Soquel Creek Water District 08/18/26

Well, then I will welcome everybody to the August 18th meeting of Soo Creek Water District. We'll um have the roll call, please. >> Director Baloney >> here. >> Vice President Christensen >> here. >> Director Jaffy >> here. >> Director Lether >> present. >> And President Lew >> here. Um next is the if there I don't think we have any remote attendees tonight. Um, so I guess we will Anybody Does anyone have any adjustments like want to pull anything from the consent agenda? >> I do. >> Yes. >> I'd like to pull >> into the microphone, I guess. Yeah. >> Thanks. 4.6 the uh special board assignments. >> Okay. Anything else? Okay. So, now would be time for public comment. This is for anyone who wants to speak on any items not on tonight's agenda. Scanning the room. Seeing none, any board um comments not related to anything tonight. >> I have one as well. >> Go for it. So, um it struck me in the last few meetings that there's been a lot of changes to our um the way we determine uh how we uh declare stages. And I know it's not the time of year that we normally do this, um, but it may have some impact on on on agreements that we do, etc. So, I I'd like to get a review of the history of that and see where we stand now and make sure the board is on board. make sure the board is comfortable with the way we're we're doing it now. And you know, we our our aquifers in transition historically is long-term um overdraft and now we have pure water soel. And so maybe the way we've been thinking about things no longer applies. So I'd like to see that it come back to the board. Can I add on to that? >> Sure. >> I would just love to also have knowledge of what other um nearby water districts are doing. Do they have stages or not stages? If there's other models, thank you. >> Any other comments or questions? Okay. So then we'll move on to the consent agenda if there were other than item 4.6 which will come later now. Um >> move I'll second. >> All right. Did you get that so? Yeah. Okay. Been moved and seconded. All in favor? I >> I. >> All opposed. All right. Consent agenda is good. So, we'll move on to reports. Again, I'll look for public comment. Searching. Seeing none. Um, district council. >> Thanks, President Leu. Um, just a reminder that the end of this month is a deadline for bills to make it through the process and go to the governor's desk. And then the end of September is a deadline for the governor to sign bills. So, I know there's been a number of, you know, um, bills and legislation that we've been tracking through this year. Um, you know, in the next, uh, probably my next council's report, we'll try to do kind of a summary of the ones and where they landed in the process. Thank you. >> Thank you. Um, and there's the finance status report and the administration of business services report. Are those Are you going to say a few words about them? Yes, Leslie um is available for any questions related to the finance status report, but hopefully by now most of the information is pretty formatted and famili you're familiar with the way that information is presented. Um in terms of item 5.2.2, which is the bimonthly report for the administration department and the finance and business services, I would just like to highlight a few things in the packet. Um, just a reminder, we will be having a board workshop on September 1st. I also just want to announce that Purewater SoCal is being recognized as a project with an award of merit by the engineering news report magazine. Um, that was u just hot off the presses from about two weeks ago. And then again, I did just want to note that um we did have three seats that were up for reelection during this election term. And on August 7th, the county board of county board of or elections department announced that there um this board election would just move to an appoint in lie of an election because there were just three people that ran. And so, um, just wanted to note that for, uh, information on the record. We still are, um, as I just wanted to let the board know since it is an item of interest that we're tracking. It is related to the ZEV and the, um, California Air Resources Board um, regulations related to, uh, zero emission vehicles. There was uh the final regulation order that came out at the end of July. We are still going through what exactly that may mean to all of the agencies, specifically the uh the water district and California special district association's request that water districts be fully exempt like public safety uh vehicles was not fully taken, but they did add some language related to evaluating essential service vehicles. So, we're still um interpreting that. Um but I just wanted to let you know that um for public disclosure that the final order and the regulations are out. Um we do have quite a few um recruitments that will be underway. So, we've listed that out. And most importantly from the HR standpoint, we do have news that we did hire a new customer service uh representative. Stephanie started with us. And we also have included in our packet that Pat Pace, our longtime accounting specialist, is retiring. So, um, that's also to note. And other than that, um, if there's any questions, uh, Leslie, David, or I are available, as well as Becca. >> Good. >> I I had a something I wanted to point out on the finance status report. Um, people are using a lot of water in July. I know it's early. >> It's uh 14% above budget. So, just wanted to make note of that. Yep. I noticed that too. Okay. So, we'll move on to business items and the first one is a will serve that I think Brace you are going to present. Yes. Good evening board members. Uh this item requests board authorization to issue a conditional will serve letter for a proposed residential development at 2600 Mar Vista Drive. This is located on the Apttoass Par 3 or former Apptos par 3 golf course along Highway 1. It's about a 13.8 8 acre site with two parcels that were identified as housing opportunity sites on the county of Santa Cruz housing element. Project proposed project includes 495 residential units consisting of 318 affordable rental apartments and 177 for sale town homes. Um, the conditional will serve letter is an early step in the district water service process and allows the applicant to continue through the county's development review process as well as work with the district staff to design the water infrastructure improvements required to serve this project. If the project advances and all district requirements are satisfied, staff will return to the board with a request to consider an unconditional serve letter. While existing district facilities are located near the site, um preliminary analysis indicates that water system improvements likely be required to provide adequate flow and pressure to the project of the development. This will include some new on-site and off-site water manes provide adequate flow and pressure. The developer is responsible for developing engineering plans for staff review and paying all applicable fees prior to returning to the board for consideration of an unconditional serve letter. There is no fiscal impact to the district issuing a conditional will serve letter. Um the applicant has paid the required application fee will be responsible for all future fees, deposits and project related costs. There is a motion to authorize staff to issue conditional will serve which would allow the project to continue its process with the county planning department and further the design of water infrastructure. So I'm happy to answer any questions. I should also note there is a representative from the developer here um to answer any of your questions as well. I don't see public comment unless you're planning to say anything or just answer questions. >> Okay. So >> yeah. >> Okay. Yeah. Thank you. Um I I am confused about the number of units. Um the memo states 495 units then 487 total units and then another time it says 497 total units. Is there something about the units that you're not sure of yet? Okay. Um I was um interested that the um packet says the mains that they may need to be enlarged and new facilities constructed, but I was wondering which existing mains are inadequate. >> Um yeah, it's not that they're inadequate. Um the development includes two sixstory buildings. So there's a required amount of pressure to serve structure like that. The mains that are currently fronting that property are big transmission mains that go across the highway feed the lower elevations of our district. So there'll likely be some water manes from Soill Drive that need to be brought down to that parcel serve that project. >> Okay. And would these proposed improvements benefit the larger system or just this development? >> Um I would say it's primarily going to be just this development. Um but yeah, I think it would just be just this development. >> Okay. And will any maintenance and eventual replacement costs fall onto existing rate payers? >> Um I would say new infrastructure is generally like 50 to 70 years down the line. They would need to be replaced. >> Okay. That long. Uhhuh. Okay. 50. 50 years. Mhm. Okay. And um I was wondering about the 318 affordable rental units if they will have their own district monitored meter or is there a plan for a master meter with like the submeters? >> More more than likely would be master meter for each of the individual buildings and then submeter for each of the individual units. >> Okay. And then how is the common area and the landscape demand measured? Who pays for that? the common >> common area landscape >> common area or a couple common areas >> any irrigation of the landscape would be anticipated to be covered by the HOA of the um different I would say districts or different um phases of the development from the affordable to the for sale town homes >> okay so it'll be paid for by the town homes and by the rental units is that what you mean by everyone >> yeah more So the for sale with part of the HOA the affordable housing component of it will not be uh would not technically be taking on the burden of that. So it would be a part of the the overall improvements would be facilitated within the HOA of the district for the development. >> Okay. Thank you for the answers. >> Hey Bruce. >> So I know this is to my staff to our staff. Um but um I know that it that the project's not defined well enough to have an exact number on water use but on the urban water management plan there was some numbers put in. What's the r a rough number on the water use expected from the development? >> Yeah. So using the the demand factor from the urban water management plan which I believe is 0.11 acre feet per unit um we estimate it to be 33 to 68 acre feet a year of new water use. All right. And then just to follow up on the uh the metering requirement for the apartments, I know that well I recall I don't know I recall that we did a variance with Cababrio College to allow for submetering. What's the current um district policy on submetering for apartments? So my understanding is the district ordinance that is that better. My understanding is the uh district ordinance for separate metering uh requires each unit to be individually metered. Um I believe there are exemptions for affordable housing that prevent that. Um are provided an exemption for that >> at the state level. Yeah. Um I think also from a feasibility point of view submarine or um individually metering the apartment complex is pretty challenging. >> Um >> all right. So it's the state has determined Josh that submarine is is allowed for for apartments. >> That's correct. There's specific triggers for the types of affordable housing projects that qualify and the initial indication is this likely is one that would but we haven't made a final determination on that. um we would um if for some reason it didn't qualify under state law then as was um you Bryce mentioned this may be a situation where staff recommends a variance but that will be something that comes up for you in the future and then just to follow up on that so state law also exempt ADUs from submetering and there's an ADU and a they're always on somebody's property Um I believe there's um specific requirements like junior ADUs cannot be separately metered. >> Say that again. Sorry I missed it. >> Junior ADUs. So junior ADUs are typically >> small ones >> small ones that are in the existing footprint of the building. >> All right. Can I just clarify that Bryce that you said 68 acre feet per year and that's for the entire 495 units and landscaping? >> Yes. >> 33. >> Yeah, I gave a range of 33 to 68 acre feet. >> Carla. >> Okay. Um I just I noticed I saw the landscape plan and there's a lot of open place open space there. I mean, I I think uh there's wetlands, but I was wondering if you had any outdoor amenities and who would be in charge of those. You know, a lot of developments, especially with an HOA, they have make provisions for uh >> yes, >> recreation. >> Yes, this is not the landscape. This is just an open space plan. So, our landscape plan actually has details into walking paths, a bike path designated for the outside areas, and connection to the pedestrian flyover that goes over one. in addition to um amenity spaces within all of those open spaces. And so that would all be part of our development and all covered under the management of the HOA for maintenance and long-term longevity for those items. >> No swimming pools or anything? >> No, no, no clubhouse, no swimming pool. So, >> we're looking to to facilitate the more than or the the wetland area and its um surrounding areas as a pres a preserve preservation area and to keep our walking paths and stuff out of those areas for those reasons. >> Oh, okay. >> Where where's Highway One? Is it which side is that on? >> So, southbound. So, on the plan page. Okay. On the bottom. Wouldn't >> quite And then is it near where the bike um overpass >> directly connecting at the Mar Vista