1976/01/3076-68
City itla~lm Anah.eimm California - COUNCIL MINUTES , January 30m 1976m 10:o0
The City Council of the City of Anaheim met in Adjourned Regular
Session for the purpose of conducting a work-study session regarding
the City's electric utility.
PRESENT: COUNCIL ),~MBERS: Kaywood, Seymour and Thom
ABSENT: COUNCIL MEMBERS: Pebley and Sneegas
PRESENT: ASSISTA~{T CITY bgkNAGEP.: Uilliam O. Talley
CITY ATTOFd;EY: Alan R, Watts
DEPUTY CITY CLE.PJC: Linde D. Roberts
UTILITIES DIRECTOR: Gordon W, lloyt
ELECTRICAL SUPERINTENDENT: George Edwards
Mayor Thom called the meeting to order at 10:15 A.M.
Hr. Hoyt introduced the following gentlemen representing the City's
principal consultants in various legal and technical areas pertaining to the
electric utility; Frank Twohy, Wainwright & Ramsey, Financial C.o,~s~tants;
Bill Kraemer- O'~lelvenv & Myers, Bond Counsel; Herb Westfatt, Ua.~qe peterson,
Ed Cecil and William Trommershausen of R. W. Beck and Asso~.~e~!
Consultants; George Spiegel of Spiegel & McDiarmid, Attorn. ~..
Mr. Hoyt reviewed the agenda proposed f~ the s~U~y ~~ ~}}~ ~ised
that the various experts present for the session wllt akC~ :~ :~ptN ~o any
il might have regard g ~ ~ ~ectric
utility.
TLiE UTILITY'S PRESENT SITUATION: Mr. tlR~t explained that since 1867 the City of
aimed at controlling the co~.~ g~f ~.~ ~,:otesale or bulk power supply~ During
this period, Southe~ Califg~~ ~8~ has ~ilaterally increased wholesale
rates many times and in the ~~ ~iod the City of ~aheim has intervened
and opposed every rate ~,~~.~' ~'~ result of one of these actions during
1971 and 1972, the Cit~ ;~;~d a set~~t agreement with Southern Califp~nia
Edison Company ~ich ~ovi~ed the Ci~w' ~g~ the first time, the opportunity
participate ~ ~wer supply and transmission projects. Mr. Itoyt reported that
the City is still negotiating the integrated operations agreement which is
based on principles ~cluded as a major part of the settlement agreement in
1972. It is hoped that the Utilities Department will be able to reco~end an
integrated operations agreement for Council approval in the next few months.
Mr. Hoyt read two policy statements which are intended to express the City
Council's existing policy and requested that Council take action at the end of
this meeting to adopt these as submitted or with modifications. He reported
that it is implicit in these statements that the Utilities Director carry out
the policies indicated therein within the framework of existing authorized
funding.
LITIGATIONS AND INTERVENTIONS: Mr. George Spiegel of Spiegel & McDiarmid
explained that his function as the City's legal consultant in utility matters
is to assist the Utilities Director in dealing with the regulations in order to
keep =he cost of bulk power down as much as possible so as to protect the
City's very large investment in distribution facilities.
Mr. Spiegel discussed the rate cases in which h~ has represented the City
of Anaheim since 1971 to the current application by Edison to increase the
rates by 14% effective February 1, 1976, which would amount to an increased
cost to the City of 5.9 million dollars. IIe described other types of actions
in which he represents the City such as the "Conway Arkansas" case which holds
that the courts should consider as a factor in their deliberations the "price
squeeze" situation in which the City of Anaheim and other utilities are placed
when required to pay prices for wholesale power which are comparable to retail
rates. If successful with this action before the Supreme Court, then the City
of Anaheim's case will be reheard before the Federal Power Commission.
In the l)avajo Case, the issue stems from the Federal Government's sale of
400 Megawatts of surplus power to Edison at the Government's cost. This sur-
plus power is considered preference power and as such the municipals and
cooperatives should be given preference to purchase same prior to any investor
or privately owned company. The City of Anaheim had originally attempted to
enter the Navajo Project at its inception but were thwarted in this effort
76-69
C~ity ,H,all, Anah_eim, C,,a,!ifo, ,mia - C,OU~,CIL, MINUTES -Januar7 301 1976! 10;00 A.M.
since Edison refused to transmit the power on their lines for the City. The
Court of Appeals has agreed with the theory that preference power should be
sold to publically owned agencies. The case may go back to the District Court
for further proceedings, but there is an excellent chance that the City will
acquire a block of low-cost power from this litigation.
An additional proceeding in which Spiegel & McDiarmid represent the City
of Anaheim is the Federal Power Commission investigation of the California
Power Pool and related major power contracts in California to determine what
kind of California Power Pool contract there should be as this power pool
exists more in name than in reality. The City of Anaheim's effort is to
persuade the Federal Power Commission to modify the agreement so that this
would constitute a real power pool. Mr. Spiegel explained that such a power
pool would be the most important single aspect in reducing power costs for the
City as it would provide for an integrated network for transmission, and the
City could either buy or sell wholesale power over that network, opening up a
compet it ive market.
At the conclusion of this discussion and during a question and answer
period, in response to Councilman Seymour, ~r. Spiegel advised that he felt if
the Arkansas Case is upheld and the price squeeze situation is found to be a
violation of the anti-trust laws, in his opinion, an inquiry would be conducted
as to the effect of the wholesale rate on the City's ability to sell at a
competitive retail rate. He indicated that Southern California Edison's posi-
tion in this matter is that they did not intend the price squeeze but that it
occurred because the California Public Utilities Commission had not acted on a
retail rate increase filed with them in sufficient time to off-set the whole-
sale rate increase which was filed with the Federal Power Commission.
Councilman Seymour observed that this is more of a political problem than
a practical one, since the State sets the retail electrical rates and the
Federal Government the wholesale rates. He inquired what attempts, if any,
have been made on a Federal level to legislate some change and create some
equity between rates established by these two separate entities.
Mr. Watts reported that the American Public Power Association is currently
gathering its forces to seek an amendment to Section 205 of the Federal Power
Act which would correct the problem of different rate setting times used by the
Federal and State Commissions. The General },~anager of the ;~nerican Public
Power Association has indicated this to be one of their top priorities during
the current session of Congress.
