Good morning. It is Monday, October 7th. This is the Transportation and Environment Committee. We have two items on our agenda today both related to WSSC. Good morning, WSSC. Good morning. You brought the whole team. Thank you for being here. Thank you to Madam Chair. I think I see in the back, Ms. Foster. Thank you. I don't see anybody else. The two items that we are taking up is first WSSC's led led reduction program and meter infrastructure enhancement and PFAS program and then the second item will be on the spending control limits. But let me just start with some thoughts about the lead reduction and infrastructure enhancement and PFAS. Just last week or about eight days now ago, I was in Lincoln, Nebraska as a member of the EPA's local government advisory committee. And we've been having a lot of conversations on lead reduction and the federal regulations about that, which have been screened and approved by the local government advisory committee. So we spent a lot of time in Lincoln talking about the rule and talking about how it will affect local water utilities. But I'm glad to say that most of the discussion was about worst-case scenarios, and there are some jurisdictions represented on that committee in areas that need a lot of federal help. And I'm glad to say we are not one of them because we continue to work on our infrastructure and continue to update and modernize and that's what this conversation is really all about. And then secondly, the infrastructure enhancements is something that we as a committee and a council have spoken about for a number of years. It is a relatively newer item for this council and the makeup of this committee. But it is something that I have been wholly in support of. We will get into the details. Why I am supportive of it, so I welcome this discussion. And Jim Davis, I will turn it over to you. Or Mr. Lovchenko, any other opening comments? Yeah, just to note today, my understanding is we do, we are trying to end the meeting by 11.30 this morning. And I think since we do have two substantive items, the goal is to try to get through the first item in the first hour or less so that we do allow at least an hour or four the second item, the spending control limit. So we'll look to you for the countdown call. Right. And we'll see if we can do that. Certainly any questions you have or any follow-up you want, we can always bring these items back to the committee. But WSSE staff were anxious to get these before you because some of them have some timely public notification issues and there's some interest in partnering with the council on some of that. So, it was important to get this before the committee as soon as we could. Okay. Thank you. Turn it over to WSSA, Madam GM. Good morning, Chair Glasson. Thank you so much, Councilmember Rosbalco and Councilmember Stewart for having us this morning. I'm having a little bit of ear issue. So if I'm not speaking up, please let me know. I'm going to save my extended remarks if you don't mind for the second part of our discussion today regarding the budget, but I do want to say first, I want to recognize our chair of the commission is here, Chair Foster. I also understand Commissioner Bayonette is here as well. I did not see him. Yes. I wanted to found out. Okay. Yes and we have several members of of T.M.H.2O that are here in the audience and I'm joined by my colleagues who will be presenting on our meter infrastructure, which is, it looks like the first presentation up. You'll recall from the last hearing that you expressed an interest in hearing about the state of our meter infrastructure, and we have some very insightful things to share there. That will be presented by Glendiaz, our Director of Utility Services, Priscilla Toe, will be presenting on PFAS and Dr. Shin. Jinshin will be presenting on lead and copper. And without a doubt, these are probably three of the largest drivers of our expenses going forward. And I'll touch on that more during remarks in the second half. So at that I wanna turn it over to Glenn. Good morning, I'm Chair Glass. Good morning, council members. My name is Glenn Diaz, Director for Utility Services at WSSE Water. Today's presentation is an overview of our meet-up in infrastructure enhancement. And due to the time constraints, I'm going to zip through some of the slides, but want to make sure I hit some of the high points as we go through. I want to bring your attention. If you can just go back to the first slide. I'd like to give just bringing your attention to the picture at the top of this slide. It's a picture that I like, but everything I like about the picture represents what I dislike about it. And what I dislike is that this is one of our meter readers, one of my coworkers, line in the snow just to get a reading from a meter. And this is going to happen in 2024. So this is not old news. Next slide. High level overview of WSSE water. WSSE water is a best in class utility with zero water quality violation in our over 106-year existence. Serving 1.9 million people in both print sources and Montgomery counties, we support the economic output of both counties. And just want to bring your attention to the bottom right of the slide, as we maintain $9 billion in assets. And so connected to this presentation, it's very critical that our meet-and-infrastructure supports the needed funding for the maintenance of this infrastructure so that we are able to provide top-class service for our customers. So short video. to the TAS in homes and businesses rather service area is at the core of WSSC Water Limited. But before our safe clean water is delivered to you, it passes through a meter, the backbone of our filling system. More than a century ago, in 1918, when WSSC Water was created, meter readers walked house to house leading the water meters. A lot has changed in our century of service, yet our meter readers still don't have to house. 96% of WSSE water's meters are red just like this. A small number of meters in a WSSE water system, about 4% are equipped with automatic meter reading or AMR. Introduced in the industry in the early to mid-1980s, AMR was first used at WSSC water in 2005. With AMR, instead of walking from meter to meter to collect reading, a meter deer can get the information while driving by. Using a radio frequency, a device mounted in the vehicle picks up a signal, said from the water meter, and captures the reading. So I think the video speaks for itself, but I do want to emphasize it's been over a century and we're still reading meters the same way. Here you see where we manage over 503,000 meters in our network. 343,000 of those meters are located inside customers homes, which makes it difficult for maintenance and access 470,000 plus meters are read manually the same way we read meters over a century ago and The small percentage of our meters are AMI AMR I'm sorry or automated meter reading As the video states this is 1980's technology. So while we're doing a little bit better than we have been, we're still dated as far as our technology goes. And most of our meters are beyond a useful life with an average age of 17 years. Just really quick, this is just a graphic of our meter population on the left across the two counties, our AMR footprint, and then on the right you see in our meters that are on non-registered meters, which means these are meters and customers that are estimated. Some of the challenges we face with meter readingA Readin, with our META and infrastructure, I'm sorry, 96% of our METAs are red manually, which creates a problem for our send-out customers. META Readers walk seven to 10 miles each day. If you can imagine that's walking from this building to the National Institute of Health in Bethesda on a daily basis, not for leisure, but pretty hard, tough walking in dangerous conditions. Meta-readers account for 19% of all workplace injuries at WSCC, and 68% of the lost days due to injury, while it meta-readers only make up about 2.5% of the employee population. Recent water audit found that nearly $35 million. We have been about a $35 million revenue loss due to metery in inaccuracies. Bring your attention to both pictures. On the top right picture, there's a bit way of dog sign on the gate and the meter reader must enter that gate. Unfortunately on the 17th of September one of our meter readers were bitten by a dog and so this is one of the dangers our meter readers face on a regular basis. But I'm right. A little bit hard to see but there's a small black pad right where the wire enters the home that's WSSC's touchpad for manual meter reading infrastructure and it's right next to the electric company smart meter which just talks about how far they're outpacing us as far as technology goes. And so to help eliminate the problems we have in both on the utility side and for our customers, we've developed a customer focus strategy for enhancing our meet-up and infrastructure. Focusing on prioritizing and replacing large meet-ers and also prioritizing small residential meet-ers for replacement would have focused on addressing customers in disadvantaged areas. There's a need to move customers from quarterly billing to monthly billing for better budgeting, better management. And also, we would like to make sure we're prioritizing so that we're not haphazardly replacing meters. We have a systematic way of replacing meters. To determine best way and best practice for enhanced in all meter and infrastructure. We advertised recently a request for information just to see where the market is and get input on how we move from where we are to the next state in our meet-up and infrastructure. So responses from the RFI, just want to say we did not ask about AMI. You will hear responses and you will hear conversations about advanced metering infrastructure which is AMI. That's directly related to responses we got from the industry through the RFI. And so first question, just a few questions from the RFI. First question here was best practices for meter infrastructure. While AMI was not explicitly stated, the response is suggest AMI infrastructure. And two things I'd like to point out, enabling tamper and leak detection. Those are benefits you get with an AMI system, and that's what the industry is saying WSSE should implement, and also deploying user-friendly software, which puts data in the palm of the hands of our customers so that they can better manage their water usage and budgeting. The next question was the system approach, what system approach would best be suited best for WSSE water? 