2.22.2024 Sewer Commission and Watuppa Water Board

being uh here I'm going to call this meeting of the what ala water board to order um first thing is pursuant to the open meeting law any person may make an audio or V video recording of this public meeting or may transmit the meeting through any medium attendees are therefore advised that any such recording or Transmissions are being made whether perceived or unperceived by those present and our acknowledged and

permissible and just in time we have commissioner so citizen inut we we'll call the rooll oh for the Mr clerk would you call the role member fera here member Collins here president Tero here and then we'll just open up the SE commission meeting okay U welcome to the uh meeting of the for civil commission uh it is Thursday February 22nd um I don't have to call I don't have to say the me was already um I

guess you want to do the roll call roll call yep member El here member harak here chairman El here so again just for uh an overview uh I just want to let everybody know what citizens know why we're having a joint meeting of the water Bard and Sewer Commission uh on the agenda tonight is uh the proposed fy2 uh budget and rates for both the water board and the Sewer Commission uh we uh have Consultants uh

here that have worked on both budgets and done valuations of the budgets so I wanted it be to be able to be presented to both uh water and sewer at the same time again when we talk about rates and impacts to customers and stuff like that it's combined with you know a lot of times we look at it combined cuz the bills go out combined so that's why we're having I think probably the first

ever joint meeting of the water board in the FL theion this is I must say this is historical it is in a way it is historical so the first item on our agenda would be citizen input do we have anyone signed up for citizen input we do not we we can move right along then uh to the next item on our agenda which is the proposed leak Abate uh excuse me minutes of the previous

meeting um if everyone's had a chance to review the minutes um there are any adjustments or omissions hearing none the chair would entertain a motion to accept the minutes as submitted motion made second all in favor I motion pass is maybe we'll let the SE commission just catch up on their items one and two then from there we can just hold the date so you want me to yeah if you want

to just okay um with respect to item number one on our uh agendas uh is there anybody here uh what say an input with respect to the S commission no we haven't received anything okay um moving right along item number two minutes of the previous meeting held on December 20th has been uh distributed to uh the Commissioners uh I hope you've all had a chance to review it if you have any

comments or wish to make any changes um please do so now if not uh I'll entertain a motion to approve the minutes of the previous meeting held on December 20th 2023 just justce if I could make a note uh the uh minutes that were originally sent out to you um were the incorrect version version uh there was new minutes sent out today with you packet updated minutes so I don't know if we all get a

chance to review them but I just wanted to point that out to you so that you know i' I've looked at I don't see any objection to what changes have been made if anybody else has to speak up you wanted to go on record as Mak any change you you want to make a motion second all in favor next item on the agenda proposed leak abatements we have 22 abatements totaling $ 17,22

345 um are there any questions concerning them if there aren't the chair would entertain a motion to accept them as submitted without going through them individually if that so if that meets with your approval um so moov say all in favor I I

okay one second okay um proposed next item yeah Amendment to the leak of bement say again please Amendment to the leak of bement policy so item number four on your agenda what is I'm sorry I didn't see okay item number four amendment of leak abatement procedure in relation to details denials so um and I mentioned about denials I'm sorry and I mentioned uh the uh at the last meeting I

mentioned about uh a complaint that we had in relation to denials uh I reviewed the policy uh and I feel that it would be uh in the best interest of uh the Water Board um to uh uh kind of almost do what we do with the uh storm order appeals uh that are submitted uh initially when an abatement comes in it's reviewed by our staff uh internally the billing staff uh on a leak of

baitman uh the there's a checklist of requirements that have gone through does it meet uh is the overage double what the normal bill is uh is was there a leak a verified leak has the leak stopped or slowed down uh you know has there been a proof of a repair made so all those things are checked off if we go down that check off list and it's deemed a non eligible leak so maybe the

bill didn't double or maybe the leak still going on um essentially what we do is we send those out as a denial um the and we've always brought those to the board in the past and the board has approved them as a denial my recommendation would be that uh rather than that denials coming to the board that they be administratively reviewed if it is a denial that a denial letter be sent out

to to the uh to the uh appellant stating that they uh did not meet the minimum requirements uh on that and the same thing that we do with the storm water right on that letter if they want to be heard in front of the board um to make their case on why they feel they're eligible for for a leak abatement uh then they have the right to be able to

sign that uh sign that send it back to us and we'll schedule them for a future meeting uh in front of the board um so if uh you know if the water board uh is uh is amendable to that change I'd like to make that so so uh they would come in uh administratively reviewed any denials would be sent directly to the customer that they don't meet the minimum requirements and at that point they

would have the right to come in front of the board uh to make their appeal to the board sounds good to me um that's and it would dub tail along with the storm water pH so it would be the same procedure yeah corre so if the board's good with that if they were to make a motion to amend uh as discussed uh and it's and it's really just an internal

policy on how we do it but again I wanted to bring it to the board bring it to your attention because uh at that point you won't be seeing denials anymore within the abatements so in in the form of a motion we would um um proceed to um administer trative review of the denials uh sending correspondence to the appal all right and then they they still have the right

at that point to come in front of the board all right I'd make that motion it all in favor I I now I can move on see you Sni that one in on okay proposed fiscal year 2025 budget Mr Clark all right excellent so um on both Water and Sewer as I mentioned earlier uh we have the uh the uh budget um water board is item number five uh SE commission is item number three um and

then we have the rates as item number six for the water board uh and item number five uh item number four for the SE commission uh if you like to make a motion what of ought to take uh items five and six together um just for uh discussion purposes uh along with the uh with the sewer items that might be the best formal course of action you want to

make motion to take item five and six uh along with the uh sewer uh budget okay the chair entertain a motion to take items five and six uh in unison second all in favor I I and with the SE commission uh if you'd like to take items three and four uh in unison with the uh water uh budget rates as well okay we have um we have a proposal

to um tie into the uh water board with respect to the uh their proposed budget and their proposed rates um I'd like to have somebody entertain a motion to uh accept the proced to tie into the qu motion made second all in favor I so be it thank you very much again I know it's uh it's kind of new ground we're we're treading here so so uh just to uh roll into it the fy2

budgets have been prepared uh as both boards know we typically uh need to submit our budgets uh by um March 4th uh to the uh to the city council the mayor needs to submit them uh so they come in front of the boards uh then they go up to the mayor then they go down to uh city council for their review um the city council from the day of submission

has 45 days to act on our budgets and rates uh excuse me the budgets they have 45 days to act on it and that could be uh either an approval uh a refusal uh or a reduction uh of the budgets uh and then as the boards know the rates need to go through the ordinance process uh which would refer to ordinance uh committee um and then also uh two readings through the full Council uh

once AUD once the ordinance committee if they send them back to full Council uh so just a brief overview the water division budget uh for fy2 is 16, 173,880 um uh the proposed water rate to support that budget uh is $436 per CCF um on the sewer division the uh proposed budget is 31 million $78,400 uh with a rate to support that budget of $811 cents uh with no change to the

storm no change proposed this year uh to the the storm water um So within both of those budgets uh the Water Division there is a increase of uh 59 per CCF uh that's uh on an average household that works out to about $312 per year uh for the sewer uh rates uh there's an increase of $25 per CCF uh which uh average household effect is roughly 8,6 5 cents on the average household um

as some of the board members know uh so we've uh worked with a uh consultant this year we had uh uh we did the lead service program which we were looking at rates and budgets and impact on Capital Improvements on all of our rates and budgets across the board uh we continue to use them uh as this budget was uh was built to review the budget process uh do analysis of the rates uh impact on

customers um so that was Woodward and current um and one of their subc consult is raap Talis uh rafis is a uh company that does uh utility rate planning and budgeting uh Across the Nation so I'm very familiar with this type of work um so if you want uh now I can turn it over to uh Dave Fox from raell and he has a presentation in relation we me stand or sit or anybody have a

preference however you feel comfortable I just want to be out of your way out preference maybe you're the guy you're good all right I'll stand

here thank you very much uh good evening everybody my name is Dave Fox as Paul mentioned I'm a vice president of rapis rapis is the the largest firm in the country predominantly focused on Rate Financial Planning matters uh for the utility industry um what my area expertise is in water and sewer rate setting um we are a self-c consultant through order and current we've been working on that with them for uh past

several months um actually maybe over the last year or so in in several aspects um looking at rates and finances and customer impacts things like that um relying on what in current to do a lot of the engineering related work talking us about the need for R and replacement of capital infrastructure um the the need for additional Revenue to pay for that Ren and replacement um and we're

here with you tonight I'm going to try to keep this as brief as possible um please feel free to ask me questions as I go along um let's get going so just to kind of give you a brief overview before we start getting into the nitty-gritty uh the reason why a community want might want to do a rate study is we're trying to evaluate the existing status both of a financial and rate perspective of both

the water and the sewer funds and then set out a plan to ensure the long-term uh financial and operational sustainability of both the water and sewer funds um we do this through proactive financial planning we have developed a nonproprietary financial planning and rate model for the city that's getting turned over to them at the end of the engagement to use um at their discretion update and understand

how things are changing over time just as a planning document um our model goes out 20 plus years um we focus on the next 5 years just because that's where we have the best Clarity once we get outside that 5year window things get really fuzzy um too much is going to change between now and then but we do want to plan for the future with the best information we have today rather

than um we want to expect what's coming rather than just look at the upcoming fisal year in a silo um that leads to big surprises when you look out two three four years down the road you want to know what's coming um in doing so we set out this financial plan and I'll get into exactly how we did that in just a second or at least a high level overview

but we also want to understand what the impacts are to customers um that's obviously uh you know at the front of everybody's Minds we have to increase rates to pay for operational increases regulatory increases um renewal replacement of infrastructure but what is the burden on the rate paays and trying to maximize the quality and the reliability of service provided to Rays at the the the lowest price possible um

just to to provide a little bit of context around the rate increases we'll be talking about across the the country for the last 20 years or so water rates have increased by about 5% a year every single year and Sewer rates have increased by about 6% over that same time period every single year um a lot of this is due to just inflationary impacts certainly in recent years um aging infrastructure especially here in