Mr. ~oyt advised ~hat the policy of the present administration in
Uashington is that all rate making for electric utilities should be carried out
in the fashion used by the Federal Power Commission and would prefer that the
states adopt the same procedure, that of granting the requested increase on
filing, subject to refund if it is later proven to be inappropriate. However
the state commissions are not generally receptive to that idea.
Councilman Seymour questioned how the citizens of Anaheim would view
becoming involved in generation and their desire for lower retail rates if, in
fact, that political problem were resolved. The assurance that wholesale rates
would be below retail rates is an important consideration which must be taken
into account in the justification for maintenance and ox~nership of distribution
and/or generation facilities.
Mr. Hoyt concurred with Councilman Seymour's statement and remarked that
if the lowest cost bulk power supply is obtained by purchasing through a nearby
supplier, then that is what the Anaheim Electric Utility wants to do. This
approach was explored in the early 1970's with Southern California Edison at
great length but was met with a notable lack of understanding primarily because
Edison feels they have to recover the cost of service. However their cost of
service is so much greater than the City's, the business decision has been made
fairly clear.
~.~r. Hoyt pointed out that there is a whole new approach to rate making in
a large-part due to the inflationary costs, wherein the Utility recovers its
average rate of return on investment from every class of customers, whereas in
the past the industrial rates were based on the ability of that customer to
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City Halll Anaheim~ California - COUNCIL MINUTES - January. 30t 1976! 10~00 A,M.
find and use a competitive energy source. This system has placed the
industrial and wholesale consumer at parity with other classes of custom, rs.
At the request of Mr. ltoyt, Mr. Spiegel reviewed the Kaiparowits Coal
Mining actions which deal with a coal fire generation plan in Southern Utah, in
which the City of Anaheim has an opportunity to participate. ~]e litigation
stems from the coal supply which is to be mined locally and the cost thereof.
The Cityts position in this legal action is that the price for the coal should
be based on the cost for service and not tied to the prevailing oil prices.
Councilman Seymour observed that this has been another example of the
inflationary cost spiral for fuel which the utilities are currently faced with
in regard to oil prices.
:~ayor Thom addressed the question of Federal legislation on the
methodology of fixing rates which was briefly mentioned earlier. ~Ie stated
that if that type of legislation were successful, in his opinion, it would tend
to be all-encompassing and would apply not only to investor-owned utilities but
also to municipals.
':,~r. Uatts reported that a bill (HR 10,000) was introduced in this session
of Congress which was very far-reaching. This has met with a lot of opposition
from the entire utility industry and is not expected to be adopted in its pre-
sent form.
ELECTRICAL RATES; Mr. Ed Cecil of R. W. Beck and Associates reviewed the recent
rate increases filed by Southern California Edison and reported that with the
latest proposed increase the City of Anaheim will be paying 3.05 cents per
kilowatt hour. His firm feels that a more reasonable rate for the City of
Anaheim would be 2.6 cents per kilowatt hour.
Mr. Cecil explained the manner in which rates for an investor-owned
utility are developed, w~ich include the following steps: 1) to determine the
expenses which are allowable for rate making purposes; 2) to determine the
rate base from the investment facilities; 3) to determine the rate of return
or the amount of earnings on that investment which should be allowed; and 4)
to determine the allocation procedure, i.e., how much each customer class
should contribute.
Mr. Cecil stated that in the past most of Anaheim's rate cases have been
in connection with the fourth step mentioned above, the allocation procedure.
A major factor in that allocation difference has been the treatment of the
transmission cost. The complete cost to supply electrical service is broken
down into three parts, production, transmission and distribution. The Edison
procedure is to calculate transmission costs at the 66 kV voltage level. R.W.
Beck and Associates' view of the matter is that since the wholesale customers
make very limited use of the 66 kV voltage level, a more reasonable method
would be to calculate costs down to 220 kY, and then add on the additional
costs which are necessary to carry power from this level to the wholesale
customer. In Anaheim's case, since they are now being served at 220 kV, there
would not be any additional cost. Other utilities which are served at a lower
voltage level would have to bear some additional costs to carry power from the
220 kV level to their service level.
Hr. Cecil advised that in the past the distribution portion of the cost of
power has been the primary reason for the difference between Anaheimts cost of
service and Edison's cost of service, but as each rate filing comes about some
additional differences develop, one reason being that in each case filed Edison
has requested a higher rate of return. Further in the current case a new
subject has been introduced, Edison has proceeded to "normalize" certain income
taxes. Mr. Cecil explained the "normalizing" procedure as follows, whereas
normally in a given year the utility has certain income tax deductions and
these reduce the utility's tax for that year, for rate making purposes Edison
has proposed that instead of reducing income taxes in that year they "pretend"
they did not receive a reduction in the current year and spread it over a
number of years to the future. ~r. Cecil advised tha~ this normalization
process~ amounts to about one-third of the current 14% increase in wholesale
rates which they have filed.
C_ity tie!...!; Anaheim, California - COUNCIL MINUTES - January 301 19761 10;00 A.M.
Discussion ensued between Council Members and }~r. Cecil during which
Councilman Seymour asked him to describe what percentage per P. ilowatt hour the
citizens of Anaheim benefit from the fact that the City performs tile distribu-
tion function rather than having Southern California Edison do it.
Mr. Cecil advised that the citizen benefits to the extent that they pay
lower rates :hah Edison retail customers, as well as to the extent that the
Utility Department is able to contribute funds to the Cityts operation.
Mr. Hoyt responded to Councilman Seymourts question that with a $3,000,000
unencumbered transfer to the General Fund and a sale of 1.4 billion kilowatt
hours of electricity, the differential comes to 4/10 of a cent per kilowatt
hour saving that the people of Anaheim are receivin~ from operation of the
distribution system.
Councilman Seymour stated that the point he is trying to get at is whether
or not the City's policy of maintainin~ rates at 5% below Edison retail rates
is fair or should the Anaheim retail rates be 10% or 157-', below Edison.
Mr. lioyt emphasized that the figures given are general and that the City
has not yet requested R. W. Beck and Associates to perform these kind of
studies, but should the Conway Arkansas Case come out in the City's favor, the
cost figures for the City's distribution portion of providing electric power
would be compiled to present as evidence to the Administrative Law Judge.
