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Public Utilities 1996/09/05 RECEIVED PUBLIC UTILITIES BOARD MINUTES OCT 1 1222111 6 OFFICE OF CITY C; ER:Y, SEPTEMBER 5, 1996 CITY OF ANA HE N The agenda having been posted on Friday, August 30, 1996, the Regular Meeting of the Public Utilities Board was called to order by Vice - Chairperson Ward Wiseman at 3:30 p.m. on Thursday, September 5, 1996, in the City Hall West, 1 lth Floor Conference Room, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: W. Wiseman, T. Kirker, J. White, R. Lawson, P. Lem Board Members Absent: D. Stanton, D. McMillan Staff Present: E. Aghjayan, M. Bell, D. Tarkington, E. Alario, L. Moses, L. Topaz, M. Long, E. Leung, G. Broeking, P. Grimes, J. Chavez, I. Pai, A. Dubberly, K. Welch, R. Howell. Guests Present: None Vice- Chairperson W. Wiseman acted as Chairperson in D. Stanton's absence. 1. PUBLIC COMMENTS Vice - Chairperson W. Wiseman asked for public comments. There being none, the Public Comments portion of the meeting was closed. 2. APPROVAL OF MINUTES OF MAY 2, 1996 AND AUGUST 1, 1996 W. Wiseman read a memo from E. Aghjayan referencing the minutes of the May 2, 1996 Public Utilities Board Meeting in which P. Lem requested that a paragraph be added to the minutes on page 337 at the end of line 17. As stated in the memo, the Secretary to the Board and City Attorney's Office recommended that the Board approve the minutes as submitted. P. Lem commented that without his paragraph inserted in the May 2, 1996 minutes, that M. Bell's statements on the Financial Statement were incorrect. He said that M. Bell referred to the Notes of the Financial Statements and that they actually addressed the dates and months that the figures took place with respect to the transactions of the City. In the case of the financial balance sheet for water, Note 10 does not explain the $559,000. Note 12, with respect to the electric balance sheet, does not fully explain the $4,602,000. He felt that both Notes are identical and they explain what the City received back from the County Pool, so the two Notes do not really clarify what M. Bell said and both Notes actually reflect the financial transaction of the water and electric utility, not the City. P. Lem objected to the use of the financial transactions of the City to explain the $559,000 in 354 the water statement and $4,602,000 in the electric balance sheet. By adding his suggested statement, P. Lem believes that Notes 10 and 12 only refer to the consolidation of the bankruptcy accounts of the City and not to the balance sheets respectively. P. Lem stated that neither Note clarifies the water utility fund balance sheets of $559,000 in the Orange County bankruptcy or the electric utility fund balance sheets of $4,602,000, which is also in the Orange County bankruptcy. E. Aghjayan replied that staff and the City Attorney's office reviewed the tape of the recorded minutes and that the minutes accurately reflected what was said at the meeting. The minutes are not intended to be rewritten to reflect what someone wishes they had said during the meeting. M. Bell added that the notes, as presented in the Financial Statement, are accurately reflected in the minutes of the May 2, 1996 meeting and that as far as the auditor and the County of Orange are concerned, there is not a distinguishing difference between the Water Utility, the Electric Utility, and the City of Anaheim. The account that was held at the County of Orange was in the name of the City of Anaheim, which included all sub - organizations of the City of Anaheim, including the Utilities. For purposes of the Financial Statement, the auditor so identified the total transactions of the City of Anaheim, of which they noted water and electric participation in that fund. P. Lem moved to have his paragraph added to the minutes of May 2, 1996 added to those minutes. The motion failed for lack of a second. P. Lem asked that the minutes of the September 5, 1996 PUB Meeting accurately represent what • was discussed with respect to this item. J. White moved approval of the May 2, 1996 minutes as submitted. T. Kirker seconded the motion. MOTION CARRIED 5 -0. 