100% of the respondents, keeping in mind we ask about AMR, 100% of the respondents suggested an AMI infrastructure or a combination of AMI and AMR, with 67% saying AMI only, zero respondents said AMR only. Next slide. Questions regarding environmental impacts for advanced, enhanced, metering infrastructure. The first response suggests AMR increases carbon footprint while we're not walking as much with metaritators we're having more truck rolls because AMR requires driving. AMI decreases carbon footprint and fuel consumption. AMI also helps to reduce water loss and that system-wide and also on the customer side. AMI enhances water production efficiency by minimizing power and chemical usage. And regarding the concerns for health, where metering infrastructure enhancements are concerned, it is determined that smart meters use the same communications technology as cell phones, television, remote, Wi-Fi, baby, and medical monitors. Questions regarding the social impacts of an enhanced meto and infrastructure? We ask about the benefits of an AMR system and the responses here speaks to enhanced employee well-being. That's another suggestion of an AMI system and the benefits an AMI system provides and then expanded professional development opportunities. Questions regarding whether or not, you know, we're gonna put meet-a-readers out of employment. This is not a program, any enhancement will not put meet-a-readers out of employment. It's repurposing the resources. So meet-a-readers will now become meet-a-technicians. Customer service representatives becomes analyst, because there's a system that provides data and the ability to analyze and support the customer's needs with enhanced meet-a-read infrastructure. Enhance service quality and customer satisfaction and also productivity, productive customer education initiatives, where customers now have information on their usage, their billing, and they can be better educated on water consumption and budgeting. Looks like. Safety, decreased physical strain on employees, we spoke earlier about the meterede being bitten by a dog, the many other injuries that meetered his face. And so an enhanced meteredine infrastructure and this response suggests an AMI infrastructure that takes the physical strain from employees. It also minimizes exposure to hazards, less frequent need for private property entries, and that speaks to interaction with customers and the potential for criminals to pose as utility workers trying to enter private properties. And suggest the last bullet, AMI, suggesting enhanced water quality monitoring, sensors on AMI network, kin measure, turbidity, and closed chlorine residual, which are great tools for protecting customers. As far as funding goes, customers. As far as funding goes, there's several funding sources that can be leveraged for any metering enhancement program, some are specific to smart metering. And for example, the public-private partnership is a source that many utilities across the country has used and many of the other ones that are seen here are resources that can be used for mid-rangement programs. All right, just a little bit more about the benefits to our customers. Enhance mid metering infrastructure supports of affordability efforts with customers. Moving customers from quarterly billing to monthly billing, it enables customers to frequently monitor their usage, look at their bills, and able to budget a little bit better with monthly billing as opposed to quarterly. More accurate meter reads and bills. This always brings up the question as to whether or not customers' bills are going to be increased. In some cases, that's a possibility if the meter has been underregistered. There are a number of reasons for replacing meters. If the meter has been underregistered, there's the potential for an increased bill. However, the benefits of an AMI system, for example, far outweighs the minimal increases that are seen with new meter installations being able to monitor usage. Near real-time water usage data, near real-time unpro on property leak detection. That's emphasized by the letter on the right. That's a WSSE leak letter that was sent to a customer. And what we have seen here is just within a one month period, there was a 19,000 percent increase in usage just because of a leak. Imagine how much more that would be for customers on a quarterly bill. Having a metering infrastructure that provides real-time data would have caught this problem within the same day. It starts. And so the path forward, the path forward, continue a large meter replacement, develop and implement a strategy for residential meters, and of course seek in continued support from the both counties and committees like yourself. short term, short and long term approach while we're moving towards our infrastructure improvement. Just establishing a meeting for the task force has already been established and moving towards the end, developing a plan to enhance the meeting and infrastructure leveraging information information from the RFI that was the responses that were received. Great. Thank you. Thank you very much, Mr. Diaz, for that presentation. I have a few questions and appreciate you enumerating the benefits for a smart meter program, right? And first and foremost, dispelling any concerns about the loss of jobs, right? As we talk about technological upgrades, not only here with regard to this program, but we talk about technology across the country, whether it's EV charging and cars and other things, we want to make sure that the people who currently serve in these positions and help us have jobs in the future. And so thank you for highlighting that. With regard to the RFI that you put out there, how many responses were received? 15 responses. 15, that's a lot. Which is probably a system. Yeah, that's great. And then more broadly within the DMV area, how many other jurisdictions currently have this program with their utility? Do we know? Yes, I'm with at DC waterways and most of the others. Keisha Powell again. I believe all and at least all of the large utilities akin to WSSC water. We know that City of Baltimore did an upgrade DC water for some time has had AMI. And even we believe City of Rockville I think recently moved in the direction of implementing AMI. So we'll have some customers within Montgomery County on AMI, but not WSSC water. So, so this panel you're saying put another way that WSSC customers are one of the few people who do not have this service. Right, in this region, yes. Right, so we're lagging in terms of technological advances to maintain our water systems? Absolutely. Very helpful, right? Because over the years as we've engaged in this conversation, people have expressed concern, but I think to recognize that the other utilities and jurisdictions are moving in this direction that no jobs are being lost and that it does protect our water quality and protect the ratepayers, right, so that they are alerted immediately and I'm sure my colleagues will share some stories of folks in their communities who have gotten alarming bills over the months, I know they exist, I see them online a lot. So I'll stop there and turn it over to colleagues who might have any questions. Vice President Stewart. Great, well thank you. Those were many of the same questions I had, so I'm glad to hear. The technology, the NMI technology, since you got 15 different responses from for the RFI, like how different is this technology? Like is Baltimore using the same thing that DC water is using? Like how many folks are out there that we may potentially contract with to do this type of service? So in terms of contracting for the service it would come from a number of different could come from a number of different sources could be consultant firms that specialize in meet-up and infrastructure upgrades then they're installers who are specifically in the market for installing meters and the infrastructure that's associated with an advanced meter in infrastructure. And that program also includes the manufacturers of meters. So when you, Mr. Diaz, when you showed us the timeline setting up the working group and working through this, you know, looks like the task force, excuse me, over the winter. It looks like this is probably going to be like the next year of figuring out how best to proceed. Is that an accurate read of this slide? Yeah, I would say probably about a year. There's some decisions that still has to be made within the organization. But also part of what this has shown is that while we're looking at the information from the RFI, we still have to continue to maintain the infrastructure we have, and we're continuing to replace a lot of our large meters, which are revenue generating sources and want to make sure those commercial customers can also be built the way they should be. Okay. And we're using the AMI system to replace the large ones. At this point, yes. We're AMI only for the place. Great. And the last question I had was I think it was on slide 10. You talked about partnerships and here promotion of justice, equity, diversity and inclusion through partnerships with disadvantaged communities. As we're moving forward looking at AMI and other things, could you just flush that out what that means? Yes, so part of the emphasis is, or at least it starts with the replacement of residential meters, starts with looking at disadvantaged communities and customers and disadvantaged communities. If you go think of the leak letter that was shown in 19,000% increase in a disadvantaged customer or customer with affordability concerns, who are on a quarterly bill, that bill would be a substantial bill and almost impossible to pay. And so part of the focus is on making sure that we look at those communities, disadvantaged communities and are able to prioritize replacements in those communities where customers need to be put on monthly billing. We're also connecting this to our lead-and-copper replacement program so that we can make sure that those customers with let-and-copper problems and the need for me to Replacements can be served as quickly as possible So that's that's part of our our engagement with the disadvantaged communities to make sure that we they're prioritized and We can move them to monthly bill and as quickly as possible. Great, thank you. The last thing is a request not a question. I think General Manager Powell, one of the things that you all do really well and we'll talk about this a bit on the spending limits is showing where we are compared to everyone else on rates. And I think moving forward, having a graphic that shows where we are on this and that we're lagging behind in this technology would also be helpful so we know what other customers in the DMB in our region are experiencing given the chair's question. So we can certainly follow up with that graphic. Thank you. Thank you. Yeah, I appreciate you making that request. Again, Montgomery County leads in a lot of things. And when we're not leading but want to do something that's important, we need to share with people that we're not leading. Thank you. Councilmember Balcon. Thank you. Councilmember Balkin. Thank you. So I think we're all in agreement. We want to move forward with this. This is a very important transition and advancement, particularly first off having new technology, and not even new technology anymore. I had a copy or 10 years ago that could tell the company how many copies. So I think that's important. And the monthly billing is just critical for our population and I support that. I just have several questions but this just popped up. So the real, the smart meter is sending real-time data. So would we have to wait a whole month to see if there's a leak? Right. So you could sense that all of a sudden there's a spike in usage. Yes. Customer will have the ability to even set alerts so that when usage goes above what is normal for that household, they can get an alert that something is happening. And that alert comes wherever you are. So even if you're out of town, you can get that alert. That's fantastic. I think that's really a really important aspect. And then of course, the jobs transition, thank you for raising that. That was one of the questions that I had. And I'm sure that you'll go through the, there's a new set of skills that would have to be acquired in that transition. And I've done that in a previous life, the skills transition piece. And it can be very painful for some people to have to go through that transition. And so, whatever, however you can prepare them to go through that, I think that's really important. And that's not an easy task for some people to do. So, I think that's important to think about. And then, so the currently replacement is being done with AMI. And AMR. AMR. And what about new construction? So what system is being done with new construction? Only AMR. AMR. OK. And then how long will the instillate once you know what you're going to how you're going to do it? How long will this installation take for the entire county? Across the entire service area we're looking at and it really just depends on how the program is rolled out. As I said, there's decisions that still has to be made, we're looking at, and it really just depends on how the program is rolled out. As I said, the decisions that still has to be made, but we're looking at as quickly as within five years, which will require significant amount of resources to get the replacement done at that point. One of the things we want to make sure is that it doesn't take so long that by the time the first meters are installed, it's time to replace them again at the end. And then I guess this will all be decided when you go through developing the program, but whether there's a priority of what gets done when and whether that's large multi-family properties or whether it's our equity-focused areas. So I think that that's going to be an important part of the rollout is you know where you go first to do this installation. Have you thought about that or is that a decision that's going