we committed to will actually generate more than that it'll generate one point eight million dollars in next year so as we'll see in a moment and we look at kind of a couple few years that six hundred thousand dollars overpayment will be refunded to us as a dividend in fiscal year nineteen so this is these are the components of the what we need additional money for so i want to make sure you don't confuse this with revit with rate increases for now this these are the revenue requirements so the four components we measured mentioned  increased to marburg for a collection services amounts to two hundred fifty seven thousand and then for public containers of about twenty five hundred dollars that's an ongoing program to replace all of our public containers and to maintain them the abandoned waste component is about  hundred thousand dollars that's zero forty five increased to revenues and then the big one is tipping fees that's one eight million dollars just about to go from curt tipping fees used to the ninety nine dollars across the board and you can see that if you add up the middle column that's about nine point seven percent of additional revenues we need in two thousand and eighteen relative to relative to where we think we're going to be this year in seventeen however we're proposing next year to use a million dollars and reserves to minimize the impact of go right ahead so this is looking at multi year it's sort of a multi year forecast but we haven't done this before at least to much on the solid waste one but i wanted to demonstrate to you how we're planning on dealing with these rating packs because we're really talking about going fees to ninety nine dollars a ton and eighteen potentially going to one hundred and twenty one and then it's just a cpi increase to the tipping fees that for the resource recovery project of three percent per year so you'll see it goes from one hundred and twenty one and one hundred and twenty five and every year you'll see a three percent increase but the tougher years are in nineteen and eighteen and nineteen so you can see that going kind of this is looking at the total dollars the tipping fees that we are gonna have to pay to the county are gonna be going from five  five million dollars in the current year to seven four that's the one that's the one eight million dollar increase we've been talking about how we're going to manage that however is we're gonna only look to eight pairs to cover point eight million dollars of that or eight hundred  and the balance will come from either used to reserves which you see at the very bottom of two thousand and eighteen column you'll see use reserves of million dollars and then we plan on doing the same thing in two thousand and nineteen so we're gonna use reserves on nineteen to offset the impacts of the increase the tipping fee is going from and twenty one and the other thing you'll see there is if i could point to it is we get to six hundred dollars six hundred thousand dollars back that we overpaid an eighteen remember the one point eight versus the one point two so that'll help minimize the impacts so overall we're looking at an eighteen as about five point three percent increase to rates and nineteen it's going to be slightly higher than that buts but then in two thousand and twenty it'll level oft in the two to three percent range and thereafter it'll be about the same two to three percent the nineteen is where we're gonna see a bigger increase like again seven maybe eight percent but my guess is that we will because of the uncertainty as to when the project is going to come online that we may be able to sort of have a smaller rate increase in feathering over a three year period instead over a two year period but this is based on the original plan and dates this is how i would shake up and just so you can see what the impact our reserves are you we currently have three point one million dollars in reserves so using a million dollars per year will drop our total reserves in two thousand and twenty to about a million one million to expect that we're going to have some savings in certain areas some surpluses that'll add to that some variances but on a planning basis we think one one nine dollars reserves is still reasonable to have and it's appropriate to use two million dollars over a two year period to minimize the impacts of rate pairs the comment that committee member white mentioned the way we are going to be paying marburg i'm sorry to the county for the tipping fees and let's just use two thousand and twenty as an example we're gonna pay one hundred and twenty five dollars a ton that includes making sure that the county meets what's called its debt service coverage requirements we have the same issue with our own water fund and wastewater fund we have debt and we have to ensure that we provide enough revenues and rates to provide a one and one point two five percent coverage one hundred and twenty percent coverage of our debt the the bond that you know the investors are looking for some kind of a cushion and typically we have to cover not only a hundred percent of the debt but twenty five percent on top of that so and for in the water fund what we do is use that extra for capital that's how we fund our capital program for the county we want to have that sort of dynamic with gonna be essentially doing is over pain every year because it to me to cut their coverage requirements but then the following year we're gonna get that money back as a dividend a rebate if you will and it's a fairly large number it could be it's several million dollars per year that we will get back every year because we're paying them to meet their coverage requirements but at the end of the year since that money won't be needed for capital necessarily they're gonna bring it right back to and so we're gonna plan when we've developed rates accordingly we're gonna try to anticipate those sort of variances but we believe that those rebates but over time will help us to rebuild those reserves we'll be down at one point one in two thousand and twenty and our goal is to get back within a few years after that to the back to the two or three million dollar range but it'll be through those dividend riri payments from things that the county will be providing