Public Utilities 2023/11/15CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
November 15, 2023
The agenda having been posted on Wednesday, November 8, 2023, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson J. Seymour at 5:00 p.m. on Wednesday,
November 15, 2023, in the Gordon Hoyt Conference Center, 2nd floor, Anaheim West Tower, 201 S.
Anaheim Blvd., Anaheim, California.
Board Members Present: Chairperson J. Seymour, M. Lee, A. Pham, A. McMenamin, T. Ibrahim
Board Members Absent: Vice -Chairperson A. Abdulrahman, T. Bilezikjian
City Staff Present: D. Lee, A. Kott, P. Starr, J. Lonneker, B. Beelner, J. Lehman, C. Parker,
M. Avelino -Walker, M. Adams, S. Noble, C. Looney, S. Barrera, P.
Garcia, A. Nguyen, T. Castaneda, A. Lee
Guest(s) Present: None.
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS.
2. APPROVE THE MINUTES OF THE REGULAR MEETING OF
THE FACILITIES INSPECTION OF DIAMOND VALLEY
LAKE OF OCTOBER 20, 2023. *
3. APPROVE THE MINUTES OF THE REGULAR MEETING OF
OCTOBER 25, 2023. *
D. Lee, Public Utilities General Manager, requested a correction be
made to the Minutes of the Public Utilities Board Regular Meeting
of October 25, 2023 to update the Administration and Risk Services
Items discussed in Agenda Item 14. D. Lee clarified that the Annual
Safety Fair was attended by over 150 people, not 50 people.
There being no electronic or oral
public comments, Chairperson J.
Seymour closed the public
comments portion of the meeting.
M. Lee moved the Approval of the
Minutes of the Regular Meeting of
the Facilities Inspection of
Diamond Valley Lake of October
20, 2023.
A. Pham seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [Vice -Chairperson
A. Abdulrahman, T. Bilezikjian]
T. Ibrahim moved the Approval of
the Minutes of the Public Utilities
Board Regular Meeting of October
25, 2023, as amended. A.
McMenamin seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [Vice -Chairperson
A. Abdulrahman, T. Bilezikjian]
2023 - 85
ITEM # 01
4. PRESENTATION: WATER SYSTEM RELIABILITY.
C. Parker, Assistant General Manager — Water Services, presented
the Water System Reliability update for 2023. C. Parker introduced
C. Looney, Water Operations Field Manager; K. McDonald, Water
Systems Operations Superintendent; P. Garcia, Water Field
Superintendent; M. Adams, Water Production Superintendent; S.
Noble, Water Inspection Supervisor; and S. Barrera, Analyst. C.
Parker indicated that these employees and many others ensure our
Water System functions 24/7.
The Water System Reliability report includes water supply and
equipment availability, water main breaks and outages, and annual
water loss audit. The performance indicators for water supply and
equipment reliability (Lenain Water Treatment Plant and wells) met
the goals as access to groundwater wells is being restored. The
performance indicators for water main breaks and outages met the
goals and were within the top 251h percentile when compared with
other agencies.
C. Parker presented a six -point plan to bring the valve turning
program back in line with targets. The annual water loss audit
reflects that the City of Anaheim (City) is in the 50t' percentile when
compared with other agencies. C. Parker indicated that performance
indicators were not the only factors that are important — customer
focus and service are just as important. C. Parker explained three
such experiences where customer concerns were considered and
mitigated.
C. Parker recognized P. Garcia for his above and beyond customer
service in relation to his efforts assisting the residents of Casa Fortin
Apartments, where he assisted a private contractor in the middle of
the night.
The Board asked about the length of a pipe's lifespan. C. Parker
shared with the Board that generally pipes last about 100 years, with
some shorter, and some longer. Factors include type of material, soil
conditions, as well as age. C. Parker explained that the type of pipe
material installed depends on the environmental conditions. The
Board also asked how difficult it is to conduct valve turning. C.
Parker shared that there is a certain procedure needed, such as
opening a fire hydrant to ensure grit is removed from the valve seat.
