Board of Public Utilities - Regular Meeting

Board of Public Utilities meeting. This meeting is called to order. We will now play the inclusion statement.

Pursuant to the City Council rules of procedure and order of business resolution, the members of all boards and commissions and the public are reminded that they must preserve order and decorum throughout the meeting. In that regard, members of the boards and commissions and the public are advised that any delay or disruption in the proceedings or a refusal to obey the orders of the board or commission where the presiding officer constitutes a violation of these rules. The city of Riverside is committed to fostering a workplace that provides dignity, respect, and civility to our employees, customers, and the public they serve.

Okay. Tom Evans, would you like to lead us in the pledge? Thank you. Roll call, please.

Good evening, Board Members. Board Member Wright? Present. Member member Golder? Yes. Board member Rand? Here. Board member Montgomery is absent. Board member Evans? Here. Board member Becker?

Here.

Vice Chair Wilgemuth?

Here.

Chair Sayana?

Here.

Thank you.

And we will now move to public comment.

Public comment is now open for this item. Call (951) 826-8688 and follow the prompts to access the meeting.

Okay. At this time, with no callers at this time, we'd like to pause the board meeting for the annual Trujillo Water meeting. We now turn the time over to Trujillo Water Company President Goldwyer.

And I would like to turn over the running of the meeting to Assistant General Manager, Robin Gwenny.

Item one, Call to Order. The Trujillo Water Company shareholder meeting is called to order. I will now call the roll. City of Riverside? One of the director. Yes. Thank you. Mary Hamilton? Absent. Sarah Gardner?

Here.

Amy Consul? Here. And James and Janice Dickey is also absent. Item three, approval of minutes of June 2020 or 06/23/2025 meeting. Do we have a motion to approve the minutes?

I'll make a motion that we approve the minutes from the June meeting of last year.

Thank you. Do we have a second? Second. Thank you. All in favor, aye. Aye. Any opposed? Thank you. Item four, motion to accept resignation of Warren Avery. Do we have a motion to approve item four?

I'll move that. I'll second it.

Thank you. All in favor, aye. Aye. Any opposed? Thank you. Item five, approve to assign one share to each Jordan Wright. Do we have a motion to approve item five?

I'll make a motion to approve and assign one share to Jordan Wright.

And do we have a second?

I'll second.

In favor, say aye. Aye. Any opposed? Thank you. Item six, approve to assign one share each to Sean Rand. Do we have a motion to approve item six?

I'll make a motion to approve item six to assign one share to Sean Haney.

Thank you. Do we have a second?

I'll It

doesn't matter.

Thank you. All in favor, aye. Aye. Any opposed? No? Item seven, report of actions by directors for the 2025 meeting. We had assessments levies of $4.05 were levied by the Board of Directors for calendar year 2025. Item eight is a motion to ratify the actions by the directors for 2025.

I'll make a motion that we ratify the actions

of the

directors for 2025.

Thank you. Do we have a second?

I'll second.

Thank you. All in favor, say aye. Aye. Any opposed? Okay. Item nine, nomination of Board of Directors. Please see the proposed directors list in the packet. Is there a motion to approve the proposed members?

I'll make a motion that we approve the proposed members.

Thank you. Do we have a second? Second, aye. Thank you. Any all in favor say aye. Aye. Thank you. Any opposed? Item 10, other business. Is there any other business?

Hearing none, item 11, the meeting is adjourned, and we will move on to the Trujillo's directors meeting. Okay. I'm calling the Trujillo Water Company directors meeting to order. And item number two is approval of meet meeting minutes of 06/23/2025. Do we have a motion to approve the minutes?

To approve the minutes of 06/23/2025.

Thank you. Do we have a second?

Second.

Thank you. All in favor, say aye. Aye. Any opposed? Thank you. Item three, election of officers. We call for the election of officers. The first office is president. Do we have a nomination for president? Thank you. Do we have a second? Any other nominations? Okay. All in favor, say aye. Aye. Any opposed? Motion passes. The second office is vice president. Do we have any nominations for vice president? Sure.

Go ahead. K. Any other nominations? Do we have a second? Yes. Thank you. All in favor, aye. Aye. Any opposed? Motion passes. Secretary secretary treasurer, do we have any nominations for secretary treasurer?

I'll nominate Mary Hamilton.

Do we have any other nominations? Do we have a second? Thank you. All in favor, say aye. Aye. Any opposed? Motion passes. Item four, Trujillo Water Company financial reporting. In 2025, we started in January with $14,424.96 We deposited $822.75 And we had expenses of $800 with a balance of $14,447.71. Do we have a motion to approve the financial reporting?

2025.

Thank you. Do we have a second?

I second.

Thank you. All in favor, say aye.

Aye. Any

opposed? Thank you. Item five, levy of assessment for 2025. I'm recommending $4.05 per share. Do we have a motion to approve? I'll make

a motion that we approve the assessment that you've recommended.

Thank you. Do we have a second? Second. Thank you. All in favor, say aye. Aye. Any opposed? Item six, is there any other items of business? Hearing none, this meeting is adjourned. Thank you.

I'd like to have somebody double check that there are no public comment callers. You We open public comment before the Trujillo call. And I'm telling you that we had somebody raising their hand and has shown me a timestamp. So I need somebody on the text side to check. Thank you.

Okay. Can we still accept the public comment now? Okay. Then let the caller through.

Hi. Good evening. It's Melissa McKeefe. I'm laughing. Only a lawyer would take a screenshot of the time stamp.

Thank you very much for letting me speak a public comment. As in the last meeting, I have raised the issue of a provision that was added to the Urban Water Management Plan, Section six-nineteen, that deals with climate change. It came after the expenditure of a lot of time and resources and negotiations with the general manager and the Office of Sustainability and the City Council. And the goal five years ago was to have a very focused look at how our water management affected climate insofar as tree canopies, pollution reduction and carbon sequestration was concerned. And I have sent you the actual text from the report and what we submitted last week last meeting to the RPU because there was some question about whether or not that, in fact, occurred.

And I think we've put that to rest, as I know David Garcia will say. But the more important issue is, though there have been some baby steps, we have not really seriously focused on how targeted tree planting by the city and how the use of our non potable water, as potable water gets more expensive, is going to be critical to address climate in the future. It is inexpensive, and it's not simple. We have a large item on the agenda this evening, dollars 34,000,000 of public benefit. But a lot of what's being proposed is not going to reduce heat in our city.

The hope we had for EVs and all electrification to reduce climate or address climate, that has been very seriously derailed. And whether or not those changes come back into play, the one thing we know that works are trees. Not our $500,000 a year, we will give you subsidies on a tree for your backyard, but real targeted trees. And where we can do this and need to do this is on the North Side with new development where it would be less expensive to be able to access our non potable groundwater. The purpose of this paragraph, and I believe that Gilbert Hernandez, the assistant city manager, is here this evening, is that we really need a point person to help coordinate between the city departments that are dealing with heat because the one thing I see is that we need water to grow trees.

Trees are going to be what helps save us with heat. We don't need more studies at UCR, guys. We already know that the lack of trees causes heat islands. We already know these things. Maybe five years ago those would have been nice. But even spending another $1,000,000 on doing something that we know the answer to is frankly a waste of my ratepayer money. I think we need our city to really focus, come up with a long term short term and long term plan.

