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Public Utilities 2020/05/27CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES May 27, 2020 The agenda, including the Teleconference Notice, having been posted on Thursday, May 21, 2020, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday, May 27, 2020, in the 1 lth Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chairperson E. Medrano, Vice -Chairperson J. Seymour (via teleconference), R. Bhalla (via teleconference), R. Gaona (via teleconference), A. Abdulrahman (via teleconference) Board Members Absent: J. Showalter, V. Baroldi City Staff Present: D. Lee, P. Oviedo, A. Kott, M. Moore (via teleconference), J. Lonneker (via teleconference), B. Beelner (via teleconference), G. Bowen (via teleconference), J. Lehman (via teleconference), M. Seifen (via teleconference), M. Walker (via teleconference), J. Sanks (via teleconference) Guest(s) Present: None. AGENDA ITEM ACTION TAKEN PUBLIC COMMENTS. 1. APPROVAL OF THE MINUTES OF THE PUBLIC UTILITIES BOARD REGULAR MEETING OF APRIL 22, 2020. * There being no oral public comments or public comments submitted pursuant to the Teleconference Notice, Chairperson E. Medrano closed the public comments portion of the meeting. Vice Chairperson J. Seymour moved approval of the Minutes of the Public Utilities Board Regular Meeting of April 22, 2020. R. Bhalla seconded the motion. 2020 - 27 2. UTILITY FINANCIAL OVERVIEW AND FY2020/21 PROPOSED BUDGET. * B. Beelner, Assistant General Manager — Finance and Administration, presented a financial overview of the electric and water utilities to the Board, illustrating the forecasted impact that the response to the COVID-19 pandemic could have on Anaheim Public Utilities Department's (APU) finances. B. Beelner highlighted the impacts due to projected reductions in revenue in the current and next three fiscal years, explaining that APU is mitigating the financial impact by reducing operating expenses and utilizing reserves in the near term as well as strategically deferring select capital projects, technology upgrades, and facility improvements over the longer term. B. Beelner explained that financial reserves are accumulated over time to help mitigate the impact of unforeseen events, highlighting the fact that both the electric utility and the water utility had sufficient financial reserves going into the pandemic. However, if the economic impact of the pandemic is prolonged, those reserves will not be enough and additional measures will be necessary. B. Beelner explained that APU's electric utility is most susceptible to negative financial impacts from the closure of businesses because the majority of the electric utility's revenue is generated from commercial and industrial customers due to their high energy consumption. APU's water revenue will also be impacted but to a lesser degree because water revenues are not driven as heavily by economic conditions. B. Beelner discussed several measures that APU implemented over the past several years to enhance financial resilience and enable APU to mitigate financial impacts to customers during economic downturns. Additionally, B. Beelner highlighted numerous actions APU is taking to help customers who are financially impacted by COVID-19, including redirecting existing efficiency funds to offer a bill credit up to $250 in emergency assistance, suspension of utility service shutoffs and fees for late payments, and additional Federal funding made available to customers for electric bill assistance. B. Beelner presented APU's FY2020/21 proposed budget, highlighting an overall budget decrease of approximately 3% compared to the current year and includes a reduction in expected MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. A. Abdulrahman moved the approval of the FY2020/21 Proposed Budget. R. Gaona seconded the motion. MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. 2020 - 28 revenue, reduced discretionary costs, and higher water supply costs as a result of using a higher ratio of imported water. The Board asked if funds from energy efficiency programs have already been allocated to be used in other programs. Staff indicated that the funds have been redirected to assist customers through APU's low-income bill assistance programs. The Board expressed concern about potential layoffs and the organizational impact it may have, and requested that any such determination come before the Board prior to implementation. D. Lee, Public Utilities General Manager, acknowledged the concern of potential layoffs on employees and operations, and explained that timing of such a decision by the Interim City Manager may require a post action report to the Board. The Board inquired about whether there is a regulatory requirement to spend down undergrounding funds. D. Lee responded that the undergrounding projects will only be delayed by one fiscal quarter and the undergrounding funds will not be spent outside the undergrounding program, and that there is no regulatory requirement