Mr. tloyt compared rate making in the past, when the City merely left rates
as they were and transferred whatever surplus revenues were produced to the
General Fund, to the current situation where it is necessary to determine a
minimum relationship which the City would like to hold. It is then necessary
in budget preparation to forecast what the electrical consumption will be and
the revenues therefrom to know what the purchase power costs will be based on
existing ra~es. %]]e difference between revenue and purchase power cost is what
is left to run the Utility and make the transfer to the General Fund. In the
forthcoming budget year, }.'Ir. Hoyt explained that this differential is expected
to be narrowed to the point that it will be difficult to accomplish all that is
necessary with the limited funds available. Obviously, the Utility will have
to perform the work necessary to operate it and meet its new business. After
that point, if anything is left, it would be available for transfer. If there
is no transfer available, however, the revenues will need to be increased or it
will be necessary to consider funding some of the capital through revenue
bonds. He summarized that as City and Edison rates become closer, the City's
potential for flexibility in rates diminishes.
Mayor Thom stated that the political justification for the City operating
its own distribution system has been, in addition to the lower rates, the
Utility's ability to transfer to the Ceneral Fund. !Ie observed that what is
being communicated is that the justification for operating this system is
diminishing to the point where it will be moot, at which time a new political
decision will have to be made.
Mr. Hoyt remarked that part of the political decision which the Utility
has been embarked on since 1967 has been to seek alternatives for a lower cost
power supply to enable the City to continue to operate the distribution system
to the benefit of the citizens. He further commented in relation to comments
made earlier about negotiations with Southern California Edison aimed at
securing a lower cost of power and advised that there is no way the Southern
California Edison Company can offer the City a competitive power supply cost
comparable to the benefits the City could receive from participating in genera-
tion projects themselves under the rules by which they are doing business today.
RECESS Councilman Thom moved to recess to 1:30 P.~.~. Councilman Seymour
seconded the motion. Council Members Pebley and Sneegas absent. :~OTION
CARRIED. (11:50 A.H.)
AFfER RECESS: I'{ayor Thom called the meeting to order, all Members of the City
Council being present with the exception of Council Members Febley and Sneegas.
(1:30 P.M.)
76-72
~ity Hall! Anaheim! Cali.forn.~ -. COUNCIL MINUTES - January 30~ 1976~ 10;00 A.M.
S_TATUS OF .VARIOUS GENERATION PROJECTS; Mr. Iioyt reported on the current status
of generation projects in the Southwest and Anaheimts potential opportunities
for participation in same as follows;
NAVAJO PROJECT: This is a coal fuel electric generating plant which will have
'~hre'e 75'o,000-kilowatt machines. The City of Anaheim Joined this project in
1969 but had to withdraw because Edison refused to provide transmission under
any conditions. Pursuant to the settlement agreement, however, Edison has
guaranteed to transmit power from the NavaJo Project to the extent they also
have power. Edison has some 360 megawatts of entitlement to power from this
project, and the City of Anaheim will receive one-half with guaranteed trans-
mission.
In addition, the City of Anaheim is involved in litigation regarding the
Federal Government's sale of surplus power from this project to preferred
customers, and if successful, the City will be able to purchase power produced
by the Navajo Project from the Federal Government at a lower cost than it pays
Edison.
NEGOTIATIONS WITH NEVADA POWER COMMITTEE (NAVAJO PROJECT); The Cities of
Riverside an'd 'Anaheim are currently negotiating with the Nevada Power Committee
for some surplus energy. This Committee is facing a severe shortage of capital
and has made an offer which basically indicates they will provide these cities
with 85 mesawatts of power without capacity, energy only, delivered at the
capacity of the plant. This would be energy from their share of the NavaJo
Project, which is the best project going in terms of energy cost in the South-
west. Riverside and Anaheim have each indicated interest in one-half of this
power or 42,500 kilowatts of capacity each. This would generate 265,000,000
kilowatt hours per year for Anaheim. In return for this, the Nevada Power Com-
mittee would like the City of Anaheim to give them 17.5 million dollars up
front. Anaheim would also have to negotiate with Southern California Edison
for transmission of this energy from the Colorado River into Anaheim (studies
on this aspect will be completed in February or March of 1976 as to whether or
not this capacity is available in their transmission system). The estimated
price given by Edison for this transmission at this point is $10 to $12 per
kilowatt year.
The Agreement which is under negotiation would have a 35-year term,
Anaheim would make equal annual payments of 1/2 million dollars~ that being the
cost of the capacity. The Nevada Power Committee may recapture this capacity
on five yearst notice after 1983. If they do, they will pay the City of
Anaheim $500,000 for each year of remaining contract life. With all costs
figured, the cost of this ener&y delivered to Anaheim is estimated at 1.7 cents
per kilowatt compared with 2.17 cents per kilowatt cost from Edison. There is
a .49 cent per kilowatt saving, which would be translated into an approximate
$1,300,000 annual saving as compared with the Edison rate going into effect
February 1, 1976.
S..ALT RIVER PROJECT: This is a publically-owned utility which bas offered sur-
plus energy off-peak, essentially weekends and evenings, for sale to the
highest bidder on a share ~he savings approach, i.e., the seller and bidder
share one-half each of the quoted price per mill over the cost to the seller
for ~he energy (if Anaheim bids 20 mills for 4 mill energy, the price to
Anaheim would be 12 mill). The Utility is considering bidding something more
than their decremental cost for this energy since Edison's incremental cost is
higher and they can consequently bid higher than the City to take advantage of
~he energy.
WAP~ER VALLEY PROJECT: Originally the City had an interest in this project for
60 megawatts, but local political conditions in Utah have effectively removed
Anaheim from the project.
VIDAL JUNCTION: A nuclear plant proposed to have two 700-megawatt units, how-
ever, the manufacturer of the equipment has withdrawn from the business and the
project does not appear viable at this time.
KAIPAROWITS: A four unit, 750 megawatt each, project to be located someplace
northwest of Page, Arizona, of which 18.6% is unallocated. A consortium formed
by the Cities of Anaheim, Riverside, Glendale and Pasadena is seeking to obtain
1.2,% of ~he unallocated portion of the project which would amount to 30.to 60
76-73
City ttall; Anaheim; California - COUNCIL MINUTES - January 30; 1976~;, 10;00 A.',:.
megawatts, iiowever this project has run into proklt~:-s with environmentalists.
There is some $25,000,000 invested in reports and studies. The schedule for
the project including the allocations of its remainin~ capacity have been
shifted for one additional year. Anaheim has not invested any money in this
project but have indicated an interest and when all the facts are known and the
costs can be evaluated, the Anaheim Utilities Department will then be in a
position to discuss this project.
