Committees - Regular Meeting

The district, and to discuss the analysis of the reserve funds. And we have a quorum, so I'm going to turn over the meeting to Amber who can explain. What she has given us, she's given us 3 different situations.

And go ahead and just do you want to bring up the, uh. The handout. And I'm just sitting at the table since I was going to be talking, I wanted to make sure everyone could hear my voice, but I'm not a new member of the board. Just to make sure people are clear on that. All right, so what I did is, like I had started this when we first looked at What it was going to cost the West neck water district pairs. When adding on this surcharge to pay for the funding, so the 1st spreadsheet, if you skip over the assumptions, I'm going to just go to this. Yeah, that 1st, 1, just to sort of show, like, how this works. Yeah. So you'll see that fiscal year 2023 was the 1st year that we had buildings on this. I don't know if you can make that. Can I?

Can we just, I'm going to number this is this is this the 1st analysis to offset rate increase? Yes. Where we're yes.

Because there's 1 that says just analysis or research funds to offset rate increase. The 2nd, 1 is. If there's a, like, a 2040 is when we do the 1st rate increase. Okay. And then the last 1 is to do a steady increase per year. So, just to sort of show, like, the baseline. So, when we started. The operating agreement with Suffolk County water authority, the West neck water had in its reserve in cash accounts. 156,618 dollars and that was money that the district had been billing customers like a little bit extra each year. So that and saving like the sign on charges and things like that, trying to get to a point where you had enough money to do some of the upgrades that were necessary. And I think over the years, just to recap, you'd have an estimate. Okay. We need this much money in order to put in a new well, or, you know. you know, replace some of the mains and then you save up the money. And then we'd get to a point where, Like, okay, we have, we have what we think is the money you get quotes again and it was just out of reach again. So that's where the 156,000 came from. So the 1st year. I have the different columns, but and I'll just go through just what's in there just so you understand the assumptions we have the West neck water billing. So the 1st year, 2023, the buildings were 100,452. what the cost was for Suffolk County Water, because our rates are higher than theirs, was $35,994. So that gave an estimated, well, actually in that year, it was an actual $64,457 that was available to pay down the $91,661 surcharge.

Amber, could I just ask a question? I'm looking at what you have posted there, and I'm just not seeing those numbers. Could you just kind of Tell us where they are.

Yes. Yes. Okay. So just if you can sort of move the, I don't know if you can see the cursor when I just. Okay. Yes. Yeah. Okay. Yeah. So the 1st, 1 is in the very final column where it says reserve. Yeah, that's the 156, 618 that we started with. And then, if you go to the 1st line, starting from the left hand side, you've got fiscal year ended 2023 and our fiscal year end, I think ends May. It's either May 1st or May 31st. I knew this a couple of weeks ago and I think it's 31st, but anyway, so the Western water billing that Suffolk County build out on our behalf and our rates was 100,452. so do you see that column? Okay, good. And then what the actual cost was on the invoice that they sent for the year end was 35,994. so that gave us funds that they were holding on our behalf of 64,457. The surcharge that year was 91,661 dollars. So we ended up owing 27,203 to Suffolk County Water Authority. And then we had clerk expenses of $359, but we earned interest on the 156,000 of 7,500. So our outflow that year was 20,000. So it took our balance at the end of the year down 136,612. So for the past, so we have three years of actual billings where we're ending this year at 147,948. We will be shortly getting another month, I think, the bill from Suffolk County Water Authority. So what I've done for estimates, because those are all actual numbers through the 147. So what I did for estimates is I said, for our first assumption, and you'll see the inflation assumptions, the average of those three years is 97,000. And I just took a nice round number. And the reason we had 100,000, then 85,000, then 108,000 was when Lisa and I spent time going through the details of the billings We found a couple of corrections and at least 1 of the commercial properties, and maybe a couple of residential properties. So, our buildings look down in the fiscal year into 2024, the 85,000 and then we got to pick back up of that in 2025 when the corrections went through. So. This assumes like, 0 inflation, like, we're just not going to raise the West neck water rates that Suffolk county charges on our behalf, which I just kept it at 97,000. Then I went over to what Suffolk County Water Authority actually charges what their fee is at their rates. And I said, okay, what if they go up 3% a year? And so that column all the way down is just 3% compounded each year. So then that gives what is available for the surcharge each year. So this year we expect we'd have $60,000 available for the surcharge and each year we're going to have less available. oh, I forgot to note on the surcharge column the first year, the surcharge was $91,661. The next year, because we were able to get that grant that Fred Thiele applied for and advocated on our behalf, that took the surcharge down to 61,892. That was the 500,000? Yes. Okay. Yeah. So that through fiscal year end of 2047, it will stay at that rate. So then I've just taken assumptions on, okay, what we're going to end up having to pay Suffolk County Water Authority. You'll see in fiscal year end of 2025, there was, we actually had more money than we needed, the $9,147 because of the adjustments that were made. We actually didn't end up paying the 10,000 that was due the year before while we were waiting for the adjustments to come through. So we ended up giving them a check for like 1500. Last year, but then you see that we start to if we don't raise our rates and they do their rates at 3%, then that's what we'll end up owing over time. So that each year grows a little bit. Um, clerk costs I increased by 3% a year and then the estimated interest I just did a percentage based upon the declining balance in our reserve account. So, if you follow that down, you'll see highlighted in your 2040 is when we get to a year where we've run out of money. So we would have to raise rates by 2040 in order to pay the surcharge. So that's kind of just the baseline if we do nothing. We wouldn't have to make a decision until 2039 to raise rates.

