Board of Public Utilities - Regular Meeting

Good evening. We'd like to welcome welcome you to the Board of Public Utilities. This meeting is called to order. We will now play the inclusion statement.

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

Mister Avery, would you lead us in the pledge?

Roll call, please. Good evening, board members. Board member Wolkenhoof?

Here. Board member Wright?

Here.

Board member Avery?

Here.

Board Member Montgomery? Here. Board Member Evans? Here. Board Member Becker?

Here.

Vice Chair Sayanna?

Here.

And Chair Goldberg?

Here. Thank you. We will now move to public comment.

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

There are no public comments. Thank you. We will call for presentation of item two by general manager David Garcia.

Board member Avery, just wanted to say thank you for I know it hadn't been long, a couple of years service, but for your time, dedication that you spent on this Board, the level of effort that you gave in reviewing the materials, your questions and your comments on having us look at things a little bit deeper. We do appreciate all that. I have a short little statement that I wrote that I'd like to read. Warren, we sincerely appreciate your dedicated service on the RPU board and the depth of experience you brought from your time on the Charter Review Committee and as Chair of the RCCD Measure C Bond Oversight Committee. Your strong involvement with the community and local organizations provided valuable perspective helping the board better understand the interest and concerns of the residents we serve.

Your business experience and steady judgment brought thoughtful careful oversight to utility projects and expenditures, strengthening our board stewardship and decision making. We are truly grateful for your commitment, professionalism and service to our community. And we wish you well in this next chapter. And with that, we'd like to present you with a certificate of appreciation.

Mister Avery.

Thank you chair. And thank you general manager Garcia. It's very nice to to say. I just wanna take a minute to say thank you to a couple people, specifically the men and women of Riverside Public Utilities. People that are out there day in, day night, literally day in and day night, twenty hours a day, making sure that the residents of Riverside can turn on their faucet and have water and turn on their light switch and be able to have lights in their homes.

I'll be the first one to say I had no idea all that goes on behind the scenes to make that happen. And it is there there is no words to describe the amount of work that it takes. So to all of the men and women that do that on a daily basis for the residents of Riverside, thank you. And then specifically to the staff that is here, every other Monday night almost, putting in your work all day long and sometimes two, three, four hours on a Monday night. So thank you.

Apologize I if I ever went too far with any of my questions, but know that it was out of the goodness of my heart, and I appreciate you guys putting up with me and my questions asking back. So just wanted to say thank you to all of you for putting up with someone like me. And then I just wanna say thank you to the board members that are up here because I don't know if I didn't know. And once again, the average residence knows how much goes in to being a board member. The packets that you get weekly, and this is a a thin one compared to some week.

Right? There's a lot of reading, a lot of research to do. And so thank you to all of you for giving your time every other Monday plus the amount of prep time to make sure that the utility runs because there's a lot of responsibilities that we have as part of the charter. So I just wanna say thank you because you guys are way smarter than I am, and you guys have this great experience level that I really makes the board work. So thank you to all of you for taking your time to be here. And that's I appreciate it. It was a true honor to be part of the board. So thank you very much.

Any other questions, comments on item two? Brian?

I just wanna say thank you back. I really enjoyed your perspective. You have a kind of a unique perspective, I think. And you kept apologizing for the questions you were asking, but I like the questions. You didn't need to apologize. So you know now. Too late, but anyway. Thank you.

We continue to run into each other, and I look forward to running into you again.

What I wanna know is who's gonna read all the contracts now?

Yeah. Okay. Thank you for item three. I will ask board members if anyone has any conflict of interest to disclose on our agenda. Hearing none, at this point, we will turn the time over to Fortino Morales for our sustainability update.

Good evening board. I'm Fort Tim Ross, I'm sustainability manager within the city manager's office, sorry. And I have three updates to share on sustainability. The first is our Grow Riverside Conference that's taking place this Thursday at the Bourne Center. This is a conference that's been going on for over a decade now and really celebrating and working on sustainable food systems in our city here.

So we're expecting over 200 participants in that. One of the projects that we will be highlighting and talking about is the Northside Ag Innovation Center. So this is a long standing project that the city has been working on and we really excited to share that we just got a community funding project grant from Congressman Takano's office for $250,000 to continue developing our workforce project at that Northside Ag Innovation site. So really excited about that and hopefully see some of you all at the Grow Riverside Conference. It's always been a good time.

The second item is on extreme heat. So we are working with the state's office of land use and climate innovation on their extreme heat program. The state has developed extreme heat action plan and they want to hear from different communities across the state and so they've worked with us to, we're gonna be hosting an outreach event with them on March 27. We'll also be hearing from them about their proposition for grants, the climate bond grants that will be coming out through their office as well. So they'll be sharing about that.