SUN DESERT: A nuclear project with two units, 95() megawatts each, sponsored by
the San Diego Gas and Electric Company. Two sites are under consideration for
this project, one in California and the other in Arizona. Following the
election on the Nuclear Initiative in June, if this passes, the site in Arizona
will probably be chosen since nuclear construction in California will be
halted. There are some technical (State of the Art) problems to be solved with
this project but it appears to be one of the nuclear projects being studied
which may come to fruition. Anaheim has expressed an interest in 17 of the
project or 19 megawatts. All potential participants have been asked to notify
them this week or last whether or not they would be willin~ to commit at this
time, and the Anaheim Utilities Department responded that in view of the
l~uclear Initiative in June, they are not in a position to recommend that the
City proceed with this project but would like to continue study of same.
I{AR?,Y .ALLEN PROJ~.CT: This is a coal fire project with four 500-megawatt units
sponsored by the Nevada Power Company located 35 miles northwest of Las Vegas.
The problem with this project is that Nevada again wants to recaPtUre the
capacity at a future date. There are also problems with the Internal ReVenue
Service regarding the use of Anaheim tax exempt bonding interest for con-
struction and then recapture of this capacity by the Nevada Power Company. The
result of this situation is that the City of Los Angeles is considering with-
drawal from the project, and if they do, enough of the power would be withdrawn
that it would be difficult to transmit anything to CalifO.rnia.~
I;~TEPC-IOUb~f~IN POi~.~ER PROJECT: Tile City of Anaheim has a substantial investment
in this project. .By 1978 when ready to move into project financing, Anaheim
will have some 1.6 million dollars invested in the project feasibility studies.
The engineering details of the project are covered in the R. W. Beck and
Associates' study. This project in general is coming along well ~and the
participants are now exploring the financing vehicle. It now appears the
project organization will be a political subdivision of the State of Utah. The
non-profit corporation approach originally proposed appears infeasible at this
time because of the change in the Treasury Department's rules for non-profit
corporations. It is now contemplated that this agency of Utah Government will
issue tax exempt securities and the other participants will issue long-term
contracts for the power. This project is having some problems going through
the California Environmental Quality Act proceedings and legiSlation has been
introduced to amend the CEQA rules to allow certain work to be done by the
Intermountain Power Project which is necessary in order to prepare the environ-
mental impact report.
SAN JOAqUIN. I~3CLEAR PROJECT: The City of Anaheim has an investment of ,~25,000
in this project and probably will not be required to make any further
expenditures other than the cost of people attending meetings. Until the
Nuclear Initiative situation is resolved in June, 1076, and the E.I.R. state-
ment is approved, this project cannot proceed. The City of Anaheim's Current
involvement is 1% of the cost of the feasibility study and would receive an
entitlement of 2% of the output of these units, which translates into 100
me gawa t t s.
SA2{ ONOFRE NUCLEAR GENERAT.ING..STATI.ON; Lq~IT NOS. 2 A~ND 3: At the moment this
is the best and most economical power supply source physically under,con-
struction. Tl,e costs are locked into the costs at the time the contracts were
executed, and an increase because of inflation does not have to be taken into
account. ;,~ile this project is under construction, if the Nuclear Initiative
passes, they will have some problems. The City of Anaheim is currently
reviewing contracts and arrangements to determine what it must do to enter the
project so that the Utilities Department will be in a position to recommend
commitments some time in the fall.
PEAKING U'~iiTS: lq~e remaining energy source possibility for the City to con-
sider is peaking units ~ich have a low capital cost and high operating costs.
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City ttall~ Anaheim! California - COUNCIL MI?~TES - January 30t 19761 10;00 A.M.
These are 20-megawatt units which would be used for short periods during the
year to carry peak loads. The economics of peaking units are in the City's
favor, but the problem is that most likely the utility would want to install
them locally, even in Anaheim, and must meet all air pollution control regula-
r ions.
At the conclusion of his presentation regarding generation projects,
.~Ir. Hoyt explained that he would not be discussing alternative sources of
energy such as solar, wind or geothermal power, as these are not now available
and the City must consider utilizing those sources for which the technology is
currently available. However he advised that he does have material on the
alternative sources and would be happy to discuss this should Council so
desire.
R. W. BECK SaND ASSOCIATES PRELIMINARY REPORT: ~r. Herb Uastfall of R. U. Beck
and Associates discussed the preliminary report prepared by that firm with
respect to acquisition of generating resources by the City of Anaheim. He
stressed that this report is preliminary and his discussion should not be con-
strued as a presentation but rather simply a discussion of the preliminary
report, considerably more work will be required before the final document is
prepared.
Mr. Westfall advised that the report is prepared on the basis of load
forecasts as prepared by the City staff. The time frame for this study is ]980
to 1990. tie explained that the City's electrical load is currently slightly
over 300,000 at peak demand and runs at 1.5 to 1.6 billion kilowatt hours. By
1990 it should be some~d~ere in the range of 700,000 kilowatt of system demand
and annually range at 3.5 billion kilowatt hours. One factor which becomes
apparent is that the cost of the power supply will continue to become an
increasingly larger percentage of the total electric operating budget. Uhereas
this cost in the past was covered by less than 5~ cents of each dollar
collected by the Electric Utility, it now represents closer to 80% of each
dollar collected. This is a paid-out cost whether the City purchases or
generates power and will continue to grow as power supply is a terribly capital
intensive item.
Hr. Uestfall explained that in the R. !7. Beck and Associates Study, all of
the potential power resources outlined by ~r. Hoyt were not used, only those
were selected which fit into the time frame of lOgO to 1990. The possible
projects used in the study are as follows: Intermountain Power Project -
450,000 kilowatts; Kaiparowits -30,000 kilowatts; San Joaquin I~uclear Project
- 50,000 to 52,000 kilowatts; Sun Desert - 19,000 to 20,000 kilowatts and
Combustion Turbine Peaking Units - 20 megawatts.
',Ir. ~:estfall stated that in any of the energy resource plans studied they
did not include resources to meet the City's entire need, and therefore in each
case the City would continue to purchase some portion of power from Edison. He
advised that they were trying to match the available resources committed to the
multiple utilities and tried to be as reasonable and realistic as possible,
recognizing that participation has not been solidified in any of these units
and that final schedules and participation have yet to be firmed. The City's
total obligations would be for about 600,000 kilowatts of capacity, this would
involve some 450,000 kilowatts of participation in the Intermountain Power
Project, which would not be a direct ownership but financed through a separate
entity. The other 150,000 kilowatts would amount to 156 million dollars total
based upon the cost estimate data.