New England where we have old aging infrastructure that needs to be renewed and replaced there's unfortunately a cost ass associated with that so um you know if we look at Water and Sewer rates they've been outpacing uh the rate of inflation by by more than double over the last 20 years um and if that wasn't an upward battle enough we're also facing uh declines in per capita consumption as people and uh and

households Implement and businesses as well Implement more high efficiency fixtures low flow toilets low flow showerheads low flow sinks things like that consumption is declining when you have at a predominantly volumetric Revenue base that's a reduction in your Revenue as well so very steep uphill battle for water and sewer utilities um I'm not sure if it provides anybody any comfort in here but Fall River is not

alone in a boat every other water sewer utility that we're working with are dealing with these exact same issues here we go I'm just going to skip Zach sorry the animation was gonna drive me crazy yeah the um I don't Zack if you want to say anything specific here but this is just a table of some of the historical material cost talking to some of that inflation um that the city has

experience going back to 2020 or 2021 in some instances um through 2024 and you can see the um the overall percentage increase from either 2020 and 2021 up to where we are currently meaningful increases in a lot of these material costs that are necessary to provide reliable and clean service to your customers so just if I can point out a couple of things within here so if you look at fire hydrants on here fire

hydrants something happens to a fire hydrant we canot replace cost from 2020 1825 they now cost us $3,042 uh you look at sodium hypochlorite that is you get to the chemicals just yeah I'm just grabbing a couple here but sodium hypoc chlorate that's used both water uh and waste water that's uh the chemical that we use the most of that's for our disinfection uh and it went from 70 U per gallon back

in 2001 for up to $214 per gon and that was last year's bid prices so those aren't even what we're exped within the 25 bu that's a 207% increase uh on that uh on that item uh and all of them straight across the board and it it it's not only impactful to us but everybody's felt this within their own homes in their own uh in their own lives you know everything costs more

now you go to the Super Market you go um out to e uh and costs have increased uh and they've really increased for us uh straight across the board uh we'll talk I'll I'll talk a little bit when we go through the budgets about uh you know um you can see it's been an incline here since 2020 um but I'll talk a little bit about how we've budgeted in the past and

uh what we did this fiscal year for the uh for the budgets thanks Paul um more animations um the uh real quick just at a very high level I just want to provide some overview of how we got to what I'm about to show you um as I mentioned we developed a a short and long-term Financial uh planning and rate model for the city um we take into consideration operating expenses the historical

changes in those operating expenses where we see them going with the inflation that we've been experiencing um existing Debt Service obligations that you have on the books your principal and interest payments to pay for the the debt that you've taken out to pay for Capital and other needs um a big driver is also the Capital Improvements plan so we take into consideration future Capital needs or

existing and future Capital needs when we think those projects are going to be undertaken how much are they going to cost and how are we going to pay for them um either through new debt mechanisms through some cash funded capital or something we're going to get to later in the presentation that the city's done a really great job of of going out and finding grants principal forgiveness utilizing arpa funds to

offset uh some of these Capital Improvements to reduce the impact on rate payers and and the city's done an absolute wonderful job of that you're going to see the the impact of that a little bit later in the presentation um all this gives us an outline or an overview on an annual basis of the amount of money that needs to be recovered in order to pay for those operating expenses to pay for existing

Debt Service new Debt Service associated with Capital Improvements um and maintain some fin viability through Reserve funds we'll talk about that in just a few minutes as well um and that just basically will indicate a gap that we have between how much revenue needs to get generated on annual basis versus how much revenue you're currently generating under your existing rates and being an indication of the the annual

rate increases what we would strive to do at some point is get to the place where we're having more smaller magnitude more programmatic increases more frequently rather than you know Sharp fluctu situations back and forth um and and hopefully we can get there with this more programmatic Forward Thinking approach so I'll start with a water fund overview um a lot of detail here in terms of the actual operating expenses

themselves um Paul's going to get into this in much more detail in terms of the the budget so I I won't spend too much time here um significant increases in Revenue requirements though or the overall cost from 2024 to 2025 um a lot of this has to do with those uh inflationary impacts on operating expenses additional Debt Service um uh also just the the Capital Improvements the spending on Capital Improvements the

water funds expected over the next 5year period or so to spend approximately $16 million annually on Capital Improvements now obviously as I mentioned before some of that is going to come from the grants principal forgiveness and arpa um so there's not a complete offset but there's at least something there to be able to um offset the need uh need for rate increases on customers and according to the city

uh CFO your retained earnings or your reserve fund balance if you will is $0 in the water fund starting in 2025 now that gives me as a Financial Consultant a b bunch of heartburn um I like to see money sitting in reserve uh Reserve fund the same reason that everybody sitting around this room should have a savings account for their own homes um for their own families well-being uh water and

sewer funds are no different there should be money sitting in a reserve fund to be able to uh offset the new regulation that pops up that you planning for the new capital Improvement that you weren't planning for um you know potentially new record inflation um fluctuations in consumption as I I mentioned before that decline in per capita consumption is a downward pressure on Revenue um there can just be

there's typically volatility from year to year predominantly due to weather a very cool wet spring summer fall consumption is going to decline accordingly and when you have most of your Revenue coming from that consumption based uh Revenue stream as that consumption Falls your Revenue Falls accordingly it would be nice to have some money sitting in the reserve fund so you can offset that fluctuation

and be able to be a lot more financially flexible um and and not have to deviate from the financial and the rate plan that we're going to set for um so this chart presents that information a little bit more graphically it's easier just to understand the bars the columns going up uh vertically and the multicolored uh these are the revenue requirements are the costs annually and the line the

black line with the diamonds in each year that is the revenue under exist in rates um and so what you'll see is from 2025 out through 2029 over the entirety of the 5year forecast period without rate increases the water fund is going to run a deficit now that can't happen um without a general fund subsidy or somebody's just printing money this can't happen if we're going to not sacrifice a level of service to

customers which in my opinion is not an actual option we need to do something about this um and unfortunately if we go to the next slide here was starting with about no money at all in those retained earnings um that Reserve fund balance quickly goes negative representative of those deficits which we cannot have negative money in a reserve account we need to obviously keep this positive or

worst case scenario keep it zero this is a unsustainable Financial picture that we need to remedy through the um some rate increases going forward um so what we're recommending is for fiscal year 2025 an 18% across the board uh rate increase for volumetric and minimum charges and then 5% thereafter we the 2026 through 2029 5% are not set in stone but again as I mentioned early on in the presentation

we're trying to set out with the best information we have today be very transparent about where we think we're going and where rates might end up and plan for the future going forward um I would encourage the city to continue to um update this annually update the financial plan as things change which they inevitably will just to make sure we're on track and nothing has deviated significantly um but with the best

information we have today this is what we're recommending at this point in time predominantly focused on the first fiscal year getting that Revenue up to where it needs to be so we could have more programmatic increases going forward when we get to the next two slides you can see with those rate increases a much better financial position where that Revenue line starts increasing gets above our Reserve our

Revenue requirements in 2025 and then meets that every single year through 20 29 um and then with those Reserve fund balances start to increase them slowly now I'll take a minute here to to pause and talk about that Target line that we have um right in the middle of the chart the the red dotted line that would give me um let me sleep a lot better at night if you were up to that amount but the

the rate increase is necessary to be able to get you there in one Fell Swoop or really even get you there over the 5year period um might be too significant on customers the fact that that Reserve fund balance is growing and not declining over the 5year period that gives me a bunch of comfort and especially since we're going to be reevaluating this annually um hopefully we have some conservatism in this

forecast and things turn out to be a little bit better than we think that Reserve fund balance might actually increase more than we need to um but the fact that it's going up uh over the the 5year period is is great in my opinion we could start building that up to allow for that Financial viability and that Financial flexibility um I want to pause here for just a second before I'm going to get

into to sewer any questions yeah I got a question sure this this whole uh presentation um from what I can understand uh you you you haven't you haven't um plugged in any figures for um what I call uh free cash shipless Revenue what have you uh for supplementing the the supplementing the budget free cash or Surplus Revenue no I have not because it was uh told to us that there was no money available to do

so okay so I know that it's historically something that has been done um we have been told by City CFO that there is no money available to do so this fiscal year okay yeah they advis us again you know in both water and SE for a number of years we've used that uh you know mained earnings of free cash uh is another term for it as well but U you know we've used that we've plugged

it in as a revenue um and you know Terry had the discussion of Mr s prior to me at city council about how that's building is a structural deficit if you don't have that money to follow you kind of fall off that cliff and have to deal with it that's the point that uh it's come to now there's a couple different reasons for that um so uh again recommendation of the CFO is that we do

not use it uh any retained earnings within the budget um so uh that's what uh that's what we move forward with um excuse me is that's something that is being recommended in the future all the way through yes so any any efficiencies that we experience in course of our operations and you know we got people out there working hard you know trying to get the cheapest prices and things like that and

those efficiencies that usually I guess I look at him as being um representative of what this free cash is and so who so who's getting that so where is that where's that was that happening so I'm not sure this is going to answer your question but I'll answer from my perspective perspective as a ray consultant if we got your retained earnings or your free cash started building this balance up I know this

laser pointers hard to see something positive maybe you know maybe something closer to this this target line or or maybe even where it is there currently um I I think there are some strong reasons why you want to maintain something in that Reserve fund and not completely offset your your Revenue base or your Revenue requirements with that every single year with the full amount and just bring it back down to zero um I

think you want to maintain some for the wh ifs the unknowns coming in terms of capital regulatory but I'm also a fan of if that Reserve fund balance gets to a point where we have sufficient uh monies in that Reserve fund to be able to offset the wh ifs the unknowns to utilize that money annually to smooth out rate increases and think of it more of as a a rate stabilization account as

well um to be able to offset the the rate increases on customers especially if in one year you have a say for example we we set set out a 5year forecast to 5% a year but the the third year of the forecast you needed an 8% rate increase I would probably make a recommendation to use some of the reserve fund balance assuming that you had an adequate amount to bring that

third year from 8% down to five and keep level 5% thereafter and and so just to I think go a little bit more into your question so the money does not leave uh our fund so any of the free cash that uh that we have left over at the end of the year stays within within our funds so it's like an independent bank account um it stays there and it would just roll in

and then come out the end of the next year as well so it's not that the free cash gets transferred to the general fund or or or anywhere else it doesn't go to a different location it stays sewers stays with sewers water stays with water all right so the way I I can say take what you just said any efficiency that we experience that that that is a viable efficiency you know relates to

