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Public Utilities 2010/05/26CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES MAY 26, 2010 The agenda having been posted on Thursday, May 20, 2010, the Public Hearing/Regular Meeting of the Public Utilities Board was called to order by Chairperson Lon Cahill at 5:01 p.rn. on Wednesday, May 26, 2010, in the Gordon Hoyt Conference Center, 2nd Floor Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: L. Cahill, J. Brandman, P. Carroll, J. Machiaverna, D. Morgan, K. Murray, C. Peltzer Board Members Absent: None Staff Present: M. Edwards, A. Kott, M. Ward, D. Calkins, R. Dowell, R. Shintaku, S. Sciortino, B. Beelner, T. Mardikian, D. Ballin, P. Lee, M. Lopez, D. Wilson, S. Welch, G. Turner, L. Quiambao, P. Oviedo Guest(s) Present: Angelique Ferrio, Court Reporter, CSR #6879; P. Bos, Resident; D. Wain, Resident and Member of East Anaheim Neighborhood Council; V. DeGomez, Resident, Member of St. Vincent DePaul, St. Anthony Claret, and Employee of First Team AGENDA ITEM 1. PUBLIC HEARING: PROPOSED CHANGES TO THE WATER COMMODITY ADJUSTMENT AND WATER SYSTEM RELIABILITY ADJUSTMENT RATES AND CORRESPONDING REVISIONS TO THE SCHEDULE W -CA, AND SCHEDULE W -SRA, OF THE WATER RATES, RULES AND REGULATIONS. The Public Hearing was called to order by Chairperson L. Cahill at 5:01 p.m. A verbatim transcript of the entire presentation with all testimony, exhibits, and public comment that were a part of the public hearing was prepared by the Court Reporter. The certified original transcript is on file in the I l Floor Department Records, Public Utilities Department, Anaheim West Tower. A certified copy of the original transcript is on file in the City Clerk's Office, 2n Floor, City Hall. A member of the public, V. DeGomez, who belongs to St. Vincent DePaul, St. Anthony Claret, and is a First Team Real Estate Agent, made a statement indicating that the Public Hearing notices should be in Spanish since Anaheim is a Hispanic community. The people she invited to the meeting did not want to attend because the meeting is only in English. She ACTION TAKEN The Public Utilities Department presented one witness, as well as prepared and oral testimony in support of its request on the proposed modifications to the Water Rates, Rules and Regulations concerning rate increase. There being no further testimony or public comments, Chairperson L. Cahill received the following motion from A. Kott, who moved that all evidence, oral and written, submitted by staff, including the 2010 -30 AGENDA ITEM ACTION TAKEN indicated she represents residents from East St., La Palma Ave., Prepared Testimony with exhibits Sycamore, Rose, Bush, Vine, and Mavis who are not happy of Marcie L. Edwards and the with the rate increase. Affidavits of Publication of the Notice of Public Hearing filed L. Cahill closed the public hearing on the proposed changes to with the Secretary of the Board the Water Commodity Adjustment (WCA) and Water System become part of the record and Reliability Adjustment (WSRA) rates and corresponding moved into evidence. revisions to the schedule W -CA and schedule W -SRA of the Water Rates, Rules and Regulations at 5:27 p.m. Chairperson L. Cahill granted A. Kott's motion. L. Cahill, in summary, stated the Public Utilities General Manager had previously testified as to the number of Notices of the Public Hearing that were mailed to Anaheim property owners and Customers and the number of written protests received. In comparing the number of written protests received to the number of Notices of the Public Hearing that were mailed to Anaheim property owners and customers, the written protests do not equal 50 % plus 1 of the tenants or property owners of record in the service territory. L. Cahill concluded that there is no majority protest to the proposed rate actions so the increase to the Water Commodity Adjustment and corresponding revision to the Schedule W -CA as well as the Water System Reliability Adjustment and corresponding revision to the Schedule W -SRA of the Water Rates, Rules and Regulations is effective July 1, 2010. The regular PUB meeting was convened and called to order at 5:27 p.m. 2. PUBLIC COMMENTS. There were no public continents. L. Cahill closed the general public comments portion of the meeting. 3. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD (PUB) MEETING HELD APRIL 28,2010.