Okay, I have 5.30 so I would like to convene this December 2 meeting with the Board of Directors of the San Lorenzo Valley Water District. Holly, would you please take the roll. President Mayhood. Here. Vice President Henry. Here. Director Ackman. Here. Director Falls. Here. Director Smalling. Here. Okay, we're all here. Are there any additions or deletions to the closed session agenda? Staff has none. Sure. All right. Are there any, this is the time for oral communications. I don't see any outside attendees. I guess we won't have any comments from the public. So with that, we'll close down here and re adjourn, reconvene for the closed session. Okay. All right. Well, with that, I would like to convene to our open session of this December 2 meeting of the Board of Directors of San Lorenzo Valley Water District. And we do have a report of actions taken in closed session, and that is that the board voted unanimously to give a satisfactory assessment of the performance of the district manager for the year of 2020 to 2021. Are there any additions? Oh, we need to have roll call for the open session. President Mayhood. Here. Vice President Henry. Here. Director Ackman. Here. Director Falls. Here. And Director Smalling. Here. Okay. Are there any additions or deletions to the. Agenda. Chair or staff has none. Okay. This is the time for oral communications from members of the public on any item that is not part of the agenda. Are there any, anybody want to make any comments right now we have three members of the public here. If you would like to make a comment, please go ahead and raise your hand. Seeing none hearing none. I would like to go ahead to the president's report. And I would just like to report that at the November 17 meeting of the Santa Margarita. Groundwater Association, the group voted unanimously to accept the final draft of the groundwater sustainability plan. This is a major milestone for both. Groundwater Association and for the district. It will be submitted in January. So far, the California Department of Water Resources has. Approved. Something like half of the ones that have been submitted. I think they've had 12 submitted. They've approved six. They've approved six. And so that has a very good chance of being approved on the first round. The other thing the Santa Margarita group did was to set up a steering committee of five members. A subset of the Santa Margarita board to begin to talk about some of the questions having to do with how to administer the organization going forward. And I think it's a great opportunity for the organization and cross-sharing and in particular grant writing because about about this time next year will be the time at which we will be needing to potentially put in a grant proposal for funding of projects. Funds for projects to bring groundwater basins and sustainability that range anywhere from two to eight million dollars. So we'll want to be thinking about whether there's anything we want to do with that. With that, I'll go on to, we don't have any old business. So what we have is new business. Which the first one is elections of officers. Rick, did you want to say anything about this? I really didn't have anything to say. I'm not sure Mr. Council wants to kick this off or not. I had not been planning to do that. Okay, I can go ahead and kick it off. And the selection of officers, the board president, Gail Mayhood will entertain nominations for the positions of board president and vice president. I will review and vote on the election of officers. The elected president will then take the gavel. The board policy manual states there shall be two officers a president and a vice president who shall be members of the district board of directors selection of officers shall be held at the board of directors meeting in December of each calendar year. For a one year term, elections will be will conform to the applicable provisions of the board policy manual. And with that, I'll turn it over to chair. Okay. And with that, I will entertain nominations for the position of president. Mark. Yes, I appreciate the leadership that President Mayhood has provided over the past year. And I would like to nominate her to continue in that role as president for the coming year. And I would like to second that. Thank you for that confidence is, are there any comments from members of the board on that where we can discuss that members of the public. You know historically it has been our policy that everybody on the board has an opportunity for leadership either in a presidential or vice presidential area and while I appreciate the work that all of our past presidents have done. I think it's important that we allow other folks to assume positions of leadership on the board. And given that I would like to nominate Jamie Ackman or president. Are, is there a second to that. Jamie is that a, I saw a hand. A second. For lack of a second that motion fails. Did you have anything else you wanted to say Jamie I think that's maybe what you were meant with the hand. I was I wanted to thank Bob very much for I am I'm flattered and appreciate the suggested vote of confidence. But given my newness to the board. I'm not comfortable accepting the nomination at this time. I do know that it has been my experience as well as a staff or too many such special district and civic boards that it is typical that the leadership of the board does rotate and so I just wondered if we could have a discussion about why and there are other people on the board besides me and and certainly people like Lois with with significant experience and so if we could just talk about why we are making the decision to do some things so different. Would anybody like to comment. Hi. Yes. Okay. I think one of the issues making this happen is all board members except for Gail are going to be running for election in 2022. I assume or at least they can run and she will not be running and she can devote her time to this district and this isn't unheard of. This was done. I think again in 2014. The same person was board president two years in a row. And it I think it's happened before that Rick had no more about that than I do. But I think it's important that we have a district manager who isn't having to spend her time trying to get elected or his time to get elected to the board. Did you want to comment on any precedents or things like that. I do believe and I think I asked Holly to research it so she probably could give you the exact but there was a time when it is not a precedent for a chair to have two consecutive terms it has happened in the past. Any other comments before I go out to members of the public Bob. I think the fact that it's certainly not unprecedented, but it is something that boards if they're trying to model leadership in the community, I really need to have a mind to. And so while, you know, for me, that kind of policy is a very, very important thing. I do believe that first of all we don't know who's going to run or not who's sitting on the board. And second of all, I think it's also been the case that we've had board presidents that have been up for election in the past. I don't see that as a valid reason at all I think people can, you know, walk and chew gum at the same time. I don't want to minimize the effort that goes into being board president, but I do think it's something that other folks could handle while they're running through election if they choose to do that. From a personal point of view, Gail, I, I think your time as president has been has been very good for the district I think you've done a good job, but but I can't support you being in that role a second time from the point of view nothing personal, just I think we need to rotate positions of leadership. And the only way I can make that clear to the public is by making sure my vote reflects that. I, I appreciate that statement. Any other comment by the members of the board before I go out to members of the public. Okay, so let's see, we have Jim Mosher you've got your hand up. Yes, thank you. Can you hear me. Yes, Jim Mosher from Felton I just want to briefly say I support the gales nomination as president for a second year I appreciate Bob's comments, but I think this isn't unusual situation. And what Lois said I support which is that it would be good to have in this period in which we have so much going on to have the chair be someone who's seed is not up. Thank you. Elaine Presco. Okay, Elaine. I got it. Yeah, of course I do support your another year as president I have just been so impressed by how the meetings have gone this year. And you've been professional and well prepared the meetings have been focused and efficient they haven't been running over time, which is good for everybody and there's more people to participate. And I also think the fact that you're not running again and I trust that you're not because you say you're not. Not only will give you more time, but also, I'm not looking forward to campaign speeches, which can sometimes happen when people are running, and they include their, they promote themselves