2010/01/12ANAHEIM CITY COUNCIL
REGULAR AND REGULAR ADJOURNED
MEETING OF JANUAR 1 2, 2010
The meeting of January 12, 2010 was called to order at 3:00 P.M and adjourned to 4:OOP.M.
for lack of a quorum. Mayor Pringle called to order the regular adjourned meeting of
January 12, 2010 at 4 :03 P.M. in the Chambers of Anaheim City Hall located at 200 South
Anaheim Boulevard. A copy of the agenda was posted on January 8, 2010 on the kiosk
outside City Hall.
PRESENT: Mayor Curt Pringle and Council Members: Lord Galloway, Bob Hernandez,
Lucille Kring and Harry Sidhu.
STAFF PRESENT: City Manager Tom Wood, City Attorney Cristina Talley, and City Clerk
Linda Andal.
ADDITIONS /DELETIONS TO CLOSED SESSION: None
PUBLIC COMMENTS ON CLOSED SESSION ITEM: None
City Council adjourned to closed session for consideration of the following items:
CLOSED SESSION:
CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
(Subdivision (a) of Section 54956.9 of the Government Code)
Name of Case: Priceline.com, Inc., et al. v. City of Anaheim, et al., Orange County
Superior Court, Case No. 30 -2009 00244120 and related cases.
2. CONFERENCE WITH LABOR NEGOTIATORS
(Subdivision (a) of Section 54957.6 of the Government Code)
Agency Designated Representative: Kristine Ridge
Employee Organization: Anaheim Municipal Employees Association
3. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
(Subdivision (a) of Section 54956.9 of the Government Code)
Name of Case: City of Anaheim v. Myrtle McGowan, Orange County Superior Court,
Case No. 30- 2009 - 00315002
4. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
(Subdivision (a) of Section 54956.9 of the Government Code)
Name of Case: City of Anaheim v. Joy Craft and Kenderic Craft, Orange County
Superior Court, Case No. 30- 2009 - 00315013
5. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
(Significant exposure to litigation pursuant to subdivision (b) of Government
Code Section 54956.9)
Number of Cases: One potential case relating to failure to collect and report
Transient Occupancy Taxes under AMC Chapter 2.12
City Council Minutes of January 12, 2010
Page 2 of 13
At 5:15 P.M., Council session was reconvened.
INVOCATION: Deacon Raymond Duthoy, St Justin Martyr
FLAG SALUTE: Mayor Pro Tern Harry Sidhu
PRESENTATIONS: Recognizing long term City retirees with more than 20 years of service
Walter Jerz, Human Resources, introduced a number of long -term City employees who
retired last year with more than 20 years of service.
ACCEPTANCE OF OTHER RECOGNITIONS (TO BE PRESENTED AT A LATER DATE):
Recognizing the Youth Leadership America graduates
Recognizing Manny Jalandoni for his service to the community
ADDITIONS /DELETIONS TO THE AGENDA: None
PUBLIC COMMENTS (all agenda items):
Marcus Gonzalez, Orange County Human Relations Commission, presented the annual
report on services provided throughout the County, specifically identifying those services
performed for Anaheim. On behalf of the Commission, he recognized the City for their
continuing support of good human relations infrastructure.
James Robert Reade, resident, addressed his comments to actions taken by the Anaheim
Police Department.
Brian Beger, President of Anaheim Municipal Employees Association (AMEA), spoke on
behalf of Anaheim employees concerned about their future. He requested Council postpone
taking action on Agenda Item No's. 6 and 9 and allow management to continue to work with
AMEA to find solutions other than privatization and to allow time for AMEA staff to meet with
the Finance Director to understand the full scope of Anaheim's financial situation.
David Pangold, Vice President of AMEA, requested Council reject Item No's. 6 and 9 or
postpone taking action at this time stating AMEA was ready to consider mandatory furloughs
or pay cuts in lieu of layoffs.
Jason Motsick, Orange County Employees Association (OCEA), reiterated the request to
delay layoffs until OCEA had the chance to meet with the Finance Department staff to
understand budget concerns and jointly work together to discuss the financial decision.
Gayle Wilson asked Council to think carefully on the impacts of their decision to layoff
employees, urging they should work collectively with labor unions to find solutions.
Marc Posner, Cypress College, announced their upcoming fund raiser, the American
Awards, scheduled for February 20 th , indicating Anaheim's Dorothea Stephenson would be
honored for her service to Anaheim as well as Man of the Year, Tommy Lasorda. He
indicated proceeds from the fundraiser would support the work of the foundation,
scholarships, emergency loans, and grants which amounted to $300,000 last year.