They haven't hit the street yet, but they'll be sharing about the the ideas behind that, what they wanna see in projects and we're hoping to to hear more and to be able to share our thoughts on that. And then the third item is that Earth Month, Earth Day is coming up. So April 22 is Earth Day and we've been working, our office has been working with marketing and with departments across the city to coalesce all the different events and programs that are taking place during April. We have over a dozen different programs and events throughout the month, including everything from the libraries to our famous insect fair that we are gonna be hosting this year. And we will have a website launched relatively soon that will have all of the different events there where you can click on, go to, you know whether it's taking your kid to a reading about Earth Day or taking them to the insect fair.

But we want to celebrate all the good work that's happening across the departments and across the city when it comes to celebrating Earth Day. That's my sustainability update for today. Thank you.

Tom, go ahead. Is

this, this, no it's not on, is it? Can you, is it on?

I think so.

The light's on but okay. What was the second item you talked about? I couldn't quite understand the well, couldn't understand what you said.

Oh, yeah. Sorry about that. The extreme heat. It's an extreme heat convening. So thinking about extreme heat in our area and our

region. Extreme heat?

Yes, yeah. Okay. So there's a, the state of California has an office that focuses on extreme heat. I think it is only about maybe two years old now. And they have grants that they did a first round of grants and we are hoping to apply to the second round of a grant to really take a work on expanding the work that we have been doing in the city with our extreme heat summit last year and tabletop exercise that we did with the Emergency Operations Center. So, are hoping to build on that.

Okay, thanks. Any

other questions, comments? Thank you. Okay, thanks. We will now move to the consent calendar. Does anyone wish to pull anything? Pete?

Would to pull item five.

Anyone else? Okay. Can I get a motion to approve the balance of the consent calendar? Thank you. Second?

Second.

Thank you. Tom did.

I'm like

I had to think. Sorry.

Please vote.

Motion passes unanimously.

Thank you. And, do I have to open for public comment for item five? We'll now open for public comment for item five.

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So there's really no presentation. I'm guessing there's a correction?

Yes. An amendment correction. So for last meeting's item 13, which was items for future board public utilities consideration, it says in the minutes on page believe that's eight that there were no items requested. And that's not true. So I requested an item to be put on a future agenda that involved the court case down in San Diego that had to do with tiered utility rates and legality thereof and requested that it be put on the minutes for some future agenda item.

So the minutes need to be corrected to reflect that.

Thank you. I guess I should ask if there's any public comment. Thank you. With that correction, can I ask for a motion? Yes?

Move to approve the item with the correction.

Thank you. Second?

Second.

Thank you. Yes.

Please vote. Seven yes votes, one abstention, member Montgomery. Motion carries. Thank you.

Thank you. Now, we will move to the balance of the discussion calendar and we will open for public comment for item nine.

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

And we will call for presentation of item nine by Melody Morgan.

Good evening, Board Chair Goldwere, Vice Chair Sienna, and members of the Board. I'm Melody Morgan, senior water resource analyst. This item is for the Board to consider recommending City Council approve of a Memorandum of Understanding, MOU, between the City of Riverside and Virginia Tech. This MOU would allow RPU to participate in a national research effort known as a pipeline infrastructure database or PIPE ID. This initiative focuses on improving how water utilities track system performance and reduce water loss.

Virginia Tech is leading a national research project focused on the collection and compilation of water pipeline field performance data known as PIPE ID, which would lead to improving water analysis. Approximately 500 utilities and 100 federal facilities are participating nationwide. This is a joint venture between Virginia Tech and the U. S. Geological Survey to help utilities cost effectively reduce water loss from source to tap.

California water agencies were invited to participate from the Department of Water Resources. RPU has been invited to voluntarily participate in this research effort, and participation requires an MOU to govern data sharing, data security and confidentiality. RPU would provide existing pipeline infrastructure data only. No customer identifiable information would be shared. It's free.

There's no cost. Under the proposed MOU, RPU would share existing pipeline infrastructure and water loss performance data with the Pipe ID research team for review, standardization and analysis. The data will support evaluation of pipeline condition, distribution system performance and water loss. It will also undergo quality review to ensure consistency across participating agencies. This standardized data also supports national water loss modeling consistent with American Water Works Association methodologies and improves performance estimates for public water systems.

At the conclusion of the project, RPU will receive complimentary access to Pipe ID analytical tools and visual reports. These tools will allow us to track performance trends, compare our system to national benchmarks and support long term infrastructure planning. All final engineering and operational decisions will remain with RPU. We anticipate receiving initial analytical results within a few months of data submission. The MOU would extend through 12/31/2028 with an option to extend for updated analysis.