Thank you, Ms. McKee. Okay. So did I say we're going to reopen it yet? Well, it's open. We're reopening reopening Board Public Utilities meeting. So for item number three, I'll ask our Board members if anyone has any conflicts of interest to disclose. Seeing none, So we will move on to the consent calendar. Does anyone wish to pull an item on our consent calendar? K.

Do we have a to approve? Thank you. You. Roll call.

Please vote. Motion passes unanimously. Thank you.

Okay, thank you. I think we are going to switch to closed session right now to item number 11 to address this first and then we'll come back to address discussion calendar. Okay. Returning back, from closed session. We'll now move to the discussion calendar.

So there is no reportable action taken out of closed session.

Right. Okay. Okay. So now we'll move to the discussion calendar, and we'll open for public comment for item number eight.

Public comment is now open for this item. Call (951) 826-8688, and follow the prompts to access the meeting. To request to speak, press 9. When called to speak, press 6

Okay. And we call for a presentation of Item eight by Carrie Dousset.

Good evening Board Chair, Sienna and members of the Board. My name is Kerry Dowsert. I'm the Customer Engagement Manager and I'm here this evening to bring you a report on the Mobile Home and Multifamily Energy Efficiency Program. So this program is part of the Public Benefits Program portfolio and as such is funded through the state mandated Assembly Bill eighteen ninety that was adopted in 1996. And as the program is managed collaboratively with SoCalGas, also addresses the requirements of Senate Bill X2-two, which requires POUs to streamline programs by collaborating with other existing gas providers in the same territory.

The program was established back in August 2024 when it was approved by City Council to expand on the availability of energy efficiency measures for customers living in mobile homes and multifamily residences. The program supports customers to make energy efficiency savings with no cost direct installation measures that are tailored specifically to their homes. And program qualification is based on housing type, which streamlines the administrative process that we have and then also ensures optimal participation in the program. The program also mirrors the Income Qualified Energy Savings Assistance Program or ESAP, which some of you may be familiar with. And this assists low income RPU and SoCal gas customers by providing energy efficiency measures from both utility providers.

Due to the program's success, the program is extended and in May 2025, the Council approved the first amendment to the program, taking the contract through fiscal year twenty twenty five-twenty six, which leads us to where we are today. So to date, the program has been very popular and has seen some strong participation numbers, and we've served in excess of fourteen twenty one homes currently, which includes two seventy two mobile homes and eleven forty nine multifamily homes. This has resulted in almost 1,500,000 kilowatt hours in reportable energy savings, which is about enough to which is approximately enough to power two zero seven single family homes for the course of the year. So to contextualize where we are with the program currently, we've got 33 affordable rental complexes for seniors across the city of Riverside and we've currently completed work at about five of those servicing around 90% of those units in the five communities. So that means most eligible programs eligible homes have not been served by the program as yet.

And so we want to be able to continue to offer the program to those who haven't yet participated. And in addition to that, we've got 15 mobile home parks located across the city of Riverside where we've served two seventy two of the approximately 2,040 mobile home spaces that we now occupy in the territory. So that equates to about 13 that we have served, leaving about 87% that have not yet participated in the program. So the program also addresses the equity gap by providing access to appropriate energy efficiency measures to more of our customers. And the program has been set up to provide measures that are specific to housing type and is not income qualified, as I mentioned earlier, which enables more customers to be able to participate.

The program is also now being expanded to provide a new HVAC occupancy measure, which aims to provide energy efficiency in common areas that are accessed by multiple residents in those communities so that it's beneficial to more customers. RPU's direct installation energy efficiency programs are aimed at maximizing energy savings and customers who participate in the mobile home multifamily program can benefit from energy efficiency upgrades provided by both RPU and SoCalGas and the program support customers by helping them to lower their bills as well. On average, program participants are expected to save approximately ten seventy six kilowatt hours per home and see an annual bill savings of about $147 And the program is also very cost effective for RPU and only cost $05 per kilowatt hour for lifetime energy savings. So with that, the staff recommend that the Board recommend the City Council approve the inter utility agreement with SoCalGas and authorize the City Manager to execute the agreement, including making non substantive changes. And I'm available and I have staff available here to answer any questions you may have.

Thank you. Do we have any public comment? Okay. No callers do we have any comments from the board?

Tom? Yeah. Is this turned on? Okay. I'm a little bit confused because in the next item that's coming up we have an item recommendation number five for $2,000,000 towards this program. So what's the difference between what's what's part of the public benefit program, backlog spending or whatever you want to call it, and this? Because it's the same customers.

I'm going to defer to Tracy to answer that.

So thank you very much for asking that question. My name is Tracy Sato, Assistant General Manager Strategic Initiatives. This program right now, we are limited in what we can spend to what we have available budget in the public benefit dollars that we bring in every year. So because we have the working group and spending plan coming forward for all of the excess dollars, we actually ended up limiting this program and reducing how much we really wanted to spend on the program because the consultant that is working with SoCalGas could actually be reaching more homes in both of the next couple of years. So the recommendation from the working group was to expand the funding to both the was to the Energy Savings Assistance Program and potentially, we, as staff, also noted that it could also go towards the multifamily our mobile home multifamily program to simply expand this program.

So if that item is approved, we would then renegotiate our

contract and potentially expand it and bring that back at a future date. Or

expand make a recommendation tonight to add more money to the program?

We could do that, knowing that then we would have less money, less excess dollars available in that $34,000,000 that is currently for the working group. So basically, we would be allocating more today than we have the dollars available we would have to dip into that reserve. Additionally, just as a note, we would then have to go and take that contract back through before it went to counsel just to get it approved and to make the contract modifications.

Well, but the objective is to spend the money that's in

the So unspent could we do

not spend it on something like this. When it's already been well, I guess technically I can't I'm not supposed to be talking about this at this point. But I don't see why we don't allocate the money now. And that way you clear the path to get going.

It could be done, but again, it would reduce the amount that the working group had considered. And we're probably going to have to reduce that amount. We'll get to that item and I can talk about that. But it is up to the Board to make the recommendation before this. And again, those other programs are also going to go to the City Council.

Well, considering that interest is included in that $34,000,000 I bet the $34,000,000 is more than what it was before when we started. But how much do you have in this program now?

This year we had, how much was it, dollars 2.5 into this program, but we've been spending a little under $800,000 per year right now to date. It's been averaging about $800,000 per year. If we expand program, the consultant will be expanding their outreach in the community.

What is a delay? So the recommendation recommendation from from the the working group was 2,000,000

Yes, for this program and the Energy Savings Assistance Program. There would be no impact if you waited until after the Board and Council consider the working group item for this, because if this is approved and the Council does approve this item tonight, the consultant will it will be seamless. They won't stop work. This contract will then start on July 1. And all that we would do is, if we do move forward with the expanded program, we would negotiate with them and potentially expand that program as soon as we could after July 1.

Recommendation.

Any second?

I'll second.

Okay. Roll call.

Please vote. Motion passes unanimously. Thank you.

Thank you. We'll now open for public comment for Item number nine.

Public comment is now open for this item. Call (951) 826-8688 and follow the prompts to access the meeting. To request to speak, press 9. When called to speak, press 6 to unmute. You can also join via Zoom.

Okay. And we call for presentation of Item No. Nine by Tracy Sato.