to spend a certain amount of money in a given year. The Board inquired about the risk associated with deferring capital projects. J. Lonneker, Assistant General Manager —Electric Services, responded that delayed electric projects will have only medium risk to electric reliability because they are projects on substations where electric service can be rerouted in the event the existing asset fails. M. Moore, Assistant General Manager — Water Services, responded that the risk of deferring water capital projects is low. The deferred water projects include new wells and automated meters, neither of which will have an impact on reliability in the near term. M. Moore highlighted that pipeline projects and groundwater treatment projects will not be deferred at this time. The Board asked about the impact to existing contracts, and if delaying projects would affect those contracts. Staff responded that existing contracts would remain in effect since payments are only made for services rendered. 3. APPROVAL OF THE DIRECT PAYMENT AGREEMENT NO.20Y-2006 BETWEEN THE STATE OF CALIFORNIA, DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT AND THE CITY OF ANAHEIM TO RECEIVE FEDERALLY -FUNDED LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP) GRANT FUNDING TO BE APPLIED TO ACCOUNTS OF ELIGIBLE Vice Chairperson J. Seymour moved approval of the Direct Payment Agreement No. 20Y-2006 between the State of California Department of Community Services and Development and the City of 2020 - 29 ANAHEIM PUBLIC UTILITIES DEPARTMENT ELECTRIC CUSTOMERS. * B. Beelner explained how APU receives Federally -funded Low - Income Home Energy Assistance Program (LIHEAP) grant funding through the State of California Department of Community Services and Development. He indicated that the existing agreement recently expired. The assistance provides electric bill assistance once per calendar year for those customers that qualify. B. Beelner noted that the new agreement is for a 3-year term, and expires in March of 2023. B. Beelner also mentioned that $900 million in additional funding had been allocated to LIHEAP via the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which is expected to increase the allocation available to APU customers; however, the exact amount to be allocated to Orange County has not yet been determined. 4. APPROVAL OF REIMBURSEMENT AGREEMENT AMONG THE CITY OF ANAHEIM (CITY), OTHER GROUNDWATER PRODUCERS, AND THE ORANGE COUNTY WATER DISTRICT FOR REIMBURSEMENT FUNDING FOR THE CITY TO DEVELOP, CONSTRUCT, OPERATE, AND MAINTAIN GROUNDWATER TREATMENT FACILITIES, AND AN AGREEMENT WITH BROWN AND CALDWELL TO PROVIDE OWNER'S ENGINEER CONSULTING SERVICES FOR THE DESIGN - BUILD OF GROUNDWATER TREATMENT PLANTS IN THE ANNUAL AVERAGE SUM OF $1,000,000 FOR A FIVE- YEAR TERM WITH A FIFTEEN PERCENT (15%) CONTINGENCY FOR EXTRA SERVICES. M. Moore, Assistant General Manager — Water Services, provided an overview on the Reimbursement Agreement for Per- and Polyfluoroalkyl Substances (PFAS). M. Moore indicated that PFAS is a compound that has effected many groundwater wells and have caused APU to purchase imported water at a higher cost. M. Moore mentioned that staff has presented on this item at previous board meetings that described the need to construct new groundwater treatment plants. He noted that this Reimbursement Agreement will allow APU to be reimbursed by Orange County Water District (OCWD) for much of the cost to design, construct, and operate the new facilities over the next 30 years. The Reimbursement Agreement is the result of several months of negotiations with OCWD and neighboring water agencies. M. Moore indicated that the item also includes a consulting agreement with Brown and Caldwell to assist APU staff with Owner's Engineering services. The Owner's Engineering firm will assist staff in creating the bidding documents to solicit and award Anaheim to receive federally -funded low- income home energy assistance program grant funding. R. Bhalla seconded the motion. MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. A. Abdulrahman moved approval of Reimbursement Agreement among the City of Anaheim, other Groundwater Producers, and the OCWD for reimbursement funding for the City to develop, construct, operate, and maintain groundwater treatment facilities, and an Agreement with Brown and Caldwell to provide Owner's Engineer consulting services for the design -build of groundwater treatment plants. R. Gaona seconded the motion. MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. 2020 - 30 design -build contracts for the new groundwater treatment facilities. The Board asked how many wells are currently online. Staff indicated there are four wells located in the western part of Anaheim that are in operation and noted that those wells tested below the regulatory limits therefore were not required to be offline. 