Dollars will probably end up being part of our Reserve fund yes yes and cost savings that we generate in round numbers if we have a budget of $16 million uh 2025 uh and your revenues come out to be exactly $16 million but over the course of the year you experience efficiencies and you only spend $15 million of the $16 million budget that million dollar in excess would be contributed to this Reserve right

now I think we used to allocate some like $100,000 to to a reserve I mean under suicide am all right so that's a stabiliz stabilization of account but is that is that still going to be you know around or is this that money now going to go into the reserve NOP so so there's there's there's two separate accounts you have you have the free cash Reserve Reserve account you also have the stabilization

account so stabilization account you kind of look at that as a uh as a uh emergency um retirement if you want to call it you know if you're comparing it to your household you look at that as something yet you do not want to touch unless everything's gone totally sideways um that's also another uh thing that helps uh stabilized borrowing um you know that's something that's looked at by all all the agencies that do our

credit rating and stuff like that what we have uh in a stabilization account so you have that and then you have the retained earnings account as well which is uh directly related to the operational side of it so that's more revenues and expenses and what's left over is the retainer okay so that's not going to change correct so I and recommendation you know we should still be budgeting and uh contributing to our

stabilization account to build those up I believe the recommendation is to have stabilization accounts that uh equal 10% of your operating budget is that still a recommendation that that's correct and and the fact is if you did not have that stabilization account my Target Fund balance of of 90 days of Revenue requirements would be something higher than that um to be more in line with

industry best practices but the the fact that you have that worst case scenario retirement fund sitting there you have a little bit more that you could tap into in the worst case scenario so that's why our recommendation is only 90 days it would probably be something higher than that if if that fund were not sitting there okay good you thank you not not necessarily a question but a comment I

think on the water side as far as we're concerned um at least this Bo has been concerned for the last number of years I don't think we've taken into consideration any retained earnings when putting together a budget from one year to the next in other words from a budgetary standpoint we should assume that money is not is never going to be available that that we don't have a bunch of money sitting there so

um I think I would prefer to on the side of caution and assume that it will never be there yes okay um I will move forward with storm sewer and storm um this is same exact structure is water um so hopefully I can get through this a little bit more efficiently um again you know meaningful increases in both operating expenses Debt Service uh um going from uh fiscal year 2024 to 2029 over that that five to

six year period uh spending about $22 million annual in Capital Improvements again some of that is being offset by uh arpa grants uh principal forgiveness um same exact situation on the water fund where retain earnings or the reserve fund balance is started at a zero uh or close to a a a zero balance going forward um significant uh deficits in the exact same same way uh a little bit

more meaningful here over the forecast period with no rate increases um and you know again negative Reserve fund balance was is not a a feasible financial future or situation to be in whatsoever um in order to to remedy this and to bring um our Revenue lines up to where they need to be and start having more financial flexibility get to that Financial Health that that getting the the fund back into the black

um what we're uh we put together two options for you um the the second option on the bottom there is what Paul mentioned earlier in his initial slides of the rate increases um we also ran a a scenario where So within the sewer in storm there's the the sewer rates themselves and then the storm water fees um so we ran a scenario where the um the first scenario where uh both the the

sewer volumetric rates themselves and the storm water fees would both go up at the same percentage increase which would require about a 23.1% increase if we leave the storm water fees alone and we don't change them from 2024 to 2025 and we only got the additional Revenue that we need Revenue neutral the exact same amount of Revenue that sewer volumetric charge would need to increase by 33.8% rather than a

23.1% because we're getting no additional revenue from storm water and I have some slides at the back end of this presentation where we're looking at Bill comparisons or bills for uh combined customers under each of these options so you can see what the impact is on different customer types a low volume customer an average volume customer high volume customer and there is some deviation there of what these

two options would produce in terms of customer impacts um similar to what I showed you on the water slides with those rate increases we're bringing our Revenue up um either at or above our Revenue requirements or our costs on an annual basis um every single year from 2025 to 2029 uh obviously contingent upon future updates and ensuring that we're we're keeping up with plan and we're not

deviating from that hopefully we are deviating from that the assumptions that we have in the model are conservative maybe we have some efficiencies those res U those Revenue requirements in the cost columns might actually come down some that would be great but we want to know that um but with the best information we have today this financial forecast with those rate increases I just showed you on the slide before

we'll make maintain that Financial sufficiency annually um and again not quite getting up to our Target Reserve fund level but starting to have that upward trajectory we're getting closer and closer and building that up so we have more of that financially uh flexibility and potentially the the you know once we get to a position where we are financially viable um to do some rate mitigation or rate stabilization

through some of the use of this to be able to mitigate rate increases on customers um okay so we talked about percentage increases in my mind that doesn't really mean a whole lot we want to talk about what are the dollars and cents the actual bills that customers are paying that's what this section is going to talk about so um here are the the proposed rates current rates and

what they would be in 2025 again this is not uh not too too indicative of what customers are actually paying but I just wanted to show you the actual rates themselves um you can see that $811 down here in that uh scenario 2 which Paul mentioned earlier in his uh his initial slides um okay so I know there's a lot going on in this slide so just give me a

minute to to set this up um this is a low volume customer using 8 CCF per quarter or CCF is I'm sure you're all aware 100 cubic feet about 748 gallons with a 5/8 in meter and 1 eru of Storm water um approximately 18% of all of your bills are at or below this amount right just to to provide a little bit of context there um on the right here we have a total combined annual Bill

inclusive of the water charge the sewer charge and the storm water fee total total combined um what this is showing is currently this 8 CCF per quarter customer this low volume customer is paying approximately $571 per year for water sewer and stormw water service with option one on the sewer side where we're increasing both components the sewer and the storm water component by approximately 23% increase

um that same customer's bill would increase from $571 up to $693 it's $123 per year increase $31 per per quarter $10 per month or about 34 cents per day option two where we're keeping the storm water fee the same in 2025 as it is today in 2024 instead of going up to $693 that same customer bill would increase to $668 um and the reason for that is a much lower volume customer um they have

a a they have a preference of paying more in the the volumetric component rather than that storm water fee which is fixed they cannot they cannot change that based on the amount of water they're consuming does this make sense yep okay um this is going to get a little repetitive I apologize if we go to an average volume customer um this is about 35% um 35% uh of your bills are are at or below

this amount so it is inclusive of the 18% here it's a little tricky to to identify exactly how many customers are using this because some are using 12 some are using 11 some are using 10 and so on and so forth but 35% of your your overall bills are at or below this amount um average customer paying about $777 per year in total for water sewer and storm service same customers bill

under that first option would go up to $943 second option $932 so you can see still a benefit for this average volume customer as not increasing that storm water charge and only increasing the sewer but not quite as much of a benefit as it is for that that very low volume customer so we're starting to close that Gap a little bit if you will and then if we go to a high volume

customer using 3200 cubic feet per quarter um this accounts for 76% of your bills are are below this amount so only about a quarter of your total bills are at are above this high volume amount here um we can see that it actually starts moving the other direction so instead of option two being beneficial in terms of the bill impact option one is actually preferential here um because of the high amount of water they're

consuming they would prefer to pay that fixed charge on the storm water side rather than having a higher volumetric charge because they're using a lot more water and subsequently the sewer service because that's how it's charged um go are these numbers predicated on Strictly domestic homeowners or does this number of 32 CCF include industrial we have a commercial customer here institutional customer here as

well I told you was going to get repetitive I had a lot sorry um commercial customer here um very same similar situation to the the the high volume these to maybe answer your question better these uh three here low volume average volume and high volume are more indicative of resident IAL property so they can be single family residential home um duplexes triplexes but but smaller unit size Residential