to wait? Well that's something we're working on at this present time. We're actually significantly into that and substantially completed with that prioritization. And as you mentioned, just looking at disadvantaged communities for us moving customers to Montpellin, large meters also is a priority, but they can go on two separate tracks in terms of the replacement and the resources used for the replacement. But definitely disadvantaged communities, that's one area. Also looking at areas, for example, let UnCopper, as I mentioned, trying to combine both programs as much as possible. And so those are some of the elements of the prioritization that's ongoing, as I speak. Great. And then my last question, it's not really a question, but just an observation of some bills will go up. As you said, there's under reporting in the old system. And so there'll be the new systems will be more accurate. And so I think that that has, we need to think about that in our discussion, our next discussion about rate increase. And when the installation happens, and if that occurs, we just have to remember that when we talk about rate increase, we experience that when we talk about rate increase. We experience that when we talk about property taxes where the property tax rate goes up at the same time that assessments go up and it's really difficult for the consumer or the resident to understand which wider bill is so high. And so I think that that's something we have some time to think about that in terms of when people will be getting their first bill under the system, but it's important to just keep that into consideration. Thank you for that input. I think it would be helpful for us to try to baseline where all of our customers are prior to any upgrade so that they understand the nature of the change. And our goal is to maximize revenue under existing rates as much as possible. And I think enhancing our metering infrastructure gives us an opportunity to do that as we move forward. So we'll keep that in mind with. And also the accuracy, people won't be experiencing these skyrocketing bills because of the leaks. And so I think that's important. Right. There's a number of customers who will see their bills go become reasonable because they won't have that leak activity. Yeah. And just being more aware, I get the, my PEPCO, this is how you're doing and it spurs me to be energy efficient, right? Which, I mean, part of that discussion is the flat usage and maybe declining usage of water. That's a revenue issue. But I'm really a strong advocate of this program. So thank you. Thank you. Last question before we move on to the two other items in this section. The path forward, just looking at slide 15, is ongoing stakeholder engagement. But with regard to this body and this committee, what are the future points of inflection? Would you need to come back to us if you were to implement this or procure any services and technology? I would say that we would definitely wanna keep you briefed as we move forward. There is a piece of business that we have to, Mr. Diaz said, handle internal to the commission to allow us to actually move forward to truly plan to go in this direction. And once we have that clearance, if you will, we'll be able to then lay out a full strategy, which we would be happy to come back and share with you, how we would proceed. There is the need to actually put out an RFP to move forward. And we are also going to have to, or our desire is to pursue external funding. So once we have a full strategy, I think that would be a good time to check in. And then we can establish a regular cadence in terms of approvals if this is going to be in our operating budget or capital budget, of course, that would come before you as well. I think that cadence, I like that word, makes sense and clearly you're hearing from the three of us to proceed internally as an organization to keep moving forward. Thank you very good. Thank you very much Mr. Diaz for that. Mr. Lovchenko, I'm not sure what's cute up on the PowerPoint whether it's PFAS. Great. So now we'll turn it over to a conversation on PFAS. Otherwise known as forever chemicals. That have been in use since the 1940s. And we know that WSSC standards currently meet safe drinking water standards but we still need to mitigate PFAS strategies to make sure that they remain clean safe and healthy and so turn it over to you to walk us through this update. Good morning council. Can you hear me okay? Yes. My name is Priscilla Toe, Senior Scientist and Interom PFAS Program Manager with WSSC Water. And I'm happy to bring you through and share with you what we're doing on PFAS management. So next slide is our agenda. I'll just do the recap of what you shared, the forever chemicals, and then how we are preparing for compliance now and in the future. All right, next slide is, what are PFAS? It's an acronym for Purim Polyfloral Alkal Substances, PFAS. There's a reason I didn't enumerate that further. Yeah. Ha-ha-ha. Ha-ha-ha. Ha-ha-ha. They do not occur naturally in the environment. The term encompasses thousands of chemicals with similar characteristics and they have, like you said, been used since the 1940s in a vast range of products. This diagram includes some familiar household and consumer products and then if you go to the next slide, some industrial applications as well. Peafast, they're known for their strength, so that makes them very resistant to oil and water and stain and flame, very powerful chemical, but that also makes it resistant to degradation and makes it very stable in the environment. That's why it's difficult to capture. Next slide. So this diagram, I selected because it illustrates how interconnected our environment is. And because PFAS is so persistent, because it has a long history of use, PFAS is what we would call one water issue. And in this diagram, it could be called a one environment issue also, as it has ended up everywhere in the environment. So a couple things I'll point out is that WSSE water, we have a couple control points. One would be the water plants and then our waste water plants. But really the contamination starts at the top of the diagram with production and use. So in a one environment approach, the most effective way to reduce PFAS is to remove it at the start of the cycle. And that's where the source, where it's produced and used, which stops it from entering every other realm of the environment. Next, a summary of what Maryland has done. They have an action plan and this is from their document published on December 2023. Their first efforts were to minimize direct exposure, and that's some of the earlier chapters of the table of contents shown there. That work has been mostly completed from 2020 to 2024. And then the next step is their efforts to minimize potential for exposure by past and future releases. So it's a good plan. I'd like to point out a couple things that the table of contents doesn't, the chapter titles don't show, and one is the cost of control. The treatment at each of these points come at a high cost, and the cost is actually lowered best by heavier emphasis on source reduction. And then the second thing you don't see here is that PFAS chemicals don't respect geographical boundaries. So, effective PFAS management requires cross-border collaboration, cross jurisdiction. Maryland policies are going to be good, but we need comprehensive policies to control PFAS. Next slide. A WSSC water, we are prepared for drinking water compliance. EPA issued their first drinking water limits in April of this year. At the time we updated our website with the data so that the public can see the data easily, as well as frequently asked questions. We have about five years of data on PFAS. And these limits, I'll note, take effect in 2029, but our drinking water would already meet those standards. Next slide. And so we also expect that there might be future regulations in water for PFAS and we expect regulations to come out about wastewater and biosolids. And so we are preparing for all these potential scenarios. Our priorities are going to be one is increasing our internal capabilities and then second is smart one water management And that's an approach where we look at the entire cycle of PFAS in water and in the environment and look for holistic solutions So I'll go through those items in the next slides All right first priority is Increasing our internal capabilities First aspect of that is enhancing our analytical capabilities. So here's the challenge we face is that PFAS is very hard to measure. It eludes analytical capture and it's at very low concentrations. So we are nearing completion of our in-house lab. We have our lab team has already gotten ready to purchase equipment. They have their lab resources in place. Their staff resources. And this is going to enhance our ability to gather good data and to make well informed decisions. Second, we're enhancing our research, to understand where and how much PFAS we have in our drinking water source, as well as in the wastewater we collect, which involves a plan to survey our drinking water watershed, which is about 20 times the size of Montgomery County, and 6,000 miles of wastewater collection system. So at the same time, we're also trying to conduct treatment tests, and that involves samples as well, in case we need that to maintain compliance. And we're also active in research. At last count, WSSE water staff are participating in eight different PFAS research projects on impacts and destruction methods. And those are funded by almost $7 million worth of research grants. And then finally, we're trying to enhance our expertise. We have a large PFAS team. It's 20 to 30 people from all aspects of PFAS management. There are a lot of developments to keep up with and we have WSC Water Staff leading in many industry organizations in source water, drinking water, wastewater, biosolids. That's keeping us at the leading edge of finding the best solutions for our community. Next slide. And then smart one water management of PFAS, the approach that is holistic and looks at the entire environmental cycle. So this approach involves focusing on reducing the source, first and most. PFAS is hard to treat for. It is very expensive to treat for. And so the economical and sustainable solution for PFAS is source control and pushing for polluter responsibility. If I could just borrow from the analogy of getting blood test results, we go to the doctor and get your blood test, and sometimes they come back, you're in the safe range for cholesterol, but you might need a control your diet to lower that so that you stay out of the high range. And that's where we are with source control, is we are in the safe range, but we want to change our diet the source and what's coming into our water so that we continue to stay in that safe range and don't enter the high range where we need to maybe make some other changes. But in good preparation we're also preparing testing and planning for potential treatment that we might need. So in this strategy, if we need to invest, we want to maximize our return of investment. And that's going to be by seeking the most holistic technologies, those that will deliver multiple water quality and resilience benefits, not just PFAS removal, but simultaneously address other routine and emerging contaminants in water and resilience to climate change and emergency events So we're seeking solutions with longevity even as sources are being controlled and levels come down in our water We're also seeking solutions with sustainability So we're exploring wastewater technologies that would retain community and environmental benefit of biosolids and divert that from landfills. And as we plan, we're planning for multiple scenarios because we, there are still unknowns about what can be accomplished through source reduction and where the ultimate regulations might fall. And we're working quickly on pursuing affordable solutions and that involves conducting performance tests because that's necessary for sizing a system and defining the funding needed. In parallel, we're working to identify non-treatment solutions that can reduce your treatment needs, which then directly reduce your costs. So for instance, source control is one of those. Alternatives with