at the meetings, and it would be nice not to have that. So, so I really support your, your serving as president again. Thank you. Any other comments from the public. Okay. Let me go back and we have a motion on the table and give people an opportunity to comment one more time before I call the motion. Not seeing any Holly. Would you please take the vote. I. Vice President Henry. Yes. Director Ackman. Yes. Director false. Abstain and director Smallie. Yes. That. Thank you very much. Alex me as president. And so next we have the election of the vice president. Additionally, the, the president is least what I've seen in the few years I've been involved has sort of expressed an opinion about who they would like as their vice president. I guess I would like to take this moment to say that. The issue of me being the only person that is in a position and not being up for election in 2022 is one thing, but I think that another issue in my mind is that the district has been going through some really extraordinary times, and I, I know how much work it was actually for Gina and Rick to, to, to train me and get us up to speed so that we're now we're pretty well oiled team. And so I think there's something to be said for continuity. So I just want to express my desire that, that basically we continue with everything as is, with the exception of, in other words, both the vice president being lowest, and that the committee memberships all remain the same with the exception of the Santa Brown Water Association that I would like to have me and Jamie be the representatives with Mark being the, the alternate on that. So, by that sort of by way of explanation. And so with that I would like to nominate Lois for Vice President. Is there a second. I can second that. Is there, are there any comments about that in the board. Same comment. And comment. All right, I, I mean, this is, this is, this is not how we develop leadership at a board level. And the, yeah. So, really runs counter to our history runs counter to I think are best practices in boards like ours. But I can see that it's kind of ready to go. Any other comments from members of. Jamie. I appreciate the nomination for the Santa Margarita groundwater committee and I very much would like to serve on that so I appreciate your support there.   We are in a really unusual position as a board in that one, having four seats up for election in the single years, just an incredibly unusual position to begin to begin with. And having two of five members in appointed positions, such as Mark and I are also creates an unusual dynamic and and so you know I. As much as I really would not want this to continue in the future to be the practice in terms of how we rotate leadership. I do acknowledge that we are in a very unusual position this in this particular cycle. Thank you any other comments. I'd like to go out to the public them and among the attendees. We have a comment. Cynthia. Hi. Can you hear me. Yes. Okay. I, I just want to say, I support the. So what you're suggesting because I think that director Smalley is so good in his position on the engineering side of it, that I would hate to have him be distracted by having a different responsibility. I think that Jamie is so good at communicating. And we need that kind of liaison with the Santa Margarita groundwater agency. So I think those are really good suggestions there. So thank you. Hey, Jim Mosher. If I just want Jim Mosher again, I just want to echo what Cynthia just said. I agree with everything she said and I also agree with Gail that this is a really unusual situation also what Jamie said about this. So I think I think having Lois as vice chair is also a good idea. Thank you. Any other members of the public like to say anything. If not, we'll go back to the board. Bob. Did we look up has there ever been a situation where somebody's either been president or vice president three years in a row. I'm not sure about three years in a row. We can definitely look at that. I know Holly may have some more background on that. I don't remember. Quite unprecedented. Thank you. Any other comments or questions. Okay, so it has been moved. Elaine looks like we have one more comment from the public. Go ahead. I just have a question is has has there ever been a situation where there are four people running or four openings for the board. In past years. Not, I can't answer that tonight but we can get that question. I think there has been but I don't want to speculate. We can get we can get back to an answer on both. President, I know there's been a president twice in a row. I'm not sure there has been four but it doesn't happen often, obviously. Okay. Any other comments from the public. Not. It's been moved and seconded that Lois Henry, the vice president. Can you go ahead and call a roll call vote. President may hood. Hi. Vice president Henry. Yes. Director Ackman. Sorry, yes. Director Fals. Abstain. And director Smalley. Yes. Motion passes. We now go to board member assignments to district committees. And I sort of already said what I haven't. I think that as a board president, I can make suggestions and I already did maybe just for the record, I probably should say them verbally. For the television record. And as I said, everything would stay the same except for our representation on Santa Marta Rita. Bob and Jamie would serve on the administration committee, Lois and Gail on budget and finance. Mark and Lois and engineering Mark and Bob on environmental Lois would continue as the liaison with the laid off oversight committee. And Gail, excuse me and I would be the representatives on Santa Marta Rita groundwater association with Mark serving as the alternate. So that's my suggestion. Is there any discussion of that? If there's no discussion with somebody like to make a motion that we basically do that or I can, I can make the motion that we appoint board committee members as I just described. So a second. Lois, is that a second from you? Yes. Thank you. All right. So we have a motion and a second. Any comments by members of the public about that. And any further comments by members of the board? No. All right. So, Holly, could you take a vote on that? President Mayhood. Hi. As president Henry. Yes. Director Ackman. Yes. Director Falls. Yes. Director Smalley. Yes. Okay. So having finished with that, we move on to public committee members for 2022. As you could see from the memo that Holly said, it's a very impressive group and the district's really fortunate that people with their qualifications and having experienced so relative, relevant to the committee business that they're willing to serve as we're really lucky about that. In the staff memo, Holly listed committee assignments, if all the applicants were assigned their first choice and my own thought is that we should respect the applicants wishes and assign them that way. Yesterday. With Lois's help doing some prodding, Holly received applications from the four current members of the lay doc oversight committee, which Holly posted a supplemental material to the agenda, and also sent copies to the board members. So basically what I'm suggesting here is that we appoint people to the committee that was their first choice and that we also point all four applicants that applied. Two of which were, I think actually were all of them were were essentially re upping on the lay doc oversight committee. And is there any discussion of this. Holly, I just wanted to mention that I, there was an error on the Mike Murphy was also a current member of the committee and I didn't put his asterisk next to his name so that he he he react. All right. So, if, is there any public discussion of this. Well, if that's that's the case what I'm going to do is, I will just make a motion just again to read it into the record. And we also must set the committee memberships to a particular number that corresponds with with those. So, bear with me as I go through and list all these, if you will. So, that I'm making a motion that the appointments of public members to standing committees shall be as follows. Amanda, the Jesus Mark Dawson, and Monica Martinez to administration committee, and to set the committee membership to five members. Jeff Hill and Alessia Kalanowska to budget and finance committee and set the committee membership to four members. Randy and Michael Murphy to engineering and set the committee membership to four members. Elena liang and to environmental committee and set the committee membership to three members. Norman Hagan, Marianne LeBalbo, Jamie Newton and Tony Norton to the laid off oversight committee and set the committee membership to four. Is there a second. I'm making that motion is there a second to that motion. Second. Okay. Any further comments or questions on that from the board. Not seeing any how about from members of the public. No. All right. So, go ahead, Holly, if you will take a roll call vote on that. Hi, Vice President Henry. Yes. Director Ackman. Yes. Director falls. Yes. Director Smalley. Yes. And I want to thank all the people that applied and we look