City Council Minutes of January 12, 2010
Page 3 of 13
Robert Nothoff, OCCORD, announced the state had passed SB 375, legislation requiring
the reduction of greenhouse gas emissions. Since this law took control from local
government and no funding had been provided, OCCORD believed the program was ideal
for Anaheim by implementing its own policies and using the Platinum Triangle as the site to
enact such an initiative. He indicated the Community Benefits Coalition had drafted a
blueprint for implementing the types of policies the state was seeking and through this
Request for Proposal process, would like to assist staff in drafting a proposal. He added this
plan could provide a solid foundation for successful application and establish Anaheim as a
priority site for funding for the next five years.
Mayor Pringle responded SB 375 directed regional governments, rather than municipalities,
to submit land use transportation plans and that the Orange County Council of Governments
voted to work in cooperation with Orange County Transportation Authority and move forward
with preparing a subregional application in response to SB 375.
CONSENT CALENDAR: Council Member Sidhu pulled Item No. 3 for further discussion.
Council Member Hernandez pulled Item No's. 6, 9, 20, 22 and 29 and Council Member
Kring pulled Item No. 30. Council Member Kring then moved to waive reading in full of all
ordinances and resolutions and to adopt the balance of the consent calendar in accordance
with the reports, certifications and recommendations furnished each council member and as
listed on the consent calendar, seconded by Council Member Hernandez. Roll call vote:
Ayes - 5; Mayor Pringle, Council Members: Galloway, Hernandez, Kring and Sidhu. Noes -
0. Motion Carried
1. Receive and file minutes of the Public Library Board meeting of November 9, 2009;
B105 Senior Citizen Commission meeting of November 12, 2009 and Public Utilities Board
meeting of November 18, 2009.
2. Reappoint Alicia Berhow and appoint Stephanie Sarmiento to the Anaheim
B105 Workforce Investment Board representing business, each to a four year term, ending
January 11, 2014.
4. Approve an amendment to the policy guidelines of the Neighborhood Stabilization
D155 Program.
5. Waive the sealed bid requirement of Council Policy 4.0 and authorize the Purchasing
D180 Agent to issue a purchase order to Tantalus Systems, Inc., in an amount not to
exceed $500,000 (including tax and freight), for the purchase of automated metering
communications equipment for the Public Utilities Department.
7. Waive the sealed bid requirement of Council Policy 4.0 and authorize the Purchasing
D180 Agent to issue a purchase order to Digital Sandbox, Inc., in the amount of $676,305
plus applicable tax, for risk analysis and management software, services and support
for the Police Department's Homeland Security Division.
8. Accept the lowest responsive bid of West -Lite Supply Company, in an amount not to
D180 exceed $246,912, for the purchase of security lights for the Public Utilities
Department for a one year period with four one -year renewal options and authorize
the Purchasing Agent to exercise the renewal options, in accordance with Bid #7328.
City Council Minutes of January 12, 2010
Page 4 of 13
10. Award the contract to the lowest responsible bidder, All American Asphalt, in the
6089 amount of $867,985.36, for street improvements on Magnolia Avenue from the South
City Limits to 915' North of Ball Road, authorize the Finance Director to execute the
Escrow Agreement pertaining to contract retentions and increase the Department of
Public Works' fiscal year 2009/10 revenue and expenditure appropriations by
$998,184 for the American Recovery and Reinvestment Act funding.
11. Award the contract to the lowest responsible bidder, Ortiz Asphalt Paving, Inc., in the
6070 amount of $468,864.08, for street improvements on Miraloma Avenue from 800'
West of Tustin Avenue to East City Limits, waive minor technical errors or
discrepancies in the bid to best serve the interest of the City, authorize the Finance
Director to execute the Escrow Agreement pertaining to contract retentions and
increase the Department of Public Works' fiscal year 2009/10 revenue and
expenditure appropriations by $539,193.08 for the American Recovery and
Reinvestment Act funding.
12. Award the contract to the lowest responsible bidder, R.J. Noble Company, in the
6071 amount of $240,025.80, for street improvements on Broadway from East Street to
Bond Street, authorize the Finance Director to execute the Escrow Agreement
pertaining to contract retentions and increase the Department of Public Works' fiscal
year 2009/10 revenue and expenditure appropriations by $276,030 for the American
Recovery and Reinvestment Act funding.