Our recommendation is that the Board of Public Utilities recommends city council authorize a memorandum of understanding between the city of Riverside and Virginia Polytechnic Institute and State University to participate in the Pipeline Infrastructure Database or PIPE ID Research Project. Participation will provide RPU with advanced analytical tools and national benchmarking resources at no cost to the city. This concludes my presentation. I have Farid Boushaki and Blake Yamamoto, principal engineers here, and we're available to answer any questions you may have.

Thank you. Do we have any public comment? Do we have any questions or comments from the Board? Jordan?

Good evening. I have a few questions. The MOU is with both Virginia Tech and the University Associated and the USGS?

The MOU is with Virginia Tech.

Alright. But the data will be shared with those three agencies?

The data will be shared with Pipe ID. Let me have Farid answer that more accurately. Actually,

good evening.

You hear

me? Farid Boushaki, Principal Engineering, Water Resources. Thanks Board Member Jordan for a So, this MOU is just between RPU or the city and Virginia Tech. What's gonna happen is Virginia Tech will will have this model in which they, it's a data driven model so they need as much as participant to provide with the data to create to have their, they call it machine learning model to have this data driven model. And with that information, they will provide model output that USGS would utilize to do their wireless analysis.

So I think to answer your question, our MOU is just with Virginia Tech. They will pass on the results of the model to the USGS to feed their model

if it

works. Sure.

And it's all aggregated data?

Yes.

Okay. Is there anything about the city's infrastructure? It's just purely consumer data?

So, the data that they are requesting now is the GIS based pipeline distribution system. And they also asked for the water loss audit data that are available actually in the state website because we submit those water audit or validate water audit information.

Is there anything in the MOU between Virginia Tech and the city that prohibits the USGS from sharing that data with other agencies?

I don't think we have anything mentioning the USGS in the MOU.

Okay. So to be clear, data gets passed along to Virginia Tech. Virginia Tech then passes it to the federal government.

So if I could jump in there, please. In the agreement, there's a confidentiality provision.

That's what I was looking for.

Thank you.

Are those all your questions? Cool. Tom.

They have been working on this, but we don't have the results because we're not participating in it yet.

So the understanding we get from reading the literature on this program and actually we went to a couple of presentation they did at the DWR webinars for this water loss group. It was mostly focused on the pipelines. But they are asking for other water loss information. So on the meters, it doesn't say specifically that plus they didn't ask about the meters information. It says in the MOU that probably they will have some as we go data request and we'll assess that as the request comes in.

Okay.

Thanks. So I'm back online now?

Yes.

Okay. Thank you. Well, I guess I would just encourage that not talking about metering is a big, Lisa, is an issue that needs to be addressed in terms of frequency, the type of meters, that kind of things. Would hope that out of 500 or whatever agencies are going participate in this that you learn something about maybe somebody's got sophisticated way to deal with metering issues or frequency of calibration, whatever, in addition to the pipeline materials. But I think it's good to be part of a larger study.

Like I say, I would I think there's one factor of it that's important that doesn't sound like it's being explicitly included.

Questions, comments? Pete?

Hi. Thank you for the fine presentation. This sounds like an admirable effort. However, I'm skeptical about the results. I hadn't even thought about Tom's point about the metering, but that's an excellent point And would seem that it need to be addressed, if not here, somewhere down the line.

The reason I'm skeptical is that I don't think the model that's gonna be generated is gonna tell RPU anything that it doesn't already know. Okay? I mean, you know about the pipes, where they are. You know about the conditions and the age of the pipes. You know about the conditions of the soil that's gonna affect the corrosivity of the pipes and and everything else. But the main problem is with this model is that there's no way to test it. There's no way to validate it unless you go dig up a pipe and say, yeah, look, it's leaking. Well, that's bad. We should fix that. But you're gonna do that anyway.

So the fact that it's no cost and we got nothing to lose, I think we ought to go forward and do this. But I remain somewhat skeptical. Although as Tom points out, the metering issues needs to be addressed somewhere down the line. Thanks.

Other questions, comments, Warren?

Thank you very much. And Pete brought up a good question. Are there any resources that RPU is not money wise, but people or other resources that RPU will be putting forth towards the project?

There's going to be a secure link for us to upload data. The data is data that we already collect.

Okay.

So we'll just take the data and upload it to the link.

So we're not taking people out of the field to take Virginia Tech people to go on-site to look at things and do that. So we're not taking resources

away It's a data sharing MOU. Thank you.

Thank you, Chair. Chair,

if I may.

