City Council — September 1, 2026

Mayor, the City Council met in closed session to discuss the one item of significant exposure litigation listed on the agenda. Council gave direction to staff but there was no reportable action taken. All right. Very good, so open session. Roll call.

Thank you, Mayor. City of Lompoc, blessings on you. Appreciate, Lord, this council and thank you for the members I'm so appreciative of the workers and city manager. And all of you that make this city operate, I'm especially thankful to our Lompoc Police Department and Fire Department. Man there was a lot of sirens going on today. Did anybody hear that? So did anybody pray and think maybe somebody might be in trouble? I did.

Because when you hear that, that means somebody's in trouble one way or the other. But we get to come together here, and we get to join our hearts together because we really want the best outcome for Lompoc. Is that a true statement? You can nod your head and say yes. That's a true statement. So would you join with me? Father, you're the creator. You created us. You create everything when you give us this earth And you give us responsibility to take care of it. You gave us Lompoc, you give us leaders but we can't do anything without your guidance. We can't do a thing and so we're asking for you to join with us tonight to give us that wisdom, to give us that insight Lord that you would bless our leaders, that you would give us the best outcome for the city And for our guests that are visiting us here, we pray for their city and we pray for the Central Coast.

Thank you for the opportunity Lord that we can still come up and invite you to our meetings. Lord, You're so gracious and You're so kind. You are loving, patient And though at times, Father, we do miss that opportunity to be loving and patient. But I'm asking tonight for your presence to be here. We ask Lord that your kingdom come, your will be done here in Lompoc.

And it fathered that Lompoc will be a stellar city. It'll be a model city. We thank you Lord that you have given us the best leadership that we can get the best outcome. Ask Lord tonight as we are convened here, we ask Lord for your holy direction that you illuminate our hearts and our minds so that we can see Lord not just in our immediate own personal concern but that you can see the future. You know what's going to happen tomorrow. You know it's gonna happen next week And so we ask the Lord that you would bless and minister to us all. May we walk in harmony, may we walk in peace and unity of your spirit. We ask all these things, Lord, in your name.

Amen.

Thank you, Pastor Ron. City Manager report.

Thank you Mayor.

Libraries call for local artists and please note that the local artists have an opportunity for their work to be displayed at the Library. The library is calling for the Central Coast artists to submit work samples to be considered an exhibit for the Grossman Gallery. Artists must provide a represented body of work, six exhibit pieces and they're due by Thursday September 17th.

They must be 18 and selected will be displayed later once they went at the Grossman Gallery in the village Parks and Rec, I'm excited to share that the Parks and Rec is hosting a free senior prom this year. Local seniors age 50 at the Dick Dewey Center will be on Saturdays September 26th from 5-730. It's a free event, music, dancing, social hour, DJ refreshments.

opportunity here for the creative drama program. There will be four sessions for that. That will be for kids 6-12 and they need to sign up I'd like to share that the building division is hosting a workshop roundtable. That'll be tomorrow from September 2nd, 1130 to 130 here in the chamber. Developers, builders, contractors are invited to come and make discussions and ideas of what we can do to make it more efficient. And our building official's real good about that conversation so come on out and give your input.

I know there was questions about SHARPS and what we can do with those. There is a free MedProject SHARPS mail-in program that was passed on SB 212, which went into effect in 2018. SHARPs users must be provided with free and convenient disposal options to keep our community environment safe. MedProject program allows for such disposal Community members can request a mail-in packet, or they can talk to the call center.

And that would be all under the MED project. I know we had talked earlier about presentation for the flock. We were planning on doing that October 6th. We have a little staffing issue for the next one. I know you talked about that. So we are planning on doing that and bring that back. Also wanted to let the council know that the center ambient mic is currently turned off. And lastly, I'd like to remind everybody Monday will be Labor Day and trash and recycling will be delayed one day but I hope everybody has a safe and restful holiday and that's all I have.

So we don't have a local sharps disposal? You have to call to get a mail package or... Is that what I got from your

I don't know all the options, but I just found this one so I thought I'd share it with anybody that's trying to get rid of their sharps. So we can keep looking into it if I have more information. I can come back.