forward to working with you starting in. In January, you'll be hearing from Holly to help set up. The initial meetings and you may also be receiving some materials from her and sort of terms of onboarding committee members as well. But that will go to item 12 D on new business, which is local agency investment fund signature. Change a resolution regarding that. Thank you. I guess this item is requesting the board to adopt a resolution updating. Designations of individuals, deposit or withdrawal district monies invested in the local agency investment fund. Pretty straightforward housekeeping. Any questions or comments by members of the board. I don't see any. Any questions or comments about members of the public. Okay. If there are none, does anybody want to make a motion on this? If not, I will. That I move that we adopt the resolution, which updates the signature authority to include Rick Rogers and Kendra read. For the local agency investment. Any other discussion or comment from the board or from members of the public. If not, can we have a roll call vote. Hi. Vice president Henry. Yes. Director Ackman. Yes. Director falls. Yes. Director Smalley. Yes. Okay. The motion passes. Next we have the discrimination, harassment and retaliation policy for 2022. Yes, thank you. This, this item is to ask the board by motion of the board to adopt the attached resolution. Establishing the district's discrimination, harassment and retaliation prevention policy for 2022. Are there any questions or comments on this policy? How about among public members. In attendance. I don't see any. All right. Would anybody like to make a motion on this? I'll make a motion on this one. I'd like to motion that the. Board approve the. As proposed discrimination, harassment and retaliation policy for 2022. That was presented to us this evening. Sorry for stepping in here, but could the motion specifically approve the resolution? Yes. Yes. Thank you. I didn't have it in front of me to read it. All right. Any comment, more comments by members of the board. Or the public. Then let's go ahead and I don't see any. So, Holly, would you like to take a. We'll call that please. I'm afraid I didn't hear a second. I had second. Oh, I'm sorry. No problem. President Mayhood. Hi. Vice president Henry. Yes. Director Ackman. Yes. Director Falls. Yes. Director Smalley. Yes. Motion passes. And we have now the final item of new business. Revenue rate stabilization. Rick. Thank you, chair. Yes. I'll ask the acting director of finance to present the rate stabilization. Okay. Yes. Okay. Thank you. Thank you. The board. You're muted. Hear me now. Okay. You're my screen. Holly, is she a presenter where she can share a screen. I think it holds, sorry, one moment. Starting to come. Everyone see this? Yes. Okay. Okay. part of the study with the intent of stabilizing the district's variable rate revenue that may be affected by low water sales due to conservation or unusual weather patterns. If the district manager determines that annual water sales in units to date is more than 10 percent below expected year-to-date level based on monthly averages over the previous three years, the district manager will inform the board. So this memo is to inform the board that as of September 2021 usage has dropped below the 10 percent expected year-to-date levels, which would trigger the stabilization rates. The following items will be presented per the revenue stabilization rates policies and procedures. So let me scroll to the next page. So this is the analysis that is provided in the monthly status reports. This shows that the September usage has dropped below the 10 percent trigger rates for the cumulative total. It's at negative 11 percent. These next slides are the adopted resolution that shows, you know, the policies and procedures of the revenue stabilization rates. I'm not going to read through the whole document, but part of it states the items that we need to bring to the board, which is what the next slides will go over. So one of the items is we have to explain the reasoning for the decrease in consumption. We have compiled a list of the main factors and the reasoning for decrease in consumption. One, more customers are back to work compared to last year. The pandemic, the pandemic quarantine had an effect on the population's time spent at home. School is also back in session. Same time last year, schoolwork was remote, which meant, you know, more parents had to be at home with their kids. And a lot more businesses have opened up back, back up since last year. Another factor is California's and the district's drought messaging has more customers conserving water. And another factor is we had some cooler weather compared to last year, which we think would decrease the outdoor water usage. We have reached out to Scott Valley Water District and SoCal Creek Water District to see if they are currently seeing the same type of reductions in consumption and they also have seen similar reductions. I've included some of their finance and status production reports on the next few slides, but I'll just go over, you know, their numbers here. Scott Valley showing their first quarter is down 13% from last fiscal year and their September and October production numbers showed a reduction of 4% and 21% respectively. SoCal Creek Water District is showing a reduction in September and October of 12% and 9% respectively. And their production numbers for September and October are showing a 14% and 16% reduction. So then the next few slides. So this is our San Lorenzo Valley Water production numbers. You'll see overall, compared to last year, it is there is a decrease in our production numbers as well. And then these next few slides are just snippets from Scott Valley and SoCal Creek production numbers. Basically, the percentages that I listed are the result of those reports. So the next item that is to be included to inform the board is six months projection of anticipated water sales. So obviously this is, you know, a fluid event that will need to be updated based on new consumption data we receive in the next few months. Below are two scenarios to determine the assumption. The first one for the last six months of April through September 2021, we have seen an average of a 5% reduction in consumption compared to the prior year. So we are using that 5% reduction as a baseline to project the next six months. And just to note, October is an actual number. Our October numbers came in at the 56,474, but the next November through April are all projected at 5% below last year. And then scenario two is we are going off of the 5% reduction in consumption for March and April, but we are going to assume that winter consumption November through February stays relatively flat as outside water use is not occurring. So we assumed the budgeted numbers for this scenario. Moving on to the next item is the revenue gap project and projection. So we are to present a calculation of the year-to-date revenue gap resulting from the water sales gap along with projected revenue gap based on the six months projection of anticipated water sales. So this first box here shows we have a shortfall of 536,000 year-to-date. And the next box shows the projected water sales based on scenario one, which is from the last slide. And that brings the total revenue gap to 613,000. And we're going to be using that as the basis. We just included scenario two just to provide more information. Then scenario two, if we assume that the water sales are going to be the budgeted amounts, that would leave the revenue gap at 539,000. So this next slide is just a revenue projection with the rate increase, which is not part of our recommendation, but we just wanted to provide for informational purposes. So the next item that is required to be presented to the board is expense reduction measures. So the first expense reduction measures would be from salaries and benefits. There were this year 21-22 budgeted for three full-time employee positions that have been sitting vacant. This provides savings and salaries and benefits expenses that can offset consumption revenue gaps. So we originally showed the total annual budgeted amount and the Q1 portion. And Gail had made a suggestion at the budget and finance committee to also include Q2, since the project manager position is still sitting vacant and as well as the director of finance position. The GI CAD specialist position has been filled in November, but so there's still some additional savings. The savings totaled 181,000 roughly. And then moving on to capital expenditures reductions. These are just a few items that we took from the capital expenditures that we are suggesting to hold off on. The meter replacement one, we're not saying that we're going to do half of the meter replacements, but we are applying for grant funding at the beginning of the year that would match 50% of the replacement. So those reductions come to a total of 466,531, and that can be used to cover part of the revenue gap. And then this slide shows the revenue gap and expense reduction analysis. Scenario