Public Utilities 2015/12/16CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
December 16, 2015
The agenda having been posted on Thursday, December I0, 2015, the Public Hearing/Regular Meeting of the
Public Utilities Board (Board) was called to order by Chairperson J. Machiaverna at 5:00 p.m. on Wednesday,
December 16, 2015, in the 2"d Floor Gordon Hoyt Conference Center, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Chairperson J. Machiaverna, Vice Chairperson S.E. Faessel, L. Cahill, B. Hernandez,
D. Wain, E. Medrano, A. Abdulrahman
Board Members Absent: None
Staff Present: D. Lee, B. Beelner, J. Lonneker, M. Moore, G. Bowen, J. Lehman, A. Kott,
D. Ballin, L. Quiambao, P. Oviedo, M. Seifen, M. Jouhari, J. McBride, I. Macias T.
McCarthy, D. Cotton, P. Hayes, D. Albaugh, A. Quintero, R. Gomez,
S. Boodanian, Y. Dominguez
Guest(s) Present: Nikki Howell, Court Reporter; John Elwell, Anaheim resident; Eileen Taber, Anaheim
resident; Donald Yvaska, Anaheim resident; Mirian Stypan, Anaheim resident; Lin
Yann, Anaheim resident; Ving Yann, Anaheim resident; Mike Lynch, Anaheim
resident; Norma Rosales, Anaheim resident; Roberto Ramos, Anaheim resident; Buen
Thio, Anaheim resident; Steve Nunez, Anaheim resident; Sarah Carillo, Newport
Pacific; Henri Laborde, Anaheim resident; Rosa Castillo, Anaheim resident; Ernestine
Armstrong, Anaheim resident; Alex Sanchez, Anaheim resident; Stacey Shokri,
Anaheim resident
AGENDA ITEM
1. PUBLIC COMMENTS.
No Public Comments.
2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC
UTILITIES BOARD MEETING OF NOVEMBER 18, 2015. *
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ACTION TAKEN
There being no public
comments, Chairperson J.
Machiaverna closed the public
comments portion of the
regular meeting.
B. Hernandez moved approval
of the Minutes of the Regular
Public Utilities Board Meeting
of November 18, 2015. E.
Medrano seconded the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 1 (L. Cahill).
ABSENT: 0.
AGENDA ITEM
3. PRESENTATION ON STORMWATER CAPTURE AND
WATER SUPPLY.
T. McCarthy, Engineering Manager, shared a presentation with the
Board on Stormwater Capture and Water Supply. As part of the
presentation, he described the EI Nino weather phenomenon, how the
stormwater generated from EI Nino relates to the City's groundwater
supply, and the systems that are in place to leverage stormwater
runoff to improve water supply. T. McCarthy also shared how the EI
Nino weather conditions and the Pacific Ocean water temperatures are
similar to those observed in 1998, which was a very strong EI Nino
year.
He shared how stormwater runoff recharges groundwater, and that
measures have been implemented to capture as much stormwater
runoff as possible including raising of Prado Dam, groundwater
recharge at the Anaheim Lakes, and the Five Coves Inflatable Dam.
T. McCarthy addressed how all these projects work to help recharge
groundwater and shared how the Public Utilities Department
(Department) and regional partners are preparing for the forecasted
wet winter conditions.
The presentation also addressed how customers can help this winter
by limiting irrigation, keeping downspouts clean, and reporting
clogged catch basins. Customers can also use rain barrels to capture
and use stormwater at their homes. A rebate is currently available for
rain barrels and the Department will be hosting a rain barrel event in
late January 2016 to make them available at a very low cost.
