Environmental Services Commission - Regular Meeting

And I'm calling the November 6 Environmental Services Commission meeting to order. First,

we'll do

a roll call for the commission. Commissioner Letterman? Present. Commissioner Dupertis? Present. Thank you. Commissioner Hainosh? Commissioner Laxon? Commissioner Tyson?

Present.

Commissioner Margolis is excused absence. Right. Next, we'll have a call for a motion to approve the agenda.

I move to approve the agenda.

Thank you. May I have a second? Thank you. Are there any objections oh, not objections. Are there any modifications to the agenda proposed? Nope. Hearing none, the agenda is approved as motioned. We'll now move to oral and written communication. Oral and written communication are now open. Remember that 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 the subject matters encompassed within the power and duties of this commission. Persons participating in 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 comments. In compliance with Washington state campaign laws regarding the use of public facilities during elections, no speaker may support or oppose a ballot measure or support or oppose a candidate for an election, which includes your own campaign. Any speaker who begins discussing topics of this nature will be asked to stop.

Alright. First of all, Scott, are there any written communications? There are no written communications. Alright. And we have one person registered for oral communication, mister Zimmerman.

You can see right here. Yes. In front of the computer.

Oh, I'm sorry. Yeah. It's okay. Yeah. About your, I'm totally confused. Yeah. New law law, what is you have? Yeah. What is made by consulate mayor Robinson, a Nazi pig. Yeah. So I want to explain to you about fascist rule, what is called Belvieu because Belvieu number epicenter of fascism in Seattle. Yes. This my statement for election against mayor Robinson was a cut. It could only from 204 to only one sentence. Make a Belvieu greet again.

So they clean 200 my statement for election because they support mayor Roberts. By definition, these are crimes. They are criminals. They're supposed to be be in jail for this. And for my understanding, only one man and I have 15 election before. Yep. Only one man stayed in Washington. What is they do for me? For the nutmeyer, Nazi pig is Nazi pig. Yeah. It's number one. Yeah. I will talking about this. They doing this for two years. I will talking for two years.

Another, they prosecute me with small misdemeanor claim, trespass second degree. This trespass second degree go for two years with 300 pages. One man, his name, Tony Macaroni, make a 100 pages. How bad I am. Yeah. So, guys, it's very interesting for me. You know what this mean? Because public defender, city attorney, it judges all acting like a Nazi pig. Yep. Conspiracy, totally.

Because statistically, in King County, misdemeanor case, like Meyer, similar similar public dependence spend one hour. One hour per case. In Bellevue Library, every Tuesday, 02:00, is commissioner court, what is leader O'Toole. They spent seven cases for one hour. Five minute case.

My case for two years. Seventh time, I try fire my public defender because I don't want public defender from beginning. They put my neck with judges so can control me. And after two years, they make dismissed case. How much this cost? Who will pay for this? You? You? Me? Guys, this fascism, what is recover? Is I call fascism with

the deotic face. We were Trump. We were new American revolution. Stand up, slave, and happy cow. Guys, you're for Dory, Dory fascist, Hunter.

Thank you very much for your time. You need to understand who you are when you can. Thank you.

Alright. Would anyone else in attendance like to speak? If you're in the audience, please raise your hand. If you are attending remotely, please use the raise your hand feature in Zoom. Or if you're joining via phone, press 9.

Are there any attendees online, Scott?

There are none.

None.

It's

alright. Okay. Then that concludes our public comments section.

We're all

in written communication. Next let's see. Council member Lee is not here today, so there'll be no updates from him. And so we'll move on to staff reports. Scott?

Yes. Thank you. We do have a few items, informational items for the commission this evening. First is a reminder of current training opportunities. I think Joe mentioned this a little bit last month, but I'll just throw this out there as a reminder. We have parliamentary procedure training on December 8, and that is focused on conducting effective, organized, and fair meetings. The RSVP was due earlier this month, but it's not too late. If you have an interest in attending, there's still time to respond. If you can confirm attendance with either myself or possibly Larissa, this evening would be great if you can, but maybe tomorrow would be fantastic. Second, we have the Open Public Meetings Act and Public Records Act training.

That's focused on implementing and complying with those laws. Training must be completed within ninety days of appointment with refresher training completed every four years. That training is available online. And once you've completed it, you need to be sure to email confirmation to the city. So if you need assistance with any of this, more information, reach out to myself or Larissa.

We're happy to get that to you. And then finally, I wanna highlight, that the upcoming twenty twenty five, twenty twenty six mid biennium budget is to be considered by council later this month, which includes a 2026 sewer rate adjustment for utilities. The council previously adopted a 7.6% sewer rate increase for 2026, which accounted for a 7% rate increase with for King County's wastewater treatment charges. Earlier this year, King County adopted a revised wastewater treatment division forecast, which adjusted their 2026 rate to 7.5% as well as, the increased rates in the longer term forecast. King County's, 2026, point 5% increase results in a point 3% increase in the city of Bellevue sewer rate for 2026.

And from our perspective, completing this adjustment is considered administrative in nature because it is consistent with the city's financial policies that direct wholesale costs to be directly passed through to Bellevue customers. And with that, that concludes staff reports.

Thank you, Scott. Any questions, from any of the commissioners on, Scott's report, whether it be the training or the administrative rate increase?

On the second training that you mentioned, so every four years, you said that was needed.

Refresher. Refresher. Okay. Every four years.

So if we just joined two years ago, this is

Likely not required. Okay. Yeah. So it is if you're recently appointed within ninety days of taking your seat or at four years, refresher is required.

Sure.

Alright. Thank you, Scott. We'll move on to the approval of minutes. First, I'll ask if there are any requested changes or modifications to the minutes as published. No? Okay. Then with that, may I have a motion to approve the minutes?

I move to approve the October 2 minutes.

May I have a second? I

second.

Thank you. Alright. Then we have no unfinished business either, so we're gonna move to today's full calendar of new business. First one is the adoption of the updated Environmental Services Commission bylaws.

K.

One moment. There we go. Okay. Good evening, commissioners. It's my pleasure to provide a follow-up presentation tonight concerning the environmental services commission bylaws.

Staff is seeking the commission's adoption of the updated bylaws, which requires two thirds of the membership to vote in favor of any amendments. The agenda for this presentation includes a brief background and summary of the changes, and then the commission will consider taking action to adopt the updated bylaws. By way of background and summary, at the commission's last regular meeting in October, staff presented an overview of ordinance sixty eight sixty four and ordinance sixty eight sixty five, which amended several provisions of the Bellevue City Code or BCC that apply to city council advisory boards and commissions. These ordinances limit service on any board or commission to two consecutive terms, extend the maximum period, and advisory board or commission may exclude individuals from future public comment and or meetings for any disruptions or other meeting violations. It increases the exclusionary period from sixty to a hundred and eighty days, and it also clarified the appeal process by which any excluded individual may seek review of his or her exclusionary period.

Given these ordinances amended chapter 3.55 b c c, which applies to the commission, staff prepared and recommended discrete amendments to the commission's bylaws to ensure conformance with chapter 3.55 b c c as revised. Following discussion at the October 2 meeting, the commission directed staff to bring back updated bylaws for a final vote in action at the next regular meeting this evening. The final updated bylaws are included in attachment a showing revisions and attachment b, which is the clean version for adoption. Please note attachment a does reflect three additional revisions not previously presented at the commission's meeting in October. These edits are non substantive and intended to ensure consistency and uniformity across the city's advisory boards and commissions, advisory boards and commissions and are considered cleanup amendments.

The revisions include use of the city seal at top of the document, identifying the correct resolution that supports the current rules adopted by the city council, and using gender neutral terms throughout the bylaws. Pursuant to article 16 of the commission's bylaws, a two step process is required to amend said bylaws. The commission has followed the two step process required to amend the bylaws and may now take final action. Any amendments, require two thirds of the membership to vote in favor of amending the bylaws.

Thank you, Scott. Commissioners, do you have any questions for Scott before we take a vote? Alright. Then I'll do a roll call vote. If you could indicate your vote with yay or nay, that would be appreciated. Commissioner Letterman? Yay. Thank you. Commissioner DuPertis?

Yay.

Commissioner Hainosh? Yay. Commissioner Laxon? Yay. Commissioner Tyson?

