Santa Cruz City Council 09/08/2026

The hour of 2 o'clock having arrived, the Santa Cruz City Council will come to order. Madam clerk, would you be kind enough to call the role? >> Thank you, mayor. Council member Triggero >> present. >> Bruner >> present. >> Newsome >> present. >> Holder >> here. O'Hara here. >> Vice Mayor Kellory Johnson and Mayor Keely >> present. And a quorum having been established, let me ask if any member has a statement of disqualification on any of the items in close session. Council member Bruner. >> Thank you. I will recuse myself from item number one, real property negotiations at 1020 Cedar Street as it relates to my employment out of an abundance of caution. Thank you. >> Well, thank you. Anyone else? This would be the opportunity for anyone who is with us either in chambers or online who wishes to comment on our closed session agenda which has uh two items on it. It is a real property negotiation at 1020 Cedar Street. I'm sorry. We have one item on our close session agenda and the city attorney was wondering what second item we might have had. She was unaware of but we only have one. Uh this will be the opportunity to comment on it. Anyone online? No one want their hand up. Uh what we're going to do is we are going to adjourn uh into close session. We will come back uh either at 2:15 because we will have completed our work. That's the earliest we will come back. Uh if we are still doing our work in close session, we could be in there till sometime after 2:15. But at this point, we turn into close session. Recording stopped. >> Yes. >> Santa Cruz City Council is back in session. We established a quorum prior to our adjournment into close session. So, the quorum continues to be present. We have completed our business in close session. Let me ask our city attorney if there's any reportable action from our close session. Uh would you like me to give uh the summary of close session? Uh the council met in closed session uh to discuss real property negotiations concerning the property at 1020 Cedar Street and council member Bruner recused herself from that conversation. >> Very good. Thank you. Uh oral communication. And this would be the opportunity for anyone who is with us in chambers or with us online who may wish to comment on an item under our jurisdiction but not on today's agenda for a period of time not to exceed 2 minutes. Good afternoon, Mr. Yuing. Welcome. >> Yeah, good afternoon. Um, yeah, my name is James Yuing Whitman. I mean, kind of what to comment. There's so many insiduous things going on in our society and in rooms like this. What is it? September 8th, 2026. found myself with a who knows. It was a very interesting opportunity to get up at at least by 4. I had already packed all my dropbox and stuff. Drove down to a drop site in Mountain View. Dropped off a dropbox and then dropped off my truck um at 7 a.m. or before on September 11th, 2001. So unknown to me, it took those guys five weeks to rebuild my transmission. It had only a,000 miles out of its 36,000 mi warranty. Their rebuild didn't even last 30,000 miles. The new transmission that was slightly different, although they would they lie. Lots of people like to lie, has been in the truck almost 500,000 miles. Um, so it's really kind of interesting what's going to happen next. You know, a couple weeks ago, this nation's um national debt came over $40 trillion. I don't quite sure know how to validate the weight of $1 million and $100 bills. I said it was 22 pounds. I thought that in $20 bills it was 35 pounds. But at least I validated that. So $1 trillion in $100 bills is $490 semitrs. Those trucks can carry about 50,000 lbs of weight. 490 semitrs. 190 semi-truckss would pretty much wrap around downtown Santa Cruz. So what is this nation going to do with all of the malfeasences? What is it going to do with all the What is this area going to do with all the gifts they've gotten with various things like I heard because I was mostly present at a surprise presentation to me on Thursday where I was very happy to record most of your 4 minutes and 9 seconds that the city of Santa Cruz or the county of Santa Cruz has gotten $23 million to help people with their homes. And I think that's great. But the elephant in the room is not only the why are we allowing military frequency weapons in civilian locations, but the elephant in the room can't be seen because of the nanotechnology. I don't know. It's been explained to me that a nanometer is one a meter is 1 billion nanometers. So a millimeter about the size of a matchbook is a million nanometers. Apparently I have robots that are really quite small that are in our bodies and we're inhaling. Thank you. >> Anyone else who is with us wish to comment oral communication? Do we have anyone online? We'll take the person online person online. Good afternoon and welcome to the Santa Cruz City Council meeting. >> Good afternoon Fred. Good afternoon council. Bradley Snider. So, um, of all the times I've complained about, um, the the the the massive development going on downtown, really think about things, um, you know, in detail, but I' I've thought about like really one of the one of the um parallel ration uh to the uh low-inccome housing is obviously Silicon Valley and all the um the global, you know, um, uh, leaders in technology um, that's over in the valley. Uh when I say the valley, when I say Silicon Valley, obviously, you know, the companies stretch all the way up to uh the San Francisco Peninsula and way way up towards uh you know, Martinez and Conquered um you know, in the East Bay and then, you know, down to the south, you know, south of the Santa Clair Valley and there's like maybe you could boil it away. You could say like there's a hundred companies and and you know, I thought about it. you mean major companies or main companies. And I thought thought about it and I said, "Well, if you have if you built a thousand units in downtown Santa Cruz, wouldn't it have been better to um develop uh 20 unit um you know uh uh developments near all these big companies like immediately near them because those those individuals who are are paying those uh exorbitant rates for those units um and I've been inside them. They're tiny shoe box units. I've lived inside them when they were building the 555 building. I lived just down the street in the Barry Swenson development and so I knew exactly what they were doing and and they wanted uh and then you know years later I came by and I said well you know how many of the units would you say are rented? And this is just some employee there who I hope doesn't get burned for having said this but you know about half about half were rented at these really exorbitant rates. um that like $3,000 for what I was paying uh you know in a rent control unit uh down the way. I think people were paying under two. Um so why are we just cramming why are we cramming uh development in downtown Santa Cruz? One thing that I think is going to become apparent because all these uh intermediaries and and and services and asset holders like the company at the St. George that sold out and they tried to raise the rent and there was a feel-good moment where you said, "Hey, we're going to we're going to make you m, you know, maintain this this lower rent." Uh, but um, one of the things I think you're going to find that if you continue to develop in downtown, you're going to have a hard time getting reelected as politicians. I'm speaking to you directly in this in this instance. I mean, normally I'm just, you know, here to speak, uh, you know, because it's a it's a great it's a great way to get out there and and have my voice heard. But, you know, mainly I don't think I don't think, uh, the the the market saturation and and the uh the increases in prices that everybody experiences because these developments is worth it. Thank you. >> Well, thank you. Do we have anyone else online with their hand up? Anyone else? Last call on oral communication. We are on item two. This is a mayoral proclamation declaring September 2026 as childhood cancer awareness month. And council member Triggero has a proclamation she would like to read. >> Thank you, Mayor. Whereas the character of our community is revealed in how we treat our most vulnerable. And whereas each year more than 19 in every 100,000 children in our community will be diagnosed with cancer. And whereas cancer remains the leading cause of death by disease amongst children more than asthma, more than diabetes, more than cystus fibrosis and genital congenital anomalies and AIDS combined. Whereas Jacob's Heart Children's Cancer Support Services has been keeping medically fragile children and families housed, fed, and emotionally supported by steadfastly adhering to the following commitments. One, parents of children with cancer and other serious illnesses will be relieved of financial fears and able to focus their attention on their children. Two, no child undergoing intensive treatment in our community will be homeless. Three, families of seriously ill children will not experience food insecurity during or after the pandemic. And four, no seriously ill child in our community will ever miss a medical appointment because of lack of transportation. And whereas Jacob Heart, Jacob's Heart Children's Cancer Support Services holds the memories and honors the legacies of hundreds of childrens from our community who have been lost to cancer, ensuring that their memories will never be forgotten. And whereas the oncology department at the Lucille Packard Children's Hospital at Stanford has worked closely with Jacob's Heart Children's Cancer Support Services for the past 28 years. as a trusted community partner in providing family centered care that addresses the emotional, practical, and financial struggles of families of children with cancer in the city of Santa Cruz. And whereas it is important and essential for all Santa Cruz city residents to recognize the impact of pediatric cancer on families within our community and honor children in our community whose lives have been cut short by the cancer. Now therefore, I, Gabriella Triggero, along with Fred Keelley, mayor of the city of Santa Cruz, and our colleagues here on council, do hereby proclaim the month of September of 2026 as childhood cancer awareness month in the city of Santa Cruz. And we encourage all citizens to join us in honoring Jacob's Heart Children's Cancer Support Services for its 28 years of outstanding service and support to our community and acknowledging its essential contributions to Childhood Cancer Awareness Month. Thank you. >> Thank you. If Miss Silva is here, please come forward. We would like to present this to you, Council Member Miss Silva, thank you and your team so much for your great work. The uh microphone is yours. >> Thank you. So, good evening um mayor and members of the city council. My name is Gina Silva and my daughter is Ania. I've been a Jacobs family since 2017. So on behalf of Jacob Sart and the kiddos and families we serve, thank you for recognizing September as childhood cancer awareness month and for standing alongside families in our community who are facing childhood cancer. At Jacobs are walk alongside families from the moment of diagnosis and throughout their entire journey. Our families are navigating so much more than medical treatment. They may tr they may be traveling hours for specialized care, missing work to be at their child's bedside and struggling to put food on their table or trying to help siblings understand why their life suddenly looks so different. Although it's been eight years since I lost my daughter, Jacob's heart continues to support us through this difficult journey called grief. What I hope you remember tonight is that childhood cancer doesn't just affect one child. It impact an entire family and an entire community. And these families should never have to face it alone. By issuing this proclamation, the city of Santa Cruz is helping us bring greater visibility to childhood cancer and most importantly showing local families that their community sees them, remembers them, and stands with them. Thank you for recognizing Childhood Cancer Awareness Month and standing with the children and families at Jacob's Heart. >> Thank you. Thank you for being here. Thank you for your courage. God bless you. >> We are now going to receive uh an update from the community gardens project by Kira Gorman, a youth fellow. Miss Gorman, good afternoon. Welcome. >> We're so pleased to have you here today. >> Pleased to be here. Thank you. >> Microphone is yours. >> Thank you. Thank you for giving us some time today to give you an update on the gardens. Good afternoon, council, mayor, city manager. Um, my name is Kira Gorman, as you heard, and I've spent the last 10 months working across our six community gardens within Santa Cruz. Sorry, there we go. I held it the wrong way. Um, so we have Tresin Garden, Lighthouse Garden, a garden, community garden in the London Nelson Community Center, Riverside Community Garden, Beach Flats Community Garden, and Poets Garden as well. Um, if you haven't had a chance to go through town and check out the gardens, I highly recommend. And there's a little map up there so you can see where they are. So, a little bit about this position is it's grant funded through a California volunteers youth corps fellowship. Um, centers on food security, sustainability, and community engagement. And so this description up here really guided me as I came into this position and as well as the parallels with our CAP climate action 2030 plan. Equity in all policies, efficient and lowcarbon energy and water, protecting and enhancing natural resources, and eliminating food waste while supporting local food sources. And so our first community meetings way back in November of 2026 or 2025. Um the main feedback that we received was in regards to unattended plots, lack of rules enforcement, and the challenges of growing in a public space due to the lack of capacity that parks and recreation had in previous years to really monitor all of the gardens, all 115 plots. Um, and so I just wanted to quickly take you through the takeaways throughout the last 10 months and getting in the on the ground and trying to get people together and conduct outreach in the gardens. Um, one of the main takeaways was access and I was noticing literacy barriers and different cultures, micro cultures which within each garden that took different outlooks and um outreach methods. And so up there you'll see a couple pictures from the beach flats garden which is full of really hardworking people who don't necessarily have the time to get together outside of taking care of their plots. And so we found that getting together to make food or getting together to build our kids garden was a good way to encourage people um to connect. And then on in regards to also the access because of literacy barriers, especially digital literacy, we installed some garden boxes thanks to a wonderful donation from Big Creek and the Santa Cruz High School wood shop who donated their time and made these boxes for us. So if you do visit the gardens, please drop a note and put them to good use. Takeaway number two were was that the gardens are an extension of home. So no matter what the background, no matter which garden it's coming from, we heard from everybody um the sentiment that I put up there which is that the gardens are absolutely cherished for utility for families. Um a little breakdown and mind you this was about 30 responses out of 114 gardeners. So, just a little bit of a survey or we're we're waiting for the survey to get more responses. Um, but for now, we can tell you that about 40% have rented a plot for over 10 years with a good amount of those more close to 20 to 30 years. 