April 20, 2026 — Water Resources Advisory Board Regular Meeting

Transcript

Captions from City of Boulder YouTube recording.

[7:32] Katie? Okay. Okay, Katie will serve as secretary. Alright. We can move on to our, fifth… agenda item, which is the approval of the March meeting minutes. which I have right in front of me here. Can we move to approve the March meeting minutes?

[8:02] Mr. President. So, okay. Approval of the March trading Units. I'm not gonna vote, because I wasn't here. Thanks, Melinda. Yeah, just to be thorough. Yeah. We'll move on to the virtual public comment. Do we have anyone ready to speak tonight? Let me check, and I'm just getting a little trickle in from folks online that they can't hear, so I unmuted my computer, but Karen, could you see if the… I don't know if you can get the room audio? Check. Okay. Step 4. Awesome. And it looks like it's picking it up as I speak. Okay. Let's do a little test run here with folks online. We are hitting the public comment portion of the meeting.

[9:08] So if you would like to speak in the meeting tonight, if you could virtually raise your hand… I can try to unmute you. Okay, but it's working now. Okay, it looks like the audio is working, so please send me a note in the Q&A if you're unable to hear us, and I'll try to adjust it. But until then, we do have one person ready to speak. If there are others online. That would also like to speak under public comment. I just want to make sure you know to virtually raise your hand, and I'll call on you. For right now… We have one, Lynn Siegel is ready to speak, and Lynn, you should be able to unmute.

[10:01] Yeah, with Sundance coming, and with a metropolitan District, we can't afford the water demand. This is gonna come, bring to Boulder. We cannot. So, what are you gonna do about it, Rab? This… scam. of Metropolitan District. is exactly what it is, a scam. It brings more police, more fire, more infrastructure. Then, in 10 years, when Sundance is gone, we're stuck with it. They can bond, they can compound interest. And they can go up to a mill levy of… 5… Mills or something, and… Tax us. Indirectly. Through their businesses, In the Metropolitan District. That will have increased rates to pay for all of this.

[11:04] That ultimately, we will pay when we utilize those businesses. That's a problem for me. As if we don't have enough inflation in Boulder presently. for housing, We don't need it for commercial either. Because… You have less money to pay for your housing? You have less money to pay for your goods and services, because Everything's inflated? We're the metropolitan District, Where does RAB weigh in on the Metro District? Where… was… was RAB… Just absent in that discussion.

[12:00] Water use is not an issue for you? In this community? to these businesses in this metropolitan district, to Sundance, to all the people that it's gonna flood to Boulder. And then when they come here, they're gonna come back. to buy houses. And to cause greater demand. And to cause housing prices to go up. And the land value to go up. And this compounded interest. And these bonds, and these loans. That are on the public's back. It's not this panacea that this metro district is gonna help us out. It's not. And where was Rab? When you could have done something about it. For the water use.

[13:05] Thank you, Lynn. Is there anyone else online that would like to speak under public comment? Alright, I don't see any others, you should be all set. Thank you, Lynn, for your comments. Jodi, do you want to speak? Yeah, so if it's okay, I might want to, speak to that. What the… what Lynn was talking about, City Council here in April, voted to allow creation of metropolitan districts within city limits, and the commenter, Lynn, had a question about RAB's role in that, and Of course, I'm not the expert on city charter, but the board's purview, specifically, is not to involve itself in those types of matters, and so that was really just a council item, and a metropolitan district, generally, is,

[14:10] a structure that allows a funding mechanism for developers that want to develop within the city. So that's… And some context of what those comments were about. Just for clarification, the metropolitan districts It's, like, can create tax increment financing structures and results in… Yep. We'll move on, to item number 7 on the agenda now, on the water supply update from staff. Looking forward to this. Yeah, great. Some years, there's nothing to see here, and not much to talk about. This is not one of those years.

[15:01] But for… for context, for our water supply update, this is something that we do for the board every year in April, and we… we formally make an announcement about our situation, typically on or around May 1st. And if you think about the water operational year, like bank accounts. This is the time of year when we know what our starting balance is for the water supply operations for the year. And most years we have Decent snowpack, good storage in our reservoirs, and a good supply. From Northern Water, which is also one of our sources. This year, two out of 3 of those things are pretty good, but as everyone knows, it's been a really dry year, snowpack is low. I know there's a lot of interest in this topic for 2026, so our team tonight will walk you through our thinking.

[16:02] This item will be led by… Isabel Laritier. She's a water resources project manager, and she oversees our water rights accounting, which is a really important role in our operation, very complicated. And in that role, she coordinates very closely with our field operations staff. others in water resources and the water treatment staff to optimize use of our supply, which, that can mean different things in different years. This year, it's… the focus will be on preserving our storage. Before I turn it over to Isabelle, though, I know there's a lot of interest in the Colorado River situation, and we talked, I think, in the last meeting about potentially having a Northern Water representative attend even tonight. The good news is we do have that visit arranged. It'll be in June.

[17:02] Just for a variety of reasons, June fit better, and I don't think that issue is going anywhere anytime soon, unfortunately. But, several of our Water Resources staff, and myself, and Kim Hutton, our Water Resources Manager, just recently attended the Northern Water Spring Symposium. And we heard some great panel discussion on the Colorado River directly from people who are involved in the operating. guidelines, so we'll talk about our supply and our situation with Isabelle first, and then I believe Kim is online, and she can… when we're done with that, she can summarize what we heard from the Northern Water meeting, and kind of use that as a primer for the June visit. So, with that… We're ready to go, I'll turn it over to Isabel. Thank you, Joe. Hi, everyone. My name is Isabel Laertier. As Joe said, I'm the Water Resources Project Manager.

[18:03] Here at the City, our water resources team handles operations and planning of the city's municipal water supply. Within that group, I manage the day-to-day operations of our water rights. So, determining how much water we can take from the river, or from storage into our system to meet daily demands. Which changed every day. I'll be providing a quick update related to the water supply and As mentioned, it's no surprise. Conditions are dry, but, we'll go into more detail about that. We'll be going over water supply conditions and a variety of indicators for what the year might look like, as well as planned water conservation messaging for this year, given the City's recent drought launch declaration. And I'll leave time for questions at the end, too. First, I'll just briefly talk about our water supply system for context.

[19:05] Here we have a map of Boulder, where the lower part is the eastern Lawnee City. And the upper part chose to give their legs. We rely on 3 sources of water. You can see 2 of those sources are the Boulder Creek Basin. The North Boulder Creek and Middle Boulder Creek. Watersheds are shown in blue on the left there. They provide around two-thirds of our water supply. We divert our water from those two watersheds. We carry that water down to the Vitaso treatment plant through a series of pipelines, shown in blue. And our service area is showing that they're Near the bottom. We also receive water from the headwaters of the Colorado River. to projects operated by Northern Water, the Colorado Big Towson Project, or CBT, and the Windy Gap project. Those areas are identified in the tan portion of the project.

[20:05] And about one-third of our supplies come from that space. Water's collected on the western slope, brought over to the east side. and conveyed to various water users in the South Platte Basin. And Boulder gets, water from these projects, from Charter Lake through Blue Pie Flowering. That goes directly to our Boulder Water… Boulder Reservoir Water Treatment Planet, also known as the 65 Street Treatment Planet. Which is then distributed out to the community. So, as Boulder gets its water from these multiple watersheds, that's, that's one thing that contributes to our water supply being resilient groups. Our drought plan, which was recently updated in 2022, provides guidance on whether to declare drought, and if we do, how to implement water use restrictions to meet target water savings goals.