one, which is what we are going off of, will require 147,000 from reserves. And then another item that's required to bring to the board is the reserve levels. Our cash balances as of 1031 and our reserve level is 3.6 million. I would all be able to update that number through November by next week once the bank's reconciliation has been completed. And so that covers all of the items that need to be presented to the board. So our recommendation is that the Board of Directors review this memo and discuss the revenue stabilization rates, and by motion of the board, stop the revenue stabilization rates from taking effect pursuant to the policy and approve the district manager's proposed expense reduction measures with the remaining revenue gap to come from reserves as follows. Direct the district manager to implement proposed expense reduction in the amount of 466,531 from salaries and benefits and capital expenditures. And direct the district manager to utilize reserves in the amount of 147,174 to meet the revenue gap totaling 613,705. And with that, we can take any question. Lois, would you like as the chair of the budget and finance committee, would you like to comment first? Yes, I would. But this was discussed at the budget and finance committee. And that committee recommended that the district manager look at ways to decrease the expenses at which he has done. But one of the things that came up at the budget and finance committee was people asking about the stabilization and how long does it last? Does it go away in five years? Because that was a five-year plan in 2017. It does not go away in five years. It remains in force until the board decides that they're going to change it. And that's the only way it gets changed. It has to be done by the board, not in five years, because it is policy. So, Kendra has gone over a lot of the things that I had in mind to talk about. But okay, in January, we will be getting about $380,000 that I believe we will have to use to delete our delinquencies. It's coming from the state. And if Kendra said anything about that, I didn't hear it. And maybe at some point, she will. We will also be getting property tax in December and again in April. And also from that property tax, we had put our long-time delinquencies on the property tax. And we should be getting some of that money, even if people did not pay their property tax that was on that list, because the county teeters, which means they know they're going to get paid eventually. So, they go ahead and give us the money, even though that tax bill has not been paid. So, I guess I really don't have much else to say. I did have a lot. But the recommendation from the committee is what has been proposed, that the district manager reduce costs. As also a member of the committee, I would like to say that I was, one, I was very glad that our district manager did not ask us to come in and implement these rates, given that we've just gone to the public for the surcharge and gratified that he found ways to save in the operating expenses so that we don't have to pick up all of this on reserves. I was also glad that something that happened after our last word review is that me and Kendra went and got the information from Scott's Valley and the city of Santa Cruz to show that they're experiencing the same thing. And I think that that's important because it shows that this is not some sort of glitch or problem, something very specific to us, but is a regional issue. And so I was glad to see that information. I do want to comment on one thing Loa said about these rates. And there is in the statement in the board packet about rescission of these. And I just want to clarify that if the district, if we were to ever implement these, the rates are automatically go away once the district manager reports to the board that the cumulative water consumption or revenues have reached, gone back up. So I'm not sure what Lois was getting at, but at least I got a little bit confused because the implication was that these would go into effect and could just stay in effect. And in fact, the rules under which they were constructed make it very clear that they will automatically stop. We hope that's not what I was saying. Okay, I'm sorry, I misunderstood you. What I was saying is rate stabilization is a policy and it doesn't go away at the end of five years. People were asking that at the last budget and finance meeting, just this go away. It doesn't, it can rate stabilization can only go away if the board chooses to change it. And that has nothing to do with, if we're in rate stabilization, if we're actually having to do that. So what you're saying is that because this already went through the last two, a team process, it stands and doesn't have to be. Yeah, it stands. Yeah, okay. Sorry, I'm glad I asked and clarified that. So anyway, my conclusion is I'm glad we're not implementing these now. I am worried that these decreases in consumption may continue. And so I think we need to be aware that we could very well be revisiting this issue in a couple of months and talking about it again. Mark, would you like to comment? Yes, I have a couple of questions. Part of the cost savings are the postponement of salaries from individuals that we have not had the opportunity to hire yet, specifically the project manager and as listed the director of finance. I think I heard you saying earlier Rick, manager of finance that we're considering now. So we're not canceling either of those positions, correct? That's correct. Okay. To make those appointments. Okay. And the second question I have is we mentioned a grant or potential grant for a portion of the meter replacements. Given all of the encouragement from the state to reduce water usage and the fact that we've met a 10% reduction, are there any grants from state for meeting any water reduction amounts? We're investigating that. We're still looking into that. And you know, definitely that another source of funding that we could use for force account labor would help us reduce O&M operating costs. So, you know, we are definitely concerned with that and looking and staff and our grant writer are constantly out looking for additional funding for those programs. Um, force account labor? Yeah, for our district staff instead of out of our salaries and benefits. So that would lower our expense and staff. If we could, on changing meters, because right now we're changing meters by our own district staff by force account. So if we could get a grant to pay for that labor that would reduce water cost. I see. Okay. All right. Those are my questions. Thank you. Jamie. Thanks. Yeah, I so agree that, you know, this is a needed move because it would be at a wrong time to implement the rent stabilization policy. So I appreciate your thoughtfulness there. But I guess, and perhaps I missed this Kendra in the discussion, but in understanding sort of the usage patterns, we are seeing the significant drop. You're suggesting that it may be related to reduction in usage because people have returned to work, students have returned to work. So is there a mechanism, I mean, because that seems like an unusual spike. And if we're returning to more normal patterns, you know, perhaps in the future we should consider like a smoothing mechanism in the rent stabilization policy that addresses unusual spikes in usage because it, you know, if I guess, am I understanding that that we're returning to a more normal pattern, although we're seeing reduction in consumption because of conservation. Now, is that what I was understanding? Yes, that is correct. We Yeah, now that more people because based on last year, more people were at home working from home, school was in school is remote. So all of the kids were at home. Now school is back in session this year. More people are back to work. So there's going to be less water usage during that time. Right. Does that answer your question? Well, it does. It's just that I guess what I what was interesting to me is this idea that we would, because we saw an unusual, I'm guessing, increase in water. Is that accurate that there must have been a commensurate increase in water consumption over and above normal patterns to accommodate for the fact that people were at home using more water in the past year. And so that that's what I'm getting at. Gotcha. Rick, this might be about how we were talking about last year, the spike in usage. Maybe that has something to play into it. Well, we're looking into there was some unusual spikes during CZU fire. And we're looking into how that affects the rate stabilization. We just started doing a deeper analysis and really not quite ready to make a determination. But yes, we did have the unusual spikes in consumption during CZU fire. But not just generally what during throughout the pandemic? We did have some increase during COVID. There was noticeable increases in consumption for that time of year during COVID when everybody was home. We kind of thought that we would see a decrease, but no, we actually saw an uptick in consumption. Okay. So all of this is where