Environmental Services Commission - Regular Meeting

Alright. It's 06:30, and I'm calling the January 8 Environmental Services Commission meeting to order. We will start with our roll call. Commissioner Letterman? Present. Thank you. Commissioner Hainosh? Present. Commissioner Laxon? Present. Commissioner Margolis? Present. Commissioner Tyson? Present. Commissioner DuPertis?

Alright. Commissioner DuPurtis is absent at the moment. Joe, let me know if he joins remotely. Good evening, and welcome to the first Environmental Services Commission meeting in 2026. We have, I believe, two sets of minutes to approve. But before we do that, we're gonna approve the agenda. May I have a motion to approve?

I move to approve the agenda.

Thank you. May I have a second?

I second.

Thank you. Does anyone have any proposed changes or modifications to the agenda? Hearing none, the agenda is approved as motioned. We're gonna go now into oral and written communications. Oral and written communications are now open.

Remember, there's a three minute time limit per person and thirty minutes total per meeting. Public comment shall be limited to matters relating to city of Bellevue government and to subject matters encompassed within the power and duties of the commission. Persons participating in the commission meetings must not engage in speech or conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of any meeting. Disruptions may include and are not limited to failure of a speaker to comply with the commission bylaws concerning public comment. Joe, are there any written communications?

There are no written communications.

Thank you. And we do not have anyone registered for oral communication. So I'm gonna then ask the audience, would anyone like to in attendance like to speak? If so, if you're attending remotely, please use the raise your hand feature in Zoom. Or if you're joining via phone, press 9. And I do believe we have one person joining via Zoom.

We now have Indeed.

I hear that boring.

Hello?

Is that commissioner Dupuertes there?

Yes. Hello,

Andy?

I'm here. How are you?

Okay. Great. Thank you. We could not hear you just now. Alright. So for the record, commissioner Dupuytis' presence. Thank you. So is there anyone else joining via Zoom that would like to speak during our open oral communications?

Just observing, it looks something.

Nice. K. Very well. If that's the case, then we will move on from public comments and into communication from city council, community council, board, and commissions. Joe, are there any updates from well, first of do we have someone who's replacing council member Lee?

Yeah. I'll I'll touch on that. Council member Lee, as you know, is is no longer on the commission. We're working with the commission. We do have a full agenda tonight, so I'll just make a quick announcement. Mayor, the mayor was selected last night. Our new mayor is Mo Melakutian, and our new deputy mayor is Dave Hamilton. And, we had an update today that they are in the works, assigning council members to boards and commissions. I'm I'm hoping we would have a new liaison from council by by February. That would be

the hope.

Yeah. That's it. Alright.

And is that also your staff report?

It is not.

Oh, then would you like to Like, turn to your staff report.

To Scott Edwards for our staff report.

Excellent. Good evening. Last November no. Last November. Actually, it was last November. Last November. There was a discussion and a request. We had in our, many presentations, there was a conversation around the utility rate summit that was coming up. I think it was November 14. And there was a request by the commission to bring back a briefing, if you will, on the summit itself.

I know since that time, there's also been some information that's been released, so the commission may already have learned the summit and and the outcomes. But just real quick to be responsive to the request, just note for you that over 200 participants, including more than 20 elected officials, attended the utility rate summit last November. The day included short presentations from five municipal and investor owned utilities that addressed the sources for their upcoming rate pressures and current affordability strategies. There was general consensus among the panelists that much of our future regional rate pressures would be driven largely by changes in regulations and public policy at the state and national levels. And as a result, addressing the anticipated affordability challenges will require our cities, special districts, and counties working together to develop cohesive and compelling solutions that can redirect and influence policy at higher levels of government.

If you are not already aware, as I mentioned, there was a release from King County shortly after the summit concluded. There was a press release, if you will, that summarized the day, including a brief video that highlighted the event itself. What I would say is the best briefing for you is likely to receive that release and watch the video. If you're willing, I can obviously forward that to you at your convenience following this meeting.

You bet. Thank you.

Alright. Any other staff reports, or is that it?

That's it.

Okay. Great.

Then now we get to the approval of the minutes. We have, first, the minutes of the 11/06/2025 ESC meeting. May I have a motion to approve those minutes?

I move to approve the November minutes.

Thank you. May I have a second? Second. Thank you. And are there any changes or modifications anyone would like to make to those minutes? No? Okay. So no objections. The minutes are approved as motioned. And now may I have a motion to approve the 12/04/2025 meeting minutes?

I move to approve the December minutes.

Thank you. May I have a second? Second. Thank you. And are there any requested changes or modifications to the December minutes?

No? Then hearing no objections, those 12/04/2025 minutes are also approved as motioned. We have no unfinished business, thankfully, since we're the first meeting of the year now. So we're gonna move on to our first item in the new business, which is the sewer cost of service analysis and proposed rate design. And after the discussion, staff are requesting a vote by the commission to recommend that rate design changes for them to go to city council. So with that.

Thank you, chair one and commission. Good evening once again. Tonight's meeting does represent our third presentation on the 2025 sewer cost of service analysis and rate design. In regard to our meeting objective, we are requesting ESC approval to recommend three rate design proposals to city council as part of the sewer cost of service briefing later this spring. Prior to voting on the ESC recommendation, we will recap the proposed rate design changes for the commission, obviously, and then as chair Juan stated, we'll be seeking that recommendation.

In many ways, our body of work this year and going forward will emphasize utility bill affordability, beginning with the comprehensive sewer cost of service evaluation, the rate design proposals, which is focused on ensuring equity across customer classes and minimizing adverse rate impact impacts wherever possible. We also, moving on this year, will look to bring forward policy options to consider expanding utility bill assistance for financially disadvantaged members of the community. We also, as you know, are undertaking a large body of work around our biannual budget development, which, with any biannual budget, and rate forecasting that goes with it, we'll be focusing on minimizing adverse rate impacts, wherever possible. We also have some upcoming initiatives, which will include a future transition from bimonthly to monthly billing as well as ongoing refinements to our fee methodologies such as utility connection charges. Overall, all of these initiatives and what we're working towards this year and in in the time going forward will be focused on what is of paramount importance to the city, is to provide the appropriate level of financial assistance and make rates, affordable to the extent that we can.

So that is really, where we're focused this year, and this slide is really just intended to convey that for the commission. With that, this, is depicting essentially what we've already said. This represents our third, presentation or briefing on the sewer cost of service analysis. And we know and appreciate that during November, the commission listened to and and worked through a very meaty topic, with the analysis itself. And, ultimately, appreciate the recommendation on implementing, the rate design or, excuse me, the cost of service findings and and transition over a five year phase in period.

So that with that behind us now, we are looking to and turning towards the rate design proposals that we briefed that night, focusing specifically this evening on those and then looking for a recommendation to include those, as I said, we move forward to the council briefing later this spring. With that, I'll turn it over to Matt.

There we go. Great. Before I get started, I want to remind the commission well, I'm gonna be throwing out the terms that we've been using interchangeably in the last couple of meetings, and I just wanna make sure that that that those ones that we oftentimes mention that may seem very familiar to me. But first of all, I've never seen a 100 cubic feet of water even though I talk about it all the time. So so when I went and referenced CCF, I'm referring to a 100 cubic feet of water, which is how we bill customers for their sewer flow.

When it comes to sewer flow, we don't actually measure and meter sewer flow. You can imagine that's a that's a tricky business. And so in lieu of that, we look at what how much water customers use For multi residential and nonresidential customers, we assume that their metered water is synonymous with their sewer flow. They don't have as the same irrigation requirements that a single family residential customer may have. For single family residential customers, the city assumes that sewer flow is synonymous with water use during the winter months, and so we use that as their billing basis for flow.

So when I'm talking about flow charges, recognize that we're billing on a per 100 cubic foot or CCF basis, and it's a proxy for water use. We don't really have metered sewer use. So as Scott mentioned, just as a a quick recap, in October, we summarized the existing cost recovery rates for the sewer utility for its three customer classes, single family residential, multi residential, and nonresidential or commercial, as oftentimes it's referred to. The key takeaway from that study is that our multi residential customer class is their revenue exceeds the cost of their service. The cost recovery rate for multi residential is about a 123%, which means that the revenue we collect not only pays for their cost.

It also partially subsidizes the cost of our single family residential and our commercial customer classes. Both of those other classes have cost recovery rates around 91%. In November, we had, we presented several options, to transition the existing revenue that we collect from each of those classes towards full cost recovery. As a reminder, that is not something nice to have. That is a state requirement and a city financial policy.

Of the recommendation or the the options we presented, staff, I'm sorry. The commission evaluated those options, kind of the merits of each of those, and voted to recommend a five year phase in period so that by 2031, the revenue we collect from each customer class, will be equal to their cost of service. And so tonight, we're going to talk about, as part of the cost of service analysis, we only utilities typically have this opportunity then to kind of clean up their rates, and make improvements. And so some of the the proposals we're presenting tonight are of that flavor. They're not required by law.

They're not necessarily required by city policy. It's just good practice when you do these studies to also evaluate how you currently collect that money from each customer class. The five year phase in plan that the commission voted to recommend to city council includes customer class specific rate adjustments as indicated in the table on the bottom of this slide. It's important to note two factors or or or elements. First, and most importantly, these customized or class specific rate adjustments are responsive to the overall revenue needs of the sewer utility in that they collect the adequate overall level of revenue needed to operate the sewer utility on an independent and self sufficient basis.

So these rate increases aren't detached from the overall goal of fully funding the utility. Second, as I mentioned earlier in the previous slide, they are designed to achieve full cost recovery for each class by the year 2031. Rate design focuses on developing a schedule of fixed and variable charges that collect the adequate overall level of revenue to fund the utility and are consistent with those cost of service principles. While cost of service studies follow a standard industry methodology and are often used to comply with state and local requirements for cost equity, rate design exercises more often than not focused on achieving the utility's specific public policy goals. This is why it is often said that rate design is much more of an art than a science.

And you'll see some of that play out where we have to make judgment calls, and there's nuance in what we're presenting tonight, and we appreciate and understand that. Examples of criteria when it comes to rate design could include things like revenue stability, price incentives for conservation, affordability, simplicity on the bill, and alignment with unit costs. While all of these rate design goals sound great, and we would love to do all of them, the truth is that a utility cannot create a rate design that accomplishes all of those equally well. Sometimes establishing rates based on cost may not match up well with creating rates that incentivize conservation. Similarly, and this is one of my favorites, cost based rates are generally not synonymous with simple rates.

Alright. So given the wide range of potential rate design goals that the city could accomplish with this cost of service study, staff selected four guiding principles to help prioritize and inform the rate design proposals. First, we use this as an opportunity to simplify the rate structure where it made sense. Rate structures that may have made sense twenty years ago may not make sense today. In these cases, we evaluated whether there was a strong basis for the existing rate structure.

And if not, if we could not establish that connection, then we use this as an opportunity to suggest a revised proposal. Second, the city of Bellevue has a financial policy that requires the department to pass through wholesale costs, like the sewer treatment costs that we receive from King County directly to utility customers. As part of this process, we evaluated opportunities to improve the nexus of our existing rate structure with this city policy, specifically looking at how we collect sewer treatment costs from our multi residential customer group. Third, we evaluated the proportional level of revenue that the sewer utility generates from fixed bimonthly charges that are assessed to customers regardless of their actual use of the system. While revenue generated from these fixed charges is a wonderful thing to have as a financial manager, they do not provide any incentive to a customer to control their bill.