Yeah because I know more and more people I talk about they're like hey what am I supposed to do these needles? So I don t understand why the system itself stopped accepting them in a lot of ways.

Yeah, I can look into that. I know there's some requirements that if you're issuing them that you have to take them back but let me get more information. Just wanted to share the information I had.

And I was told on R Street that they would take him back but you had to be a client on R Street before they would take him back so maybe we can drill down a little bit more on that. But thank you for what you found. Quick questions on a couple of the parks. We've had some water issues. We've done a bunch to improve it between the three major parks that were, well I'll call them failing. With River Beatty and

River Bend

what do you got going on?

Well some of the parks if they have city water we can manually turn them on like Beatty. River Bend Park has been a big challenge because it's And when the well goes out, there's no other water for us to manually turn on. So we've been trying to do a lot of creative things like we're getting ready for AYSO. We've been using water trucks. We got a backup generator on the well and found that the well was actually having issues. We did get it up and running.

We also have been trying to utilize a big sprinkler head that we have on a reel system that was at the corporate yard, and that was actually a pretty good alternative to applying it down manually using the fire hydrant. We'll have to hook a meter to it but it gives us an opportunity to get the fields ready for AYSO tournaments that are coming up.

The River Park is on

It's back up and running. There's a couple sections that we're fixing the valves, but then it's back up and running so we have to alternate when we put water in the lake and then we switch to irrigation so it's back up.

Have you been able to seal the lake yet or is it still leaking?

Then the lake, we're monitoring it and filling as needed. So we'll see that process and see how

I

just have a couple of items that I want to make sure don't get lost. At the last meeting, I believe we talked about having safe RV parking addressed so if we could And the Riverbed MOU, I believe Councilman Ball wanted that. Yeah we

actually signed it so it's in effect we have an agreement with the county sheriff's department and the city so we did sign it

So maybe the council could get a copy so we can have some awareness.

Sure, and we can do an update on that. I know we did some drone footage trying to assess what we had. I was pretty happy we didn't have... I think we had one, maybe two encampments with a lot of trash in there that we're going to go and clean up but it looks pretty good. I actually saw the police department out there today when we did the video footage of the drones.

We're actively on it.

246 Bridge, right kind of below the bridge there. You still have a City of Lompoc garbage can

down there so... There's one there and there's one over on the other side where it crosses just the river from the campground area and then there's a couple of them that are further down so like there might have been three but there's A lot of trash that we still need to pick up and a lot of them We were out there today talking to him

How they drugged that garbage can down there I don't know but maybe they're waiting for curbside pickup. It ain't gonna happen though right? I know those aren't cheap, so maybe somebody can go down and grab that garbage can right there. I think it's Lompoc. It might be somebody else's. Council Member Ball?

I'm going to be super short and maybe a little bit silly. I was raised going to garage sales. We charge $3 for a garage sale permit. Do a lot of people get their permit? And what happens when somebody doesn't get their permit? Do we enforce anything or is...I mean $3 is a good deal. Inflation hasn't hit that yet, so you get your permit.

Sorry, I thought it had some notes on the Garage Sales Act coming up. I believe it is $3. Yeah, we get a lot of participation. A lot of people come out and get their permits, yeah?

It's not very expensive. Maybe in the future you might remind us about that process. It's really easy and what's allowed under that specific regulation in the future. I think that'd be helpful. I know a lot of people that love going to garage sales or hosting garage sales. There are a few people that I've met that seem to have a garage sale every week And a lot to sell, obviously. But I'm curious about some of those details in the future.

You used to

only

allow two a year, right? One time. Yeah. That was your professional business, right?

Yeah it is $3 and it's good for three consecutive days. Encourage people to get those and obtain those through the Treasury Department. Thank you.

