Yeah, I know, because I'm weeping. Well, you're traveling light today. I wish to hear, I don't know why they do the alphabet back. Good afternoon. I'd like to call the meeting of the Board of Public Utilities for the City of Santa Rosa to order. We may have a roll call, please. Board member Wright. Here. Board member Grable. Here. Board member Barthelot. Here. Board member Baden-Fort. Vice Chair Arnone. Here. Chair Galvin. Here. Let the record reflect that all board members are present with the exception of board member Baden-Fort. Very good. Good afternoon, everyone. Any statements of abstention by board members? Very none. We'll move to item three, which is the oath for office of our new board member. So at this time, Director Burke. Thank you. We're very pleased to have a new member joining our board today, which is the appointment of Councilmember Alvarez and board member Yvonne Sierra. If you wouldn't mind coming up, we will have our recording secretary issue you the oath of office. Hand and repeat after me. I, Yvonne Sierra, do solemnly swear that I will support and defend the Constitution of the United States, that I will support and defend the Constitution of the United States, and the Constitution of the State of California, against all enemies of foreign and domestic, that I will bear true faith and allegiance, to the Constitution of the United States, and the Constitution of the State of California, that I take this obligation freely, without any mental reservation or purpose of evasion, without any mental purpose or mental evasion, that I will well and faithfully discharge, that I will well and faithfully discharge the duties upon which I am about to enter. The duties that I am upon to enter. Welcome to the dais, and we take this opportunity, if you'd like, to say a few words about yourself and your role here on the board. It's up to you. I don't have much prepared, but I do come from a history of being at Keysight Technologies for 22 years, and then I decided to slow down a little bit and become a property manager, which that's not slowing down. So I have a few clients, and I do that. And my next chapter in life is wanting to be on this board. I was on the board of the Community Advisory Board, and now this one, and this one, I had a training that just blew me away. Now that cup of water on my dinner table has a whole other meaning. And so it's a privilege and a pleasure to be here. And thank you very much for having me. Well, great. Well, we're welcoming you to the board. I know it's going to be a tough learning curve for you, but I understand you had a very good orientation last week with our staff, and they'll be available to you throughout your time on the board to help you get through whatever issues come up. All right, any other board member questions or comments? All right, then at this time, we'll open it up for a public comment on item 3.1. If you'd like to make a comment, please move to the podium and wait for the timer. Seeing no one, that'll take care of item 3.1. We'll now move to item 4.1, our study session, Director Burke. Thank you, Chair Galvin and members of the board, and welcome to our new board member. Our first item will be a study session, the asset management overview, and Jason Roberts, our supervising engineer with the asset management team, will be making the presentation. Thank you, Director Burke, and good afternoon, Chair Galvin and members of the board. My name is Jason Roberts. I'm a supervising engineer with the asset management division for Santa Rosa Water, and I'm pleased to give you this presentation, our asset management overview. Just a brief outline of the presentation, we'll go over the purpose of asset management. We'll discuss why we perform asset management and get into some details of how that's done, and then we'll talk about how we get from asset management to project development. So the main purpose of asset management for utility is to ensure that we can maximize the value of our assets, optimize their performance while they're in service, and minimize risks and costs associated with ownership and operation of those assets. This helps to improve transparency and clarity in decision-making, gives us the ability to describe and defend projects that we choose to move forward, and helps us prioritize our projects to maximize public benefit. So what is an asset? This comes from the Institute of Asset Management. An asset is an item thing or entity that has potential or actual value to an organization. It's left a bit vague on purpose because it really means everything that goes into the operation of utility, from the pumps and the pipes to the data and the computer systems. So anything that we use or need to operate the utility is an asset to the Santa Rosa Water. I'm gonna go over our, do a brief review of our water system assets. We've got about 630 miles of transmission and distribution mains, 24 reservoirs, 20 booster stations. In total, the estimated replacement cost of the water system is about $2.7 billion. Our current fiscal year CIP funding allocation is about $14.6 million, and we do anticipate to need an additional $194 million over the next 10 years to replace assets that are aging out. Here's a map of our water system by age. You'll notice that there's a lot of yellow on this page, but in between the 1950s and 1970s, Santa Rosa expanded quite a bit, and you can see some internal pipes and on the outskirts of the city as well, pipes that have been replaced and pipes that are still in their original state due to the expansion of the city in the late 70s and going on through the 90s. Here's a map of our water system by material. You can see a lot of red on this page that represents asbestos cement pipe having to do with a lot of the expansion of Santa Rosa in the 60s and 70s. A lot of this pipe is aging out and is a focus of our pipe replacement program. Under our sewer system assets, we have about 600 miles of trunks and collection mains in the city. 17 sewage lift stations, estimated total replacement cost of the system of about $2.3 billion. Our current CIP funding this year is about 13 and a half million, and we do anticipate a need of an additional 285 million over the next 10 years. Here's a map of our sewer system by age. You see a similar trend here based on pipe age as Santa Rosa expanded, and a similar trend as well regarding that asbestos cement pipe, which is a focus of our pipe replacement programs as well for sewer. And our regional water reuse system, multiple elements to this system consisting of the Laguna treatment plant, the Laguna laboratory, reclamation system, of course the geyser system and also our borosolage management system. We estimate the total system replacement cost to be in excess of $2.7 billion. The current CIP for this fiscal year is $10 million, and we also anticipate an additional 160 million over the next 10 years of funding needs. An overview of our regional system, of course you see the heart of the system, the Laguna treatment plant down there, the Green Star down there on Lionel Road. This shows our regional partners, cities of Sebastopol, Rona Park and Katadi. And you can see the geysers pipeline in red moving north from the treatment plant up past Windsor. Windsor is not a regional partner, but they do contribute to the geysers system. So that's why they're shown here on this map. From Windsor we're gonna go north through Healdsburg and then up the mountains through three lift stations, ultimately finishing at the terminal reservoir at the geysers. So why do we perform asset management? Well it helps us take a programmatic approach to managing our assets and moving projects forward to replace those assets. We don't wanna have any surprises with our assets when it has to deal with water delivery or sewer collection. And it really helps us make the right decision at the right time for a particular asset. We also wanna answer questions like which asset needs the most maintenance? When should we replace these troubled assets and what will our costs be in the near term? We also wanna answer longer term questions like what level of service do we expect from our utilities? Which assets are critical to sustained performance of our systems? And what are our long-term costs gonna be and really are we investing enough in our CIP program? So what is asset management? It's not a software application. It's really a commitment to comprehensive management program. Has long-term financial planning component and really focuses on the entire life cycle of an asset from planning through design and construction and rehab and replacement. And of course when you replace that cycle starts all over again. The main goal of asset management, irrespective of if it's a utility or not, but really we're trying to minimize the cost of service and risks the utility and maximize the level of service to our customers. Comprehensive program should include strategy and planning, decision making, a look at the whole life cycle of an asset, not just the planning and procurement, asset information, data collection, maintenance records, a focus on the organization toward an asset management program, and regular risk assessment and review of that data against our assets. So we'll talk about how we get from asset management to project development, how we look at the data and some of the standardized criteria for our assets, and then how we use that data to make data-driven decisions for project development, developing our CIP program budgets and also our ONM budgets. Our capital projects have been prioritized for some time. We reevaluate the program every year and we do that for water sewer and our regional system. And we identify capital projects through a number of different studies, right? So we look at the general plan, we look at master plans and engineering studies for specific asset classes. We have condition assessment programs that we use to prioritize projects. We evaluate the level of service, perform risk assessments based on all of this data, take into account regulatory requirements and also stakeholder and public input. For the general plan and master plans, we evaluate our systems based on expansion or intended use identified in the general plan. And so our water and sewer master plans will use those guiding documents to assess the current and future state of our systems and make sure that we have the necessary capacity under those general plans. When you talk about asset scoring, there's really three different pieces that come into play. The condition of the asset, things like remaining service life, information on direct observations, like maybe CCTV footage of a sewer pipe and how often an asset is needed to be maintained, how many work orders have been made against that asset. We also look at the level of service, hydraulic capacity of a water pipeline, for instance, or slopes of sewer mains that may be causing problems with backups. And then we look at the risk of failure of an asset. Is it in a high seismic activity zone or there are fire flow deficiencies? Is it next to a creek where an overflow may be problematic environmentally