And so as part of this process, we look for opportunities to provide cost based adjustments to fixed and variable charges that would improve customers' control over their bill. And finally, rate design changes are agnostic to while rate design changes are agnostic to the overall revenue requirement of the utility, in that they don't change the level of revenue we would collect from that customer class, they do and can have big impacts on individual bills. If this rate design changes are not carefully measured and evaluated, utilities can often discover unanticipated and significant impacts to customer bills after the fact, and that's not a good thing. Jacob manages our customer service group, and and, I would make his job more difficult if I didn't do this part of the study. So for this reason, our team conducted an evaluation of the bill impacts from these proposals to every one of the 200,000 plus bills that we sent out every year and monitor the adjustments and report on some of those today.

The three rate design proposals that were presented to ESC back in November and for which we're seeking direction tonight, are outlined in the row in the first, column in the table here. The four guiding principles that we use to evaluate these proposals are organized along the columns along the top of the table, and then the body of the table summarizes the alignment of the proposals with those guiding principles. A positive indicates a positive sign indicates that it supports that guiding principle, and NA indicates that the pro proposal has no impact on that guiding principle. And in that one negative sign on the second row on the last column indicates that that proposal actually runs counter to the guiding principle. I'll just briefly summarize those proposals here, kind of the philosophy behind the proposed changes.

The first proposal addresses an antiquated rate structure of the single family residential customer class. Today, customers with bimonthly flows of 50 CCFs or less are assessed $7.33 per CCF. Customers who generate more than 50 CCFs of flow are assessed $9.46, about $2 more per CCF for everything above that first 50. For those of you who can do the math or wanna do the math, 50 CCFs is a lot of flow. That's equivalent to flushing a toilet 400 times a day every day for a two month period.

As you can imagine, we have very few customers who hit that tier that that rate. Of the 200,000 plus bills we sent out to this customer class, 200 or one tenth of 1% actually paid this rate. We also don't have a strong cost basis for it. There's not a higher cost for that fifty first or fifty second CCF compared to the fiftieth CCF. Given these factors, staff proposed eliminating this two tiered approach for residential volumes and instead replacing it with a uniform flow charge for all CCFs.

The second proposal has two parts, and you'll see that two a and two b on the table. The key finding of the cost of service analysis was that the multi residential customer class is generating too much revenue relative to its cost. And the main driver for this finding is the existing rate structure where the fixed charge assessed to this class pays for its classes share of treatment costs as well as the equivalent of 11 CCFs of flow per dwelling unit. The 11 that 11 is important because they're paying for 11. They're actually using about six, and that's what's driving their overrecovery.

The issue with this rate structure, as mentioned, if we don't address this rate structure for the multirensential class, it makes it difficult to address the core cause of the cost of service finding. So as proposed, the city would eliminate the 11 CCF allowance embedded in the fixed charge. Instead, the fixed charge would be indexed to an estimate of the class's share of those wholesale treatment costs that are incurred by the city to pay for, King County treatment expenses. This rate structure is similar to how we how the city sets the fixed charge for the single family residential customer class. By removing the 11 CCF allowance, the city would begin assessing the flow charge on every CCF flow for this class.

While this rate structure changes would help eliminate the source of the cost and equities identified in this study, it would have significant and sudden impacts on bills for this customer class. If the city were to implement these changes in proposal two a in one year all at once, we would estimate that some customers would see as much as a 40% increase to their bill year over year. As a result, proposal two b would phase in the change to the fixed charge over a five year phase in period, aligning with the phase in period for the cost of service study. This proposal will reduce the volatility of those bill impacts, and I'll summarize those in a couple slides. The final recommendation, proposal three, aligns the minimum charge that is currently assessed to nonresidential or business customers with the wholesale sewer treatment costs for one residential customer equivalent, essentially what we're charged for a single family customer.

Once again, this is not a fixed charge. It's the minimum charge. Their fill their rate would be no lower than this amount. Today, the minimum charge is $234.68 every two months. There is not a strong justification for this amount.

We can't tie that amount to anything specific. By indexing the minimum charge to the King County treatment rate, what we're doing is providing a consistent approach with how we structure our fixed charges and our minimum charges to customers across the utility. The previous slide was intended to provide the kind of a narrative, the philosophy behind these policy proposals. This slide provides a more quantitative illustration of, what we are proposing with these three changes. On the you'll see that series of charges that exist today on the first column, what is adopted for those rates in 2026, and what the proposed rates would be for each of those, with these three proposals.

I'll start with the first one. For the first proposal, what we would do, as you can see, we have two volume charges under the single family residential, one for the first 50 CCFs and one for anything above that first 50 CCFs. Those both charges would go away. We would create a new line on the bill for a volume charge for all CCFs, and that bill that rate would be $8.54 per CCF. The metro charge, that first row under the single family residential, group, would continue to be indexed to the wholesale sewer treatment cost that we are, charged by King County.

Two a and two b restructure the fixed charge over a five year period so that by 2031, the fixed charge per dwell unit for its multi residential customer is equal to 0.63 of the fixed charge assessed to single family residential customers. As a reminder, we didn't make this point six three number up even though it kinda sounds like we did. The point six three, that's the ratio that King County uses when assessing connection charges for customers. And so they for for a customer connecting to a King County system, they'll look at the single family charge, and they'll take point six three of that, and that becomes the multifamily connection charge. This is a policy proposal.

We're trying to say is let if the goal of that fixed charge is to capture a proxy of treatment cost incurred by the city to serve these customers, then index indexing that charge to to the same method that the county uses for its connection charges is a rational and defensible method to do that. Otherwise, if we kept the fixed charge as it was, we would continue to collect over collect on this class. Eliminating the 11 CCF I'm gonna go to the next piece of the of this rate change, looking at the volume charge component. We would eliminate the 11 CCF allowance, and, therefore, that volume charge in excess of 11 CCS would go away, and we would replace it with a volumetric charge assessed on all flow. Now if you look at the the flow in 2027, you know, just shy of $2.

Right? And if you look at the flow charges for the other classes, it's much lower. And that and that can that's that's something that that we are aware of. And the reason that is happening is it will take us five years to transition the multifamily rates towards our targets. We're we're aligning this change over five years to mitigate the bill impacts to customers.

By the fifth year, that variable charge will be around $9 per CCF. So it's slowly gonna get to where it needs to get. It's gonna take five years to get there because we're trying to mitigate those bill impacts, those unfavorable bill impacts. K? This last, change, we would tie the minimum charge for the nonresidential customers to the fixed charge assessed to king, to single family customers.

You can see that the minimum charge in 2027 for nonresidential equals the metro charge on that first row below the single family residential group. And so we tie those rates together. This would effectively lower the bill for approximately one third of our business customers who are currently paying for more than what they contribute and flow for for the system. So as I mentioned earlier, while rate design changes really are agnostic to our overall revenue needs, so they don't change how much money we collect from different classes, they can have big impacts on individual bills. For this reason, we looked at every single bill that we sent out last year to measure and manage the anticipated impacts from these rate design changes.

The following three slides illustrate the bill impacts in 2027 from these proposed rate design changes. The first slide focuses on single family residential, the second slide on multi residential, and the third slide on nonresidential. Each slide is layered laid out in a similar fashion, so I'll spend time in this one, and you'll see it rinse and repeat. So at the top of the slide, you'll see the four guiding principles that we looked in evaluating these proposals. The principles that are targeted by this proposal are highlighted with that green check mark.

The bill impacts are measured from two perspectives. On the left y axis is the number of bills impacted. On the right y axis is the percent change to those bills from 2026 to 2027. And then we organize the impacts by, by flow along the x axis. And you'll see this play out here.

We'll go through this individually. The first data you're gonna see is a set of blue columns. This tells you the number of bills that we have by CCF for the non for the single family residential customer class. So if we just focus on where we see the peak, the the the majority of bills are between six and ten CCFs. Then we have this outlier, that you see at 15 CCFs.

And what's going on there? When a customer moves in to Bellevue, as I mentioned, for single family, we base their flow on winter water averages, which means we didn't know how much water they're using. But for a new customer, we have no history of that customer, and so we have to make an assumption. The long standing assumption in the city of Bellevue and it's codified in our rate ordinance is when we don't have water history, the assumption is that customer has 15 CCFs for two months. So the 15 CCF spike is essentially new move ins.

We know that's that's not correct. This is an example where a rate design may have made sense twenty years ago. It doesn't make sense today. Twenty years ago when water use was much higher, 15 CFs probably sense. As part of the 2027 budget process, we'll be recommending a change in that assumption, bringing it down to more of what we would anticipate around the 10 CCF limit.

So that's that's where you see that anomaly on the graph. But the point of the blue chart or the blue bars to give you an idea of of depth of impact, where were you gonna see the biggest, people impacted by these rate design changes. The next data you'll see is a percent change in each customer's bill if we simply increase the bill across the board based on the utility's overall revenue needs. In in essence, this provides an indication of the bill increase if we simply ignore these proposals, and that's in this dotted green line. So every bill will go up in 2027 because rates are go because our revenue requirement's increasing.

The last data point you'll see is the percent change in each customer's bill if we adopt the proposed rate design changes that we've just discussed. So, for the single family residential customers, we're proposing creating a uniform volumetric charge. Our current rate structure is kind of antiquated. Nobody really gets charged that 50 CCF charge. And as a result, almost there's almost no impact on the bills, on every other customer in the in the class. And so from a from a bill impact perspective, approving this proposal simplifies our rate structure and has virtually no impact, unfavorable impact on other bills.

Question before we move on. You you're saying percent for the right Well, all sorry. But these are saying dollars. I

Well, they're not for the single family residential, it's dollars. I'm sorry. For every other class, it'll be expressed in that percentage.

Okay.

Thank you. Yeah. My fifth mistake of the hour. No.

I'm just saying.

Okay. For a multi residential, the first is gonna show you the, range of bills that we send out. So for multi residential customers, we're showing the bars expressed in CCFs per dwelling unit. Average over a two month period between six to eight CCFs is where you see most of that concentration. If we do nothing, every bill will increase 11.3% next year.

Under this proposal, once again, we're gonna change the fixed structure. We're gonna charge on every CCF of flow. This is a projected impact for that class. So the observations you can make right away is the vast majority of customers with this change would pay less than what they would have paid under just increasing rates across the board. We do acknowledge that if you there are customers at the 10 CCF and 11 CCF that will pay slightly more.

And those numbers under the 10 CCFs, there are 67 properties, and their bimonthly bill would increase 90¢ above that green line. And and in the 11 CCFs, there are 44 properties, and their average bill would be $2.90 above that green line. But the vast majority of customers, think of the five, six, seven CCFs, average, they would actually see increases in the range of, three to 6%. And, yeah, and then finally, for the nonresidential customer group, we have a much wider array. We're going from zero to 2,000 CCFs.

But if I can focus your attention on the left side of those blue bars from zero to 15, around one third of our cust our commercial customers generate no more than 50 CCFs 15 CCFs every two months. Under the, status quo approach, everyone's bill would go up 11.3%. Under this proposal, we would be lowering the minimum charge and tying it to King County's treatment rate per an RCE. Customers who generate less than 15 CCFs would on average see a $35 reduction in their bill in 2027. Customers who generate more than that would see their rate increase instead of being that 11.3% across the board to be closer to 17%.

The point of these three charts is simply to show we we acknowledge one of the critical pieces of rate design is they're good concepts, but you need to test them to make sure that you can see the impacts and you can measure and manage them where they're on they are unfavorable. So that concludes the technical component of the presentation. I've outlined the three rate design proposals in the table on this on this slide. The reason I keep saying three and there are four rows is that the city we do not staff does not recommend implementing two a or two b individually. We recommend if you're going to implement, either of those, they need to be done together.