[21:07] The plan considers varying degrees of response to drought. Drought watch involves increasing communications around water conservation. And promoting voluntary water use reductions. For example, watering a llamas frequently. It's a great tool to promote water conservation when it's dry, but mandatory restrictions are not triggered. The city is currently in a drought botch. Throughout stages 1 through 3 include additional messaging, and also have specific water conservation targets. With mandatory water… watering restriction. For example, overall stage 1, we would aim for up to 20% reduction in domains, and to achieve that, we would implement rules such as limiting the number of days a person could leave their log.

[22:00] To help us decide which drought stage we might consider, the drought plan uses a metric we call the Projected Storage Index, or PSI. The metric takes the sum of projected storage both up in our watershed And, throughout Northern Water's CBT system. And divides that total by our citywide demands. We start calculating this value in February, but we typically wait until May 1st. to use the PSI to determine whether or not mandatory watering restrictions are necessary. Even though the PSI determination is formally made on May 1st. We're already taking actions outlined in our drought plan to respond to drought conditions. Including increased water conservation messaging, and the city's April 1st Drought Watch Declaration. Based on what we know right now, the PSI will likely land in comfortably. above the threshold where we might consider Stage 1 mandatory drought restrictions.

[23:02] Where that trigger is shown here at .85. Stage 2 and 3 triggers are also identified on the chart evaluating. The primary reason this metric is expected to be relatively high, despite how dry it's been, include the fact that our citywide demands are 30% lower than what they used to be back in the early 2000s. And the fact that reservoir levels in both the cities and northern waters reservoirs are in a good position right now, heading into this dry year. Although we expect our PSI to be above these thresholds, we're being proactive in operating our system more conservatively. And promoting water conservation messaging, which we'll discuss shortly. So the PSI is one tool that we use in evaluating the drought conditions. We support it with other data and observations, both locally and regionally.

[24:00] Additional indicators we track, as mentioned, are snowpack, stream flow, regional drought conditions, and reservoir storage. And I'll run through a variety of data. That we look at related with these indicators. Here we have a map of snowpack conditions, specifically Snow water equivalent or Sweetie? Sweet represents the amount of water you were the amount of water present if you were to take a column of snow and melt it down. So, the metric takes into account the fact that light, fluffy snow has less water than the same amount of wet, dense snow. There's a network of sites across the western U.S. that we track For snow conditions over a wider area. So the South Platte Basin, which is kind of towards the top right there, which includes the Boulder Creek watershed, is currently around 27% of medium.

[25:01] We also tracked the Colorado Headwaters Basin as an indicator of CBT supplies. And that basin is currently around 22%. So, this map helps illustrate why reservoir storage is so critical in the western U.S. to help communities endure the drier conditions like we have this year. So, this year, Northern Water issued a higher-than-average CBT quota of 80%, Which is up 10% from the annual average quota. the CDC's… CBT system is intended to be a supplemental supply, so it is often higher in drought years. Which is, again, one reason Boulder's combined water supply is so resilient. So as you probably know, most of the city's water comes from snowmelt.

[26:02] And there are two snowpack sites within the Boulder Creek Basin that we rely on regularly for local conditions. University Camp is located on our property in the North Boulder Creek watershed near Silver Lake. In this graph here, the line represents, the current SOMAT. And the blue shaded area shows the 30-year median. And we're currently at 48% median at university camp. So, peak snowpack, is usually around May 1st. But we anticipate that we already hit the peak snowpack. We did march. Which is one reason the city declared a drought watch ethical. This is the Lake Eldora snowpack site, which is located above Barker Reservoir in the middle of Boulder Creek watershed. And it is at a lower elevation. Then the university campsite. snow at Lake Eldora is already done melting, which is about, 6 weeks earlier than usual.

[27:07] So, in addition to these two local sites, which we track. We also participate in a regional group that performs flights Above various watersheds. With special equipment to estimate the snow across the entire watershed. So these… the robust data that comes out of those flights is useful to us. Because they're over a wider area. They help, corroborate the conditions that we see on the ground. At our local sites, and, they can better inform stream flow projection. So this year, the flights took place over our watershed on March 20th. And identified a bit more snowpack at higher elevations. Around 10,000 to 11,000 feet. Compared to what our two local sites showed.

[28:00] We also look at streamflow forecasts as we transition from winter into spring. As the snow melts, it transforms into spring flow, which provides a lot of supply as we either divert that water directly from the river, or divert the water into storage. Streamflow forecasts help us anticipate what conditions to expect as the season progresses. So there are a variety of sources that we look at for streamflow forecasting, and here are just two, sources that both show around 65 to 70% of average stream flow for Boulder Creek, and a bit lower in the Upper Colorado River at 52%. These projections typically go typically represent, forecasts for April through July. So, although we did see some snowmelt in March this year. Those flows are not captured in these numbers. The low stream flow projections are similar to 2002 conditions.

[29:02] So, in most years, we're fairly confident we'll fill our reservoirs. But given the dry conditions this year, we may or may not be able to fill. The last time we did not fill and spill our reservoirs was in 2002. As I mentioned previously, we have seen some early season snow melts. So our reservoirs have already started to store water for the year. So right now, Boulders and Vines Mountain Reservoir storage is in good shape, as we see here. Tracking near average amounts for this time of year. And we're regularly optimizing operations to, do our best to capture and preserve storage as much as we can. We also look at regional drought indicators for, for context. And one great resource, although it's pretty broad scale, is the weekly U.S. Drought Monitor Maps.

[30:02] So as you get darker in color from yellow to red, that indicates more severe drought conditions. And you can see here in the South Platte Basin in Boulder County, which is marked, there, the drought conditions are eventually categorized as expected. So drought conditions will likely continue to worsen across the state, and we see it in the form of lower soil moisture. I fire danger, and I will walk into the hands of glass. Peace. So, to summarize, our… their water supply. Snowpack is well below average this year, and spring flow forecast, but also well below average. However, we do have strong storage reservoir… storage reserves from previous years. And Northern Water has set higher than average CBT quota at 80%.

[31:01] So, based on the PSI, we do not anticipate getting a Drought 1. drought stage 1 triggered, or a need for mandatory water use restrictions on May 1st. Instead, we'll continue to promote voluntary water reductions Consistent with the City's current drought watch declaration, which I'll describe shortly. We'll continue to monitor conditions over the summer to track if there's a need to update the drought status. So, given the drier conditions we're experiencing, as we mentioned, we do plan to ramp up our water conservation messaging throughout the community all summer through what we call a drought watch. So, before we get into the voluntary reductions that we're promoting, just a reminder that we do have Already some water use rules that apply to all city uses of water, regardless of drought conditions.

[32:01] So here, for example, no sprint foot irrigation from 10 a.m. to 6 p.m. Which is a new rule that was added, with the recent WaterWise landscape code change, and a few other rules shown. With the drought watch. We're also implementing voluntary water reduction. But one message that you've hopefully seen out in the community is to wait to water your grass until May, since grass can stay dormant this time of year. In early May, we also plan to start encouraging limiting sprinkler irrigation two times a week. We also have other sinful but effective actions that will promote For example, letting your grass grow longer before cutting it, taking shorter showers. We hope that voluntary action will achieve up to 10% water savings, given our community's shared commitment to resource conservation and environment stewardship.