I'm just waiting for the presentation, but good evening, Chair Cianna, members of the Board. My name is Tracy Sato, Assistant General Manager of Strategic Initiatives, and I am extremely happy tonight to get to present the outcome of our community working group, our Public Benefit Energy Efficiency Community Working Group and the recommendations for a proposed spending plan that, that working group arrived at after several meetings that were last year and extended into early twenty twenty six. Did want to before we get going too far, I did want to acknowledge we do have one of our committee members has our working group members has joined us this evening. David Hahn from Habitat for Humanity is here along with our board members who who also participated so to support this effort. So But I will give him an opportunity to speak if he wants to or submit a card after I speak today.

So just to go back, we did provide a lot of information to the working group because they are community members. They don't have the history behind this, but we also had some new board members, so I'm going to just quickly go over some of the introductory information that was provided so that all of our board members are up to speed on why we ended up having to have this working group and what the requirements are around the funds and kind of what led to the discussion of what the working group proposes. So as was just mentioned, in 1996, there was a bill called 1890 to restructure electricity markets in California and that actually included language that created the public benefits charge requirement. We started collecting money on that charge in about 1998. Over time, that legislation changed.

Those provisions in law changed. In the early 2000s, bills were passed to incorporate in low income assistance and analysis of low income customers to make sure that we were providing service to those customers and to support those programs. In 2005 through 2012, we started seeing a lot more eyes on what these programs would provide and there was new reporting requirements, target setting requirements were established, and then in 2015, the state actually passed energy efficiency requirements and goals for the state and then required POUs and investor owned utilities to align all of our energy efficiency programs and targets to achieve energy efficiency with the state goals of doubling energy efficiency savings in existing buildings. So again, the main goals of these programs that the public benefit dollars get to is to deal with energy efficiency. And those are the goals from the initial start of the program all the way through.

It's to create cost beneficial energy efficiency, meaningful information on the costs and benefits around those programs, reducing market barriers to energy efficiency, so designing programs that would encourage people to not only install energy efficiency, but to also reduce barriers to the companies that want to provide these products to make sure that their products were now price competitive with other products. The way to do this was they had to collect and we as utilities have to collect a non bypassable customer charge of 2.85% on the electric bill. It applies to all customers residential, commercial, nonprofit anybody who pays an electric bill to Riverside Public Utilities will pay this. 2.85% was the minimum that Public Utilities is required to charge. Some utilities actually charge more than this, but we have kept ours at 2.85%.

What this means is the average customer pays $3 per month and the average commercial customer pays $10 per And again, are averages, some people pay more, some less and we collect approximately 10,000,000 to $11,000,000 per year and that can go up to $13,000,000 in a given year. That being said, we are limited in how we can use these funds. We can't use them for just anything. They are limited into four areas. We have to use them for cost and every word counts cost effective demand side management to promote energy efficiency and energy conservation that includes peak reduction new investment in renewable energy resources and technologies research, development and demonstration projects for the public interest to advance science and technology that is not currently competitive in regulated markets and for services provided for low income electricity customers, including but not limited to energy efficiency services, education, weatherization and rate discounts.

RPU's programs cover all four of the areas and as you can see here, over the last ten years, how much money has been spent in each one of these areas? About 61%, the bulk of the funding is going to our demand side management energy efficiency and conservation program, so directly at those main goals of the program. We also spend about 30% on low income assistance through combination of our SHARE program, our Energy Savings Assistance program, our Reliability Waiver and we did spend some money during COVID to also assist people who had lost their jobs during that time. We've also spent in the last ten years about 7% on renewable energy and then R and D has been about 2%, a much smaller proportion. But what has happened is the amount collected over the years expenditures have increased over time.

But over the last five years, six years of the program,

we

collected more than we were able to spend and there's a lot of reasons around that. We had COVID that hit and when you're collecting $10,000,000 a year and you're not spending all of that money, it's going to build up and it has to stay in our reserve fund. We had COVID, we had a new way that we had to do procurement for energy efficiency programs with our vendors and we just had a myriad of little things that had happened that led RPU to accumulating. Last year it was $32,000,000 it went up to $34,000,000 at the end of the fiscal year. This year we are actually I think we're going to actually be below $34,000,000 when we get done because of the success programs that we had with those direct install programs, outdoor lighting and things, and I will get to a little bit of that in a bit.

So we knew that we had this issue. It was presented to the Board last year on January 13. We were asked after that presentation by the mayor. She had requested that requested that RPU form a community working group to help guide and identify what the community really wanted to have these dollars spent on because this is a substantial amount of money. She requested that the task force or the working group be knowledgeable community members to recommend the best way for these public benefit reserve funds to be spent, and that we were directed to bring that back by the 2025, which got delayed because it was hard to get a large group of people together a number of times, and then we've had a couple of delays getting this to the Board.

But in June 2025, after the Mayor had asked us to form that working group, we did form the working group in June, and they had their first meeting oops, let me talk about this we formed the Working Group in June, and I do want to say these were the community members. It spanned a wide variety of expertise areas. Not only did we have members of the Board of Public Utilities, we had representatives from UCR, Doctor. Matt Barth, Nick Atkoc joined from the Chamber of Commerce representing the business community. We had representatives from the Realtors Association, so they're in housing and understand what our housing market is doing.

David Hahn, who is here tonight and we want to thank him for Habitat for Humanity. Rose Mays from the Fair Housing Council, Tom Donahue, is a resident and community member. We had Faustino Alvarez from the Community Access Center and we had industry experts from the heat pump industry as well as from media with Chris Trujillo and Michael Berger attending several of the meetings. And I can't thank these working group members enough. They were hit with all of this information, plus the staff report that we had sent.

They were inundated with a lot of information. They met four times for about two, two and a half hours at a time, had to absorb a ton of information and then come up with helping to come up with a spending plan with that expertise that they have in these different areas. The community working group was advisory and is advisory. They are intended to provide ideas to the Board and to the Council for how to spend this money, but it was always an advisory group and their final decisions on the expenditures are fully up to the RPU Board and the City Council. So what is presented here is their recommendation this evening.

There were four meetings that were held. We were initially going to have three meetings, but the working group did request the additional meeting in January. And I'm not going to go over all of these, but we basically went over Education and then started talking about different programs. They asked a lot of questions and we had to provide a lot of information back to them. Your packet includes all of the meeting presentations, the materials that were presented and the minutes for each one of these meetings.

So that was the numerous, I think it's 193 pages of attachments. If you have any questions on those, we can also answer those. But not only did they provide us with the spending categories, they also gave us some themes or some categories to follow that followed, goals that they wanted to achieve with all of the programs. They recommended that we really do look at non energy impacts. What are some of the things beyond energy efficiency?

And this is particularly important for marketing. And how do we market comfort, safety around appliances to our customers? We can't take credit for that and we can't use public benefit dollars for that, but it is a way to market and a lot of our programs do add those co benefits to our customers for their homes. They also suggested that the programs really target and look at the largest energy usage and the behavioral changes. How do we change behavior around that?

So we did provide information largest energy usage is predominantly air conditioning or industrial uses, how that is used and where we could target programs in those areas. They also wanted to make sure that the investment stayed in the city. So particularly with solar and battery energy storage, they wanted to make sure that any of the benefits of these dollars stayed within the city and were directly impacting our customers here in the community. So not spending them necessarily on large programs, but that they are as a benefit that our customers realized here in the city. And that we needed to also not forget about our low income customers and to keep our support going for all our low income customers and keep those benefits in place.

