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HomeMy WebLinkAboutMinutes - February 23, 2015 - UBi AZUSA LIGHT 4 WITFL CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, FEBRUARY 23, 2015 — 6:30 P.M. Chairman: Edward J. Alvarez Vice -Chairman: Angel A. Carrillo Boardmember: Joseph Romero Rocha Boardmember: Uriel Edward Macias Boardmember: Robert Gonzales Secretary: Jeffrey Lawrence Cornejo, Jr. The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, in the Azusa Light and Water (AL&W) Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Chairman Gonzales called the meeting to order. Pledge to the flag was led by Vice -Chairman Edward J. Alvarez. Call to Order Flag Salute ROLL CALL: Roll call was taken by Secretary Cornejo. Boardmember Carrillo joined the Roll Call meeting at 6:33 P.M. after roll call. PRESENT: BOARDMEMBERS: CARRILLO, MACIAS, ALVAREZ, GONZALES ABSENT: BOARDMEMBERS: ROCHA ALSO PRESENT Elected Officials: Secretary Cornejo. Staff Members: City Manager Butzlaff, City Attorney Ferre, Utilities Director Morrow, Police Chief Gonzalez, Assistant Director Customer Care Solutions Kalscheuer, Assistant Director of Water Operations Anderson, Assistant Director of Resource Management Lehr, Assistant Director of Electric Operations Langit, Administration and Financial Services Manager Johnson, Utility Program Specialist Reid, Administrative Technician Juarez. PUBLIC PARTICIPATION None Also Present Public Part Util Director UTILITIES DIRECTOR COMMENTS Comments Utilities Director Morrow acknowledged Boardmember Rocha's birthday, as he was absent from the meeting. UTILITIES BOARD MEMBERS COMMENTS None. Board Comments CONSENT CALENDAR: Moved by Boardmember Carrillo, seconded by Vice -Chairman Consent Alvarez, to approve Consent Calendar Items D-1 and D-2, Vice -Chairman Alvarez abstained Calendar from Item D-1, as he was absent from that meeting, by the following vote of the Board: YES: BOARDMEMBERS: CARRILLO, MACIAS, ALVAREZ, GONZALES ABSENT: BOARDMEMBERS: ROCHA ABSTAIN: BOARDMEMBERS: ALVAREZ (on Item 1 only) 1. The minutes of the regular meetings of January 26, 2015, were approved as written. Minutes The proposal by Vasquez & Company, LLP in an amount not -to -exceed $31,283 to provide Vasquez accounting services to the Financing Authority for Resource Efficiency of California Proposal (FARECal) pursuant to the Agency Agreement between the City of Azusa and FARECal that FARECal was approved by the Utility Board on November 22, 2010, was approved. Services STAFF REPORTS/COMMUNICATIONS Staff Rprts Federal Energy Regulatory Commission (FERC) Relicensing of Azusa Hydroelectric Project. Hydroelectric Project Utilities Director Morrow gave an update on the Azusa Hydroelectric Plant located next to the Hsu Water Treatment Plant, stating that the water that Azusa receives from the River and Mountains is typically clean and has been abundant for many years; recently there had been challenges that could impact that water supply, such as the proposed National Recreational Area (NRA), new legislation that may come from Congress, the National Monument declared by the Executive Office of the President, and the Santa Ana Sucker Recovery Plan; the most recent challenge is a conduit that was built in the 1990s, approximately 5.5 miles long and runs from the San Gabriel Dam, to the Hydro Plant, which is critical for Azusa's water supply; the conduit can by-pass the river without dumping water where it can pick up solids and other elements; the best way to capture water is through the conduit into the Hydro Unit and into the treatment plant, this helps keep the water clean; the license permit for the conduit expires in 2018, and the City of Pasadena has begun the renewal process of the Hydro Licensing Project; however the Forest Service and Fish and Wildlife agencies are intervening in the extension of the permit; they have asked for about 25 environmental studies of the Hydro Unit that was built in 1949, that could cost more than $2 million; because there will be some uncertainty of what would happen to the conduit, AL&W staff will argue that Azusa has rights to use that conduit in perpetuity; there are four cities, from the Committee of Nine, that control the water rights. The agencies believe that Pasadena controls the water, but that is not the case; AL&W has an agreement with Pasadena to use the water that goes through the conduit and use it to create renewable energy, and the water then comes back to Azusa; the Committee of Nine legal counsel provided a letter to inform the involved parties of the Committee's position and rights. 