60% experience a lack of space to grow at home. And even those who have space to grow at home have pointed to when you're a renter and you have to move, having a consistent space to garden in, it's more like home than some of the rentals that that they've experienced. And then 90% spend Oops, sorry about that. 90% spend 9 plus months regularly tending their garden um with 60% really there for 12 months a year. So, what I learned in in taking the grant stipulation and trying to apply it in our gardens is that there's so much common goals throughout Santa Cruz with our local nonprofits. Um, and I was and even within interdep departmental um and so through creating a network of shared stewardship, we were able to create local partnerships focused on climate action, community outreach, and education. Some are displayed above like the homeless garden project, our waste reduction team with public works, community bridges who we work closely with in the beach flats, and the city lifeguards who we've worked with once and upcoming we're going to have another day that I'll I'll highlight a little bit later. Ecology Action was also a huge partner. We were able to put on two awesome events with them as well. um regrowing your own groceries scrappy gardening workshop in the beginning of the year uh was really wholesome. It was really great to teach some people some stuff that I'll also send you guys home with a littleformational packet. And then our recent climate action game day where we brought people together in Poets Park near our gardens in the beach flats and really made climate action fun and connected the community a little bit more and we got a lot of positive feedback about having attention in that area and at Poets Park specifically. Um but in regards to the specific gardens, a quick summary would be Tresin Garden has two active sustainability projects since last year. We've got a good three bin compost system going. And then some members of all the lifelong learners as well as some Santa Cruz UC Santa Cruz students have partnered to take over a unused space and plant natives plant drought tolerant make a drought tolerant garden um centered on community education. These are three examples of some of the gatherings we've had at Tresany. um getting the community together, whether it's the garden community or just the broader community. These spaces provide a really great opportunity to plan things. Um and then lighthouse garden. We've got also a compost system going. Our goal is to have compost systems in each of the gardens that can be hubs for the entire community if you're a gardener or not a gardener. Able to bring your food scraps there. Um, and then we've been getting people off of the wait list. I forgot to highlight that when I went over Trescany, but we've got three people off the wait list at Lighthouse. London Nelson doesn't have a wait list. It's a little bit of a different setup, but we've been working closely with the teen center who shares kind of a backyard with the garden and trying to get them involved in redirecting their kitchen food scraps and having a little bit of a hand in the garden. Although it is a a senior garden, Riverside Garden, we were lucky enough to partner with Hardcore Compost. So, the compost situation there is more independently run and takes a little bit less um of the gardener's time to make sure that it's going smoothly and we're really excited to see the outcomes of that partnership. Um there's Tony up there helping in the upper left of one of our volunteer days. Beach Flats and Poets Park. I threw into one slide because they share a fence, but they are pretty different at the same time. We've got a compost going there and we've got a kids garden club as well, which has been really, really amazing to get the kids in. And I think the gardeners have loved to fill that space. We had an issue in the beginning with that space being in a public area as one of the only green spaces in that area. There was a lot of traffic and a lot of misuse of the space. So, we were able to fill that space with the kids garden club and the compost and get more positive. Um, I actually got that advice from a community bridges employee in the very beginning where he said, "If you want to deter negative behavior, you need to fill it with positive behavior." So, the gardeners have been helping me to do that. And that's pretty much it. We've gotten a lot of people off the wait list this year and we continue to do so. And we're getting a lot of really wonderful feedback from all the gardeners. >> Thank you. If you don't mind, if you would like, I do have some of the scrappy gardening >> please >> things for you guys. all >> compost pamphlets and then the upcoming lifeguard day should be very important. >> Thank you. If you would present those to the clerk, the clerk will distribute those. >> Well, we thank you so much for your fine work and the department and your colleagues and our community gardeners uh for all engaging this really wholesome activity. And uh do you have further comments you want to make? No, that's >> Well, we thank you so very much. I see if any of my colleagues want to make any comments on this. Council member O'Hara, >> uh, I just wanted to share my appreciation. Um, I think in hearing your presentation, there's a couple things that are big takeaways for me. The critical importance of stewarding these gardens, but also the role that um, you and a few of your colleagues have with this new relatively new program at the city. I you're so wellspoken, so articulate, such command of the work that you're doing. It's really a testament to um having these opportunities for younger generations of potential public employees to be brought into the fold. So, I just really wanted to appreciate that and um commend you on such a great, you know, job well done and thank you for being a strong steward for our public resources. >> Thank you so much. >> Thank you for being here. >> Thank you. >> All right. Uh we are on item four. Item four is a national emergency preparedness month. Miss Albert, our principal management analyst and office of emergency service manager who I do not see here. >> I don't see her either. I just sent her a message though. >> Okay, we we'll jump over this. We'll come back when when she is uh present. Uh we are on presiding officer announcements. Uh I will as I oftenimes do stretch this uh to include items I want to include but uh uh a couple of thoughts. One is uh happy uh day after Labor Day to all the men and women who work so hard every day in all kinds of jobs around our community whether they are irrespective of what they are but thank you for working so hard and adding to the economic vitality of our community. Thank you for working every day to make ours a better community. The other item I wanted to mention very briefly, we will not be here on uh on the 11th. Um and I don't think it's exaggerating too much to say that uh it is a moment for reflection. uh 911 uh affected every person in this country irrespective of how old they were when it happened and people who weren't born uh until after 911 I think it is one of those uh moments in our history that was like for those of us that weren't born before let's say the second world war or other traumatic moments in our history uh that it is maybe a little harder to grasp what impact that had on the psyche of the country. Um, and how we I think as a country uh pulled together uh in a very tight way to uh to respect and honor the the country, to respect and honor the people who lost their lives, to respect and honor the people who ran into those buildings to try to save lives. Uh we can't thank them enough. There was actually a remarkable event that took place about 10 days after 911 uh in New York and the New York Mets ended up playing a baseball game at Chase Stadium. U and both teams came out beginning uh met each other, talked, shook hands, hugged each other. Liz Minnelli sang New York New York which brought the entire stadium to te cheers and tears. It was a remarkable moment for for the country and I think that it took our national pastime and put it right at the center of our nation's grieving and our nation's hope uh for better outcomes as life moves along. So for those uh we just pause for a moment right now and think of of 911 for just a moment if we could. Thank you. God bless you. Uh we are on statement of disqualifications. Any disqualifications on either the consent or regular agenda? Seeing and hearing none additions or deletions. Madame clerk. Well, yes, the um the National Emergency Preparedness Month. >> Oh, no. I'm sorry. Oh, we'll get back to that. >> Well, she would like to um continue it >> continue it to another future meeting. >> We'll continue it to our to our next meeting, our uh for that item uh which was the uh national emergency preparedness month. We'll we'll still be in the month when we meet again, so it'll work out just fine. Uh, additions or deletions, madame clerk. Any others? Madam city attorney? >> No. None. >> Thank you. Madam city attorney, you've already reported on closed session. Thank you. Council meeting calendar. Madame clerk. >> Any like to draw to our attention? >> No. >> Very good. >> Yes. Council, >> of disqualification, please. Yes. >> Uh, agenda item nine. >> I will recuse myself. This is the third amendment to lease agreement uh with Laughing Phoenix, Inc. at 915 Cedar Street as it relates to my employment out of an abundance of caution. Thank you. >> Well, thank you. All right, we are going to start through the consent agenda for those of you that might not be familiar with it. We will be taking up items 6 through 14 inclusive on one motion. Uh what I will do in anticipation of that or in advance of that I will give each council member an opportunity to pull an item, comment on an item or ask a question on an item. I will extend that courtesy uh to those who are with us as well whether you're here in person or you are online. I'm going to start this time uh on my left with council member Golder. >> Thank you. Council member O'Hara. >> Thank you. I have one question and one comments or maybe one item for which I have questions and then one item where I have some comments. Um on item seven, the Santa Cruz uh county uh civil grand jury response. I did have a couple questions that might be for this gloy. Um >> council member, I am going to pull the item if you don't mind. So we can maybe you okay with that. >> That sounds great. Thank you. Very kind. Um, and then I do have a few comments on item 12, the memorial request honoring Celia and Peter Scott. >> Please proceed. >> Um, I have the great opportunity, well, I know we all do, but I take advantage of the great opportunity pretty much every day, maybe 95% of my days of entering into the Poganip and um, using that amazing resource that we have. We have a lot of open space in this community. Um that particular space is um in my district and from my perspective greatly enhances my quality of life every day. And I'll I'll note that our parks and wreck uh department head Tony Elliot is aware as of how often I'm in the poganet because I'm frequently making requests for um slight adjustments as I walk through there because there's a lot of people that um appreciate the Poganip um on a daily basis. I want to share my wholehearted support of this memorial plaque request and know that there are few there are a lot of very important stewards in our community. But Celia and Peter Scott and the work that they the unwavering work that they did to support the Poganip amongst many other areas of advocacy in the community um is not only generational but something that is going to be lasting through the rest of our lives moving forward. So, I just wanted to share that appreciation um and just, you know, have an a moment of reflection on the herculean lift that happens sometimes that we all have the benefit of of seeing um and experiencing every day day. So, thank you very much. >> Thank you, council member. Madam Vice Mayor, >> thank you. A comment on on uh item eight and item 12. Um, item eight is the sugar sweetened beverage tax oversight committee bylaws. Um, I just wanted to note that this is a great milestone and wanted to acknowledge and thank the work of the SSB oversight committee um, members who um, looked at this and gave feedback. And I want to acknowledge and thank Miss Bronson for her work and um, city staff Judah Liebig and um, Michelle Templeton. Exciting. It's it's just bylaws, but it's not just bylaws. It's the beginning of some really great work in our community. So excited about that. And um I want to also echo my colleagues comments around item 12 uh and support the memorial request honoring Celia and Peter Scott. Um and I want to acknowledge um former mayor Katherine Buyers who's here who I know had a hand in um the great work uh that was done by Celia and Peter. Um thank you for your past work. >> That's it. Thank you. Council member Newsome on the consent. Council member Bruner on the consent. >> Thank you, Mayor. Uh, I had a a question on number eight, the sugar sweetened beverage tax oversight committee bylaws, and then I had a comment on uh 12 and 14. So, I'll start with agenda item eight. And um I I I will start with uh just acknowledging the milestone mark of this oversight body and the work thus far. Thank you to city staff as well. And to the members who are volunteering their time to serve on this committee. In reading through these bylaws, it's a draft of the bylaws. I noticed that in the membership year um in the article five section two called membership year, it would be a a a term from February 1st to January 31st. And my question is in the following article under election of officers, the election of officers would happen as soon as possible following the first day of January. And it seems like it would be better aligned for the membership year uh the election of officers. So I'm not sure who could answer that question. The city clerk is recognized. >> Thank you for that question. Um the election of officers is broad enough to happen after the membership term. We had to do that based on council member election. So whenever the term ended for council, but then we also needed to give new commissioners time to be elected because the council doesn't elect people until the um second meeting of January. So we needed to align that with the terms. So we couldn't have an election without the term being after or else there would be a vacancy. If that makes sense. we would somebody would term out in January 1st and we wouldn't have a new person until Jan the second meeting of January. >> So election of officers I I I do understand that process with council members but if there is um a membership term starting February 1st it would seem the election of officers for this body would happen after February 1st. It would happen after February 1st. They the the bodies make sure that their elections are after the new commissioners start. >> Yes. >> So that's why it's very broad that it's after the first of the year. As soon as possible after the first. >> Okay. I >> we ensure that the new commissioners have a say in who their chair and vice chair are. >> Thank you. >> All right. Thank you so much for answering that. Uh and then let's see my next quick comment uh agenda item 12. And uh it's nice to see there are folks here for that as well. But it was really nice reading about this agenda item. It's not often uh that there's a memorial request uh naming a city park or street or um place and uh acknowledging