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Public Utilities 2018/04/25CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES APRIL 25, 2018 The agenda having been posted on Thursday, April 19, 2018, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday, April 25, 2018, in the rd Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chairperson E. Medrano, Vice -Chairperson J. Seymour, A. Abdulrahman, R. Nelson, J. Showalter, V. Ramirez, V. Baroldi Board Members Absent: None City Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, B. Beelner, A. Kott, G. Bowen, J. Lehman, P. Oviedo, M. Seifen, A. Nguyen, Y. Saldivar, C. Pereyra, H. Mendoza, J. Sanks, A. Markis, P. Hayes, M. Robledo, C. Thompson, L. Nugent, R. King, S. Boodanian, E. Krause, M. Pan, M. Gonzalez, T. Marmitt Guest(s) Present: None AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. 2. APPROVE THE MINUTES OF THE PUBLIC UTILITIES BOARD MEETING OF MARCH 28, 2018. * 3. PRESENTATION: FISCAL YEAR 2018/2019 PROPOSED BUDGET. A. Nguyen, Utilities Budget Administrator, gave a presentation on the proposed budget, beginning with a comparison between the Fiscal Year (FY) 2017/18 adopted budget and the FY 2018/19 proposed budget. A. Nguyen discussed the Public Utilities Department's (Department) revenue, he noted that electric retail sales are forecasted 2018-27 There being no public comments, Chairperson E. Medrano closed the public comments portion of the meeting. J. Seymour moved approval of the Minutes of the Public Utilities Board Meeting of March 28, 2018. A. Abdulrahman seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. to remain flat while wholesale revenue is expected to decline as a result of exiting the San Juan Generating Station, a coal plant in New Mexico. He also explained that water revenue is forecasted to increase by approximately 10% because of the recent rate adjustment and slightly higher demand that is expected next fiscal year. A. Nguyen noted that power supply is decreasing because the Department will have less excess energy to sell into the wholesale market. A. Nguyen explained that water supply is proposed to increase by nearly 13% because of higher wholesale water costs, slightly higher forecasted demand, and more treated water that will be imported when the Lenain Water Treatment Plant is shut down temporarily for expansion next year. He indicated that total debt service is decreasing by approximately 5%, while capital investments in the electric and water system are proposed to increase by roughly $14 million. Following this breakdown, A. Nguyen highlighted accomplishments from the current fiscal year and what the Department is planning for FY 2018/19, mentioning the Department's continued engagement with schools, students, and the local community. He also described the Department's customer service -driven accomplishments in the past two years and how new options of bill pay such as pre -pay and level pay are currently being evaluated. A. Nguyen discussed the Department's capital projects mentioning that 2,000 Light Emitting Diodes (LED) street lights have been installed to -date this year and another 2,500 LEDs are being planned next fiscal year. In addition, A. Nguyen indicated that 30,000 feet of direct buried cable replacements are planned for next year, and that the designs are progressing on undergrounding Beach Boulevard in coordination with other agencies. For Water Capital, a new storage reservoir and pump station at the La Palma Complex are currently under construction, and 34,000 feet of water main replacements are planned for next year. A. Nguyen indicated that the second phase of the Linda Vista Complex will begin next fiscal year, and construction on rehabilitating and expanding the Lenain Water Treatment Plant will also commence next fiscal year. The Board asked if the Department had any capital improvement projects that should be prioritized. Staff indicated that five year plans for such projects are put in place in order to ensure that the system priorities and funding are planned out accordingly. For example, an improvement project at Lewis Substation was deemed to be a high priority and was completed several years ago. The Board also asked how frequently water main breaks occurred and the response time to address and repair. Staff explained main breaks occur at a level that is below the industry standard, and a typical repair takes approximately four hours. The Board inquired about the 2018-28 rapid growth of solar installation with residential customers and the impact it has on the Department's revenue. Staff indicated that in order to maintain revenue, adjustments are incrementally made to the rate structures which allow the Department to support customer's choice to install solar panels and simultaneously recover costs since solar customers also use the local grid to both send and receive power. Lastly, the Board asked if the Department has a budget in place for emergency preparedness for major outages due to natural disasters. Staff explained funds are spread out throughout the budget for unexpected emergency expenses. In addition, staff made the Board aware of new technology for earthquake ready pipes, and if determined to be cost effective, the Department would begin deployment. 