us based on what we're paying and tipping peas i know it's a complicated explanation and i'd be happy to sort of repeat any part of that so they're using in a sense they're using some of our reserve as their reserve because they'll be collecting it over the year having it sit there so the bank sees it and they're comfortable or not right asking them to accelerate their payments and then at the end of the year they will refund yes so why wouldn't they just keep it for the next year and not charge a higher amount it seems like yeah they have to go through this dance today they have to be able to demonstrate the revenues that the revenues are coming in each year from the jurisdictions equal to its in their cases  one three times their debt service so it's it's a it's a big number but they the they have to have that money coming in as revenue through our through our tipping fees versus just keeping that money on deposit they will hold that jurisdiction o reserve on deposit that'll be a static number that they hold and if they ever no incased unless they happen to use it but in terms of meeting the debt service coverage requirements that they have to have revenues coming in from all jurisdictions that provides that coverage at the end of each year then they'll rebate that is the amount of debt service is that sensitive or is that changing because of delays and the project yeah the delays aren't going to affect the cost of the project is just going to affect when it becomes operational does it impact the lifespan because i assume during expanded or extended but we're only talking a few months not years so i just not really i'd like to see if possible the reserve strategy may be drawn out a couple more years twenty one and twenty two and maybe reflect the the dividend and i'm assuming the return of that money will increase over time so maybe a graph that would show that and then also at some point maybe talk about we could have something in writing about how delays impact or don't impact the value of the project sure and we will be back sometime in may to present the slaughtered waste budget to the full council so we'll be sure to give you a longer term sort of a look at how these numbers play out great can't w right what's the what's the what are the policy levels for reserves in this fund so it's a it's a little different you know normally what we do is we have to have a twenty five percent of the reason of the budget covered you know the reserves eighty five percent of the solid waste fund is just money that's passed through to marburg so the portion that we keep to cover our program  fees and the like is somewhere around two and a half almost three million dollars so twenty five percent of that is somewhere around seven hundred thousand dollars if i'm doing the math right so the one one million dollars that we expect to have in two thousand and twenty is still above that that those policy requirements based on just what the non marburg portion and we think that's appropriate to measure that way the other the other thing that if you could bring back when we come back to talk about this is the change and interest rates while this delay is happening would you anticipate that to mean in terms of the county bond issuance good question yes thank you so here are the impacts of rate increases we every year we kind of show you some common examples the first is a typical single family residence what they're currently paying and what they're proposed two thousand and eighteen or eight mil would be and what the percentage changes again it's really if it's five three percent across the board for all customer classes multi unit residential with can service to forty two today to fifty six starting next year the larger multi unit residential customer will see their their bill go from three hundred and sixty five or three hundred and sixty six to three hundred and eighty five and then in the business of category of those who have carden can service a typical business would be more on the smaller side of go would see about a twenty dollars increase to their to their bill and then for the larger business customers we have dumpster service for your trash twice a week and then recycling twice a week we're looking at a fiscal year nineteen there's a bigger jump in the tipping fees but i know it's it's a seventy percent of that and then there's another multiplier because the tipping fees is only a small percentage of their fee so are we looking at somewhere between five and ten percent again as i mentioned it can be summer into six to eight percent range but i think it's in the end you know you don't wind up being potentially less than that so in terms of the the noticing and rated option schedule as i mentioned at the outset or notices will be sent out via the utility bill through an insert starting in early april potentially it'll be starting late march so every you know every day we send o proportion of our customers so over a thirty day period what we will be including insert so that everybody sees and note this notice we will have that hearing on tuesday june th as we do every year around that time and this is again where folks can come in person write letters or you should issue their or communicate their protest if they have some and then the race will take effect july one for services beginning july one so they people won't start really seeing this until they're the bills they receive in august for a july service and then we have the rate schedules available online as shown there unless there are other questions i'll turn it over to miss a royal let's see if there's any public comment is there anybody in the thank you and good afternoon my name is lisa roy i'm the wastewater system manager and i'm pleased to present the two thousand and eighteen wastewater rates and revenue plan in my presentation today i'll be reviewing the goals and objectives of our financial plan i'll review the financial plan talk about some of the proposed changes and you will be happy to answer questions throughout the presentation as well as at the end the goals and the objectives of our financial plan are to develop a wastewater rate structure that is based on cost of service principles and ensures revenue stability back in two thousand and