and publicly? And is that asset near a right of way or railroad crossing that may be problematic to replace that pipe if it fails? A little bit about a condition assessment and how it helps us prioritize projects. An asset in new condition will operate for a certain amount of time before it is no longer meeting your minimum acceptable condition or level of service that you need out of it. So along the way, you'll perform maintenance renewal activities. Those activities will improve the operation of that asset but never back to the new condition. So as you maintain this asset, it'll degrade over time and ultimately come to a point where you need to make a decision on whether or not to replace that asset. And that's really what we're trying to do with condition assessment is figure out what state the asset is in. Can it be rehabbed or doesn't need to be ultimately replaced? We also evaluate the level of service. Our assets provide a service to the city and our customers. And the level of service can be numeric or qualitative such as percent downtime of a water main or a number of incidents or breaks per year, hydraulic capacity and cost to maintain that asset. So if the cost becomes too high, even if it's delivering or it's performing as intended and meeting its level of service, in that regard, the cost may just be too prohibitive, the cost to maintain that asset. Then we look at risk assessment of our assets. There's two components to a risk assessment. There's a likelihood of failure and a consequence of failure. The likelihood component is really everything about that asset, the maintenance history, the condition, the age and material. And the consequence of failure really looks at what happens if that asset were to fail. Are there financial implications? Are there social implications and also environmental implications? Those two things come together ultimately to produce a risk score for that asset. So you see here a risk assessment matrix over in the red and the extreme category. Those are projects, those are assets that we would immediately elevate to consider immediate replacement. The assets in the green, we wouldn't elevate those and we might just have regular maintenance activities on those. When you get into the yellow and orange, that's where we start looking at, do we need to have either increased maintenance or do we need to do some additional condition assessment at a higher frequency so that we can keep those assets from getting into the red area of the matrix. We also look at regulatory requirements that we're required to adhere to, building code and fire code, drinking water requirements, waste discharge requirements, storm water requirements and also safety. We seek stakeholder and public input, collaborate often with local water and sewer operations and our regional water reuse teams, work with finance and water administration, take into account customer calls and of course, public meeting comments. So how are projects prioritized? Well, we look at risk reduction and mitigation first and foremost. We also take into account additional benefits beyond renewal of that asset and we look at compliance needs. Is there a time sensitivity to this project? Doesn't need to be done by a certain time that before we know an asset's gonna fail. Doesn't need to be done before another project. And we also look at grant funding opportunities and timelines there as well. There's an example framework that we look at when we have two high priority projects that maybe a water project and a sewer project. We'll use this matrix to assess an overall benefit for the project. So for instance, a water project that has, we wanna avoid a critical failure and it will receive a high risk management score. If there's a secondary benefit where we're also improving capacity or customer experience that will also receive a high score. And then if there are water quality or public health or OSHA components to that project, then that project will get elevated among others aside from just individual risk of an asset failing. So how are projects initiated? Review the data of individual assets. Determine which assets need work now. We'll develop a scope and a full project package for replacing that asset. We'll confirm that funding is available or we'll look where we can get funding for that project. Consult with stakeholders throughout the city, TPW, local operations, traffic, and make sure that we're getting as comprehensive of a project as we can. And then we'll queue that project up for design with our capital projects teams. And I just wanted to end the presentation back to recognize the water department's greatest assets, which are the engineers, operators, technicians, and administrative staff that make this program work. So with that, any questions? Thank you very much, Mr. Roberts. I'll open it up now for board member questions or comments. Board member Wright. Thank you for the presentation. Two questions. What is the current makeup of the asset management staff by function? And secondly, flush score. I don't recall having that in the old days and maybe you could talk about that a little bit. Is that something the operators do when they go out and flush the lines? Yeah, that's a maintenance activity on sewer lines. Yeah, so they go out and if there's more, essentially it's an indicator of additional maintenance that may not be necessary. So that's something that's taken into account when we're looking at the asset and whether or not to replace it. So do they provide your team with some kind of numeric value like zero to five or something like that? Absolutely. Our team coordinates with local operations and all of that data based on work orders is available to us through our maintenance management system. And so we can pull reports. The information is available to us and we'll coordinate with them on specifics because looking at the data is one thing but coordinating with them on the exact, getting the idea of the exact trouble that they're having is another. So yeah, we definitely take that into account. And then as far as the makeup of our asset management division, we have four tech staff right now. We're looking to hire one more and our engineering and mapping side is fully employed right now. So we're almost back up to full staff. So could you just say what the positions are and what they do? So I'm a supervising engineer. I've got two assistant engineers that assist me with project planning and condition assessment work. I have a mapping QCA and a GIS analyst that perform the mapping work for the water department. And I have two civil engineering technicians. One assist with GIS and project planning and the other manages the, our document database for all the historical documentation and also helps with creating and inputting new assets or modifying assets in our maintenance management system. I supervise a department information technology specialist and she is the head of our water IT group. There's a QCA in that group and there's a department programmer analyst and also I can't think of it right now. I apologize, but there's two more staff that essentially manage the city works and the city works program right now. Technical application specialist. Thank you, it has is, right? Technical application specialists. There's two of those as well. Thank you. Yep. Other board member questions or comments? Board member Grable. Yeah, thank you for the presentation. This is always really fascinating. I don't know if you've addressed this in terms of what the percentage of our system that might be vulnerable to this would be, but it just occurred to me I had a meeting with the department of emergency management recently and one of their main focuses essentially is earthquake resilience preparedness, you know, what are our strengths and weaknesses and that was county wide.  What'd you say? I don't have an exact number for you, but I do know that we are focusing on some projects in this upcoming CIP program to replace some water pipelines along the Rogers Creek fault specifically.  And so we're looking to get those going and make sure that we can replace those with some more resilient pipe. There has been almost decades long, I think, you know, program to seismically upgrade our water reservoirs and we've been doing a good job with that. I think there's a few more that need to be upgraded. And so now our focus will be turned to our distribution system and hardening those against earthquakes. And maybe I'm making an incorrect assumption, but I'm assuming that PVC is more resilient in terms of rate of failure and certain magnitude of earthquake versus some of the other older and more rigid pipes. Is that correct or not? No, that's correct. Okay. And that would be the first material we'd look to. Potentially Dr. Lyon in some cases based on the application, but yeah, you're correct. I was just, when I was in that meeting, I was like, oh man, there's so many things that, you know, not necessarily like catastrophic, like, you know, 9.0 earthquake, but even in the like six to eight, which is more, I think what they're expecting at some point, right? It's just how many infrastructure assets we have in Northern California, but especially in Santa Rosa that have some major vulnerability to that and just the amount of frustration that would cause and when people can't use sewer and water delivery, it's like, oh my gosh, like the scale of that is like its own disaster, right? But yeah, thank you so much. You're welcome. Other board member questions or comments? All right, we will open it up for public comment then on item 4.1. You wish to make a comment, please move to the podium. Seeing no one rise, that'll take care of our study session. Thank you again, Mr. Roberts. Thank you, Chair Galvin. Item 5 on the agenda is the approval of the minutes for January 18, 2024. So we'll take public comments on the approval of the minutes. If you wish to make a comment, please move to the podium. Seeing no one rise, the minutes will be approved and entered. We have no staff briefings. We'll move now to our consent calendar. We have three items on the consent calendar. I'll move adoption of the consent items. Second. We have a motion by Vice Chair Arnone, seconded by board member Grable to approve the consent items. Any comments from the board? All right, we'll open it up for public comment on the consent items. If you wish to make a comment on items 7.1, 7.2, or 7.3, please move to the podium. Seeing no one rise, may we have a roll call vote, please? Board member Wright. Hi. Board member Sierra. Thank you. Hi. Board member Grable. Hi. Board member Bartholau. Hi. Vice Chair Arnone. Hi. Chair Galvan. Hi. The consent calendar passes unanimously with board member Baden-Fort absent. Very good. We'll now move to item 8.1, which is our report item. Director Burke. Thank you, Chair Galvan and members of the board. Our report item for today is the Progressive Design-Build Contract Lonno Trunk Rehabilitation Phase 1, contract number C02403, and Rachela Mayeda, our associate civil engineer with the Capital Projects team, will be making the presentation. Chair, would