Transportation Board - Regular Meeting

OK, I call to order this August 26, 2026, special meeting of the Board of Public Utilities, our annual strategic planning discussion. Thanks, everyone, for being here. And we do have four board members. We have three board members here this evening and one remote, and one very remote who's not likely to be able to join us. So first item of business is public comment. Do we have any public comment in the room? I don't see any. Do we have any online?

Thank you, Chair Gibson. For members of the public who are joining us tonight on Zoom, when Chair Gibson calls for public comment, please use the raise hand function.

If you are participating by phone, please press star nine to raise your hand.

If you'd like to make a public comment now, please raise your hand. There are no hands being raised.

Okay. Well, I will take this opportunity since I'm a member of the public to make sure that everyone knows that the gas rate increase was passed by council last evening and the ECA was approved by council last evening. So now we can go back to real work.

I don't know. You must have logged in somewhere.

We're not asking you to leave so that you can come in by the remote access there. Okay. There will be no more public comment. Is there a motion to approve this giant agenda tonight? speak at once. I move that we approve tonight's agenda. Thank you. While Eric catches up, I'll second that. All in favor?

Aye.

Thank you. Motion passes 4-0. That takes us to strategic planning. And we'll start off with Philo. And

can introduce our facilitator this evening sure so board members and my senior management team we have kathy darwin here tonight to help facilitate our strategic planning we started out i had gone to a seminar in Boston with the APPA on strategic planning. And one thing that's frequently done among all the organizations that represented there was a bunch of public power agencies was having an organization do a SWOT. I worked with Kathy. We had done a SWOT about four years ago in 22. And the SWOT at that time was more related to the aftermath of COVID, the great resignation, we had a lot of staff turnover. So things were different then, just to kind of give you a framework. So we shared, we did a swap with my newer team because most of the managers have retired, not that every, I think Clay, you were not quite in that role, you were in an acting role, I think. So we pretty much have turned over our senior management team. We've had employees here for that over that time, but not in the roles they're in. So we shared that with you, and you got to see a complete unedited version. There are some surprises for me in there, as well as some board members. So we're going to walk through those as we go through the SWAT, too. And I invite the senior management team members to jump in and clarify if the board has any questions of those so we can take the reality we have in front of us. And then the other thing we started looking at, I know talking about data needs but we also kind of looked at performance measures etc that you know a lot of our objectives in our strategic plan some are just ongoing items and others are measurable items and so we divided it in half and Obviously, we can talk about if we need to move one to the left or right of those columns, but we want to take an attempt to do a little workshop where people break apart, have a discussion, what metrics or measures or data that we need to collect to make measures, and then we come back WORKING GROUP WILL NEED TO HAVE A LEADER AND MAKE A PRESENTATION, AND THEN WE CAN HAVE A DISCUSSION COLLECTIVELY, AND WE AGREE WITH THOSE OR HAVE OTHER SUGGESTIONS OR IDEAS. SO I THINK WITH THAT, I'LL TURN THIS OVER TO KATHY TO FACILITATE THE DISCUSSIONS FROM THERE, BUT I JUST WANTED TO KIND OF GIVE YOU A HIGH LEVEL OF WHAT WE'RE PLANNING TO DO And one breakout room's gonna be in the DPU conference rooms. That's where we can bring Jen Hollingsworth in the fold where that work group can talk to her and work on the performance objectives.

Welcome back.

Thank you. Thanks for having me back. I am really looking forward to this evening because we're gonna really be focusing in on those areas that I believe are going to give you more information as a board and also provide really strong talking points for the management team as they come back and provide information. So how does it feel to be in this room? This is a little different, different seat, different arrangement than we've done in years past.

I think it's better.

I like it better, more interactive. That's my objective, interaction tonight. We're going to have a conversation. I said earlier that I really like what? I said a word I really like? Noise. I really like noise. I like it when I hear lots of people talking over each other. Please, please do not wait to be called on tonight. This is your meeting. I just want to remind you of a couple things. First of all, would you guys mind passing that down to the end for me? Thank you. This is your meeting. So if it's not going at the pace that you want, or if there is a discussion that you would like to have, just call for it. Just say, let's stop for a second and back up. Take at least one break. We're going to see how things are going to go. Bilo did say we're going to do breakouts. Anyone like a breakout group? We're going to have a good time. We're going to be able to have a smaller conversation and walk away with some action items. So we have two objectives. You have a packet tonight. We're really going to use this packet. We're going to wear it out a little bit. First objective will be to go through the SWOT. did not edit did not remove any of the things that we didn't want to talk about or explain or that we didn't know how to resolve but we have as a management team they talk through every item in the SWAT she spent a little over half a day talking through it working through it understanding the comments putting them together into a summary, which we'll get to in a few minutes. So that'll be the first half. The second half of the meeting is really going to focus on the objectives. I don't want to discount the importance of focus areas and goals. The focus areas and goals have been fairly consistent over time. So we really want to get really clear on the objectives. Are our objectives in here actually ongoing objectives, or are they measurable objectives in which we can look at specific data to say how well we're doing, where there may be opportunities to focus in. So, only two objectives for tonight's meeting. Yay, can I hear a yay for that one? Yay. All right, thanks, Clay. I appreciate that. So with that, let's take and turn to page two, back of the agenda. Question.

You said there are two objectives for tonight's meeting. What are they?

First objective is to go through the SWAT. Second objective is to look at the objectives. Those are the two objectives. So, the SWAT. Now, what I want to point out is that Vice Chair Huebner did send in comments. He did quite an extensive review of the SWAT. I have notes. I'll make sure I point them out. We also have copies of his notes if anyone would like a copy of that.

And my keen powers of discernment tell me that SWAT is for strengths, weaknesses, opportunities, and threats. Correct.

I can really confuse you, because in my company, I don't call them slots. I call them rocks. So I could really confuse you, but I won't. So would anybody like a copy of the comments that the vice chair sent in prior to the meeting? I'm going to pass them that way. All right.

Sorry, were these email?

I can email that.

Jen, Philo will email that to you right now. And it will be timely because there were no comments from the vice chair on strengths. I want to just remind you that strengths and weaknesses are internal to the organization. So these are items that we have more control over. We may have more opportunity just within our individual departments or the department as a whole to make shifts. When we get to opportunities and threats, those are external and I'll remind you of that at that point. So let's talk about how we did this. survey that the management team participated in. They all completed the survey. All of their ideas are included on the right hand column, the related comments. The left hand is just giving it a subject title. We just put it into an affinity diagram to give us a little more structure around looking at what are the strengths. So when you look at this page two, and we look at the themes, strengths in the department, experience, qualified and knowledgeable workforce, leadership culture and ethics, providing good quality service, confident financial management, and partnerships. And as the management team talked through this, there was a lot of consensus. You'll see a lot of the comments on the right hand side really spell out the specifics. I would ask the management team to jump in if there's a specific topic that you want to pull out and share with the group, please do so. Very positive overall, five themes that were very positive as it comes to strengths, especially when I think about the work that we did last year, if you remember, around the visioning and the culture of the organization. Comments, questions about specific statements? Yes, sir.

Two comments, maybe three. First, when it says under leadership, culture, and ethics, it says competent leadership and governance, which I don't disagree with. But I think we need to recognize that we have three new deputy utility managers within the past year or so. So the depth there and the experience at that level is still developing. It's not particularly seasoned yet. So it's a factor. I won't say it's not a strength. I won't say it's a weakness. But it's a factor. Second item down under competent financial management. The theme here says competent financial management. That's a little different than where we really are. It says strong financial strength. And I'm not sure I would agree with that if one looks at how low our reserve balances are pretty much across the board. The gas fund in particular had, at least until we heard something a little different last night, negative cash flow, negative cash balance, and a low reserve balance. It actually now has a slightly positive cash flow for last year. That doesn't sound to me like we're in really strong shape. I don't feel we are strong. I'll probably comment later as we go through it. I think that's an area that probably needs more attention than it has gotten in the past. Ability to obtain project financing to slow needed rate increases. I'm not so sure about that one. We've been able to obtain project financing. I'll just leave that one for you.

Can I just ask, what exactly does that sentence mean? Project financing to slow needed rate increases. I'm not quite sure I follow.

Anyone in NAMSHA want to add to that? And this is whenever you do kind of rate models and so forth, Build in some financing so that you don't have to pay as you go. Come up with all the cash to build a project. We've been obtaining pretty much no interest, 0.05% on water and wastewater projects. And that has mitigated the need for higher rate increases.