* K. Murray indicated that the Minutes omitted her discussion D. Morgan moved approval of the regarding MWD's rates, and how Anaheim worked with other April 28, 2010, Public Utilities cities to keep the rate increase at 7.5 %, rather than the Board minutes as amended. significantly higher percentage initially proposed by MWD J. Brandman seconded the motion staff. Also, she indicated she appreciated joining J. Brandman as amended. in supporting Anaheim schools at Solar Flag dedications. MOTION CARRIED: 5 -0. ABSTAINED: 2 (P. Carroll, C. Peltzer). ABSENT: 0. 2010 -31 AGENDA ITEM ACTION TAKEN 4. APPROVAL OF THE FISCAL YEAR 2010/2011 BUDGET. * M. Edwards indicated that at the last PUB meeting, Staff presented a very detailed Budget Workshop. In summary, M. Edwards indicated the recession caused a mid -year course correction resulting in removal of $6 -8 million from the current budget and creating the need for additional budget cuts for next year. D. Morgan commented on the volatility of the economy resulting in a likely need to discuss the status of the budget at each meeting. K. Murray asked that staff reinstitute monthly budget reports to PUB, which reflect the actual budget and the proposed budget so PUB will have budget information on a month by month basis. Staff had already planned to do so. K. Murray indicated that Tuesday, June 8, 2010 at 3:40 p.m., the Utilities Presentation will be presented to the City Council in the Budget Workshop. There were a variety of questions posed by various Board members about the Budget, which Staff addressed in addition to the substantial discussion that took place at the April PUB meeting when E. Zacherl gave the initial Budget Workshop presentation. 5. APPROVAL OF UNDERGROUND CONVERSION 5- YEAR PLAN* P. Carroll moved approval of the Budget. L. Cahill seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. D. Lee presented an overview of the Underground Conversion D. Morgan moved that the PUB 5 -Year Plan (Plan), which included the current and proposed recommend to the City Council Plan highlights. Projects in the proposed Plan were reviewed that, by Motion, it approve the by the Underground Subcommittee and recommended for the Underground Conversion 5 -Year Board's consideration and action. Subject to the Board's Plan. P. Carroll seconded the recommendation, the Plan will be forwarded to the City Council motion. MOTION CARRIED: with a workshop held prior to final approval. Fifteen projects in 7 -0. ABSTAINED: 0. ABSENT: various stages were included in the presentation. 0. Two proposed changes in the Plan were presented: (1) the inclusion of a new project on Brookhurst Street from Katella Avenue to north of Ball Road, in coordination with a planned street widening project by the Department of Public Works; and (2) the acceleration of the West/Westmont project in coordination with other construction activities in the area. J. Brandman conveyed congratulations to M. Edwards and staff for the beautification that results from this Program. 2010 -32 AGENDA ITEM After a lengthy discussion in which Staff answered a variety of questions from the Board, L. Cahill called for a motion. 6. APPROVAL OF MEMORANDUM OF UNDERSTANDING AMONG ORANGE COUNTY WATER DISTRICT, CITY OF ANAHEIM, YORBA LINDA WATER DISTRICT, AND THE IRVINE RANCH WATER DISTRICT. M. Edwards began the discussion by indicating that this particular item involves annexing Anaheim territory (i.e., Mountain Park) into the Orange County Water District (OCWD) so it can be supplied with groundwater. The Memorandum of Understanding (MOU), which defines the associated environmental review process, is a joint agreement among Anaheim, OCWD, and two other water districts that also want to annex territories into the OCWD. This is a fluid issue, which is being withdrawn from the Agenda as an action item, but Staff will provide a brief overview of the matter. D. Calkins indicated that after the PUB agenda package was mailed, OCWD decided to delay taking the MOU to their Board for consideration because when this item was reviewed by an OCWD Committee, several groundwater producers (other cities /districts that pump groundwater) raised some questions and concerns, including how would the annexations affect the availability and cost of groundwater. OCWD will now take a few weeks to work with the groundwater producers and a Board workshop will be