work that someone has done in our community and the environmental impact and stewardship here um was pretty wonderful to read and so I think this is a wonderful request that has come before us. Uh, thank you. And agenda item 14 is not so pretty and maybe gets overlooked. It's a wastewater treatment item. Purchase of a wax valve truck. And um I actually enjoyed reading about what this truck can do because it it's a pretty pricey price tag that we're uh that is on the um agenda. So I just want to say that uh thank you. This is absolutely city business and city work. It's fascinating all the tools that are needed to do the behind thescenes work that makes our city function every day. And this track seems to be such an improved system uh from our old 2009 manual system of however this was done. And um I I appreciate the financial uh stewardship here um in in the uh cooperative purchasing contract. So, thank you to to the staff and um I'm happy that our city staff will have this new improved walks valve truck. Thank you. >> Thank you, Councilman Chiro. on the consent agenda. Uh with regard to the consent agenda, I would like to pull item number seven and we will take it up uh immediately upon completing our work on the consent agenda and before we take up our regular agenda. All right. This would be the opportunity for anyone who is with us who wishes to make a comment on the consent agenda. This would be your opportunity to do so. Good afternoon. Welcome back to the council chamber. Nice to see you. >> Good afternoon. Uh, I'm K. Archer Bowden. Haven't been here in a long time. Uh, and I'm going to talk to you about item 12 on the consent agenda. I suspect that most people who walk and run on the trails at Fogen have don't realize that the property was not always available to the public. When I moved to Santa Cruz, one had to climb a fence to enter and hope to avoid an encounter with the mounted patrols. A few citizens could use the property for jogging or walking for a few hours on Monday, Wednesday, Friday, Sundays under special license that was issued by the Cow Foundation. Katherine Buyers had one. She's asked me to give it to the parks director for his historical archive. It took many years, many meetings and negotiations for the public to obtain free access to Poganip. I don't think it would have happened without Celia and Peter Scott. The letter from the Native Plant Society, the Sierra Club, the Center for Biological Diversity, Katherine Buyers and Debbie Boulder, summarizes the work and civic accomplishments of Celia and Peter. They accomplished a lot >> and Poganip remained their favorite park. In the 70s, they gathered signatures to qualify the Santa Cruz Green Belt Initiative, which protected Pogan. In the 80s, Celia served on the PE Pogan Citizens Advisory Committee appointed by the Cowell Foundation. In the 90s, they founded Friends of Poganip and began leading monthly walks on the property. Peter served on the city's Poganip task force, which produced the planning document for Poganip. They had remarkable skill for building consensus and remarkable tolerance for meetings. We owe our ability to enjoy Poganip to their efforts and attention. Please approve the plaque honoring their achievements to remind visitors to Poganip of the rewards of civic involvement. Thank you, >> M. Putin. Thank you very much. I'm going to do something slightly different if it is all right with the folks who are lined up. Either Mr. Brown or or Mayor Buyers, would you like to make comments on this item? >> Okay. We we are so grateful for your public service and your longtime friendship and alliances with uh Peter and Celia. Thank you very much, Mayor. Mr. Brown, would you care to make any comments? Thank all three of you so much for your participation in this, your leadership. Let me see if there are others who wish to comment on the consent agenda. Mr. Yuing is recognized. Yeah. Hello, my name is still James Euing Whitman. Um, I want to comment on the consent agenda item number six about the August 25th meeting which has to do with procedures and such, but it's unfortunate a friend of mine thought he was going to come to the meeting. I gave him two and a half hours notice, but he's not here. He used to live in the Pocono. So about the minutes I had mentioned and I'm going to you know I gave some grace before as far as uh standing and waiting and just smiling. Uh once again, it sure would be nice if uh people who were present could make comments on the various things that were said about the proclamations. And I just was I just wrote this because I could say the same thing when it happens before. Insiduous, criminal, deceptive, fiduciary trust malfeasences or unless one uses the acronym of digital ID, internet of things, which would be digital idiots. Um there's a lot of really interesting things going on now. Person who I'm very sorry that she lost a child due to cancer. Fizer were making a killing. I mean I'm a I don't know anything but I'm almost 60 years old and when I was 8 years old I had the pleasure to literally run around Stanford Hospital and engage with several um people who were in charge of thousands of rats. And I've said this before, at the time, the only thing that would keep them alive was Cheerios. But they were because they replicate so much faster than we do. They were not only realizing that their fertility was being weakened very quickly by what was in the food, in the air, and in the water, but also by the medications. That was over 50 years ago. I'm almost 60. So, what do I know about? It's one of my favorite subjects to talk about. Now, as far as uh and I was talking about in the August 25th meeting, how the citizens, the ones that are here, there's not many, should be able to comment on these proclamations. Now, as far as the emergency preparedness, I've commented on that before. I I'll connect it to the garden thing. during World War II over half of the population. >> We're gonna do on the emergency preparedness. We would be glad to recognize you next time on the consent agenda when it's on there. We have continued that item. >> You spoke about the preparedness about 911 and the sadness of that and that was during the National Preparedness Month. >> Excuse me. I'm not going to debate this with you. >> I'm the presiding officer. You're not. This is on comments on items that are on today's consent agenda. That is not on the consent agenda. Please proceed. Your time is now. Good afternoon, sir. >> Mr. Phillip, good afternoon. Welcome to the council meeting. >> Yeah. Hi. Um, yeah, this is sort of an afterthought actually. I just thought well I'm going to write this up anyway as to item 11 uh allowing 125,000 to be spent on openheimer investigations group whether a sufficiently unique number of cases of discrimination or harassment cases requiring third party legal expertise do occur next year and every year is in a word sad. I wonder with all the indoctrination and training I'm pretty sure your and the race gender oppression blah blah entire leftist establishment have droned on about this for the last 15 years and one would think this would not be necessary. The choice of Oppenheimer on the surface is a chuckle to me since they can't express enough with typical leftist babble on their web page how their strength is their diversity giving them special insight into such matters. But their partner board has nine women and one man. The investigative team has 17 women, three non-white men, and three white men, and can't hardly keep themselves from mentioning four or five of their investigative partners are uh black, indigenous people of color, which mathematically is far less proportionately diverse than the population of city workers here, at least using leftist logic. uh their expressed idea. They imply as a feature and strength of open hires that their race or gender makeup makes them uniquely qualified in matters of race discrimination or gender harassment which makes them to me seem racist and sexist to me uh similar to leftist anti-racist racism and male sexism. Uh perhaps they should investigate themselves as to their hiring practices for discrimination. I take away from their website the definition of diverse is non-white male. I have no problem for instance with an engineering department being mostly men or an HR department being mostly women as those jobs just play to on average and in general to those genders interests and strengths. But when the job is law impartial investigations devoid devoid of bias I'm not sure the race or gender of the investigator should really make any difference and to think so is again racist and sexist on their part. Okay, you get the idea. I think this choice is uh too uh committed to leftist horse due to ide ideology and the public should not have to fund it. Uh do you get 125,000 worth of complaints HR cannot investigate themselves because of conflict of interest every year? Again, it's real sad if you do. If so, maybe the leftist victim oppressor ideology that fuels a boatload of such complaints more than in the past is is the reason. You only have a thousand employees. I worked at companies with 10,000 employees and I doubt they had lawyers on retainer just for this although there were HR training sessions and complaints but lawyers were seldom involved. Uh sure a lot goes on nobody knows about in my whole career. The only instance of harassment if it was even that was at a going away pizza party for a popular buxom young woman. Uh the production manager blurted out I'm going to miss you and especially those big boobs. And it became a HR issue. Oh expensive lawyers. Do we have anyone on on online who wishes to make comment on the consent agenda of the matter? >> We do not. >> Anyone else who is with us? Matter of fact, before the body, pleasure of the body, >> council member Bruner, >> I'd like to move the consent agenda with the exception for me of agenda item nine. >> The exception item seven. There is there a second? There's a second by the vice mayor. Is there debate or discussion? Seeing hearing none, the clerk will call the role. >> Council member Triggero, >> I reer >> I O'Hara. >> Hi. >> Vice Mayor Kellen Tory Johnson. >> I Mayor Keely >> I thank you all. Motion passes and awarded. Thank you again with regard to Peter and Silia Scott. Thank you very very much for your fine work on that. >> And just for the record, Council Member Burner recused herself from item number nine. Is that correct? >> Okay. >> Item nine. Thank you. We're on item seven. This is the response of the city of Santa Cruz to the Santa Cruz County Grand Jury uh set of uh recommendations uh uh regarding walking in the county of Santa Cruz is not for the faint of heart. Can vision zero help? The city uh has received this report from the grand jury and the uh city manager's office in conjunction with public works. Miss Gali have prepared responses for our consideration. I asked to continue this item for a couple of reasons. So one is uh it is my belief after 50 years of seeing such items uh from the from civil grand juries is number one to draw the distinction between a civil grand jury and a criminal grand jury. Criminal grand jury gets brought together by the district attorney to consider the indictment the evidence for an indictment alleging some kind of crime has been committed. Civil grand jury has nothing to do with that. Civil grand jury is a group of volunteer citizens uh who are selected by the superior court uh with a fourperson of that grand jury and they choose themselves uh what areas of local government they may want to look into. And as this grand jury did, they looked into a number of issues. Those of us that are on the regional transportation commission, we considered some of their uh all of their suggestions a week or so ago at our meeting and we are doing the same thing today. My observation is this is that grand juries perform a very important function. a civil grand jury. Just public agencies knowing that there is a grand jury a civil grand jury process out there uh that is going to be looking at things and making recommendations I think has a beneficial effect on public agencies. I think it's a very positive thing. Having said that, I think that the civil grand jury's work is very uneven. Some of it is quite good and quite thoughtful and well informed. Uh some of it is not. uh as good as that and so it is uneven and I think that is because they don't hire consultants they don't hire people to they talk among themselves and investigate uh in a civil capacity themselves uh I really like our response because I have no issue with the grand jury focusing in on this important issue about walking and public safety in walking around Santa Cruz County and of Our interest is more narrowly cast into that effect on the city of Santa Cruz and what walking in Santa Cruz like might be different than walking in Boulder Creek. So, uh I appreciate them focusing in on uh uh on items that that relate to the city. Having said that, I also really like uh that uh any government, whether it's the RTC or this government or any other government that receives a grand jury report, I think it is important to in a very thoughtful way with some deep analysis look at what they're recommending. Last week at the RTC, there were half a dozen items that their fundamental premise was faulty. So anything they built on top of it didn't work well. And I think there's a couple of those in this. Uh I think that it is good that we have provided detailed responses to their comments and to their recommendations because their recommendations are I think rather uniformly thoughtful. What I think it lacks in many cases is an understanding of what we have been doing are doing or going to be doing before their report ever showed up. Uh there are some items, a couple where they have made some suggestions uh that we have not considered every possible uh situation where we might be uh do a better job in vision zero and we have pointed that out and and are willing to certainly uh take good recommendations and good thoughts when they come along. Uh but I uh to conclude this part, my opening remarks is I uh I am very pleased with the response of the city because it is serious and thoughtful in the same way the grand jury civil report to us is serious and thoughtful. Let me see. Miss Guly, do you want to make any comments on this item? I'm going to ask my colleagues for comments. I know that council, please come up and have a seat here. My colleague, council member O'Hara also was interested in this item. Council member, >> thank you, mayor. And I would second, third, fourth, fifth everything that you just went through. I've I've had an opportunity to be a witness for the civil grand jury a few times as a city employee. I know they take that work and their research very very seriously. Um, and I have seen dozens of uh city grand jury responses through my tenure um as a city employee. and I know we also take it very seriously in terms of the response. Um, this particular response raised a few questions for me. So, I was hoping to ask Miss Goggle a couple questions. Um, specifically on R12, the grand jury recommending the Santa Cruz City Council direct their public works department to develop a policy to actively identify sidewalk hazards and faded paint and initiate the repair process by June uh 1st, 2027. I am particularly interested in our response not from the perspective of I want to change anything in the report but I am interested in hearing more about the opportunities that we are evaluating with regard to property owner investment and particularly exploring the development of a sidewalk upon sale ordinance. What