In those two sectors, yeah. Can I also add that? So, like, we have to go, we have to be ready with turnkey projects, like shovel-ready projects. We go to the State Office of the Engineering, you know, we go in front of the Water Trust Board or, you know, the Water Board, and you have to be ready. And you have to demonstrate and prove a readiness that if they're gonna fund this project, you know, it's not gonna, it's not gonna get mired up in a lot of problems. So when you look at our ability to go from a proposed project to actually having one completed, I think you would see Los Alamos at the top of the list in the state, being able to fund a project, get it up off the ground, and complete it. We constantly get positive feedback from the State Office of the Engineer about that, and the Water Trust Board, that we're ready, we have a financial match, because a lot of these we have to match. There's a grant match portion. And so I think these two, although our situation seems dire our track record has been good um yeah it's i think especially with the gas fund you know we've kind of kind of come in to a cul-de-sac here or we need to to make some some changes i just suggest on that bullet it sounds like it's really water and wastewater projects so just I mean, we've done well on the gas system in the past, but these last few years, it's just, you know, all kinds of funky things have happened, and it's just sort of depleted our reserves.

Well, the interesting point of the three comments that Chair Gibson pointed out is if you turn to page three, they also become weaknesses. So not every strength is a strength that stands all by itself. There's always opportunity for improvement. And I think that's what the management team called out. So you'll see that very first line, revenue shortfalls, starts to speak to some of the weaknesses that the management team identified in going through the SWOT.

Are we going to move to that page now?

Not yet, but I have a comment on that. We'll stay on strengths for just a second, but I also want to point out that I don't want to lose the comment regarding the confident leadership, because that also is addressed under workforce as a weakness. Recent retirements have resulted in a loss of institutional knowledge. So it's interesting how some things are perceived as a strength, but then when we dive a little further into it, it can also be a weakness. So before we move on to weaknesses, though, let's talk about any other strengths that we need clarity around.

Can I go back to this, these two points, because this is an interesting, it is interesting to compare, you know, what we've gone through with the gas rate increase with what we're saying here. We're rare in New Mexico, a municipal-owned gas system, there's what, Two or three? Not many, yeah. There's a reason for that. It really is difficult to absorb over the few customers, and we're the smallest, I think. It's Las Cruces and Gallup. Is it Gallup?

I think it's Gallup. It is Gallup.

We're the smallest of the three. We're the smallest, yeah. It's hard to financially... of hold that up with all of the sort of volatility and just the many difficult things that go into owning a gas system. So it's just something to consider with that particular.

I think gas is going to be, seems like gas is going to be one of our major challenges.

So just a quick comment. On several of these topics where you have two sides of the coin and some aspects you see a positive and the other you see a negative, is there a need to be a bit more specific in the language? You know, so... So it doesn't look contradictory. For example, in the positives about transparency and communication with the public, that's probably more with respect to day-to-day operations and dealing with any issues as they go, as opposed to some of the more recent issues with respect to rate increases. and other changes that have happened that the public sometimes doesn't feel adequately informed over. Anyway, we just might want to be more specific in the language about where you think the positives are versus the negatives. Thank you, Jen.

The beauty of the SWOT is also a deterrent to it because it actually is taking the actual words that came from the management team from their day in and day out, what they're interacting with the public, with their team, with the industry as a whole, and putting it on paper. And you can see the conflicts that you run into every day, right? Well, we have confident financial management, and on the next page, we have a revenue shortfall. Which one is it? Probably both, right? Yeah. So I think, to Jim's point, yes, we could get real specific with the warning. What we did is literally took that right-hand side straight from the management team, what they're observing from their positions. And remember, a SWOT is an internal resource. It's something we use to really build on those objectives. So while I realize in this case it is public information, it's for the intent of internal use and building in strategic. So other comments about strengths, any wording changes that you do want to make before we go on to weaknesses? Let's jump into weekly.

This might add, I don't think it's necessarily that we need wording change from the board. I think we just want the board to understand what each management team member is experiencing. So I think it's more of, if you don't understand it, we'll try to explain it. So it's their words, we didn't scrub them to say, this is a corporate spot. We just put all the words on the paper and and then grouped it into the categories. That was the extent of what was done.

Perhaps another way of looking at that is wordsmithing the SWAT doesn't do us any good other than the discussion that might go into that.

It's a discussion to understand where the team thinks they're at. That's important.

And that makes sense. And I wasn't suggesting that we have to be overly detailed. It's just that if things look contradictory, it's confusing. And that makes planning hard, right? So it's good to make sure that we understand the context for some things.

I appreciate what you're saying. I think it's an awareness of there are contradictions. And you'll see how real the data is on on the next page, turning to page three, weaknesses. And one of the first comments that we received, yeah, on page three, that Vice Chair Hinder shared with us is if you just scoot down to workforce culture and recruitment. We're gonna call out the elephant in the room right away, okay, and we're gonna talk about it. Read that first bullet, everyone. And I think the comment that the vice chair made was that it's as important for DPU to deal with, good for DPU to be aware of this, that it was news to him. I think he's absolutely right. It has to be dealt with. But what a great opportunity that we even know that it's out there. Management teams spent quite a bit of time talking about it. And talking about not just about what was going on, How do they step into the situation and try to redirect? And I don't know if anybody wants to share a little bit about how we discussed that, but without going into real specifics, but it was a long discussion about making sure it's addressed.

Any comments on that? You're in the field.

Yeah. Yeah. And I mean, you know, I'm not going to sugarcoat it. Guys can be rough on each other, but we have a weekly discussion about this, and we really try to get everything out on the table so that the younger, inexperienced guys understand that sometimes the senior guys are in a hurry, and they may not always have the highest level of patience in certain situations, but we know we're when they cross a line, and we've had to issue disciplinary actions, you know, with some people. I don't know that this actually came, that comment is emanating from GWS operations specifically but we have had the issues and I mean we just have a lot of group therapy and it's it's an open discussion and we we talk about it because they understand that there's a line that shouldn't be crossed and they need to know where it is so the point is not to go right up to it right Things get emotional and the guys have to stop a lot of fights and just have, whoa, we're back off. It's not worth getting to this point. Because, you know, there's waterline breaks when suddenly there's like a waterline break and then a gas line situation all at once and it's in the middle of the night in the winter. having to call people in they're not happy about it i mean so emotions run high and and there's there's like what we do out in the field and then what comes back into the office and if it's coming back into the office and they're still mad at each other we have to have a yeah it's a changing world because i mean i was a journeyman electrician

And this was our life. This is what we did. And if people come out to the field, like if the engineers come out to the field, we treat them nicely because they're not a member of the group. If they're a member of the group, we're ragging on each other one side, one down to the other. And then we go buy each other a beer. So I think the key is what you said. As long as it's in the field, it's fine. But if it comes back to the office, well then, okay.

We have had issues with some of the field crews not not exactly respecting engineers to come out because you know there's some new guys and different personalities and so we've had to have some discussions and sort of training about that it's like if you don't agree with them don't start calling them names and doing so you need to find a positive way to communicate and if you disagree bring it up to myself or James and that has been a situation. I think they've adjusted to that and they know where their boundaries are.

As a matter of fact, after I think we met with Kathy the following week, we had to address an issue that occurred in the field where a shouting match occurred and we had to sit down and

You know, we have a situation that's still ongoing, but there was a little bit of a pattern of sort of escalating, you know, bullying, and we've had to jump in on that.

The management team talked, though, not just about it just being in the field, that it also can happen within the organization in the offices, and really leaning into the ethics document, components of the culture that have been put together, making sure they use those, they reiterate them in their meetings. But I just think as a strategic planner, I appreciate the honesty and how authentic this comment was. Because it really would have been very easy to say, let's take that off the list. And so leaving it in there really ties it back. So if we start, I just jumped there to show you how authentic the wording is. If we start at the top of weaknesses, revenue, shortfalls, project and workload demands, workforce culture and recruitment, IT and tech challenges, collaboration and then aging infrastructure and electrification readiness. So I'm sure some of you have some comments that you're needing some clarity around.

I have a comment on the very first bullet. The way I read this, it says, effectively, we realize rate increases are going to be challenging because the public is going to get angry and we're going to get a lot of scrutiny. That's just a fact. It's not a weakness. Rate increases ultimately are our responsibility as the board. And the fact is, we have not kept pace with inflation if nothing else over the years and that's why we've had this hockey stick effect and so we need to have I mean the fact is great I don't see it as a weakness in this for this management team like except that we need to hear as a board like when we need rate increases to keep physical solvency but it should just be assumed that as long as inflation is not zero there's going to be a steady stream of rain increases And the county, I mean, that's just the way life is, right? That's just the only way it can be. Does that make sense? I mean, the way this reads, it's like, we don't really like dealing with that. Fair. Nobody likes dealing with that. That's just the way life is. And that's also our responsibility.

And it could be. We may not like dealing with it, but we have to deal with it anyway. And so it's put out there that the weakness is maybe we haven't kept up. We need to keep up. We need to keep pushing it. We need to do the tough work of making those increases if that's the need. Anybody have a comment on the management team regarding that rate increase comment?