The bill impacts the unfavorable bill impacts would be too significant if you didn't adopt them together. So we're hoping that tonight the commission can provide formal direction by way of a vote on recommending these proposals to city council for implementation. As a reminder, these proposals would be in addition to the customer class specific rate revenue adjustments that the commission already voted on to move the classes towards full cost recovery over the next five years. Happy to answer any questions. I also just wanna say thank you. I know it's been a long three meetings, and I really appreciate the the attention and the questions. And so with that, I'll open it up.

So I'm right here. Staff are requesting a vote to recommend the We'll metric the rates.

The two restructures

Parges towards the new rates target will be just sort of value of phasing, period. On residential, aligned with minimum bi monthly charge for none. Questions you may have. Motion to recommend the three rate changes to counsel.

I move to recommend all three motion all three rate proposals to counsel.

I second that motion.

I have a question about how this gets communicated. How does it get communicated? Yeah. I mean, to the public, to the ratepayers.

Okay. Look. Go ahead.

So there's a legislative process first. We're gonna be briefing city council. And then, as part of the 2728 budget process, these would be reviewed at the city council level and formally adopted as part of the twenty twenty seven, twenty eight rate ordinance. Following the adoption of the rates, the city the department does a series of, brochures and flyers out to the business community and bill inserts to communicate the changes to the bills.

Yeah. I would just echo that. I think it's it's a priority for the department. We have a fairly robust communication strategy that we implement for any major initiative. And so there's various media that we use. We use newsletters, publications, inserts, bill inserts. We'll use the city's website. It will be broadcasted wide and far, and we'll take make sure that's taken in a very strategic and measured way along and prior to implementation. So, again, communication, a strategy, and implementation plan is very important to us, and we make sure we're just very thorough in that process working with our, public information officer.

I just imagine that there's the outbound, and there's probably generates a lot of inbound.

Certainly. Yeah.

A part of that strategy is to manage that.

It is. And we we have obviously, have a call center. And so we receive written communication via email and otherwise, and we prepare responses accordingly. But we also brief and prepare speaking points for our call center and team and make sure that we're communicating effectively on the large number of calls that we receive on a daily basis, which could include this topic, of course.

So these changes, in addition to the intraclass equity changes we voted on last month, will be part of the 2728 budget process and all of the associated public meeting and and open communications as part of that budget process as well. Correct? Okay.

Yeah. I just wanna clarify. I'm sorry if I didn't hear this right. But at what point does the public have an opportunity to come and speak out or or give their feedback? Is it at the city council meeting, or or do they do it at a meeting for at the commission level?

That's a great question. I would expect public comment is the typical manner in which they can voice favor or in favor or opposition, of course, and concerns. Mhmm. So I would expect we're going to be broadcasting this through a a very well developed communication strategy, again, as I said, hitting multiple media and other avenues. And I would expect through that process, we would be fielding responses verbally, calls, etcetera. And if there was the need, obviously, individuals, residents, customers could come in and speak and and present

Okay.

Concerns to council.

So it's not like a formal public hearing or a meeting or something where, like, the city council says we're gonna take up the rate proposal.

We do have Oh, we do have Yeah.

It's part of the budget development process, I

budget. Okay. Got it. Thank you.

To add.

That's what makes sense. I just wanna make one related comment that I just wanna say thank you very much for doing such a thorough customer impact analysis. You know, we don't often see it for every single customer. You just see we see sample, you know, customer bills or something, and so this is really so thorough and what a robust analysis that we've done. Thank you very, very much.

Thank you. And I would just echo that for our fiscal manager. Very fortunate to have Matt Hopson on board and performing just exceptional work. So thank you very much for your feedback.

Any other questions or comments? Commissioner Tyson?

You know, I I appreciate, how you you went back through the material that we had previously discussed in previous meetings a few months back. And being able to describe in detail each of the proposals, I think that's really important that we understand all of the nuance in that. And then for me, that last piece was then I wanna see analytically how it lays out, how people are specifically impacted, and then getting some insight into, you know, what is the typical usage for commercial property or multifamily property. So I thought it was very, enlightening in order to fairly evaluate the proposal. So I appreciate that.

And, you know, just kinda my reaction too is I feel like the proposal two a and b, you know, because of the the cost of service analysis, it's a little bit of a necessary evil. You know? And so in many ways, the only consideration there for us was the time it takes to implement that, and that's part of proposal to be. So I feel like that's that's the biggest part of this, it seems, at this point. Thank you.

You. Commissioner DuPertis, do you have any comments or questions for staff?

No. Thank you for thank you for the presentation.

K. Thank you, commissioner Laxon. Any comments or questions from you?

No comments or questions. Just wanna say thank you for the presentation and the analysis.

Alright. Okay. Then I think without any more oh, mister Margolis.

With the the change of the the middle housing shift that will affect Bellevue, how does that how do you anticipate or how do you build in how that will shift kind of the makeup of these different kinds of customers that we will have? Right? Because that will shift density presumably, presumably, or that's the intent is to that it will shift density, and we'll change demand and change the proportions of types of customers, presumably. So how do you account for that or think about that?

I'll be brief because I can talk about this stuff for a while. But, great question. When we when we contemplate, either creating a new customer class so maybe there's a change in in the composition of housing in Bellevue or in other parts of the of the country, and it makes sense maybe the three classes we have don't do the city system justice, then we evaluate creating a new customer class. State law allows us to do that. We just have to demonstrate that there are unique service demands and needs that require differentiation.

And so you and you have to have kind of the volume of customers to justify that change. We don't wanna create a customer class of one. And so it's kind of a it's a long term evaluation. We wait till we have the the critical mass to be able to justify a new distinction in the customer served class. Yeah. Something that we evaluate, though, in terms of monitoring, new connections. We're looking at it on a monthly basis.

And I suppose if you don't have enough justification to create a new class, we will be doing this cost of service analysis periodically. Correct?

Yes. And so, the plan at this point is to, do a similar identical study five years from now in 2031. However, every year, we from now until then, we will be monitoring and evaluating the cost recovery rates for these classes to make sure it's doing what we we expected it to do, and we can report that progress to the commission on a on an annual basis. What we hope is in twenty thirty one, one, there's an acknowledgment that that was a difficult choice made in 2026. It had some impacts, but look. It worked. And now we're making just smaller and fine tuned adjustments. That's that's the goal of of that next cost of service study.

Did I answer your question, commissioner Marcos? Any other remaining comments, questions from the commissioners before we take a roll call vote? Otherwise, if you could just say yay or nay when called, and we will take the vote. Commissioner Letterman? Yay. Thank you. Commissioner Margolis?

Yay.

Commissioner Hainosh? Yea. Commissioner DuPartis?

Yea.

Thank you. Commissioner Tyson? Yea. Commissioner Laxon?

Yea.

And for myself, it also is a yay. Alright. I think that concludes our first item today. Thank you. With that, our second item of business for the evening is the asset management program update.

Well, I'll just go ahead

and take a moment to introduce Jacqueline Noth. Jacqueline is our asset manager, for the city of Bellevue, and she presented here two years ago. Most of you were here then, and so she's back tonight to do a refresh on the asset management program. Jacqueline.

Good evening. I'm excited to be here tonight and talk to you all about the asset management program. I hope it's it's exciting for you as it is for me. So so as Joe mentioned, I'm Jacqueline Noth. I'm the utilities asset manager.

And so just providing an update on what we're doing in the program and kinda what we've been doing since I came to you last in 2024. So this is an informational briefing only, just providing the update we just discussed. So there's no decisions requested of the commission at this time. So before I leap into talking about the program work and what we've been doing, because it's been a while since I've been here, I wanna take a few minutes to cover the portfolio of utilities utilities infrastructure at a high level and talk about asset management as a practice. And then we'll look at the program work that's been completed in '24 and '25.

And finally, I'll give a status update on the strategic asset management plan and the related improvement initiatives. So first off, I wanna share the utility's infrastructure portfolio. And so, like, infrastructure portfolio, what is that? Fancy word. So what I mean by that is I wanna share the volume and types of assets included in each of the utility systems.

Utilities provides three services to customers within Bellevue and in various neighboring communities. So our water system includes over 600 miles of water main, over 40,000 meter connections, 24 water storage facilities, and 21 pump stations. The sewer system is made up of almost 500 miles of gravity main, 18 of those miles being lake lines. I'm sure you guys are familiar. 47 total pumping facilities and over 13,000 maintenance whole structures.

And our storm and surface water system is made up of another 400 miles of gravity means, 12 regional facilities, more than 23,000 catch basin catch basins and maintenance holes. And in addition, we have over 800 acres of protected wetlands, over 90 miles of streams with more than a third of those being fish bearing. So the reason that I share this slide is because I think it's important to center on the scope and the scale of the systems that we care for and point out the variety of built and natural infrastructure and the types that we work with across the utilities department. So next, I wanna introduce asset management at a high level just to anchor us in the topic. So what is asset management?

So there's all kinds of technical language and buzzwords that I could throw out, but that's not how we get the message out to people and make it understandable. And as a public servant working in asset management for over a decade, it's really near and dear to my heart and important to me that this is something that makes sense to people, and we make it make sense. And I know that that's a value held, by the utilities department as well. So, hopefully, we we can pull back the curtain in these presentations and give a little bit of, easy to understand information. So in its most simplistic form, I will just say asset management is stewardship.

It's caring for the infrastructure that we manage in a reliable, cost effective, and sustainable manner to deliver the levels of service that our communities desire for their investment. So what do you see on the screen is a common graphic for describing the five core components of asset management. They're very base level pillars, and it really starts I always start with asset inventory. So up there, the purple triangle, asset inventory. So that's really understanding what assets do we have and what condition are they in and what are their value.

The next section is service levels. So what level of service do customers desire, and are the assets and systems delivering that level of service? The next core component is criticality and risk. So this is really understanding which assets are most critical to system performance and which are at the highest risk of failure. Then there's life cycle management.

So we need to know how the assets should operate, how they should be maintained, and how to identify when they're failing, and what's the expected life we would get out of them before renewal. And then lastly, but certainly certainly not least, is a funding strategy. So we need short and long term funding strategies so that we're able to sustainably maintain the infrastructure through maintenance and capital renewal efforts. So these are the basics. So those concepts can be really simple, but the of that is where it gets complicated.

It takes people, processes, tools, and resources to implement an asset management program. So I've listed out here some of the major elements an organization needs to functionally manage its assets using asset management best practices. So we need organizational structure that supports the program and the strategies. That's things like policy, leadership awareness, and support. We need a line of sight for staff throughout the organization so we can all understand how our individual roles contribute to the overall goals.

We need tools and technologies to support analysis and decision making, things like work order tracking softwares or risk modeling, field inspection technologies. We need data and methods to measure things like system performance, condition trends, and failure events. These data points are benchmarked, and they help us understand how we are performing on those service levels that we're delivering for our customers. We need a financial strategy that accounts for near term and distant future investments in system renewal and replacement, and that eye on the fiscal horizon helps us make plans today that support the future. And finally, we need governance.

That's procedures and business processes that align with the asset management best practices. We need strategic action planning for continuous improvement and dedicated resources to do all of this work that I just described. So it really takes a village to bring all of these things together and truly implement asset management. And I wanna highlight that because we can break it down into those five core components. But when we talk about doing it, it takes everybody on the team to bring it together.