fourteen we prepared a financial plan it was a ten year financial plan from twenty  and twenty three and that's that middle column you see up on the table right there it projected that we when we were doing the plan that we had sufficient revenues to fund operating costs  didn't have enough to keep our revenue or reserves or our program our capital o program so that's why we saw a five and a half percent increases in some of the outer years and then they projected in two thousand and seventeen on that it would be a five percent increase when we started observing some of the conservation of it efforts and how it the actual rate increases weren't corresponding to revenue increases we another financial plan and that was about a year ago we finished it and that also took into account some of the increases in capital that we had we have a couple of very large capital projects that are state funded through the srf program and last year i came to you with a five and a half percent increase for two thousand and seventeen which was adopted and i also let everyone know at that time that we were looking at six percent increases moving forward so right now we are continuing our revised ten year financial plan and we're proposing six percent this year as was mentioned last year some of the key assumptions in our financial plan we had very conservative for our financial model using residential growth at about zero point one percent per year we reflect in a lot of our other revenue  accounts as far as growth was concerned for inflation we used a three percent annually and that's for our costs for salaries benefits general services things like that and as far as interest when it comes to debt payments we used some of our historical interest rates as far as expenses go i'll talk a lot more about capital but as far as operationally what we've been projecting in our financial model has been holding fairly consistent so everything's in order there as we take a look at our capital expenses i showed us i slide similar to you to this last year we're gonna be spending about ninety five million in capital improvements over the next ten years if you take a look at that chart there the bottom green bars are our pay as you go capital typically we will spend somewhere between four and five million each year finding our page as you go capital program which consists of the collection system the lift station in ellis tarot as part of our two thousand and fifteen rate study we observe that there was going to be about a twenty million dollar increase from our ten year financial plan that of those were about twenty million dollars each we have since then we can finish final design and have now gone into construction and during final design there was some additional scope added to the secondary process improvements project that made up about ten million of that and we've also finished a conceptual plan for our bio solids and we have a much more accurate understanding of what the project entails and that was about another ten million dollars as well  just to clarify that was ten million on top of twenty million correct the actual project cost for the secondary process improvements was estimated at in two thousand and fourteen at about twenty million and it ended up being thirty two million as a total project cost similarly so to me that seems like a pretty big miss from only three years ago it was really a ad in scope when we initially went in for the srf loan we were looking just at the the blowers the tanks and and had it fairly well confined to that area as we continue through preliminary design and we ended up adding additional scope to it because we wanted to update the process we wanted to add in the secondary clarifiers we added in chemical primary chemical treatment to make it a holistic project instead of just looking at the aeration basins and so we're getting a much better product for the extra fifty percent absolutely absolutely it wasn't it wasn't a miss so to speak it was as we're looking through and going through this process of luminary design this makes the project whole this makes  much better secondary effluent that we can filter for recycled water we have just makes me wonder why didn't we ask for that in two thousand and fourteen that is that is a good question i think it's part of working your way through the design phase and as you're going through these projects of that magnitude where your everything looking at it for the future it's it can be challenging and how much do you want to take off at one in one chunk and that was what was envisioned when we started and that project actually started i think in two thousand and ten with just that small portion of needing to update the blower's because the blower's are coming up on forty years old now and they need to be replaced and updating the whole process and so this this is the primary driver for the revenue adjustment going from i guess an estimated five to five point five and then five to six that's one of the the drivers yes the increased capital  is and it's if you if you take a look at it and i talk about it a little further in my presentation it's the increase in debt service because these are srf funded loans that will have a that we have to start paying on the debt and i'll show you a slide that will help illustrate thousand and nineteen we're gonna be looking at six percent increases up until about twenty three twenty four and then at that point i think we'll have to take a look at a new updating the financial plan the original one was supposed to go from fourteen to twenty three we updated it in fifteen and so we would expect to be putting out another or updating our financial plan at some point and where the numbers and in the center column or these all fives for twenty twenty one twenty two and twenty three that is correct and what would this just these five point five percents what is the key for that what is that number that was being consistent with if you're looking at two thousand and sixteen or is this a cost of living increase is this a rate increase i don't understand what the metric is here you're using five point five percent of what i know it comes from the so this is revenues and rates yes because generally speaking with the exception of when we had