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We believe this is an appropriate entry level for the city's first year of participation, and Public Works Admin is prepared to fund it out of our existing divisional budget appropriation in the two utility funds for FY07, as we continue to explore longer-term funding levels and rate impacts. Deb Brewer indicated that she had looked at our figures and had no problem with this proposal. Dennis's administrative approval of this proposal would also provide an opportunity for Angel and ~Richie and the homelessness initiative staff team to report tangible progress in this area in their next homelessness priority issue update to council. * * The wateY utility benefited from $85, 000 of Energy Share contributions in 2005, according to data provided by the HSC, and has committed $62, 000 to the program in its 2006 budget. Obstacles to desired outcome -political, legal etc.: Last month, we became aware through Deb Brewer, EWEB's Governmental Affairs Coordinator, that EWEB staff had been approaching our mayor and councilors individually and advocating with them for a city commitment to Energy Share--and apparently EWEB staff feel that they are getting commitments to councilor/mayor support for the idea of city contributions. EWEB staff is also meeting with their attorney on Monday to explore their legal ability to withhold from city and MWMC utility fee turnovers those amounts that they deem to be our "reasonable contribution," based on actual Energy Share payments against delinquent city fees, in my understanding. We are, of course, concerned about both of these EWEB staff initiatives. I told Deb Brewer in .mid-June that it is our strong preference to keep this issue on the table along with the other issues that Dennis would be discussing with Randy in mid-July. She agreed that a resolution by mid- July on this issue would be acceptable and would be a better outcome for the long-term relationship than either acouncil-directed mandate to staff or an imposed withholding of city collections, with likely legal reverberations. There is also the question of MWMC contributions to Energy Share, since $44,000 was used in 2005 to pay off delinquent regional sewer fees. There was an assumption by EWEB staff that regional sewer contributions would be withheld or paid by the city, as well. However, we've pointed out to them that those monies are not under the city's control and cannot be legally diverted without authorization from MWMC. We also suggested that city staff may be willing to go to MWMC and explain the program and advocate for their participation, as an alternative to EWEB initiating legal action to withhold the monies. I've spoken to Peter Ruffier about this issue, and once the city-EWEB agreement has been secured on this issue, he indicated he would be willing to take a similar request to MWMC Board for consideration in their next budget development process. Another minor issue to be aware of is that city and EWEB staff have a difference of opinion about the legal character of Energy Share monies used to pay off city utility bills. They maintain j that this use of Energy Share is basically awrite-off of uncollectible accounts, and that legally they could simply withhold those Energy Share "write-offs" from our collection turnovers. It is our belief that an Energy Share allocation may occur earlier in the delinquency/collection process than would an ultimate bad debt write-off. In other words, if there were no Energy Share.