Culdeac. >> Yeah. Okay. Well, not just for them. >> One more question. Take advantage of the fact that you're here. That's time timetable. So, um, in working with the county on the planning department, because the zoning and everything was already put in place before we came along and the housing element site was there and were matching their criteria of the number of units that they expected. Um, we've gone through two levels of DRG back and forth with the county DRG stand >> design review group. Okay. And we are at a place where we will be submitting an actual building permit application next. In essence, we're getting um pushing forward to those. But we would anticipate that um this wouldn't come into place until the because of the affordable housing award process that would be anticipated in 2027. You nothing's guaranteed and for each of the rounds. So we would be anticipating, you know, 180 days from the date of the award as to when we could close and start breaking ground. So if it were, you know, beginning to middle of 2027, we would be looking at the end of 2027 into first quarters of 2028 as more of a an overall time frame expectation. And how long is the conditional will serve letter good for you? >> They're good for two years and there's a one-year extension for a third year. >> Right. Right. Good. Any other questions, Michelle? I'm at an advantage because I've reviewed at least three of three previous or maybe it was two um proposals for the same property. So, I know exactly what you're doing and what's there. >> Good. >> I was just amazed. It looks so much different than the last one. >> I'm hoping for the better. >> Okay. Right. No other questions. Okay. So, entertain a motion if anybody's interested. >> I'll move. >> Okay. Motion been made for the >> I'll second it. >> Okay. Moved and seconded and I know that this is a a lot for us. You know, we're not used to this many units. Um but we've got it moving us. But that's the way it's going. So, yeah. The one thing I don't like is the idea of a six-story building right there. >> Yeah, >> Cababrio's five and it looks like a huge monstrosity next door. >> Well, so moved and seconded. All in favor? >> I don't get to vote on this. >> I >> I. >> All opposed? >> Okay. Motion carries. >> No, I'm I'm I'm Yes. >> Okay. >> All right. So, now the next item is 6.2. the um draft 2026 community water plan progress report. Becca, it's you there. Good evening, directors. So, um we're bringing to you the 2026 progress report for the community water plan. So back in 2014 um a couple years before I actually started at the district the community water plan was conceived with the community for the community about the direction a roadmap to water sustainability. So originally it had the four options that the board was looking at um to where we were going to get a supplemental supply of water. So um del down in moss landing groundwater replenishment which turned into pure water soel water transfers and storm water capture. Thank you. I was like what's the fourth one? Um and then every it was we had done updates in 2017, 2019 and 2021 and then there's just been kind of a long gap since then um once the board chose um Pure Water Silk Hill to go forward as our supplemental supply. So at the ad hoc committee I had brought it up saying should we do a progress report? Should we do a community water plan 2.0? You know what what do you think the board would like to see? And um thank you directors Christensen and Belony for being on the ad hack ad hoc committee and and working with me on this. And they're like we'd really like to see a progress report. And and luckily I got to be at the last board meeting um while I was working on this. And so we really I I feel like we really kind of took your comments about messaging that we want to our customers right now that we're not out of the woods. Pure Water SoCal is online um and we're still working towards sustainability and so feel like having that on the front page helped um and kind of like right there out in our faces. So um I would love to hear if you have any comments or changes or Oh yes. So the plan is to um it is a self-mailer. Um if you noticed on the back page there's kind of a thing. So, it's going to be folded in half and then in trifold and we're going to mail it to every single customer and not insert it as a bill. Um, because we have a lot of customers now with ebills. Um, and we want to get it in people's hands and make sure like they see it. Um, a lot of times people don't open necessarily open their attachments when you get your bill um um in email. So, it'll be um mailed to everyone and also be um available on our website to download and then we'll also announce it in quick sips. Thank you. >> I still don't see anybody here for public comment, so I'll welcome them anyway, but any board comments or questions? >> Oh, nice job. >> I really like >> I feel awkward doing that since I participated. >> Yeah, thank you both for being in on that. And Becca, I really like the way the message comes across on the first page. And I think it's short enough and concise enough. You know, people don't like to read very much these days. And so to me, with the kind of combination of images and, you know, and text, I think it's should be very readable for everybody. I like Thank you. Good. Thank you. Welcome. >> I like it. Um I'm going to be an Eeyore. >> That's okay. Um, so it's very upbeat and maybe I missed it, but we're a critically overdrafted basin. And um, by definition, we're in long-term overdraft. Hopefully out of there soon with Pure Water Soill. So where in in this you talk about that or do you think it's not appropriate for this document? >> I I would say um there is a sentence on the very first page that says while we have much to celebrate our work isn't finished. We remain focused on aiding the restoration of our groundwater basin, adapting to changing conditions and regulations, continuing regional collaboration, and providing safe, reliable water for generations to come. as well as our work continues towards base and sustainability by 2040. And that third bullet are two places that I think are meant to address that >> also talk about it under groundwater management um about sustainability. >> Okay. Well, >> we also still identify um director Jaffy that Pure Water SoCal replenishes the critically overdrafted Santa Cruz midcount groundwater basin. So, we are identifying and still utilizing that label of the basin is critically overdrafted. >> It's in that green box on the second page where there's like an arrow. Oh, >> right. I'll show it on the screen. Um right here. I was strategically putting it in places where I thought people would look quickly and so like the green box calling it out um on that page on the front page using water wisely. So it does say critically overdrafted. >> Yes. Mhm. >> Um, okay. I guess I'm in your if the other board members don't think that it needs to be strengthened. >> No, I mean, >> well, it's >> you wanted it to be more like, oh, it's not solved. You know, we're we're still critically overdrafting it and we're evaluating. >> We're in transition. >> We >> we are we are evaluating how it's going to work. >> I I have I do have a suggestion that might help. Um, in the pure water SoCal box on the front, we is now replenishing our groundwater basin. We could put critically overdrafted right there. >> Yeah, >> sure. >> If that will >> thing that strengthens the message. I mean, it's beautiful and and I think we look really good with all the accomplishments, but I >> I saying that that that people might not pay understand basin sustainability for the way we understand it. >> No, just that I think he's saying >> Yeah, that's what I was saying. So, but it it sounds like I'm an outlier. >> No, no, >> the other piece we could add is by the numbers we can one of the key messages we always say is we're one of 21 basins that are critically overdrafted in the state of California. >> Yeah, that is one place we can >> always >> add something. >> It's in every PowerPoint presentation. >> Yeah. anything that um balances the message that our customers get good. And uh like for instance, no it it's it's showing that we're doing good work. But I the balance I think is that we have have a long way to go still at least in in my opinion on on sustainability. >> Okay. I'm just wondering if somewhere in the looking ahead there should be monitoring >> to see see the effects of >> suggestion >> of >> but that's I mean that we all want to look to that >> to see if we're getting what we plan to get out of it and it is sustainably I'm not sure how to word that but in in the future I think monitoring to see how we're doing is really an important part of it. President Leu sorry >> goal the optimizing pure water soel and continue in order to achieve our goal for replenishment of it says it a number of different places but I feel like it would be worth saying it again that the plant is a long-term project to replenish but it can probably be reinforced in the sentences and >> I'm somehow make it not sound like it's a done deal for you know, like it's just like we're we're doing all the right things, but we still have to monitor and we still don't know for sure, you know, >> and so have to be careful. >> I I app I appreciate that, too. But I Yeah, I think just repeating it >> everywhere. So, >> well, all I know is that I don't watch the news anymore because of the repeated bad news on the same stuff. And we don't want to make that mistake either. >> No, because >> No, we don't. I'm I'm like I'm done. Anytime I see anything that has any negative to start with, I just throw it in the recycling rather than read it. >> No, we don't want to go negative. >> Oh, it's very positive right now. And just I think adding those few extra things >> um >> when we ask for more money. >> Yeah. Well, we we are on the right track, but it's true. This is a long-term effort. >> Yeah, we're in transition is the way I look. >> So maybe continue to optimize pure water soel continue to uh restore the groundwater basin which is what we've been harping on for what 40 years I guess. >> Thank you. It look it's it's really nice and sorry for the Eeyore comments. No, no. I think you make a good point. >> I appreciate it. Thank you. >> Just just you want to like whenever I even write anything kind of see if the tone is right and and and if you're getting that little bit more careful message in there, you know, however she it's worded. Yeah. >> So, here's a trivia silly question. I'm looking at the picture of the tour center. Is the butterf Are there butterflies really on there now? >> Yes. >> Yeah. Have to go by. >> Go take a picture. >> That's why we put it on the garage. So the garage door so people can take a picture anytime they wanted. >> I like it. >> Yeah, it looks really good. >> Okay. So that was just >> with my red bud. >> What? You want to go visit it? >> The tree. >> The tree. Yeah. >> I'm gonna put a little plaque there suggested by Michelle Leather. should >> to appease. >> We don't want to give all the history. Yeah. >> So, you're back to the I'm going to recycle it. >> All right. So, we good? >> Yes. >> Okay. With that? >> Yes. >> Right. So, um the next item is to receive information and input on the draft inter agency agreement with the city of Santa Cruz. So, I think this is a combined effort. So, it's Melanie and Josh and Leslie. So, a lot of work's gone in. And and then Brent's here because he's got a perspective that probably no one else has at this point. >> Thank you for printing this up as well. We can take notes. >> Thank you. We do have a PowerPoint presentation and there are copies at the dis. In addition, um the presentation will be a combination of myself, Josh Nelson, and Leslie who will come in and talk um at their appropriate times related to more of the business terms um that we are working on um with the city of Santa Cruz. And then there's also a financial aspect. So, as discussed in the staff memo, uh we have been working on a draft inter agency agreement with the city of Santa Cruz. Um our purpose tonight is to review the primary business terms in the current agreement. We want to discuss aspects related to the regional collaboration um with the district as well as with the city um water supply conditions um operational factors and also the financial aspects with a water transfer with the city. We also um will be going through several of the business terms that are currently at a point in the draft agreement where we would really like one to provide that information to the board and also to get input so that we can further discuss items with the city. And then of course tonight um as you as you can see this is not necessarily a page by page of a draft agreement but more focused on policy issues and highle topics associated with the core components of the agreement. Let me just kind of reduce this a little bit. So I just wanted to focus a little bit in um setting the stage related to collaboration. We had a public advisory committee meeting last week and received some input from our public advisory committee members that we're actually going to be bringing to the September 1st board workshop. But there was a question related to collaboration and I just wanted to kind of share that that data point with the board. These were actual um sentiments from the public advisory committee meeting committee members. Collaborative agreements with other agencies and municipalities is imperative. More groups working together in a cohesive direction. Cooperating can get us all further. Different agencies all tap the same underground aquifer. Coordination can help protect the resource for all. And then the one at the top says collaboration provides learning. Um, since 1976, the city and the district have partnered into at least 19 formal different agreements. Again, some of these include the surface water pilot with the city of Santa Cruz that just expired this year. We have a mutual