2 ABSENT. J. White asked that the agenda for the September 5, 1996, Board Meeting be corrected to show W. Wiseman as the Vice - Chairperson, not D. McMillan. Staff indicated the correction will be made. P. Lem pointed out that during the August 1, 1996 Board meeting he requested that the minutes of June 6, 1996 include a statement by him at the end of the first sentence, lines 1 & 2, page 343 and asked if the investigation into the paragraph by staff was conducted as requested by D. Stanton. E. Aghjayan replied that staff did not pursue this request because it was stated in the August 1 Board meeting that staff does not rewrite minutes to reflect what one Board members wishes without a vote of the entire Board requesting staff to do so. A motion was made and carried at the August 1, 1996 meeting to approve the June 6, 1996 minutes as submitted. Any Board member is welcome to listen to the recording tapes from the meetings if they so wish. W. Wiseman suggested that P. Lem make a motion to have staff investigate the stated paragraph in the June 6, 1996 minutes if he still feels it is necessary. P. Lem moved to have the referenced paragraph investigated. The motion died for lack of a second. 355 R. Lawson commented that P. Lem has some issues that perhaps should be addressed some way other than at the monthly Board meetings. P. Lem pointed out that the minutes of August 1, 1996 show the vote on Agenda Item #3 as Motion Carried 4 -3, 1 absent, P. Lem opposed, J. White abstained. The correct vote should be reflected as Motion Carried 4 -1. E. Aghjayan stated that P. Lem was correct and because it is a factual error, the minutes will be corrected to reflect the correct vote. R. Lawson moved approval of the minutes of August 1, 1996. T. Kirker seconded the motion. The minutes will be corrected to reflect the error on the Agenda Item #3 vote. MOTION CARRIED. 4 AYES, 2 ABSENT, AND P. LEM ABSTAINED. E. Aghjayan stated that J. White had expressed concern regarding information items presented to the Board. Staff started the practice of identifying these particular "Information Only" items on the Board Agenda so that the Board would know which items were going to City Council for approval and which items were intended to advise and update the Board on utility issues. The Board has the authority to take action in terms of advising the Department on any item on the • Board agenda. Because an item is not going to City Council does not preclude the Board from voting on a recommendation to the City Manager's Office, the City Council, or the Utilities Department. In the future, staff will omit "Information Only, No Action Required" on the Board agenda items and each item will be available for complete discussion and recommendation. J. White noted that the Board had not voted on any actions that were sent to the City Council for approval in quite a while. . Aghjayan added that there are items that staff may advise the Board of that are not necessarily forwarded to the City Council for approval. The Board may request white papers on any issue or request that an item be agendized for discussion. W. Wiseman suggested that an asterisk be placed next to the agenda items that will be forwarded to City Council for approval. T. Kirker stated that "Information Only" tells the Board about future items that may go before the City Council, or if the Department is proceeding along the approved budget, or if the Department is meeting its goals and objectives. It provides an opportunity for the Board to inquire into these items and clarifies for the Board what is currently happening and will be happening in the future in regard to the Utility. The Board was invited to attend the Electric Industry Restructuring Update presentation to the City Council at its workshop on September 10, 1996, 3:00 p.m. 356 3. ELECTRIC INDUSTRY RESTRUCTURING UPDATE D. Tarkington gave a presentation updating the Board on Electric Industry Restructuring and competition. The presentation covered opportunities for further reducing the Department's debt, the impact of AB 1890 electric restructuring legislation, reduction in stranded costs, and future issues that will still need to be resolved. 4. RESOURCE EFFICIENCY AND BUSINESS DEVELOPMENT QUARTERLY UPDATE M. Long gave a presentation on the quarterly update of the Resource Efficiency and Business Development programs. T. Kirker expressed a concern that some of the Anaheim Schools that had received security lights did not have sufficient electricians to get the lights installed and wondered if there was anyway the Department could assist them or require in the contracts that the schools install the lights by a certain date. E. Aghjayan suggested that staff look into the follow -up of installation inspections as required in the agreements with those who receive the free lights. J. White asked for an update on the Thermal Energy Storage (TES) Program and L. Topaz replied that staff is working on developing a cost - effective program. With the cost of capacity in the market place being so low, it is difficult to justify spending the money on this, so staff is trying to locate a financing program that does not require the Department to take a financial position. 