I think the one thing that we do need, frankly, from the department is really good fiscal modeling of expenses and accounting for expenses. Because the only alternative to rate increase, there's only three things. You can have red ink, rate increases, or you can cut costs. That's the only way you can do it. So we need to know, and we need to have good data, basically, from the EPU saying, like, here's the situation. Here's costs we can cut. Here's costs we can't cut. Here's what inflation is doing to us. And so here's the recommendation. I think that should come regularly and often. That's the only thing I would say.

perhaps this evening we'll identify some performance measures that will help to get some more guardrails for that to happen.

I'd like to speak to what Board Member Nockley just said about the rate increases needed to cover and how that's, that actually ties over to Section 4 and threats, there's a couple of items there that speak directly to what you're saying. Oh, OK. I had not heard of that. A lot of failure to pursue timely rating increases. Yeah. So it's another cross linking between different areas here.

And what's interesting there is if it's a threat, that's perceived as being external, that we can't really control the rising costs. And so we have to be willing to make those adjustments at a time.

No, I understand. Stay lean. Just because everybody wants this new thing that's really cool. We constantly have, believe me, there's every day, hey, can we get this? It's not a... unnecessary, it's very expensive. And they think every day is like Christmas, right? Let's get this thing. So there are those moments, but it's just this individual conversation and filter that has to run through us. I don't know how much we can cut out of what we're doing so much as just make sure that we're not piling on to the costs. that can really happen.

I want to add that when we were doing the FY27 budget, Richard and I went through with each deputy every line item. What are we spending? What do we not need here? So we did scrub a lot of our expenses out. Yeah, I know you do. I'm just saying that we do try to work through some of our expenses and do they need...

xyz no not this year we can wait another year so I mean we did work on some of that trying to I think one in particular was the gas that has been rising that uh pipeline that we have to get weird it's gone up 12,000 and the following year it's been 18,000. This last year it came in at like 20-some thousand. Things that, we don't foresee those things coming in, we just get the state and the other state.

That's just a fixed cost that must be paid, right?

I think it's paid based on the amount of residents. Yeah.

Mr. Gibson, you had some points to bring up.

Yeah. I think the theme of that first section, and this carries through to a number of other places in this whole documentation here, says revenue shortfalls. But budgets are, as Charlie was just saying, two sides. There's the income and the outgo. There seems to be an emphasis in here on adjusting rates, increasing rates, et cetera, et cetera, without a corresponding amount of scrutiny for the costs. One thing we plan to try to do some of is fall a little more than this board or council typically does, drilling a little deeper, because we did get some information from APPA anyway about what other entities spend. in the electrical area in particular, and apparently water, we've got some on water too. And in some cases, we're considerably above what some others are spending. Now that doesn't mean that it isn't just a matter of how things are accounted for. It could be. But it could also be real. We need to understand where we might be spending more than others are, and if so, why? That doesn't mean it's wrong, but why? Are there potential areas for cost savings to hopefully reduce some of the need for some of the rate increases? Inflation underlies everything. And it's not just CPI. We know that many things that we buy have a different index to them. But it's not just revenue shortfall. It's the expense side of things also.

And also scope of what the department absolutely must do with the funds that it has.

There's that balance of scope versus how much money we have or want to try to get from our customers. On the other bullets in that one section, Seasonal fluctuations in water and gas services, great volatility in projected revenues, that shouldn't be a problem. We know that we have that seasonal volatility. And since we look at our budgets primarily on an annual basis, we ought to be able to say, yeah, it goes up. We know gas revenues go way down in the summertime, and they come way up in the winter. We know that. Water runs on a different cycle. Electric has its own fluctuations, although they're not as large. That shouldn't be a problem. I don't see that as a weakness. The cash reserve targets and reserve requirements are difficult to meet. Well, that's maybe part of the bigger issue that the income and the outgo in general are not matched. And we do at this point intend, in fact, we've already had one meeting to start talking about it. is to actually look at our financial policies, including the reserve targets, which have apparently been looked at since they were first developed 10 years ago. And it's not obvious that they were followed in recent years.

Did we not change our reserve requirement a few years ago? One of the first things I did on the board. I didn't know what I was doing. Debt coverage ratio. Debt coverage ratio.

Which is kind of a reserve, but operating.

The very last one here, prior budget projections were overestimated. I think this is referring to gas. But in that case, that's really a symptom of inadequate reserves. If we'd had adequate reserves, that should have carried us through one year at least of a dip in revenues without having to hit the panic button and say, oh, we've got to raise rates in a hurry here. If the gas usage stays down year after year after year, that's a different story. But reserves are supposed to cover those kinds of fluctuations, and we didn't have those. So I'm not sure that That one year between budget projections and actual usage was by itself a weakness. I think it was indicative of this we don't have an adequate reserves.

I think bullet point number two, instead of seasonal, I think it's It's to say year-to-year fluctuations instead of seasons.

That's what I was reading. Oh, that's not the way I read it. Well, like last year, we sold a lot of gas, and this year we had a warm winter and didn't sell as much. That's how I read it.

And then same thing, last year we had a wet summer and we didn't sell much water. Same thing happened. We went short on our water revenue because we didn't sell that much water. I think this year will be different, but. I don't know.

Personally, I think on the gas stuff, this is a trend that's just going to be going on for a long time. My advice to the department is gas is, I think, going to be a huge problem for this department. All the pluses.

factors into all of this, and I think we sort of captured it somewhere else, is that in five years, in the last five years, the amount that we pay our operations staff has gone up exponentially for retention. And it's because of retention. So our labor costs have gone way up across the board.

That's the kind of data we need to really look at.

Did you have a comment that you wanted to make?

Yeah, a couple more questions. Under project workload demand, staff are spread thin across many issues and chat, blah, blah, blah, with multitasking contributing to inability to focus fully and so on and so on. So is this suggesting that DPU is actually genuinely understaffed or it is a matter of allocation of the staffing resources to fix this, to address this weakness? That's one question. The other is Two comments, one under IT and tech challenges and one under collaboration seem related. One is suggesting that with respect to documents, there's a lack of centralized document sharing between divisions. The other is also saying something similar. Teams operate as separate entities rather than a cohesive unit. and reluctance to share information. So the first sounds just like a operational change needs to be made so that there is a centralized sharing. But the second is even suggesting that there's maybe competition between units and that's negative and perhaps influencing behavior. I'm just wondering if you guys could address that as well.

So let's start with the first one regarding the staff spread thin. Anybody want to try to share some background on that one?

I'd like to ask a clarifying question to go before that discussion. Sure, sure. Is that meant to apply or does it apply to all divisions or are there certain divisions that are more effective than others?

I can tell you on the electric distribution side, we've been trying to hire two positions for two years, so that is a thin area. I didn't write this comment, so I'm asking one of the deputies to jump in. I didn't write it either, but I agree with it.

There are days where... Well, one in particular, now that you mentioned the electric distribution, is when we have... It takes the... and one person. One person doing that and like our team, we have at least three, four that can take in customers and help them. Mariano's only one and sometimes they come in every day and they don't catch him because he's out in the field. Spread thin between making sure that the contracts, the treachery mean or meeting with residents and the contractors to make sure the trenches are completely excavated or things of that sort, but it's become a challenging issue with trying to balance between sitting down with residents for new permits and those that are already in the process.

So Jen, I think the response to your question, and if we go back to the conversation the management team had, was around the difficulty of hiring at the right skill set. And so folks are having to wear multiple hats and do more than one individual's position. And I'll tell you that that's across multiple industries, not just here in this department. But you're feeling it because the demand doesn't go away. So there was quite a lengthy conversation. If we move on to the lack of centralized document sharing and then that whole idea about being teams operating separately. Anybody want to share our conversation around that?

I'll share the document sharing. We had a water rate increase that we had some version controls that got entered into our Calling it munis, but it's legis star. Yeah got entered in the legis star and then After some attorney review it got supposed to be updated and it didn't get updated and so our new document is I'm looking for Christella's signature on the actual document when it gets attached because it could be just one word changed in document in this case it was some dates and and it made the ordinance ineffective. That's why we had to reintroduce it. So that's a process improvement that came out of our SWAT and we've come up with a pretty simple solution, actually, but I appreciated that. That's a water rate increase.

Is this a one-time thing? Yeah, I think.

Versus an ongoing? Yes and no. I think we have other issues with... It's called SharePoint. It's how files are entered. It doesn't work well. They don't work. So that's the other piece that we're struggling with. And so it's not one time. I can just give you the one example that the board has experienced recently is the lottery. But others are welcome.

How do you transfer files between each other via email? And then it's a matter of searching back through the email sometimes to find what someone sent us. And everywhere else I've been, we had a central server. Every department had a directory on that server to store data and transfer between each other. My emails disappear after a few months. So going back and finding it in email is a pain. I don't have the ability to transfer anything over 25 megabytes via email because you can't email that big a file. And transferring them with other people is very, very difficult because we don't have a central server that we can store our data in our department on and transfer it between even us and James' team.

This has to do with drawing files. It's not a good solution with SharePoint.

Engineers use a system called Ignite. Ignite. Ignite. So I don't think, you probably...