13. Award the contract to the lowest responsible bidder, R.J. Noble Company, in the
6072 amount of $668,465.60, for street improvements on East Street from Santa Ana
Street to Cypress Street, authorize the Finance Director to execute the Escrow
Agreement pertaining to contract retentions and increase the Department of Public
Works' fiscal year 2009/10 revenue and expenditure appropriations by $768,736 for
the American Recovery and Reinvestment Act funding.
14. Approve an extension request to the California Department of Finance for the
1654.M.118.0.1 Cooperative Work Agreement for the Gene Autry Way (West) project.
15. Approve the Assignment and Assumption Agreement with Pouk & Steinle, Inc., and
2735.B.0.1 International Line Builders, Inc., consenting to the assignment of an existing contract
with Pouk & Steinle, Inc., to International Line Builders, Inc., for maintenance, repair,
relocation, construction, inspection and immediate response services and authorize
the Public Utilities General Manager to execute the agreement and related
documents.
16. Approve the Assignment and Assumption Agreement with AMEC Earth and
3229.A.0.1 Environmental, Inc., and Group Delta Consultants, Inc., consenting to the
assignment of a specific portion of an existing contract with AMEC Earth and
Environmental, Inc., to Group Delta Consultants, Inc., for geotechnical engineering
and material testing and inspection services and authorize the Public Works Director
to execute the agreement and related documents.
17. Approve the Assignment and Assumption Agreement with Pouk & Steinle, Inc., and
5872.0.1 International Line Builders, Inc., consenting to the assignment of an existing contract
with Pouk & Steinle, Inc., to International Line Builders, Inc., for the Mohler
City Council Minutes of January 12, 2010
Page 5 of 13
Drive /Country Hill Rehabilitation Overhead to Underground project and authorize the
Public Works Director to execute the assignment agreement and related documents.
18. Approve and authorize the Convention, Sports and Entertainment Executive Director
6073 to execute the Occupancy Agreement with Freeman Decorating Services Inc. for the
temporary use of a portion of the one -acre property located at 1790 S. Douglass
Road and authorize the Executive Director to approve and execute future temporary
use agreements for said site.
19. Approve the First Amendment to Communications Site Lease Agreement with T-
1675.1.1 Mobile West Corporation authorizing T- Mobile to place an additional cell site at the
Anaheim Convention Center.
21. Approve and authorize the Public Utilities General Manager to execute an agreement
6074 with Kema, Inc., in an amount not to exceed $614,759, to implement and administer
residential advantage services for the Public Utilities Department for one year with
options for two one -year extensions and to take the necessary actions to implement
the agreement.
23. RESOLUTION NO. 2010 -001 A RESOLUTION OF THE CITY COUNCIL OF
D150 THE CITY OF ANAHEIM authorizing the City Manager or his designee to submit a
grant application for a State of California Park Program (Miraloma Park project).
Amend the Community Services Department's budget for the fiscal year in which the
grant funds are awarded.
24. RESOLUTION NO. 2010 -002 A RESOLUTION OF THE CITY COUNCIL OF
D124 THE CITY OF ANAHEIM accepting certain deeds conveying to the City of Anaheim
certain real properties or interests therein (City Deed Nos. 11327, 11328 and 11330).
25. RESOLUTION NO. 2010 -003 A RESOLUTION OF THE CITY COUNCIL OF
D159 THE CITY OF ANAHEIM adopting the taxicab regulations of the Orange County Taxi
Administration Program.
26. RESOLUTION NO. 2010 -004 A RESOLUTION OF THE CITY COUNCIL OF
D175 THE CITY OF ANAHEIM approving the addendum to the Final Environmental Impact
Report for the Gene Autry Way (West) Highway Improvement project and
determining its adequacy to serve as the required environmental documentation for
the proposed project.
27. RESOLUTION NO. 2010 -005 A RESOLUTION OF THE CITY COUNCIL OF
D160 THE CITY OF ANAHEIM authorizing the Chief of Police or his designee to
participate in the U.S. Department of Justice Program in conjunction with the City of
Los Angeles on behalf of the City of Anaheim, authorizing the execution of all
required documents, and amending the budget for fiscal year 2009 -10 accordingly
($34,403).
28. RESOLUTION NO. 2010 -006 A RESOLUTION OF THE CITY COUNCIL OF
D154.5 THE CITY OF ANAHEIM establishing rates of compensation for classifications
assigned to the International Brotherhood of Electrical Workers, Local 47.