Seeing nobody else, we'll move on to public comment on consent calendar. Consent calendar, we have three items on consent calendar. Approval of ratification expenditures of payroll. July 31st 2026 of two million bucks and a voucher register July 27th to 31st, 2026 of $579,000. Another voucher from August 3rd to 7th of 2026 for $1.25 million. Number two is a word of request for proposal number 3109 to Engel and Gray Incorporated in approval of Organic Waste Processing Service Agreement.

And number three is adoption of resolution number 6848, parentheses 26, authorizing the acceptance of Prop 64 public safety grant funds and state of California Board of State and community corrections approving authorizing city manager to execute the grant agreement in all supporting documents. Million dollar grant there, Prop 64 grant right? Just as long, you gotta be able to file all the filings on time, there's a long list right? Every quarter It's a

five-year grant, $200,000 a year. So it's a good grant to help us with the use of proactively preventing them from getting on cannabis.

And an SRO at the middle school too right?

Yep that's what we're proposing, that's

right. Anybody want public comment for these three items? Let me get Council Member Ball, he's got his light on. Hold on one second. Yes?

Very good.

You guys just did what I was going to ask which is to pull item three from the consent calendar. My name is Rene, by the way. I'm a proud uncle of two children who just entered TK and kindergarten in our local school district. I am asking you to pull item 3 from the consent calendar and discussed separately before voting. This item would approve an independent contract of status agreement with Lompoc Unified School District for a school resource officer program. Before we add another sworn police officer to our schools, we should pause and ask whether it is the right approach especially for our middle school students. Lompoc Valley Middle School is not starting from zero. LUSD already has safety infrastructures in place Visitor check-in requirements, cameras in public areas, emergency protocols, regular drills and anonymous reporting through the district's Say Something tip system.

LSUSD also maintains a civilian student safety officer position. A non-sworn role specifically designed to patrol and supervise campuses, monitor emergency drills, investigate incidents and serve as a liaison between schools, families and community Before adding another sworn police officer, the council should determine whether LVMS currently has student safety officer assigned and consider whether strengthening that civilian position making it full-time better staffed or more visible could meet the same safety goals without expanding the police presence on campus. We should also invest in restorative justice. That means training coordinators who can bring students together for conflict resolution circles, peer mediation Accountability plans.

Students who cause harm should understand its impact, accept responsibility and work to repair it, not simply be suspended, pushed out of school or introduced to the criminal justice system. Thank you.

Very good. Councilor Paul, do you have something? Nope. Anybody else on Kitson calendar public comment?

No, Mayor. There's no more public comment via phone or TV. This

is Consent Calendar. Just Consent Calendar. If any of us rise for Consent Calendar public comment we will run on Consent Calendar, okay?

Hi there, I also wanted to go ahead and just agree with you guys that you definitely need to talk about agenda item number three first. SROs are considered harmful by critics like the National Education Association and the ACLU because their presence often leads to higher arrest rates for minor behaviors and increases harsh punishments like suspension. They often turn everyday rule-breaking from schools into police matters.

It also disproportionately targets students of color. The lasting harm of having SROs in schools also shows that Sorry, just one second. I lost my note thing like scrolled back up to the top. Okay there we go all right so It disproportionately targets students of color research shows that black and Latino students face harsher punishments and higher arrest rates than white students when SROs are present Additionally, there's no proof that having SROs in schools reduces violent behavior in students.

Again according to the National Education Association studies show that SROs do little to stop mass shootings or reduce overall campus violence. Additionally they increase anxiety in students So constant police observation can make students feel judged, stressed and unsafe. And a jail-like atmosphere reduces the trust between students and staff making kids less engaged in their education. So I think that when we have this talk about this item on the agenda calendar maybe we can consider how we can spend this money in a way that better helps The students. So more after school programs, things that keep students engaged and wanting to learn instead of inviting law enforcement to a place where frankly they don't... There's not really any proven benefit for having them there.

I also wanted to use my last little bit of time just to say that in response to the garage sale thing, that for people who pay the $3.00 thing to get the permit for the garage sale, I think we should have some kind of board Consent calendar.