is your perspective on that Miss Gogley? Um, I'm pretty interested in moving that forward. Um, where are we at in terms of conversations with the transportation commission? Um, what is your recommended approach for us to consider? >> Thank you, Claire Gloley, principal transportation planner in public works. That is a great question. So, over the last two years, you've seen me multiple times as we've come to you with updates and adoption of a new active transportation plan. You'll see me um at your October meeting with adoption of our safety action plan. And a big component of that is that we have an ongoing issue as this report calls out with pedestrian safety on our roadways. Sidewalks are a fairly challenging thing to get funded because by California law, the sidewalk is the responsibility of the adjacent property owner. So where you see maintenance issues called out, um we have this back and forth constantly, which is really challenging. We go out and we do a field inspection. We send a letter to the adjacent property owner letting them know, hey, here's this unexpected expense that you have coming and you probably didn't know, as most people don't, that the sidewalk adjacent to your home is your responsibility. So, we look for both grant funding opportunities, local funding opportunities, and ways that we can be really creative to build out and maintain our sidewalk network. And one that we have recommended in our active transportation plan to pursue and one that we called out in this response is a sidewalk upon sale ordinance really modeled off of our great sewer lateral ordinance. So what that says is at the time of sale right now you have to have your sewer lateral inspected and it has to be in a state of good repair. Doing something like this for sidewalks, both bringing your sidewalk into a state of good repair, so accessible path of travel, as well as installing a sidewalk if one doesn't currently exist in front of your house, would be a way that we could pursue incremental improvements to our sidewalk network. Um, we've been talking with our colleagues who work on the sewer lateral side about how they did this, how we could build it out, and it's something that we would be really interested in bringing back as an ordinance. Thank you for that response, mayor. Um, after uh we go to public comment, I would like to potentially have amendment for the motion. Thank you. Thank you. >> Let me see if members have other questions. >> Council member Bricker. >> Thank you. Um, I just had a quick comment and appreciated reading the responses and the topic here that um from the civil grand jury. Um, but I know this has been front and center in our last few meetings and um, since I've been on council and so I'm just really uh, thankful for all the work and planning and community engagement and staff time and we are constantly moving forward for pedestrian safety, bicycle safety and just reading through these responses, It's just a great summary and thank you. >> Thank you. >> Other council members, let me see if anyone who's with us in the public wishes to make comment on this item. Do we have anyone online who with their hand raised? Anyone with us? No one with their hand raised. Matters back before the body. Council member Oair is recognized. >> Thank you, Mayor. I'd like to move staff's recommendation for item seven with an amendment to direct staff to return within 6 months with a sidewalk on sale ordinance for council consideration. >> There is a motion. Is there a second? Second by council member Bruner. Council member O'Hara, you may open on your motion. >> Thank you. um in discussions with Miss Galloi about this ordinance, I think it's something very worth our council pursuing. And while, you know, in large part our response to the civil grand jury report was um you know, in in many many of the questions um pushing back that we would not be implementing or were in, you know, quite frankly disagreement on the characterization. I do think council direction specifically on exploring this ordinance and how we can incrementally improve sidewalks moving forward is uh worthy um cons consideration and I really appreciate the civil grand jury bringing up this particular issue and if this is one area where we are you know moving forward very deliberately I would like to do that. Thank you >> further debate or discussion. Council member, >> whatever my name is. Golder. Golder today. >> Golder. Is that it? >> That's it. That's it for today. For today, um I I support you in this and I think it's a great um path forward. I just want to acknowledge that with this the tax that we're adding on the sewer lateral and every little incremental bit that we're doing to improve the town also incre increases the cost of the housing. And so when people say it's expensive to live here, it's just one more thing that we're adding on as another layer. So there we go. I just wanted to acknowledge that, but I will support it. >> Thank you, Council Member Golder. >> Further debate or discussion. Seeing hearing none, the clerk will call the role. >> Council members Triggero. >> I reer >> I. >> Holder. >> Hi. >> O'Hara. >> Hi. >> Vice Mayor Kent John. >> I may. Motion passes and supported. We are on item 15. We are on item 15. This is the uh 2026 water department long range financial plan. We have uh information in our packet. We have a presentation by our very able water director, Miss Lukembbach, and uh others uh may be joining her as well. Madame director, good afternoon and welcome. >> Good afternoon, mayor, members of the city council. We are here today, excuse me, to talk with you about the 2026 longrange financial plan, our cost of service analysis, and little closer >> the water rate study. >> I have a few folks with me today. Our your assistant finance director in the water department, Nick Karns. We have two members of our water commission joining us today. Tom Burns is here in the audience, as is Sierra Ryan >> Burns back there, >> who is on the phone. um and you'll understand in a few minutes their role in this process. Um and then Eric Helguson who was with Bartle Wells and did the large body of work related to the cost of service and the water rate study. So today ultimately we will be asking you to adopt the longrange financial plan, receive the water rate study, accept the rate recommendations, and authorize staff to issue the Prop 218 notice and set the public hearing for November 17th. So quick overview of the presentation. Uh very brief statistics about the water department just to set some context with you. The rate study process because there are several uh pieces that are intertwined. We wanted to speak with you about the drivers for doing the water rate study and the rate increases, our financial projections, but not just in a forward-looking way, also historical, so we can kind of get a sense of what the city, the water department's been investing in our infrastructure and why we need to do this now. Water rate recommendations by Bartle Wells. Uh we want to provide an update on the customer assistance program, cover next steps, and then recommended actions. and we're going to kind of tag team this item and I'm assuming that you would prefer to take questions at the end, but I defer to to your choosing. So, really quickly about the water department. Um, as you know, we are a self-supporting enterprise utility, which means customer rates fund the cost of service, the cost of doing business in the department. We're going to share with you a little bit about how we try to reduce the impact of that cost of service on our customers. But what we have to rely on, as you know, is the rates set and the revenue received from our customers. Our population served is almost 95,000 serving a portion of the county. We have about 25,000 connections. And here is a list of really only our major infrastructure. uh three treatment plants, seven production wells, six diversions, some located as far as 12 miles out of town. >> A partridge and parry. >> Yes, at least 17 pump station and 14 tanks. Some of these assets are from the late 1800s. I'm going to um send it over to Nick where he's going to talk through with us a few slides on how all of these pieces work together. Okay, thank you, Heidi. Uh, good afternoon, Nick Karns, assistant finance director in the water department. Um, so what's in your packet are are two key reports uh that are intended to be complimentary. Um, they're very interconnected and those are the long range financial plan and our 2026 rate study. um the key question that the long-range financial plan is answering and it's looking 15 to 20 years in the future and that's you know how is the department preparing itself you have financial policies around debt financing and borrowing um but a broad range of financial policies to tackle the challenges in front of us um that informs I would say drives the the cost of service and water rate study uh that we engaged Ard wells to um to prepare but the two reports are very complimentary. Um the long-range financial plan report. Um this is the fifth or the third iteration. The last update was in 2021. It discusses our key guard rails, our debt service coverage ratio um and our reserve policies. So those policies are maintained. But we did do more than these two studies alone. Um as part of this process we've um worked closely with the water commission. We engaged an ad hoc committee of the water commission to um be a part of the process and the policym decision um process. Uh along with that we've engaged various consultants to view different aspects. It was a priority that we maintain our credit um quality. um we worked with a financial advisor around our options there as well as an economist um to look at the impact on affordability of the scenarios that were reviewed. So by working with the consultants and and keeping sort of affordability of essential use as a key priority, we added these these elements to the process. Oh, of course. I'm sorry. Better. So, this is a summary of of that uh extended process. It's um in total over 15 months of work on this um I mentioned the formation of the ad hoc committee um last fall. I want to say prior to that uh the department did work to um look at look closely at our capital investment program and the priority of the projects that are within that um the scope and the cost of that pushing some projects out. So really the effort predates that in terms of what we needed for this. But as part of this project um you know we worked with the ad hoc committee over a number of months reported those findings back to the water commission as we went along um eventually producing a report and getting the water commission's uh support and recommendation on their August 24th meeting. So that leads us here to today. The next couple of slides are are speaking obviously specifically to the drivers for doing the rate study but also providing a snapshot of our financial investment in the utility historically and then moving into the future. So the drivers of our rate study and proposed rate increases are aging infrastructure. As I mentioned, some of our assets date back to the late 1800s. And all of that to make sure that we can meet the needs of our community, providing safe, reliable water service 247, 365. We're also addressing, and we're not alone in this, addressing rising operating costs. And for we note a few here being electricity and chemicals. In the last five to seven years, I would say every sector is seeing unprecedented inflation factors that we're we're trying to incorporate in a um reasonable fashion. And then the next two, maintaining prudent financial reserves and meeting debt service requirements are really two areas that we value because it ensures that the utility is well positioned in the financial arena, if you will, maintaining good credit ratings, uh ensuring that the debt that we do incur is that low interest rates as possible. Um I am sharing some of these pictures with you again, but I think it's just important to reinforce the some of this is the before and then we can look in a few slides at some of the after of where our rates have been invested. So this slide is showing the investments that we've made on both the capital and the operating side from 2004 to present. Yeah, the green line is the capital investments and the black or gray line is our operating cost. And just to touch on the operating cost because I think it's the easier one to try to understand, it just reflects what I mentioned that costs for doing business are increasing at a pretty steady rate, sometimes going down but largely increasing. The capital side is a little bit more of an interesting story in that it shows that we have not consistently invested in our infrastructure. We are not alone as a utility of deferring some investments in our utility till about 2018 2019 when those really took off recognizing that you cannot sit on on assets from 1890 for a very long time and anticipate that they're going to provide that reliable water supply. So in 2018-19 we began the prior water director began a really aggressive program at getting out in front of where we need to be to invest in our infrastructure. So this is all looking backwards. The the kind of up and down 22 23 we'll see it go back up but that's just a reflection of the projects that we've invested in that have finished and then kind of waiting for the next project to really take off in that 20 26 time frame which we will see. I wanted to touch really quickly though and share with you the projects that are nearing completion under this current five-year rate structure and then those planned for the next five-year rate period. And I think it's just really important to notice the number of projects which are significant. This is just a snapshot again, but also the cost of the projects. I I don't know anybody that would imagine that revamping a w an existing water treatment plant could cost upward $200 million, but it does. These are all in costs. So from planning, squa, permitting, construction, so on and so forth, but they are significant costs that the the community needs to invest to to create that resilient water system. And these are some of the after photos that we like to show. And some of these you may have seen before, but we're really touching the entire water system. The picture on the left is in the university system where we're completing our final university tank that serves that whole upper west side. The New Creek Dam inlet outlet project, which you've probably seen before, and that's that was completed several years ago. The concrete tanks project on the far right will be wrapping up. I think the notice of completion is coming to council in November. And then the bottom slide is our ASR well in Live Oak, Belts 12, demonstrating the progress that we're making on water supply augmentation. So looking forward, this picks up where that prior slide left off and showing the um showing the amount of money that we anticipate spending each year on capital investments either through PIGO or revenue being the orange and then debtfunded being the blue. So these are significant numbers year after year largely accomplished in the next five-year rate period but we will still have work remaining um in the outer years. Nick mentioned that um we did a rep prioritization exercise focusing on the critical infrastructure that had to be replaced now recognizing that we cannot replace the entire system now. And so on an ongoing basis 2030 32 we will have ongoing expenses and investments to make but they will definitely be not of the scale that we're seeing currently. Thanks, Heidi. Um, one of