Finance Audit Sep 15 2026

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Unknown: All right, maybe five seconds

Unknown: Alright good evening and welcome to the finance and audit committee and special board meeting of September 15th

SPEAKER_03: 2026 this meeting is being recorded and can be accessed on smud's website

SPEAKER_03: Please remember to unmute your microphone when speaking in order that our virtual attendees may hear

SPEAKER_03: The microphone will display a green indicator light when the mic is on

Unknown: For members of the public attending in person that wish to speak at this meeting

SPEAKER_03: Please fill out a speakers request form located on the table outside the room in tenant this month security

Unknown: members of the public attending this meeting virtually

SPEAKER_03: That wish provide verbal comments during the committee meeting may do so by using the raised hand feature in zoom

SPEAKER_03: Or pressing starting on your phone at the time public comment is called

Unknown: Technical support staff will enable the audio for you when your name is announced during the public comment period

SPEAKER_03: You may also submit written comments by emailing them to public comment at smud org

SPEAKER_03: Written comments will not be read into the record

SPEAKER_03: But will be provided to the board electronically and placed in the record of the meeting if received within two hours after the meeting ends

SPEAKER_03: When the chief legal officer, please conduct the roll call

Unknown: director kirth

Unknown: dr. Bowie Thompson

Unknown: Chair rose I'm here

SPEAKER_08: Director kirth and chair rose are present director Bowie Thompson is absent also present are directors fishman herber

SPEAKER_08: Sam Warren and president tomorrow

SPEAKER_03: So I don't know one on tonight's agenda is a discuss approving a contract change

SPEAKER_03: To a contract with Kaiser Permanente approving of the 2027 medical insurance premium rates

SPEAKER_03: And it's in the contract by one year for the period of January 1st 2027 through December 31st 2027

SPEAKER_03: Cost estimated at 43 million dollars our director of people service and strategies will lead discussion welcome

Unknown: Thank you

Unknown: Good evening directors and chair rose

Unknown: I'm Uge Cochran, and I am the director of people services and strategies

Unknown: Before I begin I would like to take a minute to thank the benefits team for all their efforts working with our

SPEAKER_00: Broker and carriers to negotiate the renewal terms for the 2027 medical contracts

SPEAKER_00: This evening. I have two separate presentations and board action requests pertaining to smud employee and

SPEAKER_00: Retiree medical benefits with Kaiser Permanente and United Healthcare

Unknown: First we will review the contract renewal with Kaiser Permanente

Unknown: request is to approve the

SPEAKER_00: 2027 medical insurance rates and extend the Kaiser contract for the 2027 plan year and

Unknown: We estimate that cost to be about 43 million dollars

Unknown: Kaiser remains an important part of the portfolio because it provides integrated care strong digital access

SPEAKER_00: Coordinated services with on-site specialists and pharmacists

SPEAKER_00: Preventative care programs and presence within the California public sector market

Unknown: Providing ease and simplicity for our employees and their health needs while remaining the lower cost option

SPEAKER_00: 2027 will be the third year of the current three-year agreement with Kaiser

Unknown: next slide, please I

Unknown: Like to start by providing some high-level background on smud smud's medical benefits

Unknown: smud currently offers health plans provided by Kaiser United Healthcare and

Unknown: They are offering plans based on our employee and retiree needs and location

Unknown: Between both plans we cover

SPEAKER_00: 9112 employees

Unknown: retirees and their eligible dependents

Unknown: If we take a look at the current industry trends total medical premiums are projected to increase by 9% for

SPEAKER_00: 2027 this is the highest increase in 17 years

Unknown: What is driving this increase our outpatient facility care?

SPEAKER_00: Which is the single largest component of health care claims in 2026?

Unknown: along with pharmaceuticals

SPEAKER_00: Oncology and behavioral health services

Unknown: like most employer plans employees share the cost of health care premiums and

Unknown: in 2026 the average employee cost share is benchmarked at

SPEAKER_00: 16% for an employee plan and

SPEAKER_00: 25% for a family plan

SPEAKER_00: I'm happy to share that smud's average cost of sharing are below industry benchmarks

SPEAKER_00: Which supports smud's ability to attract and retain talent and talented employees in general our employees share of the health care plan

SPEAKER_00: costs are between 9 and 16 percent for individual employees and

SPEAKER_00: 11 to 18 percent for family plans and a high deductible plan provides even lower premiums starting at 6% cost share

Unknown: next slide, please

Unknown: I'll now go into the specifics of the 2027 renewal with Kaiser Permanente

Unknown: 51% of our active employees are enrolled in Kaiser

Unknown: smud offers both an HMO

Unknown: High and an HMO low plan starting 2027

Unknown: Kaiser is changing from a 12 month to a 24 month utilization period rate

Unknown: This welcome

SPEAKER_00: This is welcome news for employers as one bad utilization year will not be predictive of renewal costs of the future as

Unknown: noted on this slide

SPEAKER_00: Utilization and claims are the main drivers of premium increases in addition to utilization

SPEAKER_00: There are other trends driving driving cost increases high dollar claims are going up

Unknown: There are now more serious diagnosis

SPEAKER_00: especially cancer

SPEAKER_00: circulatory and musculoskeletal conditions for younger and older working adults

Unknown: Medical inflation is outpacing general inflation due to higher supply and labor costs

SPEAKER_00: For example a shortage of primary care doctors is expected to occur in the next 10 years

SPEAKER_00: The cost for specialty drugs and treatments for cancer and weight loss are continuing to rise

SPEAKER_00: even though Kaiser put in place limitations on GLP1 use for medical conditions only and

Unknown: Health systems are raising prices because hospital consolidation

Unknown: Have substantially reduced competition allowing them to negotiate higher prices

Unknown: Next slide, please

Unknown: Taking a deeper dive into Kaiser's utilization summary

Unknown: Which Kaiser measures in three categories based on the metric price per member per month?

Unknown: Which is known as PM PM?

Unknown: The PM PM calculation represents both an increase in utilization and an increase in cost per service

Unknown: overall paid claims

SPEAKER_00: Per member per month has increased 4.7 from prior 24 months

Unknown: For the 12 month utilization period from April 2025 to March 2026

SPEAKER_00: Impatient claims have increased 3.7 percent

SPEAKER_00: Outpatient claims have increased six and a half percent and pharmacy claims have increased 3.4 percent in

SPEAKER_00: addition

Unknown: High dollar claim reporting also showed six claimants over five hundred thousand dollars totaling 3.9 million dollars in

SPEAKER_00: Costs however compared to prior year large claims are trending down with a decrease of 8%

Unknown: next slide, please

Unknown: Here is the summary for the

SPEAKER_00: 2027 cost increases to our plans our active HMO plans are going up by 11.2 percent

Unknown: Early retiree HMOs are also going up by 11.2 percent

SPEAKER_00: the Medicare Advantage plan actually had a rate pass this year, so it's staying flat and

Unknown: The total cost for Kaiser is actually at 10.3 percent or a four million dollar increase compared to last year

Unknown: Kaiser has also provided us with a $20,000 wellness fund

Unknown: Next slide, please

Unknown: This slide breaks down the monthly

SPEAKER_00: medical premium rates for active and retirees

SPEAKER_00: for employee only employee plus and

SPEAKER_00: employee and family

SPEAKER_00: With these options the HMO low plan has the lowest premiums coming in at one thousand thirty nine dollars for employee only and

SPEAKER_00: 3117 dollars for employee plus family

Unknown: now smut pays between 82 and a hundred percent of the premium depending on several factors such as

SPEAKER_00: employee status dependent coverage and

SPEAKER_00: Represented group next slide, please

Unknown: Finally I'm formally requesting the board's approval for extending and approving the contract with Kaiser Permanente for 2027

SPEAKER_00: The total estimate cost is 43 million dollars. I

Unknown: Can now open it up to questions or we can go to the United Health Care plan before we take questions. What would you prefer?