where I'm going is that what we saw was unusual usage patterns last year. Now we're seeing a return to more normal patterns on top of increasing drought conditions that are requiring conservation. And so I just think that we should be mindful as part of the revenue stabilization policy that if we don't want to, I guess I'm having a hard time explaining what I'm thinking, but we don't want to penalize people for returning to normal usage patterns if the usage the year prior was abnormally high. And so then going through a revenue stabilization to address that, there may be other mechanisms that we can use and looking at some kind of a smoothing in terms of the revenue to determine when we implement the revenue stabilization policy might be helpful. It's something that we did as part of rate setting when I worked for private utility when we were considering proposing rate increases. And I'd be happy to talk more with you offline if that would be useful. No problem. Let me just say, Jamie, that it is intrinsically smoothed because we take the average over three years. And so we don't respond to anomalous spikes. Also, if you look at the fiscal year 2021, there's some spikes in July and August of increased usage, which probably are people that left their sprinklers running on their roots during the fire. But if you look at the other months of that year, September was lower. October was higher than the previous year. November was lower. December was lower. January was a little higher, et cetera. In other words, it was not that different. Last year was not particularly different, except for those two months of July and August. So I think what I would say is we are smoothing, that we're not responding to any unusual spikes. I think really what we're seeing now is in this year is partly a response to the drought messaging. It's partly a response to what Kendra said that people are going back to a more normal pattern with kids in school. But another one I think that can't be overstated is we had a very cool summer. And we sell a lot of our water in the summer for outdoor use. And when the summer is cool, people don't irrigate as much. And I think that's another thing that sent us this way. Also note that the rates that what triggers this is the cumulative use for the year. It's not a single month or two months. It's the cumulative use. So again, there's lots of things in here that kind of smooth our response to this. Thanks, Gail. That was really helpful. The other thing that occurs to me as you're talking is that we also have fewer households that we have been serving over the course of the last year. Yeah, that's I think I suspect that's a small part of it. And that was why I, you know, Rick, you can say how many fewer households we have because of destruction by the fire. But I think that was why it was really important to get information from the city of Santa Cruz Water Department and Scott's Valley where they did did not have any loss of houses to the fire. And yet they're seeing very similar changes both in direction and in scale. Right. I think we're down about what we started after the fire approximately 125 plus or minus Kendra. Yeah, this is and a few have trickled back. And you know, we're we're revisiting all of this as we move forward because you know, obviously, this really concerns the district moving ahead. And we will monitor this very closely and you know, take a real detailed look at our consumption. Bob, your turn. Thank you. I have a series of questions as you probably were anticipating. Yes, indeed. So just to make sure I'm clear on the prop 218 process from 2017. Because typically the rates are only set for five years. What I think I heard is that the rate stabilization was part of prop 218 in 2017. But that it has no time limit on whereas the rates for our water sales had a five year time period. Do I understand that correctly? Yeah, that is okay. And Gina, you're concurring. You're not, Gina, are you nodding your head? Yeah, I concur. There's no, no, no, and okay. And so if we were to take action to not implement this as would normally be the case, we're not, we're not stopping that surcharge at all. We're merely postponing it. That is, at some point in the future, if conditions warranted, it would kick in again. Yeah, you got it. Okay. Yeah, I think that's a fair summary. Yeah, but just want to make sure it's clear in my mind and maybe for anybody else that was listening, the prop 218 process, as you know, is a weird and wonderful thing and it gets confusing sometimes. On the topic of houses that were lost during the CZU fire, were those sort of backed out of the calculations or did we not go to that level of refinement? The calculations, the anticipated water sales? Or even the historical for the last, yeah, excuse me, yes, for the, for the looking forward, yes. Is it just so small that we're not worried about it? It's pretty small. I believe the budgeted how the prior director of finance budgeted, she factored in the missing houses and then the did like a 2% reduction for fiscal year 2122 for the budgeted numbers, but it is a pretty small amount. I mean, if we look at the average, it's probably roughly around 400 500 units of water. Yeah, exactly. Which percentage wise is not really big. Okay. On the usage, I'm anticipating that the students that might not be at home might be going to school and since we charge a flat rate for usage, it's probably not 100%, but there's at least a major portion that's going to be offset with the school bill going up, whereas the household bills might be going down at usage wise. I mean, now it's not 100% because not every student in the San Lorenzo I water district goes to public schools, but it's going to be a fair percentage, 80 85%, something like that. So we should expect that to move from one category to another. People that are going to work, if they're not working in San Lorenzo I water district, of course they would go to some other area and benefit their sales. Right. So that'd be Santa Cruz or over the hill or something like that. So we probably aren't looking at sort of maybe as much of a decrease because of students going back to school, but that actually some of that will go into the school category. We haven't looked at those numbers to make that determination. That's definitely possible though. Well, I mean, I think at some level, of course now the school's plumbing may be more efficient than some of the homes in terms of water per flush or water per drink or what have you, but at least some portion of that is going to go into the school category. On the expenses, it sounds like the operating expenses really aren't being reduced so much is because we hadn't filled the position, we kind of have a windfall at this point. I mean, it's not really, we've made no changes in how we're actually operating the district. And once these positions are hired, that operating expense is going to go back up. It's just, I mean, I hate to put it this way, but you kind of lucked out or we lucked out on not having those positions filled. There's a salary savings there, yes. But other than that, we're making no changes in our operating expense profile. And certainly though, as Mark was saying, no reductions in headcount. So we expect those numbers to pop right back up once those positions are filled. Correct? We did do reduction in capital and machinery equipment. Well, but that's where I get a little bit, you know, in the finance guy. That makes me a little uncomfortable because what we're doing is we're conflating operating with capital. And that's usually not a good thing to do. So if I look at the P&L that's going to result out of this, we're going to be down on our operating margin substantially. Not as much as would have been if all three positions had been filled, but the operating margin is going to be down. So what we're doing there is we're actually not doing anything at an operating margin level. We're then pulling the rest of the quote savings out of the operating margin, but that's really a different category that that isn't operating expenses. So what you're really doing is at the end of the year, you're saying, well, our reserve level is going to be at this at this point, even though we're tapping in some of the reserves, but our operating expenses really aren't changing. And it's just that our operating margin is going to go way, way down. And of course, the next question I have is, well, what happens in May and June? Hopefully by then, or I'm expecting that you guys will have all those positions filled by then. And so we're going to be looking at those operating expenses kicking in. And if we still are going to be looking at the same kind of downtrend, you know, that's a concern. I mean, if we look at 2014-2015 routes, people's consumption went down 25%. And it really didn't come back, not substantially. And so if we're looking here again at going down another 10 or 15% and it not coming back, I think we would need to do at least some what if scenario calculations and present a updated P&L to the board so we can really