smaller footprints that will reduce the amount of land you need. Earlier, the solutions that would improve your leak detection or improve decrease your water loss because that directly translates to needing to treat less water, which will directly reduce cost as well. And for affordability, we'll support local and federal policies that advance control at the source. And that being the cost effective means for public health protection. Next slide. So all this, I won't go through this slide line by line, but this is summarizing the current program areas that we have divided into program support, source, water, and drinking water, and then wastewater and biosolids. That concludes my presentation, and I'm available for any questions. Thank you for the thorough presentation, Ms. Toe. I don't have any questions, but look forward to receiving more updates from your research. And you said you're, I think, with the $7 million or $8 million? I think I said seven. Seven. Seven. But there are more on the way. There are just being applied for and possibly granted. And how long are those grants or funds allocated for to keep this research going? Sure. The typical research project goes about two to five years, and then you'll have results towards the later half of that. We're continuing to apply for more grants, and that's why our strategy is not relying entirely on research solving the problem but going at this from a source control approach also planning in case we need treatment as well as researching on impacts and technologies that will help us. Look forward to that information and analysis as it would help inform us as to what we need to do if anything to help mitigate the flow of the PFAS. Thank you. Councilmember Baulkman. Thank you. This is such an important topic. Do you go outside of the WSAC envelope and test? I have a lot of my constituents are on well and they have found PFAS in their systems is part of your research going outside of the WSS system? Yes, absolutely because our source water comes from the Potomac River and Potuxent Reservoirs of the Potomac River and those waters, wherever the rainfall that gets to that point, those are the areas of concern so that involves the area from here to Virginia, Pennsylvania, West Virginia. So we have a project regionally with partner utilities sharing the same source water and we are looking all the way up through to West Virginia to try to understand what the levels are and what the potential risks, higher risk points might be. And then in the wastewater collection system, we're also treating it with, you could almost say the same mirror that wherever the water comes from, that's where we're searching. And are you aware of any, like, home tests that our folks on well can use? One of the reasons that I mentioned we are enhancing our internal capabilities is because the cost of PFAS analysis is very, very high. It is a very difficult chemical to capture, and that makes the lab analysis pretty difficult to capture at the low levels that are being discussed in drinking water. So there are tests if the funding is an issue. It's not a test that is easy to buy, and that would only be a snapshot. But I think the state of Maryland has done a good job in going for trying to understand drinking water not just community systems but well systems as well. And they have published most of their data for the public to see. And then because this issue has really accelerated in the last one or two years. The amount of data that's coming out is coming out very quickly. And more and more, there's more information on well systems or on what we call cell watersheds areas of what PFAS sources there could be and what PFAS levels are in drinking water. All right. Thank you. Appreciate that. No. Sounds like we'll have to add. Not only PFAS as a forever, but forever and elusive. So thank you for the presentation, Ms. Toe. And then final presentation for this section of the committee session is on the Reduction Program. And we'll turn it over to Mr. Shen Yeah, I'm just gonna bring up the PowerPoint Good morning customers. I'm Jin Xin, Water Quality Manager and I'm also Lead Programmeasure for WCC Water's Lead Reduction Program. As you know, Lenin Copper Rule is one of the most important public health initiatives. And WCC Water historically has been working very hard to implement measures to protect health and safety of our customers. And our effort goes where beyond what is required under the lead and cover rule. So I present today what's been here, what's been done here so far, and how we will continue our effort to minimize the risk of lead. Some of the major historical milestones that we have accomplished, WCC water is a public water system, but we also regulate the plumbing codes in our system, in our service area. In 1954, WCC banned the use of lead pipe as plumbing and service and material. And what this means is that the homes built after 1954 do not have lead. And this is three decades before the federal ban in 1986, stopping the use of lead pipes and lead solder. In 1991, Lennon Kapoorou was first enacted. We started Corsian Control Treatment in 1992. And in 2003, we started adding Corsian Enhibitor Chemical Orthophosphate. This water treatment has proven to be very effective in preventing lead corrosion as our lead level never exceeded the EPA's action level. In 2005, we voluntarily completed a system-wide search and replacement program for that. As the outcome of this program, we are very confident that we have very little FNI-led pipes remaining in the public space that we own and maintain. So the remaining effort in our current program will be finding and replacing the led pipes owned by the customers. In 2021, EPA propagated led and copper rule revisions. The first major change since 1991, LCR, becoming effective October this year. Last November, EPA proposed yet another update on the LCR called LCR improvements, which is anticipated to become final later this year and effective three years later. Next slide, please. This is our program timeline and some of the important milestones next few years. By October 16, we are required to submit a completed initial inventory and make it publicly available. We also plan to have a customer art each program ready by this time. In the next three years, we hope to accomplish a substantial progress in with the inventory verification and replacement by the time RCR improvements become effective and replacement completed in five years, which is late 2029. Our goal is to accomplish environmental justice through mitigating the risk of lead. So we are incorporating environmental justice as a building block in all aspects of our program. And that can be done in a few ways. The most effective tool is to remove the source of lead. So proactive lead service and replacement is the major focus of our program. We're also making sure we are protecting vulnerable population and we are prioritizing inventory, replacement, and sampling for these customers. Public education is a powerful tool to mitigate water quality risk and we are building a comprehensive public outreach and education program to inform the potential risk of lead and how to avoid exposure. We want to make sure, we want to make this program a community-based program so we are planning to collaborate with our community organizations and local businesses and use this opportunity to support local community organizations and local businesses and use this opportunity to support local economy and maximize business diversity and inclusion. We wanted to make sure the program equitably addresses vulnerable population and customers in underserved communities. So we developed a prioritization framework for inventory and replacement, taking it to cut need-based and vulnerability-based criteria. So that includes customers that are more likely to have let-service nights, customers living in disadvantaged communities, and homes with sensory population, such as young children, or pregnant moms. This apporting shows that these most at risk of population are addressed first. Before we begin presenting our inventory, here's some information to help understanding what we are looking into. Per EPA, service sign is defined as the entire length of pipe, conveying water from the water main to the house structure. So it includes the portion owned by the utility and the portion inside the proper line that's owned by the customer. EPA's new lead-incurporal revisions require water systems to develop a initial inventory of these pipes, including both portions owned by the utility and the customers. We have now completed the initial inventory based on the review of 478,000 plumbing records, work for the history and permit records, construction, contract records, and other calls and regulations and specifications. Review these fast amount of records to develop a comprehensive inventory of the service and material. And thanks to this endeavor, I'm happy to report that we now have ninety seven percent of the service science identified as not enough. Currently we have about fifteen thousand five hundred services of unknown material. 1377 Gavinite Services acquired replacement and eleven services with initial record of lead installed in 1940s, but these service ends require field inspections to confirm. These are the same data showing the distribution between the two counties that we serve. As you can see, the numbers are pretty even. Most of the lead or galvanized pipes are found from homes built in 1940s or before, and they are generally concentrated around the birth weight across the two counties. WCC water developed a total program cost based on the number of unknown service lines in the inventory and estimated number of how many of these unknowns will turn out to be led and eventually have to be replaced. We are estimating a planning level total program cost of up to 205 million dollars which was recently updated. This includes direct construction cost of replacement, test pitting to verify the presence of deadlines out each and community engagement, water testing, petri filters, and program management cost. WCC water has been actively pursuing external funding to help support our effort. So far, we secured total 34 million state-reverving funds, but given the magnitude of our program significant funding gap exists. In addition to the funding gap, like many other utilities, we have regulatory constraints limiting our ability to use repair funds to support privately on service and replacement and limits the availability of the loan funds to be used towards the private side replacement and we are in composition with MDE to find a way to navigate this challenge. So we need your help. We know that there are various local programs and initiatives out there that have close connection with the communities, providing support to communities, and especially these advanced communities to correct similar issues to remove health hazards. We would like to collaborate with them to leverage their resources and their relationship with communities. Just a brief overview of our communications plan. By October 16th, we will finalize and publish our inventory as required. In addition to this, we also have other outreach and customer support programs ready, including our website, call center translations and sending notification letters to customers with a lead. And because most of the sources are in private property, this cannot be done with customers first understanding the risk of lead and importance of removing the source and letting us access what they have and eventually participating in the replacement program. So it's very important for us to develop relationships with customers, which is why we plan to make our program a community-based program. So we can work with customers, educate them about the lead and our program, and to help them replace the deadlines. So we are developing plans to reach out to diverse group of community organizations that already have ties with the community and even financial programs to support them. And this includes canvassing the neighborhoods and connecting with the customer store to door, town hall meetings and basically meeting with them where they are. Finally, I'd like to conclude my presentation, summarizing the opportunities and challenges. Our