Just to give you a little bit more background information. RPU does have its own model, leak model that was developed by staff. So it would be really interesting with this Virginia Tech model is some comparison. So something for us to look at if maybe it confirms what we're doing right now as far as modeling is correct or maybe it gives us some information on things maybe that we need to change. So, we're excited about that.

Anything else?

I'm going to approve.

Okay. Hold on just a second because I looked it up. Provides robust data database and model driven methodologies to benefit water utilities, researchers, infrastructure. Facilitates consistent terminology, data standards, and model specifications. Just those, if we could have consistency across the institution, across the nation and that's what part of this research from Virginia Tech is trying to do.

With that said, please make the suggestion that they expand the research potential. They'll just apply for another grant and then we can be on that one. So, that would be fun. So, now you can move, please.

Second? I'll second.

Thank you.

Please vote. Motion passes unanimously. Thank you.

Thank you. And we will now open for public comment for item 10.

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

We call for presentation item 10 by Christina Bernal.

All right. Good evening board members. I'm Christina Bernal, fiscal manager, and I'm here to present the RPU's twenty twenty five financial highlights. On December 23, RPU's financial statements received a clean opinion from its independent auditor CLA. There were there was a corrected finding that regarded a prior period restatement.

The restatement was recorded to adjust beginning net position related to construction and progress, accumulated depreciation, and customer, deposits associated with developer funded capital projects for both utilities. Since the finding, RPU has implemented new procedures to ensure that work orders and developer deposits are reviewed by year end and properly recorded. This slide presents the financial highlights for fiscal year twenty twenty five. Net retail revenue was $392,000,000 for electric and almost 89,000,000 for water. Electric invested nearly 55,000,000 in capital improvements while water invested nearly $14,000,000 The general fund received a transfer of 45,000,000 from electric and 8,000,000 from water.

Our Pugh's financial metrics continue to be robust as evidenced by the strong credit rating for both water and electric, which in turn keeps borrowing costs and rates down. The electric and water utilities year end undesignated reserves combined with the line of credit meet the minimum targets set forth in RPU's cash reserve policies. The electric undesignated reserves increased from 136,000,000 to 153,000,000 and water increased from 43,000,000 to 50,000,000. This accounts receivable and delinquency graph shows a total AR across all utility services including electric, water, refuse, and sewer, amounted to 35,700,000.0 as of 06/30/2025. This is higher than last year primarily because of rate increases and warmer weather.

The delinquent total stands at 6,900,000.0, a 7% decrease from last year's 8,700,000.0. This decline reflects a downward trend due to successful collection efforts and payment plans. The utility continues to work with customers to reduce delinquencies and monthly updates are provided in the general manager's financial report. The electric cash reserve includes the undesignated reserves of $152,600,000 which met the minimum reserve level when combined with the line of credit of $35,000,000 The designated reserves of 124,000,000 and the restricted reserves totaling 244,600,000.0, which decreased by 21,900,000 primarily due to capital improvement projects. The electric utility received $512,000,000 in revenue, an increase of $55,000,000 or 12% over last year and 47,000,000 or 10.1% over the current year's budget.

The increase in revenue was mainly due to approved rate plan adjustments, higher customer consumption, and a new enhanced methodology for estimating unbilled revenue at year end. Other contributing factors include higher resource adequacy sales as well as positive adjustments to our investments in accordance with accounting standards. The electric utility incurred $420,000,000 in expenses excluding depreciation and amortization. This was 6,000,000 or 1.4% higher than last year but still lower than the current year's budget by 37,000,000 or 8.1%. The increase in expense was primarily due to higher distribution expenses and decommissioning liability expenses.

The electric utility ended the year with a debt service coverage ratio of 3.2, which was well above the bond covenant requirement of 1.1 and RPU's fiscal requirement of 1.75. It was also above the industry medium of 3.01 as surveyed by the American Public Power Association. As you can see here, our electric rates continue to be lower than San Diego Gas and Electric as well as Southern California Edison, which is a direct result of the board and city council's fiscal management policy that helps keep RPU's electric rate substantially lower than other utilities. I'm going to move on to water. The water cash reserve includes the undesignated reserve of 49,800,000.0, which met the minimum requirement the minimum reserve level when combined with this line of credit of 25,000,000.

The designated reserve of 10,700,000.0 and the restricted reserves totaling 41,900,000.0, which decreased by 7,500,000.0 primarily due to capital improvement projects. The water utility received a 100 received a 111,000,000 in revenue, an increase of 30,000,000 or 13.3% over last year and 11,000,000 or 11% over the current year's budget. The increase in revenue was due to approved rate plan adjustments, higher customer consummate consumption, sorry, and a new enhanced methodology for estimated unbilled revenue at year end. Other contributing factors include proceeds from settlements and liquidated damages as well as positive adjustments. The water utility incurred incurred 77,000,000 in expenses excluding depreciation and amortization.