Properties so we get into commercial um this is an average commercial Bill uh 100 CCF per quarter a 2in meter with for eru um on the storm water side um same exact situation as that high volume where that option two where we're only going up on the sewer volumetric and not allowing the storm water fee to increase um is is a little bit higher in that second option for this commercial

customer just given the volume of water that they're consuming and the exact same situation on a very high volume customer institutional customer even more of a deviation and swing in the opposite direction where that option two is pushing more of the burden onto this high volume customer by keeping that storm water fee the same and pushing more on the onus on those those customers that are using more and more

water U by increasing that that sewer volumetric charge even more and just to to provide a little context on both of these it's commercial customer um these types of customers although they might they're going to vary um in magnitude their consumption represent about 7% of your total bills this institutional customer is is less than 1% of your total bills just given predominantly your

residential so yeah just one thing I want to say about all these slides so so if you if you think you and I know this this was a lot um to look at but if you look back one of the reason reasons that we chose to do uh and it's primarily on the suicide based on the storm water uh increase versus uh versus sewer rate increase one of the reasons we decided

to go with option two when we uh created the rates uh the proposed rates was because we looked at the impact to uh those low uh low volume uses or the average volume uses those low volume uses uh would be you know uh potentially you know two people living in a house you know people that may be on a fixed income or or something like that that you know retirees that are living in a

house by themselves or potentially you know somebody that's a small family that that's in a house by themselves uh it puts less of an onus less of a burden on those types of customers the way that we structured that increase this year specifically with with the sh because um again the less that they use and it gives people the ability to kind of Drive their own fi too uh if people know

want to pay less they have the ability to use less of water and they can fall into one of those lower categories where they're potentially paying less by us uh implementing option two rather than implementing option one and just it's a great Point Paul and just one more data point just so you know when we talked about you know earlier here uh average volume you and even the low volume benefiting

from that option too as Paul was just mentioning by putting the onus on on the backs of the customers using more um about 60% of your customers are going to benefit from from that change of of recommendation of option two where the storm water fee does not increase so we looked at the break even point of how much consumption a customer would have to use to tip that over where option two

is actually higher than option one and it's about 60% of your customers are at or below that consumption amount um okay a couple more slides here uh I I I don't love doing this I'll be fully transparent here of of comparing yourself against other communities I think there's um this is as as much as we try to make this in Apples to Apples comparison by looking at create or developing a bill for each of these

different communities using the same consumption amount the same meter size the same same customer class it's still not an Apples to Apples comparison when you're looking what other communities are doing um there are plenty communities out there I work with some of them who have general fund subsidies um they're getting in you know influx of cash on an annual basis from the general fund to offset what their costs are

they're not fully Revenue they're not fully recovering enough Revenue to to meet their costs um that could keep a a community's uh bills artificially low compared to where really where they should be um there's Alo things like you know having very large base of of institutional or industrial customers just spread the cost amongst that they're very large customer base so the these aren't um these aren't great

comparisons but I I'm always asked to be you know present this so wanted to look at it the 2024 where you are right now a combined bill um for Fall Rivers kind of right in the middle of these other communities here um and then when we are talking about the increases that we we've talked about tonight with the recommendations although it moves you to the right on this chart I would ask you

to just take into consideration that that's assuming that none of these other communities are going to have a rate increase in 2025 which if they're doing what they should be doing in reinvesting in their infrastructure and keeping up with their cost increases they should have a rate increase it doesn't mean that they will they might be kicking the can down the road like a lot of communities do um but they should be

having a rate increase so we're talking about even further from apples to Apple's comparison when we're looking at 2025 Bill compared to these other communities because we don't know what increases they might be looking at for this upcoming fiscal year as well those all those communities that are there are they all um are they all functioning under as Enterprise funds um so I believe most most of those

are uh Iris Enterprise funds um I do the uh you know I look at this as well comparisons um but so the one thing about Enterprise funds and uh da Dave touched on it is um there are other communities out there where so an Enterprise fund essentially can get money from the tax from the tax revenue from the general fund so the general fund can subsidize an Enterprise fund an Enterprise fund cannot subsidize a

general fund except for indirect cost so there are a number of communities where they take money from their general fund side and put it into their enter Enterprise funds to help fund their Enterprise funds and keep rates either lower or or down um but we don't we don't we operate totally independent as you should in my that correct that's the reason I'm asking is because now maybe

some of those communities are you know contributing to the uh to the operating cost of the Enterprise funds and I wouldn't be surprised if they are it's never surprising to me when I I start working with the community for the first time and I see that they are getting some sort of influx cash from from the general fund um I don't think they should be I think water should be paying for water sewer should be paying

for sewer and general fund should be paying for the general funds stu um except as Paul mentioned maybe some indirects from from the Enterprise to the general fund but that that's it they are business type activities they should be self-sufficient with their own revenues but it's it's not always the case Okay um we have a couple uh this and one more comparison slide here of of just looking

at other essential Utilities in 2025 um compared to Water and Sewer um you know significant differences in terms of of the magnitude of dollars spent compared to I mean internet which I I know is incredibly important in today's day and age you know people need it for communication and for gathering information um but as far as biology goes it's not quite as important as water in my opinion um and it's not

quite as important as being able to flush your toilet and have sanitation and and take everything away from your home um and I think you know a lot of times people just actually I know just having conversations in the industry that I'm in and just um type of work that I do um people just undervalue Water Service they just do this and the water comes out and they do that and the

water turns off they flush their toilet they think it's magic it just goes somewhere they don't know all that goes into it and and I think you know putting this in the context what folks are paying for other utilities that um I know they are essential um but from a biological standpoint perhaps not as essential as as as water um so again just another I don't know if you want to

say anything on this yeah no you know this is something that I that I've started to build you know the these types this type of comparison over the past couple of years and it's it's funny you know water SE we 9% of what the total utilities to run a household uh gas electric um everybody has cell phon that uh cable uh and internet you know that's you're going to probably 95% of

the houses in the city and that's uh what you'll find in every single household and uh you know what Dave said watering sewer uh is that's significantly under value I have a question um so you mentioned that option two is better for the residential but not commercial but it's going to be higher for commercial but we're sticking with option two for commercial as well this is across the board it's across the

board it will apply to to all customers are same and there um I I don't want to say for every commercial customer that this would result in an increase on that option too um but on average yes that is the case there are some low volume commercial customers that would benefit from having um more of the owners put on the volumetric charge but but by and large you yes to predominantly shift the

cost away from those low to average volume residential customers and the commercial customers can also try to reduce consumption I guess gives them that yeah I I think by intive by by putting more on the volumetric charge um every customer no matter if it's a commercial customer residential customer has more of an ability to control their bill by reducing their consumption just seems like it's a huge jump for them I

know it's the same percentage but it's a huge jump of money for commercial I'm wondering what kind of backlash we're going to get from the business Community I know it's just 1% did you say institutional commercial is about 7% of your your overall bills so institutional what I guess what examples we have a institutional Hospital yeah hospitals fac I think you're still looking at it's somewhere in the vicinity

of large percentage probably 2,200 accounts will fall in there something like yeah between the seven and the one between commercial and institutional yes a yeah yeah boy we got to sell more product that's all there is to it you can I mean that's that's the bottom line we just don't sell enough product I mean we're pumping somewhere around 10 million a day we used to pump at 16 you know we just don't

have the usage we got an oversized system and non enough customers yeah uh loss of customer base and and also just the customers that you have are using less water just by nature of the industry every time you go up they'll cut the single largest uh reduction in water was the institution of the sewer user fee we saw more cut when that went into effect yeah it's it's always definitely

uh you know a balancing act between the usage you know cuz yeah people do people will start to regulate themselves you know back in the ' 80s and 90s to uh open up capacity within the sewer system you know there was a push for low flow toilets low low showerheads low flow sinks which reduces your water usage and your Vol volumetric usage U but then you still have those same operating cost uh

across the board so uh that's one thing the other thing that Fall River and this has been talked about for years was the loss of our industry within Fall River oh no two words about it you you you hit the nail on the head when you said we used to pump 16 million gallons a day and now we're down to 10 you know you used to have uh Pioneer finisher that

was a million G right right exactly you had those that made up four five 6 million gallons a day of usage which supplemented uh all of the other uses at that point um and the rates at that point so that's something else we're dealing with yeah you know we we're going to have to look at efficiencies obviously we do we've looked at them every year how to get more efficient how to

save you're really up against it unless you can expand sales uh yeah there's there's only so so many efficiencies to be had that's it there's very small percentage you have a very lean operation already there's not much you can cut and and really you know with the biggest drivers we're seeing are not just you know fat operating budgets they're their Capital that is necessary to maintain infrastructure as

we sit tonight we're down to 39 people in the water department when I started we had 105 yeah y speaks for itself 39 as is tonight I don't I don't know how you could get Lena we've got 13 funded I don't think you can 13 vacancies and we need every one of them plus the only way you get leaner is if you sacrifice service to customers which I don't you can't do it you're in public

health that's I'm saying it's not an option but the only way to actually cut cost is to sacrifice service um all right few more slides let me uh get through this o going too far uh another just quick comparison slide here I put together what a cost per gallon is for different liquids I sometimes get Chuckles sometimes people get mad at me for putting this together I kind of like

it um it's it's what a a gallon of Fall River water costs less than a penny a gallon you can't even see it on the chart compared to these other liquids within Fall River um that's the cheapest milk we could possibly find it's definitely not the grassfed organic stuff but um didn't want to be too too aggressive here um but you know walk you know and that's delivered to any room in

your house you want to have that that water delivered to 24 hours a day 365 days a year um Clean safe for liable service for less than a penny a gallon if you put that ad in the newspaper and said somebody responded us the city of Fall River is the only person or the only entity that would be able to respond to provide that water the same service to you for less than a penny a

gallon you have to get your car and drive to the convenience store and pay you know a thousand times more to get a gallon of water in a plastic bottle um and then milk gasoline and I love my coffee so I don't want to hate Onin Donuts here but significantly more um with that probably that same water in there at 6 cents per or you know less than a less than a cent of

gallon um I told you before uh the city has done a wonderful job of taking advantage of grant funding principal forgiveness arpa funds outside funds to to mitigate the need for rate increases on customers to offset those Capital Investments U so we wanted to put a couple slides together um of the benefit of those supplemental type funds um Zach I do you want to say about no I can jump

in here um so this slide there's about 30 you know the the city of B River Department of Community utilities over the last 5 years or so has secured over $37 million in grants loan and principal forg principal forgiveness the fund necessary water water studies projects design um and and construction Administration um the sources um our an American Rescue plan uh arpa which is formerly called uh drinking water State