the, uh, successes of the department historically is there's been a, um, a big emphasis on securing grant funding and low interest loans to offset the impact to rateayers. So, we do want to um, call attention or highlight that that we've been able to secure, you know, some grant funding um, to to pay for these projects. But I think most importantly, you know, a lot of these major projects are being invest are being financed via state and federal loans that come at low interest rates. So, um, in total over 300 million has been secured to to fund this. And, you know, with the interest rates being significantly lower than the market rate for that, that's generated uh more than hund00 million in savings for rateayers. Um, so we do all we can to to offset the the impact of the project costs on rates. Um, we've taken a new approach to our operating budget really to address the the impact of of inflation. Um, and had seen some success there. Um, and then lastly, the activity that's been mentioned about the rep prioritization of CIP. Just wanted to point out some of the activities that we have done um to you know going into the rate study prior to to looking at what rate adjustments needed to be to looking at ways that we can pay for these um really generational investments in the CIP. So with that I think we're going to um ask Eric Eric Helguson from Bartle Wells to present the results of the rate study report. Good afternoon, sir. >> Good afternoon. Thank you for having me, members of the of the council. And um my name is Eric Helguson. I'm a principal with Bartle Wells Associates, and I was the project manager on this study. Um also want to thank staff uh and for all the work that they did leading up to this the study. um is highlighted in the previous slide and then all the work during this study to help bring it together and so we could get a result based on solid data and rigorous review and all the input from uh the uh water commission as well and the ad hoc committee. Uh so the the objectives of the study are to um one make sure that the rates are financially sufficient. Um, as was highlighted, there's a lot that needs to be paid for and rate revenues are the main source of revenue for the water enterprise. We also need the rates to be um, legally compliant. The main driver of that is Prop 218 and rates cannot exceed the cost of service and rates also need to be proportional to the cost of service. So that drives a lot of our recommendations. Um finally we also wanted to align uh rates uh when possible with the objectives of the of the city. The primary one um this generational capital improvement program um the uh uh also improve revenue stability so that um to largely support the debt service associated with that program and to uh take steps to mitigate the impact to rateayers when when possible. the the key components of the rate study are the financial plan um where the uh amount of revenue needed from rates is identified and then and then we move into the cost of service analysis where we look at how customers use water, how they utilize the system and and what um types of uh uh what parts of the system are being utilized and then we uh a portion that revenue revenue requirement to the different customer classes um rates and tiers um uh reflecting the proportionality of the cost to serve those customers. And finally at the end we look at how how do these impacts affect customers and it's somewhat of an iterative process. Um the uh water department also engaged um MCQ that also helped look at the uh uh customer impacts of the of the um as a result of the study. Um so the the capital um investment program is a very significant part of the driver uh significant driver for the overall the need for revenue increases. Um, as was stated, um, a significant amount of it is, um, debt funded. This shows the five-year period that we're looking at for the rate study. Um, and the the gray is the amount that's cash funded. Um, and the the yellow portion is the amount that will be funded um, from debt. So about 287 million in total and uh, 213 million of that will be debt funded. um that will help mitigate the impact to the immediate impact to rateayers and and many most of these assets are going to be in place for decades and it will spread that cost out over the uh beneficial period of those assets. Um as a result of the debt funding that service will be increasing. It'll increase to about $22 million by the end of this five-year period. And part of um uh getting that debt service is also making sure that that um the department is complying with the debt service obligations. So rates will need to not only just fund the direct debt service but also be sufficient to meet the coverage requirements which is in excess of those um of the debt service amount. Um, also as noted, costs continue to rise. Um, and rates um, need to keep pace with those rising costs. Cost of chemicals. Many of the costs associated with running a water department rise faster than overall inflation. And um, rates need to be able to to continue to u support the uh, operation of the of the of the department. And finally just meeting the um uh targets identified in the financial plan. A key part of that is maintaining prudent reserves to um support the uh debt issuances and um to ensure that um the department is prepared if there um for emergencies and unpredicted event emergencies and other events that could arise. This this slide shows uh the figure of the uh financial plan for the next five years. The columns in the in the chart show the uh total cash expense that the uh department is projecting. Um and the green line depicts the uh the total revenue that the department will bring in. The the black line, the solid line is the reserve level and the dotted line is the reserve target. So essentially over the next five years u revenues with the recommended increases will keep pace with expenses and um the reserves will be maintained just above the reserve target. Um the first um just a side note that the first increase that 7% increase that is a partial year increase and it's also when the cost of service adjustments are applied. So, the first increase in the rates, not every rate will go up 7%. But, uh, we'll there'll be some that go up more, some that go up less because of the cost of service um, uh, adjustments. Um, one other final note on this slide is that rates are going up um, by having the revenues go up with the expenses. Um, we know that there are, you know, you're in the middle of this large capital investment program. It it is mitigating the impacts and spreading it out so it's more incremental and um easier for um customers to uh to to uh handle on an annual basis rather than just jumping up to the amount that's needed right away. So for the fixed rates, um we had a couple recommendations. Um the primary one was moving from uh only collecting 10% of revenues um from fixed charges to 20%. Um there was a lot of uh the water the ad hoc committee for the water commission um provided a lot of feedback many there's a range of options that were looked at and the associated impacts to customers um and ultimately the recommendation was to move to 20% fixed rate revenue. Um uh industry practice is typically between 30 and 50. So the agency your rates are still below um are still below the industry standard but you're moving to a have a bit more revenue stability as you have um increase your um debt service uh load as well. Um the addition of the additional rate revenue that's being recovered um reflects uh costs of system capacity. So it was being uh recovered from volutric rates and this cost is um is best recovered based on the the capacity of the meter than just even evenly distributed to each customer as the same fixed charge per customer. So essentially the result is that a large meter, a large industry industrial customer will be paying a larger fixed charge. But for normal use the uh the outcome will will um essentially wash out where the larger fixed charge will be offset by the uh less revenue recovery from the uh the volumetric charge now because you're shifting 10% to the fixed charges. But by having more of it recovered proportionally via meter size, it will uh better reflect the cost of service. And and you'll note that the larger meters are seeing that that larger increase as opposed to smaller meters in that in that fixed charge uh schedule that we're proposing for volutric rates. Um there there are a few different recommendations. The first um was just a result of the cap cost of service analysis and that is that the the tiers are uh there's a bit less differentiation because we link the the rate and the tier to the actual cost of providing service and it's based on how customers are using water and the costs in the system. um we just it was basically the result of a math problem that the uh the tiers are now closer together. Also a result of of that analysis is is the uh landscape there's very few customers in the landscape irrigation class but the landscape irrigation class we're recommending moving from three to two tiers. And finally, the larger impact that will be more noticeable on water bills is consolidating the the volutric components back into one one volutric component. And this is this will just be easier for the customers to understand um how much they're paying for each unit of water they use. And it also aligns more with uh the result of our cost service analysis. Um the final recommendation is to um have the drought search charges um be volutric as opposed to fixed. So in a drought you have less re less use but your many of your costs are fixed. And what the drought surcharge does is allows you to recover your fixed revenue even as as usage goes down by having it be volutric. It'll also um reinforce the uh conservation need and send the price signal to also encourage customers to reduce water in the use in the time of drought as well. The result of our of our recommendations are are shown in this schedule. Um one thing with that first year again the rate the rate recommended rates reflect the cost of service adjustments and the shift from the um uh 20 10% to 20% revenue recovery or that first increase there's only a 7% increase in overall revenue. So the volumetric rates are actually going down in the first year. So just to make note of that. Finally, looking at the the impacts to to customers. This is this is looking at single family customers at a three unit bill, a five unit bill, and a 9 unit bill. Three units represents about 30% of bills. Uh five units is about 50 and nine nine is about 90%. And what what this shows is that the first year there there are some differing outcomes based on the cost of service adjustments we've recommended, but the majority of the impact is is the amount of revenue needed over the 5-year period um to support the uh the capital investments. Um, one other thing to note with the um, review that was performed by MCU um, with uh, 90% of essential use still is within that your first tier. So, they're still paying the lowest fly metric rate. And with the uh UKAP program, um the uh uh customers are still um customers in the UKAP program will still be um within that affordable range of of water costs relative to their income. Um uh the uh I believe uh the UKAP program will be discussed at the I turn it back over to to Nick and Heidi. And my my final slide is just looking at how your rates compare and the proposed rates compare to surrounding agencies. Um, one thing to note, every every agency is on a different replacement schedule, has different average use. Um, but this gives you an idea of of where you stand with the with the recommended changes. You're still um basically average. And um one other note is that almost every agency on here is either starting a new rate study or is in the midst of a in the midst of a five-year 218 schedule. So as as your rates are moving up their theirs are also moving in the same direction. >> Thank you. >> Thank you sir. >> Thanks Eric. Um so we we um you know can't talk about rate increases uh in the infrastructure investment without also talking about affordability. And on that we wanted to um say a little bit more about our utility customer assistance program. Um some program information on the screen just for for reference. This is really how we um you know provide rate relief to the lowincome customers in our in our area. Um there are two tracks. We offer the program to single family residential assistance and then multi-unit which is um which is innovative and um been helpful. But the assistance amounts are are there on the screen. Um we also provide a rearage relief uh past due balance relief as part of the program. And then I think it's very important to note that this is non- rate revenue. So this is uh funded via special revenue fund um not via rates. Um just a little bit more on the program. the the benefit of the UKAP program is intended to um be dynamic and that means as rates increase we'll preserve a 25% um average bill discount current program enrollment statistics we have 630 single families enrolled and then 520 and that like I said this is a a new program I believe it's been since March um the single family a year longer but just March of 2026 for the multif family so doing more to increase those numbers. And um for those that are enrolled um over 75% have have seen their past two balances eliminated. So this is um I think one of you know closing things out one of our last slides. We wanted to um you know talk about what what these rates do in terms of long-term stability for for the department. Um but most importantly it provides the funding that's necessary for us to execute on what are essential projects for the the system mainly Graham Hill Water Treatment Plant as was mentioned but projects that ensure system reliability. Um it ensures that rates keep pace with our costs and and protects our credit profile. Um so you know this is how we move forward with our essential investments responsibly using long-term debt um to spread the capital costs to across generations while keeping affordability safeguards central to every decision. In terms of the rate setting process, um we're here on September 8th. We've got a couple um items to note in the future. Um ask your recommendation to to release the Prop 218 notice um shortly. The public hearing is um scheduled November 17th. Um and the interim will offer a a public presentation with the rates to be effective January 1st. I think this is the last slide. This is it's in the staff report that we initiate the process. I think with with that we're happy to answer any questions. >> Thank you for your presentation. Let me ask if members have questions. Council member Golder. >> Okay. Thank you for the presentation. Um I know I say this every time, but it's it's every year since I've been on council, the rates keep going up and up and I get it. Um, we do have aging infrastructure and I do know that it was a strategy of past councils to maybe not maintain that infrastructure as a means to curb development. We've been in some backyard neighborhood meetings where people are upset and they're still asking how are we going to continue to support new development, new residential houses if if water is still not available and then we say it is available but now we're saying but it's going to cost more. And so how do we reconcile that with the community? That's just something that I've been wrestling with. >> Is that a question? >> It's a question. Yeah. How do we like how do we say yes, we Yeah, I don't have >> Mr. Luck. >> Yeah, thank you for the question. And I'm viewing those as two separate