aid agreement with the city of Santa Cruz. We also have source water for pure water soel the site use at the dis at the Santa Cruz wastewater treatment plant and the use of their outfall. >> I just want just quick note I just Melanie sent me a copy of a letter that I signed back in 2011 wanting to collaborate with the city. >> Good job. It's just 15 years ago. >> Some things move faster than others. >> Again, you know, as I had that snapshot in that previous slide, we also just started to expand a little bit. Again, these are just highlights. But while those that last slide showed three, some other ones that we um were talking about and have been working on, you know, currently there's still the cooperative groundwater management agreement. We have um the partner agencies uh with the Santa Cruz Midcounty Groundwater Agency. A lot of collaboration and work um with the partner agencies on anything related to the midcount groundwater agency and the groundwater sustainability plan. And then I did want to just add you know obviously recently too there's been a lot of effort related to the regional optimization study. That was a report and effort that received grant funding through the midcount groundwater agency in 2022. >> So Melanie is the uh cooperative groundwater management agreement is that where there's a limit on uh how much groundwater the city can extract? >> There are parameters in the co collab cooperative groundwater management agreement that does have uh volumes associated with both the city and the district. that was done in 2015 um as a way for us to do some shared management of the basin. >> Um in terms of the regional optimization study, the last report that I mentioned in the last slide, I did just want to take a pause and you know note thank you to Dr. her dad who's in the audience tonight who's worked with um a major component in that optimization study was related to collaboration with agencies working together on shared solutions. Um, as part of his effort, he did interviews with the Santa Cruz Water Commission, Santa Cruz City Council, and of course, as you know, um, our board of directors in 2024, and then again, he's interviewed, um, did some interviews in 2025. At a high level, um, again, this is just verbatim coming from the study report. Uh water leaders have expressed optimism that regional cooperation could improve water situations of both agencies. Leaders offer principles of which to base the negotiations on and how we could proceed. And I wanted just to at least um highlight those principles again that were captured back um in 2024. principles for the agreement. Fair, clear, implementable, long lasting, genuine um I can't say that word. Non hierarchial collaboration. Each agency retains obligations and freedom to serve their customers and replenish the basin. Cost to minimize rate impacts. No rateayer subsidizes the other agency. Reflect on community concerns. environmental protection plus climate resilience. And again, the nature of the agreement and how we put an agreement together, streamlined but with an amendment approach, clear legal definitions, arbitration procedures, sufficient water of love, sufficient monitoring of water levels and quality, and rapid collaborative decisions on water transfers. I feel like um those principles have been ongoing as well as continuing at least for on the district standpoint. Leslie, Josh, myself and our other staff continued to hear the input from the board at our board meetings and at the dis. So before I turn um it over to Josh who has been working alongside district staff, city staff, and the city's um uh legal uh representation. I wanted to at least just highlight the draft agreement and the overview of the the main points. This agreement is for a potable water transfer from SoCal Creek Water District to the city of Santa Cruz. Our previous pilot efforts and previous agreements have primarily focused on a water transfer from the city to the district. So this is an agreement that would be the district to the the city. Again, we would be using the existing O'Neal Ranch inner tie that was an inner tie that was built and we have been using for water transfers going from the city to the district and it can do this direction. Now again um one of the core principles is to support regional collaboration and water reliability while still preserving the district's responsibilities obviously to the basin to our customers and this is not a transfer of water rights or create a city property interest in the district facilities. Thus this is one of the reasons why we are bringing this tonight in open session to talk more about this and get feedback from the board. how the agreement um has evolved. Um this will be my last slide. Okay. And then um as as mentioned um this isn't coming out necessarily of thin air. We've been kind of talking about water transfer since 2022 with optimization study and Tom thank you. You just reminded me back in 2011 um there has been efforts related to the city and the district collaborating. We obviously know uh history we can't we can't completely rewrite history. We also know that there's been collaborative efforts along the way with del uh collaborative efforts with the source water for pure water soel and then again you know going forward how can we collaborate. So um tearing off of the optimization study in late 2025 early 2026 uh we started to meet with Dr. Hadad on the main kind of core principles and concepts associated with an inter agency agreement. Uh those early drafts focused on you know securing a long-term water supply commitment. the city had gone through uh their water supply implementation um and identified a water shortage gap. So they were looking at agreements with both the city of um like Scots Valley Water District as as well as Soal Creek Water District. Um, specifically for our agreement, uh, back in April and then in May, um, you can see that there's been some evolution related to whether it was a long-term agreement, whether we started and we were more comfortable with a two-year term. We also started to add in some um, criteria and conditions related to operations, regulatory, customer, and groundwater conditions. on July 1st. I think that was a pretty pivotal moment between the uh partnership and collaboration with the city and the district. Um Ren actually um came in and did a facilitator edit. um try to really look into what the points or issues were. And we had a an edit then that really focused on I think a little bit of um taking the agreement and pivoting it to a long-term regional partnership versus something that was just transactional in nature. It also added some of the water shortage restriction provisions and enhanced the um criteria and the methodology associated with groundwater monitoring and reviewing of the groundwater conditions. And then where we are currently is we have some additional clarity on the definitions related to reliefs andor offramps associated with the district's ability to provide water to the city. Also, we started to go into more billing. And of course, in any kind of agreement where there's a sale of water, there really is a component related to how much is the water going to cost, how is that cost um calculated in terms of a methodology and approach and then um how that could be built into the agreement. So, we did bring in Raph Telus and Leslie will talk a little bit more about that portion of the draft business terms. So Melanie, it looks like things accelerated uh starting in in April and um do we have a a timeline for when uh we want to complete the agreement? We obviously I think the the core principle of our our agreement with the city is we want to make sure that we get through a successful negotiation of terms. We want to make sure that it's comfortable. Um as we know with um labor negotiations, sometimes it takes time, sometimes it can go fast, sometimes it can go slow. I wouldn't say necessarily that there was a huge ramp up from April. um we've been kind of and you know Dr. her dad is here and if well you're welcome to to share. Um, I think that was the point where there had been a lot of discussions and Brent felt it was time to put some stuff on paper and so that is kind of why in April there really was a a time we looked at many different types of agreements. That was one of our efforts was you know do we we don't we shouldn't have to reinvent the wheel in terms of agreement water water agreements wholesale water done either through agency to agency or agency to private entities is up and down the state and all all around. And so that was a lot of the effort earlier was also about what type of methodology in terms of a contract we would want. And then I do think you know in April Brent was like I think I need to start putting some stuff. >> So there's a planning meeting on the the proposed schedules um on March 1st. Is the is the hope to have an agreement before that that time that that that there could be a planning meeting in March 1st 2027. the March 1st is more tied to the window of the way that the contract is um described is that that is when if we were in an agreed uh an agreement or a contract with the city there's a step-wise process for scheduling and quote unquote calling for the water. So that's the March 1st. The window of the transfer again an operation our operations team also had to work through kind of some operational considerations. The transfer really is typically between April and October. So we would like some early onset of how much water they are are they expecting. It's tied also to um kind of that window within um most of California where we start planning um under um the urban water management plan. we have to do a water assessment and availability. So that would also be about the time that we're looking at our water conditions and the city is we're looking at their water conditions. >> So it sounds like if if we don't have an agreement by March 1st of 2027 really it it's March 1st 2028 or when >> yes >> you don't know which one >> at that at that point right now we have done it. So the contract is the window of a transfer is April to October, >> right? So there's no time frame. I just want to know how much time as a board member I have to evaluate the agreement and the the assumptions in terms of really the protection of the aquifer. That's my primary concern. I'm concerned about other things. I' I think it'd be great to help our neighbors and I think there would be a benefit in terms of decreasing what our um what our customers have to pay. Um although it's it's not a huge amount it is is something but my primary concern is is this the pure water soel project was built to stop seawater intrusion and I want to be able to uh to know that we've evaluated that in light of of water transfers. So, it doesn't sound like there's any time frame that I have to be concerned about. >> I would at this point >> I would say my follow-up um response to your question is there are things that we need to do before an agreement gets in place. Um one the negotiations has to be complete. The contract has to be I think approved by both parties. Uh we also have environmental review on this. The city of Santa Cruz has gone forth with doing the squa associated with this agreement and the transfer of water. Um that needs to be done. Again, that would be a precursor to any agreement moving forward. We also have to finalize the components. You know, again, the cost um is also something that we need to really sit down and negotiate with the city. We've not talked about that. and the quantity of water that we're able to to transfer. >> Absolutely. And that's those are and you're jumping to the jumping to the meat of it and I'm I'm happy to switch over to to to >> I'm happy to switch to Josh because that is those are exactly a lot of the the terms included in the No, no, no. It's great. >> Yeah. I should mention I met with with Brent um is that yesterday? And we and so I've had a preview of this so I'm probably ahead of other board me I am. >> Maybe >> you did have a preview. >> No, I don't want to give it. No, thank you. But I do Yeah. And you've been keeping track. So I I haven't been keeping track. So, this has come as um hard and fast to me that the that's this far along. I just want to make sure that that that I have time and it's my responsibility as a as a board member to to make sure that um any water transfers doesn't jeopardize the uh >> recovery of the health of the of the Josh, >> Josh Josh did just want me to make sure that I have have clarity. If if we can get to uh resolution or agreement or consensus on the business terms, uh the SQA is done there. There is an opportunity that the earliest would be 20 March of 2026 would 2027 um would be where we would work towards that. >> There is that hope. That's our hope. Um, but I think that's really kind of the point to to Melanie's you setting this up. That's really what we're looking for this evening, right? I mean, if if the board is like, "Hey, we're we're interested in in potentially moving forward, but we don't want to see this start until 28 or or whatever date." I mean, that's exactly the type of feedback that we need. we need this evening because I think at least at the staff level the anticipation was you know we may get to a point where assuming the board is comfortable you know we could have a signed agreement this calendar year which could allow a transfer next year. Um again not we're not suggesting that's necessarily you know a requirement um but the type of feedback that we're looking for as we move forward with the city. Um, so I'm gonna, as Melanie mentioned, covered the the business points. Um, and it'll be all the business points with with maybe the most important one, the exception most important one, which is the finances. And Leslie, of course, will cover that. Um, so the, uh, the biggest picture, um, business point that's non-financial is just the amount of water that's being transferred. Um, and the