Yay.

And I am a yay as well. For the record. Thank you. So that concludes the adoption of the updated environmental service commission bylaws. Thank you, Scott.

Next order of business is the sewer utility cost of service analysis and rate design recommendations.

Good evening, commissioners. Matt Thurber here with the utilities, and I am with my good friend again, Matt Hobson, our fiscal manager, and we are back for better or worse to talk about a sewer cost of service analysis. And this time, we are gonna get into some rate design options for you. So the purpose of tonight's presentation is to continue the discussion on implementing the results of our cost of sewer study. Bellevue Utilities as well as utilities across the country use a cost of service study to evaluate the fairness or equity of rates for its customers.

Public utilities also rely on these studies to evaluate the pricing of services to help achieve their financial and customer service goals. So this is the second of two meetings. We met with you last on October 2, and we discussed the purpose and methodology of a cost of service study, and we also showed you some options for phasing those results in. And so tonight, we'll follow-up with the commission about what their preferred option is for phasing those rates in. Following that discussion, we'll present four rate design recommendations, and those will be focused on the fixed and variable portions of a customer's bill.

And there are three primary goals that go along with that. First, to simplify the rate structure so to make it more understandable for the customers second, to provide the customers with greater control over their bills so in other words, if they use less, it's possible for them to pay less And then third, to minimize the bill impacts to the extent possible on each customer's bill. So this is our agenda for tonight. Again, we'll recap the October 2 findings. We will provide three options for phase ins.

First, we'll show staff's recommendation, which is a five year phase in period, and then we'll provide two additional options for consideration. The second is a three year phase in option. And the third, at the Commission's request, is a seven year phase in option. After that, Matt will provide some brief background and rationale for changes in rate design. This isn't required by law, but again, there are several goals that we're trying to hit with the rate design recommendations.

Those include affordability, bill simplicity, and providing greater control for customers over their bill. So we'll be seeking the commission's feedback on moving forward with those rate design options or sticking with the rate design structure that we have. We'll wrap up the presentation with discussion, questions, and then we'll talk about next steps for the cost of service study. So here is a recap, just briefly, of our October 2 findings. So we talked last time about what purpose of a cost of service study analysis is, and so first and foremost, the state of Washington does require by law that public utilities base their rates on cost of service.

And furthermore, the city of Bellevue has financial policies that require the utility to set rates based on cost of service for water, sewer, and stormwater so that rates are equitable in proportion to each customer class's demand on the system. So there's three main purposes for this analysis. First, it's a rational and defensible basis for determining the fair share of utility costs for each customer group in proportion to the demands they place on the system. Second, these cost studies are compared or the cost shares are compared to the revenue collected by each customer group to measure if they meet cost of service, and we'll show a graph that puts that into perspective in on the next slide. And then third, the cost of service study is the most widely used and defensible basis for setting utility rates across the industry.

Okay. So we showed this slide last time, and this is a comparison of the cost of service for each customer class. So I'm gonna just orient you real quick to this graph. So the black dotted line in that graph is 100% of cost of service, and that is a goal, but it is not always easily achievable. So what those yellow lines represent are the upper and lower bounds of cost of service, so we would like to get each customer class within those yellow bounds to the extent possible.

And for the rest of the graph, the bars, the dark green and the light green, that represents cost recovery for each customer class. The dark green is cost recovery based on 2027 data, which is what our cost of service study is based on this time, and the light green is the cost recovery from 2019. So you can see that not much has changed from 2019 to 2027. So partly, that's because in 2019 when we when we did this study, we didn't act on those results, And there's a reason for that. So when you do cost of service studies, there is an industry standard that if you see results that show you're subsidizing other classes, it's good to verify that with another study just to make sure you're seeing the right thing before you act on it.

So at this point, now in 2027, we are seeing the same thing, so it would be prudent for us to act on it. One other thing that I'll mention before I get to the big takeaway on this slide is that it is possible for utilities to to intentionally subsidize other classes with one class's rates if you're trying to create low income rates, for instance. Bellevue isn't trying to do that here, so these are what we would call unintentional subsidies. So the big takeaway from this slide, as we presented last time, is that the multifamily class, that's the class on the far right, is subsidizing the other two classes, the single family residential class and the nonresidential or the commercial class. So multifamily is paying more than their fair share of the cost, and the nonresidential or commercial and the single family residential are paying less than their fair share of the cost.

So with that said, I'm gonna turn it over to Matt. He is going to start talking about the phase in options and some of the major takeaways before we get into rate design recommendations, and we are going to do our best to switch chairs.

I told them we had to sing the song. Alright. So before we talk about the phase and options get a little scoot a little closer here. We did wanna provide a little more context to the results, that that, Matt just shared. And, the high cost recovery result for the multifamily residential class is is almost completely attributed to their unique rate structure.

I'll talk about the jet that just briefly. Our multifamily residential class, they are assessed a fixed charge that's assessed for every dwelling unit, every apartment unit in that building. And that rate is a $141.47 every two months. So a 10 unit apartment complex, that fixed part of their bill would be about $1,400 every two months. In that rate structure, there's an assumption that, that $141 per per apartment unit includes an allowance of flow.

Flow is a a measurement of of water volume leaving the the premise, and that allowance is equal to, I think, is equal to about 11 CCFs, 1,100 cubic feet of flow every two months. So that fixed charge they're paying every month includes this kind of basis, this the amount of flow that's embedded in their charge. Anything above that amount, they'll pay per CCF. Okay? Sounds great.

The issue we have, though, is that on average, a do an apartment unit uses a lot less than that. They use about seven and a half CCFs every two months, but that fixed charge assumes they're using 11. And what that means then is that they're on average, the vast majority of our apartment dwelling customers, they're paying for an allowance that that that they don't need, and that's why we're showing that high cost recovery level. It's this unique rate design that we're trying to correct with those recommendations. So these recommendations are designed to bring the cost recovery rate for multifamily down, and there's just you push one side of the balloon down, the other part's gonna come up. So the the rates for single family residential and nonresidential would increase in proportion.

K.

In our last meeting, we talked about cost of service analyses are, they're a launching point for making policy choices. These are technical studies, and they're useless unless you make a decision based on the information you see. And so we house two types of actions that oftentimes come from the result of a cost of service study. The first one is if you see those inequities between classes, the first question to ask ourselves is, is that a real difference? And if so, should we act on it?

As Matt mentioned, this is the second time we're showing these results. It's a it's a justifiable and defensible conclusion here. And so in talking to the commission last month, there was a realization, yes, the city needs to do something about improving the cost equity. The more difficult question is, how fast do we make this correction? And we talked about a three year and a five year ramp up period.

And that and then also there was a suggestion that the commission to also produce even a longer ramp up to seven years. The the second set of policy actions are, related to rate design, And that really deals with, the the series of fixed and variable charges we provide to our customers. That is the economic signal that customers see on their bill. This cost of service stuff, you know, unless they love this stuff and they're gonna pull this memo up, they're not gonna see this piece. What they will see is the fixed and the variable charges on their bill.

And rate design is focused on changing those for the purpose of making it more simple to understand, providing greater incentives for conservation if that's one of our goals, and then aligning to other policy goals that we may have as a city organization. One of the requests from our last commission meeting was instead of in addition to talking about these phase and options as a reflection of percent increases, showing them in terms of dollars and cents. So to house that conversation, I'll walk through this chart here. This is a, if I knew my my accounting correctly, a seven year forecast of the typical single family residential sewer bill. If the city does nothing in response to this cost of service study, sewer bills will still increase.

Arc the cost that the city incurs to provide sewer service will go up regardless of the choices about improving cost equity. This is an illustration or a projection of that typical single family bill absent any changes in response to cost of service. So the typical bill in 2026 will be about a $124 per month, increasing to about $240 seven years from now. Under the seven year ramp up period, if we were to eliminate all unintentional subsidies from our rates, that would add about $3 per month next year in 2027. Sorry.

It's two years from now. I'm I'm already thinking way ahead. My my brain's budget 2027 right now. And then by 2033, that would add, the seven year plan would add about 30 for a monthly bill. And and so by year seven, by 2033, all customer classes will be paying their fair share, and this would be the incremental cost to the single family customer to do that.