revolving fund and several other funding grant funding opportunities including Mass Works uh federal and state earmarks uh so if you go to the next slide you can see where that gets broken down right so we have drinking water which is a principal forgiveness associated with a lot of drinking water State revolving fund projects totals to about 3.8 million uh arpa funding which is just

you know through through the American Rescue plan approximately $1 19.5 million and then other other grants slew of them that couldn't even fit on one one uh table um totaling to 13.7 M almost 13.7 million that put you at that around that $37 million between total um Grant arpa and DW uh principal forgiveness dwsrf principal forgiveness dollars now that doesn't even include the loan amounts that are low interest

loans for drinking water State revolving fund projects but it speaks to the amount of funding that the city is consistently going out to seek to supplement uh the projects that are necessary to be performed within the city but and also a way to Finance them at the same time um so similarly on the sewer and storm water fund side the city has uh secured over $33.5 million in Grants loans principal principal

forgiveness um I won't bore you with the details again of where those are coming from um $9.7 million in uh clean water State revolving fund principal forgiveness um $6.5 million for total arpa funding and then total grant funding which is is other grants Mass Works Federal earmarks 17.1 million and that puts you at that 33.3 million and then Dave is going to walk through a little bit what does that

mean if we didn't have those one more of these funky slides I promis I'm done with these um we we Quantified if you did if the city did not take advantage of that arpa funds the grant funds the principal forgiveness if you were required to you know issue debt associated with those uh those amounts of money that that Zach just went through what the impact would be on a customer in 2025 accordingly and

it's meaningful um so your your average uh your average residential household um in 2025 would be approximately $943 with the grants and that's what we just went through in the prior slides um if those grants those supplemental funds the arpa the principal forgiveness was not there in place that same customer's bill would be $1,068 or $125 more than it would be um which is a not an insignificant amount of money and

a significant savings for customers from the city doing a a wonderful job of going out and finding these outside funds to offset the need of rate increases on customers so um I think you know City's doing it the best it possibly can um to to mitigate increases on customers to the greatest degree possible just to emphasize that's so it's 33 million on on sewer 37 million water 70 million total in The Last 5

Years that's that's remarkable and this is not a one-time thing that would be you know $125 every single year higher as we build up over time so just just you know like like Zach said that's only a fiveyear look back that we did for this presentation we have many of them from before that but uh that's over $70 million dollar that uh that the staff has saved the water

power um and and it's and it's all the staff H does a lot of the uh Financial Grant Management and those Cy uh you know the water department guys uh Brian Tom uh and Dave PE help manage those grants and and follow through and construct uh construct the projects um as well as our Consultants that all uh that that are working on the projects as well so um you know the city has a

excellent grant writer uh one that was here in the past and a current one uh which we receive assistance from what we're when we're doing these grants so it's a real team effort uh for us to be able to save in past uh in the past five years over $70 million for rate payers yeah it's incredible I'm down finally thank you for your patience I appreciate you while I got through that thank you thank you

be copies of that presentation okay yep I can get I can get all all those copies we've been working on it so that's why I wasn't including get copy understood so uh if you want what I'd like to do now is kind of run through the two independent budgets a little bit just to touch some of the high points on uh uh some some increases uh or uh changes within the budget um one thing

that I want to go back to is just uh and I'll and I'll stop running through water here one thing that I want to go back to is that uh Second slide that came up uh in presentation that's the uh the one where it talks uh where it showed the increases uh in expenses of of certain uh items that we used uh and last year during the budget time we talked about

uh chemicals uh in both Water and Sewer uh in this year uh we did have to carry another increase um even last year the year that we're currently in F 424 uh we increased uh chemical budgets substantially um and uh when we got the bids they were even higher than what we budgeted so as it stands right now both Water and Sewer the chemical budgets are uh in the

um for so the 1 milon 152 is actually not enough 1, 152 is what we propose for f for FY 25 for next year yeah that's and you're you're expecting it to come in higher uh no no so for for this FY 24 that we're in uh in SE we budgeted I think it was 800 844 right and and we came in almost over 950,000 when we got bids all right so are you saying that

the 1, 1552 reflects that increase reflects that increase plus that also a 10% increase for the for above bid from last year for this year's y yeah so you know like like that first slide showed the chemical cost increase um you know hydrants pots and pieces that the water department uses uh replacement pumps down at the sewer plant uh all of those costs uh have increased over the years we have not

increased those budgets um those line items within our budgets for probably six or seven years on the majority of those line items so we've been carrying the same amount budgeted for those so all that means is that we were a we were could buy less of those parts and pieces or we would have to uh hope that we could make it through the rest of the fiscal year with the pump that we had on

a hope and a prayer because we didn't have it enough money within those budgets uh to to do that so this year when I sat down with the division leaders uh and some of the other managers uh we went through and we uh looked at those line line items and adjusted those properly uh so that we feel that they're at a proper funded rate now um So within the water within

the water budget if you run through uh the salaries uh there are no new positions uh added within the water department uh salaries are budgeted based on uh based on a uh uh CBA or potential impact from a CBA uh water department employees are part of the asme union and that contract uh ends at the end of uh this fiscal year so it'll be open for negotiation uh we have

budgeted uh what we feel uh may be close to an increase within the water uh within the water uh salary line items um running through some of uh some of the other items uh within water Administration uh other Professional Services uh was increased um and that's due to uh some uh so that's due to uh the Neptune software that we use for uh Neptune 3 60 which we use for all of our bill and

readings and stuff like that uh when when we when that was negotiated the contract for that uh the first uh two years were no cost to us uh and then an incremental cost uh so we're going into the third year in fy2 uh so that uh so that starts to come out that's the Neptune billing software correct does that include the cloud yes okay yep that's the uh so that's the Ami

system the radio read system uh that transfers it to the cloud and then we download it um water water Administration Capital which is the capital uh what we buy any Capital expenditures for out of all of water uh We've carried that at $100,000 uh in the past and that was flatlined for a couple of years um that was moved up to $250,000 uh if you look at any Capital items that we would be buying in water

uh either trucks or pieces of equipment I think a back ho is probably up to $140,000 now um a uh pickup truck with utility body is $880,000 wow yes just a regular cab F250 with an 8T bed is over $50,000 I was sitting in a bar in Maine the guy next to me had just bought a Ford King Ranch at $92,000 for a pickup truck y we we don't we don't get fancy trucks

like that we get B we get base models but the cost of them is is phenomenal um so and that may be you know that may be an unexpected you know those Capital costs may be an unexpected repair to a pump that we need down at the water plant or uh you know if one of if our raw one of our raw water pumps goes down that could be $70,000 a loone just to

replace that pump uh rebuild an electric motor if an electric motor goes out uh $330,000 um so uh those are the things that that would fall within that Capital so $100,000 is not a proper um proper uh level to fund that at 250 we F uh was good uh if we go through uh indirect cost um just a little bit um general fund our contribution to general fund uh indirect cost uh was budgeted as a

flatline um I've got some serious questions there yeah uh transfer to stabilization was uh we left funded as uh we told the council we would do a number of years ago at a $100,000 contribution uh again for the past two years we have not made that contribution in both Water and Sewer uh due to uh rates not being increased for 6 months within one within FY 23 and then also um

excuse me within fy22 and 23 and then also uh the uh chemicals um being uh over the budgeted about uh within FY 23 and 24 uh so but we uh did budget that um transfer to general fund for health uh is budgeted based uh on what we project for for the actuals for the uh Health uh transfer to general fund for pensions uh was increased uh the um the retirement uh board came out with a uh

new calculation and there is an increase this year uh so it's it's projected that those will be actual for the pension uh and the uh $1 million is what was recommended to budget that app but those are actual cost numbers in other words those are the real numbers from the ret re and when we look at transfers to the general fund um those are as I understand it the costs the share of the cost that is

attributed to the water department okay so so so there so there are expenses um that are paid for by the general fund services that provided to the water department and the in the sewer department uh services that are provided to us by the general fund uh so the indirect costs that we pay for are supposed to be uh for us paying for those services that are provided to us uh by the general

fund can you give me an examp just CU I don't know can you give me an example of what some of those Services may be yep so uh the collectors department uh collects all of our bills um so they collect all the money when somebody pays a bill uh so again so that's General that's paid for collector Department fully funded by the general fund so again somebody pays a bill there's a

clerk there that collects that bill enters enters that payment uh the payment goes through their process uh to have them uh the treasurer puts it uh onto um you know through the system then the Auditors need to review that and properly apply it to our Revenue accounts um so they so they both the auditor's office uh collector's office Treasurer's Office are paid for by the general fund so that's a service that

they provide us uh other services might be the Law Department uh so we don't have uh for special projects or special things we may go out and hire a special Council uh negotiation of the uh Leed uh ACO um when we're talking negotiation of uh with CLA or uh you know EPA we may hire a special councel to assist us with those negotiations and we pay that cost direct but normal everyday uh operational legal questions or

recommendations or advisement typically goes through the law department so that again that's a service that's provided uh Human Resources um you know hiring um managing the health uh on boing of employees dealing with day-to-day uh Human Resources issues uh all goes through HR so that's just a quick example there are lots of other services that are provided but those are just examples of some of

those than well excuse me uh do they does the city give us a a breakdown of what they said so they do give us a breakdown they gave us a breakdown uh this year and uh I'm mean I'm in discussions on how I feel I guess my next question is do we have leverage at all to go in and say that I think it's a little bit much and so forth so the so the breakdown