So I'm not going to read off all of these, but this outlines the summary of recommendations. We were targeting the $34,000,000 and these were the six programs and I'm going to detail those in the coming slides. But there's a heavy recommendation around having additional solar, but also predominantly looking at batteries because that is something we spent a long time with the working group going over was the need to have batteries to move the electricity that's generated by the solar from the middle of the day into our peak times in the evening when solar is not available. So the first program that did get recommendations and staff had already been working on this program actually prior to the working group. We had actually launched the program development prior to the working group forming, but it's a residential energy storage rebate program and it will provide $500,000 per kilowatt hour for a battery storage unit at a customer's residence.

Any customer can apply. Low income would also get to cover some additional costs, but for an average customer this will cover about half to a little over half of their energy storage system for an average storage that they would install at their home. The proposal is to fund $5,000,000 over five years and of course we will review that program every year, make sure it's actually performing as expected. If it's not, we will always, as with all of the programs, reallocate those dollars where they need to be or determine changes to the program to make it work correctly. This is a program that has a positive impact on the resilience of our overall distribution system and so it can actually help our heavily impacted circuits that have a lot of solar penetration right now, so we intended this program to be brought forward as quickly as possible and this will be one of our first programs that we bring forward if this is approved.

The Community and Emergency Center Solar and Battery Rebate Program is a program to really look at providing funding for solar battery storage and deep energy efficiency at our community centers that serve as emergency resource centers and cooling centers during the summer. A lot of our customers cannot afford to run their air conditioning. They do go to these locations or if there is a power outage, these give them an opportunity to have cooling in our community. It does provide that money back directly into the community for a benefit. The proposal is for $12,000,000 in funding over six years.

We did reach out to the other departments, both the Parks Department and the Libraries Department, to see if there was interest in this and to make sure that they could actually spend this amount of money in six years because it is hard to get that much in construction projects going. Our Parks Department is extremely excited and actually has a project already underway that they would like to utilize this funding for and really push it for the community. It's the Nichols Park Community Center over on the West side of the city. The funding incorporated the working group recommendation to provide energy efficiency and other RPU education because we can provide that deep energy efficiency savings and education at these centers. In other words, we can brand that and provide education services there as part of this.

The next program is our solar and battery energy storage at the Utility Operations Center and the Emergency Operations Center. This would be a rebate to move forward $5,000,000 towards this program. It's a three year program if this project moves forward to put in solar and battery storage with a potential, if we can afford it, microgrid capabilities at both of these locations so that if there is a significant power outage, these centers would be able to continue operations for safety in the community, and then at times when it is not being used as a microgrid and not needing to fund that, that solar would then basically serve our customers. We would not use that just to offset our bills, but would feed that solar electricity into our community. The next program is a battery energy storage or a solar with battery energy storage rebate for residential customers.

And this is a pilot program to really do research and development around identifying the best demand response programs that we could put in place or can we develop programs to utilize customers' batteries during emergency situations to kind of develop that out, having this program in place and covering the cost for those customers is a fairly typical way to test that on our systems and make sure we can get our internal system set up, but also the customers will be benefiting from that and we would be able to create a program that will come out of the research for a demand response program that could potentially be funded fully with this $9,000,000 Our timeline for this program would be three years with an annual review, and at the end of it, if there's money left over, we would be continuing a demand response program. Additional funding, this is what was brought up with our last item, was to increase the funding for our energy savings assistance program on our mobile home and multifamily direct install programs to accelerate energy efficiency. Again, 2,000,000. We would expect this funding to be spent within two years. And the next program is $1,000,000 for expanding our Riverside University's research grant program.

Right now, we haven't been really offering that program. It's been a small dollar amount, which hasn't been productive for a lot of the research that needs to be done on some of the new emerging technologies after we had some input from our UCR representative. So really looking at $1,000,000 it would be a four year program. We would need to have the funds encumbered within two years between 100,000 and $500,000 grant award, and then they would have to be spent and expended with a project completed within two years if this program is approved. There were a number of programs that were considered and I just mentioned them here.

We had a Springs Battery Storage project, so this is a project that has been introduced by our Power Resources team. Doctor. Scott Lesch has brought it forward. We were going to consider funding this instead and of those costs becoming part of the rate program. But the working group didn't really want to do this program because they feel even though that would be a rate benefit, it really wasn't getting out there in the community programs and offering programs directly to the community.

The demonstration facility project, again, we can get that same benefit through the solar for parks and libraries parks facilities and libraries. This would have been a demonstration project, but we can get the same value out of those other programs. It was suggested to refund the $34,000,000 back to our customers, but after review with our city attorney's office, it was determined that that is not legal. It's not a legal expenditure of the public benefit funds by state law nor is it legal under our charter to do that. And then the remaining part of these were some solar PV installations at various facilities, warehouses or over the Gage Canal, and those projects, we did evaluate them and staff at a very high level, are really cost prohibitive for the benefit.

And as far as the gauge canal goes, there's not a lot of solar that would come out of it without damaging the canal. So it proposed, we wouldn't be able to get the vehicles down to do the maintenance. We'd have to do it by hand. It would be very, very expensive to maintain that project. I did want to provide from staff that since the last working group meeting, we have really looked at all of our programs.

This year, it looks like we are going to spend all of our dollars that came in, so we won't be building on that $34,000,000 is what I'm seeing in my forecast. We won't know until around August once everything has settled, but it does look like, at the worst case, we're still only going to have $34,000,000 But we may actually be less than that, what we have moving forward. And the reason for that is we've been having really successful programs, not only with all of our regular rebates, but our mobile home and multifamily, but also the business outdoor lighting direct install program has been extremely successful with our business community. So that's been a very, very beneficial program and we were working with vendors who are being very aggressive with those along with our staff, with our staff team really getting them matched up. So what that means is that we may not have the full $34,000,000 but over time, other programs like these may be very successful moving forward and we may want to shift money out of something that's not working.

So what we do recommend as part of the Spending Plan is that program amounts that we're showing tonight need to be flexible over time because we really want to reallocate those funds, as Member Evans suggested this evening, to increase the Mobile Home Multi Family when we need to. We would want to be able to do that. But once these are all allocated into the programs, we would bring those forward with those changes. So our next steps, with the Board's recommendation, we will be presenting this conceptual spending plan to the City Council for approval. Right now we're targeting the June 16 meeting.

If all goes well tonight, we can take it forward that soon. We would bring forward a final spending plan with each program's requirements. So in other words, we'd have the first one will come forward with the spending plan where it sits and the phasing of when we're going to come forward to get the approvals for all the expenditures. So for example, we have the Residential Energy Storage Program. We had buildings,

which we could talk about a little bit more, and I mean a lot of money. But what I didn't see is any research and development money or any funding going to what I strongly urge us to focus on. And that is how we could use our resources to target more tree planting to provide incentives for developers so that there was dual plumbing and that we would have more water resources to actually support outdoor irrigation and our trees. Because at the end of the day, when it is hot, we use more electricity. When it is cooler, we use less.