City Council Minutes of January 12, 2010
Page 6 of 13
D154 RESOLUTION NO. 2010 -007 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM amending Resolution No. 2000R -122 for the purpose of
modifying those classifications designated as Executive Management.
RESOLUTION NO. 2010 -008 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM amending Resolution No. 2000R -123 for the purpose of
modifying those classifications designated as Administrative Management.
RESOLUTION NO. 2010 -009 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM amending Resolution No. 2000R -124 for the purpose of
modifying those classifications designated as Middle Management.
RESOLUTION NO. 2010 -010 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM amending Resolution No. 2000R -126 for the purpose of
modifying those classifications designated as Supervisory Management.
RESOLUTION NO. 2010 -011 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM amending Resolution No. 2000R -125 for the purpose of
modifying those classifications designated as Professional Management.
END OF CONSENT CALENDAR
3. Ratify acting appointments for the positions of Assistant City Manager, Deputy City
D116 Manager, Finance Director, and Fire Chief and authorize the City Manager to make
future similar executive acting appointments as needed.
Tom Wood, City Manager, reported action on Item No. 3 would ratify acting appointments of
four executive positions as part of on -going efforts at salary savings. Marcie Edwards would
have a dual role as Utilities General Manager and Acting Assistant City Manager. Dual
roles for Sheri Vander Dussen would include Acting Deputy City Manager as well as
Planning Director and for Kristine Ridge would include Acting Finance Director in addition to
Human Resources Director. Larry Waterhouse would also act as Fire Chief, as well as
Deputy Fire Chief. These efforts, he stressed, would save over 22 percent in executive
compensation.
Council Member Sidhu pointed out this action would save approximately $322,000 for every
three months in effect. Mayor Pringle stated that although he supported this action since it
reduced costs during a time when it is important to reduce the budget, he was not in favor of
a dual- sharing department head policy for a long period of time. He stated that it was
important to demonstrate leadership in all departments. Council Member Kring moved to
approve Item No. 3, seconded by Council Member Sidhu. Roll Call Vote: Ayes — 5: Mayor
Pringle and Council Members: Galloway, Hernandez, Kring and Sidhu. Noes — 0. Motion
Carried.
6. Waive the sealed bid requirement of Council Policy 4.0 and approve the first
5737.1 amendment to the turf landscape maintenance agreement with Marina Landscape,
Inc., in the annualized cost of $214,896, adding trash and litter removal services for
all City parks to accomplish a net savings of over $200,000
Agenda Item Nos. 6 & 9 were discussed concurrently. City Manager Tom Wood reported
Item Nos. 3, 6, 9 and 20 related to the City's on -going efforts to continue and provide quality
City Council Minutes of January 12, 2010
Page 7 of 13
service to residents with available financial resources. Anaheim had used its financial
strength to weather these difficult economics; but to continue to deliver core services, he
explained, further action was required to insure expenditures did not exceed revenues.
Agenda Items 6 and 9, he stated, were recommendations which saved money and
continued public services.
Kristine Ridge, Human Resources Director and Acting Finance Director, reported these
actions were part of a larger cost reduction strategy necessary to continue to address
Anaheim's revenue shortfall. Over recent years, she remarked, in response to the
weakening economy and uncertainties at the state level, Anaheim had already taken a
number of measures to reduce costs, streamline operations, and identify alternate funding
sources. The measures taken were significant and included: greater containment of health
benefit costs, a hiring freeze and eliminating positions, modifying timing of the Utility transfer
and refinancing debt, removing a fire truck from service and negotiating zero -wage
increases, placing a moratorium on vacation cash -out provisions and transitioning full -time
employees to part-time through a retirement incentive program, offering a voluntary furlough
program and privatizing operations without impact to services, as well as reducing the
number of sworn police officers. Other measures identified were shifting general fund
obligations to community development, accelerating loan payments to the general fund,
selling access rights -of -way, refunding previous general fund payments for internal services,
and reducing lease costs by securing a federal loan to purchase a building. Despite all of
these efforts, she emphasized, this current year the adopted budget anticipated a $20
million shortfall. Unfortunately, she added, based on revenue performance to date, it was
anticipated that shortfall would approach $28 million by the end of the fiscal year. Ms. Ridge
explained the increase in the shortfall was attributed to further erosion of sales tax revenue
and to a lesser extent, the transient occupancy tax (TOT) revenue. She noted while
economic forecasts had shown some signs of recovering it still continued to indicate further
sluggish performance specifically in the area of consumer spending. In order to address this
projected $8 million increase in unbudgeted deficit, she stated, staff was continuing to
diligently implement further cost savings strategies of which four of these strategies were
being considered by council this evening. These strategies included modification to the
payments to the Visitors Convention Bureau, privatization of the restroom cleaning,
privatization of litter removal, and shifting of duties and responsibilities to maintain savings
related to four executive vacancies. With approval of these items, she noted, and based on
other costs reduction strategies taken this year, the City would have addressed over $3.8
million of the additional projected $8 million deficit. She ended her presentation stating staff
recognized additional deductions of $4 million would still be necessary and was currently
reviewing how more general fund and labor costs could be further reduced citywide.