4. DETERMINE THAT AN ORDINANCE AMENDING
CHAPTERS 10.19 AND 18.16 OF THE ANAHEIM MUNICIPAL
CODE RELATING TO LANDSCAPE WATER EFFICIENCY
(LANDSCAPE WATER EFFICIENCY ORDINANCE) IS
EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT (CEQA) PURSUANT TO SECTION 15307 OF
TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS
(CCR); AND APPROVE THE LANDSCAPE WATER
EFFICIENCY ORDINANCE. *
Michael Moore, AGM — Water Services, reviewed the proposed
ordinance amending Chapters 10.19 and 18.16 of the Anaheim
Municipal Code Relating to Landscape Water Efficiency (Landscape
Water Efficiency Ordinance). The ordinance and guidelines are
required to comply with the State of California Department of Water
Resources regulations or the City of Anaheim (City) must comply
with the State model ordinance. The modifications to the Landscape
Water Efficiency Ordinance and guidelines will reduce landscape
irrigation for urban water agencies. The ordinance only affects
customers that require a permit or plan review from the City and are
modifying landscaping over 2,500 square feet or new landscaping
over 500 square feet. Public Utilities staff has worked closely with
the Planning Department to incorporate the changes. The Planning
Department will coordinate the implementation of the changes with
customers and developers.
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ACTION TAKEN
D. Wain moved approval to
determine that an ordinance
amending Chapters 10.19 and
18.16 of the Anaheim
Municipal Code Relating to
Landscaping Water Efficiency
(Landscaping Water Efficiency
Ordinance) is exempt from
CEQA; and approve the
Landscape Water Efficiency
Ordinance. S.E. Faessel
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
AGENDA ITEM
ACTION TAKEN
5. PUBLIC HEARING: DETERMINE THAT THE
Chairperson J. Machiaverna
MODIFICATIONS TO THE WATER RATES, RULES AND
opened the Public Hearing.
REGULATIONS ARE EXEMPT FROM CEQA, IN
ACCORDANCE WITH PUBLIC RESOURCES CODE,
The Public Utilities
SECTION 21080(B)(8), IN ACCORDANCE WITH TITLE 14 OF
Department presented prepared
THE CCR, SECTION 15273 (A); AND CONSIDER PROPOSED
testimony and oral testimony
PER METER SIZE INCREASE TO THE CUs TOMER CHARGE
by two witnesses in support of
AND MINOR TEXT MODIFICATIONS TO THE GENERAL
its request for proposed
WATER SERVICE (SCHEDULES W -G) AND PRIVATE
increases to the Customer
FIRELINE SERVICE (W-PFL) RATE SCHEDULES OF THE
Charge per meter size, and
WATER RATES, RULES, AND REGULATIONS. *
minor text modifications to the
General Water Service
The public hearing was called to order by Chairperson J.
(Schedule W -G) and Private
Machiaverna.
Fireline Service (Schedule W-
PFL) rate schedules of the
D. Lee, B. Beelner, M. Moore, J. McBride, T. Mardikian, and T.
Water Rates, Rules and
McCarthy were sworn in by the court reporter, after which
Regulations.
Chairperson J. Machiaverna outlined the procedures to be followed
during the hearing.
There being no further
testimony or public comments,
D. Lee, Public Utilities General Manager, stated that Anaheim
Chairperson J. Machiaverna
residents and businesses have reduced water consumption by
received the following motion
approximately 30% over the past 15 years, despite growth in the
from A. Kott, who moved that
population during that timeframe. He explained that as a result of
all evidence, oral and written,
Governor Jerry Brown's Executive Order, declaring a state of
submitted by staff, including
emergency, the State Water Resources Control Board adopted
the Prepared Testimony with
regulations requiring water agencies to reduce water consumption.
exhibits from B. Beelner; the
The City's water reduction mandate is 20% of water use compared to
Affidavits of Publication of the
2013 levels. This requirement equates to approximately 3.3 billion
Notice of Public Hearing; the
gallons of water. If the Water Utility is unable to meet that mandate,
Certificate of Mailing; and the
the City is subject to fines of up to $10,000 per day.
written protests and the
returned notices filed with the
D. Lee highlighted the impact of the State mandate by explaining that
Secretary of the Board become
Anaheim is on track to meet the State mandate but that doing so has
part of the record and moved
contributed to a reduction in revenues that cannot be entirely offset
into evidence. Chairperson J.