And from everything I have read on this topic, trees remain the number one best macro effort toward reducing heat in an area. And I did include, by coincidence, part of an L. A. Times article today that addressed this particular issue. So I am gravely disappointed that the only allocation in this was measly $1,000,000 for UCR.

I don't think that's where those monies should be expended. I would recommend we have a percentage of our public benefit dollars every year go to providing support for the interdepartmental efforts we undertake to actually install the green infrastructure we need to use more water and to have targeted tree planting for the city to be able to actually maintain and keep those trees alive, particularly in poorer areas. I don't see any really big structural innovative ideas in this proposal. I see a lot of money we had to spend. Some of it I really like.

I like it going to mobile home parks. I would love to see more of this going to large childcare development centers who have large electricity bills as opposed to just going to our municipal buildings. But we need a percentage. We need to get real about climate, folks. It's hot. None of this is going to help that. And in twenty years, if our city is even hotter, it's going to be very difficult to attract.

Thank you, Ms. McKeith. Any other comments? Okay. Any comments from the board? Go back.

I have a couple, and I will get back to the caller's comments. I'm not gonna make you go back to the working list, the group who met. I appreciate everybody's time, especially David's because he came down and he's sitting here. But I made the comment when it first generated, and I will say it again as I sit up here. There are a lot of boys on that list, not a lot of girls.

And it turns out that your outputs change when you have a balanced distribution. So will say that and I will leave it alone. I think Melissa hit on a couple of comments that I totally support and a couple I don't. I'm very clear that public benefits and the usage of that is for the reduction of kilowatt hours, and why I totally agree with her about the heat sink and how trees are gonna be helpful in planting, I don't know how lawfully you use those dollars when they are not in proximity to a building that is then having the reduction in heat on the interior, so you're reducing the usage. If there's a way and she wants to figure it out too as an attorney, like, fine.

But I don't what I know about public benefits, I don't know how you do the heat sink, addressing without proximity to a building, so you get that kilowatt hour savings. I'm generally okay with supporting the city facilities because by the by default, it turns around and helps the collective. But there was on your pie chart side, it shows about 30% is going to share in low income. Again, no concerns there. I just wonder how many of those people might happen to live in the same building.

And if we're putting solar we did it at our HTC, Indiana. We've done it in a couple of places, and so it's slightly different but wholly supportive on putting them on child care facilities. It's not like there aren't a lot of them across the city. Some of them the city facilitates and runs. Some of them are sitting at other public agencies.

RCC obviously has a child care center. Some of those get turned around and used as cooling centers, so alternate locations. So I don't know what kind of data collection and looking, and it can be for the next 10,000,000. I'm not saying you have to go back and fix this now, of looking at what ends up being the oldest and youngest Mhmm. In the population and seeing what kind of coverage we can provide with for them because there are a lot of them.

So I just I think of Mount I think of Rubino Manor. I wonder how many of those people are all getting share, and maybe it just makes more sense to put solar on the roof. So things to think about.

So to I'm going to start at the end So Rubideau Manor or any of those low income housing, we can definitely add those to our mobile home multifamily program, make sure that those are getting targeted. We have been targeting initially not only mobile home parks, but also senior apartments, any place where there is senior housing, particularly low income senior housing. I think we're working on that with that mobile home multifamily and the expansion of the program will help to support even of that moving forward. And then as far as solar goes, we could expand where that solar goes for the $9,000,000 could be changed out to address those specifically, if we wanted to do that. I would strongly recommend that it be solar and batteries, because it's usually we don't I wouldn't want to just do solar.

I want to make sure that we have batteries and solar so that we're reducing peak load. Batteries are really, really needed at this point so that we can reduce our peak loads in the evening hours. So that's kind of the mobile home multifamily is getting there, but if we want to expand it, we can definitely take that recommendation forward to the City Council. I'm thinking possibly within that, the $9,000,000 for the pilot program, utilize some of that in On that the public benefit dollars for trees, it would be I've actually been reviewing that over today and since we've heard these similar comments previously. It's very, very difficult.

We have to tie the dollar to a cost effective expenditure to lower kilowatt hours. So I don't know of a way right now to estimate the kilowatt hour savings of one tree on a street. So that would be I'm sure there's a way to do it, but I don't know what it is. We do have the research dollars and that could be a potential expenditure to develop what that would look like.

Probably is already in there. You guys just ask the machine.

Yes, we could probably ask So a we could come up with something if we wanted to do that. We already do keep we do have our Tree Power program and that program expends quite a bit of money every year. It's very popular. It does produce the, as we said, very cost effective for the energy savings as we go forward with that. And we will say the city has received rebates for trees, but again we rebate them, we don't plant them, we don't maintain them.

We can rebate them for the kilowatt hour savings, so we can provide a rebate for those. But I will say Public Works is the department that does that. They already have a grant where they're doing this study, so at the end of this year I'm hoping we have some insight from them. They're also going to be that grant covers a lot of tree planting that's going to be going on. Again, we can come back and revisit this maybe at the end of the year or when we do the energy efficiency programs on an annual basis and determine so either you could designate something now or make a recommendation that it be included in one of the programs that's here, or we could again bring that back later this year with a staff recommendation based on whatever studies we get back.

I think it's important that public works continue what they're doing, and I'm sure 14 has benefit and tie in all of this from I the sustainability think it's staff's responsibility to bring us the recommendation on whether or not you think you can use public benefits monies to do these things. And frankly, public works should be trying to get as much money from anywhere that they can, including your carbon trade money, to do and eliminate heat sink. So that's a the departments can fight accordingly. And were coming back and tell us what you're going to do. Thank you.

You. Other comments? Gary first.

Thank you for the presentation. Good presentation. Thank you to the working group for their efforts. I appreciate how much time and energy goes into that. So really appreciate the the community's support and efforts in that regard. Just a comment or an observation and a question. For me, it seems like of the programs recommended, six of them, there seems to be a really strong or heavy emphasis on solar and battery storage. For me personally, I'd like to see a little more diversity or diversify the options. It seems like a lot of emphasis in one particular category. I would think there'd be additional options or a wider playing field.

But that's just my own observation. When it comes to these batteries and the storage capacities that you guys are look it's being recommended here. And from a dollar perspective of the 34,000,000, a lot of it's going towards for the program, seem to be going towards this. Everything has a work life expectancy or a life expectancy. Batteries all die, rechargeable ones, storage ones. What is the life expectancy in today's world, with today's technology, what's the life expectancy of some of these batteries we're going to invest all this money in, if we know?

I don't know off the top of my head. I do know that they could end up I know on a utility scale you're looking at replacement in about ten years, but you've already built a lot of the infrastructure to install them, so it's a much less costly endeavor to do a replacement versus a complete install at the beginning of the project. The battery storage program, I will tell you, for example, right now the rebate that we're proposing actually pencils out to be the benefit that the utility also experiences both in avoided cost for distribution system upgrades combined with generation, you know, less electricity that we have to buy at peak periods. So there's a benefit to having the program that actually pencils out for all the customers to have that rebate program, so the age may not be as big of an issue. But if you are looking at a battery storage program, you're spot on.

They may not last they're not going last forever. It's like solar panels last about twenty to twenty five years. But your inverter usually only lasts five or six, so from experience.

Well, again,

I would encourage diversifying the palate of autism Thank

you. It's a great suggestion. Thank you so much.