it be okay we're having some technical difficulties if we just take a brief recess while they set this up? Be fine, we'll be in recess. Thank you. All right, we're back in session. Director Burke, did you have any further intros or comments, or should we just let Rachela go forward? I think Rachela is ready, so Rachela, take it away please. Thank you. Good afternoon, Chair Galvan and members of the board. As Director Burke mentioned, my name is Rachela Mayeda, and I'm an associate civil engineer with the Transportation and Public Works Department. Today I am here to seek approval of a Progressive Design Build Contract for the Lonno Trunk Rehabilitation Phase 1 Progressive Design Build Contract, contract number C02403. During this presentation, I'll start off with a little bit of project background and scoping. I'll provide a brief refresher on what Design Build is. I'll talk about a form of Design Build called Progressive Design Build. I'll discuss how the process of procuring a Design Build team went. I'll touch on the project cost and schedule and then conclude with a recommendation. Looking at the map on your right towards the bottom of the screen, you can see the Laguna Treatment Plant and towards the top is Todd Road. Lonno Road runs in between the two and where that green line is indicates where we have approximately 8,100 linear feet of 66 inch sewer pipe that'll be rehabbed using trenchless technology. Along that stretch of pipe, we will also rehabilitate 12 manholes and in order to do all of this work, we anticipate needing to set up a bypass pumping system that can convey approximately 20 million gallons per day. That pumping system will need to cross Todd and Lonno Roads, go through private property and then we'll also require 24-7 monitoring. And then primarily because of that bypass pumping system, we do anticipate needing permits through the California Department of Fish and Wildlife, the Regional Water Quality Control Board, and then also the County of Sonoma. Because we are going through some sensitive areas that have protected plant and animal species, we do expect that one of the California Department of Fish and Wildlife permits will take an extensive amount of time and effort. For compliance with the California Environmental Quality Act, we anticipate that we will need an initial study mitigated negative declaration. To describe what design build is, I first wanna provide a refresher on how we typically deliver projects through design bid build. So first, we, the owner, go into contract with a designer who can hire consultants to help develop and design the project. We then get contract ready documents from that designer and then put the project out to bid. After that, we go into contract with a builder or a contractor for them to construct the project. In design build, however, we go into a contract with a design build team that's made up of the design consultants, the subcontractors, and the builders. So from the start of the project, we have a single point of contact and then all of those entities work together as a single unit. And for the Lana Trunk project, we originally selected design build because we've seen Linium projects where a designer will design the entire bypass pumping system setup only to have the contractor completely change everything during construction. And because the bypass pumping system can be up to about half of the total construction cost, any savings or costs incurred during construction can be pretty significant. So ultimately, we thought it was in the city's best interest to have our designer, our contractor, and the environmental staff all on the same team from the start of the project. Progressive design build is a form of design build and a Senate bill was passed in September of 2022 that authorized local agencies to use progressive design build as a delivery method for certain water and wastewater projects. And then the team structure that you saw in the previous slide still applies to progressive design build. So now I wanna use design build as a basis for describing what progressive design build is. In design build, we start off with scoping the project and then develop the 30% design. After that, we go into the procurement process of selecting a design build team. And at this point, interested design builders would give us a proposal that includes the cost of both the design services as well as construction. And at that time, we would then go into contract with a design builder for both of those phases. They would then finalize and design the project and construct it. This delivery method is great for projects where the design is not expected to change as things progress. So for a little bit more simple projects. And then with progressive design build, again, we start with scoping out the project and then directly after that, we move right into procuring a design builder. So as part of their proposal, they would give us the cost of only the design phase or engineering phase of the project. We would then go into contract with the selected design build team just for the engineering services phase of the project. They would then bring the design to around the 75 to 90% design. And at that point, they would then estimate a construction cost and give it to us. If the city and the design builder cannot agree on a construction cost at that time, the design build team would be required to finish the design and then we could take those plans and put them out to bid the way we typically would with design bid build. If city staff do approve the construction cost, then we would come before the board again and seek approval for a contract change order to include the cost of construction. At that time, if the board approves the change order, then the contract would be amended to include the cost of construction. Progressive design build is good for when the scope of the project may change as the project progresses. And so the main difference between these two delivery methods is when the construction cost is determined and when that cost gets included into the contract. For the Lana trunk project, we opted to change the delivery method to progressive design build after that Senate bill was passed because we realized that there were just too many uncertainties associated with the bypass pumping system. So input from the California department of Fish and Wildlife or findings from CEQA or cooperation from private property owners could all significantly impact the bypass pumping system, which would significantly impact the cost of construction. To select a design build team, the process began with issuing a request for qualifications interested design builders then submitted their statements of qualifications. And then we've pre qualified or shortlisted the top ranked teams. The request for proposals was then only issued to the shortlisted teams. And then those teams provided proposals, which were reviewed by the selection committee. And then I'm here today discussing the contract award. We received a total of six statements of qualifications and we felt that all of those design build teams were qualified to do the project. So we shortlisted all six of them of those six for submitted proposals, which were then ranked on their responsiveness to the requirements of the request for a proposal, their proposed design and permitting approach, their capacity and approach to delivering the project, and then also the price and schedule. And then I just wanna point out here that this is a potential advantage of design build or progressive design build. The city has the opportunity to select our contractor not only based on their fee, but also based on their qualifications and their experience. Each selection committee member reviewed the proposals and we then all met as a group and we unanimously decided to move forward with SAK Construction and Corollo engineers. SAK and Corollo provided the following cost estimate for the engineering phase of the project, totally and approximately $1.3 million. It's anticipated that the total project will be about $15 million and that would include the cost of construction as well as soft costs. And soft costs would be the cost in the above table as well as any in-house fees, permitting and administrative fees. The majority of funding for this project has already been allocated and the remaining amount is programmed in our year one CIP budget for fiscal year 2024, 2025, which the board and council will be seeing later this year. Looking now at the project schedule and starting on the top row, project management will be ongoing throughout the duration of the project. Pre-construction services are those services that would be provided by the contractor and that would include doing constructability and scheduling reviews and then also providing that construction cost estimate. That would begin this summer and go into next spring. The design will begin shortly after contract award and go into early spring of 2025. The permitting and CEQA would begin shortly after preliminary design is complete and then construction would begin in March of 2025 with the beginning of that mostly consisting of procuring materials and doing submittals and then the majority of any ground-disturbing work not beginning until mid-June. It is recommended by the Board of Public Utilities Contract Subcommittee, the Transportation and Public Works Department and Santa Rosa Water that the Board of Public Utilities by motion approve a progressive design bill contract C02403 in an amount not to exceed $1,302,657.45 with SAK Construction LLC of Rockland, California plus an additional 10% contingency amount of $130,265.75 for a total not to exceed amount of $1,432,923.20. Thank you for your time and I'd be happy to answer any questions you may have. Thank you for your presentation. I'll open it up now for any board member questions or comments, Vice Chair Arnone. Thank you. Thanks for that presentation. I have a question about design bill, progressive design bill, because I recall that it was necessary to do a charter amendment in order to have design billed at all in the city Santa Rosa. And I'm wondering if this is, if the charter amendment was broad enough to cover this modified form of design bill or whether it was encompassed in the change we made to the charter? Yeah, after evaluating the municipal code on that, we felt that it was covered, that the definition of design bill could also cover progressive design bill, which is a type of design bill. Okay, thank you. We're member Wright. A couple of questions. When we got, so we did a traditional RFP process to get interested proposers in for this. Did we request a approximate price in the proposals? Yeah, so in the proposal, they gave us an approximate price just for the engineering and design services, but not for the cost of construction. And do we know the, do we have an estimate? We must have an estimate for the cost of construction. Yeah. What is that? I believe was, so in total it was $15 million for the total project cost. So I want to say that the construction estimate was around $9 million. Okay, so this is like 