with cost containment measures. It is anticipated that conservation
Machiaverna granted A. Kott's
efforts have resulted in a sustained reduction in water usage and
motion.
revenues are not expected to fully rebound. D. Lee indicated that the
Water Utility would be unable to maintain current service levels or
Chairperson J. Machiaverna
maintain the healthy financial position of the Utility without the
next entertained A. Kott's
proposed rate action, which will increase the fixed Customer Charge
request to close the record of
component of all customers' water rates. D. Lee explained that the
the public hearing because
Department is also proposing to make minor modifications to the text
there were no further witnesses
of two water rate schedules, General Water Service (Schedules W -G)
or evidence to be submitted by
and private Fireline Service (W-PFL), in order to improve consistency
the Department for the Board's
between the two rate schedules.
consideration. Since no
objections to Staff's request
B. Beelner, AGM - Finance and Administration, described the four
were interposed, Chairperson J.
components that make up a customer's water bill, highlighting that
Machiaverna closed the Public
only one of the four components is fixed and that the remaining three
Hearing.
components are billed based on water consumption. He explained
that the current rate structure places heavy reliance on customers
The Board provided comments.
using water in order to generate enough revenue to recover the Water
After which, Chairperson J.
Utility's costs. B. Beelner also explained that nearly half of the Water
Machiavema summarized the
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AGENDA ITEM
Utility's costs are fixed and, as such, do not change in proportion to
changes in water consumption. He highlighted examples of costs that
do not change even though water consumption declines, including
costs related to water quality testing, providing customer service, and
various field activities such as maintenance and repair of the water
distribution system, and debt service.
B. Beelner illustrated the Water Utility's financial reserve level
compared to neighboring water agencies noting that Anaheim's
financial reserves are low in relation to others. Low reserves are the
result of the low rates charged to customers, which keeps money in
customers' pockets as opposed to the Water Utility's bank account.
Despite low reserves, the Water Utility has historically maintained
strong debt service coverage Ievels and, as a result, the Water Utility
maintains a AAA credit rating, which allows Anaheim access to lower
borrowing costs and translates into low rates for customers.
B. Beelner explained that the Water Utility has taken steps to mitigate
the need for higher rate adjustments, which include lowering water
supply costs, foregoing vehicle replacements, deferring non-critical
maintenance, not hiring additional staff, and prioritizing capital
projects. The Water Utility will also use approximately $3 million of
the approximately $6 million it holds in reserves to mitigate the rate
increase. B. Beelner explained that these efforts alone are not enough
to maintain current service levels and maintain the financial position
of the Water Utility, nor are these efforts sustainable in the future.
B. Beelner described how customers who maintain lower water
consumption by continuing to conserve the State -mandated 20% can
still save money on their water bill compared to what they would pay
had they not conserved. He also illustrated how Anaheim's fixed
Customer Charge compares to the other water agencies in Orange
County noting that Anaheim is currently the lowest and that the
average Orange County fixed charge is approximately 59% higher
than Anaheim's proposed rate. Increasing the Customer Charge
component of customers water bills will help provide reliable funding
to maintain the water distribution system, regardless of water usage
levels.
D. Lee illustrated that Anaheim residents will continue to pay less for
their water than they would if they lived elsewhere in Orange County,
noting that a typical Orange County resident will pay approximately
20% more than an Anaheim resident, even after the proposed rate
increase. D. Lee concluded by stating that the Water Utility is
seeking only enough revenue to recover the cost of providing clean,
reliable water to its customers and that Anaheim's water rates will
continue to be among the lowest in Orange County.
D. Lee stated that Customer Service had received and responded to 57
phone calls and that written protests relating to 60 properties had been
received.
The Chairperson inquired as to whether or not the proposed increase
was temporary and if so, why. D. Lee explained that the proposed
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ACTION TAKEN
prior testimony of D. Lee,
concluding that the number of
protests received did not
constitute a majority protest.