that I've been provided with for this year uh I do not agree with I don't agree with the breakdown that they've provided I've been very clear with them that I do not agree with the breakdown and that's why I budgeted a flatline um and for a couple of years now we've been flatlined on our contribution to the general fund um reasons for that uh is um my feeling is we've gotten a

reduction in service from the general fund uh there's a number of things that our staff uh has taken on uh in uh relation to debt management in relation to uh AUD auditing of projects uh there's a lot of things that our staff has taken on and we've taken um on so even with billing you know uh postage processing uh and things like that is all done by our staff now which was done

by general fund um provided services from the general fund in the past um so there's been a reduction in our services I believe uh and again the uh the breakdown that I've been provided um and the breakdown that I was provided wasn't far off from uh what's budgeted in both Water and Sewer um but again I don't agree with their breakdown um and I have I have this conversation I'm sure Mr San

had this conversation prior uh about how much we pay for indirect cost and and things like that and there's a number of services that we provide to the general fund uh as well um water for fires U you know use of fire hydrant things like that um you know the reservation staff you know probably one to two days a week is uh is picking up trash all along the after 90s

roads out of the reservation uh so there's a number of things that services that we provide back that sometimes don't get included in that indirect cost calculation um you know and uh I guess I guess then I guess maybe the other question I got is on on the suicide uh we're looking at um across about a million and a half dollars for the last three years we we budget of that same amount

yeah does it come out to that or does the city say you will pay this so in other words do you understand what I'm saying yeah is you're thinking are they are they coming down to our Thinking by saying okay we'll agree to the 14 to5 or are they going saying it's going to be I'm sorry it's going to be $2 million no so so they've never come they've never asked us for

more for more than what's been budgeted in the past within a fiscal year um that brings us up to an interesting point here because between the two of us we're looking at $3 million yeah so you know and and just as I guess as we're discussing this I'm sure there are people on the other side of the aisle that you know worked on the six floor side that are looking at us

and saying hey they a't a paying enough well that may be true but just as a point of argument about it you know it's like pick and poison you know well I think this all one of I talked with Paul today about this and one of the things that comes up to my mind is that we've got to explore other options for billing for collecting we I think we it to ourselves

to explore and say you know can it be done differently can it be done more efficiently um you know we've gone from marking cards with a pencil to you know radio reading um this might be the fiscal year in which to look into options what are out there you know are there billing services collection Services I mean just like everything else the city is facing increasing cost so they're going to pass those along to us

who I I mentioned this earlier today I think this is high time to really be digging into options what are what are other ways to do things is there a different way to skin this cat so to speak because the customer is we've got to find way to mitigate some of this yeah and again you know I talked about the reduction in services but the general funds uh expenses just like ours have increased over time being

their labor expenses being their their expenses expenses so you know and again that's why reduction of services increased acrost on their side that's why we kind of left a flatline um you know I think it you know this is not going to be uh a quick discussion on you know with with the administration um on what indirect costs could be or should be or would be that it's not something

that's going to happen over a week or two period time you know there are um there are you know they can be a substantial study done of the indirect cost and Dave I don't know whether you've uh have anything if if that's something that you typically do or how those typically work yeah they to determine the appropriate amount of a transfer of indirect cost from an Enterprise fund to

the general fund there should be a study behind it to determine you an impetus and and a rationale for the amount that's that's transferred it shouldn't be arbitrary um within the studies you know an indirect cost study itself there are obviously assumptions it's not a perfect science it's never going to be but at least there's a rational assumption a rational basis for why water is paying x% uers paying x% and

you know General funds picking up the rest or um a a completely arbitrary and I'm not saying that's the case here but that that should not be the rational basis for for what the indirect transfer is there should be a logical basis behind it and doing an indirect cost study is is very common yeah so again I think that's something that uh within the fiscal year that's something that we do and then you

know as you know if the boards deem necessary at that point that's when you see what those indirect costs and compare them to what it would be to potentially Outsource some of the some of the services provid I think it's just it behooves us to

look right so back running through this budget um other things uh if you get into to Water Maintenance and distribution expenses uh uh there are some things that have increased vehicle repair maintenance uh water pipes pots replacement and you you think back to just the the slide and what a fire hydr used to cost back in 2020 to what it does now um so those uh those were increased uh vehicle parts and repair uh

we're looking at the same uh types of increase uh curb stops uh hydrant pots was increased as well 35% if you run through you look uh uh in treatment plan expenses uh electricity uh we went up on again just to uh increase cost uh in relation to that um fuel uh reservation headquarters uh their budget has been flatlined for uh probably eight8 years 5 to 8 years the budget has been flatlined uh so we did

increase that um some other minor ones here other Professional Services uh that is uh some contract operators that we used out of the W at the water treatment plan uh as well as some outside Consulting that we use uh for technical uh advisement on the treatment plan well I got a question yes um I know we're going to be we're in the process right now going out to bid and so forth and so on

um the increase that you've got budgeted here represents probably about a a little better than probably about $500,000 that yep um is I guess what I and this is we're going out for I think a 10year contract right correct okay so let's just say your number comes in correct but we for the next year is there an anticipated increase yes and and every year moving forward yep so the number that in other

Professional Services uh and this is in relation to sewer uh treatment plan expenses other Professional Services uh the number that I budgeted uh we did receive the bids uh for the onm contract we have open those bids and they're under evaluation right now um there was uh there was two uh two companies that submitted bids uh and they were uh very competitive um to tell you the truth they weren't

far off from what we're paying this year um they were very close they were and the two bids alone were very close uh in uh in numbers as well it's it's evaluated on the best value uh so our staff is still going through evaluating those but that's the number that I plugged in here uh for the omm cost is what was submitted to us within within the pits um so the moving forward yes

again every year we for the next 10 years just like there has been for the past 30 years there is a yearly increase uh to that amount uh and that was uh that was included within the uh within the uh budget analysis that was done by rafis with the projections all right um I think I was going to ask you about the electricity po um that represents electricity for the for all the all the um

um not only the plant but for all pumping stations and everything that and I realize that the power that we play we pay for at the pumping stations is different than what we do probably at the plant because of volume conditions and so forth but what mechanism do we have to go out and um and Cham for power so every five years or so the city goes out the city

as a whole um because sewer is a big number our plant is the largest individual user within the city the Wastewater Plant the water plants the second largest individual user within the city um but when you get into if you add up all the school department buildings uh they're a very large user uh you add up all the municipal buildings um they're a large user as well so um and it may be coming up next

year the year after um but every year the city goes out and um gets a better rate they shop as a whole uh with the school department with all the municipal buildings which includes all of our buildings so that it's a sewer say for example is this it's a sewer plant power rate the same as the water Department's power yes same as water department same as school department same as municipal buildings

every five years I believe it's every five years that that that the city goes out for as a whole year really that's typically L up by the school department cuz in uh all conjoined be one of the largest probably with all their sites they're one of the largest power users in the city where we're the largest single site user down at the waste waterer

plant yeah on the other on the other purchase Services um that you were you mentioned just briefly about um like we're looking at the cost of um Trucking out sludge yep right correct uh which is basically mostly water and so forth yeah yeah so so again if you notice from 24 to 25 that that's Flatline uh other purchase services within the SE budget uh and that's uh Rags trash grit and but the

big one is the sludge disposal from from our wastewater treatment plant uh again you look at that's flatlined um so as the SE commission knows we have a large upgrade going on down at the uh down at the Wastewater plan uh and is primarily uh the upgrade that we're doing the biggest portion of it is our uh sludge thickening um so we had four gravity thickeners before we had belt presses that were from the

70s and one from the mid 80s uh out of date um the project that we've been under construction for we had the incinerator and we had the incinerator PRI yep U the project that we're under construction for right now um and have been for the past 2 and a half years um uh has fully reconstructed it is is still in the process full of reconstructing two of those gravity thickeners uh redoing them uh the other

two gravity thickeners were turned into uh was storage tank and a thicken guas storage tank um waste activated sludge um and then our whole entire dewatering building uh has been rebuilt as well uh so there's new belt filter presses and there's gravity uh belt presses uh in there as well what that's going to do that's going to allow us for the past probably 5 to 6 years we've been

shipping out liquid sludge uh anywhere from uh 1 and 12% to 3% uh now with all of this uh and all of the dewatering operations are coming on so the belt filter presses and gravity belt thickeners should be online in March um our was tank and thicken was tank uh is online now uh and then by separating the primary sludge and the was way activated sludge you're a your primary sludge is

typically thicker to begin with uh so you'll be sending that out in about 3 and 1 half% up to 5% um your thick and W will be going out about the same uh and then we also have the option to be able to send cake out which will be able to dewat down to about 18% so and a lot of people say so that may be cutting trucks down from sending