Hello Council, Mayor. So I guess we are talking about item number three even though that was pulled. So 30 years ago I was in junior high down in Santa Barbara. We had school resource officers when an incident happened within the classrooms the officers were right on campus ready to help Help school security, help detain somebody. Investigate actions that actually investigate things that happened on campus.

They were there to deal with fights that would happen on campus. School security is not always capable They're not school security, they can't really detain somebody. They can't cuff them. They can't taser them. What is school security gonna do besides hey you shouldn't be doing that? Hey come with me to the principal's office. With the way that These kids are learning about things online and everything. They want to go viral.

Oh, it's so cool. It's so cool. Oh we're going to have a big fight at school. Oh it's going to go viral. Everybody is going to be recording it. That can open up a disaster on our campuses. Our children's safety is important I don't believe that we have metal detectors on campuses. What if a student were to bring in a pocket knife? How is that going to be dealt with?

What if somebody brings in something worse than a pocket knife, how will that be dealt Having a school resource officer, a sworn police officer on campus will provide security. Will provide safety and it'll give parents peace of mind that their children are being protected while at school. They don't have to worry about sending their kids to one of Lompoc schools because there will be somebody there who can actually have some authority over school security. Because basically, school security, they really can't do much.

Thank you.

Karen Hauenstein, lifelong resident on item number three. School resource officers in this day and age I believe are essential with respect to the way the Lompoc Police Department personnel handles themselves with Students and as the resource officer for the Lompoc High School. I have seen them going over and above to be approachable, and also have the students identify with them as human beings and people who are there to help them.

And recently we just had an incident over in Orchid Where the sheriff's office, because they had school resource officers at all schools were able to thwart a violent incident that involved a student having a weapon. So we're living in a different age than when we grew up. Thanks.

Anybody else? Consent calendar. All right, closing public comment on consent calendar. Bring it back to council for a motion. Council

Member Ball what's your motion? I'll make a motion to accept consent calendar without item three.

All right, first by Ball and second by Bridge. I vote. It barely passes 5-0. Is that presentation? Presentation on utility rate of return formula for transfers to the general fund from the electric fund. Mr. Robert Cross, Management Service Director.

Good evening Mayor and Council. This bill is requested to be brought back This presentation on electric rate return calculation. This is a process we do annually, biannually as part of the budget. It's one of the calculations done in finance as an estimate to determine for the following two years the amount of funds that electric should be using to fund general fund as instead of paying a franchise fee because we operate the utility.

So it's based on calculated estimates for two input factors and at the end of the fiscal year, we do a true-up based on our audited numbers and if there's an adjustment needed, we apply that to the current year and you'll see that in a minute so the first input factor The first input we use is the total property plant and equipment for the electric fund net of depreciation. This is pulled right from our financial statements and our financial system.

The second input is the electric working capital allowance, which is basically 120 days cash reserve. We use one-third And then the calculation is a sum of those multiplied by 5.7%. The 5. 7% has been in place since 2006, and we'll go into a little bit more of the history later slide. So the property plan equipment for 2025 is from page 59 Act for the. So it's this is broken down more than it is in the act where we have a total for land building infrastructure equipment, all the assets less accumulated depreciation plus the construction progress so that number is $28.8 million.

That's the property plant and equipment The second one is the working capital allowance calculation. This is from page 63 of the 2025 ACFR. It's the operating expenses for financials, less depreciation plus adding back in the budgeted transfer because that's not counted in the operating expense figure. Comes up with net operating expenses of $31 million So a third of that, the 120 days worth of that is 10.3 million roughly.

So then we add those together, the 28 million plus the 10 million comes up to $39.2 million at 5.7%. That's 2,236,764. That's the actual amount that electric transferred That was the calculated amount that should have been used for 2025. And based on our estimates at the beginning of the year, we'd estimated 2.6 million. The estimate for the capital property plan equipment was higher than it actually came in.