S.E. Faessel moved that the
Board determine that the
modifications to the Water,
Rates, Rules and Regulations
are exempt from CEQA and
recommend that City Council
by resolution approve and
adopt the proposed increases to
the Customer Charge per meter
size, and minor text
modifications to the General
Water Service (Schedule W -G)
and Private Fireiine Service
(Schedule W-PFL) rate
schedules of Water, Rates,
Rules and Regulations.
A. Abdulrahman seconded the
motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
D. Wain moved approval of a
fifteen minute break. S.E.
Faessel seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
AGENDA ITEM ACTION TAKEN
increase is not temporary, noting that conservation and more efficient
use of water will continue to result in under recovery of costs without
the rate changes. B. Beelner indicated to the Board that the Customer
Charge component of water rates was last changed in 1999 and is
outdated as it currently stands. Increasing the Customer Charge
component is appropriate to help mitigate financial risk now and in
the future.
The Chairperson inquired as to what will happen if the anticipated
increase in rain comes to fruition this winter. D. Lee explained that
such an event will help replenish water supplies but will not impact
the cost to maintain day-to-day operations, and that wet weather will
likely cause further conservation of potable water as irrigation is
turned off.
Three members of the public commented on the proposed water rate
revisions: one in support and two in opposition to the proposed
changes. All evidence presented to the Board was moved into
evidence to become part of the record. Thereafter, members of the
Board commented.
The Chairperson then summarized the previous testimony of D. Lee
as to the number of Notices of Public Hearing that were mailed to
Anaheim property owners and Customers and the number of written
protests received. In comparing the number of written protests
received to the number of Notices of Public Hearing that were mailed
to Anaheim property owners and customers, he concluded that the
written protests do not equal 50% plus 1 of the tenants or property
owners of record in the service territory. Thus, as guided by
applicable state laws, he stated that there was no majority protest to
the proposed rate actions. The Chairperson next indicated that an
action item was required by the Board concerning rate actions.
A verbatim transcript of the entire presentation with all testimony,
exhibits and public comments that were a part of the public hearing
was prepared by the Court Reporter. The certified original transcript
is on file in the 11th floor Department Records, Public Utilities
Department, Anaheim West Tower. A certified copy of the original
transcript is on file in the City Clerk's office, 2nd floor, City Hall.
Chairperson J. Machiavema proposed a fifteen minute break.
The regular PUB meeting convened and was called to order at 6:35
p.m.
6. APPROVAL OF THE SAFETY CONSULTING SERVICES
L. Cahill moved approval of
AGREEMENT BETWEEN ERS INTERNATIONAL, INC. DBA
the Safety Consulting Services
EHSINC AND THE CITY OF ANAHEIM. *
Agreement between ehs
International, Inc. dba ehs, Inc.
D. Albaugh, Administrative Services Manager, presented the Board
and the City of Anaheim. B.
with a brief overview of the Department's Safety Program, and
Hernandez seconded the
explained how the use of a safety consulting firm will supplement
motion.
internal safety initiatives. The Board asked a series of questions
MOTION CARRIED: 7-0.
pertaining to prior safety consulting services, and D. Albaugh
ABSTAINED: 0.
2015-81
AGENDA ITEM
explained that previous services were programmatic safety culture -
oriented, and that this proposed agreement is an on-call safety firm
with expertise in various areas.