Terry Lowe, Community Services Director, reported Item No. 6 was to amend the existing
agreement with Marina landscaping to add the trash and litter removal function to the
mowing function they were already performing in the parks system. Item No. 9 was a
recommendation to accept a bid for custodial services for City park restrooms. Privatization
of these functions, he explained, would result in elimination of eleven labor and maintenance
worker positions at an annual savings to the City of $551,000. These changes, he added,
were being proposed because of the impact the economy had on City revenues, which
resulted in the immediate need to reduce expenditures. As was the case in all of the
reductions experienced in the last few years, he emphasized, staff attempted to minimize
the impacts of these reductions on its residents. All but the most essential operating
accounts had been severely reduced. Mowing had been privatized, many vacant full -time
positions had been eliminated, over 120 occupied part-time positions had been eliminated
City Council Minutes of January 12, 2010
Page 8 of 13
and staffing and hours of operation at every facility in our systems had been reduced. He
pointed out, in the cases of occupied full -time positions eliminated thus far; displaced
employees had been reassigned to other departments. He ended his presentation stating
that given the scope and immediacy of the City's current financial condition and the fact that
74 percent of the Department's costs were related to labor, there were few options left other
than to further reduce personnel cost and Item Nos. 6 and 9 would continue to provide
clean, safe parks for the community while significantly reducing expenditures.
Council Member Hernandez requested staff explain the timeline in the 30 -day delay of
implementation should these items be approved. Mr. Wood responded the recommendation
was that Council take action this evening and since it would take a number of weeks to bring
contractors on board, Council would have the option of delaying the effective date. Council
Member Hernandez asked what the impact was by postponing action on these items until a
future date. Mr. Wood answered the action before Council was part of a strategy to solve
the $8 million shortfall. To date, he stated, staff identified a little over $3 million in savings
and with Item Nos. 6 and 9 approved, the savings would be approximately $500,000. Item
No. 20 on the agenda would save approximately an additional $500,000 which still left a $4
million deficit, and staff would have to consider further layoffs and working with labor groups
for ways to further reduce that $4 million. Postponing tonight's actions would only increase
that $4 million shortfall.
Council Member Galloway remarked that philosophically she was not a fan of privatization.
She recommended working with AMEA and Anaheim employees to ask them to step up and
take care of their Anaheim family to find suitable solutions during this economic uncertainty,
stating she would ask her colleagues to postpone action to allow AMEA to work towards a
solution.
Council Member Kring remarked that AMEA employees had been generous, agreeing to 18
months without any increase in salary, and recommended postponing action on these items
to allow AMEA to meet with City staff to get all the facts and return with solutions to address
the shortfall.
Mayor Pringle remarked that two of the three large bargaining units had ratified contract
extensions and addressed the economic crisis some time ago. Information had been
disseminated on revenue losses statewide such as sales tax and TOT for some time. He
noted every bargaining unit had been asked to participate and get involved and take budget
reductions. The City, he emphasized, had saved over $35 million in reserves, had been
using it to cover shortfalls and if changes were not made, would use the remaining funds by
mid -2011. He added staff did what it could last year and now had no options available and
Council had directed the City Manager to ensure Anaheim remained solvent. He further
added he hoped the 11 positions being laid off would be able to competitive compete for
positions in non - general fund departments in which they were qualified and would support
approval of Item No's. 6 and 9, with a 30 day delay for transition, because for every week
action was postponed there would be greater challenges ahead.
Council Member Sidhu concurred, stating council members had a bigger responsibility to the
people who live in Anaheim to provide services.