issues, but you I'd be interested to see how you would connect them because water supply, actual availability of water to serve the community. um we have demonstrated that we have adequate supplies outside of climate change and the impacts that that is going to have on our ability to store water. So setting I almost set that aside because the water rates really have more to do with developing, rehabbing, creating infrastructure to deliver that available water supply to our customers. Um, and the cost of doing that, not only locally, but regionally and nationally, is is always going up. As regulations come into play, as new water quality requirements need to be met, those costs will be increasing. So, I do view them as separate questions to answer recognizing that they are all part of the water system. >> Okay. I have a couple like followup if that's okay. Um, and so just in terms of I saw the neighboring jurisdictions rates, are they paying the same amount of and I couldn't find it in there of contributions towards this infrastructure that they're using for some of our shared infrastructure. Does that make sense? Like I know we share some pipelines with neighboring jurisdictions. Do are they contributing at the same rate that our rate payers are paying? If I understand the question, the agreements that we have with both of our neighbors, so Creek Water District and Scots Valley Water District, in those agreements, it spells out which piece of infrastructure, both the capital and the operating costs, which agency pays for and those costs are built into our rates. Okay. And then so in terms of um the another one that came that came to mind when I was watching this was the people who have the fire sprinklers in their homes pay an extra search charge. What is that search charge for? I imagine those are only being used during a fire and I think not having a fire spread is a benefit to the whole community. So I just don't know what is that a I don't know what that's for. >> Sure. >> Yes. Um the uh the fire search charge reflects um just the the specific infrastructure. So they have some additional um you know in the connection there's there's some more infrastructure to connect to them and there's some additional um customer service and billing costs associated with it but it it is um really just just only the additional uh infrastructure for having that connection. Um within this water system there is um uh the water systems required to maintain fire capacity which is available to all customers additional private sprinkler connection or via the hydrant and that's paid for with the overall water rates. It's just the specific uh additional cost for that additional level of service is is what's in that that fee. And and I believe that they in our proposed rates, they're actually going uh down slightly. >> I don't know. I just think with all due respect, it seems a little bit like a scam. I mean, you're paying you get it installed the one time, you only use it the one time your house catches fire and you're paying every month. I I I help me I'd help me understand like this does seem like we're kind of um ripping off people that are putting in things in place that will help their whole community in the event of a fire. >> Maybe just one point of clarification or several. This isn't necessarily a change other than having those costs go down. And those are private fire services, so they really are serving just that property. There's the, I suppose, opportunity that if that structure doesn't burn down or doesn't create a blockwide or communitywide incident that's accurate, but they really are serving just that singular private um parcel as opposed to a fire hydrant, which does have that broader community benefit. I'm just going to agree to disagree here because that's how fire spreads from home to home. That's how fires get bigger. And so one fire that starts at a home is going to go to the neighboring homes and it's a big concern in the state and I think so whoever installed the private sprinklers in their home, they already invested that money and then to charge them monthly on top of it. I don't know what you're maintaining. Like I just I never noticed it until it was spotlighted in here. I wouldn't have paid any attention to it. But having watched the presentation, I think when you're looking at rates, the overall rates, this doesn't seem like a fair one that we're throwing at the community, that's just my my sense of the situation. So, I just wanted to point that out because it became obvious to me. So, I don't have an answer, but that's my question or thought. >> Um, I'll chime in real quickly. I think Heidi spoke to it well, uh, Council Member Goldber. Another way of looking at it as well because it is a it is strictly a private benefit different than a hydrant which is providing you know larger community support ensuring under Prop 218 that uh other rateayers are not paying for that added service that's um providing private benefit. There is a argument to be made and I understand your comments about trying to contain in the event of fire uh from spilling over into adjacent properties, but Prop 218 is pretty specific about ensuring that um a private service is not being subsidized by uh general rate payers. >> I hear you, but I'm saying that the thing is not being turned on. You you got it hooked up once. Why not just do a fee when you get it installed? Why the monthly search charge? That's what I don't understand. what are the rateayers paying for? >> If I would add one more point which is um a water agency looks at water supply in very different ways. You have your minimum month, you have a maximum day and then you have a maximum day with fire flows. And those numbers can vary in Santa Cruz from five million gallons a day to 20 million gallons a day. And so it's that delta. It's not the connection, the physical connection. It's having the ava the available water supply when it's needed to get to that home or that business. So it's it's building into the ability to treat and deliver to all the fire services in the city that incremental volume of water whenever it's needed. Council member O'Hara, >> thank you. Um, I actually have a couple comments about that, but I will I will I will get to it. Here I am sitting next to you, so I might as well take advantage of it. Um, if we do our work very well, the last 15 plus months that you've been working on this, there really isn't a lot of opportunity to ask questions because you have been through most of the, you know, questions that the community might have and it's specifically about what council might have. But I do want to ask a number of questions to kind of get to the human side of what we're trying to do here because um we are at a position as a council to set rates within the context of really challenging cost of living considerations um that are very much out of our control most of them and this is in within our control and so I want to make sure that I'm thinking about it within that context. Knowing that um quite frankly our water director and our water staff bears a significant burden of thinking about these investments 20 year 30year 40year 50year investments in the short tenure that you are our water director and that's a sign significant burden so I want to appreciate um what that means in terms of your role um I want to ask a few questions I will quickly respond to Council Member Golders's consideration that um because I've been in water planning for most of my career, I made a little departure and now I'm back working on long range water planning. um that risk of not having adequate fire supply, whether it be at your home, your business, your neighborhood, um is the the difference between your whole neighborhood burning down and potentially not. And so the connection is obviously incredibly important. The adequacy of that supply over the duration of you owning that home, having that responsibility means potentially uh replacement of pumps on a more aggressive, you know, um schedule, higher level of um storage capacity. I mean, it does change how we run our system. If every single household had a fire sprinkler system, we would probably be having a different conversation today. So, um, just want to provide that a little bit of I Yes. Okay. So, stepping back a little bit from the rates because the the tables are very it's a lot of information. Um, we're talking 287 million over fiveyear investment, 1 billion over 15 years. How unusual is that for this system? I mean, to I mean, we have, I know, pipes in the ground and diversions up the north coast that are from the late 1800s. How unusual is this investment that we're talking about with this rate increase? >> Yeah, sure. Um, thank you for the question. Um I think the chart that we showed looking historically shows it it's it's new to us right so we have not been making um investments at that level and we have assets or infrastructure that you know is met um or approaching the end of its useful life where they're they're needed. Speaking more broadly and looking at um you know agencies throughout the state it's it's not uncommon at all where many cities are faced with this challenge of aging infrastructure. So that's kind of >> perspective >> our history have we had any other periods of time where we have talked I mean understanding the difference in in um today's dollars versus previous years dollars do we have any period of time where we made such a significant investment in our infrastructure I >> mean certainly not in my history and with the research that we've done for this body of work we've not seen that >> and then um seeing such major investment in our treatment plant, New Creek pipeline, all the belts wells projects including the projects that we are doing for um enhancing our our groundwater supply. If we defer this work, what is the practical consequence? Um more failures, emergency repairs, what does that look like if we don't do this work? >> Yeah, that's a great question. And it's all of those things. Um it's really re- repprioritizing our capital program. Um doing far more repairs just in the last two weeks as an example. You know, we're replacing the No Creek pipeline between Felton and the Graham Hill treatment plant. And that project is also nearly complete and we are advancing the completion of that project in terms of tying it in for service because we've seen two new pipeline breaks in Henry Cal State Park. So it's it's shifting definitely from doing the capital investments to have a a piece of infrastructure that functions well to doing ongoing maintenance. >> Do we even have staff to support that type of a maintenance program? We we do not um we would probably shift and do more outside contracting to make sure that we had we still have systems that um are quite old and require unique skill sets including welding. So making sure that we had those sorts of skill sets either on staff or on call. >> Thank you. Uh, Council Member Trigger and I had had an opportunity to work a little bit more closely than our colleagues on this this process and um, some of the conversations we had around this balance of how much is debt financed and how much is pay as you go really does get to the question of how we are trying to tackle affordability. Um, not just with a UKAP but within the context of how we are managing this rate increase. Um, can you describe that a little bit further because I thought those conversations were really really helpful and I'd love for the rest of the council to hear that. >> Yeah. Um I think that one of the these are generational investments obviously that um infrastructure that has long lives. Um and uh thankfully beginning in 2016 um the department established a really robust long-range financial plan that laid out a specific um you know target for how much would be debt financed. We are now advancing through that capital program. We're in the middle. I think it's fair to say of of that program and you know the um the reality um it changes as we progress right so we've taken on debt and our deci our context is is different we have more investments ahead of us so we've been very focused in this process at being able to progress on the projects that are currently underway but also looking forward at future investments and securing that we're in a position to to pay for those as as best we and right and maintaining our credit profile. So we um are um looking at future debt financing from that lens if that's helpful. >> Yeah. And um and maybe you could help um share I think there was a distinct decision to have a different percentage of fix versus volumetric really within the context of affordability. that might even be not the recommended approach by the state. Um can you talk a little bit about how the water commission reflected on that and the decision that they made that you know really um I think helps with our affordability questions. >> Thank you. Yeah. Um we we evaluated several rate structure scenarios. Uh one of the initial goals was to um come more aligned with the statistic that Bartle Wells shared that most agencies are between 30 and 50% um re you know revenue recovery from the fixed. So we evaluated different different ways to get there and um advanced looking at the option that maintained affordability for our rate payers. not not going all the way to the 30 to 40% but um approaching it incrementally. >> Yeah. So I mean my main takeaway is that with UKAP um and this you know very specific consideration about the fixed versus volumetric that we really are pushing the envelope in terms of how much we're we are working towards um innovative approaches obviously with the UKAP but also really practical approaches to ensure that there's long-term affordability even with these significant rate increases um in looking at you know the single family household going from 9948 per month to 112. Um that's with the 5 CCF. Um you know that's a meaningful increase. Um and I think you know it it's you know to council member Golders's point. We've seen increases. We will continue to see increases and within the context of affordability right now that's hard for folks. I get it. So that is happening and that's a meaningful increase. But at the same time, your affordability analysis concludes that essential water in 2031 remains roughly as affordable as it was in 2021. So how can you explain how these things both can be true at the same time? >> Sure. Um thank you. Great question. Um, one of the aspects of the affordability study um is it measures purchasing power, right? So there are um it relies on data from the California Department of Finance um for household income. Um so that's the metric that is essentially normalizing. we're we're seeing increase in in household income and that's offsetting the affordability uh ratio and and like you um indicated the the results of the independent study was we're roughly um at the same level and now not recognizing that that's not saying that um that there aren't still affordability challenges just defining that that it's um a rate recommendation that's that's um and measured to be roughly equal in affordability as previous structures. >> And one last question for the director. Uh just knowing the longevity that you've had in in our water department and in particular on long range supply planning. Um could you share and I know this this is an area of probably constant consideration and stress just 15 years ago 20 years ago long range demand forecasting what it looked like then what it looks like now and what that means in terms of the sustainability of the work that we do. Can you share a little bit about what has happened over the last 