see what we're getting into here. Because if we're looking at that kind of a reduction in revenue, operating expenses stay the same. And in fact, under the current budget projections, they're going to go up 6.8% a year, which means just to stay even under the old assumptions, we have to raise rates almost 7% a year, which means you're doubling rates every 10 years. If we now add this scenario where the potential of this being permanently reduced, that's something I think that maybe the budget committee might want to take a look at. Because I think this is really substantial. Anyway, my concern here is we're sort of conflating two different categories of numbers. And the finance guy and he says, you can't do that. That's not a good thing to do. However, what I also heard, and maybe this is the message that I want to make sure I'm feeding back to you to make sure I'm getting it, is we're effectively taking $430,000 out of reserves. That is, we're going to take a $430,000 hit to operating margin. And that's the combination of the capital expenses that you're deferring and the $150,000 more or less you're taking out of reserves. So that's roughly $430. What I heard Lois say is that between the 380 we expect to get from the state for unpaid bills last year and $50,000 of property tax money that went into the property tax role, we get $430,000 back, which basically refreshes our operating margins, refreshes therefore our capital operating capital available. And so we're even at this point. Is that a fair summary of where we think we're at? I'm not going to speak for Lois. That's Lois's. Well, no, no, this is for you and Kendra because I mean, I think this is all presented at the budget committee. So I'm assuming these numbers are already been gone through several times. I'm not sure I agree with that. No. Okay. Where did I go wrong? You know, I don't have all that in front of me, Bob, and I'm not going to critique that here, but I do believe a lot those funds are already considered in revenue. No. So those are already in the operating budget, the 380 and the $50,000. I'm going to call, I'm going to end this discussion on my end and turn it back over to the chair. I'm not going to go back and forth and try to play gotcha here, Bob. I'm not playing gotcha. I'm trying to figure out if we can say to the public that we have a neutral situation here. That would be a really good thing. Does anybody want me to talk or not? Yeah, I was going to say, Lois, if you want to please do. This is now the time to do it. No. Okay. So my understanding is we're going to get $380,000 from the state that we, and I don't know the answer to this. Kendra does. If that money is applied directly to delinquent accounts, but even if it is, it's money we're going to get that we didn't have before. And the other thing was delinquent bills that were very old that we put on the property tax rolls to collect. And that the county should be, I don't know what that, what the number was. I don't remember. I don't know. So don't ask. But we should start getting some of that money right away. It doesn't matter if the people haven't paid their property tax. Right. And that's all I was saying. I don't know a number on that period. But when I'm trying to get it all, I mean, we get half of it in December and maybe the other half in April. But I think that's great because I think the number that Kendra said that was put into the property tax was roughly $50,000. And with a $380,000, that takes us to, I mean, again, I'm not great at simple math, but that's $430,000. So unless we have already budgeted for that $380,000 and that $50,000 in our original budget that we passed last year, Kendra, do you know if we've done that already? I don't know off the top of my head. I had to look into that if it was budgeted or not. I mean, I would be surprised if it was because I don't think there was any certainty around these, you know, the state funding that. And I'm not sure that we were really all that up to speed on the property tax money that we might get at that time. But to me, if we didn't, then that means we have a net neutral situation here, which would allow me to support it because otherwise I'm sitting there going, well, we're taking another $430,000 out of our operating margin, but we're not really making any changes to our operating expenses. That would be a very difficult vote for me. So I believe this is a neutral situation. Bob, I'd like to go to Mark now. He's had a sand up for a while. I'll come back to you after that, if you'd like.  I appreciate Bob's question on, is this a revenue neutral aspect if we were not recognizing those funds recovery from the county on property tax rules? But I don't think we need to delve into that any further this evening. I would like to recommend a request between Rick and Kendra, bring that back to our next meeting, because I can see that that's significant to at least Bob. And I'm curious about that also. So I'd like to do that. But I don't think that that forestalls us voting on this motion this evening. And nor was I suggesting that, Mark, actually. From my point of view, based on the information we have now, and of course, you know, this is what we have now, it looks to me like it is a revenue neutral situation. And hopefully that'll be confirmed when we come back. Okay, I think I think that was it. You know, last thing is just, you know, what happens in May and June?  Yeah, normal. I was looking forward to that. I thought October was great. And now here we are. But yeah, we need to be looking ahead in this and not only just the rest of this year, but also what happens to our forecasts going forward on the multi-year budgeting and the projections that Stephanie had done going out to 2026 to the end of the fire recovery.  And then of course, what that means for rate increases if we're going to keep operating expenses going up that effectively doubling every 10 years. So longer term question, longer term process, but I would hope that's something that the Budget and Finance Committee would be taking a deep dive into, especially given that this year is the last year for our 2017 rate increase. Lois? I actually kind of a couple of times said maybe Kendra could answer the question I had about the money coming from the state, the $380,000 that is because of our delinquencies. So does that money reduce the accounts that made up that dollar amount because it doesn't matter, either way, it's coming to the district and I would like to have an answer on that. Yes, any money we receive for the COVID rearage program would be applied directly to the customer's account. Okay, but regardless, we're going to get the month. It's going to go towards the accounts as if they got paid, right? Yeah, okay. Yeah, they expect to have funds dispersed no later than January 31. Right. Okay, one more quick question, Bob, that I want to Yeah, just a comment, which is for that money that comes in from the state, because it's a one-time thing, it probably needs to be accounted for separately as a line item on the P&L or at least there's a note associated with the line that it goes into so that there's transparency around where the number comes from, because it's not a recurring thing we're going to get over and over again every year. Thank you. Finance guy, sorry. Okay, so I think that unless somebody else, Jamie, you haven't said anything, I think we should get to the question at hand here, which is basically that we are telling the district manager not to invoke revenue stabilization rates, right? I mean, that's the fundamental thing we're trying to do tonight. And one of these issues that Bob is bringing up, while I agree they're important, they're going to evolve over the next few months and we should probably revisit them both at the budget and finance and at the district itself. So we have a kind of a complicated recommendation in front of us and I just have one question about it before I try to parse it or whatever is that it says here that the direct the district manager to utilize reserves in the amount of and a very specific number 147,174 dollars to meet the revenue gap totaling 613705. I mean, we don't actually know what the revenue gap is going to be, right? I mean, it's an estimated revenue gap. And what we do know is the savings that 466.531 that we are directing the district manager to make in terms of basically as Bob pointed out salary that we've just not spent, which is a bit of a windfall plus the other things and capital expenditures. So it seems to me that what we're really doing is we're directing the district manager to do those 466.531 reductions. But are we really telling him to use an exact amount of the reserves? I'm clear. So Gina, maybe you can answer that for me. Can I make a suggestion? Yeah. Why don't we keep it simple? Why don't we say that we're directing the district manager to not implement the rate stabilization and to bring back a, I mean, it's December bring back a mid-year budget adjustment. And that way it'll give everybody the opportunity to put this into something that the board