Council Member Kring commented these actions were not taken lightly by council members
and moved to postpone acting on Item No's. 6 and 9 for two weeks to give AMEA enough
time to determine the savings that could be captured through mandatory furloughs and pay
City Council Minutes of January 12, 2010
Page 9 of 13
reductions and return in two weeks for reconsideration, and with no second, the motion
failed. Council Member Galloway made a motion to postpone action for 30 days, and with
no second to that motion, it failed. Council Member Kring then moved to postpone action
until February 9 seconded by Council Member Galloway. Roll Call Vote: Ayes — 2:
Council Members Galloway and Kring. Noes — 3: Mayor Pringle and Council Members:
Hernandez and Sidhu. Motion Failed.
Council Member Sidhu then moved to approve Item No. 6 and Item No. 9, implementing
action in 45 days and providing affected employees an opportunity to compete for non -
general fund positions in which they are qualified, seconded by Council Member Hernandez.
Council Member Hernandez asked how deficiencies and oversight would be handled for
contractors. Mr. Lowe responded the contractors would be overseen by park supervisors
maintaining quality control and solving problems similar to the current mowing crew
contractors. He added there were penalties associated with not completing specific
requirements, up to termination of contract. Council Member Galloway pointed out if these
items were adopted, there would be no opportunity for the AMEA to go to their membership
to try to take other actions to prevent layoffs.
Roll Call Vote: Ayes — 3: Mayor Pringle and Council Members Hernandez, and Sidhu.
Noes — 2: Galloway and Kring. Motion Carried.
9. Accept the low bid and approve an agreement with Spotless Janitorial Services, in
6068 the amount of $131,148.20, for custodial services at all City parks to accomplish an
annual net savings in excess of $351,000, for a one year period with four one -year
renewal options, and authorize the Purchasing Agent to exercise the renewal
options, in accordance with Bid #7333.
Item 09, discussed concurrently with Item No. 6 (refer to Item No. 6 for discussion).
Council Member Sidhu moved to approve Item No's. 6 and 9, implementing action in 45
days and providing affected employees an opportunity to compete for non - general fund
positions in which they are qualified, seconded by Council Member Hernandez. Roll Call
Vote: Ayes — 3: Mayor Pringle and Council Members Hernandez and Sidhu. Noes — 2:
Council Members Galloway and Kring. Motion Carried.
20. Approve the Seventh Amendment to Agreement with the Anaheim /Orange County
2990.7 Visitor & Convention Bureau (VCB) defining the reduction of compensation for fiscal
year 2009/10 that the VCB has agreed to forego, in the amount of $500,000.
City Manager, Tom Wood reported this item was a reduction in the VCB contract in the
amount of $500,000. Annually the VCB received approximately 12 percent of the 15
percent TOT rate used to market and fill Anaheim hotels which generated the bed tax. He
explained this action was something Anaheim would not normally take because marketing
efforts to fill the convention center and hotel rooms would not normally be reduced during
tough economic times. But due to the severity of the current financial situation, staff was
making this recommendation to reduce VCB compensation.
Council Member Hernandez highlighted this effort to mitigate the budget crisis and moved to
approve Item No. 20, seconded by Mayor Pringle. Roll Call Vote: Ayes — 5: Mayor Pringle
and Council Members: Galloway, Hernandez, Kring and Sidhu. Noes — 0. Motion Carried.
City Council Minutes of January 12, 2010
Page 10 of 13
22. Approve and authorize the Public Utilities General Manager to execute an agreement
6075 with Orange County Water District for the distribution and sale of Groundwater
Replenishment System Water Supplies and to take the necessary actions to
implement and administer the agreement.
Marcie Edwards, Public Utilities General Manager, reported Item No. 22 requested approval
of an agreement with Orange County Water District (OCWD) for purchase of groundwater
replenishment system (GWRS) recycled water supplies for the Canyon Power Plant project.
She explained Canyon Power Plant was an electric generating plant which the Utilities
Department would soon be constructing in April and anticipated to be operational in May of
2011. As part of the permitting requirements, the California Energy Commission required
the plant use only recycled water and the groundwater replenishment system water was a
convenient and cost effective source of recycled water and was currently being conveyed in
a pipeline to water basins near Mira Loma Avenue and Kraemer Boulevard, close to the
Canyon Power Plant site. She added this would be the first use of GWRS water for
industrial purposes with OCWD having approved the agreement prior to Council's
consideration.