But they would go up significantly.

Yes, and I do have an analysis of that. So if you go to the next one, The next huge, that's the 2040 increase year. And so the assumptions were the same as I had just gone through. And when we need to increase the rates in 2040, we would have to do a jump of 18% in the rate so that we would have enough funds available to pay the surcharge and the rest of our small expenses. But then the following years, we would only have to then increase 2.5% a year in order to keep some funds in our bank accounts. And then in 2048, when the surcharge goes away, then we would be able to reduce the rates by 48%. And then the only costs that we would have, we'd have at that point, Granted, if my assumptions play out, we'll update this year after year, we'd have 15,000 dollars in the reserve account to pay for the office expenses and clerk expenses, earning a little bit of interest. So that would give us some money through the years, but we'd be then down to Suffolk County Water Authority rates, not our own special West Neck water rates.

And I'm just, can I just add at this point that this is a 25 year loan? Yes. So we adopted this loan in 22. So that means it would be 49.

In 47, fiscal year 2047 is the last year that we have to pay. Right.

At that point, whoever's here will have to make further decisions about whether the management, what's going to happen with the lease.

Yes.

So I'm just throwing that out there.

Yes, exactly. Okay, so if we go to the next spreadsheet, that is the steady rate increases, which was discussed last time. Like, what if we just do a rate increase now and each year thereafter so that. the rate payers are just on a steady schedule and are used to a small increase. So what you see happens there is I sort of plugged it in just to get us to a point where we were, you know, we didn't have to do anything over the years, like any big jumps. So it's 0.9% through the years of an increase and the, we'd end up after the last surcharge, we'd end up with like $5,600 and our rates would drop. So we go down by 38% in fiscal year 2048. And I feel like I had one other point I wanted to make on this.

So, if you could just run through that last line again, because I wasn't really. By 2047. In our reserve, we'll have 5628. Yes. And then by 2048.

Yeah, and I mean, it goes up why it will only because I just wanted to have a clean number. So I said the rates drop by 38%. So, I didn't make it quite the 7840. I just wanted. A clean assumption, but it would really be 5600 minus. An outflow of 785 dollars if you went to Suffolk County authority rates.

Yeah.

So continuing to build a little bit of a cushion is what you're saying. Yes.

Yeah. So over, so if we just do the 0.9%, the cushion just gets eroded slowly over the next 20 years, 22 years. Whereas if you flip back to the 2040 rate, we end up using the cushion much faster. And of course, this is all dependent upon, you know, what, what does, you know, what's the usage from year to year? And what is the Suffolk County Water Authority's rate increase over the years? So the question is whether you want to do a small increase now or just monitor things and do a larger increase in 2040 or push off making the decision for a few years to see how usage kind of levels out, if there's any growth. you know, if you add any new customers to the district here or there that would help.

Going through what we're going through now, the expansion, it's such a tedious process that we can't really count on adding anybody.