This was 4,000,000 or 5.5% higher than last year, but still lower than the current year's budget by 6,000,000 or 7.2%. The increase in expense was primarily due to higher cost for personnel, repairs and supplies, and purchasing energy. As you can see here, the water utility ended the year with a debt service coverage ratio of 2.51% which was well above both the bond covenant requirements of 1.25 and RPU's fiscal policy requirement of 1.75. However, it was slightly below the industry medium of 2.63 as surveyed by the American Water Works Association. As with electric, our water rates continue to be lower than Western Western municipal water district as well as Eastern, municipal water water district.

A direct result of the boards and city council's fiscal management policy that helps keep RPU's water rates substantially lower than these other utilities. Oh my gosh. Sorry, guys. Okay. Once again, a report is presented to the city council.

It will be published on the city's website and there will also be a link on our website for the annual report. The recommendation is that the board of public utilities recommends city council approval of the Riverside public utilities 2025 annual audit and financial report. Thank you. And I'm available to answer any questions as well as assistant general manager Brian and various city finance management is online as well to answer any questions.

Can you please send the caller through?

Hi. Good evening. Melissa McKeith. A couple questions. First, I just want to make the observation that the reason our water is cheaper than Western and Eastern has a lot more to do with the fact that we don't import expensive water from the Colorado River and very little from the State Water Project, if any.

So as much as we would like to say it's because we have such a brilliant city council, we're really starting with very low input. I was curious what percentage of the increase was due to personnel costs versus actual capital improvements. I can think of a capital improvement I'd love to see happen sometime in the near future. Sorry. Because I do think we should be using our groundwater and developing that asset because the water is going to get more and more expensive as we have potable water that needs to get treated for PFAS.

Many of you know that's going to make a 25% difference in our potable water cost, and that's a big number. Another question I had was, is it true that actually used more water and that was the reason for the increased revenue? I thought we were actually conserving more, so I'm a little bit confused, and maybe Robin or someone can speak to that. And then finally, I've been trying to find out whether or not we have actually increased our developer impact fees any time recently, and I blinked and missed it at Council. I'm not talking about the cost of processing permits.

I'm talking about the actual cost of installing infrastructure that supports new developments. It's been a long time, and maybe somebody can let us know. And The woman went really fast through the numbers, but where does that show up on an annual basis? In other words, do we collect that money from the developer before we do the physical work or after we do the physical work? Sorry for lots of questions. Thank you very much for keeping our water as inexpensive as possible. Good night.

Thank you. Good questions. Other questions? Warren?

So I'll start out. One of the questions that Ms. McKeith brought up was the conservation question versus, you know, are we conserving more water? Are we raising the revenues because we're using more water. So, I'll start and ask that question on Ms. McKee's behalf.

I do believe our water consumption went up if you I believe it's one of the stat sections in the report. Let me move over to that because it shows the CCF sales. It went from $22.05 $43.07 $1.07 to $25.03 $9.08 $6.03 9. So it did go the consumption did go up. That was total.

So does I mean and I I wanna start. I thought that was a good question and she had some other questions as well. But I was gonna really get into, like, the weeds here, but then I realized that we are just approving an audit. Right? We're not we're not going through the budget process. And so I kinda had to take a step back to say, what what are we doing here tonight? What are you asking of us? And you're asking of us is to approve the audit. Right? Not to to talk about budget items. So so I I will say thank you to you and the whole finance department putting the maxes on there. So I recognize that. I think that was the request that I had. So thank you for for putting that on there. I guess I would just ask my fellow board members in future meetings as the budget process comes up.

This is a good tool as we're looking at things. Our revenue is up over budget. Expenses are down to budget. Any business likes to have those kind of numbers, but that usually means something back for the owners of the business. Right? And the owners of the business are the residents. And so if that's the case, then hopefully in as we move forward with rate plans and things, all of this great work that staff is doing to bring expenses down means benefits to the owners. So that's what I ask my board members to look at in the future as the budgeting process comes forward. Otherwise, I will reserve because the audit is the audit. Think the audit was done correctly.

Right? So that's what you're asking us to do tonight. But I just want to make those comments for future. So thank you, chair.

Other questions, comments? Pete?

I thank you for a great summary of what's actually a really, really detailed report here that you obviously couldn't get down into the weeds for. But the take home messages seem pretty simple that it's unmodified audit. We did good. There's no glaring errors. That's all that's all to the good.