conducted on June 16, 2010. It is anticipated that the OCWD Board approval of this MOU will be delayed about a month. The purpose of the MOU is to define the environmental review process, which will be conducted over the next year, and define how this effort will be funded by the three agencies who want to annex territory into the OCWD. Mountain Park, the undeveloped area by the toll road, is the only area in the City that is not within the boundary of OCWD. Annexing this area into OCWD will allow Anaheim to pump more groundwater, which will reduce its overall cost of water and it would increase Anaheim's water supply reliability by having access to redundant supplies. D. Morgan inquired if the California Environmental Quality Act (CEQA) work will look at the environmental impacts to the increased pumping of groundwater. D. Calkins indicated that it would since the purpose of the CEQA work is to analyze impacts to the overall groundwater basin, including existing and future pumping. If in the future ACTION TAKEN 2010 -33 AGENDA ITEM Anaheim needs to build a well to serve that area, Anaheim would be responsible for project - specific CEQA analysis. C. Peltzer asked if there are groundwater resources in the Mountain Park area. D. Calkins indicated groundwater is not available directly within the Mountain Park area. Under normal operating conditions, Anaheim may serve groundwater directly to Mountain Park. Annexing the area, however, would provide Anaheim the ability to serve groundwater as a backup supply, and would reduce Anaheim's overall cost of water. 7. PRESENTATION ON LANDSCAPE WATER EFFICIENCY GUIDELINES. M. Edwards commented that AB 1881, which required new landscape efficiency ordinances, was passed unanimously by the State legislature in 2006, and signed into law by the Governor. Staff needs to comply with the new law, but has tried to minimize negative impacts to customers. The Department is working with the City Attorney's office to determine if there is adequate flexibility to delegate the authority to staff to implement and revise, as appropriate, the Guidelines to provide a greater degree of flexibility to remain current with emerging technologies and state law without the need to repeatedly bring the Guidelines back to Council for approval. R. Shintaku presented an overview of AB 1881 and the proposed Guidelines for Implementation of the landscape Water Efficiency Ordinance ( "Guidelines "). State law does provide some flexibility, allowing agencies to adopt an ordinance that is at least as effective in conserving water as the state model ordinance. An Orange County work group developed an Orange County model that separates the technical guidelines from the ordinance to provide flexibility, to provide a self certification process, and to promote regional consistency. All Orange County ( "OC ") cities have adopted the OC model. Anaheim's proposed Guidelines go a step further by streamlining the process for individual homeowners. A demonstration of the new individual homeowner process was presented. 8. WATER SUPPLY CONDITIONS. Water Supply Conditions Update D. Calkins presented an update concerning the Department of Water Resources increased allocation on the State Water Project (SWP) by another 5% for a total of 45 %, which is a reflection ACTION TAKEN 2010 -34 AGENDA ITEM of the good levels of precipitation and snow fall received this year. This allocation, however, is on the low side historically due to court - ordered restrictions on moving water through the Sacramento Delta. Also, on the low side because storage was down as the winter began, and it's going to take several years to replenish storage. Fiscal year to date, water use in Anaheim is 7% below the rationing target set by Metropolitan Water District (MWD). 2010 Public Health Goal Report D. Calkins indicated that the Agenda packet contained the 2010 Public Health Goal Report because California State law requires that a Public Health Goal Report be prepared every three years. Anaheim's water has consistently met all drinking water standards and regulations. K. Murray stated that she is working with Metropolitan Water District (MWD) on an Inspection Trip of the Sacramento Delta in June or July, and another trip in October in conjunction with the City of Fullerton to the Colorado River Aqueduct. Also, she is looking into the possibility of a one -day MWD tour to Diamond Valley Lake. 9. ELECTRIC SYSTEMS UPDATE. Electric Service Reliability M. Ward indicated that the Electric Service Reliability tutorial on the Department's website is currently being updated. The updated tutorial is included in the Agenda package. American Public Power Association RP3 Recognition M. Ward suggested that an item to focus on in the Electric Service Reliability tutorial is the Department's receipt of RP3 recognition from the American Public Power Association. RP3 is a national recognition of Utilities for their safety and reliability programs. 