It's a training issue too, but we have a lot of, after a while that fills up as well, so then you have to clean that out, like the old IFP, because we use that for our IFPs, to link in the document, so that way contractors can access things.

There's still a storage issue there. Do you have something you wanted to add?

Yeah, so I do a lot of the report manufacturing, and it's chasing down data from everybody. Kathy created a big spreadsheet that everybody has access to, but it's a little clunky, right? And so that's more work for them to go into. They already put it someplace, and then they have to put it in this spreadsheet, and then I have to go find it from somebody because they don't have a spreadsheet here. And if I could just have one place that functions, like I have access to the drives, but thinking like the people who store things in file folders is hard sometimes, right? It's not called what it should be or what it obviously should be called or SharePoint doesn't work all the time. So when I have to chase down data, it won't work for everybody. Instead of just having like a central place where I know where it's at going, oh, I can access those water production records. I can access this AD numbers. So it's sometimes it delays that work because you know, they're out of office for a week or it gets deprioritized, right? Like me asking for data and then they have an outage of some sort, right? That shifts. So, and then it's finding my email in an email going, what data do they need?

Big suffix on the end of every, my email and the date, and so it's like people know, I added to this on this date.

So we could probably spend our whole evening just going through line by line. I'm going to move it, unless there's something.

I wanted to ask, there was this interesting statement that caught my eye, analysis paralysis at the BPU. No, I did not. Examples would be helpful. Under collaboration says analysis paralysis.

And the vice chair mentioned that one as well. Anybody want to speak to our conversation around this?

We're going to have you go do a study on it, by the way. We're going to analyze it. We're going to analyze it.

I don't want to put words in anyone's mouth. Anybody want to speak up?

I resemble that remark. I can see where analysis trials speak to you. We do tend to get the weeds.

I'll speak up to it. The ECA is a good example. We just spent how many meetings into another meeting to look at a document again and again and again. And that's why we have staff. I wasn't a part of that, so I feel like I can speak more freely to this. But what points of having a professional staff if you're still going to go, I think we need to look at this one more time on this angle, or using this data set. Sometimes it's a lot of extra work for the staff.

And this is a really good, it tees it up really nicely to move into the next two categories because the comments and the questions you all ask are really valid. I appreciate your willingness to ask the questions for clarity. And interesting when we talk about the words, it's as this team sees it on the day-to-day. It's not necessarily whether it's right or wrong, it's just their perception. As we go day to day, as we see, sorry, last week, Trina, but as they see it day to day and how they put it into words. Jim, did you have something you wanted to add?

No, I guess I forgot to raise my hand.

Or lower my hand. Before we leave this page, I'd like to ask a quick question on one item. In the last theme, a large percentage of the underground system is very old and beginning to fail. Does that include or exclude the direct bury cable in that comment? In other words, do we have other parts of the underground system that you think are also very old and beginning to fail? Or are you really commenting about the direct vary cable there?

It's mostly the direct vary cable. But we have a lot of old switches that are called live front versus dead front. And they've replaced most of them that can be replaced without taking an outage to the consumer. So we have old switches. And I think that's what's driving some outages that we can't identify in one of the neighborhoods. So this fall, we're going to just take a big outage and replace at least three switches if there's more than two that need to be replaced. Because we're blowing fuses. We don't know why. But I think it's possibly ant beds and switches that we can't see. And so we're going to replace the live front switches in that neighborhood. It's mostly the underground cable. And the guys go out and dig them up, splice them, and it's a Band-Aid. What's the nickname for those? The Audi switches? I don't know. I haven't given him a name myself. Steven didn't tell me if he had one for him.

It's like there's a good one over here.

Well, he opened it up, and boy, howdy. Been there, done that.

So our last two categories are opportunities and threat. I'm sorry.

Hopefully answered. Jen's questions, but there's a couple with Matt's that we missed. And communication to the public seems to be an area of improvement. I'm not sure which bullet he was pointing to.

That was under collaboration, the first bullet, communication to the public. And he pointed out that that's an opportunity for improvement, which I think we had We had a little conversation about it. He also pointed out that he needed some additional information around the analysis paralysis, but I think we did get some comments.

And then expand, strengthen divisions outside APWA. I think I mentioned this to the board that APWA was primarily water and sewer focused on our continuous improvement path. APPA has another program called RP3 that we'll get involved with for the electric production and distribution. So that is the plan for the next quality review of GPU's operations. So I think we can speak to that, that we are looking to expand. We haven't found one for gas yet, but that's another.

down the road we'll get there. Well, they kind of rolled gas into AP.

We did. A little bit, yeah. We incorporated it more.

Thanks, Philo. So the next two are opportunities and threats. And I'd like to look at this from a little different lens. So when you think about the professionals you have leading this organization, the management team in the room, This is what they identified as external opportunities that you may or may not face, as well as threats. So whether they're right or wrong isn't really the debate. This is kind of you're getting inside the heads of the management team around the table. And when we began opportunities, you see those words again. Rate, reserves, and capital funding, partnerships and government affairs, technology and reliability, and operational enhancement. So it narrowed down to four categories, but the really big themes And as you go through this, there may be some that you would like to have further explanation. Vice Chair asked for some explanation around operational enhancement. What is the fourth bullet, expand to strengthen divisions outside of APWA? What does that mean?

I think I just explained that. Sorry, I missed that one.

So it's the same, the explanation is the same here, Philo? Okay, all right. So that's actually under opportunity. That was the only question that the Vice Chair presented, but how about the rest of you? Any clarity needed around some of these opportunities that were identified?

I would be curious what was meant by the partnerships in government affairs. Continue developing the political influence that helps get grant awards. Is there any specificity to that?

I can think of... Congressional allocation for the well at Overlook Park is a political process. That's one example.

Like I was talking, it's not so much political, but it's our reputation. Our influence by reputation at the Water Trust Board and the Construction Bureau, they often they often choose us because they know that that will be a successful project and I know that there are other there are other projects that are probably more necessary but they weren't as ready and so they will like they'll carve out at least enough to It's not always a full funding, because I know Los Alamos will match, but you know what I mean. They'll give us something to fund the project. So that influence is important.

In my mind, that's a little bit different thing. It is a little bit, but it's... And that's a really strong thing in our favor if we got and can maintain that. That's different than trying to influence... politicians or other decision makers in the more traditional ways.

We have had to have lobbyists contact our Congress people when there are serious threats to a project. That's just the FEMA project, or Hemis Mountain. It was a very large political event. DOE has actually stepped in the way, kind of overstepped their a little bit and we had to have those people get involved they have they have a project ready it's being funded they're gonna lose funding if you continue down this path so I didn't write this comment that file could this have anything to do with the IC I don't know all the IC IP yeah I don't know if that comment

part of that? I did write that I'm thinking about that ICIP.

I mean if we could wordsmith this, which we're not, stay on top of fast-moving developments, well Should we also be staying on top of slow-moving developments?

So just staying on top of developments.

Staying on top of developments in period. I think that's very important. I'm going to request a study of fast and slow-moving.

We need to analyze it. I want to go back to the comment around...

I think on that comment on the issues... there are projects that are moving very quickly and when we're resource constrained with meaning staff review time that's what they need to stay on top of it's the ones that need quick review yeah yeah it's been challenging on some of those and when you combine it with the next bullet you use new technologies to support the county's electrification and carbon treating goals some of those developments are pretty slow they

storage and the inverter-based resources going from voltage-controlled to bar-controlled. Technology marches on, but it's not fast-moving, but it's extremely important.

And it's that bigger picture perception. So that comment around continuing to develop political influence, that may not have been specific to local influence, That could be national influence. That could be statewide influence. It's not specific. The opportunities, remember, are outside the organization. um last but not least on on the oh you don't need to leave that page yet so sorry i'm i was just my job is to move us forward so i was just moving us forward i'll let you go back okay we're back we're not moving off of opportunities yet first i'd like to ask for some clarification or elaboration on the very last bullet

the customer service experience by responding quickly. My question is, is there a sense that we respond too slowly?

Before we have a management team answer, I just want to reiterate that this is an industry perspective, not a Department of Public Utilities perspective. So opportunities are external. They're bigger picture. What's out there? What's the industry expectation? And that is to improve customer service experience by responding quickly. That is the expectation in the industry is how I would read this response.

That's weird. Does this make sense? No, it makes no sense at all.

Okay, so strengths and weaknesses are internal influences within the organization that we can impact. There are things internally that we do, we act or behave or have policy or procedure in place to make happen. opportunities and threats are external those opportunities outside of the Department of Public Utilities that may or may not have an impact on the organization and threats are the same so when you do a slide analysis you break it up the first two strengths and weaknesses internal opportunities and threats external so where do we put internal opportunities

Because those are the ones we can influence.

That's what influences our objectives, right? That's where we start to come up with those action items that we start to work on. I don't want to move off this topic because I can see some, wait a second.