02/23/2015 PAGE TWO Update on Drought Enforcement and Water Usage. Utilities Director Morrow gave an update stating that the public's perception as to how forceful 'AL&W staff should be in enforcing the drought and the drought program is divided, some think that staff should be more strict with residents doing outside watering on the wrong day for instance, and others just want to be educated and be left alone to meet the regulations; there is enforcement in place, but it would be difficult to patrol 24 hours a day to cite everyone who violates the regulations; few cities consume only 59 gallon per day per resident, and Azusa is included, customers have done well, as statistics show a considerable reduction in water use from January 2014 to January 2015. Assistant Director Customer Care Solutions Kalscheuer stated that the Phase III Drought was declared in May 2014, calling for 2 days a week outside watering, since then, consumption reduced approximately 8%; for 2014-15 there was a 26% reduction compared to 2006-07, a non drought year; since the current drought went into effect, 3,500 warnings and 380 citations/fines were issued, reflecting an increase from July 2014, of 1,500 warnings and 85 citations; enforcement efforts have stepped up considerably with the new part-time drought officer; Field Officer Representatives (FSR), and meter readers have also assisted with the enforcement activity; Azusa is conservative at consuming 59 gallons per day per person, which is attributed to the Azusa's drought response program. FY 14/15 Second Quarter Budget Report for Water and Electric Funds. Administration and Financial Services Manager Johnson provided the quarter budget report: Update Drought Enforcement & Water Usage 2nd Quarter Budget Report Water Fund had a positive cash flow of +$385 thousand; revenues were at 55% of budget Water Fund 'reflecting a decrease of less than 0.5% compared to same quarter last year as a result of the 8% reduction of water use due to Phase III Drought; debt service coverage was at 1.71, and the reserves at $22 million after the loan to the General Fund. Electric Fund had a positive cash flow of+$2.7 million due to retail sales going up approximately Electric Fund $7.3 million, 7.3% increase compared to the same quarter last year; operating expenses were at 49% of annual budget; revenue at 57% of budget; debt service coverage of 13.44, and cash reserve was $21.8 million; Utilities Director Morrow stated that this year Azusa acquired 45 new business and over 300 new residential customers, which explains some of the increase in sales. Short Term Renewable Procurement to Satisfy Compliance with Renewable Portfolio Standards Short-term (RPS). Renewable Energy Assistant Director of Resource Management Lehr gave an update stating that under California law and corresponding regulations, each electric entity has to procure a specific amount of energy from renewable energy (RE) resources; in 2015, Azusa is obligated to procure 20% of its energy from RE; there are long-term agreements that help procure RE, but most of them depend on nature such as adequate wind or sun; the wind trend has not been good, this has created a setback on expectations; there is the need to purchase short-term RE in order to comply with the law and regulations; the purchase will not necessarily be an additional expense, because some of the moneys that were budgeted for the long-term agreements will be used; the Risk Management 'Policy allows specific functions for AL&W to enter into one year short -tern power procurements commitments, such as the amount that can be invested on short-term agreements; he responded to Boardmember Alvarez's question regarding companies that procured short term energy and the 02/23/2015 PAGE THREE cost to obtain it, by explaining that there are a number of companies or brokers that may have already produced and have an excess of production; the cost will depend on the market, the wind conditions, natural resources, market excess production and availability, which may be less 'expensive than making long-term commitments. Utilities Director Morrow stated that because of the recent laws, staff planned ahead, as it takes a long time to procure and build resources. Governor's 50/50/50 or 503 Energy Proposal. Governor's Energy Utilities Director Morrow gave an update stating the Governor's inaugural address included 3 Proposal new energy related goals for 2030; even though, utilities are not close to meeting the 33% renewable target by 2020 or greenhouse gas goal of 20% less than the 1990 levels by 2020, he proposed the doubling of energy efficiency in existing buildings, and it is unclear of what that means; in addition, he wants to reduce petroleum use in cars & trucks by 50% by 2030; and increase renewable energy standard to 50% also by 2030; legislators have begun writing up bills to mandate the Governor's goals, but Utilities came together with a "Clean Energy Plan" to ask legislators to let Utilities know what the goals are, and allow them to figure out how to get there without mandates; all utilities and communities are different, they have their own portfolios; these new goals also include large utilities such as Edison, who joined forces with local utilities to address concerns to legislators. Morgan Meguire LLC Federal Legislative Update. Morgan Meguire Utilities Director Morrow provided the board with a written update on the Morgan Meguire LLC Legislative Federal Legislative Update for their information. Update ' ADJOURN Adjourn Moved by Boardmember Carrillo, seconded by Boardmember Macias to adjourn the meeting. TIME OF ADJOURNMENT: 7:31 P.M. ./ --/91 j I VA' NEXT RESOLUTION NO. UB -5-2015. Next Regular Meeting: March 23, 2015, 6:30 P.M. 02/23/2014 PAGE FOUR