So the difference is $389,948 and that's going to be used That money is going to be refunded to the electric department because it was over-transferred in FY25. Again, it's based on estimates but we do the true up at the end of the year to make sure it all ties out in the end. So this is the last nine years of the transfer you can see has gone from 1.9 million it's gone up 2 and a half percent and it was even for even the next couple years 1.8%, 4%. And then FY24, again it was a 4.75% increase. The original calculation was 2.4 million. We decreased it to 2.2 based on the true up at the end of the year. And then in FY25, the estimate was 2.6 million. The final calculation came in at 2.1 million which is a decrease from the prior year After we apply the credit that we're going to apply for in FY 26.

So, the budget resolution is passed and all prior budget resolutions of state and section 7 transfer the general fund from the electric fund will continue to be based on utility rate of return formula. Reimbursements to the general fund from each of the enterprise funds will continue to be based on cost-of-service methodology. Such reimbursements have been considered in light of and are consistent with the requirements of the laws adopted by Prop 26 and 218, as well as State of California legislation adapted to implement those laws and cases interpreting those laws.

Now when Prop 26 was passed in 2010 and this, the 5.7% and the 120 day cash reserve those were adopted in 2006 and since then it's been, they were grandfathered into Prop 26 so The understanding is as long as we don't change those, we're allowed to continue doing this transfer to fund basically by a factor of running our own utility. And again, we haven't changed since then. We're not looking to change since then because any changes could potentially be challenged.

We'd have to look into the legalities of that. And that's the presentation and I'm available for any questions.

My question, when this came up in the budget and I appreciate you doing the lengthy discussion of this and historically going back to 95, I went and came and talked to you. Did anybody else on the council come and talk to you about this?

I thought

this was significant because in the past we just kind of did it and I wanted to see what our methodologies were. It's kind of discouraging that we didn't get more response on what it is, but if you go back a couple slides... In the 120-day number that you have there, so that operating expense per financial of $30 million. Does that also include the franchise fee?

Or the rate of return fee?

It's not in the $30 million. It is added back below two lines below. It's not in the 30 million.

of the rate of return for this year, right? And that was one of my concerns we had because you might call it a rate of return. I call it some sort of funky wonky tax or you don't want to call it a franchise fee. I get it but it works out to about 9%.

So it's an operating expense of the utility.

Operating expense... We have a cost allocation book already so we allocate through cost allocation So we're charging twice for overseeing the electric utility? Because everybody working for the electric utility gets paid. So what is it?

It's basically the utility operating in the city. We charge franchise fees for other utilities operating within the city that aren't owned by the city.

Yeah, we charge PG or the gas company, what 200,000 or 250,000 a year?

It's based on the revenue.

Yeah, and a franchise fee so that's what they're paying but we... And I'm not sure why... Do you have any nexus as to why this even started? And how this even started? What's the justification it allows us? You gave me the justification if we don't change your formula, we don' challenge Prop 26 or 218 or whatever But what gave us, because it started in 95 if I remember correctly? So yeah. So what gave us the justification in 1995 to do this? Because

if we didn't have... If the city didn't operate a utility and another utility was in here they would be paying a franchise fee.

So I did a little investigation on franchise fees and generally speaking PG&E pays One percent. San Luis has more, but they had to approve a 5% tax on their electric. But ours is 9%. I didn't see exactly what this calculation... What it did is it calculated what we did as a percentage in the budget book. That's what I remember looking at so... Why did we- how do we justify, in this case, a 9% or 8% franchise fee? Or rate of return fee? I'm just trying to wrap myself around how when we do this because every time we raise the rates We're actually raising revenue, which means we've raised this franchise fee. I'd love to get

9% somewhere. The revenue is not one of the factors. Raising revenue does not affect the franchise fee.

Well you actually raise the revenue, you raise your expenses, you raise your operating because more money you bring in, you're going to spend it because if you're doing more than that, you're doing more cost of service so you have the monies coming in either you modify your reserve policy and then it's locked in that, but you're going to find a way to spend it.

If the utility has increased expenses or increased capital purchases, that increases the

fee. So I mean, that's what I'm getting at, but again, I'm trying to find out how it was justified other than if we had somebody else... like I said PG&E around everywhere is 1% or something like that? San Luis, like I said they did a 5% on top of theirs with the tax. How do we come to that conclusion that this formula... That was the number we came up with? Is there

any...? I went back through a lot. I went back years and years through stuff. I could not find information on how it started. I contacted prior financial service managers and I did not find where it began. The worksheet began in 1995 and it's kind of carried through until now.