What you said about strengths, weaknesses, I totally understand that. I got you. I don't really understand, but you know. How to improve the customer service experience by responding quickly. I'm just kind of stuck where Robert is. What do you mean by that?

I'll give you an example. Outages. Outage management. How do we get the information out to the customer? We have one thing with texting. You can sign up for text and get emergency alerts, but if you don't sign up, we don't have your information. You don't get it. We get no information. That's right. And so then we've been sending out emails to those customers. So it's a struggle to get very quick and timely information that customers need. And there's different ways to do it, but some are still with the old fashioned landline, just need a ring, but it's a challenge. We have our customers far as receiving communication some like that newsletter insert about half in the mail others just want an email insert so it's just it's it's how to respond to people quickly I just went to the UAMPS they're they're having the same struggle you know they said well emails obsolete text is the only thing that's immediate. But we don't have numbers to text to everybody or permission to text to everybody because we still have that kind of latency of SMS data charge. I don't know if there's ever a charge. You hear it all the time when you sign up for a text alert. Are you okay accepting that charge? So these are the challenges that I see. There's opportunities.

Think about it in a different industry. So think about it in, you go to a restaurant, right? Some of us perceive good service by somebody acknowledging you within five minutes of sitting down, at least bringing you a glass of water or acknowledging they'll be back or Quick service, so if you if you put these in a different industry it may It's it's a big shift because you you want to make these opportunities for us internally, but There they may or may not apply.

Yeah, well yeah may or may not apply there you go because what Gibson said he said what about the internal opportunities? I look at this stuff, and I'm like oh, I'll say Use new technologies to support the county's electrification. That's us. That's internal. That's not external and so I The counties, that's what it says right here. And then it says, with the installation of LASS, town site community. into smaller circuits, that's us, that's not external. So you have it mish-mashed, or you don't have it mish-mashed, but you're saying that the opportunities are external, but there's a lot of internal stuff in here.

The concept was internalized, but it's still an external, it's not necessarily something...

I think you're reaching, I think you're putting a square peg into a ramp hole. You're forcing something to fit a format.

I can tell you that what is written on the right-hand side of the page is verbatim what came from the survey. So I'm not in the heads of the folks that wrote them. but I can tell you that our conversation was around.

So the people who wrote these comments didn't understand that these were to be external. These are like nationwide things. They didn't understand that.

I can't answer.

I can answer that because you can see exactly right here. These are internal things.

Or to the control to the county to the community to think it was it was to the department.

Yeah, this is a community Well, that's right, but this is supposed to be an opportunity for so they obviously didn't understand what the rules were Okay, I'm just trying to get straightened out my head.

Thanks Um other questions about opportunities before we move to threats Threats again These should be external Pointing out, there were three comments from the vice chair. The first was around, under the financial perception, the public may not appreciate the cost of upgrades needed to support all electric initiatives. That was stated as a broader statement. And the comment that came from the vice chair is that I thought a recent report concluded that a significant majority of the cost would be due to needed upgrades, replacements, independent of electrification. DPU and BPU definitely need clear communication to the public. So this is where this external idea, we just need to make sure that when communication, there's a check mark there. Have we thought about what the purpose behind, whether it's a rate increase or what the change is? That was his comment. That was the connection he was making.

I think he's also coming on the messaging here, and we need to be clear. We funded a report. The report clearly said the majority of the cost going forward is going to come from having to deal with old infrastructure and not necessarily electrification. So I think that's Matt's concern there. Messaging. I see.

I THINK ALSO IN BETWEEN WHEN WE DID THE SWAT WE ALSO HAD THE PATHWAYS OF ZERO NATURAL GAS USAGE THAT REPORT ON A SIMILAR THEME THAT CAME UP WITH THE PANEL UPGRADES AS IMPORTANT AS OTHER ELECTRIFICATION ITEMS

The next one, I don't know if you want to speak to it, the upgrades needed to support all electric initiatives. That's under electrification.

I think it's going to be on both sides, I think, to answer his question. It's not just one. There's going to be the homeowners panels and their upgrades to their home. And then there's also the supporting infrastructure and the distribution system, additional transformers, reduction of secondary runs to each home as they increase their load.

The current lines they have are not sized adequately to support the load that they have.

So it's on both sides to answer his question.

I think we've covered his other issues. Philo, other questions you have? In the back of that image.

I think he brought up some new threats was environmental risks, the chromium plume and drought.

Plenty of influence already here, but drought is not a good addition.

Questions about threats? Opportunities and threats in every single workshop that I've ever either participated in or facilitated become a challenge because we want to bring them into the organization. If you read this as an organizational opportunity or threat, I would encourage you, because we talked through them as a management team, to remove the internal connection and look at them as these are external opportunities, why we gave you the themes and external threats. So why did we go through this exercise? Is this fine? We went to this exercise because this really becomes our roadmap to start thinking about what are we focusing on as we go to the future, as we look down the road. If you remember last year in strategic planning, we did a lot of visioning and the year before we began that visioning. This starts to give us some of those rails for the visioning as we look forward, especially when we look at the opportunities and threats. How are we going to address those, or are we going to address those? And how fast are they going to change? Now, some of these we address when we get to our objectives, which is our next piece. However, if you can bear with me, what I'd like us to do is get to our breakout sessions so that then you can take a break. Can we do that? Can we make it about another 10 minutes? Or do we need a break? You know clamoring go another 10 minutes if you want to another 10, okay, all right, so Keeping these first page two three Four and five in mind and if you and if you want at the bottom of page six is the summary it just took Spring swing missus opportunities that he gave you the big themes Keeping that page in mind is What we're going to do is we're going to take a look at our current strategic plan. On the very next page is our current strategic plan. And on this plan, we have changed the format a little bit. You probably noticed that when you started reading through. So scoot down to page seven, about a third of the way down to focus area, operations, and performance. Goal 1.0, provide utility services safely, reliably, and efficiently. We have taken and created two columns. One are ongoing objectives. They just continue on. And the right-hand side are measurable objectives. Now, we may not have the objectives in the right column. In your small groups, that will be the first thing you're going to be looking for. Is it an ongoing objective or is it a measurable objective? Something that we really want to track and follow and make sure we are moving it in the right direction. The second thing you're going to be doing is saying, how are we going to measure it? What are we gonna do to measure it? How can we measure it? So let's take the very first measurable objective, objective 1.3. Establish a plan to upgrade electric supply and distribution systems that replaces aging assets, meets the needs of all electric buildings and electric vehicles, and maximizes benefits of distributed energy resources. Wow, how are we gonna measure that?

so what progress we're making in that direction well i think what's happened is that the council and the board have realized that or at least our consultants have told us that it's going to happen organically and is this going to happen so

And maybe, I don't know, I don't have the answers. You guys are gonna come up with the answers. Maybe you say that's actually an ongoing objective.

Well, I mean, sorry. If we say the objective is establish a plan to do these things, it's complied with when we have a plan to do those things, right? So that's all it's asking for. So the measurement is, do you have a plan? Presumably some written document that accomplishes.

So the measure's actually, I mean, that's the way it's written says make a point That plan will need to be revisited every five years or something like that So maybe you decide I'm just playing off of the words that are coming out that you want to add establish a five-year plan and Every five years you're going to upgrade that plan. That may be how you decide to measure it

I don't know. I mean, I said five years, and that's kind of a typical time frame. But there may be circumstances that require more frequently than that. Or there may be the plan is working, and we just keep going with the old plan. So it may be more of a we needed upgrade. But the plan we write today isn't going to be the plan that carries us for 30 years, even though it ought to be anticipating 30 years. And so that we could use that for the first five anyway. And I think establish a plan is sufficient. I don't know that it needs to say upgrade it every five years.

Yeah, I think I like what Clay said earlier about shovel ready. Because when it comes to electrical distribution, and what you just said about as needed, that's really because you get, with electrical utility systems, you don't really start having a lot of extra capacity in them because that messes up the power system. So you have to be shovel ready to be ready to do stuff, and then you do it as needed.

So when we break into small groups, this is the kind of conversation you're going to have. First question, are the objectives in the right place? So are the four objectives on the left-hand side under focus area, operations, and performance, are those all ongoing objectives? They're just, they're gonna continue year after year after year. And on the measurable side, is that something that we actually are going to have a measure that will give us an indicator how we're doing in that specific? And there's no right or wrong. Correct, Philo?

Kathy, are you looking for the board and the supporting staff to add objectives to these two lists as well, or just what's presented? You want to respond?

The intent was not to add. It might be to clarify. And maybe before we go, we did run through all the goals. And we did make one revision to the goal, goal four. And that was, it just basically said sustained capable staff. We've been having challenges on a few positions for recruitment. So we just added recruit and sustained. as a goal, that's the only change that we as a team recommended, because we have a challenge of doing some recruiting of specialty positions.