Under the five year phase in option, that would incrementally add about a dollar 42 in 2027 and then about, at most about $8 by 2031. There are small changes in the outer years. That's because, you know, we're we're it's very difficult to achieve a perfect cash balance between the different scenarios. And then finally, for the three year, the fastest proposed, phase and plan, and we would add about $2 in 2027, an additional $7 by 2029, and you can see the values as they go out. Just a couple takeaways now that we have all the numbers and and and bars on the screen here.

The biggest lift is going from doing nothing to doing something. You can see the biggest impact to the customer's bill is going from to the seven year option. The longest term one still has the biggest impact. And as you shorten that ramp up period, it does have an increased impact to the typical family single family bill, but, it is relatively smaller, compared to just going from staying the status quo to doing something about improving cost equity. So in in terms of housing, kind of the choices we're presenting to the to the commission for discussion, I'm gonna go through this, and I I wanna pause and and open the the discussion up for the commission to kind of discuss preferences and recommendations from from this group.

If we were to measure these three phase in options from some of the key goals we're trying to hit here, Those goals would be in those columns up on, up on the table. So one of the goals would be you know, we know there's a cost in equity, and it's not fair, to keep those progressing as long as, forever out there. And so the faster we address it, the faster we eliminate these unintentional subsidies. But the faster you deal with it, the more likely you're gonna see some unfavorable or just dramatic bill impacts. And then the further we phase this out, the more we enter the unknown, the more that we may need to make further adjustments, because we don't know what 2033 is gonna look like.

I have a I have a little better idea what 2027 is gonna look and so there's also just the the uncertainty as the the longer the plan, the more uncertain that that strategy is. So the three year phase in plan, it does the most to eliminate these subsidies as as quickly as possible relative to these three options, but it also has the biggest impact to bills. Unfavorable bill impacts to single family customers, nonresidential customers, one could argue favorable impacts to multifamily customers. And it's the one that we would have the most confidence in terms of managing because it's the shortest term. The five year phase and the reason it's a recommendation from the staff is it it's kinda striking that balance between these these opposing goals.

And then the seven year phase in, it does help out the single family customers, the most, of the three options, but it is subject to that longer time frame. And that's one reason I wanted to bring up that that that graph is the biggest lift is going from doing nothing to even just going to seven years. That will have the largest share of the bill impact. Going to five and three years, it is a it is a bill impact, but it's not as much as going from nothing to seven years. So with that context, just wanted to open up the floor for the commission to discuss these results. Once again, our our hope is that we can get a recommendation from the commission on which of these three that that you all would like us to per to present to counsel.

So can you go back a page? Yes. So for instance, for '27, the the the seven year includes all three of those numbers plus two '93 plus one forty two plus two thirty eight.

The seven year would only be the bottom number. Yep. So if we the the more the faster I accelerate the phase in plan, the larger the bill impact

will be.

So the other way around. The three year would include the addition of those three numbers. And so I'm I'm not following your point about, the biggest lift is with from zero to to seven. I'm not following that point.

Yeah. Let let if I can try this again. For sure, 2027, the they're going to the three year will have a bigger impact than than the than going to a seven year. What I what I'm looking at is as you look further out into the future, eventually, we we will get to the same place with all of these plans. If you look out to the farthest on the right side of the screen, at that point, the biggest incremental increase from this phase in plan will be the $29.25 that teal on the far right.

And that's that is the cost of of going to the seven year. The five and the three will all be around that same place too is what I'm trying to convey. Okay. But you're correct if if I can maybe make a modification to my statement. There is the the the short term. Definitely, in, you know, in 2027, that impact's higher for the five and three. As you move further and further out in the forecast, they all tend to congregate on the same place.

Yes. Okay. Thank you for that, Claire.

I I have a question more related to the multifamily structure. So do most of the landlords pay the bill directly and then allocate it to their tenants, or is it each of those residents receives their own individual bill? Because I do wonder sometimes I see in other industries where if you change the pricing structure, it doesn't necessarily follow all the way to the rate payer themselves. So I just wonder about what we know or where there's questions there.

Yeah. So for for our larger complexes, definitely, it's it's paid for by the the the building owner or their assignee if they have a property management group. It is likely that when we have duplexes, three plexes, and four plexes that, they may get the bill, and they just may the landlord may divide it in four and then pass it amongst the the four units in the building. But to say there's a universal way of how the bill gets passed on to apartment owners, I can't speak specifically on every single case. I would tend to think that the larger the complex, the more likely you're not gonna the more likely detached the bill will be that the property owner pays versus how it's passed on to the individual apartment, tenants.

And then in those cases, the individual tenants have less incentive for conservation because they don't see the impact of their behavior on their bills too.

Correct. And and the inequity we're seeing in multifamily is more about the size of the bills that are being sent to multifamily customers relative to a single family customer and not necessarily how that sewer bill is being passed along to the to the tenants in that building.

Yeah. Just a few comments. I think I'm trying to think of it more from a multifamily standpoint, and I I know you mentioned that, that, yeah, the single family and nonresidential would see increases, but we've got inequity right now. And I I think I would lean towards fixing, you know, realigning that faster rather than, you know, for the multifamily folks. And since it's been we've known about this since 2019, even if we did a three year phase in, it'd still be a ten year time period.

Right? So I would lean and again, and the other thing I guess, just in sort of my rates experience, we used to be doing five year rate studies with some degree of certainty, and that has really shifted to a two or three year timeline where you can really see what's going on with some degree of certainty. Even two years is kind of stretched sometimes. And so feels like, at least to me, to get this inequity aligned with the cost of service sooner rather than later and in alignment with how we're doing rate studies these days, three year versus a five year. So I'm thinking that consideration maybe.

Want to think about that.

Any other questions? Commissioner DePurtis, any questions from you?

I can't help but notice these meetings tend to go faster when I don't ask questions.

But that's no reason to not ask questions.

I echo that. Really. Andy, you have good questions.

Well, thank you. I'll I'll find I'll find here for tonight.

Okay. Alright. So, no,

I

think that ends the discussion section.

Okay.

Are you gonna make a

So I'm sorry. Can I just clarify? Is that just you're you're gonna talk about rate design.

I I will. So so independent of the rate design, the phase in period, number three, five, and seven, that's step one. Once we have an idea of, how quickly we we accelerate or don't accelerate that phase in, that impacts the rate design choices. So the sequencing

So you'd rather have a decision on the phase in period first?

I we can certainly present rate design today. I'm just saying that when when when, push comes to shove and and we're showing dollar amounts, it it it needs to be sequenced that way. But we certainly have material to share tonight, on redesign.

Not clear. Are you asking the commission for a, vote on the phase in, time period or no?

Am I, Scott?

I believe tonight, I believe the the action we were looking for was concurrence on the staff recommendation. That is simply the the ask or or the, you know, the request of staff to the commission. This discussion and where the commission actually leans would dictate which phase in period you prefer, whether it be three years or five, maybe worthy of more discussion to see where the commission truly lands.

So as a starting point, I move to that the commission concur with staff recommendation of a five year phase in period.

Alright. Anyone second that motion? I'll second it. Alright. And are there any other motions for any other time period from any other commissioners to be put on the table?

I think we should also consider the three year. So to me, it's considering both. We should perhaps vote on both or, you know, to see just get an even kind of clear direction. Right?

Okay. And is there any interest from any of the commissioners tonight to consider the seven year option? Alright. I take that to be a no. Does that help where the commission's either between a three and a five?

Yeah. I think so. Okay. Yeah. Should

we should we narrow it down or put some weight behind which of those we prefer at this point? Or

We can take a a vote if that's or do we does the commission want to have more of a discussion amongst the commissioners as to the pros and cons of the three to five, or would the rate design help inform that discussion?

I can I can certainly provide some some feedback here? I'm not gonna speak on behalf of what the presentation would look like at city of Bellevue, but, when I've worked with other cities to present this information, it's not uncommon to present, you know, two two or even multiple options to a city council and say, hey. Here are the results. Here are the the technical results. Let's say the commission, generally was was leaning towards a three and a five, and that still gives the city council some options to weigh in on terms of how they wanna land this plane.

Alright. So I think we've achieved that then, by us, considering both the three and the five year option at this point. Okay. Okay. Thank you.