So that's a very high level introduction, but hopefully, it's helpful for anybody that's not super familiar with asset management. And now I wanna get into what Bellevue Utilities asset management program has been up to lately. And I do wanna highlight that it's so hard to take two years of work and put it into a few slides and and share all of the great things that came out of it. But so we've taken some of the really important things and tried to highlight them. So the last time asset management came to the ESC was January 2024, and we presented on the successful completion of some really large impactful improvements we made to risk modeling and financial forecasting.

And we added a great amount of detail and precision to our seventy five year forecast and our capital prioritization processes. So the asset management work for the last couple of years has really focused on understanding the health of our assets through detailed condition assessment, improving capital delivery, and beginning the journey of improving our asset data. And so those are the things we're gonna highlight. So I wanna start out by talking about two major condition assessment project completions. And before I get into those, I wanna note that these projects were driven by the results from the risk evaluations and the seventy five year forecast development that were shared with you a couple years ago.

So when we mapped our system risk and we looked at where the investments were needed, that updated approach highlighted where our biggest risk and our biggest information gaps were, and it gave us direction on where to invest in assessment. So the first project I'll share is the wastewater pump station condition assessment. We invested we invested in detailed and technical evaluation of 10 pump stations. As a reminder, we have 47. We assessed our electrical and power supply systems.

We looked at station monitoring equipment. You might have heard them called SCADA systems. Our vaults and ventilation structures, we performed detailed pump evaluations. If you didn't know, vibration testing is a thing. So all the way down to that level of assessment.

We and we reviewed the facilities for code compliance. So this project not only evaluated the stations, it built the template for future contracted wastewater pump station condition assessments as well as the standard evaluation scales for internal and ongoing visual inspections. This is important because being able to trend condition over time requires that we look at the assets with the same lens using a consistent scoring method to track their health. We also perform something called a FAMICA analysis. It's failure modes, effects, and criticality analysis.

And so that helps us look at the way that things fail and what causes that type of failure and what the impact is to the system's operation. And so I'm gonna go off script here and give a little example. So if we have a if we have a pump fail and there's a redundancy in that sewer station for a pump, then we have time to get to that and to deal with it. If we have a complete power outage at a station and the backup power fails, the time is less, and it is more urgent. So different assets have different redundancies.

They fail in different ways, and they have different effects and different urgencies. So that's what that, FAMICA analysis analysis helps identify. It further ranks those assets in their criticality. So we did that analysis, and this information was all incorporated into our risk modeling, and it helped focus the investments investments on the highest level risk assets within each station. So this also serves as a guide as for under understanding what to inspect in the future and with what tools.

If we know how something fails, we know what we should be looking for. So this project did not inspect wet wells. That takes a different kind of inspection method, but we did create detailed inspection plans to support future project for wet well evaluations for six specific stations. The final output of this project is a prioritized set of rehabilitation and renewal actions with cost assumptions that are now incorporated into our maintenance and capital plan. These kind of evaluations are so important because in some cases, unexpected failure has high consequence.

That could be environmentally high consequence. It could be to the community, or it can even be financially. In addition, there's a big difference between deciding to replace the station or make rehabilitation to the station or maybe do some small component replacements. As I mentioned before, it's our responsibility to make sound decisions and really just know kind of do we need a tune up, or are we shopping for a whole new car? Right? So we have to decide that. And to put a little bit of context behind it, these are multimillion dollar facilities. They range from, you know, anywhere from 4 to $10,000,000. And so and and they're collecting sewage. So managing them in the right way is really important.

So this project ultimately created a case for elevating some of the stations that we evaluated in the CIP, prioritizing them based on the deterioration we found. And we also determined that some stations that we had previously felt were assumed for full rehab could be mitigated with some life extending repairs and delayed in the CIP for a full rehab. So it helped us sort of shuffle the deck and focus the investments. So the next major condition assessment project we conducted was a culvert condition assessment project. And so when I was here two years ago, we introduced this project as a future priority, and it was hugely valuable to us.

It was I'm very happy with this work. I'm excited to see what we're able to do with it. So we did not have good condition data on our culverts. And with new regulations driving up potential renewal costs significantly and competing priorities of barrier removal or habitat gain versus structural integrity, we knew that understanding exactly how these assets were performing was key to rightsizing potential rate impacts and prioritizing renewal projects. We contracted with a consultant to evaluate over 200 culverts, assessing the structural integrity and capacity, identifying maintenance priorities such as vegetation blockages or small defects needing repair.

And we looked where possible potential regulatory concerns like large hydraulic drops. So the results of this project were a near full evaluation of the current infrastructure, producing an actionable list for further pipe inspections, like in pipe inspections, flaking assets needing minor maintenance, and giving us a list of critically failing culverts. Some of the additional benefits that came out of this project are, again, a standard inspection method for culverts with a formal inspection guide, giving us that mechanism for continuity and condition data and collection in the future to help us trend performance. This project also developed a multi objective prioritization method for culverts, allowing us to look at this specific portfolio of assets from multiple lenses. So we can look at the prioritization factors individually, So maybe the factors of environmental impact and rank them specifically on that or constructability and permitting complexity and look at them just on that or structural integrity.

Or we can look at those altogether prioritized in a weighted matrix. So, lastly, this produced a GIS tool that allows our environmental planning staff to quickly evaluate things like up and downstream barrier counts for individual culverts and accessible habitat gain removal. So this helps us know where we can make the most impact in our natural systems, and it's connected using the DFW information as well and our own field observations of our specific streams. So the results of this project have put forward several priority culverts to be proposed through this current CIP process, and we're now getting ready to use this information along with the watershed management plan to further build out programmatic renewal approach for culverts addressing the various drivers in a balanced way. Not every structurally deteriorating culvert needing renewal provides significant environmental environmental benefit and vice versa.

So with the cost and level of effort in these types of projects being so high, informing those investments is critical. We're excited to see the benefit of this work. So in addition to those condition projects, we have some other noteworthy efforts at various stages of development. So water mains, I'll I'll list them off here. There's just little tiles. I won't go into too much detail. But water mains is our largest network of pipes. And unlike sewer and stormwater gravity mains, water mains are pressurized. This makes condition assessment much more compliment complicated and, in general, more costly. It's also why the condition technologies that we use standardly for sewer and stormwater don't translate over to water.

So these factors are what drove an analysis of current and emerging technologies, the associated costs, and when and where they would apply cost effectively in our system. We have recently completed that study, and we're in the final stages of developing a system wide condition assessment approach for water mains. Next, we're currently scoping the next 10 sewer pump stations to undergo detailed evaluation and targeted wet well investigations, and that will inform, again, those life extending efforts or the need for capital renewal. We have the benefit of using that newly developed standardized method that we created in that previous project. And so evaluating those 10 stations in that same manner will give us a way to look across all of these stations apples to apples and continue priorities.

Finally, we're currently preparing to initiate a large scale stormwater gravity main CCTV effort. And I always take this for granted, but CCTV is a camera in pipe inspection. It's a closed circuit television. We're able to put a camera in a maintenance hole and send it down and get a visual inspection of the closed pipe. So so we'll be doing that large scale effort, and that's gonna help define the long term renewal forecast for our conveyance system.

So I'll I'll say it all the time, but direct condition data is key. That's how we validate the assumptions that we and we make informed decisions. So in our stormwater sift system, we have about half of the system inspected with CCTV, and this project is to get the remaining pipes inspected. And so if you were here again two years ago and you saw the information shared by myself and the fiscal manager, one of the things I'll remind us of is that we highlighted in our seventy five year forecast that stormwater showed a significant financial investment need, but we also knew that we had large gaps in our data. So what you're seeing here both in the recently completed culvert evaluation and the CCTV effort is the field response work to correct that data gap and better define our financial need.

Condition assessment is a foundational element of asset management. So at any given time, you could ask any one of us what condition assessment projects are you working on, and we will have a good list to share with you. With a variety of assets across the utility system and the volume of those assets, condition assessment is an ongoing effort and will always be a priority work element. Last thing that I will say on condition assessment, it's also the area where we see AI emerging the most significantly in utilities applications. So we're starting to see condition information be collected and or rated very commonly with AI tools.

I don't know if commonly, but we're seeing it more frequently. And so those are becoming widely available, and those emerging technologies are hitting the market. So I would be on the lookout in the not so distant future for Bellevue to be looking at those types of tools. So moving on from condition assessment, some of the other efforts that we've engaged in over the last couple years. So I'm gonna move on to our CIP support.

So renewing the right infrastructure at the right time is also a critical asset management function. And therefore, asset management has a large stake in our capital delivery processes and the ability to get projects identified, designed, and built efficiently. The utilities department has made several CIP delivery improvements over the last couple of years. We were able to use the asset management tools and strategies to get projects initiated and programs moving forward for PRBs and the large commercial meter programs. We integrated our updated risk tools and long term funding projections into the water main replacement program to better project our needs and ensure we're targeting the highest risk assets.

And in this current CIP process, we were able to incorporate our renewal and replacement forecast and risk prioritizations at a much deeper level. And I know that integration of processes will only continue every time that we repeat the CIP process. And finally, we are strengthening our interdepartmental coordination with our transportation partners. We're using new spatial tools to easily show planned investments from both departments and drive collaboration, minimize community impact. We'll continue to enhance our CIP delivery processes through process improvements in our defect repair program, which focuses on sewer and stormwater piped infrastructure and the development of that previously mentioned multi objective culvert CIP plan.

So I also wanna touch on some of the valuable efforts that we've completed related to our asset inventory and data quality. So when you're working with this many assets and systems and data management becomes an ongoing initiative. Sometimes small tasks like identifying errors and working to correct them, and sometimes it's really large ones. I forgot my water. And sometimes it's really large ones, like evaluating the tools and processes for larger improvements.

So recently, we've done some data correction work related to our historic CCTV video inspections in a program called Gnet. We're able to identify and are in the process of correcting over 400 orphaned video records. So those are inspections that were not able to be associated to the correct assets. This will also result in some data governance improvements to limit these types of errors in the future. When we are conducting condition assessments, we're also taking the opportunity to validate the assets information and make sure we have the right attributes like size and material and age.

We incorporated the attribute corrections we identified from all of those previous condition assessments I just talked about. And those are going to help us improve our datasets, and we will have better data quality. And that updated information is brought into our risk modeling and our forecasting tools. And each one of those data points does really make a difference. A certain material, a certain size, a certain age, all of those things have an impact on the modeling.

So some of the efforts on the horizon are fully digitizing some of our field inspection processes that have not yet moved to digital forms. That's an example of a smaller but really valuable effort, moving those paper forms into digital format. And in contrast, we're also looking to perform an evaluation of our asset management tools. So this is a much larger initiative, multiyear type of initiative requiring more time and resources. So I'm gonna transition now from an update on our recent program work and talk about our strategic plan and where we're at with our improvement initiatives.

Just so you know, the strategic plan is set to be updated between 2026 and 2027. So before I move to this topic, it feels like a good point to pause for questions or comments on the previously performed work.

I think you answered this. It had to do with AI, because I was just curious, you know, what could you tell us relative to, you know, AI investigations or applications and that sort of thing. And so it sounds like we're looking at it relative to condition assessment tools. Any anything else that maybe you can tell us about AI and what you're anticipating? And in the back of my head, I'm thinking, sure, everybody wants to be efficient, that sort of thing, but folks also are looking at AI and, you know, kind of aligning with staff reductions or, you know, layoffs.

And I know this is an oversimplification because it's happening in techno you know, the tech world. Right? But what should we expect relative to AI, I guess, at this point?