Council Member Hernandez remarked this action was important to protect Anaheim's
precious resources and moved to approve Item No. 22, seconded by Council Member
Galloway. Mayor Pro Tern Sidhu commented this project was an innovative way for the City
to go green and protect the environment. Mayor Pringle concurred pointing out that even
during these tough times, the Public Utilities Department had moved forward through the
state energy system permitting process to enable Anaheim to build the power plant in the
Canyon business area to protect residents and businesses whenever energy shortfalls or
blackouts occur. In addition to that permitting process, he added, the state included
another hurdle which prevented the use of potable water to run the plant and required a
commitment as to what water would be used before construction could begin. In this case,
he noted, OCWD provided clean water for groundwater replenishment in the county and
through a joint powers agreement, would now make that reclaimed water available to
Anaheim. He commended the Utilities Department for their efforts at providing this asset for
the City.
Roll Call Vote: Ayes — 5: Mayor Pringle and Council Members: Galloway, Hernandez, Kring
and Sidhu. Noes — 0. Motion Carried.
29. RESOLUTION NO. 2010 -012 A RESOLUTION OF THE CITY COUNCIL OF
D182 THE CITY OF ANAHEIM modifying the rates, rules and regulations for the sale and
distribution of electricity as adopted by Resolution No. 71 -478 and most recently
amended by Resolution No. 2009 -077.
RESOLUTION NO. 2010 -013 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM modifying the rates, rules and regulations for the sale and
distribution of water as adopted by Resolution No. 72 -600 and most recently
amended by Resolution No. 2009 -078.
Certify that the proposed modifications to the City of Anaheim Water and Electric
Rates, Rules and Regulations are statutorily exempt under the California
Environmental Quality Act, Public Resources Code, Section 21080(b)(8) in
accordance with Title 14 of the California Administrative Code, Section 15273(x).
City Council Minutes of January 12, 2010
Page 11 of 13
Marcie Edwards, Public Utilities General Manager, reported Item No. 29 was a
recommendation to make modifications to the electric rates, rules and regulations. She
explained the Utility Department continually reviewed its rates for competitiveness within the
region, determining whether rates were recovering the appropriate cost and to insure rate
options met the needs of the community. Following this routine review, and after unanimous
approval and recommendation by Public Utilities Board, she stated the following changes
were proposed.
The first recommended change was to reduce the power cost adjustment (PCA) aspect of
the electric rate down to zero, with a corresponding increase in base rate in order to better
reflect where the cost should be collected. This change would have little to no impact on
commercial /industrial customers and would cause a minor increase to the cost of the first
270 kilowatt hours of energy consumed by residents. She explained, the Utilities
Department collected its power - related costs through base rates and PCA. Base rates were
meant to recover long term structural cost the Utility incurred for power such as long term
purchase power contracts or debt service on power plants. The PCA, she pointed out,
recovered costs shorter term in nature such as changes in the cost of fuel or whole sale
power costs that were subject to great fluctuation. She noted Anaheim had already taken
steps to remove much of the volatility in its power related costs by using longer term gas
hedging strategy and increasing market -based renewable power supply contracts.
The second recommended change was to implement a high voltage rate for current and
potential customers taking electric service at levels above 50,000 volts. This rate would
make Anaheim a more desirable location for businesses and provide those customers with a
financial incentive to take service at this level and install the necessary infrastructure on
their site.
The third change she identified was to recommend Council reinstate and modify the
economic development and business retention rate which was previously closed due to a
sunset provision in the rate. This action, she pointed out, would be a valuable tool to
improve Anaheim's ability to attract and retain much needed commercial investment and
development.
The fourth change was to recommend a consistent and uniform method be established in
how large commercial /industrial power demand levels were measured and the last change
was to recommend the creation of a one percent late payment charge for water and electric
customers. This late charge, she indicated, had been repeatedly requested by customers
who would like to have the flexibility to pay late without the risk of disconnection and without
having to call to make payment arrangements. She ended her presentation stating this was
a prudent approach providing more rate options and financial incentives for businesses to
locate and invest in Anaheim and enabled the Utility to continue to provide reliable electric
service at lower costs.
