Public Utilities 2022/02/23CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
February 23, 2022
The agenda having been posted on Friday, February 18, 2022, the Regular Meeting of the Public Utilities
Board (Board) was called to order by Chairperson J. Seymour at 5:00 p.m. on Wednesday, February 23,
2022, in the Gordon Hoyt Conference Center, 2nd floor, Anaheim West Tower, 201 S. Anaheim Blvd.,
Anaheim, California.
Board Members Present: Chairperson J. Seymour, Vice -Chairperson V. Baroldi, A. Abdulrahman,
R. Bhalla, N. Campos Kurtz, M. Lee, A. Pham
Board Members Absent: None.
City Staff Present: D. Lee, P. Starr, B. Beelner, J. Lonneker, A. Kott, J. Lehman, C. Parker, M.
Avelino -Walker, J. Sanks
Guest(s) Present: None.
AGENDA ITEM ACTION TAKEN
1. OATH OF OFFICE: NEW PUBLIC UTILITIES BOARD
MEMBER, ANH PHAM (DISTRICT 2).
A. Kott, Assistant City Attorney, administered the Oath of Office to
the new member of the Board.
2. PUBLIC COMMENTS.
There being no electronic or
oral public comments,
Chairperson J. Seymour
closed the public comments
portion of the meeting.
3. APPROVAL OF THE MINUTES OF THE PUBLIC N. Campos Kurtz moved the
UTILITIES BOARD REGULAR MEETING OF JANUARY 26, approval of the Minutes of
2022. * the Public Utilities Board
Regular Meeting of January
26, 2022. V. Baroldi
seconded the motion.
MOTION CARRIED: 6-0-
1.
ABSTAINED: 1 [A.
Pham].
ABSENT: 0
2022 - 10
4. PRESENTATION: PROTECTING EMPLOYEES AND THE
PUBLIC, ANNUAL SAFETY PERFORMANCE UPDATE.
J. Sanks, Environmental Services and Safety Manager, provided a
presentation and gave an overview of the Anaheim Public Utilities
Department (APU) safety program that described workplace
hazards, training, audits and inspections, incident review, and
APU's COVID-19 response. He described methods for customer
safety, including a description of traffic control and APU's
contractor safety reviews. J. Sanks noted that a recent safety survey
showed employees desired additional updates related to COVID-19.
J. Sanks described training methods used by staff and how proactive
reporting of near misses and safety suggestions are encouraged. He
added that an upcoming area of focus will be on training for
engineers and infrequent field site visitors. He then described
APU's safety performance for last year, highlighting an overall
drop in the disabling injury rate and other safety metrics, and noting
an increase in reported near misses. J. Sanks indicated that sprains
and strains were the most common injuries in 2021, and they would
focus on preventing these through additional field sites, task -
specific ergonomic training, and conducting job hazard
assessments.
The Board asked how many disabling injuries were related to
COVID-19. J. Sanks answered that two out of five were related to
COVID-19 and described that even minor cases of COVID-19
could be counted as a disabling injury, due to the required
quarantine periods. The Board asked whether staff were required to
wear flame -resistant clothing, and J. Sanks replied describing which
staff are required to wear this extra protection.
5. BY RESOLUTIONS, AUTHORIZE THE ISSUANCE OF NOT -
TO -EXCEED $212,000,000 AGGREGATE PRINCIPAL
AMOUNT OF ANAHEIM HOUSING AND PUBLIC
IMPROVEMENTS AUTHORITY (AHPIA) REVENUE
BONDS, SERIES 2022-A, SERIES 2022-B (TAXABLE), AND
SERIES 2022-C (WATER SYSTEM); AND NOT -TO -EXCEED
$495,000,000 AGGREGATE PRINCIPAL AMOUNT OF
AHPIA REVENUE BONDS, SERIES 2022 A, SERIES 2022 B,
SERIES 2022-C (TAXABLE), AND SERIES 2022 D
(ELECTRIC SYSTEM). *
B. Beelner, Assistant General Manager — Finance and Energy
Resources, presented a verbal report which requested the Board to
recommend, by Resolutions, to City Council that the City of
Anaheim issue two separate types of fixed rate bonds. The first
being a not -to -exceed $520 million fixed rate Electric Revenue
Bond for three purposes: first, to fund $50 million for the
construction of necessary electric distribution system investments;
second, to fund $75 million to finance a proposed 50 MW Battery
Energy Storage System; and third to refund $395 million in older
V. Baroldi moved to
authorize the issuance of
not -to -exceed $212,000,000
aggregate principal amount
of AHPIA Revenue Bonds,
Series 2022-A, Series 2022-
B (Taxable), and Series
2022-C (Water System); and
not -to -exceed $520,000,000
aggregate principal amount
of AHPIA Revenue Bonds,
Series 2022 A, Series 2022
B, Series 2022-C (Taxable),
and Series 2022 D (Electric
Systems). A. Abdulrahman
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
2022 - 11
more expensive debt to potentially save electric customers $68.2
million in future interest payments. The second bond issuance
request is for the City to issue not -to -exceed $212 million in Water
Revenue Bonds for two purposes: first, to fund $50 million for the
construction of necessary water system improvements; and second,
to refinance up to $162 million in older more expensive debt.