Yeah. So I would say I think that Bellevue has initiatives where AI is becoming is being tested and being implemented into our work, really outside of asset management by the IT department. But if we're focusing really on asset management and utilities infrastructure, then what I would say is the area that I see us taking advantage of that, I can be really specific, it would be in defect coating in pipes. That is one of the biggest areas that we see neighboring agencies adopting some of those. And we have had those questions.

Staff do say, well, wait a minute. That's my job. I do the coding. And so it is important to understand the difference between the AI analysis, which can highlight where we might need to look or double check, and then that human element of validating the complexity or the work, and that's not going away. And so a good example is if you see there are plenty of times that we see, like, a street sign or something like that, and it gets driven through the top of a storm water pipe. Right? So if you it it happens. No. You know, it just happens. But so you're driving the camera down, and the AI might go, woah.

That's an emergency. Somebody needs to get out there. And a seasoned stormwater technician will look at that and go, okay. Well, we should probably fix that, but we don't need to run out and dig it up today. You know, in this moment, it's a stormwater pipe. It's going to be letting in groundwater. It will be alright. We don't see soil coming through. It's not blocking the pipe. So there's there's that human element of understanding the application of the utility that isn't gonna go away. And and we would be working with our stormwater field crews to implement and design how we would use those pieces of information.

Just wanna add that AI is coming along, and we're figuring out what that'll look like for us. But I you know, it's really early. As we go through that, a lot of people think that it will make us more efficient, and I agree with that. But as you establish those efficiencies, it might defer the need to add staff, and so you're becoming more efficient. So all those because there's plenty of work to do, and we'll continue to do that. But you will see gains in the form of not hiring, for example, more staff. And we'll see how it plays out, but we're always looking for those opportunities.

Put one I noted one comment on there. It said about, adding structures to your asset inventory. I think it was about hatches in the in the pump stations and such things, structural elements. So as you're doing these things, are you adding number of assets into the big database?

Yeah. Yes. Absolutely. So one of the things that we've been doing with this round of sewer pump station evaluations is looking at how our sewer pump station hierarchy aligns with our water pump station hierarchy and where there are differences. And there are differences.

In some places, we're being more detailed, and in some places, we're being less detailed. And so we when we did these detailed evaluations, we documented everything, including hatches, including valves, and all those things. And then we're working to evaluate what needs to be called out and what doesn't. Yeah. And I can tell you in working in this industry for a long time, you'll get a lot of different schools of thoughts. When I was selling setting up a facilities asset management program, I had a facilities manager that wanted to call out all the GFIs, which is an outlet that you can push the Push the button. Yeah. Yeah. Yeah. In in a city a huge city hall building.

So there's different schools of thought. And so I always tell people information over administration. Right? So this value of the information, does it meet the requirement of the administration it takes to get it and manage it and keep it effective? But, yes, we so we did find areas of gaps in our inventory, and we included those.

So some some areas are becoming more granular and and some saying we don't need that much granule.

Yeah. Okay. Right sizing, if

you will.

Right sizing.

Sure.

I just want to question about cost estimating. I know we're getting into a lot of cost estimating and cost discussion this year, but I'm just wondering if you have seen any significant changes relative to the tariff impacts for the capital cost estimating or not?

I don't think that I do not think that I have seen anything to this point, but I would say I would expect those impacts would come more on facility rehabilitations. Yeah. That's where I would expect to see it. And I don't know if we've had bid tab bid openings come through in the timeline where we would expect that to have impacted it yet. So I can't say that I've specifically seen an impact.

Any other questions from commissioners?

Right.

Okay. I appreciate your guys' time and attention. I know it's riveting stuff. So alright. So now we'll move on to the the strategic asset management plan. Okay. So in 2021, utilities adopted a strategic asset management plan, also called the SAMP. The SAMP chapters are listed here on the slide, and they give you a high level idea of the contents. Just I think it's helpful to just say, okay. What's in a SAMP?

So as you can see, it's similar to a department or organizational strategic plan. It's a governance tool. And so it's basically there to define and support the program, provide definitions, and keep the focus of the work aligned with the goals and objectives formally established by the department. In addition to documenting the current program processes and governance, the SAMP is also connected to a road map of improvement initiatives established by stakeholders across utilities to increase our asset management maturity level. And now we're getting into those buzzwords that I was talking about earlier, that industry jargon.

So as I stated before, the idea is to make it relatable and understandable. So when I talk about maturity level, this what you see here on this slide is the asset management maturity scale. This is an industry standard scale that essentially measures the competency of your asset management program, and it ranges from level one on the left, which is innocence where an organization is not aware of or does not have the intent to implement asset management, all the way to the contrast level five on the other side of the scale, which is really the continuous improvement stage. Asset management principles and processes are widely in place at that point, and the organization is committed to optimizing those elements. So in 2019, our maturity level fell between awareness and development.

We are hoping to be at approaching to be at or approaching competence in our next evaluation, which would be coming up with the strategic asset management plan update. So how do you know where you're at or how far you can go? Right? The scale seems relatively simple, and it could be kind of arbitrary. Right?

So it is not, in fact, arbitrary. It is very specific. So to understand where you're at on the maturity scale, you would do a maturity assessment, and that looks at 38 asset management subjects grouped into competencies. On the right, you see the spider graph produced from our 2019 assessment. Through specific criteria, you're able to rank your current state against the requirements that qualify a specific level of maturity in any subject area.

And the intent is to use that evaluation to drive effective continuous improvement initiatives. So you're able to see where you don't meet the criteria for an industry standard or best practice, and then you develop a plan to remedy that gap. So I wanna take a moment here to note that working in this field and in our region for several years, Bellevue has a strong asset management program, well ahead of many of our peer agencies. And most importantly, we have support and organizational understanding of asset management. And those are the things that really give us the structure needed to be leaders in this practice.

And we are called upon regularly to share our strategies and practices with our regional partners and neighboring agencies. And through that, we're able to work together, brainstorm ideas, and and learn from each other. So it's a really great environment. So why all the continuous improvement? Right?

So I just wanna keep in mind that the highest level of asset management is opt optimizing, and that's because the driver is stewardship. So as our communities and our economic climate, our bio environmental goals, and even infrastructure design change, we need to change with that to best deliver the value for your system investment. Oh, I went too far. So following our maturity assessment performed in 2019 as a precursor to the SAMP development, if you're following that, we identified 50 targeted improvement initiatives. And, again, these range from lower level improvement efforts, kind of low hanging fruit, if you will, all the way to multiyear large scale improvements of tools and processes.

So as part of the development of the SAMP and the 50 initiatives were prioritized, and they were used to create a road map. The important thing to remember too is that the improvement initiatives are single initiatives to enhance our maturity. The condition assessment projects, the model maintenance, the forecast development, capital improvement project support, those are all program bodies of work that are not part of improvement initiatives. Those are just program work. So since 2021, we have completed 22 of the 50 initiatives, and we have another nine in progress.

We've dedicated our upfront focus to establishing program foundational elements in governance, our risk evaluation and renewal and replacement forecasting, and now we're working on program structure, performance management, and levels of service. The next areas of focus will be heavily related to technology and data, both tools and processes. So here's a little more detailed look at what we've completed since the implementation of the road map. So I summarize some of these things because getting so many tasks on one slide is overwhelming both for the audience and the presenter. So the headers that you see are groupings of improvement categories, and the bullets below are completed initiatives.

So in the category of people and processes, we defined roles and responsibilities, and we established stakeholders. We also integrated our existing asset management processes into our current business processes. I want to note that that's ongoing. As we further develop our asset management processes, then those processes would need to be embedded into our business processes. So as we continue to grow, we'll continue to bring those things into our day to day work.

Under governance and decision making, we established a governance committee. We adopted a risk framework and condition scales that are applicable across all the asset classes. In strategy and program management, we created an implementation plan. We adopted a formal asset management policy, and we established uniform definitions for asset management. Looking at performance management category, we've developed asset management indicators, and we improved the reporting.

We've done a ton of work in life cycle management category. So this is big lifts, like updating our renewal and replacement strategy, CIP governance and prioritization. We updated our our alternatives analysis tools and processes, and we formalized our the process for communicating issues identified in the field that need engineering support. In maintenance and reliability, we've applied that risk framework, and we also developed individual risk scores. And we're performing that failure analysis that we talked about, the FMECA analysis.

And lastly, in data and technology category, we have improved our asset inventory and established our asset hierarchy. Although this is admittedly a never ending task. So there will always be data work to do. And then, also, our GIS team has nearly completed a tool that maps our easements, which may not seem like a flashy improvement, but it's actually a pretty significant efficiency. So upcoming priorities, we've really got them split into two categories.

We have some program governance improvements on the table, like implementing a change management strategy, developing a staffing model, skills and competencies training, and enhancing our service levels and performance indicators. But the large amount of the remaining road map work is related to data and technology, and then the related governance standards and technology upgrades around that. So I'm not gonna read them all, but they're here in the PowerPoint for you. And these are the primary areas of focus for our remaining maturity improvements. For our next steps, what will asset management be doing after we leave ESC?

We will be launching the strategic asset management plan update project and performing a new maturity assessment, updating the corresponding road map. We're gonna continue to work on those existing improvement initiatives that still are out there on the road map. We'll launch our upcoming condition assessment projects. We're going to enhance our culvert sewer and storm water gravity main CIP programs, and we'll implement the updated digital inspection forbs. Okay. And then, after all that, I'll be back here to talk to you about it. So, with that, any questions on the remainder of the presentation?

The the ISO maturity evaluation, who performs that?

So we previously had it done by a consultant, and I expect that we would use consultant services to do that again. Yeah.

I I guess I was hoping for some level of objectivity on that. It it's not performed in house. Mean

No. Yeah. No. We we have that done through third party. Yeah.

Been trying. Yeah.

My question is really I mean, you guys do have a fantastic asset management program. I have to you know, just based on what I see in in my work, and you make it look just so easy. I know it's not so what what are your like like, what are the top maybe one or two things that you think are gonna be a real lift or a big challenge out of, you know, all of those things that you're gonna be faced with? Or can you just kinda give us a flavor for what are the two things maybe or whatever, you know, that are really like, oh, boy. This is gonna be hard.

Yeah. Well, I would say one of the big beasts that we have is feeding our modeling. That is that is a constant, managing bid tab analysis, cost assumptions, and feeding condition and everything that goes into it. So that that is a beast that needs to be continually fed to be accurate. And if you let it get sort of stale, it loses its value very quickly.

So it's something that's really important to keep the pencil sharp. So that's a challenge, but it's something we're very dedicated to. I think one of our big upcoming lifts is really looking at our maintenance management tool and doing a gap analysis on how it serves us, what opportunities we might have or need to to keep up with industry best practices and tools so we can be efficient in our maintenance management processes and then affecting that change, whatever it is, through reconfiguration or evaluating tools. It's it'll be a process to get there, but that is definitely a really large lift anytime you're looking across different sections, across different users, different datasets to try and find out where the gaps are, where you can make improvements. So there's a lot a lot there.

Other questions, comments?

I'd like to add a comment. So asset management, everything you see up there, the whole presentation is fantastic. It tells you what's going on. But, really, what it comes down to is having the buy in from staff to to take the time to fill out those work orders properly, to get the criticality right, the problem cause remedy, all these different buzzwords you hear. But the staff need to understand that in having a really solid asset manager to drive that drive that home and keep

it

going, because there's a lot of care and feeding, that's critical as well. And so having the right people in the right place. And I can say, Jacqueline, over the last five years, we started this twenty years ago.

I've only been here for a little over three years.