5. APPROVAL OF ENVIRONMENTAL WASTE Vice Chairperson J. MANAGEMENT SERVICES AGREEMENT BETWEEN THE Seymour moved approval of CITY OF ANAHEIM AND OCEAN BLUE Environmental Waste ENVIRONMENTAL SERVICES, INC. FOR AN INITIAL Management Services THREE-YEAR TERM, WITH TWO ONE-YEAR OPTIONAL Agreement between the City EXTENSIONS, IN NOT -TO -EXCEED AMOUNT OF $350,000 of Anaheim and Ocean Blue FOR THE THREE-YEAR TERM OF THE AGREEMENT Environmental Services, Inc. AND ANY EXTENSIONS, WITH A FIFTEEN PERCENT A. Abdulrahman seconded (15%) CONTINGENCY FOR EXTRA SERVICES. * the motion. MOTION VIA ROLL J. Lehman, Chief Risk Officer, requested the Board's CALL VOTE CARRIED: recommendation for approval of an agreement for waste 5-0. management services with Ocean Blue Environmental Services, ABSTAINED: 0. Inc. J. Lehman explained that these services will be used on a ABSENT: 2 [J. Showalter, routine basis, as well as for emergencies, and are vital to ensuring V. Baroldi]. that hazardous materials are handled correctly and in a timely manner. J. Lehman indicated that the agreement went through a competitive selection process and that the company has the proper training, licensing and insurance requirements. The Board asked if this agreement was to extend the previous contract. Staff indicated that this is a new agreement that has gone through the bidding process and followed Council Policy 4.1, which outlines the ratings criteria for professional services. 6. APPROVAL OF DEPARTMENT ORDERS 350 Vice Chairperson J. (PROCUREMENT OF LONG-TERM ENERGY -RELATED Seymour moved approval of RESOURCES) AND 501 [NORTH AMERICAN ELECTRIC Department Orders 350 RELIABILITY CORPORATION (NERQ AND WESTERN (Procurement of Long -Term ELECTRICITY COORDINATING COUNCIL (WECC) Energy -related Resources) INTERNAL COMPLIANCE PROGRAM]. and 501 [North American Electric Reliability M. Walker, Administrative Services Manager, made the Board Corporation (NERC) and aware of revisions that were made on Department Orders (DO) 350 Western Electricity - Procurement of Long -Term Energy -Related Resources and DO Coordinating Council 501 - NERC/WECC Internal Compliance Program. Both DOs (WECC) Internal provide utility staff with guidance and appropriate procedures to Compliance Program]. A. ensure that the utility's operations meet regional and local Abdulrahman seconded the regulatory requirements, consistent with industry practices. motion. 2020 - 31 MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. 7. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, Assistant General Manager — Electric Services, recognized John Batchman, who is retiring and has been with the City for a total of 33 years. J. Lonneker mentioned that he entered into the lineman apprentice program at APU in 1998, worked as a Line Mechanic for 7 years until becoming a Troubleshooter in 2008. J. Lonneker shared with the Board that John Batchman has a very positive attitude and well -liked by customers and co-workers. J. Lonneker wished him great success in his retirement. Lastly, J. Lonneker shared photographs of the completion of a direct -buried cable replacement project in the Lake Summit Community in Anaheim Hills. The replacement was prioritized due to multiple outages from the deteriorated cable. The project was finished earlier this year and customer feedback from a resident in the area noted appreciation for an outstanding job coordinating and the timely completion of the project. 8. UPDATE ON WATER SYSTEM ISSUES. M. Moore mentioned that APU has been assisting other City departments by utilizing staff from the Community Services department to assist in painting fire hydrants. The staff has done a good job filling this community need. M. Moore indicated that APU has just received a new vactor truck that was purchased last year. The new equipment acts like a large vacuum cleaner that can excavate soil to allow safer construction and repair of pipelines. The vactor truck will. allow APU staff to make smaller excavations with less disruption to other nearby utilities. 9. UPDATE ON FINANCE ISSUES. B. Beelner discussed the monthly dashboard with the Board - the fiscal year to date electric revenue through April 30, 2020 was 4.4% below budget ($15.8M) due primarily to a temperate summer causing low retail demand coupled with lower commercial and industrial demand due to Shelter -in -Place orders. Operating expenditures fell below budget by 8.4% ($27M) also due to lower than expected demand along with lower than expected wholesale power prices causing a positive net budget variance of $11.2M. B. 2020 - 32 Beelner then mentioned that year to date water revenue was 3.0% ($2.2M) below budget due to weaker than anticipated customer demand due to a temperate summer and lower commercial/industrial demand related to the Shelter -in -Place orders. Costs were below budget as well by 4.2% (2.4M) causing a positive net budget variance of $0.2M. 10. UPDATE ON POWER SUPPLY ISSUES. G. Bowen, Assistant General Manager — Power Supply provided the Board with an update on the Power Supply Dashboard. He noted that all of the Canyon Power Plant units had undergone their pre -summer maintenance outage in