5. WATER SYSTEM REPLACEMENT PROGRAMS E. Aghjayan explained that approximately a year ago, during the budget process, staff had recommended a 1 1/2% water rate increase for the purpose of paying for the right -of -way fee for the Utility. That recommendation was not accepted by the City Council and, in order to balance the budget, staff had to take a number of programs out of the budget, most of which were in the Water Main Replacement Program. At the time, the Department wanted to maintain the system, with special emphasis on repairs to the downtown water main system, valve box replacements and vault replacements. I. Pai gave a presentation explaining the status of these Water System Replacement Programs. 6 ENERGY SALE FOR NEW CONSTRUCTION The Board had no questions of staff on the report included in the Board packets mailed to them. 357 7. AGENDA ITEMS FOR NEXT MEETING E. Aghjayan stated that the next meeting will include an analysis of electric system reliability, a water rate comparison report, an industry restructuring update (if there are further developments), a Telecommunications update, and a report on the Western States power outages in August. J. White requested that the next meeting's agenda include an open discussion and possible action on the goals and objectives of the Department and how the Board, with its current structure, will accomplish those goals and objectives. He commented that things had not been going very smoothly during the Board meetings and felt that P. Lem was trying to take over his place as an agitator, that he has a high respect for P. Lem's ability with figures, and that P. Lem could become a valuable member of the Board in time. J. White stated that anything that either staff or the Board members want to discuss that is bothering them could be discussed and /or some actions taken. J. White expressed concern over meetings or programs being canceled without the Board's recommendation. E. Aghjayan suggested the proper format for this type of item be a formally noticed workshop and any items the Board requested of staff to be researched prior to the meeting. W. Wiseman felt it would be more appropriate to discuss agendizing this item when Chairperson Stanton returns from vacation. E. Aghjayan offered to contact D. Stanton and advise him of this item and have him contact J. White for more specifics about how this item should be handled. He also stated that it might be appropriate for the Board to determine the agenda for this item, because staff does not know the specifics of the issues the Board wants to discuss. W. Wiseman suggested that each Board member write down their ideas for ways to improve the function of the Board for discussion at the next meeting. 8. ITEMS BY SECRETARY E. Aghjayan discussed the recent amendments to the legislation sponsored by Speaker Pringle (HR 2790) that would have negatively impacted Anaheim's wholesale water supply. The bill was not approved by the Legislature. E. Aghjayan advised the Board that E. Alario had returned from retirement to fill in as the Acting Assistant General Manager - Water Services until a recruitment is completed to replace H. Pepper who had resigned. E. Aghjayan advised the Board that Assemblyman Mickey Conroy was a tremendous help in Anaheim's position on the Electric Industry Restructuring Bill AB 1890. 358 9. ITEMS BY BOARD MEMBERS P. Lem would like a list of customers that are on the preferred power during emergencies. P. Lem asked what the Department would be looking for in candidates to fill the Assistant General Manager - Water Services position and what criteria would be used to determine their qualifications for the position. E. Aghjayan explained that E. Alario was with the City 20 years before retiring recently and then a national recruitment was conducted in which H. Pepper was selected about 10 months ago. There are job descriptions for all positions in the City that determine their qualifications and duties for the position. Another recruitment will be conducted to fill the vacancy left by H. Pepper's resignation. This process will take about three to four months. P. Lem stated that he would like to put this item on the agenda because he feels that the powers and duties of the Public Utilities Board are to make recommendations to the City Council concerning the duties and qualifications of the Public Utilities General Manager and other employees of the Department. He wondered if the applicants were given a background investigation. P. Lem felt that H. Pepper was hired without the Board knowing anything about his qualifications or how he was reviewed. W. Wiseman asked E. Aghjayan how the selection process works and E. Aghjayan responded that he makes the decision as to who will be hired for a position and it is not a decision that is reviewed by the