Thank you. Tom?

Yes, thank you. Since I was part of the working group, guess I have to say I generally agree with this. But I do think from a perception standpoint, does look like there's a lot of half of the money is going to city facilities. And so we need to make real clear what the benefit is to customers broadly. And certainly community centers, libraries, provide cooling centers, the things you described.

But I think we need to be real clear about that. And I also think that we need a commitment from the city departments to whom this money would go to actually do the work. Because I don't want to allocate $17,000,000 and lock it up thinking oh, Park and Rec, libraries, whoever else is going to do their share to spend the money. Because this doesn't pay 100% of the cost. It's a part of the And so I think we need a firm commitment or this ought to be discussed at the City Council that perhaps somebody in the city other than David Garcia is responsible for implementation because the utility provides the funding, the utility has its part, but it doesn't maintain the community center or And the I don't know what the Office of Sustainability does quite frankly.

But maybe this is an area where that function could help assure that the work actually gets done and the programs are there. And the maintenance for these facilities is done. My understanding, for example, is the solar system that's at the Orange Terrace Community Center no longer works. So doesn't make sense. So there needs to be a plan to make them continue to be functional.

And as I say, there appears to be a heavy emphasis on city facilities. That it's not the city I mean, customers benefit by the city's costs going down. But there needs to be some other hard benefits that we enumerate when you present this to the city council so it's more broadly viewed. The other one is this whole argument advocacy otherwise about trees. I know Melissa McKeith has got some very strong feelings about this.

I personally don't agree that this Tree Power Program provides the benefit that some people think it does. And I think it's worth, it's been in place long enough that it deserves further study and analysis of whether that half 1,000,000 or whatever spent would be better spent on other aspects of reducing heat in the city. We talked about heat islands. And there may be some areas of the community or the city that don't have as many trees. And perhaps those are the areas that we ought to target assuming that shade on a house reduces power requirements.

That we ought to target those areas instead of having this sort of creamy peanut butter approach that it's all the same everywhere. It isn't. And so that's where studying with UCR or others or public works has got a study going on that these things are linked so that we at the end of the day come out with something better than what we're doing now and just not doing the same old thing because we're doing the same old thing. So that's sort of my broad comment. But we did talk about one specific thing.

And I can't figure out where it fits. I think it's under four. We discussed the idea of targeting those customers that are uniquely impacted by the RTRP overhead construction. And what I mean by that is they're physically along the right of way. And so if we were to go to those customers and say well we're going to get you get something more than just the physical impact of that transmission line right of way construction is to install solar and battery backup on all those homes at the cost paid for by the public benefit funds.

And so where did that idea get consumed?

Or I don't

think we ever kicked it aside.

Right. That was looking at the pilot program, the $9,000,000 had come out of the working group. However, we can't target a specific neighborhood like that and specifically say that group of customers gets this benefit until we have a justification that's a benefit to all of the customers because the dollars need to come back out of the program. As far as energy efficiency by one customer benefits other customers by reducing energy load so everybody gets to save a little bit of money on energy costs. That's where energy efficiency comes into play as it helps with our loading order and so in that particular case, after this was reviewed by the attorney's office, we had to modify the program and kept it with the intent of still providing that battery or the battery and solar, but we are going to pivot it to be a research development project that also is going to look at how we can utilize those batteries and solar in heavy penetration areas to benefit through a demand response program.

For $9,000,000

That's why it will potentially be one of the programs that if we don't have enough money could be a program that we could reduce or we could reduce these dollars.

Well one point that I would add to it is that any customer who has a 215,000 volt overhead transmission line built next to their house would qualify for this program. I mean clearly. And so up in Orange Terrace, Orange Crest, whenever, when those lines are being built up Alessandro, all those customers would benefit. But the customers that do have that line coming are well identified and could form the first step in analysis of essentially a microgrid in that area. And so I still think that those customers need deserve to have some consideration to this because right now they don't.

And as I say, you put a 215,000 volt line next to somebody's house, put in solar. No problem.

I will have to take that comment but

So I mean it's more than just a comment. I think that we need to if we're allocate $9,000,000 for something that's as fuzzy as you just described, I think we need to make it more specific. The way to start that would be to say we're going to use we're going take 200 or 300 homes that are in this unique situation and we're going to target them.

The situation that we have to target the dollars to, again after this, it's got to be so that it is studying a circuit for high impact of batteries and solar for a demand response program. So regardless of where it is, again, we've already got quite a few circuits that are close to this and would benefit from a study on this and then those dollars could pivot to a demand response program that could benefit any customer who has batteries or participates in a demand response program and we could potentially be taking those dollars that are remaining and putting them into that program to pay for that benefit. But again, this is going to take study and we do have to develop this program out. This is one of the programs that will take a much longer time to develop regardless of how we take it forward, because we also don't want to have predatory vendors going in. So we've got to there's going to be a lot that has to be built around any program related to those dollars being spent before we bring forward that final program.

Board Member Evans, we actually had discussions concerning and we are very attuned to your concerns on that. But you can't just earmark certain things that are unrelated. But we fully understand your concerns. Fully understand them. And we will do our best to execute them.

Okay. Well, it seems that this since item four is the single large well, got 12,000,000 going to the EOC and the community centers and so forth. But that's the next single largest expenditure. I think it needs to be broken down to say we're not going spend $9,000,000 on a research project because you've got a million dollars down here below under the category of research. So of that $9,000,000 how much do you expect to spend on the research necessary to go out and actually implement something to test the premise or the theory of the research, I guess.

I have to admit, I don't know right now and that's part since we did do this pivot actually fairly recently. If this is approved, it's fairly recently after we have the discussion with the attorney's office, this is going to be part of the program development before we bring it forward. So if it's approved, as stated for now, I can take these comments, we'll put them in there and we would come back with a how this is going to be detailed out. But I do have to do more research and my team has to do, along with the rest of utility. We need to pull in energy delivery, we've got to pull in power resources and actually identify how long that would take.

So I will admit we don't have a lot of details particularly on that program.

Okay. This isn't the NREL thing,

Rehabilitation? No.

No. Okay.

Absolutely not. Okay.

That's all the questions I have at this point.

Thank you. Other Gary? Yes. My

under to the last comment made, my understanding with reading the recommendations at the end, you're recommending or the staff's recommendation at the end of this, the vote's going to be not just to receive this report, but to recommend to the city council that tomorrow night they approve these programs.

Well, not tomorrow. It'll And be in we will take all of your comments and add it to the report and the slide presentation that gets presented to counsel.

But it's not going to come back to us before then?

Not before it goes to the City Council.

Thank you. Thanks. I just want to confirm that.

Thank you. Any other comments? Okay. I have a few. Okay. So first of all, Ms. McKeith mentioned a million dollars for UCR, but this is just for research and can go to other

It can go to it's not for UCR solely, it actually can go to any university or higher education in the city that submits. If we have a grant to offer a program, a research program to offer, any of the universities would be eligible to receive the funding.

And you've had something similar to this in the past. Have other universities taken advantage of that besides UCR?

It's predominantly been UCR, but we have provided grants to Cal Baptist and I'm trying to remember if anything went to La Sierra, but I can't remember off the

top of my head.

It was before I started here.