[33:03] And we'll continue to monitor Janet throughout the summit. Thank you for your time. And, we'll go ahead and open it up to anybody. Thank you, Isabel. That's very helpful. I guess I have a question. So, May 1st is the official date for making the drought declaration, drought declaration, or whatever, but, you mentioned that there's going to be monitoring throughout the summer. So, if we have… very high temperatures and very little precipitation, is there the possibility that Drought 1 will be We'll declare Drought 1 later in the summer. I can hop in. Crystal Morey, Senior Water Resources Engineer in our Utilities Department. That May 1 date is really based on a lot of modeling we've done in terms of stressing our system and anticipating when we would need those restrictions. And so, based on that past modeling, we don't anticipate we would need to increase our drought response through the end of the year.

[34:12] But we're also seeing conditions that are historic, and so that's something we're tracking really closely in terms of our reservoir storage and how our community water demands are changing over time. And so I don't want to commit to never, but we're feeling an uncomfortable position and we'll keep monitoring it. I might add to that, that the team is… what I see behind the scenes and the complexity of operating the system. The team is tracking closely to optimize for these conditions. But if it worsened or stayed like it is, we can… we can always adapt at any time if we see the need to, and I think the drought plan gives us the and flexibility to do that, but agree 100% with the way Crystal, Explain that.

[35:09] I have a couple questions, and I apologize. because I'm new, and these may already… these may be obvious to everybody else, but, with the PSI, the demand… I mean, just like Northern changes its allocation based on whether it's drug or not. demand typically goes up in drought years, so your demand number in that calculation, I assume, is also… it's not just Following a trend line, it's… it's… sensitive to the fact that demand is going to be higher this year? Yeah, so particularly, there's a reason we presented a range within that graphic, because we're doing about 20 different sensitivity analyses on, like, well, what if this snowpack changes, or what if our demand changes a little bit?

[36:00] But in the formal calculation, what we do is the 90th percentile of the last 10 years, which is around 19,000 acre-feet. We have not seen demands that high in a very, very long time. And 2024 in particular was a good year that was really hot and dry, and we expected our community demand to jump up. And it didn't. And a big reason of that, is we've seen a lot of those lawn conversions around town. But… you know, where people are converting to water-wise landscaping, and so that type of landscaping doesn't need to peak as much with the hot and dry conditions and the way that turf brass does. Alright, I have two other questions. Great. One… you… Isabel talked about the fact that you're meeting with other jurisdictions, and there's groups, I assume Boulder, all the jurisdictions in Boulder County maybe aren't meeting.

[37:01] if… you know, Erie already did some really extreme things, although they've backed off a little bit. If The rest of the cities in Boulder County are not just doing watch, but are doing mandatory restrictions. Notwithstanding the fact that there's a formula. Does that affect whether we could go to Drought 1 because everybody else around us Is… and we look… It… there's… there's some other kinds of pressures that might apply. I'm happy to take that, and I know Crystal and the team, at their level, meet with, I think, a group of 40 different water providers, kind of a front-range drought watch group, and they're separately kind of taking a lead role with the Boulder County cities and meeting with them.

[38:05] Because it can get really confusing for the public if… if… Everyone's doing something different, although there are differences in people's systems and their water supplies, so we'd expect some variation. But so, they're meeting and talking about that, and then just a few weeks ago, similarly, I met with, neighboring municipalities' public works directors, and we all talked about what our situations were, and I think everyone is, there are some exceptions. The bigger metro providers, like Denver Water. definitely have had some messaging, but I think most are thinking voluntary. Reductions, just like we are, and most of these feel like they have enough storage to get them through this year, and And… and beyond.

[39:00] And so, I think, lots of coordination going on, and we're thinking about those things. And for sure, even in the presentation that Isabelle did tonight, we don't just blindly run the numbers and… don't take into account all of those other things. There's a ton of judgment that comes into play. Sure. And I was… and you're talking all the time, because… in 2002, the municipalities were chastised for being late to… Yes. …do something. Yes. Those were some very important meetings. Yes, for sure. I think in 2002, most cities did not have, in Colorado, did not have a formal drought plan. But because of that, they do now. And then my last question for Boulder, and this may be a little provincial, because it's something that's near and dear to my heart, is what happens to the in-stream flow protection?

[40:01] During this kind of a year. Right, so the in-stream flow protection, So the city has a portfolio of water rights that we've dedicated for use for in-stream flow protection during various segments. Isabel, I was involved… Oh! …with the state. You know better than I do, probably. So… so because each of those rights in that portfolio of rights, has its historical… priority or administration number. Those in-stream… those in-stream flow rights that we… that we have available to us to protect flows in the creek are subject to water rights administration, just like any other wanted right. on the creek, so… Just as an example, typically in most years, even, toward the very end of the summer, you know, into September, sometimes we have fewer rights available to us to protect in the creek.

[41:08] So, we're… we kind of have to follow along, just like every other… the in-stream flow rate is kind of, you know, just like any other water right, with its cinder again. To follow that. Follow those kind of rules that a state sets when they're administering. Yeah, I can add that during a drought watch, we do not intend to pull back our in-stream flow protection, so those will remain, but as we've all mentioned. How much we have available under those water rights might be less this year to protect the creek. And if I can tack on also that Layla Parker, Water Resources Senior Project Manager. We actually can formally pull back these remote water rights once we have implemented mandatory water use restrictions. So if we had gone to Drought Stage 1,

[42:00] we then get to pull those back. So it's actually more protective for in-stream flow if we're not entering into mandatory water use restrictions. That's an interesting trade-off for the creek. Thank you. Boy. Questions? Melinda has one of the ones I'm asked, so I'm… I guess maybe naive, but I'm sure to say, I was… quite curious about the Northern Water, because we assumed, oh, fellow open rivers in the city. In very difficult situations in that map. I guess the way they operate is they'll provide more ones. We don't have more water here, I'm happy to defer this for 2 months, but I don't know if I need… want to explain what you understand about how… how… just curious about how this works. Yeah, and It's a… it's a relevant question for tonight, and Northern Water considers their… their system and their… the water that they have for their allatees as a supplemental supply. And cities and people who are part of that system are supposed to have their own rights.

[43:06] And… The way it's set up. They actually, if they have the storage, they give out more water in dry years, and less water in wet years. And… at the… at the Northern Water meeting that Kim and others and I went to, they… they said that in past years, they might have actually done 100% quota. under conditions like this, and there would have been pressure to do so. And I think, for me, that was actually validating for how we're thinking about our system, because they're taking a more cautious, guarded approach, just in case this goes on for several years. And I think they've done modeling to show that with an 80% quota. If we had the same exact conditions next year, they could still do at least a 70% in a second year. And so they're… they're kind of playing the long game and thinking, how would you manage this if it went on multiple years in a row?

[44:10] And we're thinking similar. I was assuming they're betting on this El Nino forecast. And there is, I should say, There's something that whips on. back and forth in California. Wet to dry years. Thanks to Colorado. That's a shortage. can do better than that, so… Oh, sure. Other question I have is, two more. On the runoff, so some is… some has runoff earlier, right? Do we know what's happened to that water? Some of it ended up being under the water. round money. Yeah, I think, we, we captured what we could, looking through the stream system.

[45:00] I think there is certainly… some moss to, like, dry groundwater. But, you know, our reservoir storage graph, shown earlier. is pretty… you know, we were… it's not typical that we store quite so much in that early part of the season, so we tried to take advantage of what we could, when… as it was, starting to melt through into the Greece. The sporadic Colorado weather, It's tricky to work with, because… We capture the water winds there, but moving…

[47:45] Like, how those are.