first and foremost goal is to protect health and safety of our customers from the risk of lead. We have been doing this by taking proactive approach beyond regulatory requirements past three decades. It's not easy, but most of the lead sources are in private spaces, presenting challenges, identifying and removing these pipes. Strong public education and community engagement is a must and strong financial support program will be very helpful encouraging customer participation. But through these efforts we are anticipating developing stronger relationships with our communities, providing opportunities to support local economy and collaborating with stakeholders towards providing available funding to underserved communities. This concludes my presentation and thank you for the opportunity to speak and I'll be happy to answer your questions. Thank you for the presentation, Mr. Shen. Important top level data point to highlight is that 97% are lead free. And so the question is, while the 3% as you noted on private property, is there an educated guess into what types of buildings they are, they're mostly residential, old, commercial? They're mostly residential. The vast majority of those, remaining 3% is the 15,500 unknowns, which they're unknowns mainly because of the lack of records, which we are continuing to investigate and doesn't mean that they have letter or K.A.V.L.A.N.S. requiring your question. Do we know where in the county those properties are? They're pretty much spread over sort of the counties again the reason they are unknown Classified is unknown is because of the records and they can be they it doesn't Most of the identified and confirmed left-service signs and GRRs in the past were concentrated around the beltway, but these are the unknowns and with the unknown records of construction. So they are pretty much distributed apart. Very interesting. Makes it sound like it's going to be difficult. In this, the remaining, the 15,000, it needs pretty much the field inspections and manual investigations. So it'll take some time. And then last question, the $194 million you've assessed to do this work, is that higher than per building or per case, just because it's so much more difficult. We ran the cost estimates based on three different scenarios, which is mostly based on the 15,000 unknowns. And we did a nation-wide data to find the lead or Gavna's report, replacement based on the construction years. So we use the low probably estimate, immediately probably estimate and high probably estimate. So we adopted the high number for planning and budgeting purposes. So that's why numbers look up here high. But we wanted to be conservative in case we run into those situations. Interesting. Thank you. Can you come from a welcome. Just a quick question. So the unknown, the unknown, can you make just assumptions based on the age of the building as to what materials were available at that point? There are some predictive modeling or machine learning technologies available. age of the building? As to what materials were available at that point? There are some predictive modeling or machine learning technologies available based on just just the construction ears and other information such as neighborhood and sometimes one neighborhood has concentrated led or GRR, and the other neighborhood right next to it can have higher chance of finding that. So there are some technologies available to predict the likelihood of finding that. So we are looking into that technology. We are careful gazing what, how useful those data will be. And oftentimes, it really depends on the amount and quality of the data available to, you know, establish and calibrate the model. And it's not to be more effective on the utility on the pipes because utilities have, oftentimes, have more data to support modeling. It's become a little bit difficult on the customer side. So, and given the fact that most of the unknowns and potentially the lead pipes are, in our case, on the customer side because of the 2000 program in the past, we already eliminated all of the lead pipes on the bi-Wumly-CC water. So we are looking into what kind of data we have to be able to use that model and whether the model would be effective in predicting. Okay, thank you. Yeah, it seems like if you know when the house was built and that's what was being used at the time, it would be able to, you wouldn't know for certain if those pipes were replaced at some date, but it would be able to narrow down this 15,000, it would seem so. We already used the cut of year 1954 because that was the year that we, as a plumbing code regulating authority we banned the use of lead pipes. So any houses built after 1954 were not part of the unknowns. All right. Thank you. Thank you. Would it be possible once you get into these 15,500 to do some mapping even of where the unknowns are, I'm just thinking about the community engagement piece. And I'm looking at when the houses are built and everything, I'm gonna say, these are probably my district, a number of good percentage of this. And I think connecting with, with as you said community organizations but also council member district members because we do a great deal of outreach with the public and so combining this with that outreach I think would be really helpful and also in a number of our communities you know we have historic preservation groups and everything, so when you're thinking about the older homes and also working with some of those groups, I think would be really helpful. So if there is that capability to sort of map it and let us know where for at least Montgomery County, these unknowns are popping up. And if they are concentrated in particular districts, then working in partnership, I think, could be really helpful. Dr. Shen, I don't know if you said this when you talked about the inventory, but part of the requirement is to map it. And we have their finalizing or reviewing the mapping. So you want to talk about the GIS as well as the survey that customers and letters that customers received in the process. Sure. The part of the lead and couple requirement is number one, build the inventory of the lead pipes. Number two, make the publicly available. So we have GIS interface, map interface for customers to access. So it's very simple. We're going to be providing the link to all of the customers. And they just need to go to that website and type in their address, and it zooms into their property. But that map basically shows all the pipes, the pipe materials that we identified. And it's color-coded based, the pipe materials that we identified and it's color-coded based on the pipe material. So it shows where the unknown pipes are where the guidelines requiring replacement pipes are and of course where the non-net pipes are. So the mapping is currently available. And we provide the separate mapping for just for unknowns for your use. And we look forward to working with your team to collaborate and identify the community with the opportunities. Oh, yeah. Thank you. I think that's a great point. I'm glad to know that it's already built into the system. We'll get that information as the homeowner of a 1948 home. Yours is probably older than mine. Yes. Thank you Dr. Shen for this presentation and again Dr. Toe for for yours. I think we're going to move on to the next. So thank you all to the three of you for your very thorough presentations. Look forward to more conversation. Yep. And we'll also make sure that our intergovernmental relations office team sends you advance information on the package letters and information that will be going to community members that are required to receive them so that you know what they will be excellent and I think in particular the district council members will prove very helpful in disseminating this information so you help us help you. Thank you. So we're now going to transition to the spending control limits. Keith do you do an opening here? Yeah what I would suggest and you and we are somewhat crunch for time, but I think we can get through a lot of this. I have some summary slides just to get us through the major points in my staff report. And then WCC Water Staff have some additional information elaborating on their assumptions and their philosophy behind the base case that they developed. And then we can get to some of the nuance of the scenarios. But I think we can go pretty fast through that. And if you have questions, let me know, but I think we can move pretty quickly through the background. I want to get through that so that we can get to the meat of the subject. Sure. This is a timely discussion we have until November 1st to set these guidelines, the control limits. We're having this discussion today. Our counterparts and Prince George's are having it later this week. I've also spoken with Council Committee Chair Olson about coordinating as well as there's been lots of back and forth over the last number of years and wanting to get us all on the same page. So with that, we'll turn it over to you. So I've just put up on the screen just the schedule that you just mentioned. Obviously, we're on, we're at the committee today. The goal is to come to some conclusion on this with preferably with a combined recommendation with print storages by the end of the month. So that would be October 29th for our Tuesday schedule. And did want to emphasize the goal of this process is to ensure that we're adequately funding WSSC water, but within a framework of reasonable and stable rates and looking at it in a multi-year process. And also as I've noted here, maintain the various financial metrics that WSSC needs to meet in order to have good results with its bond rating agencies. So there are four limits that are part of this process. It was established about 30 years ago. So multiple councils have dealt with this over many, many years. The four limits are the maximum average rate increase that we talk a lot about, where that rate lands does often generate what the other limits are going to become, because those have to adjust to get under that rate. You have debt service and new debt, and then also total water and sewer operating expenses. I do want to emphasize that these limits are something that the two councils have agreed as a process by resolution. There's not state law, and there's nothing binding the council's later on during the budget process. So whatever the council's support here is intended to provide guidance to WSSE water in the development of their operating budget, and also perhaps revisions to their CIP, which has already come over as a proposed document. But it does not bind the councils in any way. So the limits here are, limits provided to WSSE water for their use, but they do not limit what the councils can jointly agree on later. I'm not gonna belabor this, but these are the rate increase limits over time, as well as the actual rates that were approved in fiscal years going back to FY96. Just more recently, there's a couple of blips that you'll see, especially last year, where both councils had supported an 8.5% rate limit, but the actual rate increase was much lower because during that time W.C. Water had also done a cost of service study working with a consultant and had gone back to revisit its fixed fees and the percentage of fixed fees compared to its overall revenue, and it recommended significant reset in its fixed fees. So the fixed fees were increased, and the councils agreed to that, and the volumetric rate was lowered basically to keep that revenue neutral. So with the fixed fees up, the volumetric rate did not have to be as high. So the volumetric rate was only 2.4 percent, but those customers also experienced higher fixed fees. So each year, WSC Water puts together what's called a base case scenario, and it's presented in September to a by county staff work group, which reviews the assumptions and the numbers that fall from that. This is the base case scenario that W.C. C. Water presented this year. These are just the four limits, not all the assumptions behind it, which we will get into. But the top line there, you can see the maximum rate increase. So for FY 26 you see 12.2% and then it declines a bit each of those years afterwards. And then you see the new debt, debt service, and the water and