But that's sort of like the two sensitivity analyses that I did for you. And then you four or five get to decide which direction you want to go. And then we'll just update these based upon what decision is made and monitor it.

I'm trying to think of any foreseeable events or fluctuations that would change this.

That we would be liable for.

Okay. Right. Well, just fluctuations that we'd have to, but we'd have to readdress it.

Is our picture or not?

Yeah. Yeah. You really can't predict what's going to happen with any certainty.

No. What do you guys think? It's either kick the can down the road or open it up and start drinking now.

And it's it's point. 9, right? So it's less than 1% increase.

Yes, and that the reason for that was, and I started to talk about it a little bit at last at the last meeting is that while sub accounting water authorities rates might I have a, you know. The assumption is 3%, but because you're already double the rates. you get the arbitrage on that, I guess, is the best way to put that.

Well, my argument would be we really have an ethical obligation to everyone not to postpone and then face an 18% increase. That just seems, I mean, anyone who actually bought a house in 2040 would end up this huge increase, whereas we would have, we who've been here and are still around, kind of got the benefit of the cheaper rates and then we whack everyone with that.

I'm with you. I want to take that scenario off the table. That's my opinion, you know, waiting until 2040. Number two.

Yeah, I think that's a terrible idea for us as well as for anyone who might end up joining the district. either by purchasing a house or if it's extended. So the question then would be, do we wanna just postpone this for a little bit and then we might have to do a higher than 0.9%, is that, that's the way it would look?

Postponing it a little bit with the idea that we're ultimately gonna split the difference. Is that what you're thinking? Sooner or later, we're going to have to. Rather than making a decision now one way or the other, in a couple of years, we will do something that will be kind of in the middle, right?

Yeah, it could be possibly more than 1%. Well, right. You know, we don't know what it might be. But I think that we're at a crossroads here where we have the information to see You know, we have good information to begin to pay it off more rapidly and not jeopardize our money that we have very little to draw on. That's my opinion. What do you think, Dan?

Yeah, I mean, let's stick it to the man. Soak the rich.

But that's not all of us here, Dan.

I'm kidding.

Let's just be clear about that.

No, I'm joking. Sorry. I'm trying to be funny, but not very funny. No, I think it's obvious. I think we have to... And I realize that my lamp makes me look like I'm wearing a fez, actually. So I just am very excited about that, that I look like a Shriner. And... I think it's so obvious. We just have to be consistent about a 10-year, 20-year plan of we're going to be raising rates in an equitable, predictable way like any utility would. And we're going to do our best to make it so that by doing it over a 10, 15-year period, we have... you know, people can budget their life accordingly. And, you know, we should also let them know we're building a giant data center, you know, on the island and for AI. No, I'm just kidding. And we can just, you know, I think we just give them a predictable way to plan, you know, how they can count on a a modest increase over a 10 or 15 year period based on our research and thorough analysis. That's really what I would recommend.

I mean, I think when I look at our own bill, even though it's high, when I think about a 0.9% increase annually, it's not going to break the bank. It's small enough to not hurt that badly. And it also encourages conservation, even more than we're conserving right now.

That's a good point.

So I am personally For the 0.9% increase gradual, and I think we're going to get pushback from customers because there might be some customers who say. I have a house here, I'm going to sell my house in 10 years. I don't care. I want the smaller rate now. So, you know, then I think it comes back to what you were saying, Wendy, about the ethics of it. You know, we have to kind of look beyond ourselves as altruistic as that sounds. But I think that that's our mandate is to be responsible for the future.

So we're a community and I think we have to recognize that. And if I'm getting advantage of something now, it's not fair for me to say, well, I'm going to get it all cheap and then you guys can pay the huge jump up. And honestly, if my bill went up 18%, that would be really hard on me. So I agree with you. I would rather the 0.9 doesn't sound, even if I kind of semi-calculate in my head, it's not going to kill me. But it will help enormously over the time.

Yeah, and I think if anybody has HOA dues or co-op dues if you live in the city or things, I think everybody knows that there's always a yearly increase. I mean, I've never had any properties, HOA things go down ever. It's never gone down. So I think... I think having a adult conversation with our members saying, we're gonna pass this on over a 10 year period. So it's affordable to all and it's predictable. I think that goes so far.