7. DETERMINE THAT MODIFICATIONS TO RULE NOS. 4
AND 8 OF THE ELECTRIC AND WATER RATES, RULES AND
REGULATIONS ARE EXEMPT FROM THE CEQA
PURSUANT TO SECTION 15061(B)(3) OF TITLE 14 OF THE
CCR; APPROVE MODIFICATIONS TO RULE NOS. 4 AND 8
OF THE ELECTRIC AND WATER RATES, R ULES AND
REGULATIONS *
Derrien Cotton, Utility Services Supervisor, presented the Board with
an overview of the proposed modifications to the Electric and Water
Rates, Rules and Regulations (Rules 4 and 8). The modifications are
part of a continuing effort to reduce regulatory burden on Anaheim
residents and businesses, and specifically addressed deferred payment
assistance and customer notices. Some of the initiatives include
providing a credit if customers opt into online bill payments using
bank accounts, providing a courtesy credit to customers who miss a
payment but have good payment histories, providing options such as
bill due date extensions or payment plans to help customers struggling
to pay their bills, and the ability to restore customers' electricity more
quickly by leaving their circuit breakers on and avoiding issues where
meters are locked in a utility room. The Board commented that these
initiatives are customer -friendly.
8. UPDATE ON WATER SYSTEM ISSUES.
M. Moore provided the Board an update on Water Services, indicating
that the State is proposing to extend the emergency drought
regulations past February 2016. The proposed changes will not be
decided until late January. The State is planning to continue the
drought regulations through October.
The Walnut Canyon Reservoir Repairs have been completed. The
reservoir will begin filling, but it will take 1-2 months to bring the
water levels to normal.
A rain barrel event is being planned for late January. The City event
will take advantage of rebates for rain barrels and allow customers to
purchase up to two rain barrels for $5 each. The event is being
planned on the Center Street Promenade.
M. Moore reminded the Board about the upcoming Municipal Water
District of Orange County (MWDOC) Water Policy Dinner is planned
for January 22, 2016, featuring Felicia Marcus.
9. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, AGM - Electric Services, provided the Board with an
update that the December 15, 2015, City Council meeting had been
continued to January 12, 2016, which has delayed the formation of
Undergrounding District (UD) 64 - Orangewood. J. Lonneker shared
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ACTION TAKEN
ABSENT: 0.
E. Medrano moved approval to
determine that the
modifications to Rule Nos. 4
And 8 of the Electric and
Water Rates, Rules and
Regulations are exempt from
CEQA and approve the
modifications to Rule Nos, 4
And 8 of the Electric and
Water Rates, Rules and
Regulations. A. Abdulrahman
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
AGENDA ITEM
ACTION TAKEN
that the delay will not impact the project schedule.
10. UPDATE ON FINANCE ISSUES.
B. Beelner shared that the December monthly dashboard would be
delayed by one month due to the Board meeting being held a week
earlier than normal and that the month of November had just closed.
He informed the Board that the January dashboard would include
monthly information for both November and December. B. Beelner
also shared that the Revolving Credit Agreement with Wells Fargo,
that the Board approved at the November meeting, was scheduled for
the December 15, 2015 City Council meeting. However, since the
meeting was adjourned before the item was discussed, it was pushed
to the January 12, 2016 City Council meeting.
B. Beelner also discussed the impacts of the 0.25% increase in the
Federal Daily Funds Rate approved by the Federal Reserve Board
earlier in the day sharing that this increase would likely also increase
the Department's annual interest costs by approximately $200,000 per
year. The variable interest rate debt is still a valuable tool for the
Department when comparing the current short term interest rates to
current long term interest rates, which are significantly higher.
11. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen, AGM - Power Supply, provided the Board with an update
that a major planned outage of the Department's San Juan Unit 4
facility was just completed. He also stated that the Unit 4 facility was
part of a total of 4 -coal units altogether in the San Juan project and
that the Department had partial ownership of Unit 4 totaling 50 MW.
G. Bowen further explained that the planned outage was part of an
agreement with the Federal and State Environmental Protection
Agencies to reduce greenhouse gas emissions and keep the facility
operating past the 2017. The agreement required a shutdown of Units
2 and 3 by date certain in 2017 and the remaining Units, Units 1 and
4, to be retrofitted with new air pollution control equipment to reduce
GHG emissions. Unit 1 underwent an outage earlier in the summer,
and Unit 4 just came out of its 6 -week planned outage at the end of
November.