10 liquid sludge trucks out of our plant a day uh cutting that down to uh maybe six liquid sludge trucks going from 1 and 1/2% to 3 and 1/2 or 4% uh so that's going to cut down on our Trucking cost uh cuts down on our disposal cost uh with the ability to make cake uh it opens up different options for disposal uh so right now most of our liquid sludges going to Cranston uh and we're

kind of locked in there because they're one of the only facilities that'll take a liquid Sledge Cranston or nogat Tu uh with us being able to produce cake opens up different options do we put it on a train car and send it out to landfill in Ohio um or up to Maine uh on a on a on a trailer so so uh it gives us different options to be able to shop

around for a better place for Sol spons so I feel that what's budgeted uh we'll see a decrease because of decrease in trucking uh in disposal cost hopefully yeah that's going to be interesting to see how that plays out I'm looking forward to see the results on that we're spending a lot of money down there yeah okay go ahead so um that was yeah majority of the water increases together the SE we

talked we just talked about some of them um the general fund stabilization we talked about that Health tension is uh is funded to where it needs to be uh within uh this year's budget uh on uh sewer salaries there was an increase um so we budgeted the project manager position which was not which was filled for a portion of this fiscal year uh but we budgeted 50% from the operational budget and 50% from uh

from capital projects um this year for FY 25 I fully took that that uh position and it's fully funded within the uh fy2 operational budget um is there going to be an anticip is there anticipated um uh someone in the uh sewer area retiring this year okay so yeah um I see that the money for that is is has been out the whole Year's um valy has been budgeted yes so I would hope to fill that

position uh I'm expecting to have uh uh an August retirement even though I'm hoping that she's still here a year from now but I don't think she will be don't mention any uh but yeah I do have an expected retirement so uh the buyout retirement buyout was fully funded uh under the retirement buyouts within this line item with vac the vacant position that you have I actually have two of them correct

will be an addition fill in that slot yes so we've had we've had for a while now another project manager position uh that would uh handle so uh currently we have one of my project managers handles a lot of our financial tracking and financial aspects another project manager uh deal does the IP uh site plan uh and other uh Associated task uh really been looking for a construction project manager and that's something

that's been on the books and within the budget for a number of years partially funded from operational partially funded from capital projects but um you know with the amount of uh with the amount of capital projects that we have ongoing uh in both Water and Sewer uh there needs to be a another project manager um you know again you look back historically what we had when Mr Sullivan was here as

the administrator um it was the project manager uh was a financial Pro uh project at the time it was a project specialist but uh we had had uh that position um and then we had uh the Deputy Administrator as well um so there was uh there was a number of people um kind of the same number it's just changing the positions around a little bit you know currently we're running we don't have a Deputy

Administrator um we have the financial project manager we have the IP coordinator project manager job

so oh uh engineering and architectural services uh that's uh expect an increase uh um as I've mentioned uh at the last SCH commission meeting uh is EPA was talking about uh issuing a possible lipy permit for public comment that has been uh issued and is out for public comment uh so budgeting for potential additional testing and surfaces uh provided within the requirement of that uh of that

permit uh Computer Services was increased for uh some U meter reading and uh related Ser services that are needed through that line item uh water charges is increased because the water rate will be incasing uh I don't think we'd have a an argument against that the electricity as we spoke about uh was increased again we have the new building coming uh online which uh has a lot more efficient um uh facilities uh

but again uh it is a lot more that will be coming online so uh chemicals uh again uh increased with we feel uh is uh positioned for this coming year and again on SE our Capital uh was increased last year well our current fiscal year we had $80,000 which again would have be to buy us a pickup truck with utility bed uh and that was increased uh to 250,000 uh and then within 25 if you

look at The Debt Service there is a uh there's a substantial increase in the uh The Debt Service uh almost $2 million uh that's debt service that'll be coming out of the books in relation to the uh current upgrade that we have going on at the uh at the wastewater treatment plan and that's a $56 million upgrade uh will be uh will be 49 million uh in loans that will uh in debt service that'll

need to be paid off over the next uh 30 years uh that's just in the uh $2 million range uh for that uh for that that servy that's coming on board the uh um with respect to um the the first item under that it's um the principle on long-term debt I can understand that going on but what what I just have a hard time understanding is the interest on it on

long-term debt goes down is that I mean I don't know that don't seem to make sense to me yeah so we had some we had some uh debt coming off some coming on uh and it was at a lower interest rate uh so what's coming on is at a lower interest rate than some of the old stuff that that was going off okay all right I guess that makes sense

uh that kind of rounds out the uh review the super buget increases again so that and that that thatt service that's coming on board is all part of the $123 million loan authorization that uh went out to referendum ballot and was approved back in November of 2017 have a quick question on um so sewer fund Revenue um it looks like we didn't stop looking into redeeming utility leans until the last few years

so um I mean that's great that we've got 1.2 million that we're expecting to redeem how are we in terms of aggressiveness with that is there room to kind of yeah so so the way this so the way this is laid out and the the reason that you see Zero for a number of uh for a number of years prior is because typically we pick up most of the uh most of the debt service from the

prior fiscal year within this year so this year we'll pick up the majority of of the unpaid debt from the PRI fiscal year um that's why you you'll see a lot of zeros when we build the budget we carry it only in that one uh fiscal year um so how our uh leans work um so essentially uh anybody who has an unpaid bill on June 30th uh of a fiscal year uh

that will be turned over um to the tax bill so it goes from us as an unpaid bill uh if our cut off dat is always June 30th uh and we usually do our lean process in December end of November December so at that point that comes off of our books as as a revenue and gets put onto the tax bill as a revenue uh typically once it goes on to the tax

bill uh it's collected we usually have probably about 90% of 90% of it collected a lot of it may be paid by uh you know if it's if it's a household uh may be paid by the mortgage company because again a mortgage company Municipal leans take uh take you know first step over um o over a a mortgage company first position yeah first position so if we if you know we

put a lean on it mortgage compan is going to going to pay that off and either tack it onto the mortgage or take it out of an escro account that they have for the individual uh and then charging charging them more uh so that that first lean us as the first position is gone if if they ever have to for foreclose on that property um so in that sense uh we're pretty aggressive um and

again that's done through the collector's Department uh then the city also has other means if it's uh if it's large uh or outstanding tax bills and stuff like that occasionally they do when when they deem necessary they do POS potentially go through the foreclosure process to take the property

so know that was a lot of uh information provided by myself and everybody everybody else involved um definitely I open that's for sure yeah and with the friendly audience right you get to do this the City Council next they friendly is both I I often want with respect to this gentleman's um uh work that he did for us here which I thought was a big help to understand it um our other departments looking into

looking at their Futures ahead for the next five years and the scope that that he presented other department in other words um you know they they collect taxes right and and the expenses going against that is maintenance schools blah blah blah and everything else are they looking at it like this gentleman is just showed us you know I I'm not sure it might it might be it might be worth

their while to to take a look at something yeah you know this this presentation was you know presented our stuff was presented to the administration the CFO uh all them so they they understand all this but yeah you know I think the projection that was done looking at the impacts and everything that was done I think is helpful to try to get everybody to understand what's what's going on uh one

thing that I do want to touch on too for both Water and Sewer is the is the free cash Surplus Revenue uh retained earnings you know that's been talked about uh again the um you know we it was recommended that we not use any which is the practice that and we've been talking about this for a number of years you hit that fiscal cliff and and and you fall off um you know

Su right now does not have any uh does not have any retained earnings um I've I've looked at the yearend account closing uh I've asked that the uh Financial team uh go back to recertify the free cash CU I believe there was a number of POS that were open when they closing the books um I think they're I don't know whether they're going to review that or not but again that's why this budget was built

with zero use of free cash um water was was in a little bit better position but again recommended and told not to use any free cash within the budget that's by both of these so right off the bat the sewer needs to make up $1.4 million almost $1.5 million water needs to almost make up $300,000 without any increases on the budget straight across and when you're talking sewer you're talking 28,000

roughly 28,000 per of increase uh water you're talking roughly 31,000 per one set of increase so you break down what the loss of that free cash Revenue uh impact is uh and that you know plays a lot lot into the increase that we're dealing with but is is the proper way of the budget it's the correct way to be able to move forward um you know everybody would say well how

come we have no free cash this year there's multiple things that play into that uh again um on the sewer I think there was uh an issue you know where P POS weren't closed closed out PRI books being closed so that all those incumbrances uh go against the free cash which which DW drew it down um the other thing that really affected uh our free cash this year if you remember two years ago um the city

council did not they approved the budgets but they did not approve the water and the sewer rate till almost December so they in so we went six months uh on our old rates and that's the free cash that would be rolling out this year so that impact of them not raising the rates within that for 6 months within that year that's what's goinging off free cash again this year so it's a Snowball Effect and you

know people don't think about how how those types of things affect you two three four years down the road but this directly shows you how that impacts us this so are you so is it thinking of having no free cash is going to be the rule of I'm moving forward from what I can see yeah so I got a question if if we're not going to be able to um take advantage of the

efficiencies that in the sense that we generate we got we got a contract coming up with um whoever it's going to be to run run the the treatment plant and to do all the functions that they re we require of them and that's that's based on my M said me correctly a certain number of people that do their jobs that's the contract right if in any event they do the job with let's say five people

less along with some other things that happen you know that's that's part of our efficiency right yep if if that's not going to be a rule of thumb anymore and historically the function that plant may requ may actually can be done with five people less yep that would contribute to the cost going down and which could have um positive effect on the race