a lot of conservation efforts increases a one percent increase in rates would be generally a one percent increase in revenue rates is a hundred percent of your revenue our service so sewer service charges are about ninety seven percent of our total revenue so it does equate fairly well great thank you  the the blue bars are gonna be our srf cash flow so to speak we're expecting to spend a total of nine point one in fiscal year sixteen so you're about four and a half million in pays you go about four point six million in s fund if they're if i'm yeah ballpark yes and then we're spending the bulk of our money for the secondary process improvement project which is srf funded in the next two fiscal years we're expecting a project completion of september tw and then you'll see the next bar it's very small that's where we anticipate starting our funding for our biosolids project we would be kicking off preliminary design and starting with final design immediately after the big blue bars right there in the middle that's where we would be funding construction and we're expecting it at this point to be about thirty million dollars one thing we have done you'll see on the last bullet we have a plan in progress brown and caldwell is reviewing all of the infrastructure at ellis terre that hasn't been touched by any of our major capital work that's going on down there and they have ranked all of our equipment on a consequence of failure and likelihood of failure  come up with an overall risk score and be able to take everything we've got at ellis darrow ranked it according to that criticality and packaged up projects to meet our pay as you go funding strategy  thing we've noticed is the top five projects are electrical we're going to be some spending a lot of money on our electrical distribution system our substations and as a component of that they will be doing a peer review on our  did the conceptual design it's very the magnitude of that project not just in cost but in what we are doing is pretty extreme and so we wanted to have a second consultant come in do a peer review and that data that we did with the conceptual plan that work should be completed by about this summer and then we'll have a much better picture moving forward on both the biosolids project and whether or not our capital is sufficient moving forward for pay as you go sorry didn't catch what was the thirty million dollar figure thirty million is for the biosolids project that's what the concept plan estimated  it at was that related to one of these i couldn't tell if you were saying one of these correct that's going to be the construction is the two larger blue bars out in fiscal year twenty one and twenty two okay so adding those t what's the little baby bar in two thousand and nineteen should be about thirty million dollars are keep going well talking just briefly about our collection system component we do somewhere around two million dollars in capital work in our construction in our collection system right there you see a rehab of a typical sewer main we're rehabilitating or repairing somewhere between four and five miles per year at this point we typically also fund any contract cctv work chemical route foaming a management and then we will be looking to fund a wet weather capacity improvement project up on upper state you may recall we went to council in a few months ago with the design contract we took that money out of reserves w also be looking to fund any construction component this next year out of reserves as well we also spend some some good money on our lift stations we did a assessment back in two thousand and twelve and again similar to what we're doing at the plant right now outlined all of the infrastructure on a criticality basis and we've been slowly knocking down that list it started in tw fifteen with the la colina force main number two and in last year we did the braemar force made number two that's giving us redundancy in our lift stations this year in the near future we'll be coming to you the council with the braemar lift station rehabilitation project it's going to be about a twenty i'm sorry a two five million dollar project that will fund design this year will construct in fiscal year eighteen we'll also be looking at rehabilitating our la colina forcing number one when we put two into service we are not able to put one back into service because it is in very poor condition and then somewhere on the horizon we'll be looking at via lucero lift station to do a full rehabilitation on that as well and then at ellis tarot there's a picture of part of the secondary process improvements project construction if you've been down there lately you'll see that we're under heavy construction we have several components our pay of pay as you go equipment rehabilitation is somewhere around two and a half million per year we use it to do the smaller replacing the pumps upgrading equipments and then we have the strategic plan where we do our long range planning an asset management and then i've also spoken a little bit about our srf funded projects i think this is a great slide that helps understand our debt service that we'll be looking at over the next several years the blue bars on the bottom that's our operating fund and we do pay the capital page you go out of our operating fund the middle purple bars and that's our debt payment currently we have our bond that we took out bonds in two thousand and four we've refinanced them last year we have a savings of about one hundred and fifty to two hundred thousand from refinancing our bonds so we make those payments we're currently making payments on our fogg and head works projects o solids and the secondary stuff and then there's a debt that was incurred in two thousand and four did you say what year correct when we issued bonds back in two thousand and four and then we refinanced them this  year and we refinanced them because we were able to get a more favorable rate and reduce the payment so did we extend it when we got the more favorable right so we kept that the term the same and so when does that two thousand and four bond get had upset a twenty  a little over a million okay so one out of five so we're gonna go one out of four so our payments will drop by twenty five percent in