[49:03] set evaluation. I'm just curious, with drought latch, do we have any data on how much production we can typically see, dreadlocks? community response in terms of water conservation. The 30% reduction we've seen from the early 2000s has been voluntary-based. I think a lot of those voluntary Assumptions, you do see a 10% to 20% reduction, but a lot of those studies have been based in the earlier 2000s period. And so, we are maybe not anticipating a 20% reduction right off the bat by telling everyone to focus on conservation, but aiming for that 10%. This is the first time we have implemented the Dropbox, so we don't have experience to look at this.

[50:04] I have… I have thoughts on that, though. I've been talking to Chris and others about just watching what's happening with our demand right now. And some of this, I think, is just a combination of experience and opinion. I do think the message has gotten through to people to hold off on turning their sprinkler systems on. We are seeing demand trend up a little bit higher than it would normally be, or higher than average. And just between what I see with my observations of the number of, kind of, yellow and brown grasses that's, like, in my neighborhood and yards, and, I believe those numbers would be much higher if we had not had the messaging, so I think I can't quantify it, but… I'm pretty confident we're already saving what we would be doing if we weren't.

[51:00] Yeah, and I was gonna say as well, I think some of, like, the private providers in town have also put up that messaging of… you don't need to be watering 3 days a week, this is pulled out, and so I don't know if the city's been communicating with them, but it seems like good messaging all around. As someone who does not remember 2002, can you talk a little bit more about what happened in 2002? We didn't have the drought plan that was formal then, but, like, how… what were the conditions like this time of year, or in August, and how did the city respond to that? there were probably 3 of us who… I actually started with the city in 2005, but I was in consulting. The City of Boulder was one of the clients of the firm that I worked for. and I worked on the Boulder project, so I could see what was happening. I think Joanna might have been here. I think it was…

[52:02] as Melinda said, More reactionary for us and others of just, like. there was no messaging starting in March or April. It was May 1st, and, like, we have to shut things down. And we went… we went to mandatory restrictions. Because we didn't have a plan, I think staff at the time were just using their judgment. And I think, you know, some cities, like Denver, have gone to mandatory restrictions, and their system's different than a lot of others. But that is also a whole other creature of managing that. And the enforcement, and everything, and just how well our community responded to that. In the moment, in 2002, and then if you saw our annual demand numbers, they have been dropping ever since.

[53:03] We believe our community will respond. in the moment now, just to the voluntary recommendations. Joe, can I just add two things… Sure. …to that? Sure. The other context… is that… In the 90s, the Colorado River community Was talking about surplus agreements. So, the 90s were wet, And… there wasn't… there weren't shortage guidelines, right? So… so 2002 was extraordinary because of the previous decade. And the other thing, and… This may be something that comes up in… in other conversations is the panic of the water providers in 2002. There were water providers who raised rates.

[54:10] Because they don't make money, If people aren't watering, and they need the money to Protect their staff and infrastructure. So there were surcharges. That went into effect at some of the large water producer… water suppliers. And that was infuriating. to users. For sure, and we… what a… what an interesting teaser for the next one on our agenda is that we do have a water budget rate structure, and In our drought plan, we do have the ability to lower the amount allocated to people's water budgets.

[55:02] Which is a lever the city could pull if we needed to. So, I'm just wondering, since we're talking about these approaches, is there a philosophy that you'd rather go easy. Early on, and then ramp up later if you have to, as opposed to going harder early on, and then maybe easing up later if you can afford to. Give it. I mean, taking a cautious approach, we have a lot of latitude on what we can do in the drought watch, and the team is using its judgment to Recommend the measures that they think will be the most effective. And cities have invested in the infrastructure and these supplies, and Boulder is no different. to be able to withstand the multi-year drought. And so, if we go right to the maximum In the beginning.

[56:00] I know it crosses my mind. I worry a little bit that That could wear thin later on if you find ourselves in a spot where we really need to. And if this goes on year after year after year, Boulder's in… Boulder's indoor demand is around 10,000 or 11,000 MGD. Our annual use, considering outside, is, like, 17,500. And so the lever that we have in demand management, if we had to, we could restrict all outdoor watering and preserve that. 10, 11, 12,000 all year… all year round. Just knowing what we have in storage in our situation. that's unnecessary, right? Yeah. And, you know, I was part of CRAV in 2022 when drought plan was put in place, and we got to see all the effort and analysis that went into creating this framework.

[57:00] It was meant to be used to make… help make informed decisions by the city, and you're following the recommendation of that framework. With heightened monitoring and the flexibility that you've built into that, so… It would make sense to me. To do a drought watch instead of… Drought breeding based on where we are. Most around us are in the same place, not everyone. And, I forgot to mention this earlier, but… For sure, the town of Erie had some pretty dramatic messaging earlier in this… in this season, and in talking to their staff, you know about their situation. If it was just the drought conditions, they would have been where everyone else is, but they had… One of their key reservoirs was down for a big capital project. And so they had a temporary window where they really had to tighten things up, and I think they've moved beyond that now.

[58:05] Kim going to… John? I think… I think so. And I'm… I'm curious, I know we're having… Potentially some audio? Yeah, I'm so sorry, we were, and now I believe the audio and visual are totally fixed, so I apologize for the disruption. Please, if you're online and you're still having issues, message us in the Q&A, but we're hearing good feedback, so no issue, and I'm going to move back with the transition. We're good to give quickly to talk about the Colorado River. And we're spending some time on this topic tonight. We normally like to keep things pretty tight, but this is an important conversation, so… If you're good, we can keep the one as planned and have Kim go next. Kim, are you ready? Yeah, I'm ready. Can you all hear me? Perfectly. Oh, great. All right, hi, hi everybody, sorry I'm not able to be there with you in person tonight. My name's Kim Hutton, I'm the Water Resources Manager, and as Joe mentioned, Northern Water does a symposium twice a year, just to give updates to its, water users.

[59:13] And at the Spring Water User Symposium, in early April, one of the panels, included the Colorado River Commissioner and, another representative from the Colorado Water Conservation Board, who are tightly involved in the negotiations. For the Colorado River, so they had a great, panel discussion, and we just wanted to share a couple slides with you from that presentation, and a couple take-home points, but as Joe mentioned, we'll have, representatives from Northern Water talking to us in June, and so they can provide, I think a bit more of a… Of a conversation, about… about the situation there. And when we say they're, negotiating right now.

[60:07] What is happening is the upper basin states and the lower basin states are in the process of negotiating new terms for the, interim operating criteria for Lake Powell and Lake Mead. The current guidelines are set to expire in October. And they have been in place for… these are roughly 20, 20 years, so coming down to the end, to the wire. For this, and so they're… I think the Upper Basin and Lower Basin states are, it sounds like, not making great progress, and it sounds like they're kind of philosophically, kind of… Opposed? To some fundamental considerations. And… I'm gonna share a slide here, and this is something that the…

[61:02] again, the Colorado River Commissioner, Becky Mitchell, shared with us, and I think it's a really great perspective, let's see here… Can y'all see that okay? Yes. Okay. So, what's shown on here is, the lower basin states, their water use over the last 5 years is shown in the orange bars. And the upper basin states water use is shown in the yellow bars. The lower basin states apportionment for the Colorado River is that top blue dashed line, so their apportionment is about 8.5 million acre-feet per year. And the… I'm sorry, that's the Lower Basin State's apportionment. The Upper Basin State's apportionment, which includes Colorado. It's 7.5 million acre-feet per year. So you can see that the lower basin states over the last 5 years and longer have been using more than their apportionment.