Okay. So now we're gonna shift gears and talk about some proposed rate design, recommendations. As Matt mentioned, these while our cost of service, we have state law and we also have city financial policy kind of dictating that, these rate design options aren't required by state law. These are ways for us to improve the how we, charge our customers in a way that they understand the bill better, maybe there's more control over their bill. It's more aligned with maybe some of our city policies. When we do rate studies, this this is a common approach to just check up on your rate design to see, are you getting the return that you expect in terms of the education, outreach, understandability of your customers? K.

And I'm sorry. Let me can I just ask you to pause for a second? So just I think, technically, we had a motion to consider the five year option. Can I have a motion, please, to consider the three year option?

Well, by parliamentary procedure, you can't have two active motions. So what I can do is I can withdraw my motion. Alright. And then that takes it off the table. Alright. I withdraw my motion.

K. Then with that, I think what we're then saying is we're gonna move to consider both the three and the five year motion that staff have recommended. Right?

That's the sense I'm getting.

Alright. So may I have a a motion to consider the three and the five year option from staff?

Can I move to what you said?

Okay. In a second?

Second.

Alright. Thank you.

Alright. Very good. Thank you. Yeah. Make sure everything's here in line here. Okay. So rate design, I just wanna start out the gate. Rate design is revenue neutral. We are not gonna generate any more revenue or less revenue from these recommendations than we would do otherwise. It's more about how we collect the same amount of revenue.

Rate design is the next step following a cost of service analysis. Utilities like Bellevue leverage this tool to advance their financial goals. They use this goal to, this this tool to advance customer service goals, and to, encourage conservation. Here's a there's a list of of example goals that are oftentimes used by water, sewer, solid waste, electric utilities across the country. I'm gonna start with the biggest box.

Sometimes rate design goals, they they hover around ideas of producing stable, predictable revenue. On the cost related goals, sometimes we design rates with a goal of of promoting cost of service, equity. Other times, it's it's promoting conservation. Lower bills if you use less. More higher bills if you use more. And then in in almost every case, we're trying to also thread that needle to make sure the bills are understandable as possible. For those who have maybe lived in California or a place where they have time of use rates, you know, if you wanna try to understand those, be my guess. Those are those are difficult, but they're precise. Right? They have different goals in mind.

My point here is there's a lot of goals that we try to achieve rate design. They don't always play together. Sometimes promoting revenue sufficiency and stability is gonna go counter to making sure folks have more control of their bill. And so when we are proposing rate design recommendations, we will need to be cognizant of the both intended and unintended impacts to customer bills. So with that in mind, the four key goals that we're trying to hit here with these recommendations are up on screen.

One, where possible, we want to simplify the existing rate structure. If there's not a purpose or value to a specific piece of the rates, there's really not a reason to keep them. Two, where we can want to align the rates to be more consistent with the city's financial policies adopted by city council. Three, to encourage affordability and to make rates more, reactive to customers' actual demand. I wanna provide those rate structures that give good customers more control over the bills. And whenever we look at rate design, I promised myself I wouldn't say it, but I can't I can't help not to. Rate design oftentimes produces winners and losers. You know? It's it's the balloon effect. You push down one side of the balloon, the balloon's gonna pick up.

And so one of our goals when when doing rate design is to mitigate those unfavorable impacts to the extent we can. So the first recommendation, I'm gonna show you four recommendations. One looks at the single family residential class. Two, look at the multifamily residential class, and then one looks at the nonresidential class. So for the first one, this is a the goal here is to simplify the single family residential rate structure.

Today, our single family customer class, their flow charges there's actually a two tiered flow charge structure. So for your first 50 CCFs or 5,000 cubic feet, that customers assess, we propose $7.33 per CCF. And then in the rare event I mean, you have to flush the toilet a lot of times to go over 50 CCFs. But in the rare event you hit over 50 CCFs in a two month period, you will be charged $9.46 for every CCF above that 50. As not surprised then, 99.9% of our residential customer customers never get over 50 CCFs.

There's not much value in having that second tier. It's something else for them to see on their bill with with really no value. And so our recommendation here is to eliminate this two tiered structure in favor of a uniform flow rate. And so if we were to adopt this, the 2027 projected rate would be $8.54 regardless of how much flow you're using. I wanna point out that maybe if you're looking at these numbers, you're saying, wow. It's gonna go from $7.33 to $8.54. That's a big jump. Almost all I'm sorry. All of that jump is tied to just the increased cost of the sewer utility. It has nothing to do with this rate design change.

Right? Rates, the cost of service will increase in 2027 compared to 2026. So if I were to not make this change, the proposed rate for the tier one would be about $8.53. Alright? So it's it's immaterial, in terms of the the the impact.

K. The next recommendation is so the next next two are looking at the multifamily residential class. And remember, this was the class that were the cost of service results are being driven by this unique rate structure. And so one of our goals was to where we could correct this and and make it, more simple and more aligned with, our city's financial policies. So recommendation number one, attempts to align the multifamily customer class rate structure with the way that we charge our single family customers.

What that looks like is and looking at the columns here, you'll see the the rate structures for the class, and then the first column is the the actual, customer class. So we'll start with single family residential. It's a two part rate. Single family customer's fixed bimonthly rate, we index to the King County charge. That is their fixed charge.

When King County increases their rate, that charge goes up to the dollar. The remaining portion of the city of Bellevue's sewer utility costs are then captured on the flow charge, and that's assessed, on winter water average volumes for single family customers. The existing multifamily customer class, just a recap here, we don't index that fixed charge to King County's charge, and it includes 11 CCFs, which as I mentioned, is too rich for what they actually use. And then and as a result, their flow rate only kicks in after they hit that 11 CCF. Not surprisingly, almost nobody hits is assessed that flow charge in the multifamily class.

So our proposal is to index the fixed charge to the King County wholesale sewer treatment rate, eliminate the flow allowance, and then charge, for flow, at at starting at zero CCFs. So there is no more allowance. And what that does, it drastically changes how that bill interacts with a, with a customer. Today, on average, 91% of a sewer customers sorry. 98% of a typical multifamily sewer customer's charge never changes.

It's just a fixed charge. They never hit that flow number. So they have no control over that bill. It's gonna be the same every two months. With this proposal, on average, the portion of the bill that would be fixed would only would drop to 61%.

So they go from 98% of bill that never changes. They'd have basically, 40% of the bill they have more control over now. That's the advantage of this this proposal in addition to aligning with our city's policies and and index indexing that fixed charge to this to the King County rate. How that would play out is that every year, King County passes their treatment rate. In 2027, it is projected to be about a $141 every two months for a single family residential account or an equivalent to that.

King County also produces a ratio for how they pass on capacity charges to multifamily customers. They essentially make an assumption that for every multifamily apartment, it that's about equivalent to a point six three flow of a of a single family customer. So our proposal is to tie the multifamily fixed rate with those two numbers using the treatment rate that King County adopts and King County's ratio of equating a single family customer to multifamily customer. How that would play out then in step three is a in our in the city of Bellevue, we would charge about $89 per apartment unit with this change. And you can see that del Delta, right now, we're charging our fixed charge right now for multifamily customer with an allowance is about a 140 something dollars a month.

It's a big change that were a decrease to their fixed charge. To illustrate how this would play out, this is going back to the the winners and losers piece. You're gonna see some big winners and some unhappy unhappy losers. So two examples here. One is a 100 dwell unit apartment complex with three CCFs per unit per month, which is about on average for a multifamily customer.

The other example is a 100 dwell units. Same number of dwell units as the first example, but about twice that flow, six CCFs per month. You can see the bills as they exist in 2026. Once again, most of these bills are gonna be driven by fixed charges, not much variation between these two customers. If we ignored the, the the this phase and, this this rate recommendation, both these customers' bills next year, looking at that third column, would grow up at the same amount, 6.6%.

If we were to restructure the the the multifamily rates, bringing that fixed rate down to about $90, giving a lot more control to the customers or the property owners for their bill, the, the first row, example, their bill would actually go down from in 2027 from 2026 levels by about 2%. Whereas the other example, their bill would increase almost 30%. These are the kinds of, you know, unfavorable rate impacts I was talking about. And so one option, our third recommendation is that we adopt this new rate structure, but we align it with our phase in plan for the cost of service. So if we're gonna phase in the cost of service to three or five years, we also phase in this new rate restructure within three or five years.