Unknown: And do the next one okay, there's no objections. Thank you

Unknown: The second medical carriers smut contracts with is United Health Care

SPEAKER_00: We are seeking approval for a contract change for the 2027 medical premium rates with a cost estimate of 40 48 million dollars

SPEAKER_00: United Health Care provides an alternative delivery model and greater choice for our employees including high deductible plan with an HSA option

Unknown: next slide, please

Unknown: Thirty four percent of our active employees are enrolled in United Health Care our plan provides several choices to employees and retirees

SPEAKER_00: including HMO

Unknown: Alliance which is a Sutter only network and a high deductible plan like Kaiser

SPEAKER_00: Utilization is the primary driver of increasing costs. The HMO plan is currently operating at a hundred percent loss ratio

SPEAKER_00: indicating that claims are exceeding premium revenue and

Unknown: Other factors in health care are generally impacting costs as well and these include significant increase in GLP one drug use

Unknown: higher health care provider costs including

SPEAKER_00: increased spend for doctors nurses and specialists

SPEAKER_00: increased costs on pharmaceuticals in both utilization and higher drug prices and

SPEAKER_00: Consolidation in the health care system leading to a lack of competition resulting in price increases

Unknown: next slide, please

Unknown: Diving a little deeper the plan increases are driven by

SPEAKER_00: Concentration of high-cost members combined with sustained utilization levels in effect a small number of employees and dependents have

SPEAKER_00: Have had very large medical claims during the utilization period these involve things like cancer treatment

SPEAKER_00: specialty drugs major surgeries

SPEAKER_00: transplants or complex chronic conditions

Unknown: Claims over four hundred thousand dollars have exceeded three point two million dollars in cost and the top four medical claimants exceeded

SPEAKER_00: 1.9 million dollars in total and

SPEAKER_00: Beyond those few high-cost cases the overall population

Unknown: Continue to use health care at relatively high levels and this trend is most likely going to continue into the next plan year

SPEAKER_00: next slide, please

Unknown: This is a summary of the 2027 United health care plan increases

SPEAKER_00: The HMO plan for active and retirees are increasing by twenty point one percent

Unknown: The HMO Alliance plan is increasing by eight point three percent

Unknown: The PPO and high deductible plan is fourteen point one percent and a Medicare Advantage plan is going up by eleven point six percent

Unknown: All in all is a sixteen point two five percent increase or six point seven million dollar increase from last year

SPEAKER_00: United health care has also included a fifty thousand dollar wellness fund in the renewal I

Unknown: Also like to note that smud is addressing rising health care costs with ongoing employee education

Unknown: shifting employees into the right plans for

Unknown: The for their needs and designing an improved health assessment program

Unknown: Our intention is to make the health assessment program more personalized and easier to engage with

Unknown: Next slide, please

Unknown: This is a summary of the monthly medical premium rates as you can see the lowest cost plan as indicated on the table is

Unknown: The Alliance HMO low plan with premium rates ranging from one thousand one hundred thirty dollars to three thousand four hundred fourteen dollars for a family

Unknown: Again, there is a cost share between smud and the employee

SPEAKER_00: Depending on several factors including plan dependent coverage and represented group

Unknown: These cost shares can range from anywhere from six to eighteen percent

Unknown: Next slide, please

Unknown: Listed here are mentally medical premium rates for retirees plan retiree plans and there is a different cost sharing model for retirees

SPEAKER_00: Depending on plan and additional factors like years of service or date of employment

Unknown: Next slide, please

Unknown: Finally we are seeking the board's approval for extending and approving the contract with United health care for 2027

SPEAKER_00: The total estimated cost is 48 million dollars

SPEAKER_00: And I can now open it up for questions

SPEAKER_03: Questions director fishman

Unknown: Excuse me

Unknown: The first presentation about Kaiser indicated we have about

SPEAKER_10: 9100 people that we're providing health care for between employees retirement retirees and families

SPEAKER_10: How

Unknown: Many of those are represented in these two contracts and can you rough breakdown and you know how many are in Kaiser and how many are in?

SPEAKER_10: United health care

SPEAKER_00: Total for Kaiser is around 3,800

SPEAKER_00: 3,800 for active and retiree employees and then I'll have to get a breakdown on the dependence for you

Unknown: But it's about a 50% 50%

SPEAKER_00: a 51%

SPEAKER_00: ratio for Kaiser versus

SPEAKER_00: United health care and these are the only two that we offer these are the only two plans that we offer

SPEAKER_00: Okay. Yes

Unknown: Director yes, thank you for this information. I mean I know I'm

Unknown: I'm not expressing anything that's new, but I just can't believe how everything just keeps going up

SPEAKER_01: Yes, so much and so quickly

Unknown: I did want to ask though a little bit about

Unknown: You know, I'm with United health care and I get

SPEAKER_01: barraged about

SPEAKER_01: You know, we want to come to your home and talk to you

SPEAKER_01: We you know want to do this for you. We want to do that for you. I mean

Unknown: I'm wondering if I take advantage of those things if I'm driving up the cost for health care for

Unknown: My fellow employees not necessarily. I think that there's a in health care. There's a whole effort of

SPEAKER_00: helping preventative

SPEAKER_00: Approach having a really preventative approach to health care

SPEAKER_00: Which is good for both us and the industry because they are going to try to keep the cost low

SPEAKER_00: So if there is a diagnosis, they're able to catch it sooner. So your treatment costs would be lower for example

SPEAKER_00: So I think in in an effort it really is to help drive the cost lower because I know that

SPEAKER_00: Industry is also feeling the increases and the pain

SPEAKER_00: especially around labor costs and inflation

Unknown: Mm-hmm and drug costs. Okay. Thank you for that

SPEAKER_01: The other question I have is I've actually been going to the gym and

SPEAKER_01: You know, we we used to staff that place, you know very nicely with with trainers and a

Unknown: Whole bunch of other things. When do you see that coming back?

SPEAKER_00: Good question

Unknown: I think it might really depend on demand and

SPEAKER_00: You know, it's it really is, you know, some of the things that we need to look at for

SPEAKER_00: Moving forward for health care really is the preventative that includes having healthy habits including going to the gym eating healthy and

SPEAKER_00: I can't really answer that unless Laura wants to bring it back

SPEAKER_00: But I think that it's going to depend on demand and the cost of that as well

SPEAKER_00: You know one of the things that we want to do in the next few years

SPEAKER_00: I'll share a little bit of the three-point plan I have in place for helping us maintain costs or at least try to

SPEAKER_00: lower the

SPEAKER_00: Maybe some more specific utilization in our health care plans

SPEAKER_00: The first one is we actually moved brokers from AON to Alliant

SPEAKER_00: you might be familiar with Alliant. Alliant actually is part of the Prism Network the JPA Prism Network and

SPEAKER_00: They are going to really help us because they service over a thousand public entities

SPEAKER_00: They're going to be able to provide an assessment on our plans and ensure that first of all that we have the right plans

SPEAKER_00: in place for our population and

SPEAKER_00: that

SPEAKER_00: We will look into some cost preventative measures, for example

SPEAKER_00: looking at

SPEAKER_00: Different providers maybe different plans even to bring into the mix of what we have

Unknown: But I think we need a full assessment of our plans right now because our population is changing and I think that

Unknown: You know we can look at the plans, but we can also look at the

Unknown: How can we intentionally do preventative

Unknown: Programs in place so one of the questions I had received from

SPEAKER_00: Director Bowie Thompson was around our HAP program and she was very

SPEAKER_00: Kind in providing feedback that the function of that program wasn't really suitable for what we were trying to do

SPEAKER_00: so we're taking a look at that so that we can really engage our employees on and

SPEAKER_00: Incentivize them to do the right things when it comes to health care including going to the gym

SPEAKER_00: Including going on walks including eating healthy. So that's the second thing that we're trying to do and I think that

SPEAKER_00: We need a three-year

SPEAKER_00: benefits plan strategy

SPEAKER_00: Costs are just going to continue to increase and I think that

Unknown: You know as smart we're known for providing great benefits to our employees

SPEAKER_00: We want to keep that in place, but we also want to look at the economics of what we do provide

Unknown: We have a majority of retirees. Do we have the right plans for the retirees for example?

SPEAKER_00: So where can we look and make changes that are you know going to provide some savings?