[62:08] And the… Upper Basin states have been using less than their apportionment. And I'm gonna go to one other slide, and then I'll just… here, let's move this number, and then I'll talk through… A couple key takeaways. So then this slide is showing… so the way the system operates, Lake Powell sits higher on the river than Lake Mead. When the lower basin states want water, they take delivery of it through Lake Mead. And they just call for water. And so, if they want water, they place an order, essentially, and… The tap is open, and water is released from Lake Mead, and then the way the interim, operating guidelines work is… are there, kind of have to balance out what the elevations are, or storage levels are, between Powell

[63:06] and Mead. So, the blue here is showing how much water is coming into Lake Powell. And then the red is showing how much water is leaving Lake Powell in order to, transfer water to Lake Mead. And so you can, again, see that in most years, 2023 was a wet year, the amount of water coming into Lake Powell is less. I'm sorry. Yes, into Lake Powell is less than what's leaving. And so when you hear on the news the levels of Lake Powell are dropping, Lake Mead is dropping. That's what the data is showing, and… and the reason, again, is the lower basin states are kind of using more than their apportionment. And the way it kind of works, actually, is that it's almost like they just have a tap. And they can just turn on the tap whenever they want water. The lower basin. Upper basin, on the other hand, is kind of living within the hydrologic

[64:05] conditions that we're… we're subject to. So, this year, snowpack is really low. We don't have a lot of water, we're not using a lot of water. However, the lower basin states haven't really been operating according to hydrology. They just, if they want water, they just open the tap from Lake Mead, and the water flows. And so that's… that's kind of where the philosophical difference between the upper and lower basin states is coming from. I think the final point, that they made that was kind of, I think a good take-home message, was the upper basin states, their position is they want the lower basin states to live within the means of the river. The lower basin states want the upper basin states to share in any shortages, but what that looks like is if the upper basin states were to conserve water.

[65:01] that water is just moving down into Powell and Lake Mead, and is just becoming available for the lower basin states to use at a later time. So it was a really interesting, conversation. I think you guys will hear more about it in June, and I'm not, hopefully some progress has been made in the negotiations that we'll hear about. But that's what I've got to share tonight. Thanks for that, Kim, and it was… I was glad I went to that meeting. It was a really striking presentation delivered by people who are sitting at the table with most negotiations, so… I never… seen it or heard it presented. I've been… I've been tracking this over the years, and I've never seen it presented quite that way. Well, thank you, Kim, for that synopsis.

[66:02] Let's help the negotiators figure out something. Creative viable solutions for what seems to be deadlock. If… Any questions for Kim before we move on to the next… Agenda item? Alright, thank you all. Thank you. The next agenda item is the Utilities Rate Study Kickoff and Engagement Overview, and we have some Steve Guests joining us, so, I'll turn it over to Stephanie, or first, Joe? I think I'll take that first, and before we leave the last item. It really is a privilege to oversee the Utilities Department, and, One of the things that I am super thankful for at this moment is we have a very experienced water resources team. In any given city or department, you can have teams that are just starting out in a lot of greenness and figuring things out.

[67:06] As they go, but this team has been doing it for years, and benefits from that, and I'm aware of the decisions they're making, and the And there will be able to stop reading, so the community can rest assured that they're… in good hands with the team, so I appreciate that. Our next item is an update on our rates study, and we've been looking at water budgets, and our team has checked in with the board previously, I think in October of 2025, earlier this year, January. We're… we're… So we're talking about water budgets in those prior check-ins. We're now transitioning into the rate study portion of this effort, different phase, which will take what we learned from the water budget efforts and integrate that into the broader study.

[68:02] And so for the rate study phase, tonight will be the initial touchpoint with the Water Resources Advisory Board. And I mentioned that, just for context, we've previously done rate studies in 2008 and 2012. We're very pleased to have our consultant, New Gen Strategies, here with us tonight. And so, I will turn it over to Steph, who… Probably will add a little bit more by way of introduction before our consultants kind of leave the presentation. Scott Whitman, I'm the financial analyst at Utilities. As Joe already mentioned, we're kicking off Phase 2 of the rate study analysis with RAB, and then back in January, if you'll remember, we did present a portfolio of water rate alternatives, so we intended for that a little bit more during this phase of the analysis. The city hired Nugent Strategies and Solutions, who is here with us tonight, to perform the rate study analysis, and they're gonna walk through, you know, an overview of the rate study process for all three of our utilities.

[69:10] This work will help inform future rate decisions, so we're looking forward to your feedback as we move through this process. There will be some future touchpoints, so this is just sort of the initial review. And with that, I'll turn it over to you, Jen. Okay. Steph, Joe, thank you. Yeah, my name's Dave Yanki. I'm a partner at NewGen Strategy Solutions. With me is Gary Anderson, she's a senior consultant. And so, yeah, we want to give you an update on where we are with conducting the water, the wastewater, stormwater, cost service study. So, I'm going to just show you briefly, here's the agenda. I'm gonna walk through the project team so you know who's working on this, and then I'll hand it over to Carrie. She's gonna walk through the study overview, what the scope of services are. We're gonna walk through the cost of service.

[70:05] the process we're going through in the 20-year forecast. We'll go through the functionalization. We'll explain what functionalization is, in case you wonder. And then, we'll also talk about project timeline, the next steps, and go through that. So, with regard to the team, again. My name's Dave John. Yeah, I've been conducting water, wastewater, stormwater, and solid waste cost service studies for over 30 years. So I'm serving as the project manager. Carrie Anderson, Carrie here has been working with us for over 3 years, he's handling all the financial modeling, the forecasting of the, budget, the capital program, all of those items, and then the cost functionalization, rate design, etc. working with her. Savannah, has 5 years of experience. She's a senior consultant as well. She's handling all the billing data, so she's taken all that. So far today, she's been working with that. We do a revenue reconciliation with current rates, make sure billing data is… we've got everything there, it's looking good. She's working with that, which she's been working with

[71:18] carry on. Their offices are next door to each other, so it's very easy for them to talk, but that will be moved into the overall financial model then. And then finally, I'll mention Eric Kolokia. He's serving as Deputy Project Manager. He's got 15 years of experience. He will be leading… he's already been leading the functionalization functionalization process that we've gotten into, and then he's going to be working on the water budgeting, piece, where he has experience in doing the rate design. Could you define functionalization? We're gonna do it later, yes. And with that, I'm going to turn it over to Carrie and let her take it.

[72:01] So, the overall purpose of our study is to evaluate and update the city's cost of service and rate structures. And so, we're going to do that when keeping in mind several key tasks and objectives. So, the first one's going to be revenue recovery. This is something that's critical for utilities and ensuring the long-term financial health of the utility overall. It allows you to provide constant, consistent quality service. Next, like Dave mentioned, we're going to be looking at rate design and that water budget policy. So we want to be able to provide clear, actionable recommendations for rates, and structures that additionally ensure long-term financial Two other key things we're going to be looking at, affordability and equity. These are necessary services that should be reasonably accessible to all. And affordability and equity are social goals, as well as operationally and financially. Lastly, community engagement. This is basically taking off our community engagement. This is something that we plan on continuing throughout the process, and just ensuring transparency and inclusiveness.