sewer operating expenses. So what is in this base case? So first it does assume as has been done the last couple of years, that the fixed fees would increase at the same percentage as the volumetric rate. And that's done for a couple of reasons. One, it does keep the fixed fees at the same proportion of overall revenue. So that's one helpful benefit. It also does somewhat protect the customer assistance program participants, the customers that meet those criteria for additional assistance, since they do not pay the fixed fees. So if the fixed fees go up, that does become an additional subsidy provided to the low-income customers that are in the customer assistance program. What else is in this base case? It does assume full funding of the recently proposed WSSE Water CIP, which we can talk a little bit more about today, but obviously this is very early in the process. We're not budgeting today. We're looking at big picture assumptions. But that's a major assumption in this. It also does have a substantial increase in Pego. And this gets back to the financial metrics that I mentioned earlier in dealing with the increased new debt and the ratios that the financial metrics rely on, and the targets that WSSC water has for those metrics. There is a, what I call, fairly modest increase in debt service, so while Pego is going up substantially, that is obviously related to the fact that debt service is not going up as much. So we'll talk more, but if Pego were to be decreased, then that would have an impact on debt service to keep things equal. You also have some of the other categories, typical categories in the budget. There's an all other cost, which is most of the operating expenses that are not covered in some of these other items I'll talk about in a minute. You see fairly modest increases in that. And as I mentioned, the base case does support the financial metric targets that WSSC is seeking. Some of those other operating expense areas, souring wages, they're up actually fairly significantly in this, but that's because of assumed coal as a merit increases, and also annualizations of new positions approved last year for partially approved, or partially funded in the current fiscal year, they need to be fully funded in the next fiscal year. And then also a significant decrease in their lapse assumption. It was a 10% assumption this current fiscal year. They're assuming a 3% assumption based on their more recent experience and their hiring projections. So that also had a significant impact in this projection for sowering wages. And then the regional sewage disposal costs, which are an operating charge from DC water, based on actual flows going to blue planes, that is also going up a bit in this budget. We have seen significant increases in that category over the last several years. And importantly, there is no additional funding assumed in the base case for new or expanded programs or costs related to new positions. If those, and obviously every year, just like with the budgets we review here internally for the executive and the other agencies, they all are considering what they need to do in addition to what's in the current budget. So you have what you might call a same services budget and then you're looking at all the other areas that you are considering enhancements to. Well those are not currently assumed in the base case. So if any of those were to be funded, they would have to be dealt with through savings elsewhere in the budget or increased revenues if revenues come in higher or projected to come in higher later. So those are not built into this and the numbers they're looking at internally relate to about a 4% rate increase equivalent about $38 million. So those dollars are not assumed in the base case at this point. It's very important to note that. So in this chart, this just summarizes the revenue dollars extra and funds available so that has a slight Offsetting impact with rates about 1.2 percent or it's equivalent to about a 1.2 percent rate increase So that that's beneficial in terms of providing some offset to the expenditure increases And yes, what I've mentioned here. But I don't want to miss the fact that overall in generally with revenues, water production is still running flat and with growth in the population. That means that per capita usage continues to decline a bit. That's still their overwhelming revenue source. So much of the revenue is flat or very marginally changing from year to year. So that's the world there and that's the world that a lot of water and sewer utilities are in in the region and in the country. And WCC's rate structure also makes it sometimes a little harder to predict revenue, depending on where customers fall within the different rate tiers. They pay a higher amount as they move into a higher tier of use. So if there's some significant variation in customer usage, then that can also affect revenues. So on the expenditure side, just to summarize, I mentioned the same services concept earlier. Most of the operating expenses, heat light and power, regional sewage disposal, everything I would say except for Pego and debt service, are what staff would portray as same services. The Pego and Death Service then are calibrated to accommodate their proposed CIP. So that, which we have not reviewed yet, that is obviously gonna be a subject of discussion next spring, but it does have a significant impact on this base case scenario because of the significant increase in Pego needed to make this, the matrix work in this. So as I mentioned, the overall results are here again. This is just showing the first year, which is of that long range scenario, the base case scenario. which is of that long range scenario, the base case scenario, but this is the year that the two councils would be approving as part of the spending control limits process, the FY26. So the new debt, the debt service, the water and sewer operating expenses, and then the maximum rate increase of the 12.2%. And this just pictorially shows what's built into that rate increase, and you can see by far the Pego increase is driving a lot of that. The sour enhancements are also hitting that a bit. I mentioned earlier the annualization positions and the lapse change, and then a lot of the other categories fit into that last quarter. Also to note, we've discussed this in past budgets. In the short term, at least a lot of WCC Waters budget is fixed or difficult to change in the short term. Dead service is more than a third of their budget. Regional sewage disposal is another 7 or 8%, which is a charge from DC water. And of course, energy costs, it's another few percent. And then of course, all the other items then have to share a lot of the inflationary increases or cuts. So that's where we get in the past WSSE water has noted that about, at any given time, about 70% of their budget is pretty difficult to adjust, at least in the short term. So this sort of walks through the rate increase impact with those different expenditure categories. And the one point I'll just note here is you get to what looks like a 13.4% rate requirement. And the reason that's there is because that's what the expenditure gap would present. But then you recall the funds available was about a 1.2 percent rate impact. That allows you to reduce that 13.4 to the 12.2. But much of that is Pego. The Pego impact alone is nearly 7 percent of that. So that's where a lot of the discussion focused with the work group that I mentioned in September and some potential alternative scenarios that might look at trying to spread that pago out a bit or making other adjustments that might smooth the rates. So that's where we get into the alternative scenarios. But before we get there, I think it might be useful to stop and allow WCC water to elaborate on their process for getting to their base case scenario and some of the key points they wanna make there before we move on to the scenarios. I think that's a great suggestion. I know you have a slide deck also if you want to go through that. Are you able to bring that up? Okay. I'll just say thank you Keith for working with the team through this process and to both councils for providing guidance to the team as we work through this. I also want to thank you council members for your support of the 8.5% increase and allowing us to move forward with level setting our rates to get more from fixed fees, the commissioners updated our policies last year. And we prioritized having stable revenue because we have to maintain the infrastructure, the 9 billion in assets that Mr. Diaz talked about. And I just so happened to be in a discussion yesterday with other utility leaders. And two things were recognized, kind of a-ha moments, where PFAS is concerned, which is going to grow to be one of our more significant costs for drinking water. Over the years, we've seen increases in wastewater because of consent decree programs. We had one, we had significant costs that we talked about last year. This is the trend that we're going to see in drinking water going forward. PFAS is the first regulation that is regulated at the parts per trillion level. That's part of what makes it so expensive. And someone said yesterday that one part per trillion is like one second and 320 centuries. That's the significant heavy lift that we have as water utilities to make sure that we are keeping our drinking water safe, getting down to that very, very, very, very granular level and as expensive as Ms. Toe said. The other thing that we discussed yesterday was that, and not to be an alarmist, but we really are in this country headed toward a water infrastructure cliff because there has been a decline in federal investment in water infrastructure. Even though under the bill we saw more funding. Don't know if that trend will continue, but across the country it has largely been on our rate payers, our customers, to make these investments. And we see that trend continuing. And as a utility, even though we're here talking year to year about the guidelines and what is needed in terms of rates, we actually have to really think for the long term. And there has to be an integrated approach to our thinking between what we need to invest in because we do, have nine billion dollars of infrastructure assets at various life cycles. But most of them are reaching the end of their useful life. That includes our plants that have not had significant investment programs and you'll see a slide that shows the change that we made as we talked about last year to program more for our facilities where we had but that meant that we pulled back on the linear infrastructure and we really can't afford to. So we are making those trade-offs and we're thinking about how to keep this affordable. Built into our budget is a focus on affordability. We have increased our affordability funding for our customer assistance programs by 10%. Last year we made a significant increase. I think more than 120% increase. So we are continuing that trend. And we're starting to think about and plan for part two of the get current program because we want to make sure that we maintain a focus on connecting customers with every dollar of customer assistance funding available because we know that this is pressure on our income and constrained customers. So again I just want to thank you and I'll turn it over to the team to walk through the details of our budget. Morning Chairglass, Council member Stuart, Council member Bauchem, I'm Netshtemp's Timothy Mussari, chief financial officer. Just to give a quick overview of the presentation, we just want to walk you through the assumptions behind our budget as well as discuss the priorities, the initiatives and then really focus in on the assumptions that we make to get from where we started when all the requests came in to each of the alternate scenarios. So our plan is to formulate a budget that is fiscally responsible. To do so we want to make sure that we maintain our triple A credit rating. We remain within the limits of the revenue enhancement request. We increase the pay go allocation to lower debt service costs and continue to leverage external funding as well as enhance our customer experience, our customer assistance programs. We have an outcome based budgeting approach and with this we want