We did have some edits to some of the objectives as we had a conversation, so we wrote our notes in red. Goal number two, under objective 2.1 and 2.4, adjusting rates is needed. It goes back to the weakness that we talked about in terms of staying on top of those rate adjustments. So we did make a recommendation to add some kind of verbiage there. On goal number three, we had a conversation of voice of the customer survey. Is that a measure that we could use under some of those measurable objectives? And then goal number four. I like your educate board numbers.

You can't measure that. Oh, we're taking data right now. We can't measure that.

We can do our whole self-assessment in a couple more months. Oh, gosh.

And then the last recommendation that was for consideration is under goal five, under the environmental sustainability area, and that is to combine

5.1 and 5.6 that the feeling was that those were those those two could be wordsmith and combined into a single objective but those were just those are all pretty much didn't we didn't we kind of um edit the goal the high level statement for each we kind of like made the language a little more concise didn't

We didn't finalize any of those recommendations other than the one for Goal 4.

That was the one that we added in.

But this is your opportunity. You're going to break into two small groups. Jen, we're going to put you in a group with another board member and a couple of members of management so you'll be able to participate. We want you to use flip chart paper. Each group will have a spokesperson. We want you to take any changes and document them on the flip chart paper so you can come back in and we can discuss them as a group. And we're not looking at saying, oh my gosh, it has to be 10 measures for each objective. Please, no. We're just trying the high level, right? Remember that analysis paralysis comment. We want to keep it at the highest level that we can because this is just to give a snapshot as to where we are in these specific objectives. So now let me stop. What questions do you have for us?

I have a clarifying question, though. Why is it on goal 5, the second column, header changes to action item instead of measurable?

Because probably it's 5 and 6. Oh, it's just we just missed 5 and 6. We just missed changing it. Yeah, we went back and forth as to what to call that column. So they should both be measurable objectives. We just missed making that change. She's talking about . It was just a mess. So Joanne is going to lead the group in the DPM conference room. And Jen will be joining Joanne. I'd like to have a volunteer from the board that would also be willing to join them. Thank you. Thank you for agreeing. members of the management team to also join Joanne cutting over that way James Abby okay then clay okay that's perfect he's going to be the coolest group yeah it is I have right now that it is two minutes till seven how much time do you want to give

Maybe include a little break in there.

Let's plan to come back at 7.30. But if you need a break before you get started, please do that. But quickly go back. Remember, you're identifying a spokesperson and you're including your changes on flip chart paper. So I have markers for everyone.

Sorry, am I staying on this Zoom or no?

Yes, you are. And they're going to just switch you over to the conference room, Jen.

You're in charge of the flip chart, Jen.

I will probably stay on for this, but I might not come back at 2.30 in the morning. I'm really about to lose it. I'll do the small group thing.

Okay, thank you.

That's important. Thank you.

I think she was muted. She got muted. We'll have to ask her. She's back on, Eric.

You can ask her, but I'm going to mute it afterwards.

Hey, Jen, when are you coming back to the States?

We fly on Halloween, October 31st.

We look forward to it.

Yeah, right. Thanks. I think I do. I won't. I'm not missing the heat. I'll tell you.

Oh, well, yeah, that's true.

Yeah. Remember Hollingsworth?

Yeah. Hi. Okay. Hi. I just want to make sure you hear us. So I think everybody took a couple minute break. So I'll just... I'm the only one in here. So I think everybody kind of put things down and walked out. So give us a minute.

Thank you. And what I mentioned to them is I want to do this, this small group. And then probably I might step off because it'll be 2.30 in the morning here. Yeah, we were just saying that. We're like, poor thing. Yeah. No, we understand.

So we do appreciate you joining us.

Yeah, yeah, no worries, of course. Yeah, I mean, I think, is this the only, so we do the small group and then we come back?

I think that we go back to the larger group, kind of the same, kind of talk about what we came up with. So we can always fill you in. I can always send you some updates to you if you'd like.

What time is it there?

Or whatever summary, hi.

Two something in the morning? Yeah.

Well, yeah, it's 2.01 right now. I mean, I usually stay on. I've been staying on to like 4.30 for the regular meetings, but I figured for this I might bop off at 2.30 because we're supposed to go to the city tomorrow for a musical and all this stuff. We have friends in town, so I kind of want to be sort of awake. Yeah. So in this little town where we have our second home, if you guys can hear me, they're talking about putting a data center in that's a 400 megawatt setup. And the town is all up in arms. And anyway, it looks like Los Alamos is going to put theirs in Michigan. Is that right?

Yeah, that's what it looks like.

Not in my backyard.

And solar there isn't quite as good of an option, is it?

Oh, no, but wind. They actually, renewables cover over 60% of their electricity generation. in Scotland I should say windmills they're not mills they're turbines yeah let's see 30.8 I was just looking it up actually terawatt hours of wind generation last year so yeah there's something they're never short of there is it yeah but then water is the question as well um But they're claiming a closed loop scenario. I don't know.

They just need to put chromium in it to make sure it doesn't scale.

I hope he's going to make an announcement that we're like taking a break so that the recording will stop.

Oh, I see. Oh, I see. Okay.

So what's going to happen is the team that went to the conference room, they're going to present their recommendations, not for the purpose of rewriting them, but for listening for their rationale behind them. Do we have any other comments or questions? And can we accept what they've put forth? So Joanne, you have our undivided attention. We're on page seven.

think of the recording does this need to be visible on the camera I don't think it needs to be visible she says the numbers okay okay so we decided or we talked about the 1.3 staying where it is and moving 1.1 and 1.2 over to the measurable column and adjusting both those sentences to add at the end so like efficiently implement and maintain secure and reliable business systems comma in accordance with industry standards for both objective 1.1 and 1.2 and then leaving 1.4 and 1.5 in the ongoing objectives and being there that anything that has the word efficiently that can be measurable so I got all that correct right okay so then focus area or focus area gold 2.0 so let's just hold on for just a second Joanne any any concerns with the changes made to

focus area one, operations and performance. Is everybody okay with those recommendations?

Let me ask a question. You divided them up into ongoing and measurable for purposes of this discussion. Then are we just putting them back together again so that whoever reads it in the future will just see them combined? Or are you planning to keep them separate?

We filed that the request was to keep them separate so that we had the measure and we would include the measures actually underneath the objective. So it would tell us how we're measuring it. That answers my question. So are we okay with focus area one?

All right, keep going. Okay, goal 2.0. On the measurable objective 2.1, so 2.4 and 2.1, the same sentence is kind of ending in 2.1. So removing that sentence, the last sentence in 2.1 where it says conduct cost of service studies, so removing that from that objective. And then taking objective 2.4 and moving it over to the measurable side. And leaving objective 2.3 where it is. And then 2.2 objective would stay on the ongoing side.

There must have been some copy paste error. Yeah. Exactly the same sentence.

We actually had a conversation about that. I went back and double-checked our notes. I don't know why we . It's fine.

It's fine. So you just set the line and move it up two lines and call it 2.4.

So I have a question here. The cost of service study by itself would not seem to be an objective. It's a means to an end.

Adjusting rates as needed.

That's what you're trying to accomplish.

But this is listed, this is already listed as an objective, that is to do the survey every five years for every utility rate.

And you would do that whether or not you needed to adjust rates.

You just have to do it, right? That's what it says. Whether that's a good objective or not, we can have the discussion about it, but that's the existing objective.

seems reasonable enough it's easy to measure it seems like it's something to be useful to do we have some mandate to do it every five years or something is that just an internally imposed the only mandates to review our utility operations once every five years by a charter and this cost of service

had no inflation five years was okay be five months maybe it needs to be every three years it just from things are moving it helps to know what your cost is if you do not deliver any commodity and that's what the cost of service get you is running a business yeah what do the employees and the equipment taxes and all of that stuff cost that goes into a cost of service whether you deliver any water electricity or gas or not you need to know what your fixed costs are change that every or as needed

Well, it's going to be important because if we are actually actively doing things to phase gas out, and we're going to have programs to get people off gas, that basal rate goes across fewer people. But that stays the same. So that's going to be spread across fewer people. So that's going to be a problem. It's the last person standing problem.

Yeah.

We do salary adjustments every four years, right, or conduct our study. This is part of our operating costs. That was one thing that impacted us as far as our rates didn't follow.

So does a cost of service study, I presume that we get a consultant to do that. Does that just give us costs of service, or is the consultant normally also tasked with making recommendations as to where adjustments might be made, where we are perhaps excessive, where we are maybe not investing enough, where they see potential efficiencies. What are we getting out of this? Is it just that this is a snapshot of what it costs us, or is it there are things you might do to change it.

I've always used it as a precursor to a rate increase and a rate study.