And if you go back and look at some of the numbers in the 70s, you'll see how much the electric utility was subsidized in general was significant. It was much larger in the 70s but again I'm trying to wrap around how we came up with a 9% and it seems like An answer.

It's been seven and a half percent over the last four years, I went back and looked at the percentage of expenses. Okay. How

did we get 7%?

Well that's just how it resulted is basically the factor of the property plan equipment.

So what i'm getting at the formula we just kind of decided this is what we're going to do and somebody did somewhere there's not Council Member Baum.

Figure out how we started something is always important. I agree. I am still very excited that the City of Lompoc provides some of the lowest electric rates in the area, something that we should definitely be proud of but devil's in the details for sure. Can you go back to one of those slides where it showed year after year after year there's the projection or the estimate and then the actual?

And again this just layman's terms for me so I kind of wrap my head around it. For all of those years, 2017 through 2023 for some reason we were able to match an original calculation with the final calculation and then obviously we took a pretty big detour. So help me understand that in very basic terms why did that happen? And what is the impact on the general fund when that happens?

Right, so in 2023 I think we're coming out of COVID. We've started doing more capital purchases, more capital equipment type things and so in the 23 budget I think those estimates assumed that that would continue. So the original amount that went into the budget was ended up being higher than It should have been, so that's when we started doing the true up to determine it really shouldn't have gone up that much. So that's why we started doing the end of year analysis and crediting it back to difference. So it was an exact amount.

Fair enough. So when we do have to have a credit applied, I'm assuming that goes back to the electric fund? Yeah. What is the impact on the general fund?

It costs the general fund those funds. They come out of the general fund, but you could argue that they shouldn't have gone there to begin with. So it's just putting the general fund back to where the right amount should have been so we're not basically charging electric too much.

And I certainly appreciate that and obviously we run on making estimates and projections and trying to read the future. When we, I'm not saying it's a mistake but when there is a miscalculation or something changes it does have an impact on us because it does change how we estimate using the budget in a certain way. We may not be able to fully utilize that budget the way that we assumed because there is this impact on the general fund even if it shouldn't have been there in the first place. Is that fair?

That's fair and I will be looking at what to do in October when we start the next budget process to see if we can get that a little closer.

Awesome thank you for that appreciate it. Councilor Bridge.

I kind of feel sorry for you up there because you kind of inherited this. I think it was very insightful what the mayor said, can you go back to that chart where you had the elements? The putting back the number, the budgeted rate of return and calling in expenses I personally don't agree with that. I think that's an inappropriate step to take, it's like a double hit.

My research says that's kind of inappropriate but like I say you inherited this. I also have a question on the reserve. You came up with $10 million. We really only have a reserve about 4 mil.

That's not the cash reserve is the term that's used in which it's not really building a cash

What you're doing is saying, we need to operate correctly $10 million in reserve to operate for 120 days. And then you take a third of it or a fourth of it. One could question the 120 days but let's just assume that's correct and it's essentially a reserve. for operations, and for you to us that's about $6 million overstated for what we have. So that's a significant element of this.

And then there's the top level. The rate of return is in business it's to offset the risk There's no risk here. I don't know where the logic is coming for any of this. This element here is two and a half times what we're cost allocating, so we're saying to run the utilities from the city standpoint, we're going to get reimbursed $1.2 or some million dollars allocated to police and maintenance. And then we come in here and say, ah, but you guys are so risky We're going to hit you for another two and a half million dollars.

And your chart, go back to where they had all the words on the chart right there, that comes That kind of discussion comes from a study that was done back then. There's only a draft up on the website, so I don't know what the final words were. But essentially they said you're going to use two rules. You're going to use a cost-of-service element and then you're going to use this magic rate-of return one.