In addition, the valves are partially opened and closed in small
increments (25%, 50%, 75%, etc.) until finally being opened and
closed at 100%.
The Board inquired about the optimal capital cycle given the high
performance of water main breaks at present. C. Parker explained
that getting to 7.5 miles of pipe replacement per year would be
optimal and that water and finance staff are working towards
meeting that target.
2023 - 86
5. PRESENTATION: FINANCIAL UPDATE AND PROPOSALS.
B. Beelner, Assistant General Manager — Finance and Energy
Resources, provided a presentation on Anaheim Public Utilities'
(APU) finance strategies, objectives, and potential rate proposals.
APU's focus on affordability and flexibility continues to keep the
City's rates lower than neighboring agencies with efficient
operations and staffing. Also highlighted was APU's focus on long-
term flexibility in its financing strategies and maintaining stability in
customer rates by avoiding large rate spikes with modest annual rate
increases that customers can more easily manage.
B. Beelner discussed the financial objectives of the water utility,
including maintaining 2.0 debt service coverage (currently 2.0),
holding cash reserve balances at no lower than 120 days worth of
operating expenses (currently 187 days), and offering customer bills
lower than the average of all other Orange County Water Agencies
(currently 19% lower).
B. Beelner discussed the disconnect in fixed revenue versus fixed
costs in the water utility, advising that APU currently collects 12%
of its water revenue from fixed charges compared to 35% of its
expenses as fixed. APU expenses are allocated as follows: 54% of
customer bills to purchase water, 17% for capital, 16% to operate
and maintain the system, and 13% for debt service.
APU will propose changes to water rates at a public rate hearing in
February 2024. The proposal will primarily restructure customer
bills with a resulting minor 1 % drop in the overall customer bill for a
typical resident. The proposed restructure will increase fixed charges
from $9.90 to $15 per month along with a drop in the base charge of
$0.35 per hundred cubic feet (HCF), a drop in the Water Commodity
Adjustment (WCA) of 8.6 cents per HCF, and an increase in the
Water System Reliability Adjustment (WSRA) of 7.5 cents per HCF.
The proposed decrease in variable costs coupled with the proposed
increase in fixed charges will help alleviate the disconnect between
fixed revenue and fixed costs.
B. Beelner detailed a second proposal to add regulatory and
environmental costs to the Water Commodity Adjustment
calculation and allow for the limit on WSRA increases to be raised
from a maximum increase of 7.5 cents per HCF to 10.0 cents per
HCF. This proposed increase will assist APU in its intended goal of
replacing 7.5 miles of main pipe per year as its pipelines are rapidly
approaching the end of their useful lives.
B. Beelner presented to the Board APU's water debt portfolio and
discussed the water financing strategies, including its intention to
issue $50 million in water revenue bonds later in the fiscal year.
2023 - 87
B. Beelner then transitioned to discussing the electric utility and its
financial objectives: maintaining 1.60 debt service coverage
(currently 2.0), holding no less than 140 days worth of operating
expenses as cash reserves (currently 267 days), and maintaining
customer rates lower than neighboring utilities (currently 41 %
lower).
B. Beelner discussed the various rate components of a residential
bill, including customer charges, energy charges, the underground
surcharge, and the Rate Stabilization Adjustment (RSA). The Board
inquired if the same components exist for businesses. B. Beelner
explained that businesses may also be subject to demand charges not
seen on residential bills. APU staff proposes restructuring electric
rates that will include a reduction to the RSA with corresponding
increases to the customer charge and energy charges, to be discussed
and voted on by the Board at a rate hearing in February 2024. These
changes would have no impact on the typical residential customer's
monthly bill. The Board inquired when the customer charge was last
adjusted, and B. Beelner stated it in or around 2015, so it has been a
long time since any change has been proposed.
B. Beelner concluded by presenting the electric utility's debt
portfolio, and describing how APU continually focuses on reducing
its long-term debt burden so that it will have ample flexibility in its
budget for currently unknown cost impacts of its transition to 100%
carbon free power by 2045.