If we were to do a five year phase in this rate restructure, you can see that, in 2027, there would be different bill impacts for these two customers, but it wouldn't be as significant. They wouldn't be as severe in terms of the the range of impacts. And so both of these customers would still see their bills increase at a slower pace relative to everybody all other customer groups. We would also still achieve this this goal of giving more control for their custom to customers. It would just be on a three or a five year timeline as opposed to immediate.

Lost there. This was a tough one. This was the one that took took the most amount of time, and we hopefully everybody can follow along and and has, some selling opinion on. The last one.

Last question. So, you mentioned the fixed charge would go down for multifamily. What does the volume charge look like? Would that be similar to what the single family volume rate would be?

Great question. I don't oh, I do have it here. So, if we under this proposed approach, we're gonna take and this is an example of phasing over five years.

Okay.

By the fifth year, the flow charge for multifamily would be about $9 per CCF, whereas for residential customers, it'd be about 14.

Okay.

And and the reason being that is the for a single family customer, the King County charge makes about half their bill. Mhmm. And under this proposed approach, the King County bill would still make up about two thirds of a customer multifamily's bill. Yeah. If I'm gonna go back one slide. So even with this phase in plan, that that ratio point six three. So, generally, the the the still 60% of that customer's bill would still be fixed. Yeah. Whereas our single family, about 50%.

I guess my question is is really going to the the flow rate, and I'm trying to figure out what the cost drivers would be between residential and multifamily for that flow rate. And it is I guess you'd I had a side conversation. Typical sewer bills are you know, the strength issue is driver, but in this case, it doesn't sound like it is. So on the flow side, is it it's volume?

Yeah.

It's all

That's all volume. And, you know, how do we explain the differences between the customer classes, I guess? Or how do we account for the the differences? I see.

You know? Mhmm. Mhmm.

Right. So that's just something that maybe, you know, you could get back to us on or if you wanna explain.

Great. So so if I can if I can

Take a shot at

keep this conversation going here. So what you bring up is a great rate design consideration. If if one of our goals is should we have the same flow charge for a multifamily customer and a single family customer and then just make our fixed charges fit that that rationale? That's a that's an approach we could explore. In this example, our goal was to number one goal was to index that fixed charge as close as we could to the King County charge. But but

Oh, I see. So it was basically if we we say this is how we're gonna capture the fixed charge, then the volume charge is whatever it needs to be to capture that cost of service for each customer class.

Right on. Yep.

Got it. Thanks. Okay. Yeah. Alright. I I think it's when I look at the rates, I I want to just be able to say, oh, that makes sense that, you know, the flow charge would be different for a customer class than this customer class because, you know, a b c. But in this case, that's really not explainable. Right?

Yeah. Yeah. Yep. And we can we can talk offline. There's there's some the nuances there in terms of how we're built by King County. Okay. It's not a 100% based on flow. Okay. Yeah. It's based on their their residential customer equivalent methodology.

And, yeah, I realize there are so many little nuances with this cost of service. I think I'm just looking for that the differences between the customer classes would not be not be big enough to raise that question. You know what I mean? Like if $14 per CCF versus $9 per CCF, that's kind of a big difference between customer classes that are relatively homogeneous in terms of their characteristics. Right?

Yeah. And and if if if I I think Yeah. What I can go really quickly here is I think to answer your question, the reason why the flow charges aren't uniform between the two customer classes is is on step two there on the screen. We're using the ratio that King County publishes their assumption for how many the equivalent for an apartment unit or how how equal it is to a single family customer. Our actual experience in Bellevue, that ratio in Bellevue is not gonna be 0.63.

It's gonna be slightly different from that, and that's probably one reason why we're we're indexing our fixed charge to data published by King County as opposed to using our own data. Yep. The last recommendation is focused on the nonresidential or commercial customer class. And once again, similar flavor here. We're trying to, make the bills more consistent, simple, and indexed to or matching our our our city's financial policies.

So right now, our nonresidential class rates, it's a two part rate. There's a minimum charge. It's not indexed to the King County charge. It's about $200 every every two months. And then we assess the flow rate on all metered volume.

Our proposal is consistent with the other two classes, indexing that minimum charge to the King County treatment rate and then assessing the flow charge, based on all all flow. Once again, the goal here is is more just simplicity and consistency. Now the impact for this is right now our minimum charge results in some of our smaller customers, paying more than they actually use. And I'll show you here. So this is a histogram of the number of nonresidential bills that we send out over the course of a year, and the x axis is their bimonthly flow.

So on the left side of the screen, you can see that the the the the most common type of customer is about the five CCFs every two months. Small small business, small small shop. And then and then you can see to the way out to the right, we have some really big businesses here in Bellevue where flow is, you know, over 2,000 CCFs in a two month period. A lot of variation in this class. Today, that if you use below about 15 CCFs, if you're in those first three columns, your bill's not gonna change.

It's gonna be the same amount every year every month. If we lowered and indexed the minimum charge to the King County rate, that would actually end up reducing the bill for these smaller customers. So this dotted line, if you wanna index it, it's following that at the the y axis on the right side of the graph. It's showing the bill impacts. So customers are using this a less amount of flow.

Their bills would actually go down because right now, they're paying a minimum charge in excess of what they actually use. Now the corresponding impact is those customers use more, their bill would go increase to around 18% in 2027. By context, if we didn't make this rate change, every customer's bill would still go up by about 15%. So, if we do nothing, the yellow line's kinda where their bills will be. If we make this rate design change, it will have a favorable impact on customers who use less flow and a slightly higher bill impact to those who use more flow.

K.

And once again, the the main goal of this this rate structure change was more about simplicity and making, indexing our minimum charge to the King County rate. This is simply the side effect or the the impact of that change. If you wanna take a deep breath, we're just gonna wrap things up here. Basically, go one slide. So we presented, four rate design recommendations listed there on the on the left side of the table.

Along the top of the table, those are the the four key rate design goals I'd I'd mentioned at the beginning. We wanted to simplify our existing rate structures, making them more understandable, aligning where we can to Citi's financial policies, providing greater control to our customers over their bills. And then if there were unfavorable impacts, being able to manage those with some some, other structure changes. So for the first recommendation, we're consulting those two tiered flow rates into one. Does make it more understandable to our customers, really has no impact in terms of aligning to our our, financial policies.

Does it impact the customers' bills? Once again, ninety nine percent of our customers never get into that second tier. And we don't see it as it really has no impact, on on a very, very, very small impact on a customer's bill. For recognition number two, this is the restructure of the multifamily rates, indexing them to King County, making them look more like our single family bill. It achieves those first three goals in spades.

It's more simple. It aligns to our policies. It provides our customers a lot more control over their bills, but it doesn't you know, there there's gonna be some impacts. One thing I wanted to point out, I forgot that, is, we we mapped these impacts to all of our accounts in the city of Bellevue. And the unfavorable impacts that I showed, those are more pronounced in areas of the city that have lower incomes for multifamily customers.

So if we just did record number two, yes, it would make things more understandable, more simple, more control. It would raise bills to the folks who probably have the least ability to pay for those those bill impacts. This is why we're not recommending the second recommendation unless it's paired with the third recommendation. The third recommendation is, it's a good idea that we we have a lot of pluses in that second row, but let's fix that negative on that second row by phasing this in between three and five years. And then the fourth recommendation, hits each of those goals.

And so that those are our recommendations. Once again, these aren't required by law. You don't have to do all of them. The decision to the commission we're looking for feedback is, are there a suite of these that you're okay with? Are they do you wanna pursue all four of them, or do nothing and keep our existing rate structure? But, no decision tonight. It's just presenting the group, information and and looking for feedback from from the commission.

I I'm personally of the opinion all four recommendations sound reasonable and worthwhile of doing and phasing in on over that period, whatever we decide it is.

Yeah. I mean, I like the summary of recommendations, I'm generally in favor of all of this. I guess my confusion a little is I was looking into the detail. You guys knew I was going look into this. So I'm looking at attachment A and just not clear on the bimonthly fixed charges that I'm seeing for the multifamily that I guess don't or maybe I'm maybe I've got that wrong. I'm looking at the multifamily residential at $151.45.