B. Beelner discussed how bonds ensure that each generation of
customer pays their equitable share of their respect use of an asset,
and prevents rate spikes when large capital assets are constructed.
In order to remain financially flexible, APU plans to cash fund its
routine water capital needs for the rest of the current decade, and
currently forecasts to issue one more new electric bond in FY 2025.
This will allow APU to become more nimble to better handle the
changing nature of the utility industry.
B. Beelner discussed APU's historical, current, and projected debt
to asset ratio and how APU has consistently worked and plans to
continue to work to bring that ratio down. The Board questioned
APU's debt to ratio in relation to state averages and compared to
other publicly owned utilities, and at what level would investors or
rating agencies become concerned. B. Beelner shared with the
Board that APU's debt to asset ratio is about average, and a ratio of
approximately 60% would cause concern.
B. Beelner then discussed how APU continually shortens its electric
debt portfolio in order to prepare for future uncertainty and uses
five year par calls as opposed to the industry standard 10 year par
calls to pay off debt faster. The Board discussed APU's five year
par call strategy and the benefits of that strategy during the current
rising interest rate environment versus the more conservative ten
year par call standard. B. Beelner mentioned that he feels that over
the long run this strategy has served APU well, and that continuing
with this strategy is still the best plan for APU's customers. The
Board also discussed the importance of the long-term plan to reduce
APU's reliance on debt.
6. UPDATE ON ELECTRIC SYSTEM ITEMS.
J. Lonneker, Assistant General Manager - Electric Services, shared
with the Board information about a recent power outage resulting
from an industrial complex fire in West Anaheim on Knollwood
Circle. APU crews disconnected power at the request of Anaheim
Fire and Rescue (AF&R) and later secured electrical facilities in
front of the building during demolition at the request of the Public
Works Department. Electrical equipment damaged from the fire
will be replaced when the site is accessible.
J. Lonneker indicated to the Board that aging cable at the Anaheim
Convention Center (ACC) has been replaced. APU assisted ACC
staff with obtaining a design and installation contractor and with
project management.
2022 - 12
7. UPDATE ON WATER SYSTEM ITEMS.
C. Parker, Water Engineering Manager, provided an update on
water supply. The Orange County Groundwater Basin was in good
condition and that Anaheim is positioned well for the drought. He
also mentioned that Metropolitan Water District of Southern
California (MWD) is using some water from its storage; however, it
still has a substantial amount in storage for an extended drought. He
stated that rainfall is slightly below average for the year and that
Anaheim may have to move to Water Shortage Contingency, Stage
2 if the drought worsens.
C. Parker briefed the Board on the rehabilitation of Well 48 at Dad
Miller Golf Course. It went offline due to motor issues last fall, but
the pump and motor have been fully rehabilitated.
C. Parker shared with the Board that he and M. Moore, Assistant
General Manager — Water Supply, met with Joaquin Esquivel, the
Chair of the State Water Resources Control Board, and discussed
potential Per- and Polyfluoroalkyl Substances (PFAS) funding for
the Groundwater Treatment Program.
C. Parker added that MWD has proposed rate increases of 8% for
each of the next two years, 16% in total. APU staff will be engaging
with MWD staff to ensure the rates are justified.
8. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS.