So to answer your question about a consultant study or internal study, it's been both with our department. The last one we did with Electric, we had a cost of service study and we identified each customer class and then the rates associated with each class, and that's how we got the recommendation for time of use and demand charges was from that study. That was breaking apart our costs in different ways. Last night there was a gentleman came forward that said, you know, we should be looking at our monthly service charge, increasing that instead of the commodity charge. That could be a consult study, it could be done internal too, but it gets a little complicated when you have a lot of customer classes. So the last water rate increase we recommended, or the one that's before board and council now, we're getting to the limit of cost of service study with, you know, we imposed a new rate for the Jemez Mountain, what are we calling it, service area. Service area. that we haven't quite built it yet. We don't have the electric data yet, but we did projections based on engineering calculations to get to a rate. And so that might be something down the road we'd want to do a consultant on. So the answer is it's both, depending on how complicated it is.

And I think what they do is they take your past trend, show you what has occurred up to now, and then they We'll trend it forward. At the current rate that you're going, your labor costs are going this direction. Commodities are projected to do this. Cost of materials. So they factor in what our near-term future looks like.

Financial forecast.

Financial forecast. That's a purely... That's just an observation of what you're doing or expected to do. It doesn't necessarily suggest what you could do to change it. Yeah, I don't think they do that.

That's up to you and your governance to decide.

Because consultants still know how we operate.

Not these consultants. Suggestions or recommendations. Consultants do look at other entities.

at other utilities. But a cost of service study is generally done by an accountant and they don't usually understand it.

So is the question if we're changing it to every five years, four, three, two?

This just says at least every five years. It can be more often.

All right, so the proposal on the table at the moment, just to review, because we did a lot of things. Under ongoing objectives, we would maintain, take and manage a favorable loan grant opportunity, so that would stay there. And then all the others would be, the other three would be under measurable, whereas with one, we would delete the last sentence and turn that into 2.4, right? And then 2.3 is still unchanged. And whether, so that's the structure we came up with, and we can decide do we want to do it. Do you want to change the five years to as needed?

At least every five years. You could do it less or you could... It can't go six years.

If you want to change that, it doesn't... I personally don't have a ton of energy.

So what's the pleasure of the group? Leave it as it is? At least every five years? Or change it... So we're going on to focus area three, customer and community, correct?

Yes. So this was our biggest change. So we're actually flopping both of them. So 3.2 and 3.4 will go to ongoing. But then 3.1 and 3.3 would go to measurable. And the reason, again, was what Clay had said was the word efficient. the first one so what we're using for the customer service process first is through the transactional survey for 3.1 and then 3.3 we use the voice of the customer survey again those will be in sort of commas afterwards as measured by the transactional survey or the voice of the customer survey Oh, and the other big thing we wanted to change is 3.4 instead of educate the board, we want to put inform.

Beyond education.

I was just going to say, assessing that is not in your hands, right? But you can inform as much as you want. That's right.

I think that's what we do more of is we inform.

Right.

Educate was kind of a strong word. It was kind of a strong word. A little strong.

Very smart men.

I don't think we need much education. We need to get them informed is important.

Lots of education. I'm not worried about that. I still don't.

Learned a lot about opportunities and threats tonight. So we're OK there, right?

It is.

OK, so are we good with the recommendations for goal number three? Yes. All right.

okay so our last one was four and so I believe we left everything where it is except for the measurable part we put or project or telling you guys promote workforce retention by investing employee training and professional develop as measured by years of service promotions and awards

I asked about, Clay and I had an interesting dialogue. I thought about what promotions mean and why this fits in there, because I didn't quite understand, but Clay explained a lot about job criteria and conditions for promotions and so on. It really is recognition that you are retaining people because you have to go through years of service. So that was interesting.

Could you read the metrics again?

So it would just be development as measured by years of service, promotions,

award those are really good data points to for in report so how did they do how did that group in the conference room do

It's measured by the time we were on time.

All right. So wait until you're wowed by Ben's recommendations. And I think Ben is our spokesperson, right, Ben? All right, yes.

We had much discussion, much, much discussion. 5.1 and 5.6, we figured out some language to combine them, and then it got edited. That's why I had to put some changes here because I didn't want to write the whole thing. But the gist of it was to keep it where it is in ongoing and rewrite, combine 5.1 and 5.6 to say promote efficient utility use and sustainability through education, technical support, and targeted conservation programs. Thoughts, comments? None? All right, seeing none, I'm moving on. 5-2. 5-2, 5-3, 5-4, and 5-5, we thought we'd just keep them where they are in measurability. Yes. Currently says action ends, but we meant measurable objective. 5-2, no change to that. We did say that we're going to measure that, we currently do, as reported in the quarterly reports. So no change to that. 5.3, support gas phase-out. Not one I didn't quite get that we had any changes to that.

I was going to measure that, but it's an annual measurement. It's out in the annual report.

Oh, right. Fire per capita. Sure. Got it. 5.4, I think we said no changes to that one. We already had some measurable metrics in it. 5.5, the wording got revised to be use as much of our class 1a effluent as possible and maybe we'll measure it with a ratio of how much of our available effluent is reclaimed effluent is used over how much is actually produced because we can't use it all right now we don't have enough use during the winter So it just goes down the drain.

So which ones, sorry, I just got lost. Which ones are you keeping in ongoing and measurable? They're staying where they are. They're staying where they are. We didn't move on.

So ongoing 1, 5, and 1, 6 got combined into this. Combined into one. 5, 1. I see.

And the other would stay.

2, 3. And we did say that under 5.4, the objective is water, that those numbers may be revised as we go forward. We need the plan to know whether or not they can go under a four-year water plan.

Sorry, 5.5 bugs me because, and I'm sorry to add to our plate, but we use all of our Class 1A water. We don't let any of it go. So a better objective for sewer would be, one, to... always meet our NPDES permits, and then two, reduce the number of releases. Spills.

Do you use all your effluent water in the winter?

Well, that's not, we don't have, I guess there could be a winter expansion. So we can leave it at expand winter use, but in the summer, in spring, we use it all. Sure. But, so we are, I think we've already expanded it for irrigation season. We're at the limit. We actually now have to supplement with potable water. They use so much. So, we could expand, we could say, you know, find a winter use for the.

Clay, I think that, on the used versus produce we were thinking like you know it may be like 75 because there's three months of the year where there's no application um but if we do it over a year we know percentage if we're going up or down that was the idea yeah you should have said per year in a year okay i could see you not five months but but but uh

Two things with the sewer is, one, always meeting our permit, and then two, reduce the number of spills and releases.

But let's keep in mind this is... Why are spills and releases in the conversation? What does that have to do with that?

Well, this is under sewer.

How do spills and releases...

I think on this, on those, we can report that in a quarterly report, but I don't think it's an objective, because it's about using.

I think we have annually.

The use of the water is actually part of our non-potable water. It's not really part of the sewer anymore. I see what you're saying.

If you're a customer, you care a whole lot more about blockages than you do in DPS reports.

Do you want to replace the word zero with F1?

I'm sorry, we had that discussion about planetary sewers.

So are we hearing pages 255? hearing no changes. So I think what the question is, is do we change the word sewer? Clay, were you okay if that 5-5 read... Reclaim water.

Reclaim water.

Reclaim water.

Because by that time it's no longer sewer.

Is that okay?

No, that's good. I like that. It's more water than it is...

5.3, the gas one. So most of our current conservation programming is residential. So when a new commercial business comes in that's got gas, it's going to completely skew everything. We're going to see no reduction even though all of our current programming is residential. So is there a way to add some sort of class demarcation in there? Because I have no control over commercial gas usage. That's like an unachievable goal because I can't touch it. Versus all of the changes that we have been trying to implement to the residential customers. And that's what our zero pathway study is all residential based. So I just feel like there's a skewed of all gas versus what our programming is actually geared towards.

implementer's perspective how about just adding the word residential you know reduction in residential usage by 2030 just putting the word residential in there i'm okay with that but that it makes i know from your point of view i disagree with that our objective is to get rid of gas right okay now it's true if if the commercial user comes in and wants to use a lot of gas there's nothing we can do today but in the long term Hopefully there will be alternatives for the commercial customer in addition to the residential. In fact, once the economics tilts that direction, they'll probably move faster than the residences do. This is a long-term goal. It's not tomorrow. Well, it's 10% by four years from now, but... Maybe it's 10% in residential sector.

Yeah, I think when we had this conversation, That's why we put the very first word as support.

Can you break it out, residential and commercial? And then you'll be able to identify where the increase is?

Well, the way the data is done currently, one of the commercial actually is residential. So it would require, which we need to do anyway, is actually break up for statistical purposes, not for rate setting purposes, the commercial balance.

Because we break it on the water energy conservation.

So it sounds like, just listening to this, it sounds like the wording that people are considering is everybody agrees that the goal, the BPU goal is support phased out natural gas by 2017. That is our goal. Yes, correct. That's actually not the objective. The objective is to support that long-term goal by now getting at least a 10% reduction in usage by 2030 as measured by dot, dot, dot. But are you saying, Abby, that by getting a 10% reduction in residential usage as the way you see that that's the knob you have to turn on that?

Yeah, because right now with the technology available in our current program, it's All residential. I don't touch commercial.