15 20 years in terms of demand, how our customers use water, how that has changed over the years and what that means in terms of revenue and why it makes this particular conversation around rates especially within this generational infrastructure considerations just kind of bring the focus of the room to what has changed. >> Thank you for that question. Um, as you know, I started almost 30 years ago and I think even recently shared with the city council those historic demand projections and when I started in the late 1990s, we were projecting in that urban water management plan to exceed six billion gallons a year. And now we're at about 2.3 billion gallons a year. So it's at least half if not even more so and just kind of wrapping your head around that understanding that you have a lot more water that you'll be selling. And so the planning around rates was very different to your point um 10 20 30 years ago. I think I shared another chart with the council showing this constant decline in demand in Santa Cruz. And Santa Cruz, as we know, is very conservation-minded, very protective of resources. We also have a climate that's very amanable to um low water use. We have very smaller parcels, few swimming pools. So, it's all in our favor. But Santa Cruz, the central coast having among the lowest per capita water use in the state of California um it's created a lot of opportunity over the years to utilize the source water in different ways. Now while climate change is impacting that source water because we are all locally sourced flowing sources very little storage at the moment. Um so there are challenges on the supply side but reducing from a 6 billion to a 2 and a half billion gallon projection really opens up a lot of opportunity for utilizing that water. Um it creates a different portfolio in terms of drought and what the community needs to um curtail or ration during those droughts. And we also know that because customer demand is so low, our we will be very challenged to get the community um to reduce a per capita water demand. There is no more not watering your grass or not filling your hot tub and and um those we've squeezed out every drop of kind of um the excess the lowhanging fruit in in the water world. So um we are very much operating every customer is very much operating at kind of a bare minimum. So building water rates around that sort of portfolio becomes um a different a different game almost. It's you're not dealing with um large volumes of water being sold. So you really have to think about and we have really thought about it in a very different way. >> Thank you. Thank you. That's it. Thank you. Thank you. The vice mayor is recognized. >> Thank you so much. Thank you for the work um over the many months and the report. Um I just have to share that this last comment makes me think we're we're sort of being penalized for being good with our water. I can't help but think of it that way. I mean, I know that's that's not the intent, but um yay for saving water and now we have to pay more. Um I have some in the weeds questions. Um, so I'm I'm curious about the percentage increases from year to year. There's a um chart table two um in our staff report and um I see that in 27 it's a 7% increase. In 2028 and 2029 it's 12% increase. And then in 2030 and 2031, it's a 9% increase. So to go from 7% to 12% seems like a pretty big jump and then we go back down to 9%. Can you explain why that um jump of 7 to 12% isn't spread out over the years? >> Yeah. Um and Eric spoke to it briefly. We did a rate increase July one of this year. It's the fifth of the current five-year rate increase process and we're shifting now to a January rate increase. So >> yeah, so the current 7% will not be in place for a full year. Instead, in this January, we're bumping it up another 7% for a year, if that makes sense. So this we're effectively at a 13 or 14% rate increase come January. >> I see. So there's pretty much three 12 13 14% increases and then it drops down. And part of the intent with the dropping down is that we're anticipating singledigit rate increases going forward as we described so we can do some of the hard work now but position ourselves later. >> So okay that thank you. Um yes I do remember saying that this was a partial the 7% was a partial. Okay so that that's helpful. um why the big jump now when we are in the state that we are in terms of our you know national econ economy and inflation and just the instability in an economy um with everything happening nationally and internationally. So why not wait till there's I mean you can't predict if there will be stability right um but why not wait until there's more stability or at least make this decision after the midterm elections. Yeah, I I think your first comment is you can't really predict the future, so who knows when um predictability is going to be here. We also have a few very large projects. One being the Graham Hill treatment plant reconstruction, which is in um it's a two-phase project. We're finishing up phase one and moving into phase two, but we're under contract for that work. And at $222 million, I think we shared on that chart, inflation is coming every day, every year. And so trying to get out at least in front of that project to successfully complete that project, I think, was one of the major drivers. I don't know if you can think of another one. >> No, I think that the cash flows needed for funding that project. >> Little closer. Little closer. >> Apologies. Um, just following up. the cash flows that are needed to fund that project are a big driver in in the sequence of the rate increases and the initial increases. >> Okay, thank you. Just a couple more. Um, back into the weeds on that table two, can you help explain why the UCSC and commercial rates are less than the tier 2 and tier three of single family homes? >> That is my question make sense? >> Uh, yes. Um, one aspect and and I can ask Eric to speak to this a little bit more, but you're looking at a a uniform rate for those two customer classes. So, the first unit of every unit of water is equal in rate and the residentials have a tiered rate structure. So, the the costs that are being recovered are are slightly um are different. Um, anything to add? I I would just add um the uh you know when you're looking at the the tiers as as was stated your your per capita use is quite low. So so significant amount of of your use is >> I'm a very old >> sorry sorry about that your your the per capita use uh water use in the city of Santa Cruz is quite low. So, so a large amount of water use is is um within tier one, I believe. Uh that one chart showing the impacts 90% of your bills are nine units or less. Um and and so you have that um you know, it's because you have more of your use in tier one. um that that the the residential tiers are reflecting the cost of those incremental use differences, whereas those those the commercial and UCSF class is is an average rate reflecting the cost to provide all levels of use um for that specific class. And when we do the cost of service, we identify the cost of serving the class. And then if it further improves the um proportionality, we then break it down into tiers. And we do that for the residential class because it's uh more of a homogeneous use pattern. Whereas the use in the the um UC and the um and the commercial class is quite varied. um residential use is you know providing you it's has a similar pattern whereas you you could have in commercial a brewery and a retail store and a car wash which is all varied types of use. So that's why we don't go down to that level and charge the average rate for the commercial class. >> Okay, I was in the weeds and I don't know if I followed but that's okay. Um, I'm I'm just seeing commercial and UCSC that are big entities and the numbers look less than single family homes. That that's what's standing out to me. Um, and I get that this is really technical and I don't understand all the technical pieces, but I could add that we talked in our ad hoc committee work about splitting up commercial into tiered rates. >> To Eric's point, that customer class is so varied. >> Okay. and that it c it could be that some commercial use I'm I'm going to make this up a five CCF and one uses a 12 CCF >> but we we don't know how many of which are where and when they will be changing to a different use >> and um there are agencies that tier their customer class but in this community it just didn't fit. >> Okay, thank you. Okay, one last question for now. Um um I think you mentioned when there was a chart comparing us to other communities and you mentioned many of these are going through rate studies themselves. The one that stood out to me is slow. We're often compared with slow um in terms of size of communities. Central coast um wondering if you know any more about slow and if not maybe we can have a follow-up um email uh if they're doing a rate study and if theirs will be comparable to ours. That's again that's the community I look at and and they were way below ours right now. I appreciate the question. I I don't know off hand, but I'd be happy to look into it and Okay. >> Thank you. >> Thank you, Vice Mayor. Other questions? Council member Briner. >> Thank you so much. And thank you to my colleagues for questions as well. Uh water, thank you. Uh this is uh a good update that we've gotten to this point. appreciate all the information and since so many questions and topics have already been said. My main uh question is around um the affordability that and as you stated generational investment. Is there a communication and marketing plan that will accompany this? To me, that would be front and center because I think it's been said in various ways. our constituents, the general public, the residents for understanding clearly um uh the Prop 218, having visuals, infographics, um a toolkit to to not and to dispel the the repeated perception that we don't have water supply. and um what are we paying for and why are we paying for increases? So all of these FAQs but in a not in a number dollar amount chart way but in a very layman easy graphic meme something that can be easily in a glance digestible to understand almost I envision like maybe a children's book with illustrations you know how a a a complicated topic broken down to a children's book, for example, can be so simple. And I just I I would love to have that perspective accompany this um going forward. So I wanted to ask what your intentions with that part of >> and I I find a a number of questions in there around communication in general, communication on different topics, including this one. Um the 218 process is a little bit more scripted than say communicating just generally around the department and water supply. We have in working with the city comm's team, we've been work and the water commission. Um we had another ad hoc of the water commission just based on communications which is what brought the aqua cruise game to us and our story map and we're going to continue with a few other pieces that we think we'll get at those um those sentiments. It's also very hard. So, we're always open for ideas around how to reach different sectors of the community on different topics um because we all have so much going on and some people receive information in different ways. With respect to this process, we do have a public meeting coming up and um tomorrow we would be sending out the 218 and posting the 218 on our website in English and in Spanish. Um and then we can go down the how are you communicating around the UKAP which is yet another um communication piece that we do grapple with. So we have a lot of different efforts underway and are always open to ideas on how they we can reach your constituents. Maybe I'll send some examples uh and you know I just communicating the need for the water rate increases and the why and having you know that in a very simple way I think would be very helpful for everyone and I appreciate all of the work that has gone behind this and to our water commissioners and everyone who has taken time to really study and think about um the community and for again that generational investment is so important and this is the invisible the invisible work that I don't think people think about and and it's so important. So, thank you for considering that and I'll see if I can dig up any examples to send your way. Thank you. >> Thank you, council members. Seeing hearing no other questions from council members at this time, we'll go out to the public uh on this item. Mr. Yuing. Good afternoon, sir. >> Thank you, Mr. Keely. My name is James Ying Whitman. I left the building and was listening to the meeting and I was like, "Wow, what do I know about the water system here?" My friend Bodie Beerman worked for Citizens Utilities over 30 years ago and he helped fix the problems with that brand new state-of-the-art facility. He worked there until it became a missing person February 17th, 1999. A lot of minutia going on with all these conversations. You know, I've pulled several permits and been the responsible party to provide from the utility to the to the house all the alarms, all the electronics, and let the fire people do their sprinkler codes. I cannot believe they use plastic pipe. It is beyond me. Even in Sonteo, where they don't allow plastic with anything except the fire sprinklers, San Francisco, you know, I've done it there as well. So, I do know a little bit. I've lived in the rural community and I've installed several systems where the minimum standard was 10,000 gallons and whatever hydrant wherever that had to be. I fixed lots of problems. But as far as the minutia from what was required to be installed so those individuals who built those homes could have certain amenities and not have certain amenities because the house was fire sprinkled. Once that stuff is installed, I mean, I have made my a pretty good living doing the art that is not supposed to be noticed. Your lights work, your toilet flushes, your system works. You take it for granted. So, what I didn't hear, and I didn't hear every word of this, um, was what kind of precautions, what's going to happen if for whatever reason the utilities go out in this community as the water treatment, excuse me, has the uh, Fall Creek, do they have backup systems for power to provide water? I mean, I think about three years ago this um or decided to take a loan from the EPA bank of up to 125 million. Um, I know that 30 years ago to 28 years ago, the water quality in Felton was amazing. Um, when I have a chance, I'll test the water here, but I try not to drink it for various reasons. So, I'm trying to be polite here about stuff, and I really don't have to be, but why not? We're all in this together. So maybe somebody could mention what kind of emergency things are going on with the water system so that the citizens actually have backup water pressure when the electricity goes out. Thank you very much. >> Thank you, sir. >> Good afternoon, sir. Welcome back. I didn't realize I'd be identified. Anyway, my name is Dan Criggy and I served on the SoCal Water Board for 40 years. And I want to add a couple other things to my resume. I um headed the Santa Clair Valley Water District's water supply system and imported water system. In addition, I appointed the governor to the California Water Commission. But I really want to add that to what I want to say to you today. I sat through a couple of hours of listening and can I just congratulate you people. I've never sat at a commission where the board of directors had such beautiful and intimidating I'll use the word intimidating questions because I know if I was on Heidi's