City Council or the Public Utilities Board. The City Charter designates authority to the City Manager for that and has full authority for the hiring of personnel. P. Lem reiterated that the Public Utilities Board is supposed to make recommendations to the City Council concerning duties and qualifications. W. Wiseman replied that the Board's authority derives from the City Council and the Board has no authority that the City Council does not delegate to the Board. The City Council has no authority over the hiring practices of the Department and so it is not the business of the PUB members. P. Lem said if that is the case, then the Municipal Code is in conflict with the personnel procedure. L. Moses stated that she does not believe the Municipal Code is in conflict with the personnel procedure and that the City Council has not asked the Board to make recommendations concerning personnel decisions and those responsibilities have been fully vested in the City Manager. Furthermore, the City Council is prohibited from getting involved in the hiring decisions. P. Lem reiterated that according to the Municipal Code, July 8, 1976, the Board does have this responsibility. 359 J. White added that the City Charter eliminates that responsibility from the Board. E. Aghjayan urged P. Lem to discuss his concerns over the apparent conflict with the City Attorney. P. Lem stated that he had received a letter from the Department and the letter that was addressed to him had been opened. He asked why mail that was addressed to the Board members was opened and then sent on to the Board Members. R. Howell advised P. Lem that all of the mail sent to the office for the Board Members is opened to ascertain its urgency and determine if the mail needs to be mailed immediately to the Board member or wait to be included with the PUB packets. E. Aghjayan added that all mail is opened that comes to the Department, unless it is marked personal, and that is the general procedure throughout the City for all City officials. P. Lem reiterated that this particular piece of mail was addressed to him and it was opened. The mail was sent anonymously to the Board members. • R. Howell advised P. Lem that the piece of mail in question was not received by the Department but was received in the City Council office and forwarded to the Board Members. W. Wiseman suggested that if P. Lem wanted to pursue this issue further that he contact the City Council office. If P. Lem wants to request that none of his mail be opened, then he can request this of staff. P. Lem asked if the opening of the Board's mail was a privacy concern with respect to U.S. Mail. E. Aghjayan advised P. Lem that staff will not open any mail that is addressed to him specifically and will send it on to him if he so wishes. If the mail is addressed to the Public Utilities Department, attention of P. Lem, then it will be opened because the Department is the addressee. Furthermore, this is not an issue that should be discussed at the Board meeting. E. Aghjayan suggested that, in the future, P. Lem bring concerns such as these to his office, not to the Board meetings. W. Wiseman reiterated to P. Lem's that his concern about opening his mail was addressed and that he was asked to contact the City Council office about his concern. W. Wiseman also reiterated that P. Lem was told to request that his mail not be opened by the staff and just sent on to him if it bothers him to have it opened by Department staff. E. Aghjayan advised the Board that he does not intend in any way to discuss confidential or personnel matters with the Board or how hiring decisions are made. Any further discussion on this issue should be preceded by a letter from P. Lem to the City Attorney's office requesting clarification on the matter. 360 L. Moses advised that Board that it would take a majority vote by the Board to request the City Attorney to render an opinion on P. Lem's concern about the Board's responsibility in hiring processes. The staff does not take requests from individual Board members. P. Lem moved to request that the City Attorney's office clarify the role of the Public Utilities Board in having the right and power to make recommendations to the City Council concerning the duties and qualifications of the Public Utilities General Manager and other employees and explain the apparent conflict between the City Charter and the Municipal Code on this matter. J. White seconded the motion. MOTION CARRIED 3 -2. 2 ABSENT. 10. ADJOURNMENT (NEXT REGULAR MEETING: October 3, 1996) J. White moved adjournment of the meeting at 5:55 p.m. R. Lawson seconded the motion. MOTION CARRIED 5 -0. 2 ABSENT. Re tfully submitteO( 7 , 1 Edward K. ghj, yan • Secretary, ubc Utilities Board • 361