Yep. So Yeah. I can speak to that. So so King County's rates, their treatment rate is going to we're we've been told by King County that that rate will be increasing twelve to thirteen percent every single year over the next five years. So if you look at the multifamily charge on that on at exhibit a, it's pretty much staying steady at the previous years.

And so we're phasing in that structure over or the the proposed structure, and that's it's not it doesn't it results in in the fixed rate not going down. What it results in is not increasing at the same pace that King County is gonna be charging us. Does the if if we weren't being faced with 12% increases by King County, you're right. The fixed charge would be we'd be going down for multifamily. But because King County's rate King County's increasing rate 13% every year, we have to recover that cost along with restructuring the rate.

So I guess if we're looking at 2027 fixed the 2027 bimonthly fixed charges, the single family residential is one forty one thirty. So would is that the projected King County r for one RC? Right? And then we're saying that that would be for single family, and then we'll change the non residential based on recommendation number four to the one hundred fortyone hundred thirty. But the multifamily help me because I guess I'm thinking Can

I share my my other screen here? Is that possible?

Do that.

You don't have to really do me.

That's a

I can can I follow-up for you? I have the table here to kinda show you. Yes.

I'm looking at the 15145.

Yep.

Right. If if I if I can go go on with me in a path of imagination here. So so today, our if you're looking exhibit a, the multi fam multi residential class fixed rate is $1.52 65, which and if you compare that to the single family residential rate in 2026, 01/2532, that ratio is 1.22. So our multifamily rate is 1.22 times higher than the single family customer group. Now shift your eyes five years later, 2031.

The multi residential rate is one forty six seventy six, and the single family rate is two thirty two ninety five. That ratio is point six three. That's the target rate we're trying to hit. Remember? That that's that's where we wanna end up. But it's gonna take us five years to bring that that rate. Right now, it's pretty high. It's 1.22 times higher than single family rate. We're gonna take five years to bring it in line with the with our target of, ratio of point six three.

Yeah. I mean, I can see that now. Alright. So if this point so is it cons I guess we're being consistent with King County, but you also mentioned that Bellevue, we have our our other rate. What is our ratio?

I can follow-up. Going to round to the nearest point one. It's about point seven.

Okay, I was thinking it would be higher. So you know, because I'm just seeing that why is there such a difference between the single family and multifamily? There is. I can see that 0.63 now. But is it an opportunity to take it to 0.7 to be more consistent with Bellevue in reality?

Yeah. I I guess that's one consideration. Right?

So detaching that point six three county and making more Bellevue flavored ratio.

Yeah. It it's something like that. I I yeah. That's

good. But but

a question. King County is billing us point six three times that number of multifamily units we have. Correct?

Billing us for our for our reported flow, which ends up being very close to that.

Okay.

It's, you know, it's gonna be somewhere between point seven and point six three.

Okay.

The the benefit yeah. The benefit of using point six three is it's provided by King County. We kinda it's not gonna shift year to year if if flow changes in King County in our our system. It's saying, okay. This is the assumption we're making. It's close enough, and it's not gonna shift year to year. And that was the idea behind using that that ratio. Yeah. Threading the needle.

Question? They were answered. Okay. Any other comments from any commissioners?

You know, I I guess just kind of thinking aloud or trying to summarize a little bit for myself, but but putting it out there. Because in considering four separate recommendations, it's interesting to think about how they're interdependent and how they're mutually exclusive because they're all presented as recommendations. So, thus, we should all generally concur to do those. It was interesting what you described that, you know, number three serves to make kind of two fully inclusive, that just doing two doesn't solve for that unfavorable bill mitigation. It just strikes me so recommendation number one is probably kind of the most minor of all of these is just a little bit of a cleanup of something that most people don't even look at.

Yeah. And so it's kind of the most trivial, but, really, the heart of all of this is down in two and four for the most part, and three just kinda rounds at number two.

I I would agree with that characterization. Okay.

Thank you.

K. Yep. Thank you. So, appreciate that. I had a sidebar just a moment ago with Lucy. We do need to revisit the vote on a recommendation for either a three or a five year phase in. The motion was made, I believe, in seconded, but there was no formal vote taken.

I withdrew it, though.

You withdrew. You withdrew the three?

I withdrew the five.

The five. Okay. Thank you.

There was no motion. But So officially saying you would like to have a commission vote on which is the preferred phase in period.

Yes. Let's revisit the motion for an action to recommend a phase in period. Let's do that. And then the ask the second ask for tonight on the on your materials was feedback on the rate design options, and we would take both the recommendation on a phase in period and the feedback on the rate design options forward to for council consideration in the spring. That was the intent of tonight. So if we could revisit the motion and vote on the phase in period.

Okay. We can do that. Anne, you say something?

Think we are new. You know, but

it withdrawn.

They want to But then we need to

consider both the three and five year option.

There was a vote. Yeah.

There yeah. It was a motion to consider both three and the five Right. Ruling out the seven. And what I'm hearing now is that you don't want that motion.

Maybe. There was confusion. There was thought that there was no vote.

Well, I think I have to withdraw that one to consider both because they want one.

I that yeah. I can

seconded. I think it it became a discussion more than No. It Oh, did you?

Yeah. When we went through it again, it was seconded. So it's

we did

We had a motion that was seconded. We did not vote on anything. And What I'm understanding. Correct. And so you would like a vote on the three vote. And a vote on the five separately?

Just pick one. Correct. A three or a five year.

Okay.

The staff are asking for concurrence of a five year.

That was the original recommendation.

Recommendation. Yeah.

On the five year phase in period. The commission can choose a different phase in period.

Okay. Well, why don't we take a vote on the five year period depending on its results? If we have to, we'll take another vote on the three. Correct? Yes. Alright.

So just

Alright. So

Okay. Correct.

Okay. Okay. So I think the commission would like to recommend a three or a five. We just haven't voted on that motion. So we're gonna now vote on that motion, which is to recommend the three year and the five year phase in plan.

But that does not accomplish the staff's purpose.

Yes. I think we have to clarify this. The staff wants to leave here with either

Right, though? I heard that

five.

I heard that oh, sorry. I heard differently earlier. So Yes. Yes.

Either or have a different recommendation account.

Okay.

Which is

fine. Sometimes, okay. And what we can do if that's what if we choose to do a different recommendation account, though, When we go to account, though, we will share the staff recommendation. We'll also share the commission with them. Okay. And and.

But the commission has to pick one. The commission has to pick one.

Prefer. Don't has to.

Does the are you can the commission pick the its current recommendation, which is the three and the five? We recommend either of those two. Is that okay?

So if the commission wants to stay, you know, either a three or a five year phase in.

And we would move forward with both?

Yes. And I think that's where we ended up. So

I do wonder if it's if if it's worthwhile to explore where we land if there's actually a preference between the three and the five.

Okay. Well, we can not take an official vote, but take just a preliminary.

We can just

discuss

around the table. We could do that too. Okay. I Kirk, go ahead.

Is that okay?

Yes. I heard your commissioner Hainash's concern about the three year. Mhmm. My original concern was, as they said, the rates are already going up 1213% for everybody. So to tack that on top of that, a a three year, I think, was would be too much. So I'm personally in favor of the five year.

Similarly, I think, you know, the staff took to heart what we discussed in the last committee meeting. And I feel like in your recommendation today, that's baked into your recommendation to us. So I also lean towards the five year for the reasons that you described.

Okay. And I guess I'll just reiterate, everyone knows my preference for the three, and the focus is really on looking at the multifamily who has been subsidizing the other classes. And so I feel like the sooner we can get them or get everyone to Costa Service, especially in light of the periods that we keep looking at, things change a lot faster than what they're used to. So a three year seems like a reasonable time that we can make this happen and still have alignment with even the assumptions that we're working with.

I have to think about this. But I agree with both points. I think, yeah, rates are going up already. But as someone who's in the multifamily space, I think, obviously, the faster we can get the cost recovery more even, personally makes me feel better, but it's tough.