And kudos to the finance team and everybody else who had their hand in the mix here to get the work done so that the auditors could do their work and come up with the findings. I mentioned last week in the pre meeting that I was a little disturbed that the capital projects weren't covered by entirely by this audit because of having to reset some time constraints. So it's still a problem for me. And hopefully, it'll be addressed in future audits and future financial budget agreements here so that a huge piece of the puzzle is not kinda left flapping in the breeze here. So I know there's nothing we can do about it at this stage of the game.

I'm happy that the audit was clean. Looking forward to moving in a direction where we can include capital costs in their to their full extent in the future because I think that'll be more meaningful for everybody involved. Otherwise, good job. Thank you.

Thank you. Tom?

Excuse me. Thank you. Water The general fund transfer has been determined to be unconstitutional by a local superior court judge. Isn't and the city is in the middle of a lawsuit about that and I think it's up on appeal. But is that noted in this financial report? Or is that a footnote to the city's financial report because it's a threat to the revenue the city gets, not to the utility?

We we actually have a set a note in here for each water and electric that shows any litigation that's going on right now. So it should be included in there.

Okay. And it's in here? Yeah. What does it say? Me refer to have to go through

this Yeah.

Sorry. Five pound report.

I do not recall. Yeah. Any litigation should be in here. It is notes oh, I'm sorry. It's note 10 and it's quite quite lengthy. But it's page one forty six

Okay.

To one forty seven.

Okay.

Sorry.

Well I'll read it later. Okay. Okay. And then in terms of the electric so called cash reserves, it's my understanding and this goes back to the report a while back about the building that the city that RPU owns where headquarters are that $37,000,000 was used by electric reserves, I guess, to buy that building. So is that $37,000,000 included in the so called cash reserves and as a debt and it's being paid back annually or whatever?

I will be honest. I do not have the answer to that. I can get back to you definitely with that.

Okay.

I have it

Because it's not cash.

Right. No. And it shouldn't be.

Unless you sell unless the building is sold and then it turns

back into cash. Right. Yeah. It shouldn't be. But let me double check just to make sure.

Okay. That's it. Thank you.

Any other questions, comments? Can I get a motion?

Move approval accept the staff recommendation.

Thank you. And a second?

Second.

Thank you. Please vote.

Someone hasn't voted.

Push your buttons again, please.

Motion passes unanimously. Thank you.

Thank you, and we will now open for public comment for item 11.

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

And we will call for presentation of item 11 by Efren Mejia.

Good evening, board chair Goldwere and members of the board. My name is Efrain Mejia. I am the electrical engineering manager for energy delivery. I have the pleasure tonight of presenting this item to you and our public. A few things about this project before I get into the presentation.

It's a very great project. I've been working at on the Northside District for the last ten years on multiple development driven projects. And this project will bring additional infrastructure and capacity through the upgrade of existing facilities to the Northside specific plan area. So the item before you is the Hunter Substation four KV to 12 KV, make ready for Circus 21 And 22 project for work order 2,124,085 for a total capital improvement cost of $2,000,000 Little bit of background, outlined in our electric system master plan requires that our four KV distribution facilities are upgraded to a 12 KV distribution system, which is a more current system, which replaces, like I said, outdated four kV facilities. The project involves the replacement of utility poles, cross arms, aging infrastructure, such as insulators, perhaps transformers that are at risk of failure.

The make ready project will facilitate future four KV to 12 voltage conversions as this is just a make ready for the actual conversion once the 12 voltage is available. The voltage conversion project will upgrade system capacity and reliability. The project location is in the vicinity of the North, like I said, part of the North North Side specific plan area, specifically North Of Marlboro Avenue, Strong Street, South Of Palmareta Avenue, and Nash, and West Of Chicago Avenue, and East Of Main Street. Customer notifications will be sent out prior to any service disruptions, and electric service disruptions will be coordinated with customers to minimize their impact. As part of the scope of work, we're replacing 22 wooden poles, 23 service transformers and related overhead facilities such as cross arms, insulators and wires.

Replacement of approximately 4,900 or so circuit feet of primary conductors, that's the existing four KV that will be upgraded to 12 KV and associated components. Approximately eight months to complete this work. And the scope of work will be performed by RPU electric field crews. Some of the benefits of the project will increase electric system reliability and and safety, improves overall electric service and power quality to customers, improve system operations and response during outage times, eliminate antiquated facilities that are no longer available for replacement, and make ready for upcoming four to 12 kV voltage conversion projects. Here's a general breakdown of our scope of work.