could vote on as a mid-year budget amendment, which I think would be appropriate given the magnitude of what we're looking at. I'm loath to do that because I think, I mean, I understand what's motivating that, but I don't really want to open to create an open ended discussion and mid-year budget debate. I think that we need to direct Rick to do these expense reductions or the allocations. But Gina, could you answer my question? I may actually have to defer a little bit to the staff on this one because Or Kendra. Yeah. I think the question becomes, is this a modification to the existing budget or to what extent is it? So if it's, to the extent these adjustments that are proposed don't really require deviations from the budget for whatever reason, then you don't need that level of detail. But if you're directing the district manager to literally take a dollar amount out of the reserves, sort of in contravention of the present budget, it may require direction to that effect. You don't have to do that. That still doesn't answer my question of how we know exactly what that number is going to be at this point. Or are we just saying that we want to, that we're essentially approving that much based on our estimates so far? And let me see if I can kind of put this to Rick and Kendra again in a slightly different way. But are you actually planning to take that exact dollar amount out of reserve accounts and move it over into another account following the board's direction? So we know that the year to date revenue gap is the 536,000, I think it was. Let me scroll to that page. Yeah, the 536,000. So yeah, I see Gail's point in the recommendation that the 613,705 is actually the estimated, the anticipated water sales. But we do know that the year to date revenue gap is the 536,560. So I guess we could modify it from there. But are we conforming with the rate stabilization policy? Or is that an issue here? Well, the only thing the board really needs to do under the rate stabilization policy if the board doesn't want these rates to take effect is to pass a motion stopping it from taking effect. And then the level of detail regarding the other elements may not be necessary. Unless there's actually a change being made to the approved budget amounts for which are essentially appropriations of the board. So as I understand it, the only real change we're saying about the budget is on those capital equipment things because the other money on the salaries saved is essentially a windfall because we didn't hire the people. Correct. Correct. I would have no problem going the other route because while I'm moving ahead on making those purchases, we won't anyhow. So it would give us some additional time. I think Lois wants to say something here.  Well, the reason that particular amount was named to be as part of what's going to come out of reserves is because it was based on scenario one. Correct. And that's why it came up with that number. It was just based on scenario one, which is basically an estimate. It's not written in stone, but that's why that was amountless chosen. Well, I think we understand that. But the question is whether we want to be that level of specificity. And I guess I think we don't. Mark, I see you shaking your head. There's no reason to. I think the motion we want in front of us today is the primary motion is that we want to direct the district manager to not implement the revenue stabilization rates. Period. Can we just all agree to that? Is that an okay, like let me move that, that we direct the district manager to not implement rate stabilization rates at this time. Period. Is that a resolution? Does it have to be a resolution or going to be a motion? I think it's just a motion. Just a motion. That's just a motion. Second. No resolution. Second. Is there a second? We have a second. Absolutely. Okay. Any discussion on this? Motion. Has there been public comment on it? I just want to make sure that members of the board didn't want to, since I kind of rushed that through the board. Okay. How about members of the public any comments about that? I don't see any there. So going back to the board, any other comments? If not, all right. I'll ask Polly to take a roll call, but please. President Mayhood. Hi. Vice President Henry. Yes. Director Ackman. I'm just clarifying we're just, all that we're doing is saying we're not going to implement the rent stabilization rate stabilization. At this time. At this time. Got it. Yes. My vote is yes. Director Falls. Yes. Director Smalley. Yes. Okay. Kendra, is there anything else that you feel like you need guidance from the board in terms of maybe taking this back in a month or so to the first budget and finance committee? No, I think I've got everything I need, Rick. Is there anything? No, I think we can also we'll review the meeting again and we'll make sure that we get detailed of our discussion and bring that back to the finance committee for starters. Okay. Good. That sounds like a good idea. All right. With that, let's see, we move to the consent agenda. Is there anything, does any member of the board like, would like to pull anything from the consent agenda? Would anybody in the public like to comment or pull anything from the consent agenda? Seeing none. Okay. Then we move to district reports. Any comments by members of the board on that? Bob? Just a couple of comments in the finance area. I think it would be helpful, my opinion, if in some of the monthly status reports and summary information, if we were to break out the CZU fire surcharge separately, I know in the detailed tables, excuse me, detailed tables, easy to say that, it's broken out, but in the summary information and status reports, it's not always been broken out. And I think it would give a more transparent view of what our real revenue situation is, if that were the case, because you know, I think the last couple reports, you know, we were saying, well, revenues are up. Well, but they really aren't based on the conversation that we've just had here. I think they're up artificially because of the CZU fire. And that needs to be taken out of that conversation. So just a suggestion on going forward on the reports. The other thing I wanted to make sure I was clear about, and this either for Rick or Kendra, is it time to celebrate? Did we pay off the refunding, the refunding loan that loaned from the late 90s? Yes, that last payment was on due September 1. Yay, fantastic. I missed it earlier, but that's really great. So we have that one off the books. That's great. That was a long time, definitely a long time coming. And thank you for the recovery, surcharge, use of funds table. I think that's going to be a fabulous tool for the board and hopefully for staff. But certainly for me, it was a very, very informative tool. Thank you for putting that together. It's great. Thank you. All right. Any other questions? Mark? Yes, on two of the reports. First on the environmental report, on PDF page 92. Carly, you mentioned the conjunctive use plan. Could you give a one minute summary of what we talked about at the committee meeting yesterday, since one of the, since Director Fultz said yes, we should bring that back to the board so that the board's aware of it. Sure, no problem. So at yesterday's environmental committee meeting, we brought back the conjunctive use comments that we received on the ISM&D. Unfortunately, we weren't able to have Vren Khan, our consultant, prepare the updated project description, the alternatives and time for this meeting. So we're planning to bring back a comprehensive package to the environmental committee in January. And from there, we'll have, or be able to have the committee give directions to the board on the conjunctive use plan. Okay. Thank you. My other questions are on the operations department report. I see on page 154, there's mention of a health department inspection that was done in, I believe it was November. Were there any significant corrective actions that come out from that? No, there was no significant ones. There's a couple of small deficiencies and that was it. Okay. All right. Good. And then, is there anything in the operations report that summarizes the badger meter replacements as to where we are status-wise in that? Or I don't need to know the details right now of how many we've done. But if it's not in the monthly, could we start to add that? Sure can. I think that's part of the district manager's goals for replacements of so many on an annual basis. Mark, I have a question. Kendra, is that in your report in finance, meter changes? No. Okay. I thought maybe it was. I have seen one where we've done meter replacements for ones that have been, that have failed or it's, you know, one here and three others there, but it's not the more global badger meter replacements aspects that we're attempting to do over the next, over the five-year period. Not a problem. I can add that to my report. Okay. Thank you. Okay. That's all my questions. Thanks. Any other questions from members of the board about reports? If not, how about members of the public? Seeing none, hearing none? Then I think we are ready to adjourn if there's no objections. I will wave goodnight to all of you. Thank you all. Bye, everyone. Okay. Thanks.