[73:12] So here we have our scope of services. We're going to be completing a comprehensive utility rate study for water, wastewater, and stormwater, and here we have listed some key components of that. Cost of service analysis, I'm going to be walking through the steps of the cost of service process, one of which is functionalization. Water budget rate structure evaluation, that's essentially the last step of the cost of service process. Both of those two steps I'll be talking through in more detail later on. Plant investment fee methodology review, the 20-year financial forecast model, and we're looking at it from 2026 to 2045. And then community engagement support. So here we have the six steps of the cost of service methodology. We start with developing the test year, which we based off of the fiscal year 2026 budget. Step two, developing revenue requirement forecast. Like I mentioned, this is going to be a 20-year forecast.

[74:12] Three is functionalization. Four, determining… determination of the billing units. 5, we have cost of service calculation, and then finally, rate design. So, for step one, we have the development of the test year. That's essentially an adjusted fiscal year that can be used as a basis for setting rates. It's supposed to be representative of typical conditions, with adjustments for any unusual or one-time expenses, and like I mentioned, based off of the fiscal year 2026 budget. Next we have the revenue requirement. So, that essentially identifies the amount of revenue that a utility needs to recover in order to, to recover the cost of providing its services. So, like I said, it's… we're starting with fiscal year 2026, going all the way up to fiscal year 2045. And so adjustments are made to the categories that are listed here. We start with operating and maintenance expenses, we have debt service, transfers, and then capital.

[75:13] Adjustments are made. So, for operating, operating and maintenance, we're doing those based on inflation factors. We looked at several different indices in order to do that, so those being, the municipal cost index. the construction cost index and the producer price index. Additionally, the consumer price index is used. The municipal… the municipal Cost Index is basically a weighted average of those other three indices, and so that's where that comes in. So that's what we're using for operating and maintenance. Then for debt service and capital, those are being projected based off of, currently existing plans or the existing, debt service. So those are looking at actual costs rather than just inflating off of the current costs.

[76:05] So, next we have functionalization. So, functionalization essentially is defining what money is going to be spent on. So, it's the process of taking that revenue requirement, and then assigning it to each utility's functional components. Through conversations with, city staff, we developed the buckets for each of the utilities. So for water, that's going to be supply, treatment, transmission, distribution, and metering. Then for wastewater, we have treatment, collection, capacity, and custom… treatment, collection, capacity. And then for stormwater, we have water quality, flood, and conveyance. And then across all three utilities, we're going to be looking at customer, and then general and administration as other buckets. For the purposes of this presentation, I will be using supply as an example throughout. There's a lot going on here, so just starting with the top line, that's where I'm going to be giving most of my examples. So, the revenue requirement in Component A flows into Component B, where we've decided on our functional buckets, and

[77:10] Supply being the one we're looking at. Next, we look at cost classification. For supply… supply infrastructure is sized to meet average demand, not peak, so we look at base demand as that cost classification. And then for allocating those costs, we're looking at the average volume. And that's what allows us to place those dollars into different customer classes to see, essentially what costs are needed to serve that, that, that customer class. And then, so, cost classification and the cost allocation is what we're going to be discussing next. So, for billing units, that, essentially, that cost classification, I'll start by just talking through the current rate structure. For water.

[78:06] It's based on the count of meters and size, and then consumption. So a monthly bill is the monthly service charge by meter size, and then inclining block rates per thousand gallons. The block rate structure, it helps to promote conservation and efficient use of water with pricing signals. And then the water budget is based on… is the amount allocated to meet anticipated water needs, and it's based on things like type of unit, bedrooms, irrigated area, and the average winter consumption. So for wastewater, it's looking at the count of meters by size, the water meters. are essentially used as a surrogate for wastewater meters, since those don't exist. And then consumption. The residential, though, is looking at average winter consumption for that consumption, which is essentially the average consumption between the months of December, January, February, and March.

[79:06] And then that's recalculated each April. For non-residential accounts, indoor, it's actual consumption, and then indoor, and outdoor accounts, it's actual or budget allocation, whichever of those is lower. And then similar to water, that monthly bill is going to be that monthly service charge based on meter size, plus the, volume rate per 1,000 gallons. Then for stormwater, the monthly bill, it depends on the type of unit, so if it's a detached resident or a single unit, it's fee based on parcel size, and then for others, it's the fixed minimum plus the, per square foot of impervious area. And then I will mention additionally, like Maddie said, average… Average volume is something that we're looking at, so we're looking at water, produced, the max day, and then the max hour of that water in order to,

[80:07] Divide across those revenue requirement costs. So next we have actually calculating that cost of service. Those first three bullets are the previous slides that we talked through, so the revenue requirement, defining how much money it costs to run the system as a whole, functionalization defines what the money is actually being spent on, and then using those billing determinants, and allocating them It defines why the money is being spent, and then we can distribute that across the customer classes to define who is causing that money to be spent. So this kind of walks through that and example for each of the utilities. I'm gonna keep using water as my example. So we're looking at supply again, which is 100% based on, base demand. I will go ahead and mention… so it says 8.8 million here. We are… we've gone through creating the test year and working through functionalization, but these numbers are still just preliminary. There could still be adjustments to,

[81:12] capital costs per year, just based on conversations with city staff, so these are subject to change. It's based on the fiscal year 26 budget. It includes operating maintenance expenses, capital, cash capital, and then existing debt. And then… the adjustments that I mentioned previously for any unusual or one-time expenses. So approximately $8.8 million per year to supply water throughout the system. That's for the functionalization step. Then we go to allocation. Water supply is needed to meet average daily demands, like I mentioned, and then we distribute that to who is actually, incurring those costs. In this case, we're looking at single-family residential, which, our preliminary billing determinant calculations, that's giving us about 38% of average daily demands. So, essentially, you're taking that $8.8 million, multiplying it by 38%, getting approximately $3.3 million in costs for water supply for single-family residential accounts.

[82:21] Then we come to the final step of rate design. Which is… the final step of cost of service, which is reach 1. So this is really a mixture of art and science. We did all of that work to calculate the cost of service by the customer classes, but… which helped inform the rates. But actually creating rates isn't just technical, it's policy-driven, so we, are just providing, a defensible basis for putting the fruits together. It's based on the alignment with fossil service, revenue stability, affordability, conservation, so on and so forth. There's a lot of things that go into it. It's up to those, policy makers to actually make those decisions.

[83:11] So that is calculated cost of service, but… There's a lot of different steps that go into getting to that point. So this is our project timeline. I'm going to go through this in the next two slides, but I'll just point out that very last one, community engagement, that's ongoing, with tonight basically being the start of that process. We have our progress to date. We started with developing the test year based on the fiscal year 26 budget. We went on to the preliminary 20-year forecast, which like I mentioned, is subject to change based on just a number of different variables, including the capital improvement plan. We went through and used the currently existing plans as a basis for our calculations. But based on…

[84:01] calculating the revenue off the building determinants will actually determine what capital needs to be prioritized and what can actually be spent each year. So that is a continuous process. And then functionalization. Like I mentioned, we went through, determined those buckets, and went line by line through the budgets to assign which, buckets they go to. But that is also a continuing evol… a continuously evolving process. As for next steps, we're finalizing the billing determinants. So far, we've gone through, with our revenue reconciliations, which is essentially taking the billing data and pulling the billing determinants like meter counts, and consumption, and multiplying it against current or historical rates. To see what revenue we get out of that, and comparing against historical to see how accurate we are. We want to have a relatively low variance from what was actually, realized in those years.