SPEAKER_00: But at the same time either provide better benefits or consistently maintain what we have at a cost that we can afford

Unknown: Well, thank you for that. I I do want to go on record and say that

Unknown: you know healthy employees are the best ways to

SPEAKER_01: run a strong company and

SPEAKER_01: We really had some fabulous things going on and

SPEAKER_01: I don't know what the costs were but I don't think we can skip on our

SPEAKER_01: Employees, you know, they really are the you know the blood of this

SPEAKER_01: operation so just want to put a little word out there that as you go through different things that really like to see a more

SPEAKER_01: robust

SPEAKER_01: Health program for our employees. Thank you. Thank you

SPEAKER_03: Director Sanborn, do you have any comment to see your head is public first? Oh, thanks. Hi

Unknown: Yes, I I'm it's really

SPEAKER_05: shocking the price of health care and I do think I

Unknown: Mean the more research is done a lot of this is related to diet and lifestyle and what we're being exposed to and I guess

SPEAKER_05: I would just encourage us to think creatively about how we can help educate our employees about you know, how to protect themselves

SPEAKER_05: What's on the market? What's healthy? What isn't whether it's food or

SPEAKER_05: Cosmetics or anything? There's a lot of stuff out there that we're exposed to that are causing a lot of problems

SPEAKER_05: And I see that very scary increase in cancer

SPEAKER_05: Which we all know is

SPEAKER_05: People especially colon cancer right now, which may be related to microplastics it turns out so

SPEAKER_05: I think I anything we can do to be preventative and support our employees and making good choices. I think would be great

Unknown: So thanks for that and that's perfect

Unknown: Yeah, thank you. Um, so I have a couple I have a couple questions and queries. I

Unknown: I went through some of the CalPERS data that I'm that I'm a member of through my day job and one of the things that

SPEAKER_03: caught my eye is CalPERS dropped United Healthcare because they didn't feel like their costs were justified the cost increases were justified and you

SPEAKER_03: See there the the basic member cost is a 20% increase which is which is a lot lot

Unknown: And so that sort of leads me to some questions. When are we comfortable?

Unknown: With using them this year and then the secondary question the larger policy question is what I think I think I mentioned this

SPEAKER_03: I mentioned this but I didn't capture it all. What is our plan to sort of bid out?

SPEAKER_03: Rebidding these and why do and why do we do? Why do we typically have two providers and not like more or less?

Unknown: Yeah, I know that's a great question

SPEAKER_00: Yes, CalPERS has dropped United Healthcare and has gone to blow cross blue shield instead

SPEAKER_00: And that is a provider that we will be looking at next year

SPEAKER_00: We'll go to market with our broker and those are the discussions

SPEAKER_00: We'll have with the lion in terms of this strategic plan because at the end of the day

SPEAKER_00: I we still want to provide great plans for our employees

SPEAKER_00: But cost does matter and it's not going to be sustainable if we don't actually take action and look at some other options

SPEAKER_00: Someone else also mentioned earlier in my conversation today that

Unknown: You know, we've been great at providing these benefits at a very low cost cost to our employees

SPEAKER_00: But it's a little bit like car insurance, you know, your deductible determines your premiums, right?

SPEAKER_00: If you're at $250 versus $1,000 in in deductible, it's a big difference in what you pay for that insurance

SPEAKER_00: So we need to have a little bit of a different way of thinking about how we're approaching this

SPEAKER_00: meanwhile

Unknown: To director Herbert's comment as well on preventative. I think that's going to be a huge

SPEAKER_00: Direction that a lot of employers will be going towards

SPEAKER_00: so I rather take our wellness funds and invest them in things that will make a difference in those areas for us and

SPEAKER_00: Educate educate educate our employees. We also need to look at our employees and how they make choices when it comes to their insurance plans

SPEAKER_00: Some employees may be very healthy their families may be very healthy

SPEAKER_00: They don't need to be in a PPO or a very expensive plan

Unknown: Really, we need to educate the employees on determining what is the best plan for them because that really helps us at the end of the day

SPEAKER_00: as well

SPEAKER_00: So there's lots of options to consider there

Unknown: Okay, and I know when I was going through the Cal bars rights, our Kaiser plan is right in line

SPEAKER_03: their

SPEAKER_03: Numbers right in line with one we have and and even our United Health Fund that

Unknown: That's within my thing like ten or twenty dollars of the blue shield anthem coverage that are that are probably pretty comparable as well

SPEAKER_03: So nothing about that way. Um, the only thing I would just say, you know, we see those

SPEAKER_03: top line numbers and

SPEAKER_03: For the handful of people with really high cost but ultimately that's in my mind

SPEAKER_03: I'm a big chunk of what the insurance is for its catastrophic coverage for people so they don't go bankrupt when somebody gets cancer or

SPEAKER_03: Needs their heart worked on or you know

SPEAKER_03: Some of these things are needs to transplant all which has happened to people in my life that I know so I certainly would never

SPEAKER_03: blame anybody

SPEAKER_03: And I'll be curious in the long run. We've heard

Unknown: Some sort of I would say concerns about covering the GLP one

SPEAKER_03: Medications but but it is also having watched people lose tremendous amounts of weight

SPEAKER_03: I do think in the long run you're gonna have better medical outcomes and you're gonna avoid diabetes you're gonna avoid

SPEAKER_03: Heart attacks and it's gonna end up saving the plan a lot of money in the long run potentially

SPEAKER_03: Yeah, no, absolutely and I think Kaiser has a limit on GLP usage, but United does not which is also driving these costs

SPEAKER_00: I do want to go back for a second to your comment about the high deductible plan. I'm actually on the high deductible plan

SPEAKER_00: Just because it fits our family needs better

SPEAKER_00: But the high deductible plan also comes with an HSA which is a triple tax advantage that maybe employees don't know about and

Unknown: younger employees tend to in companies I've worked with in the past they tend to be more on the high deductible plan because they're younger and

SPEAKER_00: healthier and

SPEAKER_00: But they take advantage of the HSA payments or you know

Unknown: Funds that we provide them and what they put into their accounts and they can take that with them wherever they go

SPEAKER_00: But there is a triple tax advantage to that as well. So there's lots of reasons we have great options

SPEAKER_00: I think we just need to educate our employees better on what to choose

Unknown: Thank you. You're welcome

Unknown: Any other board comments? Are there any public comment on item number one or number two?

Unknown: Thank you, thank you you're welcome

Unknown: Okay

Unknown: So let's go ahead and we'll jump to

SPEAKER_03: item number three

SPEAKER_03: And this is our quarterly procurement report for the second quarter of 2026

Unknown: Hello, sir. Good evening, Jessica field at beautiful council starting in April of this year. I also have the procurement department. So

SPEAKER_06: Congratulations on getting your first just go feel procured report

SPEAKER_06: Can we advance the slide one, please?

SPEAKER_06: This is sort of a breakdown of everything that falls under the rubric of BL 8

SPEAKER_06: Which is the authority that some other procurement department has to do contracting on behalf of smud

SPEAKER_06: next slide, please

Unknown: Okay, so

SPEAKER_06: Competition I know the board

SPEAKER_06: Rightly is concerned with making sure that we have a lot of stiff competition for our awards and as you can see here

SPEAKER_06: we had in the

SPEAKER_06: Boy does the eyesight fail

SPEAKER_06: 297 million dollars worth of contracting in Q 2 April and to August April June, July

Unknown: Yeah

SPEAKER_06: Almost 300 million dollars of competitively bid contracts and relatively low amounts in all the other categories

SPEAKER_06: 405 million competitive awards so far this year that the driver for 300 million dollars was a really big

SPEAKER_06: 150 million dollar

SPEAKER_06: Distribution transformer contract that we did do Eaton Cooper as well as a 35 million dollar contract for environmental services

SPEAKER_06: Well, that's for contractors under 35 million dollars

SPEAKER_06: next slide, please

Unknown: I

SPEAKER_06: was sitting at a board meeting sometime last year when someone on the board was

SPEAKER_06: Suggesting that we really need to make sure that we don't have so much direct procurement because one that's it

SPEAKER_06: Skirts competition and the like we had an extraordinarily high amount of this back in 2021

SPEAKER_06: but I asked staff to put together a

SPEAKER_06: demonstration of how the direct procurement numbers have looked over the last couple years it looks like we've skidded down this year to

SPEAKER_06: 0.2% and

SPEAKER_06: to put this into perspective

SPEAKER_06: Direct procurement sometimes just makes sense because putting together a big procurement package when it's not a super high dollar value contract

SPEAKER_06: But takes much of staff time gets a bunch of people in the community putting bids in when there's not really that much money

SPEAKER_06: On the table, so hopefully we're judiciously using that authority next slide, please

SPEAKER_06: Inclusiveness we were talking about this just the other day

SPEAKER_06: We've been working harder and harder to get more and more bidders to the table to make our competitive