twenty twenty four twenty twenty seven  you so as you see the the horizontal red line if we were to keep rates the same and that's what that's how it would affect us whereas if we're going with the green line shows the proposed six percent increase and how  like we have to fund reserves as mister samar you said we find about twenty five percent of our operating budget in reserves so we have ten percent that is we use for contingency fifteen for disaster and then we also have a capital fund target value as i mentioned earlier about ninety seven percent of our total revenues are from sewer service charges largest component is going to be the residential component showed this slide to you last year we've got the blue with the residential fix that's that base component that monthly fee that's about forty six percent of our sewer service charges and then thirty nine percent is from residential volumetric so that's the additional based off of water  usage residential volumetric does make up a fairly good sized portion of our revenues and so it probably fairly easy to see how conservation has affected the sewer fund and that was in similarly so last year we have fixed costs that are about eighty seven percent and variable costs about thirteen percent fixed cost being your personnel your service and and most of the services that we do then the variable costs are going to be things like chemical and electricity how this is going to comport with the average person's bill this is for single family residence we have a for what we call a low water user it's lower moderate hc f is what we're using for that number of for volumetric use it is going to be an increase in their bill by a two dollars thirteen cents the the sewer service charges slide where you mentioned the fixed versus volumetric so this the volumetric is lower here than normal because people have been conserving or the opposite it's rate increases they weren't correlating well with revenue increases now that things are starting to stable out it's a little easier for that correlation to take place we're not seeing all of the rate increases being gobbled up by conservation so they're they're they're more true we're not we're not staying flat where we're seeing the rate increases now as we we need to see yes thank you so does the wastewater  billing system have same regulation as the water system and that you have a minimum or maximum of amount of fixed income you can drive or revenue no  not that i'm aware of do we have a target or what is our percentage ty yes so the california urban water conservation council is what sets that threshold for water where thirty percent of our revenue can be fixed the remainder has to be a variable component and wastewater doesn't here certainly there's a big push at the state level to have variability in wastewater as well because it ultimately encourages people to conserve water but that doesn't translate as we understand it doesn't translate directly at this point and they haven't there isn't any regulations in place right now for that we just have to have a very variable component but it doesn't set the threshold so and based on conversations we've had in the past the if i understand correctly the the higher the fixed amount it actually is less beneficial to families on lower incomes or who are trying harder to conserve because there's just always that chunk they won't be able to eat away at no matter how much they conserve that is correct and it's it's one of the real challenges with service or who's just kind of discussed really this should be one fixed amount that's typically how most wastewater agencies do it it's just doesn't matter how much water you use it's fixed because that reflects what actually cost to treat your wastewater it's a relatively fixed cost and so we we still juggle with that you know we've been talking about last year it was a big discussion about whether we should be shifting more into the fixed but at what it does is it basically lowers your cost for your big water users and it increases costs to your low water users which we didn't feel like was appropriate in the middle of the drought but i think something that we want to continue to talk about going forward to basically i think more reflects the real of operating our wastewater system okay so you want to avoid any regressive impact on households we at the time yes certainly trying to keep from punishing people for using less water yeah great thank you so here's just a portion of the notice that will come out it's typical to what we've sent out every year showing everyone what they can expect as far as increases in the and then i took a look at what our surrounding agencies are doing the surrounding agencies bill in it and they have an annual cost so i just divided it by twelve two for comparison purposes the light blue is going to be goleta sanitation they are lowest at thirteen thirty five dollars and sixty nine cents the dark blue is city current and that it assumes the maximum sewer bill that a resident single family resident would receive and that is fo forty seven dollars and eighty seven cents proposed is the green at fifty dollars and fifty two cents and then you have carpinteria sanitation which is fifty one dollars and eighteen cents montecito is on the right at one hundred i here's the table it's actually pushed out to fiscal year twenty two we are recommending a six percent increase in rates for fiscal year eighteen it's to help account for conservation additional cip funding and to maintain reserves this is the same number that we talked about last year we identified that we were going to need to divert from the ten year financial plan in two thousand and fourteen and be doing six percent moving forward fiscal year eighteen and beyond and it also assumes that we're going to be a status quo on our rate structure and a two percent increase in fees for our fee resolution so with that i'd be happy to answer more questions very comprehensive councilmember dominguez so going from five percent to six percent on the last slide that's a twenty percent increase in the increase is that what the two percent is or what is the two percent percent is our increase in for our few resolution for our services like the the capacity fee so when someone a