So the proposal on the table is to add, I think, you tell me, the word residential in front of usage.

That is one option, yes.

And Ford, I think Abby has on her plate with her new energy and water conservation coordinator to do an updated plan. I think it would be best that we spend more time discussing those measures as part of that plan update, and then we can make changes to this. I think both are important, but I think we need to update the plan and seek a reasonable number that I don't know you could assume to happen.

Yeah, it might be very different, the 20-30 or the 10%.

So leave it as it is with a note that it will be updated once the plan is complete.

Is that acceptable to them?

It's within what time frame we're talking?

The plan update? I told her to try for January or February.

So it's over the next six to eight months.

It's the first quarter of 27, right?

So what is coming first? Is the board's direction coming first or is the Is this plan coming first to drive the board?

The challenge I have is we know how to do this. We've been back and forth on this data measure. I think we got it reported right in the edited annual report. We have another annual report that will come out in January as well that will show the same information. I guess I'm saying don't change anything yet until we have a better objective to seek.

I agree. And then the last consultant that talked to us about this, like I said earlier, said that it looks like this is going to happen organically. We can't tell people to change. We can't force them to change. We can inform, I guess, is the new word. We can encourage. We can do this. But at the end of the day, it's... households decision individual decision at least that's today today I Have a feeling that at some point.

It's going to go down kind of like Elk Ridge did Enough people are going organically start to shift off the cost of being Customer on that server that is going to be enough that They're going to find that's what they told us at last board meeting so are we

comfortable leaving it as it is written today and not differentiate personal and residential until the plan is completed first quarter 27?

I'm comfortable with that.

Certainly. Does that sound all right to you?

I'm happy.

Mr. Gibson? That works.

All right. That takes us to partnerships, Ben.

All right. I think the consensus was to keep 6-1. There it is. Ongoing. Move 6-2 and 6-3 back to ongoing. And keep 6-4, well. Done. It's gone.

The market is done, but it's gone.

And we decided we'll come up with a new one.

I don't know. 6-4 is off.

So we have a new 6-4.

Which is adjacent to the old 6-4.

And it states roughly, pursue contract modification or replacement to the ECA to better address cost risks and the...

I think the word was make it gooder.

Gooder with no E, right?

I would not say, personally, I would not say replacement. I think the whole thing that we discussed was like we're going to have contract mods 1, 2, 3, 4 to fix some of the infelicitous language. Infelicitous language in the... That was point of discussion. I hope I used it right. You spelled that. replacement out or leaving replacement I do I just think replace personally like we just went through this whole thing I think replacement ETA is off the table we signed it it's gonna be a 10-year agreement right but we do have an upcoming but like we've got some mods that are gonna go through right so if we want to put those as goals get those mods we can do that on the other hand you wanted a different if you wanted a different longer-term goal like you know given the fact that we have a 10-year agreement then I'm just spitballing start to do some planning as to what's going to happen you know at 10 years right and that's perfectly good these are year these are goals like for this year though right no no no no these are just long term so you see that's a 10-year goal sure easily yeah pursue in the next 10 years start planning for what happens in 10 years.

Does that mean replacement stays? Modification slash replacement, or does it go?

I think it's not. Personally, I think that's not a great word, since it was just passed by council last time.

Charlie, my concern is it's the wrong vehicle. There's no way that you can mod it and turn it into something to the correct vehicle. You have to start with the correct vehicle.

You might say follow-on. How about that instead of replacement? Because we have a 10-year agreement. And maybe it'll be a 20-year agreement. I don't know.

Well, if you could get DOE to cooperate, we might come up with something that's better in five years. And we replace the existing agreement with that. We have to be careful with that because that opens everything back up again. which we may not want to do, but it's something to consider.

I don't think that would be the wise choice.

An alternative.

I think we have the ECA. We just got it. That's what it's going to be for the next 10 years.

We don't actually have it yet. We only get it on Monday. I did all the moves.

How about changing the word pursue with strategize?

I would say begin planning for follow-ons to the ECA or future successors to the ECA or something like that. There we go. Evolution.

Begin planning for successors for?

ECA?

We have a 10-year agreement, right? That's the only thing we can count on, because you guys made the point last night as we discussed it. And so we've got to start getting ready, probably year five, given what we saw last time. We've got to start getting ready to see what's going to happen. It strikes me as slightly tone deaf, I would say. We read this thing with the federal government, had a long debate over its pros and cons, and so to immediately say, we're going to start replacing it now, it's just...

So that car, you're talking about trading it in next week on another car?

That's not what we do. Potentially antagonistic. It's follow on okay to replace it.

Instead of replacement, just say follow on.

Pursue contract modification slash follow on to the ECA.

I think the issue here is short-term versus long-term. Mr. Nockley is looking at it in terms of short-term thing. This is very definitely a long-term thing. So maybe it's so long-term it doesn't even belong in here. But this, when we talked about it, it just says strategic planning workshop. It doesn't say annual strategic planning workshop. This is a long-term thing.

Is there reputation risk by having the word replacement as an objective in your strategic plan?

I mean, a replacement is a modification. And so it's just an extreme modification.

So we just leave it at modification?

I mean, that's fine with me.

Pursue contract modification to the USDA?

A modification in here doesn't necessarily mean the same thing as a legal modification to the ECA. Modification could be amendment, it could be replacement, it could be all kinds of things. So should we just go back to the idea of deleting 6.4?

Did we just say pursue contract modifications in the short term, or to the ECA in the short term, Any plan for starting new contract discussions in year five? Something just to show the intention of starting in your short and long term?

I mean, I could support that. It really depends on what's the sense of the award. That just struck me as very

This is public information. If I were on the DOE side of the negotiations, I might be a bit offended if I saw this come out publicly. You mean they just signed it, and now they want to throw it out?

I could leave it more broadly, like continue review. Thank you.

Could you go back to the recommendation of long-term and short-term and just say pursue long-term contract modifications?

Pursue contract modification to the ECA in the short-term and start discussions for a new contract. 2031. Yeah. Just because.

So see if I got that accurate.

And just say new agreement, maybe. Pursue contract modification.

Follow on would be OK there. Follow on might be OK there.

Pursue contract modification to the ECA in the short term and start discussions for.

Follow on ECA.

Follow-on agreement?

ECA is agreement at the end of the term. ECA.

I'm just hearing that they don't want an ECA.

Oh, okay, yeah.

Follow-on agreement by 2031.

By 2031.

I mean, clear. I mean, we need to plan for a follow-on of some kind. We need to plan for what is going to happen in a post-ECA future. What we now know is... 10 years or maybe 20.

Mr. Schomburg's comment that this isn't just a this is a strategic plan this isn't just a one-year plan so you guys want to hear it again no say it one more time Kathy what I want to propose is that we did a lot of red lines um we'll work on those between Ben and I that red line copy back to the board yes next week just bring it just bring a clean copy okay that's my request because I hate red lines because they get unreadable next question so you just want a clean clean thank you mr. Schramberg and that will be next week next Wednesday and we'll just review that to be sure it looks accurate and then I The regular meeting will approve the revised plan. Is that OK with the board?

OK. So as we get ready to turn this back to Chair Gibson, why did we do this? Having measurable objectives is going to allow us to continue as we go forward to create those objectives that are actually going to start tracking We'll start to be able to have conversation, however you all determine you want to have those conversations about how we're doing. And that will also align directly with the action plans that the management team goes through, which is the next steps we'll be working on, which is multiple pages of action items that support these objectives. The other thing that happened is that we didn't spend time on what is the name of the focus area and the goal because you guys have spent a lot of time working on those focus areas and goals and now we can get really clear on what are the objectives. Last thing I'm going to say is that they align with what is in the SWOT. I spent a lot of time over the last couple of weeks since we had our SWOT review with management And what is in these objectives align over to the slot. So I would encourage you all to take a look at that. And with that, am I going to turn it back? Well, I'll turn it back to Philo, and then I'd pilot.

Well, I think a public comment we should do. Right, right. Is there anything else?

I'll do the public comments afterwards. The public comment is supposed to be the last item, so go ahead.

Okay, well, I'll do closing comments just that I appreciate the board taking time so that the management team could share the SWAT results. I mean, we gave you the raw data, and I appreciate kind of seeing what we're seeing as a team among our work group. and what externalities they're having challenges with, as well as trying to break out our strategic objectives, some measurable elements. When I do meet with all the various work groups after this is adopted, I pass it out to everybody, and I think this will help clarify to our employee group what's ongoing and what's measurable. have a better discussion on what they can do to move the needle on those. And so I just want to say thank you for taking the time this evening to go through that.

And I would thank all the staff for the time they spent putting the SWAT together. Of course, I found that very interesting. the people who are actually doing this on an everyday basis. We clearly need to analyze it more. Yeah, that's just why I'm waiting for that. That's all you did there.

We'll have an evaluation to fill out at the end here.

I don't see any in the room. Do we have any online?

Chair Gibson, there are no members of the public online.