initial agreement anticipates um, 550 acre feet per year during the first two accounting years. Um and then there would be an opportunity or well there'd be a requirement for a meet and confer process and an opportunity for the parties to dis discuss potentially increasing that any increases would be subject to agreement by both um the city and the district. Now on the last bullet point there, there's a reference to um all delivery commitments are conditioned upon there not being an article 12 relief event. We'll talk about that um in a couple of slides. Um that's sort of, you know, an important concept that we built into the draft that would allow us to reduce or potentially suspend water transfers in years where there's adverse um effects to the groundwater basin or or other situations. Um I think it's important to think about that um in the context of the of the term. I mean, I think, you know, based on some of the comments we've already heard and, you know, things that we had anticipate the board would be concerned about, we really have tried to structure the the draft in a way to um give a little bit of ramp up time as the project, you know, continues to move forward and we see how the basin responds. Um, and when it gets to the amount of water being transferred, you really see that in three different ways. First, in the amount of water. So, you know, 550 with the potential for more in the, you know, in future years if it made sense for both parties. The second that article 12 relief event provisions which we'll talk about. Um, and then third to the uh next slide. Um, the way we've structured the draft term and then uh before I I keep going uh please stop me. I mean, you know, we really are looking for for your feedback and each of these in some ways are sort of discreet points and so if you have any questions, comments, um, you know, stop us and and we can we can discuss. So the on the term of the agreement kind of what I was mentioning as far as a ramp up it's really you know again depending on when the agreement is signed essentially a two-year initial term um with an opportunity for either party um prior to June 30, 2028 um to give a one-year notice to to to stop the project. Um so in some ways it's sort of a pilot um after that period and assuming you know neither party has done that then there would be a five-year um period where during that during from 2028 to 2033 the district would have the ability to send a five-year notice of termination. after 2033. At that point, you know, our our point, you know, our our position has been that we probably have a pretty good idea about how this relationship has worked. And at that point, a longer term commitment by the district may be uh more appropriate. And so, uh for any termination notices after 2033 up until the expiration of the agreement, it would be a 10-year um uh notice. And then, as a note on the last slide there, the agreement would sunset in March 31 of 2075 um absent further uh increases. Uh just to talk a little about how the mechanics of those five-year termination notices would work. Um it's you we provide the notice and then we're on the hook for the period of the termination. So five years for that interim period, 10 years um beyond that. So the mechanics of how uh water deliveries would be handled in each uh each year, we already kind of covered this. Um so there would be a meeting um in March 1st which would be anticipation for the accounting year which would start the following April 1st. Um by March 15th the city would provide a request for the amount of water in the schedule in which they would like to see it. Um by March 30th we'd finalize that schedule and then water deliveries would as mentioned start April 1st. Um the city can always request up to the maximum um but there's no requirement for them to requ uh um requests any water in any individual year. Um just sort of foreshadowing an issue we'll talk about on the financials. Um it would have been it is possible for us to structure an agreement um where the city has u really an obligation to take to take water or they pay for it whether or not they take it. Um we have intentionally not built agreement that way because we'd like um to not create an incentive necessarily for the city to take water in years when they don't need it. So, you know, point of this slide is just really emphasizing, you know, what does that up to 550 mean? Um, and it it really is intended to be a maximum amount. And while the anticipation in the agreement is that we would provide up to 550 if if requested in each um each year, there are recognitions in the agreement that there could be um situations that arise that um prevent us from doing that. So it could be the article 12 relief events we talked about. It could be situations where the plant is offline for a period of time and so just from hydraological conditions, it's impossible for us to deliver the entire 550 in a compressed time schedule. those sort of eventualities are are built in. Um in addition, there's some discussion in the agreement about what would happen if we return to a stage three or stage four. Um and the agreement clarifies that u in those situations um the city would be subject to essentially equivalent um restrictions that are applied to our customers to ensure parl. So, this a little bit more in depth in the um the article 12 relief events. Um you know, I think Melanie has on the tile there safety safety valves or safety levers. I think that's a really helpful way to to think about this. Um what they are, and I and I won't read them. I think they're on the slides, is a series of of conditions that if they occur, they trigger a process to require a conversation between the parties. Um, so if we have an adverse event, there's an obligation for us to meet and confer and see if it can be resolved. Um, if it can't be, you know, uh, resolved, then the district has the ability, you know, to temporarily reduce or suspend water transfers. Um, and there's an equivalent reduction in the fees that are that are owed. I think again it's important to note that this provision exists in addition to our ability to opt out of the agreement and opting out of the agreement isn't necessarily intended to be a substitute for this. Right? It's a recognition that there may be um even in a long-term relationships you short-term situations that arise that require some some adjustments between the parties. >> Slide please. just that the the two errors that are being shown the next two slides are just going to go a little deeper into you know those topics. >> Thanks. Um so I I mentioned this one a little bit in the last slide but just provide some additional um information. Um so if there's a situation where we declare a water shortage um then um that triggers a a relief event um and we have the ability to impose restrictions on the city equivalent to those that are imposed on our customers. Um the fixed fee won't um won't increase of course midyear but the variable fee would increase proportionally to what the increase would be based on which stage we're in. And then uh on the uh Sigma and GSP issues. Um first they're the agreement requires annual reporting um by the the city and district about just how the groundwater basin is is doing. Um, and that reporting needs to be made to this board and then to um I guess it be the water commission or the city council. And if there are undesirable results exceeding two years, that's automatically a article 12 relief event that would go through the process I walked through a couple slides ago. I think in the the top two um bullet points just identify that we are you know obviously not out of the woods. So there still is um a criteria to meet the state's mandate. So we still will be incorporating sigma in the groundwater sustainability plan and the concepts and ongoing monitoring. There is also a point um in the draft agreement related to the 2015 cooperative groundwater management agreement being superseded by this. Um we can definitely go into more details on that if there are questions. >> And that's actually my my last slide, but be happy to answer any questions on the deal points not including the finances. >> All right. Thank you. So, I'm going to talk a little bit about the um pricing um options and the cost of service um study that we had Rafelis perform for us. Um once again um I realize that basin sustainability is our primary goal. Um but other ancillary goals are, you know, cooperation with our partner agencies, um our neighbors, helping helping um neighbors in times of drought. And anything that we cost share in something like this is money that our rate payers or in customers don't have to pick up in their rates. So I'm going to talk a little bit about the cost of water and our pricing options. again from Raf Telus. They um took a look at the cost of service to provide this water um from Pure Water SoCal and this is similar to a cost of service study that they would do for um Prop 218 rates. This is not subject to prop 218 but the methodology is quite similar. They take a look at the cost associated directly with the pure water socal components. Um the tertiary treatment facility, the advanced water purification facility and the swip wells. And um so they looked at our on&m expenses, what we would pay Jacobs to um run our facility, um any of our chemical and electrical costs that we pay um to run the facility. We also have our um debt service and our capital expenditures on any improvements made to those facilities and um those all go into what we directly pay for pure water socal. So they took those costs and to those they added the extraction costs for the water that we pull out of the swip well or for the water that we pull out from our production wells to be able to send to them. and that's primarily going to be, you know, pumping power and pumping costs. Um, and then we have our water transmission costs and that's on top of the other two components. And that's the cost of the O'Neal pump station. That would be power to that facility as well as maintenance to that facility. Uh, and the inner tie. So, those are the costs that they all pulled together to determine what the pricing would be for for this wholesale water. What they did next was they took a look at some pricing options. How would they configure that? And that's similar again to how we do it for our customer-based rates. They took a look at a fixed component, which would be similar to what we would do on a monthly service charge for our customers. It's fixed. They they pay that regardless. Um and then the variable component which would be like the volutric charge that would be dependent on how much water um that was sent to the city of Santa Cruz. So they came up with four options that we could consider. Um the first option is the take or pay option. And on this one um the city could take up to 550 acre feet a year. They wouldn't have to take all of it. They can take anything from zero to 550, but they would pay as though they took the whole 5 550. It would be a fixed annual cost regardless of whether they took the water or not. Yeah, that that doesn't sound like a great deal for the city, but but it was one of the pricing options we looked at. >> More water. Yeah. And so just to add in, it actually is relatively I would I mean pretty common in these types of agreements just because it provides certainty to the wholesale agency, but it isn't our recommendation, you know, just because of where we're at with the basin sustainability. >> So the other the other um options they looked at were a mix of fixed and variable. Um so option 2A is a higher fixed charge and a lower variable cost. So that's kind of like we'd get 60% of our revenue or something like that from the fixed component and then the variable would be the smaller component of revenue. >> So is that 60% of the water that they take? >> No, that would be 60 that would be 60% of the revenue need at 8,500 acre feet. >> If the on March 1st or whatever the final date is that's finalized, they say this year we think we'll need 400 acre feet. They would pay the fixed charge regardless. >> Okay. >> And then they would pay volutric for what they are going to take. >> They actually do. >> Yeah. And that's the same for both options 2 A and 2B. But one has a higher fixed component, one has a lower fixed component. And I I said 60%. That's what we have on our customer side. That's not necessarily the cost allocation that they did for this. >> That was just that was just an example. Yeah. So they could take anything from 0 to 550 acre feet. They pay a fixed component and then they would pay a variable component for the amount of water that they take. And then the uh option three or the last option is like a rollover or a banking option. Um similar to your cell phone minutes, if you don't use them, they roll over to the next period. So they could take 0 to 550 acre feet, but what they don't take in year one rolls over to year two. And there again, that's based on a variable amount with a fixed component. Just like Josh mentioned related to option one, the take or pay, option three is one that would provide um you know fee recovery as well as um maintaining the water that they're purchasing. We didn't really feel that option three was um an option that fits where we are currently in our situation. So again, we wanted to present that Rafelis provided a suite of four different options, but really um staff um is wanting to present more and is recommending option to 2B to further describe how pricing and structure could be um within this agreement. >> Conservation. So the next slide kind of shows the breakdown of the cost per acre foot of the of the four options that we just discussed. Um this one says option one, two, three, and four. It should be option one, 2 A, 2 B, and four. But um or three, I mean, but you can see where the total unit costs per acre foot is the same for all of them. It's about $8,500 um dollars per acre foot. And