SPEAKER_06: Solicitations yield what we hope are the most financially remunerative contracts for smud

SPEAKER_06: It looks like we had an extraordinary amount of inclusiveness at five point six percent in

SPEAKER_06: 2025 this quarter so far we're at five we used to target around three

SPEAKER_06: so we're

Unknown: Doing better than we want but then we have in the past but we're doing things to increase those amounts

SPEAKER_06: I just note on the side that meta power solutions is an entity that provides transformers as some other

SPEAKER_06: equipment that we have not contracted with before and I and one of the members of staff are going to be meeting with them tomorrow to

SPEAKER_06: Try to encourage them to participate in some of our solicitation

SPEAKER_06: So there's a lot of ongoing efforts on the part of staff to really drum up these numbers over time

SPEAKER_06: next slide, please

Unknown: Seed I know this is an issue that's to the deep in the hearts of the board

SPEAKER_06: It really does go to how much value to smud give back to the community that we live with live in and will the ratepayers

SPEAKER_06: Who buy our electricity the numbers as you see are well above the 20% mark

Unknown: And

SPEAKER_06: We've had 10 million dollars in sub-contracting for the last quarter and 34 million dollars in total seed

SPEAKER_06: So the numbers are fairly high

SPEAKER_06: Can we move the next slide, please?

Unknown: the amount of

SPEAKER_06: seed subcontracting where the money was actually gone to the seeds as

SPEAKER_06: Opposed to the numbers that they thought they were going to get was

SPEAKER_06: 75.3% for this quarter and I know that is a concerning number to the board because if somebody is a seed

SPEAKER_06: Subcontractor in a contract and they expect a certain amount of work, then it would be nice if they were able to get that amount of work

SPEAKER_06: One of the things that I've observed over the years from outside the procurement department is that it has been my experience that perhaps

SPEAKER_06: The contracts don't necessarily identify the correct amount of work that the seeds are going to get and in part

SPEAKER_06: I believe this is because if you're going to put a proposal together

SPEAKER_06: You're trying your best to make an attractive proposal and it isn't necessarily

SPEAKER_06: Your desire isn't to create the most accurate proposal based on what the historical numbers are. I met with staff

SPEAKER_06: A couple of months ago and I said for public works contracts, which I believe constitutes the lion's share of some of our large contracts

SPEAKER_06: Instead of having proposers just come up with numbers based on what they want to show

SPEAKER_06: We should identify what the historical numbers have been in those categories and then

SPEAKER_06: Require all the proposers to use those historical numbers as the percentage of work that will go to each of the individual job

SPEAKER_06: categories for example if fencing was 5%

SPEAKER_06: Historically on the civil construction contract and I just made that number up then everybody should be using

SPEAKER_06: 5% to identify the seeds are going to get I believe and I believe staff believes that if we adjust these

SPEAKER_06: Requirements and the way I just described that we will have better

SPEAKER_06: Forecasting of what the seeds are going to be getting in the way of work

SPEAKER_06: They'll be a bit better able to plan the amount of work

SPEAKER_06: They're going to get and they'll be getting a lot more of what they get at the last meeting at the last time this

SPEAKER_06: Recurrent was was proved this report was provided Casey Fallon said this and I know it's true

SPEAKER_06: Cuz I watched it half an hour ago now that we are improving our education to

SPEAKER_06: business unit so that they can manage their contracts better and

SPEAKER_06: Education doesn't always sound like the best solution to a problem

SPEAKER_06: The reality of around smud is we're very very nice to people

SPEAKER_06: We don't want to push on people really hard in order to get those seed numbers up

SPEAKER_06: We need to push on people we need to educate staff and give them the courage and the tools

SPEAKER_06: They need to be able to say look it looks like you were self-performing

SPEAKER_06: Some of the work that was supposed to go to a seed we now we need to watch out for it

SPEAKER_06: We need to bird dog it so we are putting together a plan

SPEAKER_06: It's supposed to be done by the end of this year and then we will be rolling it out in

SPEAKER_06: 2027 that will really help support staff to do that. So I believe between those two things

SPEAKER_06: We'll be able to see this number come up

Unknown: Next slide

Unknown: Stand Joe what you're saying is of all the contracts we let

SPEAKER_01: 25 percent of

SPEAKER_01: The dollars that were going to go to the seed vendors did not is that correct?

SPEAKER_01: That is correct. Okay, as far as our records show if you think about it, they're forecasted amounts

SPEAKER_06: It could be more or it could be less. But what what happened this last quarter was

SPEAKER_06: 75% were paid to the seed club subcontractors 25% were not and it's

Unknown: Let me let me illustrate what I was saying a little bit better staff

Unknown: gives

SPEAKER_06: Direction to our contractors did the work that we need when we need it

Unknown: We don't always know what the kind of contract and all the jobs are going to be for civil construction

SPEAKER_06: Do we know how many distributions transformers we need platform or?

SPEAKER_06: Platforms for we don't so when we put those jobs together

SPEAKER_06: It may or may not line up with what the seed commitments were so-called seed commitments in each of the contracts

SPEAKER_06: So that's I mean, that's why I want to align those things to make sure that they're as close as possible

Unknown: Okay, so the realities of

SPEAKER_06: Our process is that sometimes people aren't always happy with the result of an award and we get a protest

SPEAKER_06: We had two protests that were either filed in or attached to quarter to closed

SPEAKER_06: Procurements one was for crane services

SPEAKER_06: That one I looked at both leaves one of them was a math error

SPEAKER_06: Somebody uploaded the wrong number from the proposal the proposer didn't like that

SPEAKER_06: They said that should have changed the award, but it wasn't even close to changing the award

SPEAKER_06: So we dismissed the protest the other one is everybody's favorite topic civil annual construction services contract

SPEAKER_06: And one of the proposers didn't think that they got a high enough technical score

SPEAKER_06: This is the single most common protest basis that I've seen over working at some effort 13 years

SPEAKER_06: People think they should get a higher technical evaluation what we typically do in response to protests along these lines as we look

SPEAKER_06: Were the business units identifying the appropriate people to review things did they have the background to be able to evaluate the technical proposal and

SPEAKER_06: Were they done objectively and in this case there were four individual human beings they sat separately from each other

SPEAKER_06: They recorded their scores none of them conferred with each other

SPEAKER_06: And we have to assume that the business units who do this work know how to rank these things

SPEAKER_06: And so we just wrote back to them and said we stand behind the score and they didn't know that these neither of these appealed

SPEAKER_06: So I believe that they accepted the response as adequate

Unknown: Next slide that might be the last slide

SPEAKER_06: And there's your quarterly procurement report

Unknown: Are there any questions or comments president tomorrow I

SPEAKER_11: Appreciate how

SPEAKER_11: You and other staff took our concerns about the seed

Unknown: Seed awards the actual versus forecasted and

SPEAKER_11: Appreciate that you took that seriously and looked at what we can do about it, so I'm looking forward to

SPEAKER_11: What the results are so good. Thank you

Unknown: Perfect my only my only comment echo what president spider just said right it's very much about accountability and

SPEAKER_03: Fairness on those seed vendors and it sounds like this this course that you guys are going down will help solve that problem

SPEAKER_03: Right where where they're gonna be able to better project

SPEAKER_03: The actual work and then they'll be able to line up the actual over the expectations much better

SPEAKER_03: Versus more of a wouldn't call quite a shot in the dark, but not having the exact target in front of you that you're shooting

SPEAKER_03: It so thank you for that

Unknown: Okay, I don't see any other board comments. Are there any public comments on this?