4. PRESENTATION: PROTECTING CUSTOMER IDENTITY DATA AND FAIR AND ACCURATE CREDIT TRANSACTION (FACT) ACT COMPLIANCE. R. King, Utilities Services Supervisor — Credit and Collections, gave a presentation on protecting customer identity by following the guidelines of the Fair and Accurate Credit Transaction Act Compliance (FACTA). R. King discussed how identity theft impacts customers, how the Department validates and secures customer Personal Identifying Information, and the provisions to detect, prevent, and mitigate identity theft. R. King indicated that in Fiscal Year 2018, the Department conducted training and certified/recertified Customer Service employees for FACTA compliance. R. King presented the Board with examples of the Department's guidelines and practices for being FACTA compliant. The Board asked what measures the Department has in place to protect the computer system against security breaches. Staff indicated that have testing of the Department's network firewall has been performed with local law enforcement partners. An evaluation was also conducted by the Department of Homeland Security on the Department's cyber security initiatives. 5. APPROVAL OF THE 2018 INTEGRATED RESOURCES PLAN (IRP) FOR THE CITY OF ANAHEIM INCLUDING THE RENEWABLE ENERGY PROCUREMENT PLAN AND ENFORCEMENT PROGRAM. * C. Thompson, Principal Integrated Resource Planner, gave a presentation of the Department's 2018 Integrated Resource Plan (IRP). The requirement for an IRP is set forth in Senate Bill 350. C. Thompson indicated that the IRP outlines the type of power resources that will be used to provide clean, reliable, and sustainable electrical energy to customers, while maintaining affordable rates. In the development of the IRP, the Department considered expected changes 2018-29 The Board requested a more detailed presentation discussing the Department's cybersecurity measures at a future date. A. Abdulrahman moved approval of the 2018 Integrated Resources Plan for the City of Anaheim which includes the Renewable Energy Procurement Plan and Enforcement Program. J. Seymour seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. in customer demand due to energy efficiency improvements, solar generation, and the increased use of electric vehicles. C. Thompson indicated that the IRP supports the Department's goal to transition out of carbon intensive resources and serve customers using clean renewable energy, which will also significantly reduce air pollution and greenhouse gas emissions. The Board questioned why the Department's —70% greenhouse gas reduction estimate significantly exceeds the statewide goal of 40% below 1990 emission levels by 2030. It was explained that the decrease is mainly associated with the Department's transition out of coal intensive resources from its power supply portfolio. The Board posed a question regarding the 1.34% annual expected increase in power supply costs between the years 2018 - 2030. Staff explained that this percentage is less than the rate of expected inflation, and is one element that is factored into overall retail rates to be managed in order to keep customer bills affordable. 6. APPROVAL OF POSTING THE 2018 WATER QUALITY REPORT ON THE CITY OF ANAHEIM PUBLIC UTILITIES WEBSITE AND PROVIDING CERTIFICATION OF COMPLETION OF POSTING TO THE STATE WATER RESOURCES CONTROL BOARD DIVISION OF DRINKING WATER. * * J. Lehman, Chief Risk Officer, discussed the Annual Water Quality Report with the Board. J. Lehman mentioned that the Department either met or exceeded all federal and state water quality requirements. J. Sanks, Environmental Services Manager, provided a presentation summarizing the content of the Report, and discussed the various methods that the Department has in place to ensure that all customers and visitors continue to receive high quality water. J. Sanks mentioned that customers would be informed through their billing statements that the report is to be available on the Department's web site and a hardcopy of the report would be mailed at the customer's request. The Board inquired about the measures that the Department has in place in the event of water contamination due to an act of terror. M. Moore indicated that after 9/11 a water assessment was conducted and that the Department implemented procedures and improvements to monitor water facilities. The Board asked what the protocols are if lead is detected at a school above the required action level. Staff indicated that school officials would be made aware of the results from testing inside a campus, and the school would then be responsible to make the necessary corrections to their internal water system and notify parents accordingly. Thus far, no such elevated levels have been detected from schools tested by the Department. 