So the amount of effort and change we've seen in the last three years seems at least more than that is is probably why I'm thinking five. But, it really depends on the people to make it go. Obviously, the technology is important, but, just kudos to the staff for the work they do.

Thank you. I just wanna follow that up because the way I when I was developing my question, almost for a lot of the people that I work with, that what you described is the biggest challenge. And I recognize this even when I saw you two years ago for the first time, and you described this program, and I went, shoot, they've got the biggest thing done, and that is to develop a culture. And you can see it when we have presentations from your ops people and all other people throughout this utility, that they have it. They have that culture and that feeling.

And and so I just that was what I was forming my question. Like, hey. You got the hardest thing done, seems like. What what were your other challenges? But it's it's associated obviously with the people, right, and making sure that people still keep that that feeling of, okay. Every little thing that I do goes to the mission of keeping our assets in as best condition, whatever, low lower cost, efficient, you know, stewardship, all those things. And every single person has to feel that way. And it feels like you guys really have that. You know what it feels like, so keep it going. Right? That's the hard thing.

Yeah. I feel like I will just say our team so if you're not familiar with our asset management program structure, sit in engineering but really work across the department. And so it's almost like being a liaison between the two and working across the divisions. But our planning engineers are so embedded with our field staff as well, and we have regular I mean, there's just a lot of communication flying all the time, a lot of collaboration and ideas. And, you know, even those condition assessments, I can tell you, I did not know what riprap was, which is something on culverts.

But the environmental team was like, we need to be looking for this. And I was like, what is that? You know? So it we really have to have everybody and all of their expertise together. And so every one of these condition projects we do, planning, myself, our operations and maintenance teams, somebody from our project management teams usually, everybody with a different lens is developing those scopes together to point out where they see opportunities or pitfalls or they have experience where it didn't really go well that way. So really collaborative team. So, yes, I I feel lucky that we have that together. So

You you kind of alluded to this, but I'm kind of curious. This is maybe a nerdy question. But underlying a lot of this is it seems, if I'm understanding right, is there there has to be some level that the department or the city or culture of the organization has agreed on what the risk level is that you're willing to accept. Yes. And there's a different cost associated with some different levels, I assume, of of what the service level is that we're committing to.

Yes.

How how do you choose that? And is that a is that a culture of the city? Is that the way yeah. Anyway, could you just maybe briefly I imagine this could go on for a bit.

But I think that's a great question. I think that there there's some really easy ones. Right? So there's industry benchmarks. Right?

So we can look we benchmark our, for instance, our water main break rate. We we look at national studies, and we benchmark ourselves against regional and national utilities and really use that as a target. And then we model our investments to achieve that benchmarked level of service. There are other areas that are driven a little more regulatory or things like that. I will tell you, we are embarking on a levels of service evaluation right now that's going to help define some of that because we are challenging a little bit of how can we be more effective in our evaluation of investment.

So when you look at piped utilities like sewer and stormwater, not every defect in a sewer system or stormwater system is going to translate to an SSO or to a flood. And so if I say if I fix a 100 sewer defects this year, we'll have five less overflows. You that's not they don't it doesn't work that way. Those don't relate one to one like that. So we are looking at how can we really tie our investments to health level and mirror those two things together so that we know what we're buying, and we've got a stronger correlation.

So we have levels of service that are benchmarked, and it's the way that everybody does it. And we use that industry standard, but we wanna go a little bit further. And we wanna see if we can sharpen the pencil a little bit more to get it exactly what you're talking about.

Because if I'm under just make sure I'm understanding it right. Because if you were to say everything is working perfectly all the time, that would just be, like, ex you know, asymptotically expensive to do with that. Right? So you're so the benchmarks just everybody agrees on Yeah. What's an acceptable level for these things?

Yeah. Yeah. So that's a that's a great question. And there's there's there's nuance to it. Right? So if you're a relatively new system, then you are not gonna have the same amount of failures. But so that is part of why a lot of these things are looked at regionally, and you have similar somewhat similar build out. But, yes, there is kind of we expect to see x amount of breaks or, like, certain amount of unplanned interruptions per thousand connections or a certain amount of water main breaks per 100 miles of pipe, and there's sort of a range. And you could look at maybe, like, the Seattles where the system's quite a bit older and there's a lot more connections. There's gonna be there's more construction activity.

You might see a different a slight difference, but you won't see it'd be within the benchmark. Okay. Thank you very much.

Alright. The last item on our agenda tonight is the utility bill assistance program update.

Good evening again. It's our pleasure to be with you. I don't know. I think you may remember last time Jacob Edwards King, our business services manager, was presenting the commission. I think it was September 2024. So it's been a bit. So it's good to have him back. So it's our pleasure this evening to provide an update on the utility bill assistance program. Appreciate your patience, first and foremost, in receiving this update. I know it was requested probably August, September.

We were delayed a bit, I think in part because we wanted to provide sufficient time to focus on that somewhat complex topic of sewer cost of service analysis and rate design. So thank you for allowing that time to get through that process effectively. But also at the same time, I think the delay allowed us opportunities to finish the 2025 for the program and see more of a full picture of what actually transpired where whereas a mid period, if you will, snapshot really is just that. It doesn't really it's not necessarily indicative of where you're gonna end the year. So tonight does represent, that full program year.

So this slide, may look familiar. You saw it just a little bit ago with the sewer cost of service, and it really is, again, in focusing on that utility bill affordability. Goes without saying. Utility bill assistance is all about that. While I won't revisit this slide in great detail, just highlighting for you that tonight, we are presenting that update, but this is also building somewhat of a foundation for this next conversation that we're going to have around policy options to consider expanding the program and providing more support to those in need.

Looking at our agenda this evening, it really is about providing a program overview. We'll highlight current enrollment for 2025 and and what we're experiencing over the last year. We'll highlight the operational improvements completed over 2025, and that was really about refinements that improve program access awareness. So it's really about accessibility for us. Jacob will speak to the number of engagements, that that we've expanded to over the last year, which is, really quite an accomplishment for us.

We'll also highlight the planned enhancements for 2026 as we work to reduce administrative burden. That's somewhat of a focus for us going forward. We're promoting ongoing program enrollment, and we will improve the customer experience. That's an intentional focus for us going forward as well. And we'll finally, we'll provide a policy framework, which is intended to help us focus the conversation, in March. So, really, it's really a framework. This is designed to maybe get you thinking about what kind of considerations should we, be applying to policy changes that might expand the program going forward, and we'll go through that as well. And so next, I'll turn it over to Jacob who's going to walk through, I think, the program overview.

Alright. Thanks for having me. We have several programs to help assist residents facing affordability issues. We offer them in long term utility assistance programs to serve seniors with low income and low income residents with permanent disabilities, and these programs provide a 70% discount to their utility bills or a rebate check if they live in multifamily situations like an apartment or a condo and they don't directly get a bill through Bellevue Utilities. We also have in our short term programs the emergency assistance program, which provides short term relief for customers facing financial shock.

And this program could pay up to four months' worth of bills for qualified customers. And our newest program is Neighbors Helping Neighbors, which can waive two bills or, sorry, waive two months' worth of bills, and this is for customers who are past due on their bills. Neighbors Helping Neighbors is funded by donations from the community, and to encourage these donations, the utility matches up to 50,000 per year in those donations. Next, for program enrollment, during the last twelve months, we've completed the improvements that we're about to discuss, and we've increased our community outreach. In 2025, we experienced the highest number of residents applying for and receiving program benefits despite some of these improvements only being placed for part of the year.

That said, we currently serve about 1,100 households taking advantage of these programs, and we spend over $1,000,000 a year to support residents in need.

Yeah. I really do wanna emphasize that's it's obvious in the graphic here that you're seeing that there's a year over year increase in applications, a year over increase in approvals. And what's notable about 2025 that we'll get into is the improvements that were implemented over this last year in many ways, in some ways, very important ways, they weren't really implemented till late in the year. So we didn't, in our estimation, did not see fully the effects of some of the changes and improvements that we implemented over the last year. We're looking forward to 2026 as a not only is it gonna be the focus on enhancements that we'll go through, but it really is that first test cycle, if you will, of seeing, you know, the online application process, which was later than anticipated in its deployment.

You know, what are the benefits of that truly going to be? We're excited about that. We're hopeful for it. But at the same time, this is just a snapshot in time that doesn't fully represent in our minds what what the benefits of those changes may be.

Do do you have a sense of what the potential number of people is out there that you're trying to reach?

We do. I I I don't know if you can answer that currently.

We'll we'll get to that a little bit in a slide move for the broader pool, which will affect the policy discussion and talk about I can talk about how much in our with our current constraints we we think is in that pool. Next, let's discuss the operational. So we're gonna focus on the operational improvements we made in 2025. The commission may recall in 2024 when I was last here, we noted planned operational improvements. So tonight, we're gonna go through what we've accomplished since then. So we're gonna highlight a few of these areas. First, we completed the program rebranding effort. Many customers didn't understand what rate relief meant. So or if they qualified for it. Now the program we call utility bill assistance.

And the name is much clearer. It's more inclusive. I would ask a customer, what would you Google? Next, we took a close look at the application itself, we removed unnecessary questions and reduced the size of the application by half, 50%. We also launched, as Scott mentioned, the fully online application portal in the middle of the year to allow customers and meet them where they're at.

And finally, we added in an income qualification calculator directly on our website. This ensures that we respect people's time. A customer can check if they're eligible for the income before submitting or gathering all the paperwork necessary for the process. Altogether, these are foundational usability improvements that lay the groundwork for future policy changes, and we've accomplished all of these improvements within our existing resources. Next, a key success story over the past year has been the dramatic expansion of our outreach efforts.

In prior years, utility bill assistance program participated in roughly five outreach events. That number tripled in 2025. We did over 15 community outreach events ranging from neighborhood affairs to visiting senior senior centers directly to mini city hall pop ups. This outreach isn't just about increasing the numbers. It's also about reaching new audiences.

We prioritized events that served historically underserved populations, including limited English speaking households, seniors, low income families who might not know they're eligible for programs like these. By bringing this program directly to the community, we're able to reduce barriers, build trust into the community, and ensure customers not only learn about the programs but feel confident in applying for those programs with us. And this outreach strategy will continue to be a central part of

the program moving forward, especially as we consider any potential expansion or policy changes. And if I may, I I I think we've covered this, but the program itself really does have a staff of one, person. This year, we were successful in dedicating an additional half time, part time position to the program itself. So via some of the efficiencies that we've implemented, adding staff resources to the program itself, that's really helped us to free up capacity, to expand our outreach and engagement. But we're looking to go further, obviously, and so the 2026 enhancements that we're gonna talk about maybe help us help us get there, but really is a very limited staffing model.

There go.

So here's what we're complaining in 2026. So these are operational improvements. We recognize that requiring senior and permanently disabled low income enrollees to repeatedly complete application processes creates unnecessary fatigue and stress. So we intend to simplify this with a renewal process for confirming continued eligibility. And to ensure the program's integrity, we'll conduct random audits where we may require the full information.

In regards to the blackout windows, the long term assistance program currently restricts new applicants from November to January, and this was done to create administrative space to close one program's year and open the next program's year. Through the efficiency of that we're building, we instead of the simplified renewal process, we anticipate gaining enough to end these blackout periods so that we can accept new applicants throughout the year. This means we'll be able to provide assistance when the customer or when the resident needs it rather than have an arbitrary period to tell you to wait a month. In regards to the benefit continuity, the financial assistance currently runs currently ends before a six month reenrollment period, meaning would get your benefits through February. And then in February, we require you to reenroll with all that stuff, but your benefits end.