preparation for summer operations. The maintenance included oil and filter changes, checking units for clearances of rotating blades as well as nicks, cracks, erosion in and on the blades themselves. G. Bowen indicated that all units had successfully completed their respective outages and were now ready for summer operations. G. Bowen also mentioned that energy prices continued to remain low over the last two months and that oil prices in the recent weeks had little effect on energy prices. Additionally, G. Bowen reported that each year publicly -owned utilities such as APU are required to report information about energy efficiency programs to the California Energy Commission. He stated that APU had reported on its investments in those programs, as well as program expenditures, cost-effectiveness, and expected versus actual energy efficiency savings. G. Bowen noted that APU's spending efficiency when compared to other utilities such as Los Angeles Department of Water and Power, Riverside, Burbank, and Pasadena was less per customer to achieve the same level of energy savings. However, 2020 goals may be difficult to achieve due to the impacts of COVID-19 and resulting postponement of many programs. 11. UPDATE ON ENTERPRISE RISK AND COMPLIANCE. J. Lehman, Chief Risk Officer, shared with the Board that the focus of the State Legislature had changed considerably over the last several months and many, if not most, of the bills being followed will likely not pass out of the Legislature. J. Lehman indicated that there are a number of bills related to COVID-19 crisis and that, at this time, none of these bills are expected to significantly impact utility operations. J. Lehman noted that of the bills that might potentially move forward, two in particular are helpful. Assembly Bill (AB) 2560 (Quirk-D) would establish a public comment and review process when setting or revising drinking water notification and response levels which are advisory levels for unregulated contaminants such 2020 - 33 as PFOS/PFOA. This would provide more transparency into the process as well as more warning when new standards are under consideration, which would allow more time to address potential issues. Senate Bill (SB) 1386 (Moorlach-R) would affirm existing law that allows public water suppliers, such as APU, to include the costs associated with fire hydrants and the water served through them, in their water charges. There have been over 80 lawsuits in the region recently challenging this practice. J. Lehman mentioned that staff recently sent a letter supporting this bill. Lastly, J. Lehman shared that June is National Safety Month and that safety staff will be reaching out to employees through field visits, emails, and other avenues each week to emphasize a safety topic. This year the focus will be on COVID-19, ergonomics, safety culture/hazard recognition, and driving. 12. ITEM(S) BY SECRETARY. D. Lee shared with the Board the items scheduled for the following Board meeting include: • Summer Load Assessment Outlook Presentation D. Lee indicated if no action agenda items come up, the Board meeting scheduled for June may be cancelled. July is the beginning of the fiscal year and an election for Board and Committee positions will be agendized. D. Lee shared photos of APU social media campaigns during the pandemic to reach out to customers. Examples included contests for elementary students, customer service videos on frequently asked questions due to COVID-19, and thank you LED bulb kits that were made available to health, grocery, and first -response workers. D. Lee showed photos from a sheared fire hydrant from a vehicle accident, and how electric staff drove a truck over the hydrant to mitigate the potential for electrical shock from the overhead power lines, and allow for the safe shut-off of water. D. Lee indicated that Anaheim West Tower is anticipated to re- open in June. Details and timelines are being discussed with the Emergency Operations Center, and will include safety precautions for employees and customers. D. Lee reported that the city has implemented a hiring freeze to help with overall budget impacts. Other cost mitigations will be the focus of the budget discussions with City Council in June. 2020 - 34 13. ITEM(S) BY BOARD MEMBERS. J. Seymour indicated that he is thankful that APU is in good financial standing during these difficult times. 14. ADJOURNMENT: (NEXT REGULAR MEETING ON JUNE Vice Chairperson J. 24, 2020 AT 5:00 P.M. PLEASE BE ADVISED THAT BOARD Seymour moved to adjourn MEMBERS WILL PARTICIPATE IN THIS MEETING the Regular Meeting at 6:51 TELEPHONICALLY.) p.m. to the Board's Regular Meeting date of June 24, 2020 at 5:00 p.m. in the 1 lch Floor Large Conference Room of Anaheim West Tower. A. Abdulrahman seconded the motion. MOTION VIA ROLL CALL VOTE CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 [J. Showalter, V. Baroldi]. :1ectful . bmitted, Dukku Lee Public Utilities General Manager * 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. 2020 — 35