The report concludes that during the study period the City would spend
$1,547,000,000 for power with participation in generation facilities as out-
lined and could expect to spend $1,814,000,000 if power were purchased entirely
from Edison during this same study period. This indicates a savings of
$266,000,000 or 18%. lie reported that they reviewed a number of combinations
of these various generation resources and there is some flexibility, but the
savings do appear to be real and they are substantial, between 15% and 18%.
Hr. Westfall called upon Mr. Ed Cecil to explain how the projections in
the report were developed for the City's alternative of continuing to purchase
power from Edison during the study period. Mr. Cecil advised that they used
Edison's method of calculating the retail cost of services and used the Edison
forecasts of loads and resources as well as all other information available
76-75
City !iall~ Anaheim! California - COUNCIL MINUTES - January 301 19761 10:00 A.:~.
from Edison. To the extent that they had to develop their own information,
they attempted to make the assumption consistent on both sides of the equation.
He reviewed the forecasts of the escalation of fuel oil, gas and coal prices.
Tl~eir estimates indicate that in 1990 fuel oil will reach $7.20 per million
btu; natural gas will reach $2.06 per million btu; and coal will rise to ]7.]
mills per kilowatt hour. Taking all of these factors into consideration the
end result is an estimate that the ]'~dison wholesale power rate forecast in 19ql
would ]~e A.7 cents per kilowatt hour and in 19~0, 7 cents per kilowatt hour.
>ir. iierb Westfall discussed the availability and cost of nuclear fuel whic]~ is
generally termed yellow cake (uranium hexafluoride). He advised that the two
primary sources of this material in the United States, the Nuclear Utilities
Service (NUS) and S. ~. Stoller and Associates of ~ew York, indicate that prior
to 1979 supplies will be tight. After that period there seems to ~e an
adequate supply, but the cost will be increased considerably over what ]~as been
paid for it in the past. The basic price of yellow cake has been ~10 to ~177
per pound (the equivalent of 1.2 mills per kilowatt hour), the open market
prica at the present time is between .$35 and $45 per pound. This may increase
the cost to as much as 2 mills per kilowatt hour. }lc reviewed some of the
causative factors involved in the prices of uranium including the chemical
enrichment process, specialized transportation techniques, and disposal or
recovery of the by-products.
Councilman Seymour noted that .~r. t'estfall had covered the profit
potential in generation but requested that he address the risks which are
involved.
Mr. Westfall responded that there are risks of ownership involved in any
enterprise; that there are substantial advantages in participating in multiple
projects, as this spreads the risk and also allows the Anaheim Utility to take
advantage of the expertise of other large utilities who have experience in
building and operating similar plants. In discussing inherent r~sks of owner-
ship in the utility business, one must take into account t~,.e large sums of
money necessary to start a project. Until the project is fully complete, with
licenses, permits and certifications obtained, there is always the risk it .will
have to be abandoned and the dollars expended to that point absorbed at a loss.
These losses are imbedded in the rates, l-~r. Uestfall noted that part of the
rates the City is paying now can be directly translated to some of the risks of
ownership experienced by Southern California Edison.
',,~r. Westfall added that once the project is on-line, there is also the
risk of mechanical failure, but these risks are considered minimal and also
without exception are fully insurable, tie noted that ti~ey l~ave considered in
their cost projections that the City would carry full fire and water insurance
on the physical parts of the project which could be damaged or destroyed, lie
summarized that the biggest risk is the front-end start up money.
Mr. Iloyt pointed out that the front-end risks are what leads to his
reluctance to make any recommendation on the nuclear projects under con-
sideration until a decision on the i:uclear Initiative in California has been
made.
Councilman Seymour questioned to what extent R. U. Beck and Associates~
report covers the alternative of investing in a known and proven plant, such as
the opportunity described by 5~r. Hoyt earlier to purchase power from the l~evada
Power Company, versus investment in facilities whose futures are yet undeter-
mined.
Hr. Westfall answered that to the extent these opportunities become avail-
able durin~ the 1980 to 1990 study per~od, these judgments should be included
in the report. The Nevada Power Company offer has been too recent a develop-
ment to have been included in the preliminary report.
Both Mr. Hoyt and Mr. I~estfall pointed out that there is virtually no
opportunity to buy into an operating generating plant and that the offer made
by the lTevada Power Company includes their right to recapture this capacity at
a future date.
Councilman Seymour voiced the opinion that it would seem, if the City had
the choice, the most prudent approac]~ to take would be to buy as much of an
existing known source as possible and keep an interest open in the potentials.
76-76
City Hallt Anaheimt California - COUNCIL :~INUTES - January 30~ 1976~ 10:00 A.M.
Mr. tloyt and :Ir. Westfall explained that there is high competition into
the 1980~s for power and that utility companies which ]~ave accepted the front
end risks usually first make sure that they have a market for the entire load.
.~r. l{oyt indicated that the Anaheim Electric Utility~s goal is to obtain the
least cost power supply they can get and they are not particular about the
approach to be used, if it is direct purchase from a governmental agency or
Nevada Fower Company versus investment that is the way they will go. It was
pointed out however that the ~evada offer will not supply the City's entire
r e qu i re men t.
Councilwoman }'.aywood introduced the subject of solid waste as an energy
source and inquired about the s:atus of this process.
Mr. Westfall reported on several operating plants in the United States and
Europe. He advised that the technology is available and the construction time
would be short for such a plant once the environmental impact permits are
obtained. It was noted however that the Air Resources Board would not issue
any permits for such a generation plant in this area usin~ any methods of
pyrolysis currently available. Ile also noted that in the operation of this
type of plant more than 50% of the costs must be serviced by charges for
dumping of solid waste, as less than 40% of the cost is recovered from sale of
electricity.
Mr. Hoyt introduced the Utilities Director from the City of Riverside who
advised that they have plans to construct a pyrolysis plant, lie reported that
if they convert all of Riverside's solid waste to electrical energy in such a
plant, it would meet some%~ere between 5% and 10% of their energy requirements.
lie advised that it is not a complete solution, but should be considered
primarily as a method for handling solid waste.
RECESS: By general consent the Council recessed for ten minutes. (3:10 P.~'[.)
AFTER RECESS: }.[ayor Thom called the meeting to order, all Members of the City
Council being present, with the exception of Council Members Pebley and
Sneegas. (3:20 P.M.)