Unknown: Okay, thank you

SPEAKER_03: Let's move to item number four

SPEAKER_03: I'm before is by the board with smud's financial results from the seven month period ending July 31st

SPEAKER_03: And a summary of smud's current power supply costs and we have George our director of interim director of accounting

SPEAKER_03: Really been a whole month since we saw you

SPEAKER_09: Good afternoon

Unknown: Director rose and smud board of directors, so I'm George Vaughn director of accounting and controller

Unknown: Presenting the seven months of financial results and power supply costs

Unknown: Okay customer revenues we clipped over the 1 billion dollar mark through July

Unknown: The significance also of this is that we were off by about seven hundred thousand dollars against our budget

Unknown: So we were off less than one tenth of 1%

SPEAKER_09: So I just want to call that out that was very accurate forecasting on the revenue side

Unknown: Commodity expenses three hundred and twenty one million dollars year to date

SPEAKER_09: Which is twenty million dollars lower than budget that's due to lower fuel costs because we've been generating less thermal power

SPEAKER_09: Additionally, we have lower market power prices that are reducing the cost

Unknown: other operating expenses six hundred and eleven million dollars fifteen million dollars below budget

Unknown: It's driven by some I'd say project timing and lower program participation

Unknown: Kind of spread into the customer services and public goods area

SPEAKER_09: additionally transmission and distribution

SPEAKER_09: O&M is lower than expected to primarily due to efficiencies and vegetation management

Unknown: This all leads to a hundred and ninety seven million dollars through July of net income, which is our bottom line

Unknown: Our budget was a hundred and fifty three million. So we're forty four million dollars ahead of budget

SPEAKER_09: through July

Unknown: I think that's a that's a

Unknown: The revenue being so close as good since we've had such mild weather at least at that point through mid-July

SPEAKER_03: And it warmed up in August, but it's been boring in the back of my mind

SPEAKER_03: The good thing is people's bills are lower lower, but from the smud budget perspective hot weather means more sales

SPEAKER_03: Yeah, which simply stabilizes our budget. So thank you. Absolutely

SPEAKER_09: Energy sources I'll kind of talk about both of these at the same time the left hand chart is for the month

SPEAKER_09: The right hand chart is year to date

SPEAKER_09: So we'll start with the blue which is hydro

SPEAKER_09: We're under plan both month to date and year to date on hydro

SPEAKER_09: Driven by the fact that it's just been a kind of a poor hydro year. We've covered this before

SPEAKER_09: Low precipitation about nine not about 90 percent of average. So below to low participation

SPEAKER_09: The snow packs been non-existent for a couple of months

Unknown: the orange is thermal generation and the green is

SPEAKER_09: Purchase power those offset were low in thermal high in purchase power both for the same reason which is

SPEAKER_09: Kind of low reasonable market prices make it better for us to go and buy the power in the market then then to generate it thermally

SPEAKER_09: Delinquencies so you can see here. We're at 26 million. That's a little bit above June

SPEAKER_09: Which is just normal seasonal as you start getting into the warmer months

SPEAKER_09: I think the more relevant comparison is I was looking at last year for July and it was 30 million last year

SPEAKER_09: We're at 26 right now this year. So we've dropped over 10% year over year. It's still not our normal levels

SPEAKER_09: Pre-covid, but it's it's getting better year over year

SPEAKER_09: the majority of that's residential about 75% is residential obviously on these delinquencies and

SPEAKER_09: We have about eight and a half nine million dollars in payment plans out of that total

Unknown: Precipitation levels has really not changed in the last month because it hasn't rained

SPEAKER_09: So we're still at about 90% of average to date and 90% of the whole water your average

SPEAKER_09: Which is kind of what I was talking about in terms of low hydro

Unknown: Snow packs been at 0% for a couple of months now

SPEAKER_09: Last month I reported 85% on

SPEAKER_09: Our storage capacity now we're at 75%

Unknown: So we've been you know taking some of that water out of the reservoirs and using it so but we're still at about 75%

Unknown: If you look to the right here on commodities

Unknown: We're forecast to come in very close to plan at the end of the year

SPEAKER_09: 591 versus 593

Unknown: That's kind of a couple of offsetting things. So our hydro forecast is as I said low

SPEAKER_09: And when you have less hydro that drives you to more expensive

SPEAKER_09: Commodities so that kind of puts upward pressure

SPEAKER_09: but then we're seeing downward pressure because we have lower fuel costs and lower average market power prices and

Unknown: then if you look at the chart below that that just shows the

SPEAKER_09: 183 gigawatt hours below plan for

Unknown: hydro

Unknown: Finally days cash on hand

SPEAKER_09: So we're at 234 days year to date versus a budget of

SPEAKER_09: 222 that's largely driven by the fact that

SPEAKER_09: We brought in more net proceeds on our bond issuance than what was in the budget

SPEAKER_09: So that helped drive that up and then you can see at the end of the year

SPEAKER_09: It kind of goes the other direction. It's 201 days versus a plan of 211

SPEAKER_09: That's due to capital spending timing and so there's some capital spending going on late in the year. That's kind of

SPEAKER_09: driving those numbers a bit

SPEAKER_09: And you know, but we use that peak that green peak you see there in the summer

SPEAKER_09: That was the bond issuance we use that we're paying down commercial any remaining commercial paper

SPEAKER_09: I think in August or so it's paid off and then by the end of the year

SPEAKER_09: We won't have any commercial paper outstanding

SPEAKER_09: So I can take any questions. I

Unknown: Don't have any questions

Unknown: Quick observation that our access to the Western markets is paying off in a big way

SPEAKER_10: And I can't wait to get into e-dam and really make it work. Awesome. Yeah, great. Thank you

Unknown: Thank you, thank you

Unknown: All right, how are they any public comments we have no public comment, okay

SPEAKER_03: Then

Unknown: Let's jump to

SPEAKER_03: Item number five is just an informational item if there's any questions on the internal audit services report on the green energy partner plus

SPEAKER_03: annual verification

SPEAKER_03: Which I read and then there was nothing to report

Unknown: Okay, let's move on to item number six then

Unknown: And then item number six was take another bite of this Apple

SPEAKER_03: Is to discuss the contract award for the civil annual construction services contract?

SPEAKER_03: Yeah

Unknown: Chairs before we turn it over to Joe Scofield a lorong why chief executive officer and general manager its men

SPEAKER_07: Wanted to take a minute first to kind of talk through this item and kick off the discussion

SPEAKER_07: As you alluded to this is the third time that this is coming in front of the board fourth time

Unknown: So I just wanted to thank the board. I know that we've been having a really robust discussion about this contract

Unknown: And really acknowledge the fact that you each represent

Unknown: Not only your wards, but a really diverse population set within our communities and with that we all have different perspectives

SPEAKER_07: You all have different perspectives that you're bringing to the table and this is not easy, right? And not everything's easy

SPEAKER_07: We're not always going to agree and that's actually okay. And I think that's what makes this board so strong

SPEAKER_07: I do want to acknowledge the board's willingness to have these tough conversations

SPEAKER_07: Listening to the discussions. I think there's there's actually two issues here that I see

SPEAKER_07: The first is really around the contract that's being presented for approval and the work that's associated with it

SPEAKER_07: And the second is really the board's desire for us to increase our union contracts

SPEAKER_07: But I do see those as two separate and distinct issues on the work for this contract

SPEAKER_07: I think the team did a fantastic job. They followed our policies

SPEAKER_07: They negotiated really strong terms for us and for our customers. I mean, I agree

SPEAKER_07: strongly with the team's recommendation to award the contract to the top two vendors

SPEAKER_07: with a slight change in terms

SPEAKER_07: moving the contract from that five-year contract terms to three years and

SPEAKER_07: Reducing from the 250 million dollars to 150 million dollars this approach really saved SVID both time and money

SPEAKER_07: But I think most importantly

SPEAKER_07: By approving this it actually keeps intact our team's ability to continue to negotiate good contracts in the future

SPEAKER_07: The second item the board's desire for us to increase our union contracts

SPEAKER_07: The community workforce agreement has already been placed into the parking lot and the board work plan

SPEAKER_07: I think we need to get that added to scheduled and calendared

SPEAKER_07: We'll come back with the staff recommendation around the use of CWAs

SPEAKER_07: We need time to complete that analysis and we'll probably need until the beginning of the year in order to do that

SPEAKER_07: And but we'll get that calendared and I think that's really the appropriate place to have that discussion

SPEAKER_07: So just wanted to to kick that off on my thoughts on on the issue. Thank you

SPEAKER_03: So what I would ask the board members if we could have Joe go through

Unknown: The whole his whole presentation and let's try to do questions at the end

SPEAKER_03: Just so we can hear everything he has to say without interrupting and stopping

Unknown: If you guys are okay with that unless it's really you know, you need much fun to interrupt. Yeah

Unknown: This is a bit of a truncated presentation, thank you very much Laura for your hard to hollow

SPEAKER_06: I'll just say that next slide

Unknown: This is just a reminder of the ranking of all the various proposers for the civil and oil construction contract

SPEAKER_06: Top score went to Sierra National Construction

Unknown: Second place went to Doug beer camp. Those are the two awardees that we recommend awarding contracts to