I I you know I don't I'm not talking I don't want to I cut off my nose in the spot of my face here but yeah um if if we're going to be holding our feet to the fire of having historically would say a million three because I think that's what it was running in the last five six years of um free cash um then you know I think I think we might

have to take a look at in order to in order to move forward you might have to take a look at situations what I just mentioned yeah and what I'm saying is we also is if we got a job that's vacant and it's been vacant for 10 years been vacant for ex number of months or whatever and you know you're never going to get the guys to do it because you don't they don't have the credentials

and it's in the budget and so forth and so on and I'm sure that holds true for a lot of places in the city I mean what's the use of having it there if if you can't take advantage of it yeah yep no I I definitely uh you know what I'm saying jimy yeah um we're in a little bit different situation though um we need to fill our vacancies oh I'm sure you're

dope I I understand your problem yeah you know you need people to run your shifts now you got people staying over working 16 hour days and so forth and so on well and and you know one of the things I wanted to mention is is is that um in looking at at your projections we also bring with us a great deal of value intrinsic value and the departmental value our acreage our

our Holdings our our water rights all of these things um you know is an offset against any deficits out there I mean we I'm looking at this and just I keep going back 40% of this rate of the water rate is is Debt Service um I asked Paul this morning do you see going out five seven years a reduction in that Debt Service as as we pay off various things

we've got some stuff out there from the 80s 5 to seven years probably not say again please within the next 5 to seven years yeah probably not a reduction in De service I believe that just just because of the additional Capital needs that you have going forward yeah yeah now now again and and just to touch just to touch on your point that to say that we're never going to use retained

earnings within our budget ever again um would be a strong statement maybe I I I misled a little bit with that you know if we get to the point um where um our retained earnings are substantially High uh and we get to a year where potentially we're going to have a big increase this year and maybe no increase next year you potentially use Dave may be able to talk a little bit about this

use that to smooth out that that rate increase a little bit I don't know if you want to say anything you could you could have an Administration change where the thinking could go totally the opposite direction to where it's going to that you know again and that's that is one of the possibilities with dealing with the uh no I get it I get multiple different hands in the PO per se you

know the boards water board on the Sewer Commission is one uh is is one player in this in this it's you know it's you guys it's the administration and the council that are all part of this budget and rate process there is a lot of uh uh areas where things can change perspectives can change I did not understand this is a ongoing Perpetual policy that retained earnings canot be used to offset the budget it was for

phisical year 2025 there are no retained earnings to offset the budget but as we work through this forecast that I showed you before those retain earnings start to grow over time there would be an amount of money that you could use to offset um but I would argue not to use it until Paul's point that you get to a position where there's sufficient amount sitting in that Reserve fund where

you're not just drawing it back down to zero and we're starting this process all over again and starting to build it up the rainy day fund right the the 90 days right so and what are the other thing so one of the other thing that that that plays out here too is uh cash flow um that's the other thing that you know I've talked about and I know about but

just to speak a little bit about it cash flow and how it works so we get to the be beginning of a fiscal year essentially we start with zero cash in our in our account because we haven't taken in any Revenue but starting out on day one of any fiscal year we have bills that are do um whether it be om uh operation cost whether it be an electric

bill whether it be uh whether it be um The Debt Service in July is a huge cost that we have to pay upfront at the beginning of a fiscal year a large portion of The Debt Service um the water and sewer department does not have the cash in the Enterprise F in the account the cash per se U for cash flow to be able to pay those bills uh we've always

relied on the uh on the General on the general fund cash to back us up to be able to pay those bills uh other utilities that are set up differently whether it be a district or something that doesn't have that cash available within a general fund may have to go out at the beginning of a fiscal year and bond to be able to pay those bills and pay interest on the bond until they get

the revenue in maybe four months 5 months 6 months later to be able to Fe pay those bills so that retain earnings again also plays to the cash flow portion of uh support of the utility yeah yeah good point okay anything else Paul with respect to so there you no I think uh have any questions yeah what happens if the council uh holds off again you know again so our our rates go

in uh they have 45 days to act on our rates and budgets go in uh they'll be in by uh by March 4th um and then they have 40 days to act on our 45 days to act on our budgets that could be approval that could be rejection that could be reducing um so at that point uh they make the determination what what they're going to do and you know we move forward uh based

on their determination if rates are a different story so rates uh as I said have to go through the audiance process if they hold off on the rates and it's prior to the it goes past the fiscal year like it did a number of years ago we're going to be in serious trouble because this is a you know significant rate increase uh that will substantially hurt uh a cash flow at that point

essentially we're going to the do if the budgets are approved and the rates are not approved we're going to the do and say that we don't have rates to support our budget as approved by the council that that would be a step that we would have to take I would have to take administratively you know fiduciary responsibility to the department to be able to uh to cleare that at that point

um unsupported budgets they would look back at the general fund to support our budgets if our budgets were approved at that point um as it goes through with the council with the budgets themselves uh if they are to reduce or reject our budgets as proposed uh again that's you know where do we cut what do we do uh you know we're looking at again 40% uh Debt Service in the water what

else do we have for fixed cost compared to variable cost within either of our budgets you know and they're pretty close both Water and Sewer you have your debt service you have your electricity you have your chemicals what do you have that's variable so we cut our labor force uh we cut being able to to replace pumps of pots so a fire hydrant gets broken we don't have a crew to go out to replace

that fire hydrant we don't have the money to buy a new fire hydrant we don't have the money to hire a contractor to replace that fire hydrant one of our sewer pump stations goes down we need to replace the two submersible pumps within that pump station we don't have the staff to send out there to be able to replace those pumps we don't have the money to buy new pumps we don't have the

money to pay a contractor to be able to do that you know that's when it becomes so we're going to start to violate permits we're going to start to violate state and federal regulations and then what does the state and the FEDS do with that point so sorry T your question but it's not a good PCH okay we appreciate all the work you put into this yeah yeah everybody thank you I

have I have no qual just to to the dedication and the amount of work that the people in the water and the sore Department bu and um a lot of times you know it's it's like shoveling something against the tide and the wind's blowing in your face and um but you you come back every year and you do your best and um I thank you very much for that all of

you thank you all right so are we supposed to vote on this tonight you know again we uh I this does need to be submitted to council by the fourth so I need to prepare the packet to go up to the mayor and then the mayor I'm going to say is this it's l seen this yet they have seen it I have been through this with them um so they are

aware of what uh okay what potential impact is so you need you need a vote tonight on either side to U in effect move forward so you can meet the deadline of what March 5th March 4th 4th 4 yep okay we need two votes one for the budget one for the rates yes um I guess included in um our schedules there's some there's other rates too that have to be Ved on

right yep so within uh within yours uh we also have the SIU significant industrial user uh oh yeah so um within your packet there was uh the proposed ordinance um water had one which just affects the uh base water rate Within the sewer packet it had uh the proposed ordinance for impact to uh the sewer user fee uh for the significant industrial user uh which is uh increase the same percentage that the uh Su user

fee is uh and then also for the uh non-med sewer uses um the uh those that increased by the same percentage that the sewer user rate is increased that's this shap right here right correct so who's going first well ours is the easiest one so so the um chair would entertain a motion um to approved the budget of $1,173 690 and a corresponding rate to support it of $436 per 100 so

moved all in favor or could I have a second on that second but do we don't we need take we need to take those two separate items so the budget we'll take the budget first at the 16 million said to do yeah it's two two separate items on the all right then we'll take the budget first um at 6,173 690 so moved s all in favor I and a supporting water rate of $436 per

100 so moved second all in favor I I your ball well my big ball the people have any questions any additional questions comments you want to make okay then the chair would like to entertain a motion to um approve the sewer budget for physical year 25 of 31 mil 78,000 anybody make that motion I'll make that motion for second second all in favor I along with that this budget would result in a we're

not supposed to have sewer fee of $811 and would maintain the stone Water fee at $50 per quarter if anybody wish to make motion on approving those rats I make that motion again second all in favor I now with respect to um approving rates that have been uh presented to us and um Paul can I reference this page in terms of you know the the rates that have been presented yeah okay uh with respect to

the rates that are that are required to change change as a result of the um the new budget uh we have been presented with u a number of rates that deal with uh user fees and so forth and so on uh I think we all have a copy of it um I'll entertain a motion to approve the rates that are on that uh this particular out motion second all in favor I I thank

you I take this to any other business so um so just a couple of things that I wanted to mention underneath other potential matters and we talked about them already a little bit the on andm contracts uh we have to receive proposals for that for on andm to of was waterer treatment plan uh there was two submissions uh very close uh budget wise uh our staff is reviewing them uh to uh

to uh determine best value and then we'll be back to uh B for a recommendation uh for award um the other thing just that I wanted to mention and we brought it up earlier as well uh was the uh draft nipy permit that is out for public com comment yeah that came in the paper I think yesterday or day before y so that uh that's out uh it's uh it definitely has a serious uh Financial

impacts um for more Capital Improvements needed in the plant to be able to uh to be able to uh comply with uh with what they are requiring within that permit um so there's a 60-day public comment period which is the time that we have to be able to uh respond to them so uh I've been working very diligently with our technical team uh which we have CDM Smith on board they've worked out number

of our permits and stuff like that uh so we're uh drafting technical responses uh to them and at the last meeting uh youed an amendment to a contract to be have to fund that work uh I'm also looking at uh uh acquiring a special councel uh so legal counsel to be able to uh work with um to be able to you know I've consulted with the law department on this and the

administration as well so they're aware of it uh so we're looking at bringing on special legal counsel uh to help us prepare and uh and submit those public comments um you know there's a number of ways that this can go hey we're going to submit comments on why we feel uh that things within the permit shouldn't be uh shouldn't be the way that EPA wants them to our financial capacity is uh is

definitely one of those things uh again if we were to try to comply uh with the permit uh within the next four years we' be having to put a $200 million investment down at the wastewater treatment plan within 4 years uh we would have to be doing probably another $50 million worth of uh improvements within our uh within our distribution system uh which is did you anticipate that totally

unaffordable uh to uh to any community so um with that um you know it's going to be uh there's going to be talks further talks with EPA uh and this is going to involve clf2 uh cuz EPA and within the permit is looking a lot at nitrogen removal and uh nitrogen limits down in the plant so nitrogen removal would be required uh but then we also have all the CSO work

that CF wants us to do so I expect those talks will uh will go on but our first order uh right now is to draft public comments uh and then we go into uh we submit those back to EPA uh and they uh they go back and potentially finalize and draft their permit and that's the point where we could potentially legally appeal a permit uh if we decided to or potentially uh talk to them about going

into negotiation of an ACO since we wouldn't be able to comply so just to update the SE Commission on what's been going on in our world yeah got a lot on our plate down everybody else yep okay anybody have any other issues they want to discuss under suicide should I entertain a motion to aour on my side yep okay second all in favor I chair would entertain a motion to adjourn

second all in favor I I thank you very much thank Youk you