B. Beelner discussed the monthly finance dashboard with the Board
- the year to date electric revenue through January, 2022 was 0.7%
above budget ($1.9M). Electric costs for the fiscal year to date fell
below budget by 7.8% ($17.5M) causing a net positive budget
variance of $15.6M. B. Beelner then mentioned that year to date
water revenue was 3.3% ($2.OM) below budget. However, water
operating costs fell below budget by 9.9% ($4.9M) causing a net
positive budget variance of $2.9M.
B. Beelner presented the Power Supply dashboard and discussed the
continued wholesale revenue under -performance due to the ongoing
fuel supply issues at the Intermountain Power Plant (IPP). The
Board discussed the increase in purchased power from the
wholesale market and B. Beelner mentioned that the increase was
directly caused by the IPP fuel supply constraints.
9. UPDATE ON ADMINISTRATION & RISK SERVICES
ITEMS.
J. Lehman, Interim Assistant General Manager - Administration and
Risk Services, shared with the Board that an alert had been received
about the potential for Russian -linked cyber and disinformation
2022 - 13
activity and indicated that one of the benefits of these alerts is that it
provides an opportunity to check in on resources and increase the
awareness of these activities that, in reality, can happen at any time.
J. Lehman invited the Board's attention to the Internal Compliance
Plan in their packet and shared that there was a violation related to
water sampling that will result in customer notifications; however,
there were no fines and the other programs were in compliance.
J. Lehman then provided the final dashboard update on the State's
customer arrearage assistance programs. She reported that the
funding for the applicable electric and water services customer
arrearages had been received and updated the Board on the status of
the safety program.
10. ITEMS BY SECRETARY.
D. Lee, Public Utilities General Manager, shared with the Board the
items scheduled for the following Board meeting. Proposed agenda
items include:
• Bi-Annual Utilities Success Indicators report
• Cap and Trade Compliance Update
• Electric Vehicle (EV) Charging Infrastructure Technical
Consulting Services
• Election of one Member of the Underground Conversion
Subcommittee
D. Lee mentioned that APU held a community pop-up event. This
event occurred because a customer was having vandalism/graffiti
issues at the alley behind Lullaby Lane. APU has installed LED
lighting in the cul-de-sac and in the alley. This event highlighted the
Dusk -to -Dawn program where two high efficiency motion sensor
lights were distributed per household.
D. Lee mentioned that the Board identified recipients of the 2022
Sustainable Schools Awards. The winners were Price Elementary,
Anaheim Elementary School District, and Schweitzer Elementary,
Magnolia Elementary School District. Chrome books will be
purchased for the schools' accomplishments.
D. Lee shared the next award program that APU will be sponsoring
is the Sustainable Small Business Award. The awards are to
recognize small business owners who have taken steps toward
efficiency improvements and would like to expand on their
sustainable use of energy and water, given their struggles during the
pandemic. The top three finalists are Cortina's Italian Restaurant, El
Gaucho Market, and Shining Star Montessori. Board members N.
Campos Kurtz, M. Lee, and A. Pham volunteered to be on the
Sustainable Small Business ad hoc Committee to visit these
businesses and ask about their sustainability programs. The top
2022 - 14
winner chosen will receive efficiency measures up to $10,000 and
second and third place winners will receive measures up to $5,000.
D. Lee shared with the Board upcoming events.
• March 2, 2022 —District 6 Town Hall meeting
• March 2, 2022 — Dusk -to -Dawn event near Boysen Park
• March 3, 2022 — Safety Walk at Balsam Avenue
11. ITEMS BY BOARD MEMBERS.
M. Lee commented that he appreciated the presentation on Finance
which had good analogies that related to how homeowners can
actually manage money and plan for the future.
12. ADJOURNMENT: (NEXT REGULAR MEETING ON
MARCH 23, 2022 AT 5:00 P.M.)
Respectfully s itted,
Dukku Lee
Public Utilities General Manager
M. Lee moved to adjourn
the Regular Meeting in
Gordon Hoyt Conference
Center at 6:18 p.m. to the
Board's Regular Meeting
date of March 23, 2022 at
5:00 p.m. N. Campos Kurtz
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
* Indicates item(s) that will be forwarded to City Council for action upon recommendation by the
Board.
* * Indicates item(s) that will be forwarded to City Clerk and City Council for informational purposes.
2022 - 15