This often results in a customer experience where they accumulate bills, which we may correct later, but they start seeing these full bills. And this creates anxiety and then administrative rework to fix them later. And we foresee sorry. By extending these approval benefits through the whole reenrollment period, would reduce financial stress for the residents, and we'd also reduce financial burdens for fixing those situations. And lastly, we plan to add utility bill information to the MyBellevue app to create another avenue for residents to access this information and this program if they use the MyBillView app and other activities. So I wanna just reiterate if I can that these changes that we're talking about would be changes that we

can implement with, if you will, administrative authority. I don't require council action necessarily to further progress the refinements. And I can't speak enough to the efficiencies that we think we'll gain by the renewal applications refinement process, and that's taking it from, I believe, 500 down to Yeah. 50. Yep.

Yeah. So it's greatly reducing the number of renewal reviews that we conduct on an annual basis, frees up additional staff time and capacity to do other things, not only remove the new blackout window and continue the program continuously, if you will, but really, again, expanding outreach and engagement. We're trying to increase awareness. We're trying to reach more people that may not be aware of the program or may not know how what how to access and and apply. So, really, all of these things are working together just within existing resources that we have, within the existing authority that we have to further refine and improve the program and continue to grow and expand as best we can.

So all the existing renewals are reviewed by the 1.5 staff? So so currently, we do In addition to everything else?

I mean So currently, we do half of them every other year. And so 500 full applications, all financial information. Okay. Both the resident has to gather that, and that one staff has to review and approve of all of that.

Yeah. Okay.

So are you doing the usability testing yourself?

The usability testing on

I'm I'm assuming I mean, this is an online form and all these things, you've made all these refinements. So is that how you've done some of that work?

Yeah. So the army on one has also done that usability and then they you? That's a one. Or No. Hannah is our program administrator, and she does most most of that work. She did a lot of the testing. I try to support her while she can, but she did the full usability. We actually reached out to a few people who asked for it and had them do it, and then Yeah. We rolled it out so people

If you want assistance with that part of this, I can help a lot.

Sounds great. Yeah.

This is you.

Okay. So

going forward, we anticipate the community will increasingly bet I mean, you're right.

Yeah. It's very good. No. Please take it.

My my apologies. Go ahead.

The community will increasingly benefit from administrative enhancements implemented in 2025 as well as we have planned for this year. Overall, these changes should continue to improve program access, encourage ongoing enrollment, and enhance the customer experience through these processes. That said, we also anticipate the need for utility bill assistance is much greater than current resources are able to support with further efforts requiring significant policy changes as well as council action to implement. And then next, I will highlight that framework. So getting a little bit to the question of it you had before, which is, well, utility bill assistance program provides financial assistance to almost 1,100 households in its current form.

We estimate that there's nearly 10 to 14,000 households experiencing utility bill affordability challenges, and this is based on using the EPA's water affordability report that they came out with along with census track data to be able to create an estimation. That's why you also see a bit of range.

I do wanna also acknowledge that under the current program requirements and eligibility, we estimate I think it's in the agenda memo. It's about 3,000 Yep. Households. So that's under the current eligibility requirements or eligibility thresholds. It's about 3,000 households that would be truly eligible to apply.

And if you went through a lot of information, go back, you're both low income and 62 plus or low income and permanently disabled. This is looking at anyone who's has an affordability challenge.

And and is that based on percentage of AMI or what?

This is based off of the EPA's assessment, which I believe has a percentage of your income going towards the utility bill.

Utility. Yep. Okay.

Right. So the the previous the chart. So the numbers when you had about 1,100, that was people who are in the system? I'm trying to remember what that what that

Yeah.

So the 1,100 would be both the short term and the long term. Predominantly out of that group is the long term program, which means that they would be low income and an age requirement and low income or low low income and a permanent disability requirement. So you're only getting people who are permanently disabled and low income or 62 plus and low income.

Okay. So we have about 2,000 people that we're not.

Correct. Of the 3,000 household, about a third are being are engaged and enrolled in the program Yep. On some level. And so And then did

I hear that the budget was a million dollars for this for the year, and and we served a thousand out of the 3,000 eligible. Okay. Can I just can you remind me about that million dollars? How is that covered? Is that covered from grants or other utility income? Yeah. So it's it's a little bit of a mix.

Yeah. So when if you think of when we reduce a bill by 70%, we just never charge it. So it doesn't it's not necessarily funded. And then if we're doing the rebate, it would come from the utilities rates that's budgeted for it to send a rebate check. So

And we do have a small program funded through the general fund? Yep. Yeah.

So we budget for a certain amount of rebates?

Yep. Exactly.

And okay. Got it. Yep.

How does this

connect

to, or is it related to and I don't know if I'm remembering right this right, that there's a there, I think, was a federal energy relief thing like HopeLink used to offer relief to people that would come through. So how does that and I think it was canceled. The funding was canceled. Other things recently. Was this connected or or related to any of those kind of monies or people who were previously getting funding from that program?

So I can speak very slightly because that funding is for power. And because we don't do power, we're not really interrelated with it.

Yeah.

So it definitely affects, like, SPU would, for instance, be coupled. And so some other utilities, these may be a funding source that covers multiple utilities. For us, it comes out of our rates.

Right. And combined yeah. Power. Right.

So for this for the ESC meeting in March, and we're switching to a little bit of policy conversation, the staff will present policy options to consider for expanding the utility bill assistance program to more Bellevue households. As part of that discussion, staff will be seeking policy recommendations from the commission. In preparation for that, and this is what Scott was mentioning to kinda think through this, we prepared the following framework to organize the policy option considerations. And so we have this up here listed, and so I'll just sort of go through and give an example to kind of frame what it is a little bit. But eligible households, obviously, we we talked through a few of the questions.

Today's long term program only serves those who have meet our requirements. How do we expand this to reach that 10 to 14,000 we're estimating? Benefit amount, as we discussed, 70% reduction or a rebate check. Is this the right amount? If we expand it, what's that amount? Income thresholds, you mentioned AMI, so this is where it can get a little confusing. The estimations tend to come from income percentages and things. But our program is based off of AMI, and we currently do 50%, which HUD considers very low income. Their next benchmark's 80, which is low income. Do we consider raising that threshold?

And then participation level, which which was mentioned. Right? How many people we expect to participate will dramatically affect budgeting needs for it. And then to find some other utilities that have similar programs and showcase this is what they do or how we do or what we propose to do. And then the last three, six through eight, they're really the data that informs it. So they're the impact on rates potentially, staffing requirements, annual cost. So as I think of the levers above, you then will need this information to make a decision. And with that, unless you have a comment. So this is

a framework that we've established or developed for considering how we can augment, adjust, modify the program eligibility requirements to consider reaching so we know now 3,000 households under current eligibility requirements and and income thresholds. We believe based upon EPA standards or census standards, that need could be as great as 10 to 14,000 households, but expanding to 10 to 14,000 households comes at a significant cost in most cases. So it's a rate impact. So as we consider how can we reach further households addressing the obvious financial need that exists in our community, how should we consider, what should we focus on is kind of the question here for reaching. Where do we leverage the bang for the buck in trying to reach a larger number of households?

Do we get broader? Meaning, maybe we provide less assistance to a broader number of households so the financial impact is not as extreme. Do we provide a deeper benefit to a more narrow lane but still try and expand it to a broader household? All of this, as I said, as you look at, six, seven, and eight, you know, this comes with utility rate impacts, onetime impacts, recurring annual rate increases that all rate customers in theory would pay, who would not typically qualify or need financial assistance. So that's understood that that's under consideration here.

We also have staffing requirements. So if we expand the program from 3,000 eligible households to 14,000 and we experience a significant increase in applications and enrollments, there is a potential for administrative capacity issues that would require additional staff. So that's an ongoing commitment, for the city to administer the program effectively. And, obviously, that comes with operating costs that have to be considered, including bill assistance on an ongoing basis. So we know, at least we think we know, that at this stage of the game, we believe that there is it's a council priority to provide assistance and support that this is an ongoing need for the Bellevue community.

We believe that this is something that we can move the needle, if you will. It's a question of how much and how how far, how deep, how wide can we go. So our thought is that we would come back to you in March with a range of policy options to consider that could kinda speak to this, how we could approach it. But we're ask our ask of you is what you're seeing here, are there other things that come to your mind? Are there other things that we should be considering?

Do you have initial thoughts that might help frame that conversation for March about how you would want to focus resources, focus potential rate impacts. Would love your feedback. Would love your guidance this evening if you can provide it. Any questions that can help kinda get us moving in that direction because, ultimately, we want the March meeting to be as effective as possible. Our intent with that March meeting is to achieve, if we can, a recommendation for council.

We'd like to move forward with a budget proposal for the '27, '28 biennium that includes some recommended, increase or expansion of the program that makes sense that we can. And it could be, in theory, something that is incremental and builds over time. So it's not necessarily going into the deep end. It might dip our big toe in the water and keep going after that. So just keep that in mind as well. This isn't an all or nothing. It could be a progressive, you know, expansion, if you will. So I'll pause there and see if there's any questions or comments.

Yes. I I for me, number five is so critical. It's really looking at what do neighboring agencies do and, you know, broadening the scope to look at what are successful case studies, not just in the Northwest, but really nationally or regionally, whatever you have view into, you know, in terms of which have been considered the most successful programs, which are the most efficient. You know, it really strikes me, and I I love that, you know, this commission is really interested in our low income residents. That's so important for rate payers.

And it strikes me that, you know, the limiting characteristic would be how much burden can we put on middle income families and individuals to make up for the heavy burden that faces low income families. And there's a limit, right? Because we see the trends for all of our rate payers. So I think that's where I'd really love to see those case studies, you know, both, you know, qualitative and quantitatively. Because in in the line of work, you can see much broader than we can see.

So I'm curious to see what are those best cases. And and, you know, even sometimes learning from an example where, you know, an agency has maybe changed their policy after they tried something that wasn't as successful. So we can learn as much from those examples.

Thank you.

Another consideration seems like how do you what's the ratio? What's the balance of kind of emergency help, like short term help versus the long term help, which I don't I don't exactly see reflected here. But that seems like another and I I don't know what the answer is, but I thought about it. How do you focus the program?

Yeah. I I would just say if you if you look at how our current program is structured, we have hard qualifiers for the long term program. And then we have really short, broad, low income programs. And so part of that eligibility is if you're stretching that low income to be an annual program, or do you have those still have those spikes of short term help? Like, emergency assistance is designed around a financial crisis. You do have to prove to us, you know, lost a job, divorce, death in the family. Okay. And then we can we can provide this extra help. And so having that aspect still in there would be important to to add to that conversation.

Can you speak to I'm sorry to put you on the spot. Can you speak to the the level of enrollment for that program versus the long term?

Yeah. The the EAP tends to be lower because if you if you qualify for unemployment, then you might not have that financial need. And so as you were talking about some things being cut federally, federal can support. So, like, during COVID, we didn't have a ton because there was a lot of extra bonuses for people that helped people throughout an extra check here and there. And so it can depend on that enrollment.

And so that kinda gets sort of the the conversation of you trying to boost somebody back, like Neighbors Helping Neighbors, our newest ones, designed for you you get behind a bill. You're low income. We can get we can pull you in front of that bill and hopefully keep you on track where we're not having to necessarily pay out all the time, but can support that assistance. So right now, that's kind of the model framework is short terms for low income, long term for low income plus these other qualifiers. And so I think part of that discussion is, would we build a low income?