84 out of 2,000 public utilities were recognized at that particular level with Anaheim being one of them. M. Edwards indicated that the report detailed on the website uses nationally established standards for reliability, which are generalized into specific national categories so it is broken down into lay terms then shows how Anaheim compares in terms of reliability. Anaheim's performance is above anyone else who serves electricity in Orange County. It's posted on the website so Anaheim customers can see exactly how Anaheim compared in terms of reliability. M. Ward indicated that the California Public Utilities Commission (CPUC) also has a performance base rate, which had Anaheim been under that program, Anaheim would have ACTION TAKEN 2010 -35 M0 been eligible to receive an additional incentive payment. However, Anaheim isn't subject to the CPUC's jurisdiction because Anaheim is a public agency. M. Edwards indicated that Edison has to pay if they don't keep their performance indicators at a certain level so they are incentivized to do just enough infrastructure investment so as not to trigger poor performance levels resulting in a payment. Anaheim doesn't establish reliability goals that way; Anaheim's goal is to minimize the amount of time customers are exposed to outages. Thus, we set our reliability goals to minimize outage impacts to the customer. Canyon Power Project M. Ward indicated that mobilization has started on the Canyon Power Project site. The site preparation continued last month by installing construction trailers, demolishing the previous buildings and pads, and initial preparation for the switchyard vaults. Underground Conversion (UGC) 5 -Year Plan M. Ward reiterated that the UGC Plan, which D. Lee and staff manage is a 50 year project comprising about 220 circuit miles of which 98 circuit miles have been completed. The 5 -Year Plan, as outlined, will underground another 37 miles for a total of 134 miles to be completed by the end of the five years. Intermountain Public Power IPP C. Peltzer inquired about Intermountain Public Power (IPP). M. Edwards indicated that discussions are continuing about IPP and its longer term future. IPP went month to month on its coal contracts which got expensive. There is a lot of speculation about the Utah coal supply and the future directions the plant could take. There are ongoing discussions regarding the future of the facility; however, no definitive decisions have been made. 10. FINANCE ISSUES. Financial Status R. Dowell stated that the financial results year -to -date show stability, cost cutting, and people using less water and electric services. Smart Grid M. Edwards encouraged everyone to read the Smart Grid Overview in depth, paying particular attention to the discussion regarding protection of customer information; specifically, who uses the data and the rules in place to preclude any of the data from being misused. M. Edwards asked everyone to be ACTION TAKEN 2010 -36 AGENDA ITEM cognizant of the separation between Smart Meters and Smart Grid. Anaheim has invested significant resources into Smart Grid telecommunications infrastructure and the outage management methodologies, but is going slowly on the Smart Meter portion. Specifically, PGE and others have caused a lot of fear and confusion about the Smart Meter portion. M. Edwards encouraged everyone to educate themselves on the differences between Smart Grid and Smart Meter because people view them as the same when they are actually different things. As always, Staff is available for additional conversations, explanations, etc. 11. JOINT SERVICES Resource Accuracy S. Sciortino indicated that the Agenda packet contains the Resource Accuracy report for the month of June. Next month about this time, the Independent System Operator (ISO) will