And that's where some of my question earlier too about how much does that go directly to the rate payers themselves, or is it that the assignee or the property owner kind of would keep some of those savings or, you know, that it wouldn't get passed back to the individual units? That's where I was trying to process how the equity actually executes, if it really does make it back to the individuals or not. And I guess it's a little hard to discern that precisely, and there's so many different kinds of multifamily dwellings that there is no one answer. But I trust that you're the closest to that sort of analysis and have done the best to consider that in the recommendation.

Just curious. How many households in Bellevue are multifamily accounts versus single family or non About half of

our households are in what we would define as multifamily units. So 33,000 of our 60 some odd thousand households are in multi residential.

And that's probably grown faster than the single family.

Probably since the yeah.

Visual The inspector

for sure. Yeah.

Yeah. Skyline of Bellevue would indicate.

Can I also ask for clarification? Maybe I'm going state it and you tell me if I'm right or wrong. That what I heard Lucy say, the director say, is that at council you will present the staff's recommendation, regardless of what the commission votes on. I mean, if it's the same, if the commission votes on a five, there's an alignment. But if we vote for something else, then you'll see both.

And my original interpretation of what we moved on was that you folks would take our recommendation and develop rate design for both the three year and the five year, and then an ultimate recommendation from us could be made once we see the rate design for a three year and a five year.

The rate design the rate design piece is more we just needed directions so we can run the math. The impacts of the five year versus three year, whatever the deltas are that we showed in terms of percent, that would be the changes in the rate impacts. Yeah. So but if you need more information on those, we're happy to provide that. The it's what I meant more by that is we need direction on three or five years to come up with the actual schedule of charges.

Okay. Commissioner Dupertis, what are your thoughts?

I'll be candid. I'm I'm lost. I'm not sure what we're voting on. I see the slide. We have four options, but then we have a three year and a five year. Is that an overlay? I I I may abstain for to give myself an opportunity to understand this better.

Okay. Yeah. So we kind of moved past we've gone backwards now. We're going back to the earlier discussion about the three, five, and seven year phase in and trying to get a sense from the commission whether we truly are recommending to city council three year, five year, seven year, or any combination of those three. Staff recommendation is the five year.

And what I've heard so far is two commissioners in favor of the five year, one commissioner in favor of the three year, and one commissioner on the fence at the moment. And so just trying to get a sense from you so that we know I know whether or not we should be voting on a motion to recommend three and the five year to council or just vote on a motion for a single year phase in. So I think that's where we are.

I think we should vote on the recommendation from the staff. And then pending that outcome, we may not need another vote. Right? Yes. So that might be the simplest way to do it.

Oh, we can do that. Before we go there, given your comments, Commissioner DuPartis, would you like to ask any questions of staff?

I think any questions I would have would be just to I I think it would be too too much. So the the vote that we have is is the slide that's in front of us. Is

that is that right?

That is correct. And the staff recommendation is the five year. So what I'm gonna do now then is I'll ask for someone to withdraw our earlier motion to consider the three and five year because that motion was moved and second. So let's get that off the table, and then let's move on Kurt's first motion, which is the five year, and then take a vote on that. Shall

we? So I move to withdraw the motion to consider the three and the five.

Alright. Thank you. Alright. And then may I have a motion to consider the staff recommendation of the five year phase in?

I move to that the Environmental Services Commission recommend the staff recommended phase in of five years.

And do I have a second?

Second.

Alright. Then if we're ready, we'll go around and take a vote on that motion. Alright? Commissioner Letterman. Aye. Very good. Commissioner DePardis?

Aye.

Aye. Alright. Commissioner Hynosh? No. Commissioner Laxon?

Yay.

Commissioner Tyson?

Yay.

Alright. And I vote nay. So we have four yeas and two nays for the record. Okay. Is that what staff needs? Yes. Thank you. Alright. Thank you.

Yeah. I'll I'll be candid. I I don't think I fully understood what we just went over. Anyway, that's fine. Moving on.

Okay. Would you like to change your vote?

No. The questions I would have, I I think, would be, just too much for this too much for this forum.

Okay.

I think going forward, I I I guess I'm I'm just not grasping. I don't I don't have my head around what what we discussed.

Alright. Commissioner Du Parris, your vote was a yay, I believe, on record. Would you like to change that to an abstain?

And and the vote was for a five year Phase. In.

Yes.

Yes, no

Correct.

With no other option on the table. So if we reject that option, then then there's no path forward. So all we're voting on is is five years yes or no. We're not selecting three, five, or seven. Is that right?

But there could be a second motion.

There could be a second motion if this if if first motion fails.

And the staff recommendation is is five year, which is what we're voting on? Correct. Okay. In this limited in this limited case, then then I'll continue to support the staff recommendation.

Alright. Thank you. Does the staff have what its needs for the phase in time period?

Yes. We have the the motion and and the decision, the recommendation. We thank you for that. The second piece of it was feedback or guidance, if you will, on the rate design options. We received that as well. Correct.

So I think you have everything

you need. We have everything that we need. Alright.

Yeah. Thank you for your time the last two evenings. I really appreciate I know there's a lot of information, and these are big decisions. They're waiting decisions. Just as a kind of a path forward, we are planning on taking this information to for as a formal briefing to the city council, in the spring of next year, pending their feedback and direction incorporating, their direction into the 2728 budget process.

The earliest these results, the rate design changes and the cost of service discussion we had today, the earliest that that would take place would be part of the January part of the 2027 rates that would be, adopted for 01/01/2027. That's all I have, unless you wanna talk more.

I I would just add one notice while I was reading the the briefing materials and all the the thing that stuck out in my head is that with these larger increases in the next seven plus years, that the department should have what I called excessive communication with our rate payers about these things that are coming down, these these kind of increases. Yeah.

Yeah. I would agree. And especially since it's so dependent on the King County rates that are outside our control, but that they're forecasting or communicating pretty significant rates for the foreseeable future. It it is a bit jarring, I would imagine, for the typical rate player.

But I I think that's that's the the key point that I would like to land is we need our obligation is to rise above that. So if we anticipate that there are going to be significant rate increases and we don't control them and we don't necessarily know what they are going to be and Seattle may not know what they're going to be either, We need to ensure that we are adding sufficient buffer so that we don't give rate shock to our rate payers. Predictability over some goal of happy path thinking about lower rates is going to be better over the long term. So I don't wanna get caught in this trap of underbilling and underbilling and then suddenly having a a shock in in in the future.

So I

So we should be able to calculate, and and I think this is one of the things that our former our former Yandi was very good at was how do we how do we actually calculate and think about the buffer that we're going to add that is going to optimize for predictability over some number of years. I would much rather be in the position of telling a rate payer that here is the here is what we're anticipating versus we have this overly optimistic happy path. Excuse me. I'm losing my voice. This happy path lower rate to, I I I don't know, appease in some short term sense, and then have have a conversation three, five to the charts seven years later that says, now we're going to have this significant increase.

And it would be very easy to say, well, we don't know what that increase is, and that insulates us today, but it really doesn't. The fact that we don't know what that what that rate increase could be three, five, seven years from now means that we need to properly plan today. I I hope I'm I'm saying that well.

Everyone here is nodding their head, commissioner.

Yes. So I just wanted to ask one question. I know that in parallel with this discussion, was also some talk about a customer assistance program update. And I'm assuming that's coming maybe in at some point. I wasn't sure if it was on the calendar or not.

It is. I appreciate you bringing that up. That was the intention. We originally had it scheduled for September. We deferred or delayed it actually to October. And then again, because of the meaty topic that we're discussing tonight, there's a lot on the table to consider when you are considering a cost of service analysis and rate design options. As you just experienced, it is fairly weighty material, and we really did want to wait until we could truly focus, on that and then give the time that the customer or utility bill assistance program deserves.

Well, I I I I think I'm passionate about that as and thank you for asking that. It is something that that that I'm passionate about as well. And and and I'd insist is a strong word, but I'd very much like to have at a minimum, and and I agree with the commissioner, a few bullet points on where we are with the rate assistance program. Those data have to exist in Excel. They just can't it's a financial program.

The the the data have to exist. Even if it's a a simple table in a in a PowerPoint, we we we can work with that. I don't know that we need a whole evening dedicated to it, but that was something that I think we're expecting in September. Let's let's make sure it happens in in in the next meeting if we can have your commitment for that. And thanks for the commissioner for bringing that up.