6. BY RESOLUTION DECLARE THE OFFICIAL INTENT TO
REIMBURSE CERTAIN EXPENDITURES FROM THE
PROCEEDS OF WATER UTILITY BONDS OR OTHER
OBLIGATIONS. *
B. Beelner asked for the Board's recommendation to City Council,
by Resolution, to allow the Water Utility to reimburse its cash
reserves from a future bond issuance for any capital expenditures
made between the date of Resolution and the issuance of the bonds.
B. Beelner made the Board aware that this Resolution does not
authorize issuance of any bonds, it solely allows APU to replenish its
cash reserves for any eligible expenditures in the event that bonds
are issued in the next 18 months.
7. ADOPT THE PROPOSED PUBLIC UTILITIES BOARD
MEETING SCHEDULE FOR THE 2024 CALENDAR YEAR. **
M. Lee moved the Approval, by
Resolution, to Declare the Official
Intent to Reimburse Certain
Expenditures from the Proceeds of
Water Utility Bonds. A.
McMenamin seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [A. Abdulrahman,
T. Bilezikjian]
T. Ibrahim moved the Approval to
Adopt the Proposed Public Utilities
Board Meeting Schedule for the
2024 Calendar Year.
A. McMenamin seconded the
motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [A. Abdulrahman,
T. Bilezikjian]
2023 - 88
8. UPDATE ON ELECTRIC SYSTEM ITEMS.
J. Lonneker, Assistant General Manager — Electric Services,
provided an update on the progress of the undergrounding project
along Beach Boulevard. Construction kicked off on Friday, October
27th, with Council Member J. Diaz and APU Engineering and
Inspection teams at the site. The contractor set the first electrical
vault off of Stonybrook Lane on November 18th. Construction will
continue through 2025.
J. Lonneker also provided an update on the undergrounding projects
currently under construction, including along Santa Ana Canyon
Road. The communication companies are currently installing their
cables and splicing which will take approximately 12 months to
complete before the poles can be fully removed. Final paving has
been completed. Also, on Sycamore, the main electrical system has
been energized and most services have been cutover to the new
underground system, and all streetlights have been energized. APU's
work will be completed by the end of this year, and the
telecommunication companies will take approximately 12-18 months
to install their cable/splices before poles can be removed. The Public
Works Department will complete the paving as part of the Sabina
neighborhood street improvement plan.
J. Lonneker thanked the Board for reporting that the streetlights on
Gene Autry, west of the 5 Freeway (Fwy), were not operating. The
APU Contractor repaired a wiring issue in one of the splice boxes
and replaced two lights on the east side. Currently, all lights are
operational. Additionally, Council Member S. Faessel reported that
50-60 streetlights were out along State College Blvd. from the 91
Fwy to the 5 Fwy, and along Cerritos Blvd. The APU contractor has
been repairing the damage along State College from Cerritos since
last Thursday and will be continuing this week barring weather
conditions. Aluminum cable is used for the replacement, and APU is
working with manufacturers to label the boxes and cable to deter
further incidents.
The Board inquired about the remaining wood poles on Orangewood
Avenue and asked if the telecommunication providers are
responsible for undergrounding their facilities. J. Lonneker
responded that when an Underground District Formation is approved
by the City Council, this compels utilities jointly on the overhead
poles to underground their facilities at their proportionate cost. D.
Lee further explained that on Orangewood, APU is waiting for the
telecommunications to remove those facilities. D. Lee replied that
staff will contact the providers for an update on their schedule to
remove the poles.
2023 - 89
9. LT PATE ON WATER SYSTEM ITEMS.
.............
a $38M grant for turf replacement this year. MWD is also working
on their Climate Adaption Master Plan, including studying new
locations for desalinization plants alon 3: L: I 'FIS!
throughout the state. C. Parker indicated that the Water Services
team is also investigating future groundwater treatment sites for the
Enviromnental Protection Agency new maximum contaminant level
that will be released next year for Per- and polyfluoroalkyl
substances (PFAS), which will be considered as Phase C sites of the
Groundwater Treatment Program.
10. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS.
for year-to-date fiscal year 2023/24 through October 2023. B.
Beelner mentioned that the dashboard was preliminary as final
numbers were not yet available in advance of the Board meeting.
The (trelimi I howed electric revenue throuiyh October 31
2023 at 5.9% below budget and water revenue at 4.2% below
budget.
B. Beelner then discussed with the Board the Power Supply
Dashboard and that wholesale revenue was higher than originally
forecasted as the peak wholesale power prices reached $326 per
ALL
J. Lehman, Assistant General Manager — Administration & Risk
Services, provided the Board with several updates. The first was on
the Internal Compliance Plan, and J. Lehman provided information
on an inspection by Anaheim Fire and Rescue Department at one of
the substations, and on the safety training that occurred during the
quarter.
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legislative session. Overall, it has been a successful year, however
many of the more controversial items have become two-year bills
and will be revisited by the Legislature in January.
J. Lehman then invited the Board's attention to the Administration
and Risk Services Dashboard. Safety etries were highlighted and
there had been one reportable injury during the reporting period, and
2023-90
that training continues to be a key focus in helping to prevent
accidents. APU is meeting its safety metrics.
Lastly, J. Lehman provided a follow-up to several areas that were
highlighted in the Utilities Success Indicators report as requiring
attention. They included the following: a safety metric, safety
inspections, and customer call wait times. The safety metric is now
well below target, and safety inspections are on track to meet the
targets. Efforts are also underway to help reduce Call Wait Times,
but they will likely remain higher than the established goal until next
calendar year.
12. ITEMS BY SECRETARY.
D. Lee shared agenda items planned for next month:
• Presentation on addressing water quality issues in a
residential neighborhood
• Professional Services Agreement for Electric Cost of Service
Studies
• Professional Services Agreement for Insulator Gas Recovery
Services
• Acceptance of Additional Funds for COVID-19 Pandemic
Relief for Utility Water and Wastewater Customer
Arrearages
D. Lee shared photos from recent community and student
engagement initiatives. They included:
• A tour of APU facilities was provided to Senator Josh
Newman, to demonstrate municipal implementation of
California's renewable and environmental goals;
• A Neighborhood Resource Event on Clementine Street, where
multiple departments discussed services including customer -
preferred lighting for the historic neighborhood;
• A Community Pop -Up Event on Lemon and North where
APU staff addressed community concerns such as increased
lighting to mitigate car accidents reported in recent months.
Electric Services will be looking into providing additional
street lighting in the area;
• A walking tour of Brookhurst Street with Council Member C.
Leon and the City Manager, APU and other departments was
conducted to discuss corridor improvements; and
• Providing green light bulbs at the Veterans Day Ceremony.
D. Lee congratulated the Community & Sustainability Programs and
Communications teams for receiving the Smart Energy Provider
Award.
The Board inquired about the City Council's upcoming Ethics
Meeting. D. Lee confirmed that the City Clerk called for a special
2023 - 91
meeting inviting all Board and Commission members to participate,
and it will take place November 30, 2023. The meeting is
recommended for all Board Members who have not previously
attended and replaces the bi-annual online training course.
13. ITEMS BY BOARD MEMBERS.
Board Member A. Pham commended APU for the Holiday Lights
Drive-Thru event and the Electric Services team for their fast
responses to Anaheim Anytime reports of street light outages.
Board Member M. Lee expressed appreciation to the Electric
Services team due to their assistance in completing the 91 Fwy
lighting project.
14. ADJOURNMENT: (NEXT REGULAR MEETING ON
DECEMBER 20, 2023, AT 5:00 P.M.)
Reectfully s : fitted,
Dukku Lee
Public Utilities General Manager
A. Pham moved to adjourn the
Regular Meeting in the Gordon
Hoyt Conference Center at 6:56
p.m. to the Board's Regular
Meeting date of December 20,
2023, at 5:00 p.m. M. Lee
seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [A. Abdulrahman,
T. Bilezikjian]
* 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 the City Clerk and City Council for informational purposes.
2023 - 92