that's based on those cost components that we identified. The direct cost of pure water SoCal, the extraction costs, and the and the um transmission costs, but it's broken up in various ways. For the take or pay option, they would pay $8500 an acre foot for 550 acre feet regardless of what what the amount of water they actually took. Yeah. So option two is the higher fixed fee and the lower volutric fee. So they would pay $6,500 an acre foot for 550 acre feet and then $2,000 an acre foot for the water they actually take. Same with option three or option 2B, but it's a lower fixed charge and a higher volumetric. And then the banking option is the same rate as option 2B, but they could have rollover minutes. So the next couple of slides that we're going to look at real >> stop you there. >> Oh, absolutely. So the base fee back a couple of slides it had uh debt service capital expenditures paying go and O on M expenses fixed and variable showed up in the water extraction costs as well as in the direct costs. >> Right? So what's so the plant is you know pick a number 140 million and so how does that cost of the plant enter into the the base fee is >> the debt service >> right because obviously we wouldn't charge for we wouldn't charge our customers for something that we built at no charge which was grant covered right we would only bill them >> grant covered No, we would only bill them for the amount that we either had to pay. >> You're not charging for the grant portion, >> right? >> You're charging for the the the debt portion, >> the the debt or what we have paid out of pocket that's not covered by the debt. >> That's that's what we're charging >> indirect cost. >> And then the on andm expenses, they show up in extraction and in direct costs. >> Yeah. >> So, how's that? Explain that one. So, our O andM expenses for the direct costs are primarily the cost for Jacob's contract plus the AWPF chemicals, power, all of that kind of stuff that's not covered under the Jacob's contract. That's all direct costs for Pure Water SoCal. The water extraction costs are our pumping costs to pull 550 acre feet out of our production wells. Gotcha. And the transmission costs are the power to run the uh O'Neal pump station and the intertie maintenance. >> So um >> yeah, these are all justifiable. >> Yeah. And they don't they don't roll dollar for dollar into this based fixed fee and variable fee. That's just all of the cost. Those are the cost buckets that are all combined in the pie. And then they've taken and split the pie into four different options. >> So I don't expect the water transmission cost to change over time significantly. Maybe a little bit. >> It's a it's a variable. You know, if they take if they take 50 acre feet, that's going to cost less than if they take 550 acre feet. >> That's service that doesn't change. >> That's static. That's static. That's a fixed charge. >> And uh capitalical capital expenditures doesn't change. >> That's Yeah, that's pretty much fixed. So you're very um fixed if we if Jacobs wasn't the operator that would change if we had a different model for that. >> Well, it it would still be primarily fixed. We'd still have to staff, >> right? But the amount would change, >> right? It wouldn't be it wouldn't be the cost of the Jacobs contract anymore. >> Thing that will change over time mainly is the on andm expenses. >> That's because power will change over time. is that the uh >> the biggest biggest part of this >> power and chemicals are probably the biggest component of our operating costs except for the Jacobs contract. >> Yeah, that's all that's all in there as part of just an >> just trying to >> turnover of product >> get a relative >> I think >> of of these different components. I think I would say that the capital expenditures um not necessarily fixed but we would have to go out. We're assuming again if there's in in the years forward if there's um infrastructure improvements at either one of the anything associated with pure water soel if we decided to do um some sort of enhancement project on a treatment we want to make sure that that's encumbered into this cost and that's just not burdened by the district but it's in included in the formula. Good. >> I'm just asking as I go along. >> Well, I am. >> Forgive me if I'm >> on um >> from asking. >> No, you weren't. I just thought I'd jump in there. I see. I just made it. >> Chance, right? >> I just made it. >> I think there's some confusion for me on the seven slide 17 and 18. And what it is is the options. Okay. I think they need to reflect what was on 16. the same options and not be named something different. Especially on 18 where it says option three drought interval. >> Yeah, that's that um rollover. >> Yeah, >> and I was like what does that mean? >> Yeah, these are um wraplesis slides. Um and so yeah, that's the rollover option three. Yeah, the the naming needs definitely because I start thinking. >> Yeah. >> And you know may you may say the right stuff, but I'm thinking because I'm looking at that. >> Yeah, I would take Yeah. Go ahead and just look at option one, 2 A, 2 B, and three. >> And then on 17, you know, you only have option two. >> Yeah. And it should >> And then you have a base fee, which probably will be different for 2 A and 2B, right? >> Yeah. Option three is actually option 2B. >> Okay. Option two is option 2 A. Okay. And option four is option three. Yeah. Okay. And that's Yeah. Option three is the It says drown interval, but that's the rollover. Uhhuh. Option this the the third one there is option 2B. That's the one that staff feels is probably um the best option that we've looked at so far. And then um and then I know you're just trying to compare apples and apples. So you're looking at this as if they asked for 550 every year, >> right? >> Yeah. So if they asked for 400, it the base fee would be less. No, if they ask for 400 acre feet a year, the base fee remains the same per acre foot. >> We we take five I say it's per acre. >> Take 550 acre feet, which is what the agreement is for, and we multiply that by the base fee. >> Okay. 33. >> I was thinking the base fee was just a base amount. Okay. And >> that becomes their fixed amount that they have to pay us annually, whether all of it or not. >> Said per acref foot. I know I suggested that for the total, but just because the squirrels in my brain went away and came back after I talked to you about them. >> And I think the next couple slides show some kind of examples of what it would look like for zero or for 400. >> And and I will point out that we're still working on the rates. This isn't hard and fast. This is just >> this is for comparator. Yeah, just for comparison. But yeah, you take the based fee fixed and you multiply that by the 550 acre feet that that we're agreeing to in a contract. >> Okay? >> And then the volumetric fee is multiplied by the acre feet that they actually take except for option one, the take or pay. They pay $8,500 an acre foot times 550 acre feet whether they take water or not. >> So just to make sure I understand it. So for option 2B, which is the staff preferred option, we're talking about a base fee if the agreement's for 550 of somewhere in about a million and a half >> about 1819 about 1.8 1.9 million. >> Oh, I didn't multiply. >> If you go to slide 18, >> if you go to Yeah, if you go to the next slide, slide 18, >> right? This shows you the minimum amount that we would get under these options, >> right? >> And this is >> zero >> zero water sold. This is just your base your base fix charge. Okay. The take or pay option is going to be the same because they're paying $8,500 an acre foot times 550 acre feet. So that doesn't change. Your option 2A is 6,500 acre feet or it's $6,500 per acref foot times 550 acre feet and that's the minimum that we would get annually and it's there's a cost excellation factor here obviously every year those rates would go up slightly and then option 2B it looks like it goes up on 2A but not on 2B Okay, >> that might be a >> Yeah, that they may not have added the cost escalation on 2B. There should be a cost escalation on 2B and option three both. >> Yeah, >> but that is basically that 3,300 acre foot times 550. So, just to put things in perspective and see if my memor is right, our total budget income is 30 millionish >> for across the board. >> Well, just without this, yeah, I just want to know. >> Yeah, you're you're looking at about 28 to 30 million. >> So, we're we're talking minimums of five or 10%. >> Yeah. You could be >> Yeah. >> goes up. >> Now, if they take water, >> Yeah. >> that obviously goes up and it would be silly for the city to agree to this contract and then never take any water. Um, >> so, you know, on the next page would be uh an estimate of what we could get annually. Um, option one again is the 8,500 acre feet times 550. That's the same numbers as you saw on the prior page. But option 2 A is giving you some option 2 A and 2B are giving you some options assuming that the district takes 4 or that the city takes 400 acre feet a year. So you can see where you're getting between four 4.4 million with 400 acre feet of water sold. And then option three of course is your rollover and that assumes 450 acre feet a year for four years and then a rollover of the unused portion for year five. So that one's that one's kind of a variable. Yeah. So, you know, we could we we could only bring in a couple of million if they're just paying the base fee and not taking any water, or we could potentially bring in, you know, three or four million, perhaps more if they're taking 550 acre feet of water a year. But that's if it's three or four million, it's an increase in income of over 10%. >> Yeah. would definitely affect rate increases wouldn't be as necessary I would guess. >> So um so um >> how does it dive uh with we're doing a water transfer right now for the with the city of Santa Cruz uh of 600 acre feet isn't it? >> I'm sorry. Can you say the question one more time Carla? >> Yeah. Do we have an idea of what that costs what's that costing and and if it has had any impact on our aquifer? >> I don't think we've sent 600 acre feet a year to the city yet. >> We do have a we do have an agreement with the city as part of getting the source water and the land was to when we took out their tertiary facility that we would pay back the water from them not using that. So that was just embedded into an agreement related to the land lease and the use and source water. Um the benefits of the transfer is we're paying it back and then the impacts associated with how it's affecting um the I think the representative monitoring points or is it having an an impact on the coastal monitoring wells? We are seeing as we um Cameron Tana presented in June that had three months of the water transfer which started in March. So there was some data associated with um the recovery of the basin including that water going to the city and again >> what's the volume so far? >> The volume total I do you know what the exact volume is to date? Yeah. I'd like to we've been tracking the water. We've been exchanging back and forth with the city. We've taken some water from them and and given some to them over the last couple years. And right now for the transfer that started in March, we're at about um I don't know how many I think a million gallons. So I think it's we're in like the 110 120 million gallons transferred so far. But the amount we owe the city currently is about 63 million gallons as of uh I think the end of July. If we continue to transfer at the rate that we've been transferring water to the city, we'll be um even with them in uh October, early October, late September, we won't owe them any water. So, >> and the total is approximately, if I convert that to acre feet, is somewhere just over 600 acre feet of water. sense. >> Well, in March, we've since March, we've sent around 120 million gallons, but there's there's been a lot of transfers over the last four years or so, which we have a big spreadsheet tracking all of it. Um, so I'm not sure what the total transfer to them is, including all the little transfers over the last couple years. since you're up. >> The magnitude of that is similar to what you were thinking about. >> It's very similar. It's actually >> um it's funny because we didn't it wasn't the original intention, but it's always been anytime you have an exercise to like this, you want to gather information and um there's been water quality investigations going on and coordination efforts with the city. Um but it's you know it was an opportunity for us to see how does our system react in the the highest demand periods and um it's been it's been working well >> through the summer. >> Yeah. >> So since you're up there >> Yeah. >> Um where how is that exactly done? We extract from some wells and then put into the inner tie if we can't >> give them the water directly. >> Right. So, we're there's a couple of factors in in that and you know, we have our new pumping goals set by M&A that we're changing some of the ways we operate wells to make sure we're extracting more water out of certain wells that are benefiting from pure water. Um, and so we're making sure to strategically pump to, you know, take out the water where it's being put in. Uh, but it's not like the the water comes from a specific well. So our transfer station is at our north end of the district and we're able to transfer water from sub area three, two, and one kind of all the way back and forth. And there's different operational scenarios that we kind of have to move water in different directions. So it's not coming from a certain set of wells, but in our overall production, we are closely monitoring our pumping efforts to make sure that we're in line with the the pumping scheme that M&A gave us. Right. Okay. >> It's increased pumping in >> strategic increase >> strategically increased pumping. Yeah. In the news doing with the transfer or without the transfer, >> but in general it's pumping