Yeah, and it's really more, it's a 20 year period is what we're sending in ahead, 20 years.

26, 36, that's like about, yeah, it's about 20. The other piece of this too, Jesus, it just went right out of my head. What was I thinking? I had an idea, but now it's gone.

Maybe it'll come back.

Oh, we don't know. I mean, to assume that Suffolk County is only going to increase it 3%, that would be great, I guess, but they're not going to decrease it.

No.

So if it goes up even more, we've built, you know, we've, we're at least kind of moving forward and we're not going to be even deeper in the hole at the end.

Right. And I think that, you know, what is it, 2% cost of living increase? I mean, people can say, well, this is one bill, but all my utilities are going to increase and cost of living is going to go up. And for those people who are on fixed income, that never tracks with the cost of living. So there will be some people who will just fall behind naturally, you know, unless we unless everything changes in our lives and in our country and in the economy. What do you think, Bob?

I think the next couple of years are going to be very interesting and volatile. I think the idea of edging our way towards decision-making up the road makes sense. not to do anything specifically now, to take that somewhat longer range view. Okay. So I think everybody is leaning towards anyway. Well, I'm not. You're not.

No, I'm saying that to raise the, to do the increase of 0.9%.

You would do it now?

Yeah, I would. That's just, that's one vote. So that's why it's good if we all sort of give our input.

See Bob's point. And, you know, if we could kind of commit to we'll revisit this in two years or three years when there may be a lot of change in the country, potentially, you know, that might be one stop gap step, although it may lead to a bigger increase from then on. Maybe not a huge increase, but, you know, it could go up two or three percent. We just can't even predict it.

well i think you know i mean it's up to us to make some kind of decision well back to the money you know what what are we saving it for what what do you see as our obligations that we should have a reserve fund at all to pay off our debt to pay off our infrastructure that's what we're using it for okay so we either pay no no i understand that but i mean To hold on to it for a while, what do we think is going to happen? What could you conceive of that you would need the money for?

Well, you know, something county water is going to take care of all infrastructure costs going forward. And I personally don't see anything that we're going to be responsible for. We have 2 bills. We pay our clerk. And we have a very small administrative cost. What is the other thing we pay?

It's just clerk and shared photocopies. Yeah, that's it. Yeah. And then just whatever we owe Suffolk County Water Authority. Right. But then there's interest earned.

But if we just, let's just say, gave a huge lump sum now, let's say we'll just take that however money it is and just get it there to pay off at some point when that's whatever year that would be, we're all gonna be hit with a huge rate increase, aren't we? Because I don't think it's enough money to pay off the entire surcharge.

No, I mean, if you look at, that's what Amber laid out for us. Like for example, the 2040, if we wait until 2040, We're going to have the 18% increase in 1 year. And that will be that will be in 2040, right? Yes. Yeah. So. But we can't kick the can all the way down the road. I mean, we can. If we, if we all vote to do so, but. And we can just decide to defer. The rates as. You know, the rate increase that will maybe take us a little. Give us a little bit more advantage for a couple of years of paying the rate that we are right now, but eventually we will have to increase the rates. I mean, it's just an inevitability. So do we do it at point nine percent as laid out here? Do we wait two years and perhaps go up to one point five percent? Do we wait three years and it's going to go up? It's not ever going to go down. So the only other option that we have is to buy out Suffolk County Water Authority, the town, and then we'll owe all of the money that they invested in it. That's not a good scenario either. I don't think I'm recommending that. So we either pay now or pay in a couple years or pay in many years.

Can I make a proposal?

Sure.

I think we say if we said to our clients, our neighbors, here's what we're anticipating based on our analysis, and here's what we're proposing to everyone to You know, over a 10 year period and say it's like 1% or whatever, you know, whatever we ultimately say and offer to have a forum, you know, where we can hear from the community about it and present it. Or do you think that's like a bad idea?

Um, I would put it out as a mailing or as a questionnaire. I don't know about having an open meeting

Yeah. I mean, I think if you're asking people, do you want to pay more? They're going to say no.

No, we're going to get tomatoes thrown at us.

So maybe that's not the move, but I just think we're open, you know, to hearing, you know, feedback. But this is what we've approved and what we're the board has recommended.