2018-30 R. Nelson moved approval to post the 2018 Water Quality Report on the City of Anaheim Public Utilities website and provide certification of completion of posting to the State Water Resources Control Board Division of Drinking Water. V. Baroldi seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 7. APPROVAL OF AN AGREEMENT WITH RICHARD HEATH AND ASSOCIATES, INC. TO PROVIDE SERVICES FOR THE SMALL BUSINESS ENERGY AND WATER DIRECT INSTALL PROGRAM FOR A FIVE (5) YEAR TERM WITH TWO (2) OPTIONAL ONE-YEAR EXTENSIONS IN AN ANNUAL AMOUNT NOT TO EXCEED $800,000 PLUS AN ADDITIONAL 10% FOR AS -NEEDED EXTRA SERVICES. * G. Bowen, Assistant General Manager — Power Supply, provided the Board with an overview of the Small Business Energy & Water Direct Install Program. He made the Board aware that small business customers will be able to have efficiency measures installed in their business at no cost to help them achieve energy and water savings in a convenient manner where the licensed contractor would perform the work. Some of the measures included air conditioning tune-ups, programmable thermostats, and high efficiency water fixtures. G. Bowen indicated that this program will assist approximately 500 businesses with energy and water saving measures up to $3,000 per business for electric measures and $500 for water efficiency measures. G. Bowen indicated that RHA was selected based on their expertise in working with small businesses throughout California including PG&E and several municipalities in Southern California and that it was a five year Agreement with two one year extensions, with an annual funding allocation of $800K. 8. APPROVAL OF A GRAFFITI ABATEMENT SERVICES AGREEMENT WITH CLEAN SLATE GROUP THROUGH DECEMBER 2019 WITH AN OPTION TO EXTEND FOR UP TO ONE YEAR IN AN AMOUNT NOT TO EXCEED $476,500 PLUS AN ADDITIONAL 15% FOR AS -NEEDED EXTRA SERVICES. * J. Lonneker, Assistant General Manager — Electric Services, provided the Board with an overview of the proposed Graffiti Abatement Agreement which is intended as a preemptive measure to deter graffiti on electrical enclosures and street light poles that are subject to repeated tagging. J. Lonneker described the scope of work that will include the installation and maintenance of artificial ivy on electrical enclosures, design and installation of a vinyl wrapping material, and application of a sealant on street light poles allowing for faster removal of the graffiti. J. Lonneker emphasized that these services are preventative in nature to deter graffiti, and does not replace the graffiti removal and painting services provided under the City's graffiti abatement contract. The Board asked who determines the design of the vinyl wrap, and D. Lee responded that the Department will coordinate with the contractor to achieve a consistent design that blends into the existing landscape where the enclosure is located, and will also coordinate with Planning and Public Works Departments to ensure the design meets 2018-31 A. Abdulrahman moved approval of an Agreement with Richard Heath and Associates, Inc. to provide services for the Small Business Energy and Water Direct Install Program. V. Baroldi seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. J. Seymour moved approval of an Agreement with Clean Slate Group to provide Graffiti Abatement services. V. Ramirez seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. requirements delineated in area specific plans and public right-of-way specifications. Additionally, the Department has considered customized designs or artwork, but that due to the potential for electrical hazard, such artwork was not recommended around high voltage equipment. 9. DISCUSSION ON THE QUARTERLY STATUS REPORTS OF CAPITAL IMPROVEMENT PROJECTS, MASTER AGREEMENTS, GENERAL SERVICE AGREEMENTS, AND SPOT BID AWARDS. D. Lee highlighted the capital projects maps for both electric and water projects, as well as the pre -qualified consulting, construction and spot bid purchases that were included in the quarterly reports for the Board's review. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, made the Board aware that the Department celebrated National Linemen Appreciation Day on March 18, 2018 in recognition of the work and dedication of the Department's linemen and troubleshooters. J. Lonneker discussed with the Board an extended power outage that occurred the week of March 8, 2018 at approximately midnight, when a multi -family residential property was affected due to a failed direct buried cable. J. Lonneker described that because crews had to jack- hammer through the private property sidewalk to access the damaged cable, the work was delayed until the following morning in consideration of the noise level to other neighbors. Staff was in contact with customers to inform them of the extended outage, and discussed plans to accelerate the installation of a long term solution that includes new conduit and cable. 