Okay. And then one question I had was, you know, there's a couple of mentions of, and I've seen this a few times, of solar like over parking garages and whatnot, where the solar panels are working just fine, by the way. They are extremely resilient and last as long as you want. The problem is the inverters. Inverters go out, you know, that last seven, eight years.

Yes. And

then there's not maintenance of that inverter, you know, which isn't an I mean, it's a big chunk of the cost, but it's not it can be done. Is there capacity for maintenance of these things with the public benefit dollars or it has to be a new thing?

Typically, we don't pay for maintenance. It's a rebate and it is up to the customer to maintain their equipment. So if we were to include and create a rebate, we would have to create a rebate for inverters and then I have to the team would have to come up with a way that that inverter actually counts that energy efficiency or that solar production, which was probably already captured in the original rebate program. So typically we're assuming when we give that initial rebate that we are going to that the customer is going to maintain that facility for the life of the facility.

Let's put it that way. Okay.

Yeah. And I I I'll end with a comment about batteries. It it's really kind of striking what is happening in the last few years. Like, there were almost no batteries on the grid at all. And tonight, like, 5% of the entire power of the entire state is provided by batteries. We almost set a record tonight. I wanted to be able to say it. It didn't quite happen. We're like 1% short. We did set a new record for solar today.

It's it's really striking and they're getting safer, cheaper, and more cost effective. And we're just in a new phase where energy is actually cheap. If it comes from solar, we just need to be able to store it. And so that's why there's so much emphasis here on it. I yeah. I don't know. I I also wanna make this broader comment that this is a sort of a weird thing because I don't I don't think this is how I would spend $34,000,000 of the utilities money or ratepayer money if it wasn't required to spend it. Right? Like

In these buckets. Yeah.

Yeah. But this is a, you know, forced upon us bucket from which we have, you know, very limited options and whatnot. So we have to keep that in mind. To your point, Tom, communicate this, you know, to the community that that is part of the constraint, right, that it's not like yeah. We're sort of constrained here. Not it's partly out of our power. Right? So yeah. And if if we could somehow, I don't know, put a positive spin on that but also communicate that

The

importance This wasn't of just something that utility decided all of these things weren't something the utility decided to do on its own with ratepayer money. It's sort of forced a little bit because of these policies. Okay. That's all the comments I had.

Thank you.

Do I hear any motion?

I'll move it.

Okay. Anybody second?

I'll second. Please.

I'm sorry. I did want

to just one last thing. Again, it's item number four. The 9,000,000. I think that that needs to be separated such that no more than 10 of that be spent on hiring a research firm. But the rest of it be spent on installation of physical facilities to actually provide the benefit we're trying to provide. I just hate to see because you keep referring to it as a research project. And maybe that's what's got me hung up. Because it's not $9,000,000 for research.

I agree. It has to be research and development. And then at the end of it, it's going to whatever is left. So we do have to study it, we do have to see how it works with our systems on our internal utility systems. There might be requirements to implement these with some system upgrades internally to RPU. We'll have to decide how we want to move forward with that. But I agree, if we want to limit it to 10% for the study and then come back with the report of what the rest of that program is going to look like, we can include that as part of the recommendation from the board.

Can you to the recommendations go Well, on the

would feel much more comfortable about that. I guess I would ask to make her the motion if she would agree to have four be like 4A and 4B. A being the pure initial. Oh well okay I'm looking at a different page. I'm looking at the summary sheets. The chart that showed all six of them. I don't know what number that is.

This one.

12, yeah. And four, have it be, like you say, four A, doing this research analysis for maybe 900,000 whatever and B being the implementation with an estimate at this point of remainder, but that would be adjusted based on what the outcome of the first study is. And that your timeframe not be six years, you'd have one year for A and then the rest for Part B or whatever.

Can I ask a clarifying question? The research is not independent of the hardware, right?

The No, point is to we do have to have hardware installed with the so there will be we would be able to, I could say, 10% probably for bringing on a consultant to help do the study. But there is going to be hardware that needs to be deployed as part of a rebate for our study area that is going to deploy solar and batteries. And so, again, as we develop the program, we can come back with those recommendations in that general area, but we may need the amount for the study and then a certain amount for infrastructure to do the study that we hope to install and then there would be a program after that. Does that make sense?

Okay, well and then the initial study area could be that area which is adjacent to the RTRP transmission line, right?

It could be.

It could be any of our areas to study.

Okay. Well, who's going make that decision? We're going to have

to look at the grid and see where we can do those studies, where is going to be the best place, because we do need to be able to actually do the study if it's there or someplace else.

But you'd come back to the board for that?

Yes. What I'm trying to get to. Can you go to the recommendation slides, the ones that actually have the words that the Board will recommend to the City Council?

Oh, that one. The very end one.

The ones that actually That one.

That doesn't include this stuff.

But that's all we're recommending. That's what I'm trying to get to. All of the numbers that are in this report are going to come back in some form or fashion asking for expenditure. All of this is theory. Barely, but yeah, provide staff direction.

So within the direction that comes back at this point, if staff has not heard you, I don't know what to tell you guys, but they should come back with a recommendation on where the research piece is going to go and what percentage of that is X versus Y and how much is left in that bucket of $9,000,000 because depending on the catchment, depending on where you go, we'll decide the infrastructure costs are going to change exponentially from that point?

Potentially, yes.

Okay. I stand by my existing motion. Okay.

You are allowed to offer an alternative motion.

No. I I think with that clarification because but I guarantee you that well, I I can't guarantee should not I shouldn't take that kind of a risk. But I would be willing to bet that at the city council meeting somebody's gonna hold up chart number 12 and say that's where the money's gonna get spent. You can't just say this generic thing and then oh by the way there is an actual breakdown. So that's got to be Articulated better.

That's part of the public record, part of the public discussion. In some respects the way this is structured, nobody's going know how we're going to spend $34,000,000

They've got a general plan and that they have to come back to us for every expenditure. It's guardrails.

This gives us our direction, our plan and we will be coming back with all of the programs for each one of the six items here.

And recommendations

in California.

Potentially new recommendations within the boundaries of a program or if there's something that we determine doesn't make sense moving forward. And again, it needs to be flexible because after the budget ends this year, we may not have $34,000,000 So we may have to adjust the budget, the dollars in an individual program simply because we will not have those funds.

Okay. And the first one you're going to come back to us with is item number one. Correct. And item number multi family

Yeah, can bring the multi family and energy savings one that quickly as well as long as we can get the agreements

through. Okay.

Well, I think we have a motion and a second. Roll call, Please vote.

Seven yes votes, one no vote. Member Montgomery. Motion carries. Thank you.

Thank you.

Thank you, Tracy. Okay. We will now open for public comment for item number 10.

Public comment is now open for this item. Call (951) 826-8688 and follow the prompts to access the meeting.

Okay. And we will call for a presentation of Item No. 10 by Brian Santarejo.

Good evening, board chair, Siana, and members of the board. I'm Brian Sinterior, assistant general manager of finance and administration. Before you tonight, I have agreement for the water cost of service analysis and rate design project. The previous water cost of service and rate design project was completed in 2023, and that supported our last well, our current water utility five year rate plan that had an effective date of 10/01/2023 with a final year effective date of 07/01/2027. Next summer, we implement the fifth year of the five year rate plan.

