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WATER I ENERGY I LIFE <br />PUBLIC UTILITIES <br />RIVERSIDE PUBLIC UTILITIES <br />Board Memorandum <br />BOARD OF PUBLIC UTILITIES <br />DATE: MARCH 11, 2024 <br />SUBJECT: GAGE CANAL COMPANY'S CAPITAL EXPENDITURE BUDGET FOR FISCAL <br />YEAR 2023/24 <br />ISSUE: <br />Consider approval of the Gage Canal Company's capital expenditure budget for Fiscal Year <br />2023/24 and direct staff to bring back additional reports to the Board of Public Utilities for further <br />discussion on the capital needs of City water infrastructure serving the Gage Canal Company <br />shareholders. <br />RECOMMENDATIONS: <br />That the Board of Public Utilities: <br />1. Recommend the City Council approve the Gage Canal Company's capital expenditure <br />budget for Fiscal Year 2023/24. <br />2. Direct staff to bring back additional reports to the Board of Public Utilities for further <br />discussion on the capital needs of the City water infrastructure serving the Gage Canal <br />Company shareholders. <br />BACKGROUND: <br />As part of Section 15 of the Agreement for Operation of Gage Canal Facilities (Agreement) the <br />Gage Canal Company (Company) must submit the Company's proposed capital expenditure <br />budget to the City for approval. In past years, this approval was done administratively by the <br />Utilities General Manager. <br />Attached is the Company's final proposed capital expenditure budget for Fiscal Year 2023/24, <br />from the Company's General Manager. The Board of Public Utilities (Board) is asked to consider <br />the budget and make a recommendation to the City Council. The City Council is presented the <br />budget and Board recommendation for final consideration and approval. However, the Agreement <br />does not explicitly describe what happens if the Company's capital expenditure budget is not <br />approved by the City. Since there is no record of a Company budget not being approved by the <br />City in accordance with the Agreement, the practice is that the Company is permitted to perform <br />the capital expenditures as approved by the Company. <br />At the time the Company submits the capital expenditure budget to the City, it may have already <br />been developed, vetted, and approved by the Company's Board of Directors. Currently, three of <br />