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Public Utilities 2014/10/22CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES October 22, 2014 The agenda having been posted on Wednesday, October 15, 2014, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:05 p.m. on Wednesday, October 22, 2014, in the 11` Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chair J. Machiaverna, Vice Chair D. Singer, B. Hernandez, S.E. Faessel, D. Wain, L. Cahill, C. Monaco Board Members Absent: None. Staff Present: D. Lee, B. Beelner, G. Bowen, D. Calkins, J. Lonneker, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, D. Schmidt, M. Robledo Guest(s) Present: Mayor Pro Tern Kris Murray; Tracy Tran, Yorba Linda Resident; Harry Sidhu, Board Member, Orange County Water District; Michael R. Markus, General Manager, Orange County Water District AGENDA ITEM ACTION TAKEN D. Lee introduced Mayor Pro Tem K. Murray and presented her with a proclamation for her five years of service representing the City of Anaheim as Director on the Metropolitan Water District (MWD) Board of Directors. D. Calkins shared his appreciation for her service, and K. Murray expressed her gratitude upon receipt of the recognition. 1. PUBLIC COMMENTS. Tracy Tran, a resident of Yorba Linda, stated to the Board that the City should give a priority to working with Orange County Water District and water agencies in reference to the proposed seawater desalination plant in Huntington Beach. She said this would be the most effective and environmentally friendly way to provide additional water here in California. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC S.E. Faessel moved UTILITIES BOARD MEETING OF SEPTEMBER 24, 2014. * approval of the Minutes of the Regular Public Utilities Board Meeting of September 24, 2014. D. Singer seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0, ABSENT: 0. n , AGENDA ITEM 3. PRESENTATION ON THE ORANGE COUNTY WATER DISTRICT'S NORTH GROUNDWATER BASIN PROTECTION PLAN. H. Sidhu, Anaheim's representative on the Orange County Water District's (OCWD) Board of Directors, introduced M. Markus, OCWD General Manager, who gave a presentation on OCWD's North Basin Groundwater Protection Plan. OCWD, which manages the groundwater basin, has identified the need to clean up contamination in the shallow groundwater in the Fullerton, Placentia, and north Anaheim area. Anaheim's water meets all federal and state drinking water standards, but it is important to clean up contamination before it migrates into the deeper aquifers from where drinking water is pumped. OCWD is using the federal National Contingency Plan (NCP) process to investigate the extent of the contamination and identify the most feasible cleanup approach, which will take about 18 months and includes a significant public review and input component. 4. PRESENTATION ON THE ELECTRIC SYSTEM RELIABILITY REPORT. An annual report and presentation was provided to the Board by M. Robledo, Electric Operations Manager. It reviewed Anaheim's 2013 Electric System Reliability, which includes performance metrics and inspection results. The presentation and report included the results of the major standard performance indices, used as a best practice throughout the electric industry, to measure the Public Utilities Department's (Department) electric system reliability and electric outage management for the calendar year 2013 and how those metrics compare with other neighboring electric utilities. The performance results showed that the Department continues to be in the top 25% of all public owned utilities across the nation for reliability based on these tracking metrics. The most frequent causes of outages for that year were reviewed and discussed. Questions from the Board included how to increase awareness and education to businesses and residents on the use and handling of metallic balloons to reduce their impact to the electric system. Staff discussed the programs the Department has in place to replace aging direct buried underground cable and the downward trend of vehicle accidents involving power poles. Additionally, the use of advanced technologies for improving outage response was presented. The Board expressed their support of the measures taken to continue meeting electric system reliability goals and indicated to staff their appreciation for the detailed work involved in maintaining a high performing system. 