It's designed in house by electrical engineering team. Electrical work will be performed by our field inspectors along with I'm sorry, by our field crews and and our operations crews for a total work order cost of $2,000,000. It's anticipated to start next month and completed in about eight months or so. Staff's recommendation is that the board of public utilities approve work order number 2124085 for a total capital expenditure of $2,000,000 for the Hunter Substation 4 K V to 12 make ready for Circuits 21 And 22 project. Thank you. And with that, I'm here to answer any questions.

Thank you. Do we have any public comment? Questions, comments from the Board? Pete?

Hi there. Thank you for the fine presentation. We talked about this a little last week about the roundness of the estimate, 2,000,000. And you and your colleague Rudy had mentioned that you were given guidance to round up to like the nearest $10,000 or something like that. So if there was an overage, you wouldn't have to come back to the board and present this again.

You probably haven't had a chance to have that discussion yet. But it it still seems a little unrealistic that we're gonna say a project's $2,000,000 especially when you break down the components as you did on that chart and things are like to an ass eyelash too. I mean, it just looks funny. And if it looks funny, people will question it. And we don't want that.

So, I would implore you to come up with a better means of estimating or at least mention in the oral presentation or have a footnote in the table saying these are rounded to the nearest 10,000 and that's why it looks kind of funky. So again, I would encourage you to do that in the future and I'll be looking forward to seeing the next presentation of this type. Other than that, the work is great. And I know because I live in the North Side and people are fully expecting to receive the benefits that you've outlined here. And we're looking forward to joining the rest of the city structure on this.

So thank you for your presentation. Good job.

Warren.

Thank you very much. I'm just gonna tag on to Pete. We wouldn't let that fly with an outside vendor when they turned in a bid. Right? Would We probably scrutinize a little bit, and I think that that just kinda goes to, I think, what used to be like a year ago when we were questioning why are we not getting bids? Why are we not doing these? How do we compare to outside people? He brings up a great point. This is not a bid that would be turned in when it rounds up to the exact I mean, maybe, right? It it happens.

But that might be questioned by purchasing or it might be questioned for line items. And so if we're gonna hold our vendors to that a certain level of status or a certain level of service, I think we should hold ourselves to that same level as well. And I think it just as we talk about why do we always need not always need to out for bid. This doesn't help that case. Right? So I agree with Pete. It's a great project. It and I didn't think about it. I didn't kinda hit it until you brought that up, Pete. So but, yeah, I I I agree that that's a little funky, and I don't think we'd like to see it on a bid from an outside vendor. So just future, let's hurl ourselves to the same accountability that we hold our vendors to.

Absolutely. And I think those are great comments, great feedback. I can tell you that our numbers are, in general, not to exceed estimate since it's an internal job. Any any extra funds, additional cost over that, we would definitely return to the board to address any additional funding needed. But our estimate is is it it appears that way. I did review the numbers, mister Pete. And it was rounded up to the nearest 10,000, but we were off by about $3,000 or so. And it was more as a matter of fact of just trying to bring a project with a round easy number to to address as as I mentioned before.

It's just the optics. I understand. Here. And if I was a member of the public, I would go, doesn't sound right. Doesn't pass the smell test. So we want to avoid that if we can.

And I'll just add one thing. If an outside vendor was off by $3,000, they may not win the project.

Correct.

Right? Because that's the number one thing that we look at is cost of the project. And that could cause a vendor to not win a project if they rounded it up. So once again, hold ourselves to the same level of accountability that we ask our vendors to do or make a note to Pete's point because, yeah, that could cause a vendor to lose a bid if they round it up.

Thank you.

Other questions, comments? Tom?

Thank you. Well to their defense, if you look at the details, they are down to the $5 to the dollar. I know. How much four KVs left?

We have approximately out of 34 circuits, we have five that are in construction in the works including these two that were coming over. And after that, we have about 15 circuits. The majority will get completed over the next five to six years. So with Hunter, the new substation that's going in, in 2027, we'll be able to cut over at least three circuits and we'll have about 10 or so circuits left to complete, which will be done over the next three years or so.

Okay. So how what percentage of customers are subjected to the four k v reliability versus the rest of the system?

It's a it's a small number, but I I know Rudy Villavincenzio, the principal engineer, will have a more exact detail on that because there's not too many customers overall. I would probably say maybe less than 15%. But but Rudy, if you're on the call, can you please help help answer that?

Efren, I'm the principal engineer for the system enhancements team. Yes. Like, currently, like Efren said, after Hunter Substations, there will be two substations left that have six circuits each. So we still have our Riverside substation and our Mountain View substation. Each one of them has about six circuits themselves. They're about 12 megawatts each. I don't have the exact customer number.

No. That's okay. Just percentages. I'm not looking for exact number.