You know, you're proposing send these analyses out to the customer base.

Yeah, very simple thing saying, look, our costs are going up. In order to not have a big surprise bill in 10 years, we're proposing a 1% annual increase, which is below the cost of living, to manage this and make sure we have prudent reserves for the future and so on and so forth. This has been approved by the board. And while we're saying this has been voted on, we're open to feedback from the community because we care about what you guys think and how you might manage this. This is our recommendation and this is what we're thinking. you know, here's a survey to tell us how much you hate us kind of thing. I don't know. You know, I'm just thinking, just giving a chance for people who want to.

No, I understand. I agree. I think it's a good idea to see what the response is. What do you think, Wendy?

You know, I... I agree with Dan in that no one's going to say, yes, please raise my rates. And I think we're going to see a division between those who are either planning on retiring or moving to another planet soon. And those who just bought in and envision they're raising their family here, if we have any of those, and they're going to be here for 20 years, they're going to be on different sides. Because if I was going to sell my house in two years, of course, I'd say, no, don't do anything. You know, what happens after me, the deluge, what do I care, right?

And

I think just knowing how I feel and how all human beings feel, it's hard to just kind of think of the community we first think of ourselves. And I totally understand that. So we might be asking too much of people, although we could be surprised. We could have people say, no, I'd rather deal with a 0.9, you know, less than 1% increase. I'll do the math. It's not terrible. And then I don't have to potentially, or my family won't potentially face an 18% increase. I mean, we could also avoid the whole thing by following Bob's suggestion and just postpone it for a couple of years and then go back to the community, but it's not going to get any better. That's the trouble.

You know, I'm just thinking about the customer survey that we sent out and the responses that we got. um there were quite a few responses that were where people were upset because we do pay so much for water and we do there is no doubt about that yeah and so they those people are certainly not going to be in favor of an increase So, my concern is that if the majority of the customers be they 20 or 10 customers that respond and they're all no, do not raise the rates because I can't afford my water bill as it is. Then we'll be faced with. Taking that consensus and doing nothing. Yeah, you know what I'm saying actually going against. in your scenario you're going against the will of the people well we we would be going against the will of the people in like two years or three years when we have to raise again god willing we're all here or maybe not um and i don't i do you know i i'm not just i'm just not sure if i don't know

It sounds very democratic, but I don't think it's a very good idea. I think it's our responsibility to make this decision, theoretically, because with Amber's numbers and our good sense, we have a better idea of what needs to be done. than the community, which is really a disparate community coming at it from a lot of different points of view and very immediate and specific points of view. I think that a moderate approach where we raise rates in a moderate way over the next few years, we don't have to start immediately, but we could. makes the most sense, softens the blow, and also would give us a time to see what happens in the next couple of years. I don't know whether a boom or a bust or an alien invasion or whatever is going to affect water rates, but I think it would be prudent to see.

So are you suggesting then to just do a modest we're just suggesting, let's say, over the next three years this and then not have a 10 year plan? Is that what you're proposing?

No, I'm proposing moderate, moderate, moderate, moderate. The new new party, a modest raising rates, as I said, doesn't have to be this year, but in a year or so. It was an idea of what happens in the larger economic picture.

So would you like to take the percent down from 0.9 to 0.5? Would that be modest enough? I mean, I don't know.

I don't know. I mean, I'm not willing to be specific enough, but that sounds fine. I think so. I really like Anne's idea of asking people what they would like. But I think that the danger there really is doing something that they're not going to like. And the idea that everybody is really going to be coming from 1%, 2%. Frankly, that doesn't really matter too much to me. But it's true. Any kind of raise is going to be meaningful to some people. That's true. And so that's the only way to justify that is if indeed we have more information and we can make a more responsible and essential decision in any single field of .

There's a couple of things. We know that the higher users subsidize the district. So, for example, our restaurants and our hotels that bring in the most money, if the status of those industries or businesses changes, that will greatly impact our revenue. Um, and so that's that's a concern and we cannot for predict what's going to happen there. And given the fact that. Expanding the district has proved to be such an onerous task. Um, as per Barbara blooms example, then that. Anticipating other businesses or residents to come into the district to help defray costs is not terribly realistic either. Unless something changes, and it probably won't as long as we are. The owners of the district, the town and Suffolk County water is the management. And because if they were the owners of the district. They would not have to go through the district expansion process that they now have to undergo through the. So. We can't necessarily bank on an expansion to bring in revenue. We're kind of, we are very much enclosed the district with how much money we're going to take in. So those are just some things that I'm thinking about. Do you have any input on this Amber? Even though you're not a voting member?