5. PRESENTATION ON EMERGENCY RESPONSE PLAN AND ASSOCIATED ACTIVITIES. J. Lehman explained that the Department's Emergency Response Plan has been updated significantly, and follows best practices used by investor owned utilities that are subject to California Public Utilities Commission (CPUC) requirements. She then introduced D. Schmidt, ACTION TAKEN 2014-65 AGENDA ITEM ACTION TAKEN the Northern Electric Reliability Corporation (NERC) Compliance and Emergency Planning Manager, who provided a presentation on the Department's emergency preparedness efforts. The Emergency Response Plan Report and presentation described elements of the Department's Emergency Preparedness Program and provided information regarding the substantial progress being made in developing mutual aid resources and a summary of the 2014 Department -wide training exercise held in August. D. Schmidt also discussed several of the lessons learned from major incidents affecting other organizations as well as programs that are in place to ensure that timely and accurate information is available to members of the public, key stakeholders and other agencies. Subsequent updates will be provided to the Board on an annual basis. 6. DISCUSSION ON THE WATER QUALITY, SUPPLY AND INFRASTRUCTURE IMPROVEMENT ACT OF 2014 (CALIFORNIA PROPOSITION 1). D. Calkins invited the Board's attention to the informational memorandum on the 2014 Water Bond, which will be Proposition 1 on the November 4th ballot. While public agencies cannot spend resources to advocate for or against a ballot measure like Proposition 1, educational information was provided to the Board about the proposition and how the $7.5 billion in bond funds could be allocated. If approved, Anaheim will apply for available funding for additional water conservation rebates. Additionally, funding could be available for regional projects to reduce dependence on imported water, such as recycling and desalination. More information is available on the Secretary of State's website at voterguide.sos.ca.gov. 7. DISCUSSION REGARDING THE QUARTERLY STATUS REPORTS ON CAPITAL IMPROVEMENT PROJECTS, MASTER AGREEMENTS, GENERAL SERVICE AGREEMENTS, AND SPOT BID AWARDS. D. Lee shared a brief overview of the quarterly reports. He explained the reports on construction and consulting contracts, as well as capital improvement report expenditures are committed funds and do not represent actual dollar amounts. 8. APPROVAL OF A FIVE -YEAR CONTRACTOR SERVICES D. Singer moved approval AGREEMENT WITH Z- GLOBAL, INC. WITH OPTIONAL of a five -year contractor ONE -YEAR RENEWALS TO PROVIDE POWER services agreement with Z- SCHEDULING SERVICES. Global, Inc. with optional one -year renewals to D. Lee and G. Bowen, Acting AGM for Joint Services, discussed the provide power scheduling Contractor Services Agreement with Z- Global, which will provide services. S.E. Faessel real -time scheduling services for nights, weekends and holiday seconded the motion. operations. He discussed the changes in the energy markets over the MOTION CARRIED: 7 -0. last several years that have stabilized the real -time purchasing of ABSTAINED: 0, energy; however, he stated that there is an increasing need for ABSENT: 0. compliance and planning activities. Rather than requesting additional staff or seeking an expensive consulting service for the compliance and 2014-66 AGENDA ITEM planning activities, which requires insight into the Department's strategies, he shared that by entering into an agreement with Z- Global, real -time operation staff could be re- positioned within the Integrated Resources Division to provide the needed support for the compliance and strategic planning functions. The Board asked clarifying questions, including whether there would be personnel layoffs as a result of the Z- Global providing scheduling services. Both G. Bowen and D. Lee responded that there would be no staff layoffs as a result of the agreement with Z- Global, and that this approach provides new career development opportunities for affected real -time operations personnel. 9. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, indicated to the Board that Anaheim has the opportunity to host a Metropolitan Water District Colorado River Inspection Trip the last weekend of May 2015. The trip would be from Friday, May 29 through Sunday, May 31 ", which is the weekend after Memorial Day. A flyer with information on what a trip like this would entail was provided to the Board. The Board expressed interest in having an inspection trip at that time. In the next few weeks, staff will email the Board a draft itinerary of the trip. D. Calkins invited the Board's attention to the informational memorandum on the use of recycled water in downtown Anaheim. This information was provided as it may be helpful if the Board has inquiries about why the City has so much irrigated turf and landscaping around City Hall. This informational memorandum is a reminder that recycled water is used for landscaping, and it identifies other ways the City is conserving water and using recycled water. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM of Electric Services, extended to the Board an opportunity to participate in a tour of the Republic Services Eco- Center recycling facility. The 35 acre complex has a newly renovated 50 -ton- per -hour sorting system designed with cutting -edge technology. The tour will be held on Wednesday, November 19, at 2 pm prior to the Board meeting. Board members interested were asked to contact the Department. J. Lonneker provided information about Anaheim Public Utilities Line - Mechanics, Dave Aguon, Vincent Santos, and Mel Wooden, on their success in winning 1st Place out of 35 total teams in the Municipal Division at the International Lineman's Rodeo held on Saturday, October 18, 2014, in Bonner Springs, Kansas. The team also won 6th place for the overall rodeo out of 204 teams. The Board and staff extended their congratulations to the team for an outstanding performance and sincere appreciation for the pride they bring to the City of Anaheim. The Board will provide a letter of appreciation in recognition of this achievement at the next Board meeting. ACTION TAKEN 20t4 -67 AGENDA ITEM 11. UPDATE ON FINANCE ISSUES. B. Beelner, AGM of Finance and Administration, invited the Board's attention to the monthly financial dashboard, which showed that the Department performed very well in relation to the adopted budget. For the first two months of the fiscal year, water revenue was approximately 9.3% above budget and electric revenue was 6.7% above budget. These positive revenue variances were coupled with positive variances for both water and electric expenditures. B. Beelner cautioned that positive variances like this were also seen in the early part of Fiscal Year 2014, but the variances decreased significantly as the year progressed. The Department will continually monitor the revenue situation as the year progresses before making any recommendations. B. Beelner then discussed the recent 2014 bond issue that refunded the Electric Division's 2003 and 2004 bonds. He mentioned that the new bonds will save approximately $45 million in interest costs over the life of the bonds as the 2014 bonds will pay a 1.89% true interest cost versus the 5% interest rate paid on the 2003 and 2004 bonds; this equates to a 27% overall savings on the relative debt service. He also mentioned that the 2014 bonds will be paid off nine years faster with a final maturity of 2026, where the 2003 and 2004 bonds had a final maturity date of 203 5. 12. UPDATE ON JOINT SERVICES ISSUES. G. Bowen, Acting AGM of Joint Services, shared that the City of Anaheim won the United States Green Building Council's Eco City Award for the second consecutive time. Projects that helped to secure the award were the Anaheim Regional Transportation Intermodal Center (ARTIC) development, Convention Center Solar Project, Water Sustainability Campus, and Renewable Projects, such as the Bowerman Landfill Gas to Power Project. G. Bowen also addressed a question raised by B. Hernandez last month about a proposed wind project in Wyoming. He explained that the project is called Pathfinder Wind Project (Project) and consists of a 2,100 MW Wind Farm located in Wyoming, in combination with a Compressed Air Storage Facility located in Utah. The proposed cost of the Project is $4- billion. G. Bowen shared that the Project works by sending power generated from the wind farm in Wyoming to a compressed air facility in Utah where air is compressed, injected and stored in air tight salt caverns underground. The hot, pressurized air is then released to turn turbines and produce power for use in peak load periods. The proposal for the Project is expected sometime in the January 2015 timeframe at which time the Department will have an opportunity to evaluate whether or not to participate. The online date of the Project is scheduled for 2023. Lastly, G. Bowen shared information on Oak Canyon Nature Center Composting event, scheduled to take place on November 1st, between 9:30 a.m. and 11:00 a.m. at the Oak Canyon Nature Center. The event is sponsored by Anaheim Public Works and Republic Services, He ACTION TAKEN 2014-68 AGENDA ITEM also mentioned that the Department will have a representative at the event discussing and providing information on turf removal in favor of drought tolerant plants. 13. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, shared that the Legislative Working Group was provided with the legislative wrap up report for 2014. She shared that 2014 was a fairly calm legislative year, and that this was a water focused year, with two major water related bills passing. First, a water bond bill which will be Proposition 1 on the upcoming November State election ballot. Second, the first ever groundwater monitoring laws in California. Both of these are not expected to have negative impact on the Department. She also mentioned that several new energy laws could have indirect influence on electric system operations and are being closely monitored. Potential legislation in 2015 may include, the on -going anticipation for additional Greenhouse gas and Renewable Portfolio Standards (RPS) related legislation, some type of low- income rate assistance for water, the requirement for the development of long -term state energy plans, and efforts to streamline the process to settle groundwater right disputes. The next Working Group Meeting will be held in February 2015. J. Lehman invited the Board's attention to the Internal Compliance Report and reported that there were no major issues and thanked staff for working to mitigate impacts. She mentioned that a $1,000 settlement fee was paid to the South Coast Air Quality Management District (AQMD) in regard to an incident that occurred in 2012 when a report to the AQMD was inadvertently missed while the plant was not in operation. While there were no emission limit exceedances, a Notice of Violation was received and the Department entered into a settlement agreement whereby no wrong doing was admitted. She also mentioned that the Department had the first inspection of the drinking water system by the new State Water Resources Control Board's Division of Drinking Water. In July 2014, the program was transferred from the Department of Public Health. The inspection went smoothly, and no issues were identified. A full report is expected at a later date. 14. AGENDA ITEMS) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON NOVEMBER 19, 2014. • Customer Information System (CIS) Presentation and Demonstration. • Schedule a Public Hearing Date for various Water Rate actions. • Regulatory Relief Modification to Electric & Water Rules 13 and 14.* ACTION TAKEN 2014­69 AGENDA ITEM ACTION TAKEN 15, ITEM(S) BY SECRETARY. D. Lee, Public Utilities General Manager, shared photos of the Department's field staff wearing pink hard hats, in honor of Breast Cancer Awareness month. D. Lee announced the retirement of S. Sciortino and information about his upcoming retirement event will be provided to the Board to thank him for his years of service and significant contributions to the Department. D. Lee shared about the passing of two Department employees, Charles Lucas, Sr. Electrical System Designer and Steve Moyle, a retired line mechanic, and requested that the meeting be closed in their memory. 16. ITEM(S) BY BOARD MEMBERS. C. Monaco inquired about the Department competing in a recent water competition in which the City of Santa Ana was named as having the number one drinking water in the nation. D. Calkins shared that the Department has not competed in that particular competition and will look into it, but several years ago Anaheim participated in a similar competition conducted by the U.S. Conference of Mayors and we were selected as one of the top five drinking waters in the nation. S.E. Faessel thanked Mayor Pro Tern K. Murray for her service on the MWD Board and looks forward to what's ahead for D. Calkins as the new MWD Board member. She indicated that the OCWD presentation showed how vital and essential the Department's cooperative activities are in providing clean water to the residents of Anaheim. L. Cahill thanked staff for the information provided at the meeting. B. Hernandez reminded everyone to vote on November 41n D. Singer said that she appreciates the friendly, family- oriented atmosphere the Department has and said it is important to encourage that atmosphere to protect the longevity of staff in contently remaining on the job. J. Machiaverna said that the information provided in staffs presentations are understandable, and provides the Board with the information needed to make informed decisions. The meeting was closed in memory of Charles Lucas and Steve Moyle. 17. ADJOURNMENT: (TO THE REGULAR MEETING ON D. Singer moved to adjourn NOVEMBER 19, 2014, AT 5:00 P.M., IN THE 11" FLOOR the Regular Meeting in the LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, memory of Charles Lucas 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). and Steve Moyle at 7:33 p.m. to the Board's next Regular Meeting date of November 19, 2014 at 5:00 p.m. B. Hernandez seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. AGENDA ITEM ACTION TAKEN Resnectfully subm 'tted, Dukku Lee Secretary, Public Utilities Board * 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. I a;