to ensure compliance with safe drinking water and clean water act, support the economic output of Montgomery County and Prince George's County, maintain and invest in our $9 billion asset portfolio to continue to focus on Team H20, phasing in the compensation plan as well as focusing on the CBN negotiations which will begin later this year, improve service delivery and find more efficientiencies in operations and mitigate enterprise risk. As far as our operating budget priorities go, in addition to compliance and supporting the $9 billion asset portfolio, we will again continue to provide competitive total rewards program, promote career growth, and workforce development within our team H2O will leverage best practices and innovative technologies, enhance the customer experience through customer education affordability reliability and trust as well as promote environmental justice by ensuring equitable access to our services and programs. On the capital budget side we need to ensure that we are adequately funding upgrades to our systems and facilities, preparing for regulatory challenges as you heard PFAS and let them copy replacement and modernising our infrastructure, our meter infrastructure. We are also focused on modernising our depots to improve the health and safety of our team members. We have several long key long term initiatives that we have funded in the operating and capital budgets. Again, PFAS, which you had the debriefing on, a Latin copper rule. What we are also doing is looking at our fire hydrant inspections. We are including FTEs to ensure that we have enough staff, dedicated staff, to do annual inspections on our fire hydrants. When it comes to our fleet, we have a significant amount of vehicles that are beyond their usual life. So the cost of repair is not efficient because we're spending so much time doing that. So there's a multi-year plan to replace all significantly aged and fully depreciated vehicles. And then we are also ensuring that we're funding the increasing healthcare and insurance costs. The next two slides really just give a innovation and technology research update. We have a cheese that you can see for million dollars in savings and revenue. If we go to the next slide, it's just really a focus on the key projects. We want to reduce non-revenue water loss. We want to extend our equipment life. We're focused on developing new products, we want to support public health, we're focused on reducing energy and chemical use and we want to make sure that we're adapting to climate change. As far as it comes to the budget request, as you can see our FY 2025 budget was $1.8 billion, which was split between $1 billion in operating and $7.91 million in capital. Our FY26 preliminary request is $1.83 billion, which is $1.1 billion in operating and $688 in capital. However, the next slide, when we talk about our capital budget, the difference is that it's 707 million because that includes developer projects, which are not part of that base budget. So in FY 2026, the Proposed CIP budget is $108.8 million less than 2025. As discussed, there was a rebase-laning of the budget and updates to some of the processes. We had the discussion, and you can see if we go to the six-year plan, where we had discussed the rebase-lining of our process. And the full impact of this rebase-lining can be seen in the six-year plan. It's only $10.2 million less than FY 25 to FY 30, but you can see the increased allocation from linear to non-linear assets. So while we pulled back from water distribution and wastewater collections we made significant increases in mixed to introduce fictional innovation as well as our facilities. Again, these slides just show some of the water main breaks that we had in Montgomery County, and it's just a reminder that this is what the team's focus on, and our CIP is dedicated to ensuring that we respond to and are proactive, to ensuring that such breaks don't happen when possible and also just a reminder of the effort that our crews put into ensuring speedy repairs for the community. So where does our money go. For FY 2025, 22% were spent on people, 37% on operations and maintenance, and 41% on debt service and pay go. As mentioned here, 41% of our costs are due to capital project financing and an undescriptionary. So really, when we look at our operations and how we function as a commission, we only have flexibility in operations and maintenance in people. So the more effective we are in our operations and maintenance, the more we can contribute to a total reward program for our staff. What we have next is the long-term plan, and this will spend a little bit of time. If you can see from the table at the top, that's the FY 2025 preliminary long-term plan. We built the FY26 plan based on the FY25 plan. So our base case, we came in at 12.2%, And that 12.2% was really the base budget increase. So the teams went in, they looked at the business that they're doing in FY25 at the end of FY25 and put in inflationary increases. Any cost changes due to just general price economic basis, and they came up with that. So we came in at 12.2%, 12.2%. And what we did, we looked at it from a holistic approach and built a six-year plan that we as a commissioner planning on adhering to. So that way, when we come and we make requests for rates, there's not a significant fluctuation. Because what happens sometimes is that there's a focus on getting the next year correct. So if we continue focusing on the next year there's always going to be a big spike in that request when we come subsequently. So what we want to do is really build out a plan that we can plan on, we can live with and that the committees are aware of. So the first one is the 12.2% and again that's the base year assumption. When we met with county staff, budget staff, we requested to make two different scenarios. And so if you see the second scenario has a 2026 increase of 10.2% and if you look at the out years there's a bit of an uptick in 2028, 2029, 2030 and then it smooths down to 5.8. The second option was a scenario sorry was a 9.5% FY2026 increase and again if you look at the six year we end up having three years of 9% it drops to 8.2% and then the last two years of that scenario are in range with the other ones. So again as Keith said the biggest area of savings in the scenarios came from Pego. So on the next slide what we did is sort of arrange it that way so you can see where the assumed drivers of the rate increase are and how they change with each scenario. So if you look at the second line improving the triple A metrics. Pego at the 12.2% is $66 million. At the 10.2% it is $47 million and at the 9.5% is $46 million. We also had significant offsets in non-rate revenue as well as certain unspecified reductions. So we are still working on identifying those so that way we are prepared as we create the budget to know which areas we are going to have to find saving from, again to fit each of the scenarios that we have. So now we have discussed the rate increase in terms of percentages. This next slide really shows what the rate revenue enhancements are in terms of dollars. So the 9.5% will result in a quarterly bill impact of $25.65, which is $8.53 a month. The 10.2% will be $27.48 a quarter, which is $9.16 a month. And the 12.2% base case is $32.87 a quarter which is $10.96 a month. You can see in the graphic below that we wanted to compare where the our customers water bills will stand in comparison to Pepco and cellular. And as you can see, the Pepco and cellular are significantly higher. And the next page shows how energy is expected to and has increased. BGE is going to go up by 43%, 51% and 61%. In the next three years, the electric, though that's for gas, for electric it's 21%, 17% and 31%. And then the two columns on the right really just show what PEPCO is doing with their summer and winter rates. The next slide also is a visual for how cable also increases and it's important for us to note that we can do a lot with our cable, we can do a lot without electricity, but there's very little we can do without water. So you want to proactively be in a position to make sure that our infrastructure is maintained. There's new targets that our chief engineer has established for replacement and we'll discuss that when we come to you with the CIP. So as far as build comparison as you can see from this graphic WSSC water is the second line from the bottom. So over 25 years, our rate of increase has significantly upticked at a lower rate than Baltimore County, DC Water, City of Rockville, Allington, Fairfax, and City of Bowie. In 2025, the CPI and our rates came together for the first time. As far as the rate increases, this slide really compares us to our peers and if you can see in the first part in the black shaded DC water has had significantly greater increases over the course of the 21 to 25. When we look at what we're doing from 26 to 31, well, again, the base case has three years or two years higher than DC water. Over the six year, the average increase of 8% is lower than what our peer is doing of 8.3%. With this graphic, we just sort of wanted to give an example of the gap that existed between the requests and what was approved. So you can see that over the last six years, our approved revenue enhancements have been 11.3% lower than what we requested and that's a cumulative total of $253 million. We did this to really, unfortunately, I didn't include the slide. When we looked at our model, they have a significant amount of federal funding. They're the significant amount of state funding and they generate their revenue through the ticket prices. This graphic shows that we don't have that luxury of federal funding, and we don't have the luxury of state funding to add to our base budget. We get those funds and they supplement our capital improvements program. But as far as our base budget and our operating budget, it's really one of those things where we have to survive on our rates. So it's just a graphic just to show that we have some gaps that we need to overcome and we can only be so efficient before overwhelming some of our operations and we wanna make sure that we continue to provide a high level of service with the dollars that we have. So again, not only the base case but all three scenarios we've mapped them out where we ensure that our financial metrics are adhered to. The big ones for our rating agency with the debt service coverage and our leverage ratio. The day's cash on hand was also very important, so we want to make sure that we continue to adhere to what we have so that way our triple A rating is maintained and that way it's a savings that goes on to our customers because we're borrowing dollars at the lowest possible cost. As you're aware we have a new strategic plan. It has eight priorities and one of them is affordability and financial viability and if you go to the next side please keep. And I'm focusing on the affordability because as the general manager said we have a target of increasing the customer assistance program by 10%. These are various areas that we're going to look into it and the things that we're doing now. If we go to the next slide, it's really areas that we have and that we have enhanced the promise plan, which was really the largest increase last year, has yielded very great results for us. We have a lot of customers who sign up for it and maintain their payment plan. We heard from Promise that we are, I forget which percent, but we're in the top five to 10% performing utilities with Promise. So again, it's great for our customers and it's great for us because we recover those revenues, the customer's systems program. Again, we wave the fixed fees, we provide free annual plumbing inspections for order leaks, the water fund folks can apply and get $500 per year and then pipe emergency repair, it provides a 10,000 to $10,000 in loans. And then we also have a CEP Plum Leak repair program. This is going to be administered through Habitat for Humanity and the MOU was fully executed on September 18, 2024 and the program will fully launch later this year. Thank you. Okay. A lot to digest there. So appreciate the thoroughness and the packets and for anybody who's following this, all of this is online and a lot of information. Taking