FINA~NCIAL ASPECT OF TIlE GENERATION PROGRAM: ,~Ir. Frank Twohy of Wainwright &
Ramsey, Inc., the City's Financial Consultant, advised that his firm has
discussed all of the generation projects reported here today with the various
members of the City staff and have also made a review of the preliminary report
of R. W. Beck and Associates. It is their opinion that the City could finance
the plans submitted very easily. For purposes of brevity, he advised that he
would restrict his presentation to Case No. 1 as outlined in the Beck Report
and additionally he would comment on the l~evada Power Company proposal.
Under Case No. 1, 607.5 megawatts would be available to the City at the
end of 1981 and all but 35.5 megawatts would be available by 1985. This
program is involved with nuclear energy and therefore it would seem prudent not
to commit to any contractual finalities until after the June election. The
total construction cash necessary for Case ~:o. 1 is $108,615,000. Of this sum,
$19,771,000 would appear to be needed by 1977.
Mr. Twohy reported that as of the close of Fiscal Year 197f~-75, the City
could issue bonds in excess of $50,000,000 and therefore bonding capacity for
initiation of this program would be more than adequate. It would be proposed
that bonds over a maximum term of 35 years be issued with a deferral of
principal until a period of six months subsequent to the time that these
machines would start delivering kilowatt hours into Anaheim. This is in accor-
dance with standard public utility accounting procedures.
The balance of the funds needed subsequent to 1977 ($88,844,000) for Case
~o. 1 would be financed in the same manner with respect to deferral and
capitalization. In the beginning of the bonding program, deferrals would be
for five-year periods and the last bond issue might have a two- to three-year
deferral. Because of the !.~uclear Initiative in June, a definite bond financin~
schedule cannot be laid out at this time, but as current contractual arrange-
ments are finalized, bond sales schedules can be proposed in a relatively short
period of time. Mr. Twohy emphasized that the important point is that the City
does have the financial capability to participate in these facilities and would
be able to reap the financial benefits indicated in the report.
76-77
_City dal!..~' Aqaheim, Cal..ifornia - COUNCIL ~INUTES - January 30~ 1976~ ]O;O0 A.:-i,
The financing program would be custom tailored to the financial require-
ments of these specific facilities. The program would probably entail an
initial bond sale of C20,000,000 with subsequent sales of $30,00,0,000,
~0,~ 000,000 and $20,000,000 spaced one year apart, assuming all details
regarding contracts are completed in five years.
Mr. Twohy commented on the ~'.:evada Power Company offer to sell energy to
the City of Anaheim and noted that under present conditions the City could
finance participation to the extent offered by the ;:evada I:ower Company and not
jeopardize its ability to participate in the projects as outlined in Case i;o.
1.
In order to provide for current arrangements, the City will require a
minimum of §2,000,000 for regular capital expenditures and another $1,500,000
continued investment in Intermountain Power, San Onofre and Sun Desert
Projects. l'[r. Twohy pointed out that it might be prudent to include in this
requirement an additional $2,000,000 for capital expenditures which would occur
during 1976 and 1977, and therefore the City is discussing a bond issue of from
$3,500,000 to $5,500,000. Mr. Twohy advised that the City would attract more
attention in the investment community with a $5,500,000 bond issue than with
$3,500,000 and the proceeds could be reinvested so that the interest from t~at
extra .,~ ,000 ,000 would not cost anything.
A~.~ong the options which the City should retain for itself is that of
short-term financing of regular capital expenditures to the point of time
required for over-all generation plans. ~is might be refunded within a period
of two to four years when the first big generation program bonds are sold.
This would be one of the techniques through which the City could save money
because of the much lower interest rate.
In response to Coua%cilman Seymour, ~'ir. Twohy explained that the City's
Zlectric Utility now has a covenant that they will cover to debt service,
principal, and interest, 1.25 times with income before depreciation and interest
charres. On that basis, using last year's figures from the City's financial
statement, this would support a ~62 ,000 ,000 bond issue at the ].25 ratio. :ir.
Twohy explained that he intends to reduce that ratio on the next issue of bonds
to 1.10 coverage which would increase the City's bonding capacity, llowever the
1.25 ratio would have to be maintained as lon~ as the 1.25 bonds are still out-
standin£~ and in this large a financial program, it might be to the City's
advantage to pick up the outstanding bonds as they will !~e subject to call by
that time. lie advised t}~at he did not anticipate any problem in the mark. et
with a 1.10 ratio for the City of Anaheim.
:~r. Hoyt explained that one of the things which happens when the City
mo~es into its own generation program as opposed to straight purchase power is
that while with purchase power the costs include payment for Southern
California Edison's debt service, principal and interest, plus depreciation and
other charges, when this is replaced with an equivalent amount of power from
one of the plants in which Anaheim has an interest, then only maintenance and
operation costs will be included, and not debt service and fixed charges. Each
time another generating plant is put on-line, the City would gain additional
bond in?. capacity.
Councilman Seymour inquired under what borrowing and economic conditions
>~r. Twohy might foresee the Anaheim Electric Utility being required to raise
retail rates.
>ir. Twohy ra~pon~e~ that t]~e Anaheim ~lectric Utility, despite the
tremendous increase in costs for the bulk power supply, has an excellent
earning record, rated "Al" from 1.~oody's and "A+" from Standard and roors.
could not foresee a time when the Utility will not be operating in a manner
as to retain that record.
Councilman Seymour voiced his concern that sometime in ~he future,
particularly during the planning phase of the generation projects, p~ior to
time the City begins to reap the benefits, that the City might be placed in
position of being forced to greatly increase retail rates in order to keep
bonds and investments going until these saving benefits begin to accrue.
76-78
City Ilall~ Anahelm~ California - COUNCIL MINUTES - January 30~ 1976, 10:00 A.M.
Mr. Twohy explained the deferral of principal and capitalization of
interest noting that the City will have no debt service until it begins
receiving kilowatt hours from a generation plant.
Councilman Seymour advised that he feared, because of the fuel cost
adjustment~ economic conditions or the price squeeze itself, that the City
would be placed in a position, for whatever reasons, that they would have
raise rates in order to get that second or third unit on-line.
Mr. Twohy commented that he felt this would be a highly unlikely situa-
tion. He pointed out that the Cityts current bondin8 capacity is $60 ,000 ,000 ~
but at the present time the City only needs $20,000,000 to $25,000,000. lie
reiterated that the City does not have to consider any part of that debt until
it begins to pay dividends by way of providing lower cost electricity.