[85:04] And that kind of ensures the accuracy of our billing determinants. And then from there, it's used as a foundation for the rest of our calculations, so we're taking our time with that one. Then we'll move on to the cost of service, which will lead into rate design, and then, like I mentioned, continuous community engagement. But thank you for listening, and Dave and I are available for questions. Another question. I think you were alluding to this at the end, but, so the revenue requirement is including CIP, The functionalization does not include CIP, is that correct? It does. The… so we go through and create the revenue requirement based off of operating expenses, debt servants, and then the capital plans as well. So, we put together proposed debts based… proposed debt, and then what can be cash funded off of the capital plan, and that's layered into the revenue requirement.

[86:05] And then we're taking that entire revenue requirement and allocating it out to the buckets. So, is, like, what bucket would, like, a capital improvement project fall in? Would that be distribution, or… It really depends on the type of project. So, for instance, you've got breakups, you talked about supply, transmission, distribution. If you were, just as an example, to spend, say, in the next 10 years, we gotta spend $60 million on our reservoirs. That would be going to supply, and so then when we're allocating supply, that gets allocated according to how it's being used. Okay, so you're allocating CAP out to the… functional area of whatever that capital is. Okay, got it. And I guess, were you working with Stephanie and team on that 10-year plan? Okay. Constant one. Yeah, and so, the CIP is actually based on last year's CIP, because as you know, we're on that annually. So right now, we're kind of in the middle of this year's CIP process, so we're just working on this.

[87:14] And I think something that would be important to mention is we have recurring meetings throughout the process, and so we're constantly communicating with updates. I had the good fortune of sitting in one of the functionalization meetings where, you know, we're going through a very, very long list of items. And Stephanie was making recommendations on how they might be slightly adjusted, so there were hundreds and hundreds of lines of the cost going forward. In the model, what did you end up using for the escalation, O&M escalation? I'm curious, based on, you know, we've had such crazy, weird inflation and escalation over the last 10 years. upload. So, we looked at… around here somewhere… sorry.

[88:05] So, we looked at the municipal Cost Index, construction cost index, and the producer price index. So, for municipal cost index, we looked at a 5-year average from fiscal year 2027 to 2032 for the first 5 years. And then… or, sorry, a 5-year average for 27 through 32, and then thereafter, we use a 20-year average. For the construction cost index, it was a 5-year average for the same period of time, and then we reduced it to 4% thereafter, just on… through conversations with city staff. And then the producer price index, same as the municipal cost index, 5-year average, and then 20, year average thereafter, starting in 2033. So the construction escalations… further out of the future was 4%, but what… I'm curious about the percentages of that. So, look… looking back, we looked at the last… you can give some examples there, but like we mentioned, the last 5 historical years, because we've seen that pick up, we use that for the next 5 years, and then we're hoping

[89:09] it slows down, so years 6 through 20, you know, it calms down, but if you want to show, like, what some of those, like, the construction. And the… and maybe the CCI was based on the Denver-specific area of the CCI. The reason that… I decided or wanted to bump it back down to 4%. That's what we use internally, and as you know, like, a 4% compounded over 20 years is… it raises the cost so much. So we just wanted to maintain consistency between our internal models and what Nugen was using. The CCI is a good basis, I think, for the next 5 years, but we can continue to watch that, and then the goal will be, after the study, to actually have that model so we can tweak You know, in, in next year, that comes down,

[90:00] Do you do any sensitivity analysis? soon been a little higher, soon a little lower. Wow, there… I'll just kind of jump in here real quick. There's so many variables with the cost of service that it's… We're going to be running a lot of rate analysis, and so to compound, like, more variables on the front end, just kind of, you know, you create so many different options and, you know. later on, so right now, we're really trying to, like, nail a 20-year forecast. We're really trying to, get to a good 20-year forecast phenomena, in terms of our CIP, and then also this operational forecast as well. Okay, again, and I apologize if these are questions that everybody else knows, but in terms of the billing unit. I mean, there's a… as a Boulder resident, there's a huge…

[91:00] debate ranging in our community about density and growth, and I guess Mike, you guys have to make some… if you're doing a 20-year study, you have to make some decisions, and… I'm wondering how you all made that decision, and then, I guess, Joe, maybe from a… This is not… is it consistent with what the planning is in other departments of the city, so that all, you know, utilities and transportation and all the other departments of the city are using the same assumptions about growth and, you know, billing units, the effective equivalent of billing units for those other departments? For sure, and maybe I'll speak to the last part of the question, then turn it back to Steph for the first part, but right now, we're going through an update of the Boulder Valley's Comprehensive Plan, which is our overarching document for that kind of thing, and one of the

[92:10] One of the elements that falls out of that is… that the city consistently uses the same planning numbers across all departments. There, there can be some, Situations where we might deviate from that, for example, if something that's conservative for one department and not for another, we might look at it different ways, but… For sure, that is in the mix, and I don't remember the first part of the question, but hopefully Steph does. Did you actually ask, like, what is the growth rate that we're using? Right now, we're using, historical average of 0.5%, but as… Again, there's compound, I mean, it's 0.5 every year, so… Correct. And so, you know, as conversations continue to evolve with the EVCP, you know, we can look at the study and perhaps update that, but right now, we're just trending based on historical, growth.

[93:08] And you're assuming something that's linear. Yes, right now we are. But again, I think… I feel like with… with… we are giving a 20-year forecast, it's… it's, it's a solid forecast over 20 years, but You know, really, we're looking at it for, like, the first 5 to 7 years. You know, like, I feel like we could be really certain with what our costs will be, what our billing units will look like over the next 5 to 7 years. As you kind of get out of that forecast, then things become… you know, lesser. And we'll be doing another rate study. Exactly, yeah. But it gives us a look ahead to see if there are very acute pinch points in the future around certain investments or certain areas of the system, so it's useful in taking that longer term. Look ahead, but recognizing to focus on the 5 to 7. And just quickly, it's not just this effort, but our engineering team looks at those planning numbers for

[94:04] Thinking about infrastructure investments and specific growth, if it's going to be in this area of town or another, what's needed there. Our water resources team, who you heard from tonight, uses those numbers in their projections for For water supply, so… Sees a lot of traction. And then I think it's… it's a different kind of looking head, but piss. Thinking about what, you know, the individual unit contributions are to the… those investment costs from a growth perspective. I just wanted to go back, because you had a question on the inflation, so I wanted to clarify. You'd asked for numbers. So, for instance, for the MCI, the Municipal Cost Index, the last 5 years. It has run at about a 4.8%. The construction cost index last 5 years, 4.7%, and then the producer price index was actually at 5.4%. Right. So, we've got those going forward right now.