No, the only thought that I feel like just hasn't been raised is the creation of the 156 is that, you know, that came from everyone who like over the years. So like if you're an old customer, you helped to create that balance. So then you might want to be able to utilize that and keep your rates down. If you're someone new, you haven't contributed that old balance. So they get the benefit of that. And it's really just a timing issue because if I add up the, in any of these situations, you pretty much get to the same amount. You're going to end up paying the same amount over the, you know, to 2047. You're going to pay the same amount. It's just whether or not you front load it or back load it. Exactly. I mean, you know, evenly pay it or back load it.

Yeah. So we have 20 years of payments, no matter what. Yeah. Well, it's my hope that we can come to a decision today. And then we can definitely notify customers, Dan.

Yeah.

This is what we've looked at the analysis and discussed it and tried to think for as You know, clearly as possible, but about what the impact was going to be on everybody and then. Just let them know that this is this is what the rate increase will be, say, starting. 2028, right? Or, I mean, we can even make it year end. I think we are billed by Suffolk County water. May 31st is the last billing. So, I don't think we want to. institute this in June, we could put it off to January.

So does it seem like it? I think it's better. I personally like I'm expecting lots of bills for my I would say most people who are like summer people there, which is the majority of probably is it a majority of our clients are kind of seasonal, would you say?

If you look at revenue, absolutely.

So I think like, I guess People are expecting, and I put myself in this category, there's startup costs like opening your pool, you know, like getting your garden clean. You know, there's always some yearly costs that are coming in the summer. So would you argue that putting it in, knowing that people are going to be expecting to be spending some money on their homes to summer, eyes them, let's say, and that we're hiding it within that, that it doesn't feel as shocking as a winter charge? I guess I'm just thinking about the optics of it. Am I overthinking that? I don't know. My vote would be to just lay it out a 10-year tranche and just say to everybody this is how we saw best to pass it on to the community and you know open to feedback but you know this is what we've decided and so do we want to stay with the 0.9 that amber has laid out for us do we want to see if we can get another analysis at a 0.5 increase

Well, if it isn't too much trouble, a 0.5 certainly would be something we could take to the patrons.

Do you think it's worth it? I just want me to know the rest of the assumptions. So if you do point 5, like. How long do you want the point 5 to stay in effect until you need to do a big bump up or did you want to do it for a 10 year period and then do a level bump up from there? Just. I can, I can analyze the 6 ways to Sunday. I just need to know.

Well, I think 10 years is not enough time because the way that this is laid out, it's 20 years. You know, this will take this reserve that we have will take us to 47. To 2047, I won't be here. I don't know how many of us will be, but I think that. That 10 years is not enough time. And then you're going to have a dramatic increase.

Although it won't be quite as dramatic as the 18%. No, so it might be 9%. At 10 years, maybe not quite 10 years.

So, so what you're saying is a 10 year. Forecast we would, we'd have to. Increase the percentage by about somewhere in the vicinity of 9 to. 8, 9, 10%, right? Yes. Whereas if we took it to 20 years, if we take it to year.

18, I guess we're in what 4 so in 14 years, we're doing an 18% if we do nothing. So, yeah, if you did 10 years at 0.5%, then it might be like an 8% increase.

And I can crunch those, which is to me a lot. I mean, I'm just thinking about my own water bill and 8% increase on my own water bill. I mean, over time, it will increase a. That much at 0.9 or 1% over the years. But I think on 1 year, um.

And, of course, this may change in a couple of years, depending on what inflation does and what the customer usage does.

Yeah.

Do you think Wendy, do you want to. Is an advantage to not going too far out because. If we said we're going to lock this in for 10 years and then we get some surprises from Suffolk later, we're looking like we. You know, are going back on what we said in terms of a 10 year plan. I don't know.

So what you're saying is we put it in effect for 10 years, but at the before that 10 years is up, we revisit this.

Yeah, I think you'll be looking at this every year.