a step back, I appreciate the comparison to bills that residents already pay, right? Electricity, cable, cell phone service. I think the message that you are articulating is an important one that water is the most important of all. If all are equal on this day and age, I would say why find cell phone services is high up there as well, but we cannot exist without water. And having safe, clean water is just so incredibly important. And so I would use that more in some of your outreach and highlighting the importance of the work that of all things equal, yours is very high priority. The other thing that stuck out to me is the seesaw nature of this process. And it's been alluded to in a few different ways. Where last year we approved 8.5 ceiling and you ultimately approved 2.4 percent. And understanding that was the result of some course correction or different planning, long term planning. But as we, and thank you, Mr. Olcchenko, this. And then, and I could not find this in the slot. I couldn't find this in the packet. We had a different graphic that you got there. There you go. Okay. Well, I think this is one of the most important ones. And I was, as you were going through, I was trying to find it, and I'm glad Mr. Volchenko pulled it up. So last year, were we approved 8.5%, and you ultimately approved or utilized a 2.4%. It's in-volumetric. So the fixed costs went up by 65%, which was the equivalent of about $12 to the account management and infrastructure investment. So they went up by 65%. So the flat fee. The flat fee. And so the volumetric went up by 2%. So that 8.5% was split between fixed and volumetric. Right. And so what I am trying to not explain, but set expectations, is that the increases or the ceilings that you are proposing will not result in the same one-off that we just experienced this year. Let me put it another way. Where we approved day point 5%, and you only utilized 2.4%. Moving forward, that will not be the norm. That is correct. That was a, I wouldn't say one time, but that was a resetting of the fixed fees, which we did about seven or eight years ago as well. And we had a similar impact where volumetric rates were lowered to reflect that. But here I think the important point where you're headed I think is that the base case last year was at 11.6%. So that's the equivalent of the 12.2 we're seeing this year. But what they were approved at, at the end of October last year was the 8.5%. And they note that over the last, you know, years back to FY20, where they've had that base case amount shaved a bit each year. And so just like with compound interest, they're losing that rate revenue going forward. Their base is a little bit lower because of that each year. And that's the $253 million that he's alluding to. It's not revenue that was ever collected. It's revenue that was not collected because of the differential between the base case and what was approved. And here we have a longstanding situation where you're proposing what you believe is in the long term best interest of your agency, vis-a-vis the entire community. And for various reasons, as policymakers, things are changed, and negotiated with our neighboring jurisdiction and that throws off your long-term planning. I mean, that is unsustainable. We deal with that with our CIP and tax revenue, but for you all who have even less agency to set those long-term plans, yeah. It is unsustainable. And as we look out into the future we know that there is going to come a time where we have to make significantly more investment at once or in a condensed period of time. We're trying to start making those investments now because we know that infrastructure is continuing to age. And at some point we will reach a point where we just have to, I mean we've seen issues around the country and very close to us where it's a steady reminder that if we don't make the investments then we could end up there not only in infrastructure, but our people. And we've been able to start bringing people back, retain staff where we were losing staff to other utilities before. The other thing I wanted to point out about this graphic is compared to the graphic that we showed last year with the Transit Agency's budget, which is built on really literally hundreds of millions of federal, state, and local subsidy. And then you get to their, the revenue from customers. Our budget is built on very little non-rate pay or revenue. So we don't have, but we have those enormous, the enormous amount of fixed costs associated with our operations, which whether we are treating and delivering a drop of water or 100 million gallons of water, we've still got plants and pipes that have to be maintained. And a service area that is grown. Right. And that was the nature of the conversation I had last week with Council Member Eric Olson trying to figure out how our two committees within our two jurisdictions can provide the oversight and engage in these deep conversations and figure out a path forward that is sustainable for you and all of our residents. Thank you. First president Stewart. Great. Thank you. I wanted to go back and make sure I understood. I think Mr. Leitchanko, you said that there are no new positions this year or. No. What I was looting to was in the base case, I mentioned it's, and Tim mentioned this as well, it's treated as an update basically of the current fiscal year. What do you need to do to do the same thing in the next fiscal year? They also did and are looking at requests from their departments for new services, new positions, and what the implications would be of those. But under the base case scenario, they would have to be accommodated through savings elsewhere or through increased revenue. The base case, and it's not to say, you know, you can have position adjustments that are cost-neutral as well. But for any of that ad costs, they would have to find some equivalent savings or revenue elsewhere. Okay. I just wanted to clarify that because I thought I had misheard and I wrote my notes incorrectly, so I wanted to make sure I just did that. And I will say that I appreciate on the goals, the top one was the looking at the AAA bond rating. You know, I think we use that as a shorthand sometime because we say, we always strive for that, we do that in the county, but the implications of not getting a AAA bond rating, can we just talk about that for a second? And having a negative review and what that would mean to WSSC. So again, the benefits of the trip-lay rating are that we get the lowest cost of borrowing. And so from a debt service perspective, that allocation, if we were not to maintain it, when we're talking about operations and people, the debt service will go up, which takes away from operations and takes away from people. And then for the long-term planning, we'll have to adjust the CIP in a way that the prioritization of those long-term plans will also be a challenge because you run the risk of fluctuation. Because again, right now, if we're planning it at one cost, we'll have to split the costs out. And then when we do our redemptions as well, we won't have an opportunity. It's because what we did in FY 2025, we did a big redemption because we were able to be efficient based on the rating that we had. So pretty much it's reputation of damage and financial damage from us losing our triple a rating. Thank you. I just want to put that out there because I think it's important to really underscore why we put so much emphasis on the triple a bond rating. And General Andrew Powell, I appreciate you really talking about the aging infrastructure because this is really about making sure we're investing in our communities and I think seeing the pictures of what happens when we do have a water main break and how devastating that is to a community and disruptive because one is devastating and the public safety issues are huge. But then there are also economic implications to that as well. And so I very much appreciate the thoughtfulness that has gone in this. I will say I also appreciate looking at the increase in Pego and I appreciate the council staff for asking for the other alternative options. And I don't know where we want to go today, but I will say I think for me you have made a very persuasive case of what you need moving forward. So thank you. Yes, thank you. I was just going to say that it's a very compelling case for a lot of reasons and I appreciate you bringing up the bond rating. We saw earlier today the need for increased capital investment on very important projects and looking at the debt service compared to new debt issue, the debt service is so high. And so we need to make sure that it is controlled through the rates that we're paying, but also with pay go and investment in that. I also think it's compelling to look at the increases compared to other utilities and also not just utilities but just inflation and cost in general. So I appreciate that. Which goes back to the argument of monthly billing and why monthly billing is so important and we must get that project moving. I've been in my house for 30 years, I get four bills a year, it's 120 bills and I'm still surprised when I get my bill. And so it's just just so important. And I also think this slide that we're looking at right now is really important. And we're off, we're faith every year with every budget we're faced with trying to make that decision of, I know that you're asking, you're not asking for anything that you firmly believe is in the best interest of our residents and to make sure that the system is as efficient as we need. So I appreciate that and it's a very compelling case. So thank you. Appreciate those comments and agree. I'll end by saying over the weekend a constituents sent me a photo of a street nearby street in our district close to where I live, which is why they emailed me. And we have determined this morning that it is a WSSC manhole with a damaged meter, right? Which speaks to the ongoing maintenance needs, right? Full stop, that's it. And so we know this is incredibly important and appreciate all you do. Mr. O'Chank, I'll turn it over to you with a procedural question. Prince George's is meeting, their committee is meeting later this week. I know that the executives team is actively engaged in this discussion with the county executive and Prince George's county. Do we need to make a decision this morning? Well, I think that's at the committee's pleasure. Our goal is to come together on October 29th with a council action that ideally would be the same as the Prince George's Council's action. The committee does have time to reassemble again between now and then and in past years we have done multiple meetings so that's certainly an option. If the committee needs more information or more detail on something we can certainly provide that. We did the alternative scenarios came over late last week so staff tried to put together what we could as quickly as possible, but staff did not even include a formal recommendation on those scenarios yet either. So it's happy to talk through them now, but we are running a little short on time. So colleagues, what I'd like to make, what I'd like to recommend is that we let all the other conversations in suit and then we can circle back with the executive and with our colleagues and print storages but make no mistake what you're hearing from us is support for a long-term plan that mirrors what you've provided knowing how important that is in the infrastructure and the quality of safe drinking water. And we do have other Teenie Committee work sessions scheduled throughout the month. And if we need to book in this anywhere we can do that. Right, and I think, as you mentioned, one key issue going forward that we'll want to work with print storages on. While we're approving on an annual basis, as you mentioned, we want the long-term plan to be as stable as possible. They've presented three plans here that have varying impacts on operating expenses in capital, but they all do in the end meet their financial metrics. And I think whatever we do move forward with Prince George is we wanna make sure there's an understanding there that that's the goal going forward for for both counties. That sounds good. With that we are adjourned thank you very much for having joined us thank you.