10% or something like that. And then just, I don't know if you're the right person to ask this, but do we get, by having this design build process where we have another person doing the permitting and doing virtually everything, only we're just the owner in this case, do we get one more layer of legal protection because we have somebody else squeezed between in there? I mean, we always have something with the consultant, but is that more so in this case? I believe within the contract that would be established, but similar to our other projects, we are still reviewing everything. All of the permit applications and the design and such still get circulated to city staff to review. But this, the person that's doing the design build is also gonna build it or gonna be responsible for building it. And they're designing the pump around system, which is our biggest risk, I guess, right now from my ability standpoint. So anyway, it's like we're... I believe our city attorney will take over this one. Hi, I'm Jessica Mullen. I'm an assistant city attorney here with the city. And I've worked with the team on this particular contract. So I think if I understand your question, you're asking if whether this kind of mode of delivery provides us with some extra insulation in terms of the liability because it's all under the design build entity. Is that kind of like asking? Yeah, and I think with all these different delivery methods there's kind of risks and benefits, there's trade-offs. I don't know that I would... In this particular instance, they're working together from the beginning. So I think that that is helpful. Sometimes with a design build project where the teams are one team, they can kind of reinforce each other a little bit rather than... So you don't get as much... I don't think there's a difference in the liability, I guess, protection that you get with the design build. Sometimes the teams work together a little bit better, which is the advantage in what you're hoping for. So that's a long answer, but I don't think it offers us any additional protection. That's fine. I kind of figured that, but I was thinking maybe that was an extra bonus I don't think the relationships are structured in a way that it gives us that extra bonus, unfortunately. And lastly, how is the city representative embedded in this design? I mean, they must have meetings or how do they... Obviously, we just don't give it to them. They bring it back in nine months. How does that process work? Yeah, so that's built into the Scopa Services, which is amended to their contract. So we do have check-ins, quarterly check-ins, with the design build team. And then they also do the normal submittals at, say, 75 to 90% design where we see everything. Okay, thank you very much. We're member Bartholomew. Thank you. Thank you for the presentation. I'm always curious when a contractor is chosen that isn't local. And I'm just wondering if there were local contractors that, because maybe they didn't respond to the RFP, I mean, that's, if they don't respond, they can't get the job, but... Yeah, I believe SAK Construction who's awarded this project does do local projects and has done several of these projects with the city in the past. Other board member questions or comments? Board member Grable? Yeah, I just wanted to thank you for the detail and the thoughtfulness. It was wonderful to learn about this at the Contract Review Subcommittee and just see how much this could benefit, not just the city's bottom line, but it seems like everything about it was really well done and we got a really good number of respondents where in the past, that's been a concern for us. And I think just it speaks volumes to the work that you and your team have done. So thank you. Thank you. As board member Grable alluded to, this matter did come before the Contract Review Subcommittee and was unanimously recommended. If there are no further board questions or comments, I'll entertain a motion. I'll make a motion that the Board of Public Utilities approve a progressive design bill contract C02403 in an amount not to exceed 1.302657.45 with SAK Construction LLC of Rockland, California. Plus an additional 10% contingency amount of $130,265.75 for a total not to exceed amount of $1,432,923.20. Second. Very good. We have a motion by Vice Chair Arnone seconded by Board Member Grable. We'll first open it up for public comments. On item 8.1, if you wish to make a comment, please move to the podium. Seeing no one rise, we'll have a roll call vote, please. Board Member Wright. Aye. Board Member Sierra. Aye. Board Member Grable. Aye. Board Member Bartholomew. Aye. Vice Chair Arnone. Aye. And Chair Galvan. Aye. And that passes unanimously with Board Member Bannon-Fort absent. Very good. That'll take care of item 8. Item 9 is public comments on non-agenda matters. If you wish to make a comment, please move to the podium. Seeing no one rise, that'll take care of that. We have no referrals, we have no written communications. As I alluded to with regards to subcommittee reports, the contract review subcommittee did meet on January 30th and we reviewed and approved in unanimously the project design build contract that we just awarded. So that's the report. Any other board or committee reports? All right, we'll take public comments then on item number 12. If you wish to make a comment, please move to the podium. Seeing no one rise, any Board Member reports? All right, we'll move to the Director's Report. Thank you, Chair Galvan and members of the Board. I have a few items to update the Board on. First, I wanted to provide a little bit of an update on the Potter Valley Project. I wanted to let the Board know that the EEL Russian Project Authority or the ERPA has now been officially formed and held its first meeting. The Board of Directors met on Wednesday, January 31st from three to five at the Sonoma County Board of Supervisors Chambers. And during the meeting, they elected Board of Directors for Sonoma Water, David Rabbit as the Chair and Board of Directors with the Mendocino County Inland Water and Power Commission, Janet Polly as the Vice Chair. Sonoma Water has been assigned as the Interim Secretary and Council for this new entity is going to be split between Sonoma Water and Mendocino County and Inland Water and Power. There were three presentations that were provided to the Board regarding the license surrender and decommissioning, as well as the status of the two design options that are being considered to continue the diversion and an update on some funding. Later, or next month, sorry, mid-March, 11th and March 13th, a technical advisory group to this authority will be meeting to review the potential design options. And ultimately, we're expecting that the Board of Directors for ERPA will make a decision on the design at a meeting likely in March. If you want additional information, there's a dedicated website for this new authority. It's illrussianauthority.org and those that are in the public can always sign up or Board members can sign up to receive updates at that website. Related, you may have seen in the news that PG&E has made a determination that ultimately they are not going to consider the proposal that was put forth by the illrussianproject authority and other entities in their license surrender and decommissioning project. They don't want that process to be under the Federal Energy Regulatory Commission's jurisdiction. And so they will not have that in their final draft surrender application and decommissioning plan. But the entities and ERPA still anticipate working together with PG&E and they're still going to be moving forward on a potential option to keep the diversion going. So I wanted to provide the Board that update on what we know at this point in time on that status. Second, I wanted to let the Board know that we are starting and very busily engaged in our budget planning for fiscal year 24-25. And we will be having our inaugural budget review subcommittee meeting next week on February 20th and we'll be covering background information as well as reviewing some of the assumptions we'll be using for developing next year's budget. And I wanna thank in particular our budget subcommittee and appreciate the time and effort that they're gonna be putting forward. We're gonna be asking a lot of you in the next month to month and a half. And we look forward to working closely with the subcommittee as we're going through our budget process. And then last, I have, I think a slide I've been told to share maybe, hey, there you go. We wanted to let the Board know that for the second year in a row, we're gonna be doing an I heart tap water campaign for the month of February. And so this fun campaign educates the public about the value and safety of our tap water that's delivered to their homes and businesses. And also as an opportunity for us to showcase the talented employees that we have that make up the exceptional Santa Rosa water team and the work that they do to specifically help deliver tap water to our community. So we will be sharing this on our social media campaign and our social media channels and spotlighting individual employees encouraging our customers to take it from the tap. So hopefully you'll see some of that on your social campaigns. Encourage you to share them if you like and looking forward to highlighting lots of different exceptional staff that work for our department. And that is my update and I'm happy to answer any questions that the Board may have. Thank you, Director Burke. Any questions for the director? All right, we will take public comment then on item 14. If you wish to make a comment, please move to the podium. See no one rise. That'll take care of the director's report. That concludes our agenda for today. Again, welcome to our newest board member. Look forward to working with you and we're now adjourned.