And then the second point, I just wanna say thank you very, very much to both the Matts and to Scott and the whole department because this as you can see, cost of service is not easy by any stretch and rate design. And so I know I know there is a lot of work put into this, a lot of work and rework and turning things around. So I'm just really proud to be part of this organization that really does knockout work in all areas, and especially here in the financial area. We're really paying attention to our our rate payers, our citizens, and and really being stewards of their resources. So thank you so much. Yeah.

Thank you.

And if I may just add one more comment too. So when we were talking about the sticker shock or potential sticker shock, and when people receive their bill, it says city of Bellevue. Right? And so that's who they will direct their questions or, you know, any feedback or frustration. But we also know, you know, insiders understand that it's not dependent on city of Bellevue, that there's outside sources.

I wonder just to consider as other municipalities also go through similar rate increases and, you know, that there's kind of coordination of communication, thinking bigger of how to help ratepayers understand why these costs go up, what's involved in, you know, the King County services. You know, just it's not just for folks in Bellevue. It's really I don't know how many different municipalities are affected by this, but it's a much broader situation, and doing broader community efforts can really help rate payers understand what's going on and what's within their control and so much, unfortunately, will be outside their control. So thank you.

If I may, just to your point, I don't know if the commission is aware, but there is a regional utility summit utility rate summit, that will convene on November 14. Elected officials from across the region, staff members from across the region will meet to convene or convene to discuss exactly what you're talking about. Awareness for the for the community. This is a regional issue of affordability. It is one that, regionally, all the jurisdictions, all the cities, all the municipalities, the county as well will come to the table and try and dialogue around what can we do to get ahead of it. Thank you.

Great. And maybe, Scott, that can be not next month because that's our special meeting, but on the staff report for January, get a report out on that. Great.

Thank you. Yes.

Very good. Thank you, Mats. And now shifting gears to the solid waste program update management brief.

Certainly. I'm happy to introduce you. So this evening, have Wendy Weicker. Wendy Weicker is representative of Republic Services, and John Guyer, our solid waste program administrator here to present this evening.

I just wanted to say, my perspective of that work stoppage, I was just very impressed with both the city's and Republic's response. The communication was clear, straightforward, timely, and then the alternatives for drop off locations that were provided. It it was my experience that me and my neighbors just was a very minimal impact. I mean, obviously, it was inconvenient for that one week, but, you know, it was all in all a minimal impact. And And I'd like to commend both the city and the republic for handling that as probably as well as could have been done. Yeah.

I will also echo Commissioner Letterman's comments that maybe we were fortunate our day fell on Yeah. The right day. And so, yeah, I think we didn't miss very many either, but I I I heard from neighbors and and folks that the coordination between, you know, Republic and the city, They were they really appreciated that and the communication. So thank you very much for that. I'm sure that was not a pleasant way to spend the summer, month of July.

And so with that, I just I wanted to be here tonight just to thank you guys. Our team

Sorry. I thought we're picking you up.

Can't thank you guys enough for your patience in working with us last summer for the work stoppage that was anticipated and certainly wasn't expected. And, we plan for these things. We plan for inclement weather. We plan for accidents. We plan, to be ready for any manner of mayhem that might happen on the streets or in the community.

And when Bellevue needs us, us, we are here. So we just appreciate the partnership, appreciate the grace and flexibility for this summer, and and we couldn't have done what we did on behalf of the residents, multifamily, single family, and commercial without the the value of the long term working relationship we've been able to build in the last several years that I've been lucky enough to to work with this company serving this great city. So thank you. Thank you. Thank you for being patient with us and working with us. And I can't thank your staff leadership enough for for always working us with us day in and day out. We have a really solid partnership, and just wanna thank you and your team for all of that leadership and partnership.

Any other comments from any other commissioners? Otherwise, I'll just say in my few years here on the commission, this is the best performance update I've seen. So congratulations. Really great results even with the July work stoppage. So thank you.

Five to get to zero. I promise. Yeah. Sure. And regarding that utility summit, I encourage you guys to attend if you can on the fourteenth. There are 39 cities in King County, 38 outside Seattle that are working with all the utilities that we all partner with the county on, solid wastewater utility, stormwater wastewater. There's a lot of interconnectedness, and and working well with the county is also a key part. And a lot of the cities turn to Bellevue for that leadership, given the scope scale and impact that Bellevue has on the rest of the East Side. So I also wanna thank the staff for helping the rest of the East Side in that regard.

You know, I was just gonna add too. I think what I've always appreciated about Republic is the direct consumer communication when there is some situation, especially inclement weather, when we're all puzzling, gosh, it's really snowing heavily. Are they really gonna pick up tomorrow? That often we get kind of the automatic calls, and I even have it as a contact so I know, yes, answer that call. I know who that is. So I I would say continue those efforts. And sometimes there's some outlier reasons why there may be some service disruption, but still kinda find a way to communicate with the ratepayers would be great.

And in general, we tend to follow the school district. And in general, the service days, Monday, Tuesday, Wednesday, Thursday, Friday, it depends. And then your neighborhood with the hills and

Right. Right.

Alleyways. There are a lot of variables in serving this diverse city. And multifamily, single family. Our drivers know their routes. Our drivers know their customers. And every day, crew out when the snow is coming. We plan the night before. We plan at 4AM that morning. My supervisors are driving the roads at 1AM and checking with the school district. So you would think we're only here, you know, seven to noon. We are working twenty four seven planning, preparing, and, being ready to go. So except for weekends, which is why we can't get those four Friday pickups when we get that call at 04:00 on Friday to come back on Saturday. But, yeah, we, I think we all plan for inclement weather and emergencies in this region. It's just gonna be part of the course. The weather outside tonight currently.

So

Thank you.

Alright. I think we're getting an encore performance from the two mats possibly on the 2728 operating budget and twenty seven to thirty two CIP budget planning overview and calendar or just one mat.

The other one fills up.

I didn't hear any boos there, did I? No. Well so thank you for having me back. We we don't have any slides prepared for you, but we had a just an overview memo just to lay out the budget process. Believe it or not, we're starting to think about the 2027, 2028 budget process now.

As you may or may not know, we in the utility start the budget process earlier than anyone else in the city. So we wanted to give you guys just advance scheduling notice that we'll be here often starting in 2026 to talk about budget. And if you have any questions about that schedule or about what we're planning, you can certainly let us know. I will say, as a caveat to all that, since we start earlier than everyone else in the city, that schedule is subject to change. We're doing our best to anticipate what the citywide budget process will be and sort of adapt to that. But that is the best information that we have now, so we wanted to go ahead and get that to you.

Alright. Thank you. So what I heard is buckle up. Starting January, it's gonna be a lot of financial, reviews. Thanks.

Commissioner DuPartis, that means you're gonna ask a lot of questions next year.

I am I am getting ready.

Alright. Scott, would you like to review the calendar?

I certainly will try. The calendar I have, projected up here is the commission's calendar. Obviously, we've just completed the November meeting, coming up in December. I think Joe spoke to this last month, and so I'll simply restate we're going through, a typical year end process where we meet off-site. We look at a year end review for 2025, and we do some planning, for the upcoming year 2026.

You just heard from Matt Thurber that will be heavily focused on budget because of the biennial budget development process. We will also include a fairly healthy update on the utility bill assistance program and the work that we have going on there and ways that we're looking to consider expanding the program to the extent possible. That is the conclusion of the year. And so then, as Joe said, I think last month, we start all over again and and kick it off in 2026. Looking next at, if I can do this, the council calendar.

We have a couple of items this month, the town of boards, franchise agreement, and a management brief on the Northeast twenty fourth emergency procurement next month in December. It's a series of capital projects. I believe Joe spoke to that to some degree last month. I won't dare to go into it in detail at this time. And so that is what is on the calendar for the rest of 2025.

Alright. Do we know where our special meeting will be next month?

Rob Robbinswood.

And and the the Main Floor, the Lower Floor living room area. Oh, yeah. Specifically. Yes.

Okay. Thank you, commissioner Letterman. Very good. Then with that, may I have a motion to adjourn?

Motion to adjourn.

And a second? Second. Very good. So the meeting is adjourned at 08:18PM. Thank you.