Councilman Seymour stated that according to the program presented the City
is going to become involved in four or five different generation projects
simultaneously, and if there is a difficult time getting these on-line, then he
could foresee complications in relationship to setting the rates. He noted
that the Edison price squeeze might affect the City so severely that it would
require them not only to economize on operations in order to meet the cost, but
the City would also have to meet certain ratio requirements for bonding
capacity as a result of the generation projects.
Mr. Twohy agreed that this could happen, but advised that if it did it
would be as a result of the price squeeze and not the financing program.
Mr. Talley pointed out that the more generating capacity the City has on-
line, the less effect any price squeeze is likely to have. He also pointed out
that the City would be investing their bonding capacity and those investments
would pay for bonding requirements until the plant is on-line.
Mr. Hoyt also pointed out that a problem could arise if construction
schedules flip once the City has already arranged financing predicated upon a
completion date. This situation might also necessitate the raising of rates.
In 'connection with this, Mr. Twohy emphasized that these completion dates
would be handled very conservatively.
There was brief discussion regarding the problems generally encountered in
start-up of generation plants during which Mr. Watts explained the delays at
San Onofre Uni~ Nos. 2 and 3 and some of the other projects. Mr. Watts
stressed that the difficulties generally arise during the planning and design
stages or in attempting to obtain the necessary regulatory permits.
Mr. Hoyt explained that the really heavy costs are those involved with the
beginning of construction, when contracts are let for equipment and con-
struction and by this time it is fairly well known that there is a schedule
which can be met. The risk period is primarily that phase prior to the time to
construction and there is lesser investment involved during that period of
time. Mr. Hoyt added that assuming the City continues to purchase power from
Edison, that firm has not and will not absorb losses incurred through invest-
ments in generation plants, but will pass those on in increased rates.
~.~r. Hoyt stated that the time frame studied is an inflationary period and
nothing can stop rates from going up regardless of what options the City
chooses; the options will determine however whether or not the rates go up more
or less.
Mr. Westfall emphasized that he did not wish to leave any false impres-
sions that the generation program would give any assurance of no rate increases
from now until 1990. The increased costs of energy sources will have to be
reflected in additional rate increases ag the retail level. The reality is
that with alternative sources of generation, it appears preliminarily that the
Anaheim Utility rates will have to be raised $266,000,000 less than if power
were continued to be purchased from Edison.
Mr. Westfall observed that the annual debt service, assuming a 35-year
term on $150,000,000 worth of bonds is in the order of $12,000,000 to
S13,000,000. The cover requirement for that which is 10%, is 1.2 to 1.3
76-79
City Hall, Anaheim, California - CO~4CIL ~4INUTES - January 30; 19761 1,0:Q0.A.~-~.
million dollars. With gross revenues from the Utility of $100,000,000 or more,
prudence would dictate that rates would be set which would return revenues
after debt service at least in that amount.
Councilman Seymour inquired how the situation might be impacted by addi-
tional investment required for the Joint powers agreement to enter into the
Intermountain Power Project.
~[r. I!oyt advised that the City's interest in that project would be
$450 ,000 ,000 flat cost. This would show as an operating expense and would be
inHistinuuishable from purchase of power from Southern California ?;dison as far
as the City's financial statements are concerned, as it would, in fact, be
purchase of power from the Intermountain Power Project. The leverage received
from this project would be in the cost differential between purchase of power
from the Intermountain Power Project or from Edison.
~',~r. I!oyt concluded that all these projects are in the developmental s~age
and at the time they are presented to the City Council, all factors will be
presented. If the program does not look good or ~here is not sufficient con-
tingency, or the approach is not sufficiently conservative, either the project
will not be recommended for participation or the Council will not approve it.
?Ir. ttoyt stated that everything the Utilities Department has heard from
their consultants tells them that the City will not get into the situation of
having to raise rates in order to provide bond coverage. Dependent upon what
Edison does with its wholesale rates,assuming the price squeeze does not become
unbearable, the City may need to have rates which equal Edison, but it is
unlikely that rates would have to be raised for bonding coverage.
Following discussion, Mr. Hoyt advised that this concludes the presen-
tation, except to point out that the time periods studied by R. W. Beck and
Associates covers the first ten years of the City's proposed experience in
generation and indicates substantial savings, tie remarked that these savings
will continue to accrue to the City for the life of these projects, and that
the first ten years are probably the worst period to review, the savings yields
will look better after the City stops paying on its investment.
.P.0.LICY STATE~:ITS: .On motion by Councilman Seymour, seconded by Councilwoman
Kaywood, the City Council approved and adopted the following policy statements
relating to wholesale electric rates and bulk power supply as amended at tile
me et in g:
POLICY OF THE CITY COUNCIL RELATING TO kq{OLESALE ELECTRIC P. ATES: In the
interest of keeping the cost of electric power as low as possible, it is the
policy of the City Council to intervene and be represented in proceedings
affecting Anaheim's wholesale electrical power cost and to oppose rate
increases and require wholesale power suppliers to justify any rate increase
through hearings conducted by the appropriate regulatory agency.
In order to carry out this policy, the Utilities Director shall initiate
action by appropriate legal and technical counsel when, in his judgment, action
is needed in connection with wholesale rate filingm, Federal Power Commission
rule making proceedings, or actions pending before the Federal Power Com-
mission, other Federal and State administrative boards, commissions or
agencies.
The Utilities Director shall represent the City, in person or through
legal counsel, in matters related to the cost of wholesale electric power
coming before Federal or State administrative boards, commissions or agencies.
It is intended that tile Utilities Director, City Attorney and City
i[anager's Office shall collaborate closely together in carrying out this policy
within the approved budgetary allocation for these express purposes.
CITY CObl;CIL POLICY STATE:~I~.~T ?diLATING TO BULK ELECTRIC FOWER SUFPLY: It is
the policy of the City Council to secure the lowest-cost bulk electric power
supply for the City whether by purchase of wholesale power, by ownership
interest of electrical generation and transmissior, facilities or by other con-
tractual means.
76-80
City Hall~ Anaheim~ Califo,rni~..- COUNCIL ~INUTES - January 30~ .1~76.~ 10:00 A.M.
In order to carry out this policy, the Utilities Director shall explore
all potential sources of bulk power supply, both long-term and short-term.