Yeah. And modify as it does change.

What do you say, Wendy? I absolutely agree. It could change based on Suffolk rates changing or the economy changing or whatever. I feel I'm a little uncomfortable just kicking it down the road rather than doing something now. Even at the same time, I realize no one wants it. I don't want it. We don't want it. But it seems unavoidable to me.

I'm uncomfortable with the kicking it down the road concept. I think that we're keeping an eye on it and are available to adjust, readjust, or change. And keeping it at a level that we could continue to make moderate increase. So that's not really kicking it down the road. We're still involved in decision making. We're being conservative.

We're being conservative about the rates and cautious.

Something should be conservative.

All right. So how about this? How about we Amber, in her spare time, comes up with another analysis at 25% over 10 years. And we'll see what that looks like.

And then whatever we need to bump it up to be leveled going forward. Would everybody agree that that's?

Yes, and be able to explain it, to obviate Dan's democracy. I think that's what's critical there, and that's what he was reaching for. Sure. It's the idea we have to explain why we're doing this and why we think it's in your best interest. Absolutely. And if you don't, go buy Poland Springs, right?

You're right. Okay. I'm just going to question more money. So is that a good solution? Do we all agree that that's... I mean, does anybody have any other suggestions?

No, I'm in favor of that.

Me too. Okay, so we're going to get one more analysis at a 5% increase over 10 years. And with the understanding that before that 10-year period, let's say in five years, We will revisit and look whoever's here to do so and look and see what the changes in the district have been. I mean, there haven't been a lot of changes since I've been on the board. In some respects, we don't have a lot of property to expand. And as I say, our hotels specifically 1, they're the biggest users and they subsidize really district in a formidable way. So, if that were to change that, that would be huge. And then we'll. Should we just think about instituting this increase starting January 2028? For 27, what year are we in?

26.

I would go with 27, but let's see what the numbers look like first.

All right.

How does that sound to you, Amber? Okay, so what you're saying is we're going to. Okay, yes, that's what we have for fiscal year in 27. we were going to have the increase. Okay.

Yeah.

Okay.

Would you be able to do this?

Pretty quickly. I'm working on it now.

Well, there you go.

Because I have the spreadsheet set up. It's just changing these variables.

Would we be able to see it? Are you suggesting we see it before we leave? Maybe. I just have to see what it looks like.

OK. And then while we got everybody, are we Should we get the town lawyer to look over the new kind of manual just so that it's been vetted by a human kind of thing?

You're talking about the rules and regulations?

Yeah, yeah, exactly.

We can enter. I know, Wendy, you have to leave at four, right? Or before then?

Well, it's already 420, so I've got to... So it's cheap.

Yeah. Do you want to do you want to set up another meeting to talk about the rules and regulations or do you want to do it?

I mean, I think it's pretty straightforward because it just what it did was it took I'd use the AI prompt to just kind of train it to be you know, able to work with all the documents you sent me and put it into one form with the updated Suffolk County laws and any new New York state laws. But I don't, as we know, we can hallucinate this stuff, you know? And so we, I would imagine it would probably be good to have someone in the town just look it over and who's a human who, you know, can say, good to go. And then we can share it, you know, with our members.

I have a couple of points about it. I think there's, there's a lot that's not in that document that you sent that perhaps needs to be.

Yeah, definitely a first draft. So whatever you think, just let's add it. Not a problem.

Does anybody else want to put in on what you think about that draft?

Well, I never got it, so I don't know. But I mean, I think that also, I think it's very important that we look at it carefully and talk about it. But also, we still are not approaching our need To define what our job is. What do we do.

This is what we do.

No, but no, we have to do more than that, I mean just the irrigation enforcement alone. give up on it. Say it's not our job we don't care about it, but that's what we're used as we're using as yours for and really impacts so much of this. Where do we go? Hire drones to check out all the ways that people are filling their pools. I don't know. I mean, we really have to either decide we're not in that business and that we really have no real role here, or we really do.