put out a summer technical assessment, which will be discussed at next month's PUB meeting. It's mostly the ISO's view about how this summer will look with respect to demand and supply and the kind of conditions that would precipitate state of emergency conditions. The outlook seems somewhat better than last year, due to lower electric consumption because of economic climate, but there is also some generation additions which provide higher margins than last year. Solar Boat Race S. Sciortino stated on a more fun note, there is a press release concerning the Solar Boat Race that occurred last week. Next month, staff will show pictures and invite the students who participated in the Solar Boat Race to come to the PUB meeting. Canyon and Savannah High Schools placed I" and 2` in two of the main categories. Anaheim High School finished I& overall. Water Conservation Poster Contest S. Sciortino thanked L. Cahill who gave his time on Monday, May 24, to come to the award ceremony for the Water Conservation Poster Contest for the elementary schools at the Angels Stadium. The trophies were presented to the students on the home plate side of the field. 12, AGENDA ITEM(S) FOR NEXT MEETING ON JUNE 23, 2010 Anaheim Regional Transportation Intermodal Center Presentation (ARTIC) Public Hearing for the Public Health Goal Report Landscape Guidelines Resolution CTION TAKEN 2010 -37 AGENDA ITEM • Agreement with the Orange County Sanitation District for the Water Recycling Project 13. ITEM(S) BY SECRETARY M. Edwards commented on the Canyon Bond rating trip to New York in which presentations were made to Fitch, Moody, and Standard and Poors. Fitch had Anaheim on a negative outlook due to cash implications, but over the last week or two, the results coming back indicate all three rating agencies affirmed Anaheim's AA status and Fitch took Anaheim off negative outlook and put Anaheim back on stable. E. Zacherl informed M. Edwards that the bonds did sell with an interest cost of 3.9 %, which is the best Anaheim has ever done in a bond sale. M. Edwards acknowledged S. Welch for all her efforts on the budget indicating she has done an excellent job. 14. ITEM(S) BY BOARD MEMBERS. J. Machiaverna commented about the need to raise water rates due in large part to the serious restrictions on water delivery in the Central Valley as well as Southern California. He further indicated that especially during these financially trying times, this action was not taken lightly. J. Machiaverna expressed his belief that the restrictions on water delivery needed to be corrected, otherwise it would result in even more rate increases. K. Murray indicated that following the very impassioned discussion on Prop. 16 at the last PUB meeting, she was invited by the Anaheim Chamber to speak to their Board of Directors on Prop 16. She agreed to do so purely from an educational standpoint speaking as a resident of Anaheim, but highlighted what the implications to the City and City businesses and residences would be with the passage of Prop 16. P. Carroll conveyed his thanks to D. Calkins and M. Edwards for the invitation to the recent Orange County Water Sununit. It was a very interesting program, providing a California, national, and international perspective. P. Carroll also thanked E. Zacherl for taking the time to go over the budget materials with him. He indicated he may not be available next month for the Public Hearing on the Public Health Goals. L. Cahill asked that if anyone knew of they would not be here for the next meeting to please let him or P. Oviedo know, since staff needs to provide public notice for the public hearing. ACTION TAKEN 2010-38 AGENDA ITEM D. Morgan complimented the Utilities on doing a great job and continuing to overcome challenges concerning the budget. L. Cahill requested a motion to adjourn the meeting. 15. ADJOURNMENT: (TO THE PUBLIC HEARING /REGULAR MEETING DATE OF JUNE 23, 2010 AT 5:00 P.M., IN THE 11"' FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BLVD., ANAHEIM, CALIFORNIA.) Respectfully submitted, 'M ,,,,..- ,,,,,,,,,,,,,, 4p Marcie L. Edwards Secretary, Public Utilities Board ACTION TAKEN L. Cahill moved to adjourn the public hearing/regular meeting at 7:02 p.m. to the public hearingtregular meeting date of June 23, 2010 at 5:00 p.m. K. Murray seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED:0. ABSENT: 1 (J. Brandman).