The Utilities Director shall represent the City in discussions, negotia-
tions and studies with potential power development groups and potential power
suppliers and shall make recommendations to the City Manager and the City
Council for participation in project feasibility studies, power construction
projects and contractual arrangements which, in his judgment, will be
beneficial to the City.
The Utilities Director shall initiate action by technical, financial and
legal counsel when, in his judgment, action is needed in connection with
electric power supply studies, generation construction projects or contractual
arrangements for power supply.
It is intended that the Utilities Director, City Attorney and City
l-Ianager's Office shall collaborate closely together in carrying out this policy
within the approved budgetary allocations for these express purposes.
Council }.~.embers Pebley and Sneegas absent. }~OTION CARRIED.
The Mayor recognized ~'r. Paul Randolph, 816 State Street, Santa Barbara,
California, 93101, Chairman of the Domestic Energy Initiative, who explained
that this initiative addresses the automatic adjustment of electrical rates as
well as the Nuclear Initiative which is scheduled on the June, 1976 ballot.
.~[r. Randolph stated that the Domestic Energy Initiative finds that the i~uclear
Initiative is contrary to the public interest and would destroy the capacity of
the State of California to respond to the energy crisis. It provides therefor
that if this measure is placed on the same ballot as the Nuclear Initiative, or
if it is passed at a subsequent election, it would supersede and nullify the
provisions of the Nuclear Initiative. He stated t1~at his petitions and
information on the Domestic Energy Initiative have been placed before the
Anaheim Chamber of Commerce and he solicits any interest and inquiries from
Council on same.
In response to the Council, Mr. Randolph explained that the sponsors of
the Domestic Energy Initiative are a group of Santa Barbara businessmen. The
initiative also proposes development of a domestic source of energy from the
use of helium-cooled nuclear reactors to be mounted on earthquake-proof barges
at three inland marinas created specifically for this purpose about one-
quarter mile from the ocean with plumbing to the ocean for cooling purposes.
These reactors would produce enough power for distribution to the 14 western
states and with off-peak power they would electrolyze sea water for a source of
hydrogen which could be infused into existing gas lines. These power sources
would substantially reduce the petroleum consumption in the United States and
would aid in this Country's becoming an oil exporter once again.
Mr. Randolph submitted informative materials on the Domestic Energy
Initiative for Council perusal and in answer to Councilwoman Kaywood, he
advised that the reactors were proposed to be placed at Moss Landing, in Orange
County, and near Camp Pendleton, none in Santa Barbara.
UTILITIES COMMISSION: Councilman Seymour stated that he felt it appropriate to
discuss the formation of a Utilities Commission ~for the C,ity of Anaheim at this
time inasmuch as the study session conducted this date has confirmed his
opinion that such a commission is necessary to deal with these very complex and
involved issues, as a great deal of time is required to develop any competency
or level of understanding of same. iie s~ated that he is in favor of estab-
lishing such a commission and felt that it should be accomplished relatively
soon before the City finds itself committed in one direction.
MOTION: Councilman Seymour moved that the City Council ask the Anaheim Chamber
of Commerce and City staff to report back within 30 days with some guidelines
and/or recommendations for the creation of a Public Utilities Commission for
the City of Anaheim. Councilman Thom seconded the motion. Council Members
Pebley and Sneegas absent. MOTION CARRIED.
Mr. Joe ~ite, 809 West Broadway, Anaheim, Chairman of the Chamber Utility
Committee, reported on activities undertaken by them in connection with their
recommendation and advised they would do their best to consolidate their
76-81
City tlall~ Anaheim~ Californi. a - CouNcIL, )ii,JUTES - January 30~ 1976! 10;OO A.)I.
opinions and report to the City Council in 30 days. tlc invited Council Members
to attend the session scheduled for February 6, 1976 in the V.I.P. P~oom at the
Anaheim Convention Center, at which the Chairman of the Los Angeles Department
of Water and Power Commission would speak.
ELLCTRICAL RATE INCREASES: ?,.rr. Talley gave a brief synopsis of his findings
regarding the financial status of the City as of December, 1975. lie advised
that ~he most significant aspect of the report is the change in unappropriated
balance over the years, i~e reported that it is anticipated, with a rate
increase which would equal approximately 95~' of Southern California Edison
retail rates, that the City's total revenues would slightly exceed what is
currently estimated. Uithout the increase, it is estimated that the City will
lose approximately $800,000 to C900,000 from the Utility this fiscal year. It
was further reported that next fiscal year it is proposed that the Utility's
transfer to the General Fund be three-quarters of a million dollars less.
Mr. Talley recommended at this time, in an attempt to achieve a stable revenue
base, that the policy of maintaining retail rates at 95% of Southern California
Edison be retained. Uith this rate adjustment and the implementation of the
other recommendations listed in the January 27, 1976 report, provided that
employe~, salary adjustments are settled at approximately the rates that have
been proposed, the unappropriated balance at the end of the current fiscal year
will be reduced by approxiv,;ately $500,000 from the figure currently budgeted.
In deference to ~ayor Thorn's earlier statement that he was not prepared to
act on the recommendation for sale of electric revenue bonds this date,
)~r. Talley advised Council )fembers that he was not requesting action on that
matter at this time and summarized the actions recommended.
Councilman Seymour stated that although he felt the rate adjustment is
justified, as it would not be sound business practice or fiscal policy to draw
on cas~ reserves to the point where the City would begin a new year on a
negative footing., that since two Council ~embers are absent at this tlme,
perhaps Council should defer decision on the matter until the meeting of
Tuesday, February 3, lq76, and ~ake these adjustments, if approved, retroactive
to ~ebruary 1, 1976.
'~r. Watts advised that a retroactive adjustment is not possible, but that
the matter of two to three days in adjustment of the rates would not make that
much difference.
On motion by Councilman Seymour, seconded by Councilwoman Kaywood, the
Council deferred decision on the recommended adjustment in electrical rates and
implementation of actions recommended by the Assistant City Manager in his six-
month status financial report to the meeting of February 3, 1976. Council
i, lembers Pebley and Sneegas absent. HOTION CARRIED.
ADJOURi-P,IJ.J..;T: Councilman Seymour moved to adjourned. Councilwoman Xaywood
seconded the motion. Council ?.Iembers Pebley and Sneegas absent. HOTION
CARRIED.
Adjourned: 4:40 P.?[.
AL01-;A ?i. II0UGARD, CITY CLE?d(
Deputy