And as Scott said, wider deep. Maybe it maybe it's a small amount and you get extra amount and all those sort of conversations come in. I went to a conference and talked to a lot of colleagues about this. And really the thing that came across to me is there's no when you're looking at these these different levers to pull, there's no wrong answer. But you really have to find what the right answer is for our community. Yeah. And so it really becomes that discussion of we can well, we can help with this, try to create those different models and examples, but it becomes a discussion of what's right for Bellevue and what sort of levers you want and how much you wanna invest in in the issue. And then that sort

of guides how much is available, wide or deep. Yeah. And if there's a desire to expand beyond seniors, permanently disabled, to any household, any family size, you know, it it would at the current level of benefit, that is a significant financial impact. So, again, getting back to if you wanna go broader, do we go more narrow or or shallow, if you will, in terms of level of financial support? So it's a mix. It's a balance, as we said, to fit our need.

Yeah. One thought I had, and and you hit on it, in terms of what's the right program for our community, which is the city of Bellevue, which also includes other utilities, including, like, Puget Sound Energy. And I'm sure they have some sort of bill assistance program. So I'm just thinking, you know, have you talked to them or or, you know, it might make sense to talk to them. You know, why reinvent the wheel for criteria of eligibility if they've got something?

And so a resident that lives in the city of Bellevue, whether they're taking utility from it's a water utility or electric utility, you know, they might qualify across the board. Right? And I was thinking about that more in terms of it it doesn't sound like it's a huge lift from the looking at eligibility administration, but if there's already criteria built or if somebody's already doing it or if there's federal criteria or something, you know, maybe we could increase efficiencies that way.

I think reciprocity or something like that is something that we would consider. Yeah. I think that might make that actually I believe that takes it's beyond an administrative change Sure. To do that.

For sure.

So but it is it is something that we can do to increase access to the program and efficiency in terms of being able to enroll.

Right. Right. Mhmm.

Just to add a little bit on that, we we do have one. So Republic Services are a vendor, and so they will take you know, I'll explain this to complexity of they will take we say these people are enrolled. They automatically get enrolled in Republic Services

Oh.

Which is great.

Yeah.

Problem is the the organizations have to accept the organization. There isn't quite a standard.

Mhmm.

And so then it becomes, can you do that? Right? Is it the same if they use 80% and we use 50? Yeah. And so and and maybe, you know, we've thought it wasn't too much in this presentation of maybe you just need their income, and you can take the rest of it. Or if your standards are lower standards mean harder to get into, you know, maybe we can take them. Something like affordability has harder standards than us. We can accept that. As far as I've investigated their lawyers, we would need council change to get to some of that ability to empower our director to make those decisions. But that's an avenue where you can take or share from another city.

You're moved from Seattle and you're on their program. It's close enough to ours. We just put you into our program. So we've done that, but it's it's hard because there isn't really quite that standard. And so you get into those rules, and there's nothing empowering us currently for, you know, Lucy to say, this is close enough. I accept it for these reasons.

Mhmm.

And so right now, it ends up, like, they're not quite the same, and then we need to validate that it fits into our program. But we do have the one with Republic Service, which is a little easy because they're our vendor, and they believe when we tell them. But, yeah, anybody who enrolls in in the long term programs, we would send a list, and they would automatically be enrolled into Republic Services discount programs, which is which is great. And, actually, it's so smooth. Sometimes we get a call. How do I get this? How do they know? We're like, oh, sorry. It's in the fine print, but we told you that we would pass this to our vendors. So

And just as a follow-up to commissioner Thiessen's comment about benchmarking, I absolutely support that as well. I'm just curious, you know, like, when you went to this conference, did you hear about utilities around here that were implementing, you know, some really successful programs or innovative programs.

And so I did actually, from that conference, talk to PSC. Sorry. I meant to mention this. Part of the problem with it is is sharing PCI for some information between organizations. So they wanna val like, we would validate with your ID, but I can't share that ID with PSC. So that kinda creates a block you have to work. The conference I went to was in Arizona. Unfortunately, there wasn't too many utilities directly around us, but it was a sampling around the country. Some of it was mixed with the question really about power. So that mix is sort of they take the federal funds for power that supplements.

But for sort of on the leading edge, a lot of the utilities around their country struggle to get traction to get support. And so we have the advantage of having a supportive council and a supportive commission that and he's encouraging us to it, but a lot of the areas around the country aren't particularly supportive or take whatever the fund or federal funding has. And if they don't have it, we don't have funds. And so you get sort of that less supportive attitude toward it. Obviously, when I was there, the funding for federal government was a huge talk for the power companies because they don't know what they have, so they go very shallow.

Because they don't know what they have each year, and it becomes and we're in a much more supportive place where we can predict these things. But we had some of the cities. Austin, Texas has a couple of things. I actually took some of their ideas for that renewal idea because it's a risk assessment. You have somebody who can prove they're 62 plus and low income or permanently disabled by the state of federal income low income. What's the risk that their life changes? And I don't remember if last time referencing, but the UW helped us with the human design element. And so with that element, it comes in you know, one of the people actually said when they were interviewing, what do you think is gonna happen? I'm 72 on Social Security. And so you can derisk this area that's low risk and then move to those other options we're discussing, and maybe we feel more comfortable with a higher level of scrutiny.

But this level's you know, they they actually found the audit a huge amount, and that kept lowering because they don't find anything. Right? It's a really low risk that once you validated it on an entry that something's gonna change. And we have you know, when somebody moves, we get legal records. So, you know, there's certain ways we can check that next person moves in doesn't get that. And so it's kinda mixing some of these different things with utilities, but, unfortunately, there wasn't any directly around us that we could lead the model, but try to find similar ones to model. And you kinda have to take elements. Right? We wanna we wanna help in a really whole way, and a lot of utilities will have a one great avenue or program, and you kinda learn from those and empower the

ones you have. Did you hear from them ideas about, like, how they think about the impact or the metrics that they're after? Because, I mean, at a high level, it's clear, like, what what the goal of assistance is. But but if you actually dig into that a little bit, like, how would you define what is the impact? How would you know if it's successful? What what's the what's the policy that you're after? I would no.

I'm just I I would say that is something that I think we can think about and bring back maybe for a deeper dive discussion in March, if that's okay. I think we're taking all of the feedback tonight. But if not, I'm in in all seriousness, I just I feel like there's very relevant key points that we need to consider over the next many weeks as we develop, you know, options for you to consider and then an open maybe in a little bit open book that we can massage together. But at the same time, we'll take that feedback. We'll obviously take yours, everyone's, and we'll try and build that into a presentation and list of options that we bring back. Okay? Is that alright? Thank you.

And if you do want help with the customer experience design, usability stuff, let me know. Sure. Alright.

Any other thoughts, comments from the commissioners?

Just just to say it out loud and be absolutely crystal clear, the looking at expanding these programs in in any way numbers or or benefit levels or things comes at the cost of the remaining ratepayers. So it's it's just a very difficult problem. It's it's hard to to find where that, trade off is going to be, where that balance is going to be.

You know, middle income family

Exactly.

Everybody else.

So Which is already feeling the squeeze themselves.

So

So it's in

that light or that context that we would say, is there something incrementally to consider? No.

It's not full war. I just I wanted to say that, and that's why I I think it's my brain is sitting here racking, trying to give you one little specific thing. Hey. Try this. But if I it's hard to find these.

I will tell you this. When we bring back options for you to consider, they will be quantified in terms of cost dollars, staff resources, potentially. Fiscal impact is one thing, but the rate impact to our customer base is is of paramount importance. So Yeah. We'll quantify that for you.

Yay. Yay. I that that's as good as we can do, I think, and and make some decisions on that.

Alright. Thank you so much.

Thank you.

Joe?

Next item on the agenda?

Okay. Yes. Shall we review the calendars?

Let's review the calendars. So you'll see we have the word tentative up here on this calendar, and we we're doing that now. So we've we've printed this, I guess, a week ago, and we're gonna already move, the a couple around. And this is gonna happen during the course of the year, just depending on where we are in development of the of the work to show you or hiring a consultant, for example, on, the solid waste contract. We're swapping solid waste contract about down to March and pulling stormwater management plan under the MPDS permit to February.

So there's one little tweak there. But, guys, I'm not gonna go through all this. You know it's a busy year, and a lot of it's going to be around policy budget, those types of items, everything. We do have some system plan work to do this year, and we don't wanna lose sight of that. So not gonna hit on each of those.

And then, council calendar has some flavor of water main replacement, capital programs, flood improvements. And then you'll see a couple of them in there in July, one being cascade on the budget rates, bringing their information to us. It helps inform our budget as well as April, King County solid, solid waste division, LTD options. I had that earlier today.

Excellent.

But the Your disposal. Disposal.

Long term disposal. Yeah. Some. Yeah. It's not a it's not an old Ford or what Yeah. I think I'm right. Am I

Yeah. Okay.

So, those are the types of things that are coming. Capital, bill assistance again in June. So we have bill assistance, I think, in March. No. No. That's, for council again. So bill assistance will be going to council. We're gonna be looking for your feedback as I, Scott said in March. So bouncing around a little bit, but you get the sense of a busy year, a productive year.

February council wonder about the solar or March?

Yeah. That would be the, make sure. Council. Yep. It would be a presentation, a study session on the solid waste contract procurement.

Which is starting up next year. So it's, in advance

this year.

Oh, this year, it is.

Yeah. So Developing

the contract. Gonna happen this year, the new contract.

Procurement. Procurement. Yes. This year.

Okay. Thank

you. So if I can just Sure. I'll just clarify real quick. So we are kicking off very soon what we estimate to be a full year's worth of a procurement process, competitive procurement. And so if it moves us on the timeline that we expect, we look to execute that contract of that new vendor contract in the 2027. So we're gonna be go going through selection process, getting it on the street, the RFP developed, getting it on the street, going through evaluation criteria, and then negotiating a contract in theory, and coming up with something to award early twenty twenty seven.

And so that's the council study session on the process of that will happen over those twelve months.

There are various touch points with the council Yeah. On this process, including the preliminary review of the RFP package itself, I think, and some what's going into it. So that's early, and then we will come back at a later later stage of the procurement process with vendor selection of some kind and apparent successful bidder of another kind and and then try and move forward and get authorized to negotiate a contract.

Okay. Good. Thank you. Yeah. You bet.

Thanks, man.

And the timing of that city council won't be impacted by the fact that our review will be also moved to that same month in March. Correct? Because, Joe, I heard you say that we're moving solid waste contract procurement from our agenda from our calendar from February to March as well.

Right. Then look at the calendar. I've got the so we're back on the ESC calendar now. Mhmm. And this is the this right here being moved to March for the ESC discussions.

And then the council, if you don't mind?

Yeah. It's June, I believe. Let me look. Nope.

Well, it's March 1.

One is in March. And when I so what's happening is these calendars can are draft, I mean, into a state of flux as we we were meeting just yesterday, still kind of penciling out some of these. So

Yeah. Initially, we had the solid waste contract coming in February, initially. But as we look at the body of work to execute between now and next month, it is not realistic to believe that we could have an effective briefing for this body in that period of time. So we're moving it to March. If that does result, as we're kind of talking about in a ripple effect where the council needs to go a little later in the year, you know, that is an adjustment we would make. So

Thank you.

Thank you. Alright. So with that, we're at the end of our meeting. May I have a motion to adjourn?

Motion to adjourn.

Second. Yep.

K. Second and third. Alright. So the meeting is adjourned tonight at 08:49PM. Thank you, everyone.