Oh, no count. No follow-up count. I shouldn't be x the first one to be fair All right, we're gonna drop down here in spark because for some reason I feel like Jiren has to Jiren has to live to get a hit here He died. He's dead already Jiren's already dead Gets the follow-up grab and everything is this still gonna cost three bars. This might actually be a tuba. What is the Just to make sure it kills with one level three so Broly could stay out. Is that the level of play? How's it going everybody dachodoi here back with some more dragon ball fighters rank matches And this is going to be kind of a weird intro because this video predominantly takes place in the second set of the video And I'm going to be honest with you It was such an intense set that I'm actually just going to skip over the first one But I did want to cover what the overall point of this video was supposed to be which is actually Jiren Jiren received quite a few buffs in season three that really help him out in terms of his versatility and just overall The impact of his character the two big ones are being able to get sliding knockdown practically everywhere Like you see here. So what you're going to see here is how I would Boom there you go right there. Why did I spot you? That's fine. That's fine.  He wasn't blocking. Oh There we go that was pretty much everything I wanted to say with the first part of this video Now we'll pick things up when I hop into the second match and run into a top 15 ranked Broly player online God All right. Well, this is a good chance for Jiren to go up against God my very bad Jiren. What is this team? This is going to be a very tough match. I can already tell at least we did Oh dragon rush already Okay, started with an early dragon rush at least we started with the Yamcha ASS because I'll be I Wanted to jump in so bad. I can't believe I had a hold that I'll follow up. I completely forgot about that. I was like if it doesn't hit me Does it still follow up and it did? Probably should have watched out for that one Thought I had that doesn't get the meterless conversion. No, he just wants to get oh, what? Okay, I didn't know it worked like that. That was very that was awesome. Actually, I'm not gonna hide it I was impressed. I was very impressed by that. I'm Ash Vanish. Okay. He had me in Bly he had me He made absolutely destroyed there. I wish we could have gotten more off that level one No way the guinness is the body charge. It was hype Drop me. I want to be home. Oh No count no follow-up count. I shouldn't be x the first one to be fair All right, we're gonna drop down here in spark cuz for some reason I feel like Jiren has to Jiren has to live to get a hit here He's dead already Jiren's already dead He gets the follow-up grab and everything is this still gonna cost three bars This might actually be a two but what is the Just to make sure it kills with one level three so Broly could stay out. Is that the level of play? We're all I Need the damage increase. I might as well That's the level of play we're on. All right. All right. I respect that actually I Wish he wasn't happening to me personally, but y'all to means we out Give me Goku black can't handle a little bit of the snipe. Oh guard cancel, please. Thank you Oh No, I didn't get the ex my wolfing face. Oh damage. All right. All right. That's probably gonna be Goku black dead What I should have done there is ex that wolf a gale claws one two three four five Please hit. Oh, it missed. I did that wrong I should have ex the wolfing fist regardless. It only costs half a bar now. That's tough to adjust to poor y'all Oh, here comes the level three probably from Broly No, I love a one from Broly.  That's actually pretty good follow-up Am I dead yet? Yeah, I'm probably dead here unless he drops it. Hello, Broly So you knew I was coming from behind you. Damn. That was a match. All right, let's do one or two more I mean if if we do two more that'll be a full set anyway So I don't mind.  Oh I forgot that goes up Nice great follow-up there. I you will not hear me complaining about that. We got the sauce I didn't expect him to challenge the first one the second one.  No, okay, probably wants to All right, just okay with the level one. I was okay with the level one Well, I was in blocking. Oh, no, I could have sworn. I was holding back. I didn't even do it low either Gonna do the same process. I assume. I wonder what the follow-up here is Okay, we had to do this There was no other way Was no other way to get that win right there Okay, I'm glad that grab hit. It's so slow. That was such a big risk I was gonna make him block. Ah Damn, bro. Okay Krillin doesn't take a big beating here. That's fine. That's fine I just wish it wasn't happening to the boy Krillin Okay, I'm actually gonna put him in the corner. It's my this is my best chance. I dropped it I dropped it. No over his head. Damn. He's still combo'd me Damn it. We still got combo'd. It's the life of y'all to player. I guess Sparking here. He doesn't have three bars. Can you get three bars?  Nope. No bar spent here. Whoo. Wow All right.  Okay. Come on You want to keep back that heavy Jiren has some answers for you? I tried I thought he was gonna read me and then push a button, but he reflected he respected me He respected that I wish he didn't I wish I wish he wouldn't have respected that At least spend a bar two bars make it two. Oh Well our big benefit here is that we have sparking which to be honest I'm surprised. I haven't used earlier All right, I'm gonna put him back in the corner. It's a little expensive.  I'm mashed my my I'm mashed to my heart's content right there All right, we got a win. We got a W there. It was not gonna lie to you I'm mashed so I don't have too much pride in the last segment there But my Jiren play up.  I'm actually it was luck that Jiren counter all skill, baby That was an awkward situation for both of us poor Jiren though got got collapsed without even really knowing what was going on That overhead got me good. I'm raw. I'm holding down raw tag if he makes a mistake. I'm trying to get out But he would probably down heavy that let's be real I think he expects a raw tag if he doesn't kill me here, Broly All right, I'm not I that was a weird interaction. I tried it We're out of here. I'm not trying to stick around No, my careless meant my careless not offense. I knew he was gonna down tech, but I just I missed time, but Don't down heavy me. Oh, he did down heavy me.  Ah, he didn't even leave Broly out If he would have left really out I would have been way more comfortable with that because Broly's one hit from death Where as Goku black with my skill level is like seven Forgot about the little Jiren, huh?  Ah same side. You can see me jab in the air trying to ante it Ah One bar here probably gonna get the jet well two bars now, but that probably would get the job them regardless I might actually wait hold up I was gonna say hold up. I thought that was a window. Oh, that was bad.  I got both of them, too Again, you and Broly and Broly was so close to death. That's that's the worst. This is the worst case Broly you gotta stop Broly bro He's gonna vanish and do his thing. Yeah, which I didn't know until this this game. That is so sick You can do that meterless though But online it is probably a little finicky. Do we do one? I'm gonna do one more honestly I think I'm gonna do one more This isn't a good showcase for Jiren though. This is not a great showcase for Jiren, but trust me He's much better if this was season two. I would be let's not even talk about it Well, that was bad. I really had no answer. I probably should have jumped up and met him in the air Do we early spark just to try to get a little momentum? I'm gonna do it He just look at these big meaty claws, dude Broly just throwing it around Just throwing him around Please stop my sparking timer is almost up. Oh, it's gone It's all gone Level one. He gets does he get snappy? All right. I'm so tired of dealing with Broly with beam assist I delayed it. I just didn't know when I thought my double hitting move would maybe cover it, but Oh, he got behind me. Oh, let's go gonna have to vanish the combo. I wish there was another option All right, get him to the corner and cool with that as well You can't reflect that I should have done something to kill So slow, you didn't see it coming. That's that gets better players. This grab is so good because they're like, you might never do that I'm killing it right now. I'm really gassed myself up for nothing, but I'm just I'm so happy with Jiren, dude.  Wait, can he combo off that? Is he not gonna? Oh, I thought that was gonna. I would have been so impressed. I would have been I would have forfeited the game I lived. Oh, that was a good response That was a great response. All right. What do we do now? Okay backwards jump worked out pretty well Unfortunately, we already vanished so we can't get Ginyu in which kind of sucks Nice beautiful hit Okay, the two level ones will kill. I wish I could leave I wish I could leave yonch in the back But that wasn't in the cards there. Ah, I guess I could have done two destructed it Yeah, the beam assist more important. I take it. I take it back. Nice super dash. I'll give it up Take go body cheat. Oh beam just for the practical effects. Yo Movie maker magic. All right Take that Please destructo this do me one solid Krillin Oh One more time. Oh, I wish it would have hit him that would have been sick Well, we can't leave now. This is a this is a full set now. I I can't leave on a win, baby Let's go. I'm here to get crushed two to two That was awesome Hey, I'm having a good time too Meet him anywhere. Ah that beam assist covers so much All right, we got a lift No counter I should have ranged countered it. He's not vanishing off these ranged counters, by the way They're a lot worse than they look right now um Oh, no I don't know what that was. I don't know what that was on my attempt. I just knew I had to do something, dude Please kill. Please kill. Please kill. Please kill. Yes. All right, Broly's out of the way That's the big problem character. We can now with the with it with the with advantage We can play pretty risky. I was trying to avoid that at all costs. Damn. That's probably that's a lot of damage Oh, he vanished me out of the beam. He's not going for the usual extension Give me that Okay, the vanish killed him. I messed up so bad though. Oh, all right now with with this much of a character lead I love Jiren's odds Oh, he cleaned my clock. That's it. I cleaned my clock. Absolutely I'm sorry Jiren You got destroyed, man All right, all right, let's take a raw level three no way for him to recover health So even these tiny leads I'm cool with My button I didn't push a button. Oh no Hold out Krillin. Hold out level three vanish. She probably just wants that level one again. No That was a sick key blast. Sorry Yamcha No, I came back to him. Ha ha. Damn it. I thought that was my response Oh, wow, that was a good response to him I can super dash over that right. Okay, good Brock landed at his feet, but he was already hitting me.  What does he spend it on? Nothing Oh, I could have tucked it, but I just didn't oh, no. Oh, no, we're choking at water choking. Oh, no This is risky. Okay, Yamcha and that's the video Thank you guys so much for watching this one all the way to the end. Hopefully Uh, I mean Jiren didn't really do too much But you know, he's still he if again if this was season two I would have got zero three Stomped out but Jiren is here in season three and he was ready to go. Thank you so much for my opponents for the games It was really awesome. You played a mean Broly and I do mean that in a literal sense It was very rude what you were doing with him But but it was an awesome match. Uh, like I said, let me know your thoughts on this game down below In the comment section while you're down there if you like the video and the channel Make sure to the like button and subscribe other than that. There's a few more videos on your screen So check those out if any of them catch your eye I have been dr. Doyle and I will see you in the next one