more from where closer to where the SWIPS are. >> That's correct. >> Okay. >> Makes sense. >> And then one, two, and three. We have a four, right? But we're not interconnect. We're not >> inter. Yeah. We send water to four. We don't pull out of four. >> That's Se-scape and >> Well, no, that's the sub area three is San Andreas, Bonita, where we're building the Chrome 6 plant. >> I see. >> Subary four is like Selva and uh down at Canondale Soul. So, that's all gravity fed. >> I see. Yeah. And then in term in terms of the cost, have you noticed has there been a >> are you able to take the cost the increased costs from this extra delivery because we have our own >> part of the >> water consumption and then we have that. >> Yeah. Nick was able to provide the pumping costs from the O'Neal pump station. >> Yeah. So the the what we owe Santa Cruz was just gallon for gallon. Um but part you know Yeah. We're paying for the power right now to send that water, >> right? >> Um, but the cost of of pumping O'Neal water to the city is is realized within the agreement >> in the in the power and and chemical and operational cost. >> Okay. So, you have a pretty good grip on that. >> Yes. >> So, Okay. And and so just think um just to kind of get a temperature gauge here, are you guys thinking that you kind of like the option 2 A 2B configuration a little better than the rollover or the take or pay? >> Yes. 2 or >> 98 degrees for me. >> Yes. For temperature reason. >> You're you're at 90 you're 98 degrees. Okay. I'll I'll note that. >> So >> so livable. I have another question. Okay, >> that's a finance one too >> and that is let's so there's these four options of of billing >> and then assuming there's if it's constant then that they are constantly going to order year after year 500 acre feet consistently then that would point to one of those options. But if it's going to be pretty variable, especially looking forward uh into the future when we won't even be around here, but uh what would be the most uh adaptable to a extremely variable ordering water ordering system? Um >> Right. Right. >> I mean that's the idea. And if if they were if they were going to take 550 acre feet a year, every year, no question, absolutely max it out every single year. The one that's most beneficial to the city would actually be the take or pay because the annualized cost per acre feed under that program is um 9,270. That's the lowest that's the lowest cost to the city per acre foot. Um, if you look at slide 19, >> the last column, >> that last column >> shows what the cost to the annualized cost to the dis to the city actually is. That would be the lowest cost per acref foot option for them would be take or pay, but that would be predicated on them absolutely using the full 550 every year. >> See that? >> I have a question about how much could be changed after two years in the agreement. I mean, We're going to have to go through a cost of service rate study periodically. >> Okay. >> This isn't just like we do with our with our customers rates. We're going to have to go back and do this every four, five, six years. >> 218 process. >> Not a 218 process. No. But I think I'm going to guess the temperature of the board is that nobody wants one or four and that more likely one that doesn't has the least encouragement for them to take as much water as pos, you know, we don't want to encourage them to take a lot of water unless they need it, you know. So >> if I'm paying the flat rate for 550 acre feet anyway, >> I I would still take it all. That's why I was asking what is this base fee? >> Yeah. if it's 550 acre feet every for all of them or for the you know I >> I'm assuming 2 A is 550 acre feet and 2B is like 300 >> they're both they're all could be >> they're all 550 >> for the fixed part >> it's all it's all assuming 550 acre feet on the fixed >> it's basically saying they're signing up to get up to 550 acre feet and capacity readiness. >> So I don't see how it's actually keeping them from doing that. >> It's kind still less money. >> Well, the volutric one is one is the one based on what they actually take. So they pay the fixed service charge of >> how are they different numbers? >> TB Tuby has the lowest fixed charge, >> right? And so that would be so that would encourage them to you know >> they're they're not going to pay as much if they don't take the whole 550. >> So it's 1.8 million is what they pay upfront whether they take any or not. But if they take the full 550 >> I hear it from them. >> But I'm telling you >> he is correct that the 1.8 1.9 million is the fixed fixed annual service charge. >> So okay. So you're you're trying to get the same number at the end with fixed plus variable. >> This is one of those areas where there there actually is more than one way to slice this and and there are some costs that you could you can fairly characterize as fixed or you can characterize as variable. And so you know in 2A Rafelis has put all of those costs and and you this is a gross simplification. Lesie will correct me in a second. um you has taken all those costs you could fairly characterize as fixed costs and put them in the fixed fee. In 2B, Rafelis has taken a a more conservative approach of fixed costs and put a smaller bucket of costs in that bucket and put more into variable. And the and the idea there was just are we going to create more of an incentive to take each acre foot or or or not? What makes the the most sense for both the district and the city? That's why those numbers are different. But, you know, if if um you know, if looking at uh >> I'm just Yeah. >> Slide 19. You know, if you if if the city takes 550 each year, >> options one, 2 A, and 2B are going to be the same across the board for the revenue. >> Now, option three might be different because the the variable fee depends on when they take the water. So, that one could be slightly higher if they they end up taking more water in future years than they would in in prior years. >> I don't I don't know if I was the city I'd want this. I mean, I'm fine with us from our >> The one that incentivizes um the one that incentivizes them to use the water most judiciously is option 2B. >> Right. I see that. I'm just thinking >> if I was the city and now I'm being Eeyore and I'm looking at this, why should I be paying the base rate for 550? Because you need to buy into the capital costs of Pure Water SoCal. >> Yeah, we we incur those costs like regardless. And so being able to guarantee that they'll get that 550, we incur those costs the second we sign the the contract. Um, and so, you know, from staff, we do think it's important that there be a base fee that that captures those costs that we're going to occur whether they take a a drop of water. Then beyond that, then there's a question of, you know, do we want to create a an incentive structure for them to take more or or less water? And and for us at the staff level, it it cuts both ways, right? Because if we do a take or pay, the the most uh you results in the most guaranteed revenue to the district, that helps on affordability for rates. But but we also have to balance that with where we are in the project and you know how the basin's going to respond. And so you know that's why I think SAS recommendation would be put a higher variable rate even if it may result in less guaranteed revenue over the over the life of the of this initial rate period because it it you know it recognizes our counterveailing interest in based in sustainability and not creating an incentive for them to take the full 550 whether or not they need it. Yeah, I'm just want I want this to actually work for everybody. I want it to be agreed upon. And so I'm looking at it. I mean, at first when we talked about it, I was thinking the base rate was was um was also reduced if they're not taking 550. So I now it suddenly you know comes to me that it it's the same ba I mean although I don't >> 2B is less than 2A. >> Yeah I know. So what so how is that f based on 500 acre 550 acre feet >> with 2A you're multiplying the 500 acre feet by $6,500 an acre foot that base that base fee of 6500 an acre >> foot. With option 2B, you're multiplying that 550 acre feet smaller by 300 by 3,300 acre feet, $3,300 an acre foot. >> So, it's half. But then option one is the same as I'm like, well, option one, option one, don't even look at base and fix or don't even look at base and volumetric. You're looking at $8,500 times 550 acre feet. That's what option one is. >> I also think that it was just kind of eye openening when Raph Telis presented this that >> whether you however you slice and dice this it was all about the same cost. >> Yeah. >> Which >> Yeah. Because the costs are the cost to >> 550. Yeah. Should be all the same cost. I'm just um you know I've done rate studies and I understand that there's a fine line between fixed and variable and so um that's probably why I'm just you know kind of thinking that it's not >> I I think it's >> less question on 2B which is the preferred option at this point. So if basically to enter in the agreement it's roughly $1.8 million and then if you don't take any water it stays at 1.8 and if you take the full 550 it goes up to about 4.7. So there it is less to the city. So what you're wondering is whether they're willing to pay 1.8 million >> and get nothing >> and get nothing for the option >> to just like our other customers think. >> Yeah. That's the way we do our rate studies work. >> I mean, our vacation homeowners don't use any water, but they pay the monthly service charge as a readiness, you know, to to have access to it at any time. >> Yeah. I'm what I'm saying is how do you decide what that is and how to encourage not to use 550 unless they want to, you know, they need to and discourage them from. So, I was wondering if you'd considered a like since we're going to be doing a two-year trial, right? >> Uh a certain rate structure for that period and then an evaluation and then >> that actually gets to President Lew's question that I didn't answer and I apologize, which is, you know, how much of this can we change in in the future? What what's in the agreement? and what's what's currently in the draft is a commitment to a fixed and variable fee structure. >> Um, with the understanding that those uh the amounts of those would be updated over time, you know, likely at the same time we're doing our our retail rates just because of economies of scale, but it's not required. And we would have Ratellis help us. So, um, you know, what could not be changed based on the current agreement absent an agreement by the city in the future would be a move to a taker. >> Yeah. because >> the the underlying rate structure >> we could still see a you know couple wet years right now as we're undergoing this test and then prolonged dra dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr dr drought and the prolonged drought will have a more immediate effect on city of Santa Cruz than our district. So their needs for the full 550 acre feet would change uh change. And so I'm just saying how do you come up with a a a rate structure that functionally recognizes that while not overcharging them or without >> and that >> making them just take our water supply because we've made it so cheap for them. That would that would be option 2B, I think, because what we're saying is we're going to ask you to pay 1.8 1.9 million annually as an as part of the agreement that you have access to this water. It's like an access charge. >> Yeah. And then you pay the volutric rate for every acre foot you actually take. >> Do I understand it correctly? If this agreement is signed, then they are uh agree to pay that two times 1.9 because it's a two-year agreement or 1.8 whatever it is. >> Correct. >> Annually? >> Yeah. >> 1.9 annually. >> Not at once. No, but the but the total they're commit they're committed to two years. >> You probably have a feeling for or has this been presented or talked to with them yet? Okay. So you haven't they haven't given you any idea how they feel about rate structure or anything >> because our costs are so um prescribed already. We know how you know we have our debt service structure from our loans. We have contracts that have been brought to the board for approval for Jacobs. Those are all known costs associated with pure water soel. Then there were the chemical costs, power costs, and then the transmission costs. So when Leslie did a back of the envelope cost analysis about a year and a half ago, it was plus or minus about $8,500 an acre foot. So we already knew that it was in this ballpark. So when Rafelis came forward and presented this, it was of no surprise. Um and then obviously of course I'm sure that the city does have some um considerations or preferences associated with the different options. Even our finance department had said you know from a financial standpoint more more certainty in what we're getting helps with knowing how to plan for our budget. the the variable one does leave some um I think scrutiny or discretion for setting rates because we will have to assume just like we do now how much water do we forecast that will sell and then that sets the rate or rate increases on a taker you just know that number so you can plug in what it is when you don't know the number you have to to guess a a little bit >> if you're letting Lesie choose she's going to go with take her pay Sorry, Leslie. >> What did you say? >> But but you know, I I realize that >> if you're the city, you'd probably like to have the option, >> right? Yeah. So, what you're saying is if it was all variable, it would be 8,500 per acre foot. >> And so, and they could do up to 550. It's and so your base fee is what you call fixed lower fixed and higher fixed, >> right? >> I mean, we know we I I mean I I'm not going to say it out loud. >> I think what's confusing I think what's confusing to you, Michelle, is we normally don't present that as a per acre foot >> charge. We normally would have said the base fee