[95:09] I would honestly hope they would maybe be a little high, but right now, it doesn't look that high. 2018 and 2014 to 2019, we had construction and escalation costs that were below 3%. Yeah. So we were operating in a completely different environment. And unfortunately, we are working with so many clients right now. That are spending literally hundreds of millions of dollars on capital projects, and Those… those interest rates, you know, those inflation rates are… significant. Yeah, they're probably not unrealistic with what we're seeing, unfortunately. So, what are you assuming on demand? I mean, because we've seen, in your earlier presentation, demand is sloping down. Do you assume it continues at that rate, or does it assume level demand? So…

[96:06] In their presentation, they had that going down, which is great to see. Right now, we're getting the budget finalized, we're getting the cost of service, everything done. We're making sure we have billing data as… billing data for the last 3 years, we're good with that, and then we're going to use that with discussions as we go into water budgeting of what do we want to do going forward for assumptions. Correct me if I say anything. Probably some sensitivity analysis, right? Assuming it goes flat, assuming that Productions continued, which I don't know how it went through, so… physical limits in terms of the reductions, like, they just have to look along. Yep. And to Melinda's point earlier about 2002 drought and how, you know, so much of this cities at the time, revenues were based on

[97:01] variable demand, right? And so, like, how much water people were using was very closely connected to how much they were paying on a month-to-month basis, but that creates a lot of vulnerability for the revenue of the system. So, Boulder, as you all are thinking right now about what that balance of You know, the monthly amounts that everyone is paying, and then what is variable on top of that based on usage, instead of having it all be usage-based. And one of the challenges you have with it then, too, is, again, we just talked about inflation, we're talking about capital costs. If you've got either things you have to upgrade, or you've got the infrastructure you have to replace. While you're encouraging conservation, which is good, because you have finite resources, or what have you. you know, the cost per 1,000 gallons is still going up. And so, it's… it's a fixed-cost business that you're running, and so when I heard that, where you have the surcharges, we've… we've seen that. You go, it's not fair, but it's just kind of what

[98:12] run a utility. I have a question, and Juliana, Joe, it's maybe more for you all, I guess if what comes out of this is vastly different than what we're doing today, is there kind of a thought as to the most change we want to make? Are we relying on that community engagement, or like, how are you thinking about incorporating this already? For sure, we're thinking about that. And, I think when you… Zoom up to the highest level and think about this. The way our type of operation runs. we have to recover our cost of service. And I think we have a pretty good handle on what that is. And the rate design is really kind of the mechanics or the algebra of how we do that.

[99:02] And I think each time we do a rate study, we have specific things in mind that, in staff's mind, that we want to change, as you heard from previous presentations. One part, especially our commercial billing, is really complicated, and like to… simplify it. So, I don't… I don't think customers are gonna experience dramatically different, like. I think when people hear REIT study, they can worry that, oh my god, my bill is going to triple, and it's not that, just we're streamlining the way we design it, so… And the customer engagement, or community engagement, is aimed at bringing people along with that, and also getting their feedback of what they're experiencing. We've gotten some really good feedback already from our Large commercial customers.

[100:01] So there's not going to be a huge surprise or, like, a tripling of builds or anything like that. Or you'd be very busy on the floor. So, this may not be a question for the consultants, but I just… and maybe I should have asked it for the earlier presentation, but it struck me when you showed the I think it was the per capita usage of water. We put in the water rates in what year? The water… the budget, water budgets. 2007. 2007, are you? Yeah. Okay. And I don't think it was 2007, and then… but then it was after… it seemed to be level, I don't know, maybe we talked about that, and then it was after the… Was it one of the droughts that it… started to fall, give him an explanation of what was… why it was level for a few years, and then… Then usage fell, which is good. Bert doesn't usage fell, but I'm just curious about the cause. Yeah, so we really saw usage start to fall after the 2002 drought. That was the primary trigger point. And the main water conservation that we saw within the community was really people changing out to efficient fixtures that had been designed at the federal level, so those toilets, those shower heads.

[101:14] Things of that nature. And that adoption was slow and happened gradually over time. Okay, and I'm just curious, do we have a projection of whether that… when that… does it… does it continue to accelerate, or does it bottom out? Yeah, so it might surprise you that Steph and I are talking all the time and projecting demands, and I think the level of conservatism the level of conservative and the right way to estimate it depends on the situation. Yeah. So we have our water supply planning scenarios, where we do a few different levels of demand, but then we have financial forecasts where there's different sensitivities, and so we want to anticipate that. So I don't know that anybody has a solid crystal ball of, like, it'll look exactly like this. But we are using sensitivity analyses, and we have a sense

[102:03] From an outdoor water demand, how much more water we can save. I'm curious about the… the pinks. And since we didn't talk about that a whole lot tonight, but, I think we've talked a little bit before about how development should pay their fair share. Now, that's one of the policies in the comp plan. So I'm curious, have you gotten any feedback on that so far in the rate study in the community? Like, how do folks feel about that? his thoughts. I think the team could probably answer that better, but I think we're… that's future state of the analysis. We haven't really gotten, if I'm not mistaken. Yeah, and that'll have, some internal stakeholders as well, like, talking to our planning and development, departments, and others who are, like, pretty entrenched in that world, so that'll come in the future.

[103:01] Thank you. Thanks. Yeah. Thank you. If there are any more questions, I think… we can move on? I think so, and I just… I might sum up by saying that the board will have additional touches, as Gary nailed it in the timeline, and also just a reminder that, over the years, for some of these efforts, we will sometimes invite a board member in to follow along with us. We did that for the Water Efficiency Plan. In 2022 or 23. And, oftentimes, there's a board member that has a background that syncs with whatever effort we're doing, and for this one, Amy graciously offered her time to help us out on that, and has a background that syncs with this type of work, so we really appreciate that.

[104:03] Be involved. Oh. So, the last couple of items on the agenda here, we've had matters from the board, so, is there anyone from the board have anything they'd like to bring? So, looking at them. It's about, so yeah. Do you want to put it up? There you go, right. So, Melinda and Joel, did you, either of you have any matters you wanted to bring to the board tonight? Okay, great. Teach me. Pretty much every, every, board meeting, we take a pause so that if there's any matters that the board brought, like, to bring to the attention of other board members or the staff and the folks that are here, we give give that opportunity, and then we turn it over to Joe to see if there's… and the team to see if there are any matters from staff that…

[105:07] We would like to bring to our attention, other than what we've discussed. Yeah, thanks for that, and usually I do have a few odds and ends to share, and but tonight I don't. The one thing that was on my mind for matters was Kim's update on the Colorado River, and we just decided it made more sense to cover that. Since it was so synced up with the water supply update. So, I don't have anything on that, and if you'd like, board, I can move on to the future schedule. Great. And so, a pretty significant shift in the future schedule that you may have noticed is the capital improvement program. We usually do a three-meeting series for that. That historically has been May, June, and July. And, like, other departments with boards, we've been asked to change that so that we sync up with our internal budget, process and don't get in front of that before boards are making recommendations. And so, this year, the CIP will be July, August, and September. Really doesn't change anything for us.

[106:20] In terms of our process, or what we do, it's just… Making sure it's not out of the border, so… With that, We really don't have a need to have a meeting in May, and so there'll be no meeting in May unless something comes up, which I doubt. And then the thought in June was to have a business meeting where we do that Colorado River update with the visitors from Northern Water, and then probably combine that with a project tour, and we're thinking about our, Major phosphorus upgrades project that took place at the water resource recovery facility.

[107:03] And then in July, we will start that, 3-month CIP process and an information item on the capital improvement programs. Normally, in that 3-month series, we start out with just a reminder for ourselves and for the board of where we left off the year before, and Then we take it from there in subsequent months, and also looking like we'll have an information item and another great study coming in July as well. So, that is what I have for the future scheduled. Sounds good. So, no meeting in May, meeting in June. July, August. Great. I think we're… Motion to adjourn. Adjourn. Abby, are we ready to adjourn? Yes. Yes.

[108:07] Thank you, everyone. Thank you, staff, and NuGen. Thank you. You bet, it's great. maybe don't. Oh, you will be.