Thank you, Jorge. Thanks very much. It's a great pleasure to be here. We had some technical issues this morning, so you're seeing a backup version of my slides, unfortunately without the beautiful animations. But anyway, we're going to make a slide available for downloading later because there's quite a few I may not get through all of them. So first of all, I want to say that a futurist does not predict the future. Okay. There are some people who have predicted the future, like Einstein or Isaac Asimov or even Ray Kurzweil. My skill is not prediction, it's observation. It's something that you can do also. I work on five-year timeframes. You know, when I was in the music business, first as a musician and producer, and then I tried to work with the record companies to understand digital music. And you know what happened with the music business, the four major music companies, Warner, Sony, Bertelsmann, they said that they don't want music to be moving to the cloud onto the internet because it would completely destroy the pricing model. And of course, copyright law. So what happened? The record labels went to court against 257,000 people and suit people. The lawyers got all the money and their record industry shrunk by 71%. So loss of 71% revenues from 22 billion to currently about 11 billion. That's not all the fault of the record labels, but the reality is today, if you buy a CD today or DVD for Christmas and you give it to your kids, they will call a therapist.  I sometimes still buy them, right? But the fact is that music is in the cloud. If you listen to music, you push a button. Spotify, Simfy, YouTube.  So it's very important to understand where things are going. And I call this the hard futures. And basically, my work is really best described as this, listening. And I would recommend that if you do the same thing, you listen to the future. In China, they say, if you want to know the future, ask your children because we're so busy in what we're doing now that sometimes very hard to look from the outside. In fact, you could say that the success of the past is the biggest problem for the future. Because when you're extremely successful, you say, well, you know, I can't really imagine this would change. But just take a few looks around you. The car company is today. And, you know, I live in Switzerland, but I am from Germany. So I feel solidarity with the German car companies. But, you know, six years ago, we had a seminar for the CEOs of a big German car company. We're talking about self driving cars, autonomous cars, electric cars, car sharing. And everybody in the room like this was laughing. Nobody could imagine that somebody would not buy their own car, would buy a car with a battery and no sound. Today, the number one initiative in the industry, autonomous cars, electric cars. Five years. And I can guarantee you, if BMW will sell electric and self driving and shared cars, the business is completely different. Completely different. It's about mobility. Tesla does not sell cars. It sells mobility. There's a very big difference. The Tesla car is software on wheels. You get in the car in the morning. It's a new car because there was a software update. Your business will be the same. Think about that for a second. Selling cars, selling music, not selling music. So you already know this mobile devices, you know, these things here, they are already our external brain. The things we can't remember, we put in here. Phone numbers, content, media, banking, all goes to here. And in the very near future, we don't type anymore. I don't know, you have noticed, but there's so many innovations, just the last three months, where we just speak, voice recognition. And imagine what this will do for an 85 year old woman, for example, or a man. No more typing, no more apps, no more downloading. Just say, hey, play House of Cards. And replace it. Buy me an airplane ticket. That's two years away. So let's not think about the future as being too far away. Everything is getting connected, including the environment. I live in Switzerland, so I use a cow. They are actually connecting the cows in Switzerland to find out how many kilometers they have walked. Where are they? What kind of mating behavior they have? Everything. The poor cow has no privacy. It's terrible. But this is the most important curve of the day. Exponential. We're moving into an exponential future. You know Moore's law, Metcalfe's law, Moore's law is kind of ending for chips a little bit because we've reached a physical limit. But this curve now, we're counting like this, very important to remember. When you're in the beginning of the curve, it's nothing because when you're doubled zero upon zero one, you still have nothing. But at four, we're at four today, the next step, 18 month is eight, 16, 32. In just seven years, we're going to be at 128. That means in seven years, we're going to see things that are literally science fiction. Artificial intelligence. Computers determining social security. Computers looking at 100 trillion data sets of social security from the last five years and figuring out new rules how to go forward, how to distribute funds. We're looking at systems that are basically mind boggling realities, automatic voice translation. That's already working today. This is an app called Microsoft translator. In fact, I was going to show you one, but I'll skip it now because I want to spend more time on the other things. It's mind boggling. The other day, I was in Japan, I was talking to the sushi chef for half an hour in Japanese. I spoke in German, not Swiss German. That is too complicated. But I spoke in German. He spoke back to me in Japanese through the mobile. It's an app called Say Hi because two dollars works perfectly in 35, even in Swahili. If you care to speak Swahili. It's a mind boggling. This is like Star Trek. Robots are now being used in pizza places to serve people. Of course, in your business, people are getting older all the time. In Western countries, we're gaining eight and a half hours of lifespan every day. Every year, we get to live a third of a year longer. It's kind of too late for most of us to really participate in this. But if you have kids, their kids will in average live to be 100 years old. 100 in average because of medical advances. Imagine what this will do to the insurance business and to retirement. I mean, we're going to retire with 60 and then live 50 years. Who will pay for that? Impossible. And of course, jobs will be also rare, which is because of automation, computers. So our whole social system will be up for a view. But having said that this is not a bad future, I just want to make clear this is not a dystopian scenario. In fact, it's all very positive if we find a way to orchestrate it. For example, we're looking at a complete convergence of biology and technology. I live in Switzerland, lots of pharma companies. So the pharma companies are not aware of this fact. Today, we're taking pills or medication for diabetes, you know, for blood pressure. In 10 years, we're going to use technology not to have the problem beyond the pill. Imagine that for a second. We're talking about $17 trillion worth of money here, right? Every year that we buy pills for. Imagine we can use technology not to have the problem and it will cost maybe a trillion dollars. Same than the music business. You know, if you used to be in the music business, you sell a CD for 20 euros. How much does Spotify cost in Belgium? I think 8 euros, 10 euros, 18 million songs. So things will get cheaper, more of a commodity. This is the first company called Human Longevity Inc. in California. Their goal is to end dying, right? Have a good laugh at this one, right? There's a series. They're funded with $500 million from Genentech is to make sure that we all get to live as long as we like, maybe 120, maybe 150, and even forever, right? I think that is of course not a good idea. I don't know. Who would voluntarily want to die? It's a difficult question.  I definitely need some good lubricant for this. So basically what happens here, I want to ask this question, are mutual better suited for such a world where we have more health and more longevity? You know, the health insurance costs and health expenses are rising everywhere globally. But it's quite clear, maybe in five years or so, health costs will decline. For example, now there's over a dozen devices that allow remote diagnosis. So you have a box of what is called Scanadu. It's actually a Belgium guy who lives in California. And you can buy this box and you can prick your finger, you cough into it, you measure, right? And it gives you a remote diagnosis better than 10 doctors. But that's what he says. It's going on to the market in China now. This box has a potential to do away with 90% of visits to a doctor or hospital. So if you're 80 years old, you use the box, you connect the diagnosis, you send that to the doctor or you send it to the cloud. The cloud says, you're fine. It's just, you know, you have to use this following medication that sends it off to you with a drone. Is that good or bad? I think it could be great for costs, but maybe a little bit lonely. I don't know. Maybe fun to go to the doctor. But, you know, this is a fact. Everything is moving to the cloud. So think about this for a second. Music in the cloud. Movies. Does anybody still watch what's on? You know, some people do. Just click through the, right? But, you know, we have hundreds of options now to watch on demand. Music, movies, books, television, money is moving into the cloud. This is the nightmare for banking. Bitcoin, the blockchain, digital money. You know what happens when digital money actually gets here? Transactions will be 98% cheaper. Talk about pain. I mean, I pay credit Swiss $20 to send $100 to myself in America. That's their fee. You know, this is one string of numbers with another string of numbers. In the future, it'll be free. Well, it already is. I already bypassed credit Swiss using an app. So everything moving in the cloud, what will this mean for your industry? This is a very, very big question. Again, going back to music business makes a great example, right? You see the red line here? The red line is traditional recorded music, CDs, and downloads. Going towards zero.  