Council Hernandez complimented staff on a rate increase which did not burden its
customers and moved to approve RESOLUTION NO. 2010 -012 OF THE CITY OF
ANAHEIM modifying the rates, rules and regulations for the sale and distribution of
electricity as adopted by Resolution No. 71 -478 and most recently amended by Resolution
No. 2009 -077; and to approve RESOLUTION NO. 2010 -013 OF THE CITY OF ANAHEIM
modifying the rates, rules and regulations for the sale and distribution of water as adopted
by Resolution No. 72 -600 and most recently amended by Resolution No. 2009 -078; and to
Certify that proposed modifications to the City of Anaheim Water and Electric Rates, Rules
City Council Minutes of January 12, 2010
Page 12 of 13
and Regulations were statutorily exempt under the California Environmental Quality Act,
Public Resources Code, Section 21080(b)(8) in accordance with Title 14 of the California
Administrative Code, Section 15273(a), seconded by Council Member Kring. Roll Call Vote:
Ayes — 5: Mayor Pringle and Council Members: Galloway, Hernandez, Kring and Sidhu.
Noes — 0. Motion Carried.
30. Approve minutes of the regular meetings of December 8, 2009 and
December 15, 2009.
Council Member Kring moved to revise the minutes of December 8, 2009 reflecting City
Manager Dave Morgan's name listed on page one of the minutes be corrected to read "Tom
Wood ", seconded by Council Member Galloway. Roll Call Vote: Ayes — 5: Mayor Pringle
and Council Members: Galloway, Hernandez, Kring and Sidhu. Noes — 0. Motion Carried.
31. Consider making the three remaining appointments to the Sister City Commission,
B105 term expiring June 30, 2011 (continued from the meeting of December 15, 2009,
Item No. 22).
Appointment: continued to a future date
(Mayor Pringle)
Appointment: Joe Aihara
Council Member Hernandez requested Joe Aihara be appointed to the Commission.
Mr. Aihara was unanimously appointed.
Appointment: Carolyn Yellis
Council Member Kring requested Carolyn Yellis be appointed to the commission. Ms. Yellis
was unanimously appointed.
Report on Closed Session Actions: None
Council Communications:
Council Member Hernandez reported on the passing of Harriett Wieder, former Orange
County Supervisor. He announced the Youth Leadership America banquet to be held on
January 19, 2010, an organization which provided leadership training to young people, and
recommended their website be visited for more details ( www.ylamerica.org ). He also spoke
of his meeting with representatives from Growth Options for 21S century, a national non-
profit public interest organization dedicated to promoting freight trains as solutions to reduce
highway congestion and air pollution.
Council Member Galloway recognized City employee, Raul Pazaro, Tree Trimmer Assistant.
Council Member Kring congratulated the Apps Challenge 15 winners selected out of 840
entries submitted from 12 states and 94 cities throughout the country. She indicated it was
a successful event with innovative and creative ideas having been submitted. She also
congratulated Fairmont Elementary School for their support of the military overseas through
their Operation Candy program, shipping nearly a ton of candy to troops in Iraq and
Afghanistan. Council Member Kring also announced the Cops for Kids fundraiser to be held
on January 20 at the Orange Tree Deli and a fundraiser to support the Y.M.C.A. on
January 28 at Rubio's located in the Anaheim Plaza on Euclid Street.
City Council Minutes of January 12, 2010
Page 13 of 13
Mayor Pro Tern Sidhu announced he would be attending the opening of the Placentia
Census Bureau Branch Office on January 14, 2010 and encouraged participation in the
2010 census. He reported that 17 Orange County teachers received the National
Certification for Teachers, nine of whom were from the Anaheim Elementary School system.
Mayor Pringle announced the High Speed Rail meeting to be held on January 20, 2010 in
Anaheim Council Chambers and the State of the City address to be delivered January 26`
Referencing SB 375 and AB 32, he announced residents should understand that the
California Resources Board established targets for greenhouse gas reductions and would
require utilities such as Anaheim Utilities to cap emissions and if those emissions were
exceeded, Anaheim would have to give dollars to other agencies below the cap. Anaheim,
he pointed out, had 20 and 30 year contracts with coal operators as it was an inexpensive
source for power and kept customer rates down and the use of coal, he remarked, could
exceed emission caps. These laws, he emphasized, could now increase the cost of power
to Anaheim residents and businesses by approximately 20 to 25 percent and he brought this
to the attention of the community as there should be more awareness of how Sacramento
and Washington actions affect Anaheim residents and businesses.
ADJOURNMENT; At 7:24 P.M., with no other business to conduct, the January 12, 2010
Council meeting was adjourned.
Re ? 6c ully submitted,
9
Linda N. Andal, CIVIC
City Clerk