side I'd be intimidated beside some but she was not intimidated. She answered your questions. Can I just just want to say one thing? I think this board at this particular time is really interested in the water supply and is sincerely trying to get the best and lowest water you can. The only problem is in this world the price is going up in water. You know cost of living went up 10 to 15%. Cost of water projects have gone up 25 30 even 100%. And so what you're doing is the best you can and I just want to congratulate you. Thank you, >> Mr. Criggy. Thank for you for your years of public service, sir. Good afternoon, Mr. Phillip. Good afternoon, sir. >> Hope you read my letter. It's pretty good. You should you should read it if you if you haven't. Um I feel well totally different about that. Um I I feel like there's uh this is this is a shock. This is going to be really shocking to people. uh every year, year after year, geometric double-digit type increases in water rates. You don't even say when you're going to be done with double digit increases other than maybe someday. When is that where was that question? When when are we done with with this? And then we go back to single percent increases. I don't know. Anyway, there's a lot of good ideas that you you have not investigated. For instance, uh there are ideas there's a misconception that we have no water and the problem is people aren't using enough water. low revenue and there are places that have tried um you know a a different say fiscal year for water starting in might like May when you know how much it rained and if it's a wet year you you know you charge less and if it's a dry year you charge more and that can actually raise the amount of revenue because people would rather much rather pay more for more water than more for less and less water and I don't know what's going to happen with with this increase because people are really tapped out. I don't know that I could use any less water, but uh we'll well we'll see. And there's a lot of over um well overkill on your concern about not having revenue and you know the one and a half times debt service charges. uh you know and the interest rate is is is one thing but you charge 11 and a half% utility tax on top of debt and interest on debt and that's going to explode upward and that's just a windfall of money for you. How how nice. Except you could use it to help pay into the race civilization fee fund or the or whatever. Well, sure you could. and and uh uh because we we don't need uh I mean it's our our money. We're giving you the money so why not apply it to to that. Um I I don't like any of those suggestions really. I think all water use is volutric. It's water is water and people buy water. It however much you use that's what you should pay for. I can see if the higher costs having to do with higher infrastructure for higher volume users, you know, that that costs more and I get that there should be some fixed cost, but you know, you're jamming the tiers together for residential use that's going to if people use a little too much. That's just another incentive not to conserve. You know, you're squeezing the rates together. Everything about this is is continuing the doom loop of lower usage, higher rates, and you know, you're not being imaginative about it. And and I and I think there's there's just too many sources. You don't even say what the rate stabilization uh fee. This is a rate study and what's it going to be? It doesn't even say it's it's invisible. You have a lot of a lot of work to do still. I think better questions. >> Thank you, Mr. Phillip. Do we have anyone online with their hand up? >> We have uh Sierra Ryan who is a commissioner on the water commission with their hand up. >> Let's take the commissioner. Commissioner, good afternoon. Welcome to the city council meeting and thank you for your service. >> Hello everybody. Can you hear me? >> Oh, it's Sierra. >> Good afternoon. >> Good afternoon. All right, so you can hear me. That's good. I think you can see me, too. >> Uh my name is Sierra Ryan. I am a water commissioner um here with the city of Santa Cruz and I have been since 2019 which actually means this is my second round of rate updates. So lucky me. Um but I do feel like I've learned quite a bit and um was luckily lucky enough to sit on the ad hoc committee um during the development of these this um rate study that you see before you. Um, so we worked really closely with staff and with the consultants as part of this ad hoc committee and then also as the commission as a whole commission and really felt like in the end this presentation that you see before you and the proposal is a a balance between priority community priorities such as continued water conservation, such as affordability for essential water use um while recognizing the fact that we have significant upgrades that are needed. Um they're not fun projects. They are necessary and large and they're going to be expensive. Um and we also are limited in how flexible we can be just given the the rigid nature of Proposition 218. Um so I really want to encourage you to um adopt the proposal you see before you today. I think uh myself um as someone who works in water as part of my day job and um most of the commissioners do as well or at least many of them do as well and we spent a lot of time and really thoughtful deliberation looking over all of these a lot of the concerns that you've raised today we also raised with staff um and really feel like what we came up with was probably the best and and most wellbalanced solution that is feasible given all of the competing needs. So, I just like to um hope that you would uh forward these staff recommendations. Uh the the commission had a unanimous um voted unanimously to advance them to you in the hopes that you would approve them today. So, thank you. Thank you for your thoughtful questions. >> Well, thank you very much for your day job that you do at the county and your evening job that you do as a commissioner. We really appreciate it. >> My pleasure. >> By the way, say hi to FA. >> All right. Anyone else online? No. Anyone else with us in chambers? Matters back before the body. Pleasure of the body. Council member O'Hara. >> Thank you, Mayor. I'm happy to move staff's recommendation on item 15. >> There is a motion. Is there a second? There is a second by Council Member Bruner. >> Is there debate or discussion? >> Actually have one lingering question, Mayor. Um I don't have any additional comments with regard to the motion. Um, Heidi, I know the mailer is intended to go out tomorrow and I know that you had said during the presentation that online we are we the the announcement is in Spanish and English. Mailor going to be in both languages or what are we planning on doing with that? >> The mailer is not in two languages. It has um language sentences in there, statements in there pointing a Spanish speaker to the website and a telephone number I believe. >> Perfect. And I think we ended up doing that with public works um rate increase as well. So, thank you. I appreciate that. I just wanted to make sure that was very clear um that the mailer that is intended to go out will be in English, but there will be an opportunity for folks that speak Spanish to recognize that there is Spanish information um available. Um so that is it for me. Thank you very much. >> Thank you for the debate or discussion. Couple of questions if I might. Um one is uh I won't be here when the next drought happens unless it happens over the course of the next 90 days. But assuming that it isn't, I'm going to get my remark in now. Nonetheless, um I think as a matter of policy that uh when it comes to drought, I have a little bit of a you of a libertarian view of this, which a little bit which is that rather than telling people you can't water your lawn, you can't wash your car, you can't do this, you can't do that, give them a water budget and tell them to live within it. To me, that's it. That that is the right thing to do. starting to say well this is virtuous and that isn't uh that just my orientation towards making such rules but maybe on something that's more timely that will happen while I'm still here which is this uh let me let me go to a couple issues one is uh council member Golder I do remember her name uh open opened the door on this topic so I'm going to rush headlong through it uh and that is on on this issue about fire service a couple of thoughts occur to me that on this one is if it was a choice to put sprinklers in your house when you built a new house or you did an addition or you built a commercial structure or whatever, but it isn't. It's a requirement to do that. So when the government requires someone to do something and they do it and then they use that what they've done is put in the infrastructure essentially the private party has as I see it school district they do it if it's you know we all do it but it's a requirement not a choice and so you go ahead and you do it but then the concept that in order to operationalize this requirement that you have when there is a fire that the water that you use uh it somehow needs to be accounted for prior to the use so that you have if I understand it the reserve capacity the demand reserve in the event that people are using that now I think I understand it in the event that we have a fire in the pogan hip and it sweeps into Santa Cruz and 200 homes are burned down I I think I get it there. I'm not sure I get it on an individual use basis. That's more difficult for me to see how it is the city needs to charge me to have a pot of water ready when there's a fire in my house and the sprinkler goes on. That's a harder from me from a policy perspective harder to believe that that's an appropriate charge. So, let's start with your response to that because I think it's a belief system issue, but I want to hear how you translate that into this policy. >> I I have a response and then I might lean on Eric and our legal to speak to the other >> Sure. >> items. Um it's a readiness to serve charge which is what we have also on your domestic service which means we are ready at any time to provide the water flow through that meter from 5/8 all the way up to 10 12 inch that you need and there's a cost to that and maybe the cost would be minimal if we had one pri private fire service in the community but we don't. We have um a host of private fire services that range in all sizes including domestic fire domestic services. So our job is to ensure that at any time one or all of them can be fed with an ample amount of water at any time. And that means like I said earlier it could be 4 in the morning and we're all using four million gallons a day. Or it could be the heat of summer and we're using 22 million gallons a day because everybody's fire service is wide open. And there is a cost to the pumps, the tanks, the treatment to ensure that that capacity is available and ready to serve every customer. >> Thank you for that. I'm my sense is that's essentially the framework of an answer that you gave to council member Golder and I think she was skeptical. Not not that that's a true answer. Is absolutely a true answer. I think it's a belief system difference about whether somebody should be charged or not charged for that. Um I'm going to torture this argument and it is not transferable, but I'm going to do it anyway. I mean, I don't get charged uh uh for a visit by the police department when I say there might be somebody, you know, wandering around in my backyard. Um but they're there all the time to serve me. Um, and I pay them for that. Uh, like everybody else pays for that with our general fund. I can see the city attorney is chopping at the bit to get into this argument. But go ahead. >> Yeah. So, I think uh what the water department has established and what their their point is is that there's an ongoing service charge related to having that type of capacity available. And so then the question is who bears the charge, right? And under Prop 218, there is this proportional relationship with the cost of what you're getting. So either all of the rateayers can pay for it. And I would argue that that's not as compliant with Prop 218 or the individual rateayers who are receiving the survey can pay for it, which is more in line with Prop 218. >> I thank you for that and I think that's absolutely in alignment with everything that's been said. absolutely everything. I think it's still fair to at least be policy skeptical of that as a as a premise as a as a way to structure the law on this question. I think and this may be a legislative issue and not not an issue in front of the Santa Cruz City Council. Uh but I do think that there is an issue here. Oh, you want to get back in this council member Golden. I'll keep it brief, but I was I was what I was my point was is if you you you're at one home, you have the fire sprinklers, you get a fire, it puts the fire out, suppresses the fire much faster, much less water. House next door doesn't have fire sprinklers. A fire happens, the fire department is going to come and use the fire hydrant. Are they even charged for that water? No. But they're expected to come put the fire out. And so that's why I was kind of joking like, come on, guys. >> City manager is also delirious and is going to jump into this argument. make the mistake of joining this conversation. Um, I don't think anyone would argue that point, Council Member Golder. And unfortunately, Prop 218 doesn't take that into consideration when they determine how we set rates. So, I think everything that's being said here is true. Uh, folks are mandated to put sprinklers in under the building code. That's not a requirement that the water department um levies on those projects, but they do have to serve them. there's a cost to serving them and that has to beared as Prop 218 outlines it by those that are receiving the direct benefit. And my sense is on that question is the directness of the benefit and the distribution of the benefit which I think is a fair debatable point. I understand the law and I I think you're absolutely correct on the way it's structured. um how you get there is not more art than science. I think this is an absolutely fantastic report. This is very very serious good public policy work and I want to thank each and every one of you whether you are consultant to the city or your city staff or like Mr. Burns your commissioner. Thank you all. This is I'm being building up to something and then I'm going to undercut you. I I really mean this is quite a good and thoughtful and serious work. I do think it's still possible to have a debate about fairness in there in the context of 218 and how you distribute public benefit versus private benefit. I I I think that's a debatable point. Um and uh are there further debate or discussions? Clerk will call the role. >> Council member Tgerero. I >> Reer >> I >> Nome >> I >> Holder >> I >> O' Moara I >> Vice Mayor Kellar Johnson >> I >> mayor >> Keely >> I motion passes as ordered. Thank you all very much. It was quite good work. Thank you madame city clerk. The time and the question has has arrived to ask you if there is more business to come before the body. >> Nothing for me. >> Sadly no more work. >> Madam city attorney, what's your thought on this? Wouldn't it be funny if I had something >> nothing further >> and discouraging? Funny and discouraging. Seeing and hearing none, council member Golden moves and council member Trigger seconds that we adjourn. >> Those in favor signify by saying I oppose. Motion carries and so ordered. We stand adjourned. Thank you all very much. I'm >> glad you opened that door. That was