What's up? I just want to give you a quick heads up when I'm talking in this clip My voice is distorted So I want to make sure you're able to adjust the volume for your ears or whatever make sure they don't hurt But the conversation is too good for you not to hear it So we went ahead and made the clip anyway This is from episode four of no labels necessary the future episodes are just fine audio wise check this out The information is too good to miss Couple of interesting things going on in the marketplace, but there's this clip That uh I'll just play it. I'll just play it Trinidad James on drink champs. Oh, no, I got him tick tock muted. Hold up.  Yeah, and ti had a hustle game. He's over it For this me out of my own 40 bands, you know, I'm saying I'm a stylist So Yo, he said that burn his soul breath Yo, that's the game And that was a growing pain he had to go through as a new because I'll go everything was yeah But I know that especially hurt like you say he's a stylist I used to go to a shop at a store He used to work at okay or whatever and um and I didn't know he was a stylist But you know, he's always dressed like you know like that like that basically So I know he's really looking at it like brah But we sell your clothing brand, I know exactly how much it costs not much You know, that's the breakdown for those who don't get it, right, you know charging the label Yeah, especially to when you look at like man, you ain't paying for it Of course, I'm not the hit your label for it. I actually have a story that goes with it part like I was This is a little back when I was like in turning for this publicist and I remember at the time We had this client there just got a juicy J feature And so I just remember the guy was like yeah, I wanted for the video.  So I'm like, bro. How much do you know juicy J charge for like this feature? He's a well, it's only 15k for the feature. I'm like damn. It's not bad. That's to me I felt like it was kind of like low for a juicy J However We wanted for the video so it's like another like 10 to 15k for his video appearance Which I'm like, okay fair. It's like an appearance for you like and he requires at least a $10,000 wardrobe budget And that's not first look I never heard that before I was like man So artists can make other artists pay for the clothes they wear in the video and then my mentor's like, yeah They got enough leverage in a big enough. He's like because it's like One I have an image I have to maintain So I'm not about to you know have my image be my image be turned because you ain't got the budget to make sure Yeah, it was make sure I look nice and I look a certain way and then to which Kind of broke their four for off me with ours.  Make this a part of your production budget And leave that that and I've seen different iterations of that I have ours that do I know ours now that do it even at smaller levels like I get it I was the artist I remember his name. He's like this He was like a Country artist like if if you found a country artist with it. Yes, bro. Yes, I think I I Remember When I lived Over like in the vinyns area. I saw billboard.  It was hot at the time God that guy that guy in that video that was I ain't seen juicy in a minute Country artist the whole thing looked off, but so I know exactly what you're talking about If you've gotten any value from our content so far I want you to stop and think about how much value is that worth in money? I'm talking about the same content channel that's been checked out by people like Lil Nas X 24k golden ugly guy Lil B, we don't want to charge you anything for this information All we need is a simple donation in the form of hitting that subscribe button. So please click it It's funny such two things right like you said One you got the labels. I mean like a lot of artists are kind of looking at like, yeah Well, I'm charging a label. I'm not really charging you even though. They know it is charging you at the end of the day Justify it as if that's what they're doing because I mean I've seen artists almost like knowingly Do that to each other where they're kind of like cool about it. Yeah, I Even think I remember future had a situation like this. I don't know something like somebody didn't charge somebody Madness time talking about how she got future Her what got future for her album and I remember DJ academic made the point that like it's Megan future She probably was like, yeah, we're just gonna tack the label because it's car sharing money Which but yeah, I don't mess with their leg when they look at it that way On the other end while you said maintain an image. I don't know if you remember But thought about this remember we had a situation a song that we blew up Oh music video is about to go crazy about to draw the music video and then that music video is gonna take everything to a whole another level however First of all it took a while for the music video to get recorded When the music video was recorded time to come out the artist says I don't like how it's just I don't like the way I look we need to reshoot this thing Because the politics of it and see this is why I try to explain to people for everybody just think oh man These people had a lot of money. It was so it's so easy to blow a song Oh, I'm when you experience all the back-end nuances that slow some shit down It's like it's so much like all right songs already popping So it's not even keeping it from popping on level one, but it would that one had about four more notches to go Yeah, right for real, but Music video doesn't come out. All right Now they want to reshoot because she ain't well the person didn't like how they were dressed, right? And so then basically music video never comes out like managers kind of go Actually the manager in the record label of the one of the artists go ahead ahead and things just kind of sour So it's kind of like well We just got let it rock as it is the music video and the rest of the artist support never comes and that was kind of We are two years later. I'm wondering what could have been What could have been what could have been? Oh, you were gonna have to a year on that level. Yeah That was the first round up Five months in business at that point.  There's a lot of different campaigns and sometimes you work more sometimes you work less, right? You we got one aspect of it and sometimes you're working a whole campaign We were the only ones touching that thing. Yeah, period going crazy. Nobody Especially when I went into label labels the major labels. Oh man, that's Music marketers out there, man. When you dealing with some people at labels Just know that they're gonna take some credit for some of the things that's going on Yeah, cuz their job depends on they're trying to get the promotion. I get it. I can't even be mad at it That's why you gotta you gotta record the calls and get government names And get them invoices you tell me I didn't work with Curtis People don't even know his name is Curtis. How do I know that? How do I know why do I have his high school email? I got his yeah, and in his social You know, just protect yourself protect yourself out here Just know that you put in the work you put in but you know, that's part of the game on a label side They got to get the promotion and they gotta whenever hit rock Happens not only is money being made for that artist It's a lot of promotions and shifting that's going on in the industry on the back of that artist just to you know be real Which all music marketers and people who are you know a professional swing got to that side of things and artists the beauty On your side is when things open up that window. Everybody is rallying around you because they try to They try to cock Yeah cat as much as they can I leave it at that and everybody a paper what you need because it was last point with this Oh, that's why I got with this is that It also explains how artists burn through a budget so fast sometimes you know No, you're kind of break down musical things you black man, there's no way studio time costs that much There's no way whatever whatever costs him much. It's like man He could have got charged 40,000 dollars for Wardrobe video Yeah, I wanted he said it like he didn't know in real time either.  Oh, you always 200 K's my life 200 K what? What hey, that's that. Oh, yeah, we handle it. No, what is y'all handle? Like tip say he good GD said they good, but why are they good? Let me see the itemizations before they travel we raise their good time because we might not be at we might not be To do this for real. I also fell into he said I gave them free verses like at that time But a ti and GD verse is probably way more important. Hey, at least around that you know Facts facts and I can respect the freemium model You get the version free and then we charge your other way, right? It's just like these apps out here I love it. I love it. Get it how you live.  I'll see you in the next clip