I let me see if I can find something as far as how many customers are on there. I would say maybe about 15% on our system, if I have to throw a number out there. Okay. So we have a 120 circuits in our system and about we would have about 12 left. So that's kind of what we're looking at.

Okay. Well, because this is important to do. Particularly, this this area is evolving. Well, it's got a lot of industrial customers. And as the North Side develops, there'll be more and more customers that will want to have a reliability and capacity associated with going to 12 KV. So it's good that you're pursuing that. And just out of curiosity, you said 4,000 circuit feet?

Yes.

So, that's about 12,000 linear feet.

Correct. Individual.

On copper wire.

Yeah.

What's the value of that copper? Do you net that out of your estimate?

I believe it's I don't have a value for the copper because I believe it's it's actually aluminum wire, overhead aluminum wire. If I'm not mistaken, Rudy, do you do you have a general estimate as to you're talking about the existing value of the existing wire?

Yeah. You're gonna I thought with four kV generally is copper, isn't it? Versus aluminum? Or even if it's aluminum, you've got you've got scrap material

to

recover, which should mean should net against the cost of the project.

Right? Yeah. I don't have the exact dollar value of that. We have to look at the work order for the labor to remove and the material that's associated to remove that particular section of the wire.

Right. But at the end of the day, you're gonna have a bunch

of

old wire from the circuit. You're gonna put new wire up. Yes. So the old wire you take down is scrap and presumably sold as scrap and should net against the cost of the job. That's all I'm saying. I'd be curious what that is particularly if it's copper, the value of that is pretty good these days. You may get a that'll help your reduce your 2,000,000 cost on a net basis.

Again, like I said, I I I don't know that it's all copper. So, Rudy, do you have an idea if It's Well

It is not all copper. It's all aluminum aluminum ACSR, what's out there. We're only upgrading the main lines. As far as new installations, I can tell you that installing, let's say, a foot of cable in some places, it's about a $100 a foot. As far as removals goes, I don't know what the market value is for aluminum, but I don't know. This should be it would be very minimal compared to the overall project cost.

Let me see.

No. But it's real money.

But right.

And so

That's something that we can come back afterwards and add to the next one as far as the presentation goes. Yeah. But it isn't something that we account for for anything that gets scrapped Scrapped. For this particular project, so that makes any sense.

Okay. Well

But we have very little copper in our system. We do have copper in our system, but usually these big projects, they're usually aluminum conductor, steel reinforced. Sometimes some some of them, they're undersized, and that's the reason that we replace them. Even our underground cables, we usually don't install copper. There's underground, we don't have that much copper either.

For primary, especially, we've been using aluminum for for many, many years. I think it's I can we can probably count the areas that had copper in them as far as primary goes. So but that's something that we can look into the future to see what what is it in these projects. If we have any copper, what what would the cost be in scrap? The same thing for the aluminum. That's something that we can definitely add for the next presentation for you.

Appreciate it. Thank you. Okay. Any other questions, comments? Can I get a motion?

I'll move to approve.

And a second?

Second.

Roll.

Please vote. Motion passes unanimously. Thank you.

Thank you. We will now call upon senior deputy city attorney Anthony Bowman to announce our closed session.

Good evening, board. We will now adjourn to closed session for item number 12 pursuant to government code section five four nine five six point nine d as in David one to confer with and or receive advice from legal counsel concerning the case city of Riverside versus Shell Oil Company et al, San Francisco County Superior Court case

number c g c twenty five eight eight two nine five.

Staff communications to report on item yeah.

Please excuse me. So I need to jump in. And this is a statutory requirement that I have to report whether or not there was any reportable action, and there was not. No reportable action took place in closed session. Sorry about that.

Thank you. Thank you. Do we have any board staff communications to report for item 13? Hearing none, are there any items for future board consideration for 14? Tom?

Well, I just have a question on one that's already on we've talked about. Would you remind me when you're gonna come back with the cap and trade recommendation regarding what was it one time 35,000,000

That's being presented at the next board meeting.

Oh great, okay. And that's the same with the public benefit report too?

I I need to check to see if that one No, the public benefit item is gonna be a board meeting after that. So they won't be at the same board meeting. Okay. Thanks.

You're welcome.

Any other items? And we will turn the time over to David Garcia for the general manager's report.

Thank you, chair. I have one item to report on. Some really good news this evening. To let you know that RERC Unit 3 has been fully repaired and returned back to service. Reinstalled, tested, and is back online. So great, great news. It's done ahead of schedule. Cost about $850,000 and there was no additional fallout expenses. So great job, team. That's all I have, Chair.

Thank you. That is it. The meeting is adjourned.