is 1.9 million. Yeah, I'm I'm not confused. I know that you came up with this base rate, >> but what I'm saying is there's it's even variable depending on what you want to count. >> Well, that's so the question is how strong is the justification, >> right? >> Including debt service and capital expenditures in this >> in this structure. >> Okay. So, >> and what difference does it make? What what they did when they did option 2 A is they took all of our fixed costs and put them in the base charge and all of our variable costs went into the volutric charge. When they did option 2B, they took all of our capital costs, >> only the capital >> only the capital costs and put them in the base fee and the operating cost >> except that's debt service >> debt service debt service and capital improvements went into the fixed fee and then everything else went into the cost of operating the plant went into the volumetric. makeable is it to have those as as something that's charged >> we yeah I under so Prop 26 is what applies in this case and requires that that the are wholesale water rates be based on reasonable cost um Rafelis has done the the support to to justify either 2A or 2B under under Prop 26 and so it really is a policy consideration for the board between those two. They both in my opinion um you know meet the legal requirements >> and and it passes the laugh test with Stan. >> Well, we haven't so we we have not we have not talked to them. We haven't talked about that and gotten into details with them. But what we have talked about and what's in the draft agreement is this general concept between fixed you know there be some fixed fee representing our fixed costs that would be determined by a third party rate consultant and then uh variable costs which would be our variable costs. >> Yeah. that maybe I'm overly simplistic on this because I'm sure certainly overly comp complicated on other things, but it's a $140 million plant >> that although we didn't pay all of it. Tom went to Washington DC and and Melanie went to Washington DC and we got it done. So that that has an incredible value and we're another agency like Santa Cruz to try and do it now. Melanie has told me it's twice that or whatever. >> Yeah. So, a screaming deal is what this is and it's being neighborly and it does help our customers. The only question I have is can the aquifer allow it? >> Can I add a little tiny perspective? I was just thinking today um that 550 acre feet is 179 million gallons and that's actually 6% of a full lock lmen. So it's a very small little baby step and the um variables in the um the agreement are changeable. Um so it's a way to begin a collaboration. That's the way I see it. >> I was wondering if you wanted to finish the presentation. anything tonight? >> I hope. >> Well, I mean, I just No, >> they had more slides. >> Yeah. >> No, I I really appreciate actually spending time and just >> going through this. I apologize for a couple of the typos and when Becca was helping format this, she even said, "This is these two slides are really hard." and rightfully so. I'm I'm really glad that we spent some time to go through that because um the more we talk about it, the more we can also help help you understand and then I think communicate that with with the city as we go forward. But again, our intent is to bring this this is a policy decision to the board to see how you would like to set this rate. So, we do just have a couple more slides if you're ready for that then Tom. Um, these are more um just some other um terms in the agreement. So, Josh, you want to hit on these? just um briefly add so the for the O'Neal Intertide the agreement does not require an expansion to hit the 550 but the agreement um acknowledges that future improvements um you know may be helpful um but those improvements would only move forward after appropriate environmental review and an amendment to the uh to the agreement um and the cost of developing those you know working through that process would be borne by each each party and then the actual costly improvements will be handled in the amendment. So let's say we we determine the aquifer can I'll just pick a number 900 ft. It can still be uh not have seawater intrusion at 900 ft. Of course that'll be dependent water etc etc. So if we were to improve the inner tie, would that be born by Santa Cruz or by Silo Creek or by both? Because right now there's no water in the near future coming back from Santa Cruz Creek. So you could make an argument that benefiting Santa Cruz. I don't know if it's a big >> Yeah. And I I I just looked at that because I thought that question was going to come up. I just wanted to double check. Um that would be handled in the amendment. Um so the cost sharing of the cost of of the improvement itself would be handled in that that subsequent amendment and that and this district could insist that it'd be a city requirement. That would be the city would need to agree. But that that would the future board would have that flexibility. I think in in the agreement it does just outline that if we were looking to evaluate or plan for that there is at least some um language in there that says that we would we would share that kind of as in kind. So each side would pay for that early preliminary costs associated with a potential future expansion. >> And the logic behind that, even though it benefits Santa Cruz, it doesn't benefit district. >> Are they able to give us water back? They never were able to give us water in the pilot study. >> Very little. Mhm. >> Director Javier, I mean that that that's really a policy determination that I would defer to the board, but I I would just say that if if you found if the district found itself in a situation where it made sense to enter into an agreement to expand the inner tide to allow us to transfer more water, presumably we're selling more water and there would at least be additional revenues associated with that. So I think that that could be part of a policy justification for those initial just preliminary staff costs, not like hard construction or operation. It's >> not a big cost, right? >> That's correct. It's time. And then another provision in the agreement just deals with the potential future expansion um of the of the project. Um the current agreement, you know, does not um give either party a right to expand the project. What it does is it sets forth the process for the city to get a right of first refusal to enter into meet and confer negotiations with the district um to uh participate or you know be part of that um a potential expansion. The process in the agreement would be that um if the district becomes interested or or aware of a possibility to expand the project that we would be initiating. Um we provide the city with notice and then the city has a 30-day time period to exercise their right of first refusal. Um if they do that, then there's a 90-day period um where the two parties negotiate over the um terms of what that would would look like. Um, and you know, the district would have an obligation to first negotiate with the city. If they, you know, were agreeable to the the cost, timelines, specifics of that expansion extension, then, you know, we would execute an agreement with the city um for them to to take over all or a portion of that expanded expanded capacity. Um if that during that 90-day period we're unable to reach negotiations with the city um on on what that would look like then we have the ability to move forward with the expansion with you know whatever third party or ourself that we um initially had proposed. So a question um using Lesley's temperature taking is there any temperature taking with the city on expansion? Do they have they considered because Jennifer pointed out that this is just a small percentage of what they need? >> I guess yeah that's the question is really what they need. If they really need 550, then that base rate is great. But if they don't really need it and they really need 200, then that would be, you know, >> but what they need during a drought is >> they would probably like a higher number. >> Yeah. Well, initially, didn't they say 750 is what they wanted? We Heidi Lukembbach who's the water director did come and present their um study at the end of the year which kind of re-evaluated and identified what their shortage gap is and kind of portfolios or packages that they would put forth to try to meet or close the gap. So, they had the long-term gap that was presented out in 2032 and then they had some interim um I think goals to meet some of the shortage that included purchasing water from SoCal Creek Water District as well as doing a transfer agreement with Scots Valley Water District. So, and then that of course also includes their own ASR projects. In addition to that, they did have other projects that they could look towards to do on their own. Um those were larger CIP including del and/or um IPR or direct potable reuse. So there is still the potential to be interested in expansion and I think that was also our intent when we built it that it would be expandable which is why we've done all of the pipelines underground and we've left um footprints at the AWPF site for expansion but we again didn't want to go to that point yet in this agreement. um the like baby steps initial um initial term. We're going to work on some water sharing, but that we wanted to make an inclusion in here that expansion is a potential uh option in the future and this is how we would do that. really it protects us and just explains amendments >> and of course and and I mean obviously this was a request by the city you know and and we we felt it was reasonable with the process that was laid out. So the the gap during a multi-year drought 10 times or more. >> Well, I don't know enough about that. I'd like to learn more about >> Okay. >> Are we supposed to have a motion? know the status of their current. They had a number of different possibilities. We don't know >> all the stuff that they've been doing. We don't we need an update. >> So, we're just providing input. So, my I provided my um highly charged input. >> Thank you. >> I think we have just this like conclusion slide which is mostly just about seeking feedback on these key components. So again, in terms of the term, is a two-year initial term acceptable um to go forward in this agreement? It was, you know, added midway through. Um originally, this did not have a a two-year initial term and that is now included and staff feels comfortable with moving forward with this, but we wanted to get feedback from the board on that. >> You want individual feedback, >> please? >> Me. So, I'll go first. I'm definitely um in favor of the two-year term. I think that's acceptable. I'd love to see not a sunset, but an evergreen. And um I'm thinking the 2A or 2B needs to be explored more. >> Well, I would like to explore a fiveyear uh test term. I guess the two-year is acceptable, but fiveyear I would think that would be encompass a wider span of how it's going to work. Uh and I I'm nervous about the sunset date of 2075. I just I suppose there has to be one. I don't know why we do. >> Yes. So it just I would be uh prefer to not have an end of the agreement. Um, I think the termination notice I'm satisfied with the termination. And I thought that was pretty well organized. And uh I think the sticking point is the monitoring and mitigating of groundwater conditions and seeing if in the chance that we might have adverse information coming in, you know, from our data collection. We need some way of dealing with that in an orly way. >> Yes. Not shut him off. not continuing business as usual. So, and uh I thank you. I trust you and refellish about the variable pricing because I it's the only fair way to do them. And uh gosh, the inner tie, I would defer that to I don't have any opinion on the inner tie. I just don't know enough. I'm going to go last. >> So, I'll take the easiest one first. Pricing model. Uh, variable. Um, inner Thai authority. I don't even know what that means. Uh, so I can't say what they either way on that. Um, let's see. the the term um assuming that the aquifer can allow it. My win-winwin is aquafer first, our customer second, and Santa Cruz third. I'd like to see them everybody win. But um so two year although I I like Carla's idea of the longer term so that you can actually experience more hydraologic variability which could but I'm not strong on that. Um, and there's so many offramps on this that I'm comfortable with longer terms. Um, and then let's see the u monitoring and mitigation and groundwater conditions. We didn't get into that really. So, I'd like to see a you know what I would like to see. Here we are over two hours and starting to the brain is going a little mushy. Um I like to see like little bite-sized chunks of this come back to the board. And one of those would be the the moni the monitoring and mitigation of groundwater conditions. Um, and then I have three other things, um, that I'd like to see. Um, one is, and Melani, Melanie and I have talked about this about how there's a source water agreement now for 30 years. I'd like to see any agreement that we do, so they're getting water. like to see that added on to that 30 years. If it's a two-year, it's 32. If it's a fivey year, it's 35 because they're benefiting from it. And um this comes more from my discussion with with with um Brent yesterday about restricting district and city uh customers during water scarcity times, whether it's a stage or whatnot. That's a little hard for me to swallow. We're being good neighbors and we're being very very good neighbors if we if our customers decrease their water use so that the city has water. So that doesn't quite sit well with me to ask our customers to restrict their water use. City customers could have water. So without no without in just in general. It's like if there's let's say there's I gave let's say there's 10 gallons of water and we're going to give the city two gallons and