SPEAKER_06: Those are the ones who gave us the best combination of technical prowess and price

SPEAKER_06: next slide, please

Unknown: This is essentially just an overview of the things that we looked at past delcorterea seed company experience personnel experience safety

SPEAKER_06: Environmental sustainability and commercial terms which was price and compliance with contract terms next slide, please

Unknown: so

SPEAKER_06: I wanted to take the opportunity to walk through the sample job because I know that

SPEAKER_06: Led to some numbers on the slide last time that seemed a little

SPEAKER_06: Jarring I guess so the sample job is a relatively small part of the overall

SPEAKER_06: Points through allocated each proposer

SPEAKER_06: 40% of the points for this were done for what we called commercial points, which is mostly pricing

SPEAKER_06: But an eighth of that was the so-called sample job and what happened was a member of Eric's Poff staff

SPEAKER_06: the director of substations and other things

SPEAKER_06: Put together what he thought was a very

SPEAKER_06: representative job of the kinds of work that most of the

SPEAKER_06: Most of the work under this contract would go to that was under a million dollars the kinds of stuff

SPEAKER_06: He does day in or week in week out month and month out throughout the course of the contract

SPEAKER_06: So it was a relatively confined space job. So it's kind of interesting

SPEAKER_06: So each of the individual proposers was required to fill out a form that identified how they would tackle this the technical specs

SPEAKER_06: to safety mobilization labor equality control

SPEAKER_06: Phasing all the things that would give us insight into how they were going to design and tackle these jobs

SPEAKER_06: so we could understand what value they would give and

SPEAKER_06: So points were allocated based on all those different things and one of the things that was interesting to me

SPEAKER_06: And that I share with you just because it really sort of brought this to life

SPEAKER_06: Is that in terms of phasing the work in a confined space?

SPEAKER_06: You have to be very careful about making sure that you're putting things in that you aren't going to have to take apart later

SPEAKER_06: don't get in the way of your later work and

SPEAKER_06: One of Eric's staff was explaining to me that one of the reasons that one contractor didn't get a lot of points is that they're phasing

SPEAKER_06: with sort of like

SPEAKER_06: Contradictory to the sort of a reasonable layout of what the work would look like

SPEAKER_06: next slide, please

SPEAKER_06: So why award to two contracts?

SPEAKER_06: The first one is just to save money where you worked really hard to drill this down getting 27 million dollars down from the top two

SPEAKER_06: Contractors over the course of a five-year contract so lower for three years

SPEAKER_06: the second one is

SPEAKER_06: Two contracts meets with the staff forecast that they'll need contractors to do the work that we have planned and that we anticipate

SPEAKER_06: So it is true that we don't always award the same number of contracts on you know

SPEAKER_06: For different contracts year to year because we have different plans

SPEAKER_06: We know you know sometimes we're building out a lot of stuff

SPEAKER_06: Sometimes we have a lot of things planned sometimes we put a little bit of buffer in for unplanned emergencies

SPEAKER_06: But for this particular contract it was staff's opinion that two contractors would get the job done

SPEAKER_06: Another one is rewarding contractors who worked with staff to adjust pricing as Laura on why pointed out

SPEAKER_06: We had a couple of contractors who worked really well with us to bring their pricing down into an area that would be very competitive

SPEAKER_06: For smud it would actually save us money over the existing contract

Unknown: I'm gonna say that again

SPEAKER_06: This is going to be cheaper than the existing contract because we were able to get such good pricing on it that hardly ever happens

SPEAKER_06: in today's world

SPEAKER_06: Next one is time managing contractor relationships one of Eric staff was talking to me about he gets calls

SPEAKER_06: Every week about how much work he's going to get from each of the contractors that's in his roster

SPEAKER_06: You have five contractors as opposed to two that's two and a half times more time

SPEAKER_06: You're spending on the phone

SPEAKER_06: Getting offers to go to lunch and all the other things that go along with managing the relationship with the contractor

SPEAKER_06: Another one is how much prepare preparation processing and task proposal discussions you have do you talk to five you talk to two?

SPEAKER_06: Do you review five proposals or do you review two?

SPEAKER_06: So if it's worth it because we need the bench then maybe it's worth it to do all that extra work and the last one is

SPEAKER_06: To get into inside baseball legal issue

SPEAKER_06: The public utilities or the public contracts code requires us to have payment bonds for our contracts for the amount of the contract

SPEAKER_06: We have five contractors

SPEAKER_06: we have to have five payment bonds in the estimate that I got from staff was that it was I

SPEAKER_06: forget what the exact number was but I think it was a

SPEAKER_06: five divided by 180 like 60

Unknown: Anyway, it was a certain amount of tens of thousands of dollars per contractor for bond and if you have two bonds

SPEAKER_06: It's a lot cheaper than five bonds. So it will save us money just on terms of direct payment line items in the contract

Unknown: I believe that might be my last slide

Unknown: One more says Mary Tony

SPEAKER_06: So we come back to the requested action which was already mentioned the recommendation is to award two contracts one to

SPEAKER_06: Sierra National Construction Inc and Doug beer camp general engineering ink for civil annual construction not to exceed

SPEAKER_06: 150 million dollars. I'll be happy to

SPEAKER_06: Take questions

Unknown: Comment signed up at this point

SPEAKER_08: Director Stanborn has a comment, but I don't see any I don't see any hands from members of the public at this point

Unknown: So the the recommendation from our CEO is to adopt

SPEAKER_03: the top two for a three-year period of 150 million dollars

SPEAKER_03: So we go ahead and have we had the previous discussion, right? We had some different ideas that we should expand it to five

SPEAKER_03: We've heard from staff some serious concerns about going that pathway

SPEAKER_03: Some of my notes right we're worrying about just the ability to having staff negotiate in the future

SPEAKER_03: And then we also have this, you know a separate

SPEAKER_03: Course of direction that we're looking at some some workforce agreements though that is separate from this set of work

SPEAKER_03: That's what I'm hearing so far

SPEAKER_03: Should we go ahead to people? I assume everybody has some thoughts and

SPEAKER_03: Comments that they'd like to express I see director Sam Barnes hands up or present

SPEAKER_05: Yeah, and I with even more information provided by staff about the bond costs

SPEAKER_05: Already knowing that the difference between number two and number three is eight and a half million dollars

SPEAKER_05: Which is the better part of a percentage rate increase?

SPEAKER_05: And basically the difference in the change in one of that health care contract costs that we were just saying so expensive

Unknown: With us trying to keep these rates low and

SPEAKER_05: Be able to negotiate in the future. I

SPEAKER_05: Just don't

Unknown: Think we should vary off of the recommendation from staff. I think it's solid. It's fair. It's affordable and

SPEAKER_05: It will get us long-term benefits as long as we go back and look at these contracts and how

Unknown: They're scored so in the future

SPEAKER_05: We don't have these discussions at the last minute when we're looking to approve contracts. That's not the time for me

SPEAKER_05: To do it. We just aren't prepared to do the deep dive and be ready. So I look forward to those

Unknown: that deep dive and coming back so we can

Unknown: Not have these kinds of things happen in the future so I'm ready to move this item as presented. Thank you

Unknown: Okay, I see present Maya. Yeah, so last week. I asked, you know, what would be the impact of

SPEAKER_11: Having five contracts and I think you know the opposite of that you you point out the reasons why

SPEAKER_11: two contracts is

SPEAKER_11: makes sense from your perspective and and I'm satisfied with with the

SPEAKER_11: answers and I also

SPEAKER_11: appreciate that we're

Unknown: We're moving forward on this. We've reduced the the term of it and also even though they're not

SPEAKER_11: inextricably

SPEAKER_11: inextricably linked just the timing of it with regards to the

SPEAKER_11: Community Workforce Agreement. I appreciate that. It's there's some clarification about you know, we're still moving forward with that and

SPEAKER_11: So I'm happy to support this at this point

SPEAKER_11: so and I really do appreciate that we're

SPEAKER_11: we've clarified the relationship of this to the

SPEAKER_11: Community Workforce Agreement that we'll be

SPEAKER_11: Looking at in the coming months. Thank you

Unknown: Yeah

Unknown: I

Unknown: In previous meetings, I mean there's there's a little bit of friction between our seed contracting and our desire to be supportive of