11. UPDATE ON WATER SYSTEM ISSUES. M. Moore, Assistant General Manager — Water Services, made the Board aware of the events planned throughout the month of May to celebrate Water Awareness Month in Anaheim including the art contest on display in the lobby, solar boat contest, and farmer's market booths. M. Moore indicated that a memo was provided to the Board listing the events in greater detail. M. Moore noted that the City Council presented a proclamation at the April 24 meeting for Water Awareness Month. M. Moore gave an update on the California WaterFix Project that helps to ensure continued delivery of water to Southern California. The WaterFix project will build two tunnels to divert water around the delta and produce more reliable water to the State Water Project. The Metropolitan Water District Board approved their participation of 2018-32 The Board was asked to contact P. Oviedo for further information about attending the Water Awareness Month events. the $11.8 billion cost, which results in about a $4.00 per month cost for typical residential customers. Lastly, M. Moore discussed the water supply dashboard. He indicated that the wet weather in the Rocky Mountains and Northern California area improved imported water supplies and storage programs. However, local precipitation was at historic low levels this year and will require the region to import water to maintain groundwater levels. 12. UPDATE ON FINANCE ISSUES. B. Beelner, Assistant General Manager — Finance & Administration, discussed the monthly financial dashboard. B. Beelner indicated that revenues and expenditures through March 2018 were in line with the budget. B. Beelner then indicated to the Board that he recently met with various investors of Anaheim Public Utilities bonds in an effort to improve investor outreach, discuss recent operating results, and Department initiatives related to legislative and regulatory compliance. 13. UPDATE ON POWER SUPPLY ISSUES. G. Bowen provided an update on the power supply dashboard indicating to the Board that the Kraemer unit had a transfer gearbox failure resulting in an additional outage from its recent outage earlier in March. G. Bowen indicated to the Board that repairs are expected to be completed and the unit returned to service in early May. G. Bowen discussed with the Board that staff attended the 2018 Children's Water Festival at UC Irvine at the end of March. He indicated that it was a two day event, there were over 6,000 students from over 79 schools in attendance overall, and 7 of the schools were from Anaheim. The Department hosted 13 classes on water conservation and the environment at the event. 14. UPDATE ON ENTERPRISE RISK MANAGEMENT. J. Lehman provided the Board with an update on the Internal Compliance Report. J. Lehman highlighted several compliance matters at the power generation plants and explained how procedures are updated and staff is trained after events. J. Lehman mentioned the Board Legislative Working Group would meet next month to review active bills that are currently going through significant revisions. 2018-33 15. ITEM(S) BY SECRETARY. D. Lee informed the Board that 2 of 3 city-wide budget meetings have been held, where the public is invited to ask questions of various departments on budget issues. Items scheduled for the following Board meeting include: • FY 2018/19 Budget Recommendation • Power Supply Summer Portfolio • Discussion Wholesale Water Supplies • Student Engagement Update D. Lee showed photos from various community engagement programs, including the Latino Utilities Coalition meeting where 39 members of the public attended; the Earth Day shade tree planting ceremony at Horace Mann Elementary School; and, the Steam-a- palooza event at Magnolia High School, where the Department sponsored trophies for the solar car race event. D. Lee requested that the meeting be closed in the memory of Mr. Ed Alario, a former Assistant General Manager — Water Services, who passed away. 16. ITEM(S) BY BOARD MEMBERS. J. Showalter indicated that Disneyland has limited electric vehicle (EV) charging stations and asked if the Department reaches out to large companies like Disneyland to make recommendations regarding the installation of more EV charging stations. D. Lee explained companies are made aware of programs that provide rebates for installation of up to four stations for public access, and it is up to each company to apply for the available rebates. A. Abdulrahman reported that he attended the Metropolitan Water District Public Forum dinner, and indicated that the discussion and speeches were informative. He thanked staff for the opportunity to attend this event. Lastly, A. Abdulrahman requested the Department prepare a presentation regarding the WaterFix Project. R. Nelson indicated he attended a tour of the La Palma water facility He requested a presentation on emergency preparedness. 2018-34 Presentations on the California WaterFix Project and the Department's Emergency Preparedness were requested by the Board and will be presented at a future date. 17. ADJOURNMENT IN MEMORY OF ED ALARIO, TO THE REGULAR MEETING ON MAY 23, 2018, AT 5:00 P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA. E. Medrano called for a minute of silence, followed by a call for a motion to adjourn in memory of Ed Alario. Res. ectfully subi i itted, Dukku Lee Public Utilities General Manager J. Seymour moved approval to adjourn the Regular Meeting in Memory of Ed Alario at 7:46 p.m., to the Board's Regular Meeting date of May 23, 2018 at 5:00 p.m. A. Abdulrahman 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. 2018-35