new development comes in they buy into the system it's a lot we used to term it by are the one time fees mostly if we look at it every year and adjusted accordingly to keep up with actual cost of service and it's jenny it's generally about two percent based on cpi i don't think we increased it at all last year but those are one time fees yes okay and what would be the net increase from the beginning of the ten year plan is a double or somewhere in there what's the and because these five percent six percent numbers are compounding correct i have not done the math on that i apologize i can have that for you when we do our our presentation at council thank you very much any other questions from israel can i just just clarify here real quick the two percent does not relate to capacity fees we are undergoing a capacity sometimes referred to as a bi and fee we are looking at both water and wastewater rates for that so this two percent really tooks to the other fees that we're looking at this afternoon has slightly different numbers some curious which are the more recent or which ones are more accurate the ones in the slideshow or the numbers in the yes this would be more accurate job this this portion we did project our capital or sixty or cip i did that work several months ago a couple months ago and as we're going through the budget process and the rate process so they all tied together and there have been times where i've had to cut their capital to keep within our budget so i would this would be slightly more accurate the powerpoint thank you any additional questions there action that you're looking for yes mister chair we're looking for direction from the committee yes who terms of moving forward with a noticing this early april or late march any potential changes otherwise we're going to move forward with with the rate i think probably looking for deviants if the committee members had difference of opinion about the approach that staff is taking to express that now and if not to recommend the direction that staff is is considering and and the resource recovery project i i want to i want that noted and move forward with the rates as as recommended by staff so that would be my motion and i have been following of course the the the wastewater capital program for three decades now and i certainly support these these efforts moving forward thank you for that motion is there a second i'll second the motion any discussion you only to split them up so you get to support one i'm just thinking out loud here which is probably dangerous but i i'm on board with what you just said and a big portion of my concerns when the vote took place was on the finances and how it would pencil out and i'm not getting enough bang for our buck and potentially having to up the rates even more than were proposed and some concern that we may end up having to do that nothing today indicated that but when you have delays it's usually going to make things more expensive interest rates are going to go up three times this year so it does make me worry that if the initial figures don't hold true we're going to be in trouble and and you know things happen you know at the wastewater capital improvement projects went up by fifty percent so from twenty million to ten million and now i understand we received a much better product and that's good but i am very concerned and i feel maybe a little bit locked in if we're contractually obligated to the county now to raise these rates so i'm not sure if there's anything we can do to kind of balance these tensions is there any other way that staff sees we can kind of hedge or risk hedge our risk in this situation the potential delay i'm not sure how much it's going to affect the cost but certainly you're right that the interest rates have been going up so i think we're gonna have to have a conversation about that what that means in terminal on term and terms of actual tipping fees again we were locked into next year but for two thousand and nineteen and beyond it is ultimately going to be dependent upon when it becomes operational what the final costs are what the true financing becomes or what the true cost of financing is you know we recognize that early on that there was this sort of potential and risk that to the extent that we there's any delay in the project of the financing cost would go up initially we were looking at having this project finance the last calendar year and it's moved into this current calendar year so we know that there's gonna be some impacts from that alone but again i think at this point we're locked in the project and we are and we recognize at risk when we did so anyway we're locked in to the final cost of financing whatever that might be  i think the only variable here will be when it becomes operational and when those rate increases will be required so what i think i would do is i would i would vote for it knowing that my recourse at this point would be some time between now and the rates we vote again after hearings there may be some room for hedging our bets and regarding the solid waste you know my concerns were that we weren't incentivizing some of the larger multi units and i know it's going to take a while to develop the technology and inventory them so i think i would at this point support the motion but really in both of these instances work with staff to make sure we have a timel and an understanding of what the financial applications are thank you appreciate that and that is the i think the concern area that i have is that the worse a bad case scenario for us could be that this in the coastal zone and that the coastal going through the coastal development permit process certainly will would would engender more delays and secondly couldn't revise the project description and that which could add to the cost and that's that's that piece if it gets bad enough i'm even expecting that there would be a cycling back around if the project description becomes substantial that there would be another at council on that and another look at the car and i would agree with that if the scope of the project changes for sure we're you know we're kind of back to me negotiating a contract okay so and that's our concern all right any other comments any comments remember the public any