I think it'll be zero here, basically. You see the blue line? That's called streaming. You hit a button in a place. That's what your kids do. When you go in the car with your kids, they don't ask for the radio station anymore, right? They want Bluetooth. Bluetooth into the radio. So what happens here? This is the most important learning, right? Traditional gatekeepers get fried in all cases. You have to think about this for a second. These red guys are Sony, Bertelsmann, Warner, and of course, copyright societies like Boomer, Stem, Gamma, all these. The blue guys are the internet companies. YouTube, Baidu, Facebook, Spotify. In the future, we have a great music business growing, but it won't be the old guys. That's basically displaced, diminished, disintermediated toast done. Now, this is actually easy to do with music. In your case, you're lucky. It's not so easy. Insurance is a lot more complicated than music. But you have to think about this for a second. Disintermediation by technology is obviously happening across the board. It just takes longer. It goes in waves. So just the fact that it hasn't happened yet, or that it's very complicated, it's based on relationships, it's based on regulation. There's a lot of protection. That's good. You're lucky. But these are the waves. The waves of disruption. You're currently wave five and six. You're just a little bit beyond the wave of retail and cities and commerce. So we can learn from this and say, well, if it looks like this, we still have a runway. I think this is a huge opportunity because it's not too late. If you're in the printing business, publishing is too late. People aren't going to buy more paper in the future. People aren't going to buy more CDs. People aren't going to buy more luxury cars. The projection for cars looks like this, for individual cars and for public and shared cars like this. You may not like this idea, but it's like oil. If you're in the oil business, you know where it's going. It's not going to get any better. The future is not oil. It's renewable energy. This means for Shell and their colleagues, $32 trillion worth of sunk assets. They have to eat. That's basically, sometimes I call this digital Darwinism, because basically digital technology makes it possible to go direct, to compare, to understand, to get information, and the monopolies of knowledge or distribution are melting. There is new ones, of course, which is also a big issue, but the commission is looking at that. I have a hope here. But basically, this graph shows my friend Rachel Boatsman, who is ripe for disruption. Look at those four points. Complex experiences, that's you. Broken trust, I'll leave that for you to decide. Redundant intermediaries, yes. Limited access, yes. The ripe for disruption criteria is fulfilled here. What we need to do is basically say, okay, in this world, where computer performance is very soon going to surpass human performance, that's seven years away. Right now, the most advanced computer has a capacity of a cricket.  In seven years, the first computer will match the capacity of the human brain, not emotionally or thinking, but computing. Now that means, for example, you can feed the computer 100 billion facts about insurance. The computer will not be programmed to do something. It will learn what the deal is. We'll come back and say, if you do this, then we can have X, or we could do the following. It can model the whole thing based on your rules. Now, I'm not a technologist. I come from humanities. I studied music and theology and philosophy. That's a scary thought. But just three months ago, Google's computer, DeepMind, won a game of Go, the Chinese game Go, against the world champion. The game Go was an extremely complicated game. Three trillion possible moves. It's a strategy game, not chess. It's not mathematical. And computer won four to one against the human player, because the computer made moves, so said the Korean guy that played against them. The computer made moves that a human would never do. That's why he won. The computer learned how to play Go. It wasn't programmed. It learned by watching, simulating. So you have about five years until the computer can take your business and give you analysis and take the human knowledge and replace it with computer knowledge, and then we have to decide who do you believe. And what is the human component of this business? This box right here, the D-Wave quantum computer is a million times as powerful as the most powerful computer that we're using commercially today. This computer takes the power of the city of Zurich and costs $300 million, so it's not very practical. But supercomputing is right around the corner. If you don't know what the blockchain is, I'm sure you're familiar with that, is the underlying peer-to-peer protocol of transaction. It's a new book that came out from my friend Don Tabscott called The Blockchain Revolution. You have to read this book, because that's impacting financial insurance transaction business pretty much across. And in the bottom line, I'll leave you to read this later when you get the PDF, but basically the idea of the blockchain is to focus on matching supply and demand and risk calculation research.  So MIT Sloan said that businesses that adapt to a digital world are 26 percent more profitable. I think that's wrong. It's probably more like 260 percent. I mean, is there any business that it does not adapt to digital? As an anti-example, the Hilton hotel chain versus Airbnb. Airbnb is doubling the number of rooms every week in Europe. I mean, no matter what you think of Airbnb, I'm sure you had the debate about what they should or should not do. It's not always good to just have disruption. You also have to have some construction. I mean, they started digitally. Airbnb doesn't own any hotels, doesn't own any property, doesn't pay any taxes. Not really. That's also not so good. They should be paying some taxes. But this was animated. You can't see that now.  If you digitize your business, you can be quicker. You can have better CRM. You can have better databases. You can be smarter. That's good. You can be more efficient, have less people. That's a fact. But on the other hand, now there's new competitors. There will be what there already is, but you may not be aware of this, Airbnb for insurance. I looked this up last night. There's 840 companies funded with over a million dollars each who are in the technology insurance space in sewer tech, like FinTech, same thing. Some of them are actually using the idea of mutual insurance in their business model, like Lemonade. I don't know if you've seen Lemonade, but should take a look. Because the idea of mutual insurance is actually very close to the idea of the internet itself, peer-to-peer collective thinking. Don't be surprised when you see this curve basically heading in this direction. The concept of saying connectivity, data, intelligence, ultimately a sort of new relationship of man and machine. That means some things that we used to do, routine, calculation, numbers, will be done by machines, by software. That's as inevitable as the music moves from the city to the cloud. We have to get used to that idea because really our job is not to be better machines, believe it or not. No matter what you learn in business school, it's not our mission to be a better machine. Today, you can be a better machine at work, more proficient, because computers are not so good yet. They're pretty good, but not good enough. In five years, every person will be beat by a computer in every job, everywhere, because computers can't do that. And guess what? Every company, every shareholder wants to get rid of as many people as possible, because it increases the profits. So our work really is to be more human, not less. And as far as I understand mutual insurances, it's very much about humanity, collectiveness. It's something to think about. When we look at this crazy world right now, I mean, if you're looking at this chart, these are all the things that are happening right now, analytics, artificial intelligence, connected healthcare, genetic engineering. It sounds like Blade Runner, right? It sounds like science fiction. I mean, any sane person looking at this would say, my head is going to explode if I study all this stuff. But in the insurance business, you have to be future focused, right? Because these are very large structural changes. You have to understand all these trends. Despite these trends, I think there's a certainty people will always need insurance of different kinds, yes. But there's a big difference. People will not always need printed paper. People will not always need radio. People will not always need big cars, private cars. In fact, in 10 years in most cities, you need a special permit to drive your car, to self-drive the car. In less than 10 years, we'll have airplanes that fly themselves. Well, they already do. I don't know what the pilots are doing. They're probably surfing the internet on their iPads. So it's very important, as Marshall McLuhan said, it is the framework that changes with technology, not the picture. Very important. When you're looking at your business, it's not using social media. It's not using big data. It's not using apps. Those are all nice things you have to do. It is the whole context that changes the business model, the logic. I think that's a giant opportunity. In this framework, going back to 1964, Paul Barron, who talked about how the framework of business is changing because of technology, going from the left, that's here, centralized business, nice fancy car. Decentralized the connected car, and here the future, the self-driving car. That's where everything is going. If you're going to think about the future, you would probably not think about centralized businesses. You think about distributed businesses. There are some centralized businesses, but it's very expensive. Here, 95% cost-saving, peer-to-peer activities. What does it mean for your sector? Well, there's a huge amount of stuff there, but basically, here's a couple of quotes. The reinvention of insurance hasn't happened yet, so this guy says. This guy, who founded a company called Lemnay, said, if you tried to create a system to bring out the worst in humans, it would look a lot like the insurance system. That's pretty serious. Well, he's talking about commercial insurance, not mutual, but still. He says, to a very high degree, insurance today can't reach the millennials, can't reach the kids. It does not connect to the kids. Insurance is desperately slow in following user demand. This inventor says that it's basically about sensor networks and data generation, and you've seen the money that goes into this. Basically, investment is to reinvent insurance as it's exploding. So if you run insurance companies today, especially in mutuals, it would be great to team up with some of those startups to import innovation, to connect to others. I mean, that's what all the big companies are doing, saying, well, there's like 50 companies trying to kill us, so we'll make a deal to import what they're trying to do. Insure tech. I'm sure you heard about this before. This is an exploding market. There was an event in Barcelona just recently, just on insurance technology. Here are some trends that are changing your business rapidly, of course digitization, that's an old hat. Disintermediation, companies getting in the middle where you used to be. Uber, Airbnb, that's great examples for this intermediation. Everything is going mobile. 80% of the entire internet will be mobile in roughly four years. Means if you're not mobile, you don't exist. I went to some of your websites in preparation. I looked at whether it was mobile optimized. They have to say quite a few could not be read on the mobile. I mean, this is like saying, you want to be in the restaurant business, you don't serve food. Intelligization, everything is becoming intelligent, automation, virtualization, the cloud, prediction. You can use modern technology to predict claims, demands, and all that stuff. So accurately, it's mind-boggling. I've seen demos from IBM, Watson, it's just, you would not believe it can be done. And of course, virtual reality, augmented reality. So you've seen all these trends, cloud computing, cognitive computing, internet of things, and you have to understand what they are. And like I said before, technology will not heal the business. In fact, it will disrupt the business. You have to build new business models based on that technology. Things that are only possible because of that technology. When I worked with the print publishers, they came to me and said, we have to figure out how we can be successful publishing magazines on newspapers, despite of the internet. What are you talking about? You're going to have a business because of the internet. That's the whole point, not despite.  