SPEAKER_10: organized labor and that that's not it's not a

SPEAKER_10: constant but but that friction doesn't come up sometimes and I think

SPEAKER_10: it's it's the board's job and to try to strike a balance and

SPEAKER_10: a lot of that will come out of this the process that we're going to go through to look at the CWA and

SPEAKER_10: Decide when and where it's appropriate and and and how to make that work a little bit better

SPEAKER_10: In this case, I'm you know, I do appreciate that staff has come back and said look we were willing to shorten the term of the contract

SPEAKER_10: We'll we'll see this again a little bit sooner and and kind of you know, open it up again for additional people to bid on it

SPEAKER_10: sooner than originally planned and

SPEAKER_10: This this strikes a decent balance and I'm ready to support it

Unknown: Trevor

Unknown: You know, I tell ya I

SPEAKER_01: Have flipped around on this

SPEAKER_01: you know as we have had discussions and

SPEAKER_01: I've gone out and I've talked to

SPEAKER_01: different folks that I think can give me insight on this and

SPEAKER_01: You know, I think first of all that staff did a tremendous job

SPEAKER_01: By really drilling down the costs of

SPEAKER_01: These contracts that is so very important

SPEAKER_01: And so I want to say thank you for doing that

SPEAKER_01: you know for me, I know there have been you know different perspectives and

SPEAKER_01: That there's a desire to have more union contracting, you know

SPEAKER_01: I fully support that but I do believe that we can take care of that with our workforce agreements and

SPEAKER_01: the fact that we lowered this from 250 to

SPEAKER_01: 150 and then shortened it from five years to three years

SPEAKER_01: I mean, I think we've really tried to be responsive to those who

SPEAKER_01: You know haven't been happy with the original contract so

SPEAKER_01: After taking my time to do a little bit more research talked to different folks

SPEAKER_01: I'm gonna support this and I do think staff did a great job

SPEAKER_04: Sure, I

Unknown: Do intend to support the compromise solution that we've come up with I think it's a good one and make sense as it's presented

SPEAKER_04: Just a couple observations though

SPEAKER_04: There are some great contractors on this list and the winners are great contractors, too

Unknown: But we do tend to see the same contractors winning our bids

SPEAKER_04: Particularly in civil construction, but it's the same group of people

SPEAKER_04: or group companies

Unknown: And I think there's something about learning to work with smud that these

SPEAKER_04: Contractors do over time and learning how our bidding process works and all that that is an experience that you only gain by

SPEAKER_04: Being a contractor for smud

Unknown: So I think that limits the number of folks who can bid into the smud work with any hope of getting to work

SPEAKER_04: Because they just don't have any experience and so it makes sense over time to see

Unknown: ways to include other contractors in smaller roles so that they begin to be part of

SPEAKER_04: I'm not sure that quite the right analogy

Unknown: But sort of the triple-a league that can then grow into a larger role with smud over time

SPEAKER_04: But that's a happy to support this

Unknown: To the contractors who do regularly win our work, and I know we have a couple of them here tonight

Unknown: It's a credit to you. Thank you for doing such great work and that smud staff values the things that you do glad you're back. Thanks

SPEAKER_03: Perfect. Um my just a couple of thoughts

Unknown: I'm happy with going with the staff recommendation. We've certainly been talking to people about their perspectives on this

SPEAKER_03: Part of me thinks to know we part of this is fairness

SPEAKER_03: We this process has been going on for probably almost a year now

SPEAKER_03: At smud and we set out the rules for these contractors to bid on

SPEAKER_03: And I think we were to change that that would not be fair to them right if at some point

SPEAKER_03: We want to have some different labor

Unknown: Pieces in these contracts and that's something that needs to be said early and up front so they can take that into account

SPEAKER_03: I like to see in terms of some of our work a little bit more emphasis on price

SPEAKER_03: Especially on sort of a general general construction we have situations where the technical ability when you have a high-pressure oil

SPEAKER_03: Line that needs to be spliced that made that technical aspect is of more importance

SPEAKER_03: So I would ask staff to think about that and and when we go out to do this in the future

SPEAKER_03: and then regarding you know, one of my

SPEAKER_03: early concerns was just that the 250 for me was just too big of

SPEAKER_03: What I was saying blank check to give staff

SPEAKER_03: The three years and 150 I thought was far more reasonable

SPEAKER_03: I do think there's some room for

SPEAKER_03: either the committee or the pre brief level to be doing some

SPEAKER_03: Scouting ahead of what's on our work plan and what contracts are coming

SPEAKER_03: Because I got the pre brief the week before and you know, the this basically was baked by the time it gets to a pre brief

SPEAKER_03: And I could have told the staff. Yeah, we need to look at that one a little bit more closely months ago

SPEAKER_03: So that's just I think something more on our on our

SPEAKER_03: policy operation side for me as a board member to think about and be on top of as a chair of this committee as well

SPEAKER_03: and the last thing I would say

SPEAKER_03: regarding directors Chris comments as the idea sort of like bidding and bidding training right as as a

SPEAKER_03: somebody who

SPEAKER_03: Scored many solicitation over the years, right that I think it's hard sometimes for contractors to understand the importance

SPEAKER_03: That they write absolutely everything down

SPEAKER_03: in these

SPEAKER_03: In these documents that they're submitting to us right when I hear oh somebody didn't phase their face stuff correctly

SPEAKER_03: It's like well, they certainly will know how if they're a professional contractor, they know how to phase a project

SPEAKER_03: But they clearly didn't write it down

SPEAKER_03: Properly in the documents and it cost them points

SPEAKER_03: So I do think that there's an opportunity to to help make sure that everybody is

SPEAKER_03: Having the best opportunity to understand what they're what that written requirements are when they're applying

SPEAKER_03: So that's all my thoughts and I would just think I would think

SPEAKER_03: Our friends who are in the audience for coming. I apologize for the multiple rounds

SPEAKER_03: This is very unusual on my tenures on the board to have to have this much discussion on one of our contracts

SPEAKER_03: But I'm certainly supportive of the staff recommendation

SPEAKER_03: And is there any objection putting this on the consent calendar?

SPEAKER_03: Currently right now it's on discussion calendar. I think we need to keep it there. It's one director's not present

SPEAKER_08: So we can do

Unknown: You know the very short presentation and open it up to staff if that works

Unknown: Okay, if you feel like we should give on discussion then we will do that

Unknown: Is there a reason I don't understand

Unknown: The way it's noticed currently there's also it's too late to re-notice it

SPEAKER_08: I believe so and there is also one director that's not present at this meeting

Unknown: And if you put it we put on the consent calendar, it's it's it's combined with all the other items. So I

SPEAKER_08: Would keep it on the discussion calendar

Unknown: Good what else the 17th? Yeah, it's pretty close to be not really an emergency to start changing the agenda

Unknown: Okay, yeah, let's leave it on the

SPEAKER_03: Let's leave it on the discussion callers is better. It's a safer route

Unknown: Okay, that's more appropriate. Okay. Thank you guys

SPEAKER_03: Was there any sorry? Was there any public comment on that?

Unknown: Perfect and then Joe, thank you for that that we'll see you again very briefly on Thursday

Unknown: There we go

SPEAKER_03: And then what else so let's jump over to item number seven and we have the board work plan and then we pull those slides up

Unknown: And I believe present tomorrow will you take us through that? Yeah, so I won't go through the entire work plan

SPEAKER_11: Obviously tomorrow we've got the zero carbon plan update

SPEAKER_11: So I'm just gonna do a few highlights and this only goes through

SPEAKER_11: October anyway, so and then we will have a discussion in the strategic

Unknown: Strategic development

Unknown: Committee on the on the six on our integrated distributed resource plan. I'm gonna do a budget preview on the 13th

Unknown: We're gonna have a integrated graded resource plan

SPEAKER_11: kickoff

SPEAKER_11: on the 14th and

SPEAKER_11: Is it correct to say that that will also be starting to talk about our large load?

SPEAKER_11: That's those are gonna that's an integrated

SPEAKER_11: Discussion with yeah, Laura Angway, I'm CEO general manager

SPEAKER_07: And we had originally planned to bring the large loan policy back to the board

Unknown: This month as we started to do that communication

SPEAKER_07: It became really clear that it should be part that outward communication should be combined with the integrated resources plan

SPEAKER_07: That there's an implication there in terms of load and what that what that means to our plan

SPEAKER_07: So we're combining the out the community outreach, but we'll bring the policy back to the board

SPEAKER_07: I believe it's in March of when we're done with the IRP

SPEAKER_11: you know, I think it's

SPEAKER_11: I'm glad that we're including that because they're starting to be

SPEAKER_11: Discussion out in the public about okay, where are you gonna get all electricity? How's it gonna affect or you know our goals?