Yeah, it is a little gray because we are. Because Suffolk County is only managing. And so their rules and regulations, we have to, according to the draft, the lease agreement, if we read the lease agreement, we have to abide by their rules and regulations. So that supersedes any of our own rules and regulations. And it bears looking through it to see what pertains to us and what. I mean, it all pertains to us, but also, and I said this to Bob earlier, and I'm not sure. How clear I'm going to be able to elucidate this thought. But my hope is that, for example, the irrigation committee is trying to draft new code. For irrigation, and my hope is that inclusive will be municipal water districts. So that then the town code assumes the responsibility. For irrigation, and we don't. Because we can't enforce it, we used to go around and tell people to. That they had an illegal drip irrigation and on their property, but we couldn't go and take remove it. We would have to go to the building department and ask them to remove it. So we always have to defer to the town at any at any rate. So, I guess where I'm going with this is that. Irrigation should be under the auspices of the town and all of the town rules and regulations.

So. I just have to interrupt because I am going to have to sign off for my work meeting, but I just wanted to say that if there are things missing, Lisa, that did you add them into the document that Dan? I did not. What would be great, I think, is do that as suggestions, and then we can all take a look at that. I think it's going to, Bob's points are well taken, as are yours. I think it's going to take more than 10 minutes to resolve this. And I thought his was pretty good. I made a couple of very minor suggestions, but if it's missing things, then we definitely want to get them in there and then review it again.

Right.

And I think that what we need to do is draft it, trying to keep it simple like you did, Dan, but also then give it to the town attorney and say, is this document, what do you suggest for this document? And can it go under the town? Can some of these items be embedded in the town code? You know, it's really hard to delineate what is Suffolk County water that. If we're under their rules and regulations, that means that we, there are specifications that they make. That we have to abide by and then, but what do we.

And I always feel like, I mean, this needs to investigating, but I feel like, so the kind of water authority rules and regulations apply, but then if ours are more stringent, like, we can make them more stringent. I don't think we can make them lack more left. Right? So it seems like we should be able to have a mechanism. But since Wendy has to jump in a 2nd, I have numbers. So, if we do 0.5% for 10 years. Then in fiscal year, under 2037, we would have to increase 1.8%. And then that will follow through until 2048 when it would decrease 43%.

That doesn't sound terrible. Can you repeat that?

Yes. So 0.5% for 10 years. Right. And then 1.8% increases from fiscal year 2037 through 2047 with a 43% decrease.

And the increase from 2037 to 2047 would be what again? 1.8%. 1.8%. Yes. So 2%. Yeah, just shy of 2%. Does that seem palatable?

It does to me.

I like that. I mean, it sounds a lot better in the end.

Okay, so I guess we'll adopt this analysis.

And inform the public, I just have to check on my head. I sent an. Email to Shelby, she's not she's a training today just to see what's the mechanism for instituting a rate increase. Like, does the town board have to do a resolution or. I just don't remember what used to happen. And what happened when Suffolk County water authority took over how we implemented. and authorize them doing those rates. So there's just a little bit, that's like the one question I have, but if you propose that's what you want the rates to be, I will double check and see legally what has to happen. Okay. So we're all good with that? Okay. So we'll- And I'll update the spreadsheet and get it back out to you and get it reposted on the TEP website. Great.

Thank you, Amber. That's very helpful. Your explanation was really helpful too. Okay.

Do we need to take a vote to approve that or not yet?

Yeah, you should. Yeah, you probably should just to. Yeah.

I vote to approve this 5% over 10-year rate increase. Anybody want to second that? Okay. I vote aye. Okay.

Yes. All right.

Yes. All unanimous.

Okay, great. So we won't let anybody know anything until Amber gets back to us.

Well, it's out in the public realm, because this is a public meeting.

Well, yeah, I know. But I mean, we won't give hard copies.

It won't be official until we know what the mechanism is.

And I will see if we can, once we figure this out, our quarterly bills come out, I think May. So at that time, I will See, or maybe maybe if we should wait till the next quarter to inform customers, although that's getting close to instituting it.

No, that was my 2nd question is, when do we need to communicate the rate increase to sub kind of water authority for it to take effect. Like, how much lead time do they need and what would that. Potentially happen, but 1st, we have to figure out the town piece, then the subject kind of water. Okay. We'll do that. Yeah. If you want to check and see that piece, I'll check on the top piece. Okay.

All right. Thanks, everybody.

I guess I'll formally close this meeting and we'll see you soon. We'll talk again.

All right. Bye.