So we're thinking ahead, and we know we need to update the water cost of service analysis and rate design to plan beyond the current five year rate plan. So we're before you tonight with that agreement. So the water cost of service and rate design project. It's a comprehensive review of all rate structures. We forecast the revenue requirements and the revenue requirements are our projected costs, are really our next five year plan.

We actually look at ten years, but it's really a five year financial plan. There's an equitable allocation of costs among the customer classes that are insured in the cost of service study. It complies with cost of service principles and is in compliance with Proposition two eighteen and other legal requirements. We also include, and I'll talk about it a little more, a water utility rate trend study. So we're looking at rates in our water rates in Southern California, California and across The United States and see how they could maybe be applied here at RPU.

We look at oh, we do a detailed customer impact analysis. We don't necessarily want to know what maybe they how the average customer is impacted. We want to know how all of our customers will be impacted by the next rate plan. We will be considering a recycled water rate design, even budget based rate design. An elevation charge will be considered, and definitely the water treatment plant rate design.

So things that will be considered as part of that revenue requirement, that next five year financial plan, is the changing industry and regulatory requirements, the impacts of drought, conservation mandates and also treatment requirements. We have operating infrastructure costs, including our aging infrastructure. And it'll be it's essential to identify the cost of service in the cost of service, the city's customers, and ensure equitable allocation of cost responsibility, sorry, among customer rate classes. So really, properly allocating the cost to the rate classes. Alright, so we issued the RFP for this agreement in December 2025.

In January, we received four proposals. In February 2026, RPU staff, in collaboration with Citi Purchasing, completed the proposal reviews, evaluations and scoring. And that scoring consisted of four categories. The first was qualifications project approach, which was 30%, experience and references, 5% and the overall proposal, 25% and then led by purchasing was the proposal pricing scoring. So Corollo Engineers received the highest score and we're proposing an agreement with Corollo Engineers this evening.

It was really based on their California experience, including recycled water rates and budget based rates, among many other water rate plans they've completed in Southern California. They have experience with the city of Riverside providing detailed knowledge of the water and wastewater utilities. And one thing we specifically ask for and they can produce is a comprehensive and complete bill impact, statistical analysis of all rate design impacts to all customers. So that helps us identify the impacts to every customer, but also accurately project our revenue forecast. So here's the ranking.

Again, there were the four consultants. Corollo Engineers out of Riverside, California finished with the number one ranking and the highest point total, 885 points. They do have the total cost of $271,960 They were not the lowest proposing consultant.

It's a fine job, but not the greatest job to justify those rates. It's because we have cheap, cheap water. And so our rates should actually be lower than they are, and they are not lower because we pay the general fund transfer, which the superior court has already said is unconstitutional, and we have all of these other costs that get loaded on to transfer monies to the general fund. The city uses the water utility to subsidize the general fund. Some of you may like that. I'm not even saying that's necessarily wrong, but a lot of people think it's not lawful under 02/18. So there are gonna be some real reckonings this time around. So let's pay attention. Corolla is a good company. Glad they're doing it.

Glad they're looking at budget based rates. I think they're much people are not gonna be able to afford as much outdoor irrigation as we once had, which is why I keep getting back to we need to come up with a process for the city watering trees. And by the way, cities all over the state use public benefit monies for trees. It's absolutely legal. The conversation earlier about suggesting it has to be near a building was nonsense. I'd like to use a stronger word, but I won't because I try to be civil. It is nonsense. If you can lower your city's heat index by eight degrees because you plant trees, you're going to use less electricity. It's simple common sense. Thank

you, Ms. McKeith. Are there other others? No? Comments from the Board?

Pete?

Thank you for the fine presentation. I know I and others up here on the dice appreciate you getting in front of this sooner rather than later. We had this discussion last week, and it's nice not to have the fully baked cost of service analysis shoved up in our face at the last minute and say here it is. Please approve it because, well, that's not the right way to do things here. So I appreciate you having a longer time frame and getting this process drawn out enough that we can have meaningful input on final product.

That's a good thing. As far as the analysis itself, it really will depend on what the numbers show and I'm glad this company has been around for a while who seems to do meaningful work will be helping the city kind of with its guidance to come up with fair rates. I like the elevation charge idea. The fact that people up at the top of the hill are paying are basically being subsidized by people down at the bottom is not right. And I I think that needs to be addressed.

So there's a lot of positives here and not a lot of negatives. I support this this idea and hopefully it will generate meaningful output at the end of the day to get to where we want to go with the next round of water reads. Thanks.

Thank you. Any other comments? Tom?

I just have a question. Corolla did the last one, right?

That is correct.

But you mentioned here they're going to provide training on how to use the model. Didn't they do that the last time? And if you have the model, why do you need Corolla?

That's a very good question, Board Member Evans. A lot has changed. Well, we anticipate a lot to continue to change by the time we finish the report and finish with the model and the rate design. As the caller mentioned, There's there's little Ms. McKeith. Thank you very much. Mrs. McKeith. Mrs. McKeith, thank you, I knew that.

Mrs. McKeith was spot on acknowledging the legal cases out there right now, so we're following those, and they provide the expertise on that. They really they're out there Corolla is out there in the industry doing these studies and making sure these studies are legally compliant with Prop two eighteen. One of the requirements of the cost service studies is to show your work, and Corollo is really an expert in that. I believe we nearing 300 pages, I believe, in the last cost of service study with the appendix.

So it's very comprehensive. They continue to update their model. We also have new staff. They have new dashboarding. So we are very excited that they did build in build in some hours for some training sessions because we want to get into the model too and make sure everything looks right to us. So does that help answer your question there?

Yes. Thank you.

Okay. Any other comments?

I'll move the item.

Second.

Yes. Okay. Roll call, please.

Please vote. Motion passes unanimously. Thank you.

Okay. Thank you. And we're out of order. Sorry. That means something. We're going in a different order than on the agenda. We're now moving to, item 13. Do we have any board or staff communications to report on for item number 13? Okay. Seeing none. Thank you. Are there any items for future consideration for item 14? Okay. So we'll now turn over time over to David Garcia for the general manager's report.

Chair Sienna, members of the board, I just want to again thank the Public Benefits Committee, Member Evans, Chair Sienna, members of the public. The mayor thanks you. The city council thanks you. City manager thanks you for the extensive work that's been done. And I wanna thank miss Tracy Sato and her team and the effort.

She's been a lot lot of long hours and effort to to get us here to this point. I'm happy to see that we're we have a an item to bring to city council for consideration and discussion. And as we discussed, is a lot of money, $34,000,000 that is sitting there, and we wanna put it to beneficial use for the community, for the citizens of Riverside. So it's been great to to to get here, and it's taken a while, but I've seen the the fruits of all the efforts, all the comments, all the studying that's been done, and there's a lot more to do. Like miss Sato said, we'll be bringing back items here individually for consideration, and those will be vetted before we spend the dollar.

So that's a great accomplishment for the utility and for this board and for the the working group that was out there doing doing the heavy lifting. The other comment I wanna make is we don't have a board meeting later this month because of the holiday. So that means that June will see some heavy agendas coming through. So although we did have some very detailed topics tonight, I expect to see the next couple meetings to also be at that level. And we're there for you when the items are released for any comments or questions or additional information that you need. And that's all I have, Chair.

Thank you.

Okay. Thank you. This meeting is adjourned.