we ask our customers to restrict a gallon. It doesn't sit right with me that we're giving two gallons to the city, selling it, not giving it. Um, I think that goes and that our customers have to restrict their water. So, that's just the way I think about it. Michelle, I know you from the look on your face, you don't agree. >> Oh, I I just haven't. >> Okay. And then the other thing that I have here that was um I don't really understand the city's um plans and agreements with Scots Valley and I think that affects this agreement just for perspective and I'd like to see a presentation to the board about that. And then one last thing is a big ask um is I'd like Cameron Tana to come to the board and give his opinions on how this how the water transfer will affect um the aquifer health. And in particular, I'd like to I'd like to learn whether um the modeling he's done is has looked at drought periods. Doesn't look like we're going to have one this year, but I just want to thinking more long term, make sure I understand how the aquifer on the little data we have, you know, how confident are we that we understand the system and that we can enter into an agreement where and I hope we can because you can ask my neighbors, Michelle. I'm a good neighbor >> and uh I and it it totally makes sense to to to think regionally and that's the other reason I want to see what Scotts Valley is doing with the city just to get the full regional picture. >> Yeah. So I that was a lot more than you asked for. >> That was a lot but I I wrote it down. I think did as well. >> We're videotaped here. >> Oh my goodness. Um only if it's working. >> Yeah. Right. >> Um he was talking about um let's let's say we ask our our customers to reduce their use by 5%. I I think the city should be reducing by 5% in order to get water from us. I mean the I know this last drought drove me crazy. The the you know different jurisdictions were requesting more or less percent and I'm thinking where did they you know where did they get the water that they could just let them you know do one% or 2%. I think we need to work together to come up with a conservation effort that's consistent throughout, you know, at least both of our jurisdictions. I can't force it on anybody else. So, that's the look on my face. Um, >> can I ask a quick clarifying question? Um Michelle, if we were to ask our customers to reduce water usage for whatever reason and then we ask the city also to ask their customers to reduce, could they just not take water from us that year? >> That's possible. You know, I mean, we could look at reducing the amount that we'd give them >> as you know. I mean they would have the option to either ask ask their customers to reduce or not take water from us. >> Right. >> I think you know >> then we can't charge them the base fee if we're refusing to give them water. Right. >> Right. There is a provision. I think a lot of the um shortage declarations as we kind of identified there's a lot of different triggers. There could be the drought, right, where there's uh no rainfall that has impacted the city because they're 100, you know, 90% rainfall dependent and that definitely has the effect on them. And so if we're all restricting and we're restricting them while when they need the water, I think we've been expressed that's that's challenge, right? Because that's that's what they're trying to do is fill that gap. There's also the times where we may call a shortage because uh we have well failures and we definitely like what Nick had mentioned, we might have multiple well failures that go out and we do need all of our customers to use less and we would really hope that they could say use less because our wellfield which is our the well field that they're depending on which is our wellfield is got this emergency and we need to do repairs. There's also shortages related to um if the Santa Cruz wastewater treatment plant has a shortfall or can't has limitations in providing us source water. That's something that we need to think about because that impacts Pure Water SoCal and we would like to talk to them about it. I think that the way and and I'm looking at Brent because Brent will be listening and trying to to address these is that there are provisions in the agreement that talks about an equivalent um restriction to the city that if we're going to impart that on the customers that we would impart that on the city and again I think the question or the comment from director Jaffy would If if we're asking our customers to reduce or we notice that we have a shortfall, I think a question might come um you know at the negotiations table of oh well the customer shortfall is about 500 acre feet. We're just going to restrict the city and then we don't have to call a shortfall because we just made up that amount. How do we address that? because that might be something they may want to know how that would work in and just have contract clarity and so >> who pays right in those circumstances >> especially if we're you know giving them the the um service you know charge base rate based on just being able to get it. So I mean I'm probably complic you know I think what what it is is this examples these examples are real simple and there's more to it than that. >> Um you >> good? >> So um >> okay I was >> I know you're last. >> I'm waiting. >> Good. Thank you. Um, so Melanie, would you consider adding undesirable uh there >> as part of article 12? I think >> Well, right. >> I think you want to make sure >> we talked about reasons for why it it was we would not be able to provide water, but it's part of article 12. So, you just didn't mention it. >> Right. >> I'll add that. One of the things I was going to say is I think we'd all feel more comfortable if we saw some of those detail on those offramps because I think our biggest concern and mine is is just the same thing. I don't want to see something adverse happen to the aquifer after all this work. um you know and so so I think I I'm guessing and just from the reading and from talking to you guys before just that there are protections for that and I think one of them was just if a representative monitoring point located in the district service area and used for monitoring compliance has undesirable results then the relief in article 12 would be triggered. So those are the kind of things I think maybe we need a little more detail on to feel comfortable, >> right? I appreciate that micro doing of maybe that be a a single topic with that. Yeah. >> And then I I mean as far as the term, I kind of thought the two-year term would be a good initial evaluation time because by then we will have pretty soon we'll have a whole year's worth of data on what the aquifer is doing with pure water. SoCal and sending fairly close amount of water to the city of Santa Cruz. And if we have two years of that data, that'll help. Granted, it won't reflect every possible drought or rainy season, but it will within our district is a longer term outlook. It should give us a better idea. So I guess um >> well you know our previous most previous uh exchange was five fiveyear periods right >> and it was to give >> the whole a chance to have it play out as much as possible before any final decisions were made which is why >> there's not final decisions here >> right and so anyway my my other things where I just think um I am in favor of also The the 2B, not 2B. >> 2B. >> No, sorry. No. Yes. 2B. Um, >> okay. That's enough from me. I I didn't weigh in on the sunset date. There's so many offramps. I don't know that we need a sunset date. Um, I mean, I like round numbers like 2100. If you're going to do a sunset date, >> it's 75 or 2075. You're right. It's 50 years. Yeah. Anyway, I don't see the necessity of a sunset date either. If considering that at any point either party can say, "Hey, it's not working." >> Well, the city has a sunset on providing source water for >> Oh, >> right. >> So, maybe they should match. No extend that >> there is a what 30 years >> 35 35 >> at the very least they should match if there's a >> because we could be in a position where we have to give water and we don't have a source water >> that would be bad that would be bad >> all right so >> we have off ramps >> do we think we have enough >> for tonight Okay. >> I look forward to >> Thank you guys and thank you for all the work and you know getting to this point because I I still think it's a a good goal. Um so shall we move on to item one? Let's see. 6.4. So this is the employment contract that >> Oh yeah. Yeah. >> So it's maybe we things we already know about but >> Taj can you check the air condition? >> Yeah. >> Okay. David. >> Yes. >> Good evening. Um, I have no slides, so I just wanted to go right forward and say that the the purpose of this item is really administrative. We want to bring back the updated as well as updated job descriptions for each of the field and office employees that were part of these negotiations. Back on July 21st, we brought forward the uh tenative agreement for a successor agreement with um SEIU. And so this is now bringing back the full umou with the red lines as well as a clean copy of theou. And I will say it's part of the request in terms of the uh recommended action improving uh the resolution 2616. Um I'd ask that you also give us uh direction so that we could also clean up any um nonsubstantive uh clerical matters in the clean copy. There's some formatting and some typos that were in there. I just want to make sure that the clean copy we provided you might require us to do some additional edits, but all of the terms of the agreement are are in place. And if there were some if there was something that we needed to bring back, we'd do so in a form where we would isolate a section that would have red lines and changes. Okay. If you have any questions on any of the documents I provided, I'm happy to answer them. But that's my presentation. No public comment I see. Just want to make sure I don't forget to look. Nobody could have slipped in. >> Um, any questions from board members? When I look at the extent of all of that? Um, congratulations, David. And to the to all the negotiating people because that's a lot of work. I mean, and to have people come out of it feeling like it was fair, you know, in the end is is a good accomplishment. So, >> if if I could, I' I'd also like to thank Nick um that way, too. >> Ryan, um Kenny from Finance and Business Service, Emma Western who's not with us. She helped at the very beginning before she went on leave, and Lesie of course for helping with all of the the costing and working on this. So, it's been a it's been a group effort and we're thankful um to move forward. >> Exactly. So, any motions on >> I'll move to approve the >> I second. >> All right. Been moved and seconded. >> All in favor? >> I >> Do we have to resolution it? >> I don't think so. >> It is. It is. >> You're right. Good point. >> Call vote. Motions adopt roll call is not required for adoption of a motion. Yeah. As long as everyone's in person. So >> Okay. Okay. Well, then let's do that again. All in favor? >> I >> All oppose. All right. Motion carries unanimously. All right. Thank you very much. >> That was something we used to before have in the motion by roll call and then Josh informed us that. >> That's only when somebody's not here. >> Okay. Thank you. >> That's right. What a good memory. You are so on top of it. >> You can go. >> You don't have to be here. >> Okay. So, I'm going to guess that you have a specific thing you're looking at. >> Very specific thing. >> Okay. >> Guess one that says director Jeffy and is in red. You got it. >> Okay. >> Okay. Let me get to the page. So, it's page 163 of 512. >> And I and I and I have it on the screen as well if you if that's helpful. I just I see that it was added and I was going to ask um first to comment that um this I'd like to see um also in addition to the um recognizing our customers um I would like to see uh a statement of the like a snapshot of where we're at in our transition uh in our the aquafer for now that we have SoCal pure water SoCal. Um so just acknowledging the critical overdraft and um historical critical overdraft and um basically we're not out of the woods yet. So, kind of both a thank you and a and anformational thing. And then I was wondering um when that the you don't have to tell me this board meeting, but maybe next one it could list when you expect to to have that come to us. And that is it. And I guess we have to do we have to make a motion on that one to approve just that one or >> no report. So just a direction. >> Thank you. >> Direction direction. >> Okay. And um Tom, can I ask a very quick question? >> Yes. >> Um during the public comment, it went by so fast that I forgot I have three announcements. Should I do it now or should I just do it off the record later with you guys? It's >> fine with me. Yeah, >> I'd recommend just now. You're okay with that? President you? >> I am. >> Okay, really quick. I'm sure you're aware of the new digital twin of the lower Bajaro Valley River that UC Berkeley's working on. So, I've contacted all the scientists and all of the grad students and I'm going to be taking a tour and um being in involved with that. So, I will um keep you up on that. Also, the flood control is having I'm on the board for the zone 5, which as you know is not par valley, but it's Capitol City of Santa Cruz. and um they're having a special meeting next Tuesday, but we're going to I'm going to be at the reuse conference with you guys. And so I just wanted to let you know there's not going to have any representative from us at that meeting. And then thirdly, I'm going to be um in London and Scotland in September. I won't be here at that meeting. Thank you. >> 15th. Uh turn >> 15th. >> Yes. I've I've called in from Italy before. >> You've called in from other places. I know. >> So have I. >> All right. So um meeting adjourning to close session. >> Yes. >> Correct. >> Thank you. >> All right. Oh my.