Unknown: so

Unknown: appreciate that and then

SPEAKER_11: finally, I wanted to point out that the

SPEAKER_11: community workforce agreements are on the

SPEAKER_11: parking lot and

Unknown: We will be doing I guess really talking about that under the kirth regime which will be coming up in

SPEAKER_11: 2027 so unless there's a coup

Unknown: So that's that's all I have does anybody have anything that they would like to see on them

Unknown: work plan

Unknown: Yeah, you know

Unknown: I've been harping at our general manager about this for quite some time

SPEAKER_01: but I don't know if some of you were also

SPEAKER_01: hearing from your constituents about

SPEAKER_01: balcony solar and

SPEAKER_01: You know, the product is out there people are buying it and

SPEAKER_01: I know that it's not UL certified so you could burn up your house. Just keep that in mind

SPEAKER_01: But you know when I've talked to

Unknown: You know folks they say well, you know

Unknown: We we might be able to maybe work with the company and help them get UL

SPEAKER_01: Certified which you know would be nice. I just really worry about

Unknown: folks going to Home Depot and

SPEAKER_01: buying these

SPEAKER_01: balcony solar

SPEAKER_01: panels and

Unknown: Plugging them in and causing damage

SPEAKER_01: so I would like for us to talk about this at a

SPEAKER_01: Meeting or to get an update on what it's about

SPEAKER_01: So I can ask people to tune in and listen to what's really the case about

Unknown: this solar option

Unknown: We

Unknown: Do have a board memo that's being routed right now that's going to the board about balcony solar

SPEAKER_07: But I'm hearing that you're wanting a discussion item. I would like to have a discussion

SPEAKER_01: I mean

SPEAKER_01: I'm more than happy to to read the memo when it comes and then decide if if that would be easier for you

Unknown: But people are talking about this and I would agree though

SPEAKER_03: I think I think the point of it is to have it a public discussion

Unknown: About it so people can can hear from

SPEAKER_03: experts

Unknown: about it

Unknown: Yeah, maybe we can put that you know on strategy or something

SPEAKER_01: Certainly, I'd be happy to have it in policy, but I I want us to talk about it

Unknown: So I have one but I see it director Samburn's hands up

Unknown: Thank

Unknown: You chair and I do want to play off that that those balcony solar bill is on the governor's desk and my understanding is

SPEAKER_05: That it does require you well certification

Unknown: For future sales if it's as it's signed

SPEAKER_05: But I find it super interesting too, and I'd love to have a presentation on so I support that

SPEAKER_05: I did also want to bring up that I've been hearing from constituents about floating solar and

SPEAKER_05: There's a lot of new creative ways to do solar to really stop

SPEAKER_05: Evaporation and as the climate heats up that could save us water or hydro and we do have

SPEAKER_05: facilities where we could maybe use that so I'd like to learn more about floating solar as well and even

SPEAKER_05: one just saw countries putting it in between train trucks and

SPEAKER_05: Using that as a leader so anyway any creep maybe it's creative solar

SPEAKER_05: I don't know

SPEAKER_05: But places that we can use a floating solar for sure I would love to hear about

SPEAKER_05: I think that's a success with the canal solar is Turlock to nearby so

SPEAKER_03: Anything else on

Unknown: Okay, um Mike one of the things there was

SPEAKER_03: a

SPEAKER_03: Piece in the media today that I ran across this morning and then it was in our news clips

SPEAKER_03: And then I got emails about it this afternoon talking about the large loads and some of these projects that

Unknown: are in discussion

SPEAKER_03: and

SPEAKER_03: We talked about it a little bit in August that we've said publicly we have a handful of projects that

Unknown: People are all looking at but I don't but they're not

Unknown: Very far along in the process right and then and so I feel like there's maybe some room to have some kind of public

Unknown: We have a public web page, which is which is good

SPEAKER_03: But maybe there's room to have a public discussion or a public workshop series, so there's so many questions

SPEAKER_03: But I don't know if anybody else thinks that that was potentially a good idea if you've gotten concerns from your constituents

Unknown: Well, I think that we're going to have the discussion

SPEAKER_11: About a large-loop policy

Unknown: You know, I'm you know

Unknown: Of course that's in March

SPEAKER_11: But we have had discussions where we've made it pretty clear what our expectations are as far as and you know

SPEAKER_11: It's we haven't had any formal direction to staff, but I didn't hear anybody say that we shouldn't

Unknown: That we shouldn't make sure that our customers are

SPEAKER_11: Protected from rate hikes and stranded assets and things like that. I think it's I think we've made our

SPEAKER_11: made our

SPEAKER_11: intentions or our

SPEAKER_11: What the board's thoughts on it have been pretty clear and

SPEAKER_11: So I don't know that having an interim meeting is important. I

SPEAKER_11: wouldn't but I

SPEAKER_11: Think that's already I agree with you

SPEAKER_03: I think maybe my concerns not necessarily at the board level. It's more our public out our public. Yeah

SPEAKER_03: Yeah, yeah

SPEAKER_03: Laura Angway

SPEAKER_07: CEO general manager we are doing the public outreach

SPEAKER_07: So as we reach out on the IRP process we will be including the large loads as a discussion item

SPEAKER_07: Within that community outreach, so that'll start I think it's October and it'll run through February of next year

SPEAKER_07: And so we will be doing a lot of public outreach with that and then bringing the information back to the board in March

SPEAKER_07: Is the idea?

SPEAKER_11: Doing public outreach on large large loads and IDRP together. Yeah, and IRP together and then to your point

SPEAKER_07: President tomorrow

SPEAKER_07: We have heard very clearly from the board your desire to make sure that our customers are kept whole

SPEAKER_07: That our existing customers are not paying for large loads that are not put at risk because of it in terms of a financial risk

SPEAKER_07: And so we do have the ability to

SPEAKER_07: Negotiate custom tailored agreements in the meantime

SPEAKER_07: So in the absence of having a policy we have a process in place that allows us to negotiate those custom tailored rates

SPEAKER_07: Which are then approved by the board it requires board approval for those rates and so we would be bringing those those back to

SPEAKER_07: The board so you will be able to see all of that if those move forward. Thank you

Unknown: So just to be clear. We don't see the board

SPEAKER_01: Voting on a large load policy until next March

Unknown: Okay

SPEAKER_03: Then the only other thing I wanted to point out

SPEAKER_03: Potentially director kirth and I are going to be at RE plus the energy conference during the budget meetings

SPEAKER_03: And so we should at least take a look

SPEAKER_03: If we might swap those meetings around to one of the committee meetings the week before on the work plan

SPEAKER_03: Just just a heads up. I haven't gone and I just glanced at the calendar notice the two are overlapping

Unknown: That's all I have okay, I'm sorry didn't

SPEAKER_02: Actually, I didn't follow. I think we probably should swap the budget meeting

Unknown: With one of the other committee meetings so all the board members can be that you're talking about in November

SPEAKER_11: I don't have that but

SPEAKER_11: Is there any reason from staff perspective or how do you want to handle that because I don't want to just

SPEAKER_11: Say yeah, let's do it and find out that it doesn't work for

SPEAKER_11: Staff or doesn't solve the problem of board members, but I'm happy to do do that. So work with

SPEAKER_11: Laura to make it was take a lot of change

SPEAKER_11: Okay, I don't want right do listen what the two members of the finance committee to not be at the budget meeting

Unknown: Okay

Unknown: All right

Unknown: All right, I've any public anybody have anything else any public comments on the work plan I

Unknown: Do not see any public comment now, okay?

Unknown: All right, then then we'll wrap up just the final reminder written comments received on items

SPEAKER_03: Not on the agenda will be included in the record if received within two hours of the end of the meeting

SPEAKER_03: Then the last item is to write a summary of committee direction

SPEAKER_08: I have staff will add the discussion of balcony solar floating solar another

SPEAKER_08: Solar technologies on the parking lot for future discussion

SPEAKER_08: And we'll look into moving the better discussion to another week

Unknown: Okay, anything else all right, thank you everybody we will see you tomorrow