I mean, the fact of life is that it's there, right? This is the Osani tribe in Africa. They play a game. I call this the game of mutuality. You look it up on the internet what it is, but essentially it's a game that only works when you stick your feet together and create a story together. So I have a question. How would these trends impact solidarity, sustainability? And I would say that the worst case, it could destroy this model, because it would be completely based on actual algorithms and numbers, which I think would be wrong because no matter how good the numbers in the data is, it does not give us a conclusive answer to lots of questions. I'll show you some slides on this. So we have to think about how that improves or changes what we can do. You heard about smart cities. Now the next thing I would say is smart insurance. Well, these days is kind of a trend.  Smart farming, smart cities, smart futurists, smart, yeah. But I tell you what, it's not enough to be smart. Smart is difficult, but pretty much everybody can achieve it.  It's also about having a human business, something that fits people. I think this is really important to remember when you see all those lists of things that are happening is to also think of the next step. I was going to show you a video, but we can't make this work. But computing is now basically changing. Computing is becoming cognitive, right? Cognitive means thinking. This is a very big shift for your business, right? Right now, you're still in the area of program computing. Computers do what you tell them to do, and that's how we use them. But just right now, in the last couple of months, there have been several inventions in deep learning and cognitive computing and voice control that will make computers into thinking machines. Well, you tell the computer, figure out exactly how this works and what the rules could be. And the computer looks at lots and lots of data and comes back 14 seconds later. That gives you an interesting advice.  And I asked the computer, I said, what is the future of Europe? And she, you know, it's always she for some reason, she gave me a 10-minute speech about the future of Europe. That was really good. It was really good. It was real voice, like a real person, really intelligent, better than I could have done it. That would lead a little bit too far. But she talked about economics and terrorism, everything. Because it's not hard to learn all that data when you're a computer.  We can't do that. But then, this is the funny part, right? Then I went to the computer, I said, look, very interesting, you know, nice job. And I said, what do you think about the United States of Europe? Which of course, as you know, is a concept, far-fetched concept. You know what she said? Command not understood. Because it doesn't exist. It's a concept, right? She could not give me an answer to something that doesn't exist. I think she could have found stuff on the Internet about the United States of Europe, you know, it just took too long. So this is the big difference in computing, right? That we're looking at this artificially intelligent behavior. You have to know what artificial intelligence is. That's going to impact the future. It's basically just the idea of computers acting like intelligent people. It can be good, can be bad, but IBM calls this the area of the cognitive computer, the cognitive area. That's what we're getting right now. Machines that can think, right? This is a short clip from Tesla. Some collage of things, you know, smart machines, cognitive computing. If you're interested, take a look and just Google a little bit. But, you know, you've heard about this before years ago. Data is the new oil. I mean, let's think about this for a second today. That was 15 years ago. Today, this year is the first year where the data economy will make more money than the oil economy. To be exact, 7.4 trillion dollars. It will be made shoveling data around. Google, Facebook, Baidu, Tencent, Twitter, YouTube, Amazon, Cisco, you name it, right? They make more money than the oil companies. In fact, the oil companies will go to zero before it's too long. Well, 15 years, I still have to go for a little bit, right? But the data economy is absolutely explosive. Data is the new oil, 93% of insurance CEOs see data mining and analysis as more important for the business than anything else. Well, that's just lip service, right? We know that's just lip service, but we have to think about this because really what it means is that data is the oil, but trust is the currency. I mean, your customers don't buy things from you because you have great data. That's like saying, I have great technology, trust me. I was like, who cares? Trust is not based on algorithms, right? We don't buy stuff because of algorithms. But still, if you don't have algorithms and data, you will never get to the point to where you can prove your trust. This is the kind of human-machine relationship that is very important for us to maintain. Mark Anderson said this years ago about technology, he said, software is eating the world. Everything becomes software. The Tesla now, for example, is software. The BMW with hardware has now also more software, and of course. The millennials, you know, that are 75% of the workforce, they understand this. Millennials, by the way, are kids between 22 and 32. They are the future CEOs, you future bosses, some of you yourself, and they're really different people. And if you're looking at what's happening here, it's really interesting to see that 72% of those millennials would bank with companies that are non-traditional, 72%. So think about this for a second. This is our future, the end of good enough. That happens across all industries. The end of good enough, you have to be better than good enough. So far, it was fine if you were good enough, there was nothing else to do. If you want to watch television 10 years ago, you have to go to the state television, the public television, or cable, that's it. Today, you have 500,000 things on the choices. In insurance, the end of good enough, that's a very big opportunity. Try to be better. Think about the future, what that means. These graphs show clearly what the number one threat is for you, that is not the other insurance companies or the regulators. It is the tech companies who are coming to the back door to reinvent every sector of our lives. Some good, some bad. And guess what? Most of them are completely unregulated. Just now, we're talking about regulating Google with data. It took only about 10 years, Google has more power than Shell and ExxonMobil combined. Yet they do whatever they like. That's something to think about. The future really is about giving control back to the user. So 70% of insurance CEOs, this is I think general insurance, they see the spread of technology as the main threat. That is a serious mistake. This is the main opportunity. The opportunity is to unleash the customer, is to make them trust you, to make them do different things. I think there will be many Tesla moments in insurance. You know what the Tesla moment is?  Think about that for a second.  Today, Tesla sells twice as many cars as Mercedes and BMW luxury cars in almost all countries. Five years. So basically, we're looking at a tilted playing field, right? Technology is tilting the playing field, making it unfair. The startups won't obey to regulation. They won't pay attention to what you're thinking. They will do what can be done with technology, and then they'll care. YouTube was the best example, right? YouTube was basically started illegal. It's not legal to upload all that stuff to the internet. But in a short time, they had 100 million users. Now they have 1.5 billion users. And still what they're doing is not entirely legal. You know, it's the DMCA, you're at the Copyright Act. That's, I mean, but they hear their effect of life now. How would you live without YouTubers? It's, well, we could, but... That's sometimes called the uberfication. I'll skip this. You can download this later. But here's an important question. So are insurance models based on tracking of actual behavior? Like tracking actual driving or eating behavior? Or again, are they deconstructing the collective principle? The free will? The answer is probably yes, right?   We'll think about that for a second. What would that lead to? That would lead to all of us driving completely calm and mellow. Would force us to comply, right?  I drive like a saint. It comes out in the end. That's collective. That's a very big question if technology can do this. We'll have to wrap up very soon. It'll take a little bit longer, because we can't get the slides to play like they were intended to. So I'll wrap it up pretty quickly. So basically what happens with this great power comes great responsibility, the Internet of Things. We're inventing a new way to live. That's your responsibility to figure out new business models, to think about what that means for surveillance, and to think for abundance. Yes, yes, I'm coming to the end. You should take a look at this company called Drove, TRLV. They're building on demand assurance for what you actually want to ensure. So you take photos of your stuff, and you ensure one thing at a time, uploading with an app. Of course, that's a very American idea, but still lemonade, take a look at. Of course, we can't play that. This is really the world's first peer-to-peer insurance. Very powerful model, lemonade, peer-to-peer, self-serve technology. So I think this is also a fact of life. Technology will make it easier to put claimants first. And think of that concept, putting claimants first. This is the key behind what Amazon did, customer delight. This is why Amazon is just a successful company, because they will go for customer delight at all cost. At all cost. That's the key to the future. So I'll get to the end here. You will be able to download the slides afterwards. As you can see, I was wildly ambitious with my timing. Just to wrap it up. The future is really this, right? Connectivity, technology, data, intelligence, and collectiveness. Because I really think that in the end, if we use technology to enforce the idea of collective insurance, we can have a good future scenario. We have to figure out what exactly that would mean, what kind of revenue models. And I sometimes call this being on team human. It's a big term in America that describes how we use technology, but we don't become technology. Thanks very much for listening.