Lastly, G. Bowen explained that with the Department's divestiture of
the Unit 4 facility in 2017 will allow for the procurement of additional
renewable resources in the Department's resource portfolio to meet
the new State -mandated 50% renewables target in 2030.
12. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND
LEGISLATIVE & REGULATORY AFFAIRS ISSUES.
J. Lehman, Chief Risk Officer, shared that there is potential for
extreme storm events this winter, and that the Department has been
undertaking a number of preparations for potential El Nino related
storm response. The Department has participated in Citywide
coordination efforts, including those in conjunction with the Anaheim
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AGENDA ITEM
ACTION TAKEN
Fire & Rescue Department. Additionally, a list of the types of actions
and activities that can be done to prepare for these kinds of events, as
well as for other types of emergencies, was provided to the Board and
made available to the public.
She then invited the Board's attention to the Wholesale Energy Risk
Management (ERM) Program's Quarterly Compliance report at their
place setting. This Program sets criteria under which certain energy
related transactions can be made providing the framework for
transactions to be made in an efficient manner while ensuring that the
Department's interests are protected and risks are identified and
appropriately managed. J. Lehman reported that all transactions were
in compliance with the ERM program and there were no violations.
She also mentioned that additional training was initiated and new
procedures were developed in a couple of key areas to address
communication issues.
She shared that there have been a number of workshops and meetings
with various legislators and regulators which set the stage for
potential follow-up legislation this year regarding water user fees and
greenhouse gas emissions.
She reported that on the Federal level, the drought legislation is
moving very slowly, and that an attempt to put the legislation into the
Omnibus bill failed, but that the California parties were still actively
working to develop a bill. The major point of contention seemed to
be the treatment of an existing provision of the Endangered Species
Act which dictates river flows for the Delta which in turn directly
impact fish. They all are looking for federal funding to assist with
drought assistance efforts that range from Dam enhancements to the
funding of efficiency programs.
13. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON JANUARY 27, 2016.
D. Lee mentioned the following upcoming agenda items are currently
scheduled:
• Water Supply Conditions Update
• Smart Grid Implementation Presentation
• Quarterly Status Reports on CIP, MA, GSA, and Spot Bid
Awards
• Renewables Portfolio Standard Procurement Policy Update
• Approval of Electronic Bill Payment Agreement
14. ITEM(S) BY SECRETARY.
D. Lee reported that City Council appointed Councilmember Jordan
Brandman to be Anaheim's Director on the Orange County Water
District Board. City Council also re -appointed Steve Faessel as the
Director to the Metropolitan Water District of Southern California.
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AGENDA ITEM
15. ITEM(S) BY BOARD MEMBERS.
A. Abdulrahman appreciated the discussion and information shared
on water rates and stormwater capture.
D. Wain thanked staff for the presentations provided.
E. Medrano stated that the Department's actions taken to assist
customers through rule modifications are proactive.
L. Chill said that important decisions were made during the meeting
regarding the water system. He congratulated S. Faessel on his
reappointment on the MWD Board,
B. Hernandez requested information on the impacts of the CIass 1
ISO ratings on insurance premiums for customers.
S.E. Faessel stated that the information that was provided in the
presentations was very informative.
J. Machiaverna commended staff regarding the presentation
components. He also stated that the water rate action was an
important determination.
16. ADJOURNMENT: (REGULAR MEETING ON JANUARY 27,
2016, AT 5:00 P.M., IN THE 11TH FLOOR LARGE
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
Dukku Lee
Public Utilities General Manager
ACTION TAKEN
E. Medrano moved approval to
adjourn the Public Hearing /
Regular Meeting at 7:04 p.m.,
to the Board's Regular Meeting
date of January 27, 2016 at
5:00 p.m. S.E. FaesseI
seconded motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
* Indicates item(s) that will be Forwarded to City Council for action upon recommendation by the Board.
** Indicates item(s) that will be forwarded to City Clerk and City Council for informational purposes.
2015-85