And that 5.7 was established as a reasonable percent at that moment in time And they implied that it would be reevaluated on some basis. But we went through COVID, we went through interest rates all the way down to 3%, and that number never changed. So I really struggle to understand how we could ever justify 5.7% as a continuous hit for risk reduction. You can get a utility loan for 4% right now, so it's got to have some basis of reality And then everybody throws out, well the Redding decision. This is all justified as costs but this isn't cost of service so you can't use the Redding. I personally think The whole thing is a bit questionable, but on a component level I don't believe we should be charging back that rate of return twice.

And I don't think the $10 million is appropriate. Your formulas all work. You're a great mathematician, but the assumptions that it's based on I think are flawed. That's just my two cents on this.

Let me reiterate with you, thank you. I've been trying to get this discussion since 2012-13 when I found out about this and it was told it was this $2 million number and as long as we don't touch it, we're good. And I really do appreciate you for stepping up and explaining the methodology and it was actually 6.8% at one time 5.8%, another time... I

know it went from 5.5 to 5.7. It

was like 6 point something, 3 or something and 95 or something but I really appreciate you digging into finding out what it is. I get it, I understand. You know Lompoc has had to be very creative to make sure that City Hall is funded And I understand why we've done that. When you look at our population growth for 25 years, it's basically been in the last GAN report was zero actually negative growth.

So the only way we can keep these lights on and the doors open and the people running around taking care of businesses We've come up with these ideas to do this, to make sure that we make ourselves solid. It was called rate of return because it was always said that what 1922 we started the electric facility and we had a couple poles out here because people in their sewing machines were graying out so we decided to run our own electricity and we did that and we expanded on it but again in 1968 It was the ratepayers who bought us into NCPA.

And we used to pay about 30% more than PG&E through the 70s, 80s and 90s as we're chugging through. But it's only been recently that PG&Es been pretty wonky the other direction. But understand and remember the ratepayers did sacrifice previous councils did see the foresight in 68 to buy us into that. I do really question, I would like to find some methodology as to how we agreed with that.

And thanks for not lining up the back wall for us again and everything. To kill this, I'm trying to understand where we are. And this way the public also understands when they say we don't do enough, believe me people, we are doing a lot. We're doing more than a lot of other communities are doing to finance the general fund. So we are doing a lo. But again, I appreciate it's been a long many, many years I've been trying to get to where you got me tonight so I really do appreciate that.

Any other questions? Because I think actually the budget book we had at 3.5 million, I think it's actually in... You guys gave me five or six budget books. No for this 26, our current one, the one we approved. They jumped significantly.

It did, but whatever the jump it was we will do true up at the end of

the year. I trust you man, I really do. You've really been spot on.

That's kind of what I was saying with the way the estimates were. The more I looked at that, I'm not sure if that's the best way to estimate it, so something we'll be looking at in the next budget.

You've always been good to me and you look me in the eye and give me the answer and I appreciate Council Member Bull.

So, I don't disagree and I appreciate you digging into these things but just for clarity because we've heard comments like flawed and I don't think they should have done that and it makes me think that where we must be out of some sort of compliance so again I'd like to know again whether you have an answer now or not but in the future are we justifiably allowed to do that? And if so what's the meaning that we should choose that number or not?

But I would like to be very clear, with this current methodology and what we're doing, are we out of compliance with someone right now?

My understanding is that as long as we use what was in place prior to 2010, we're in compliance. And our auditors have not disagreed with that either.

So I don't disagree. I'd still like to know the methodology, how do we arrive at that number? How do we justify it even if it's allowed? But I want to make sure that- I'll

keep digging.

But to be clear, we're not currently out of compliance but perhaps we should dig in a little bit on this. Thank you.

There's always something that could be challenged and that's why I was trying to wrap around is what methodology would we get to even begin to do this in the first place saying that it is so much greater than what other communities charge PG&E for And we're always so careful of calling this franchise fee, it's a rate of return but the formula in getting there. So if it was challenged I hope we can defend it. We say we haven't changed it but what was the logic and reasoning before that allowed us to do that would be a difficult argument unless we could find some documents somewhere.