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HomeMy WebLinkAboutAgenda Packet - May 27, 2008 - UBI I, i k I AZUSA '1041 A'A1IF1 I I 1 AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL ,I N MAGNOLIA ELEMENTARY SCHOOL MAY 27, 2008 945 E. NEARFIE LID 6:30 P.M. AZUSA, CA 91702 f AZUSA UTILITY BOARD I ANGEL A. CARRILLO CHAIRPERSON URIEL E. MACIAS IOSEPH R. ROCHA VICE CHAIRPERS N BOARD MEMBER e KEITH HANKS ROBERT GONZALES BOARD MEMBER BOARD MEMBER t, 6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board and Azusa City Council • Call to Order Pledge to & Flag j • Roll Call i A. PUBLIC PARTICIPATION I . (PersonlG l oup shall be allowed to speak without Interruption up to five (5) minutes maximum time, subject to compliance with applicable meeting rules. I Questions to the speaker or responses to the speaker's questions or comments shall be handled after the speaker has limited to sirty (60) minutes time.) 1 completed his/her comments. Public Participation will be l, I 001 The Consent Calendar maybe adopted with one vote, and if so adopted the printed recommended action will be enacted. If Staff or Counci/members wish to address any item on the Consent Calendar individually, it will be considered as a SPEC/AL CALL ITEM. B. CONSENT CALENDAR Minutes. Recommendation: Approve minutes of regular meeting on April 28, 2008 as written B-1. Apr 08 Min. doc - - - - Approval of Memorandum of Understanding (MOU) with San Gabriel Valley Municipal Water District (SGVMWD). Recommendation: Approve the' MOU with SGVMWD to conduct feasibility studies of small conduit hydro generating facilities and authorize the Mayor to execute MOU. B-2. SGVMWD MOU.doc 3. Authorization to Procure San Juan Outage Insurance Coverage. Recommendation: Authorize staff to procure outage insurance coverage for San Juan Unit 3 for the coverage period commencing July 1, 2008 through June 30, 2009 at a cost not -to -exceed $300,000 G&3. SJ [ns 1 4 � Policy 0C C 4. rovalll of Resolution to Destro Utili Service Applications and Meter Readin Books. Recommendation: Approve the following resolution: A RESOLUTION OF THE AZUSA UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA, AUTHORIZING THE DESTRUCTION OF CERTAIN CITY RECORDS. B4. Doc Destr Reso. DOC Approval of Blanket Purchase Order Amendment to Apple One. Recommendation: Authorize an amendment to the Apple One blanket purchase order for fiscal year ending June 30, 2008 for temporary employee services not -to -exceed $5,000. AppleOne-PO. DOC 002 i i ApprOVal Or I -Ian an0 JOCGIrIC UO05 for rrVIClL LULVVO-L - VU1111WIMM 111arn0 YIRICI. 1UUJI1 Electric Substructures at Various Locations as Shown on Plan #ED2008-2 to Extend Gladstone Circuit from Kirkwall Substation. Recommendation: Approve the plan and specifications for Project LD2008-2 and authorize City Cleric to advertise for bid. El1 . Recommendation: Approve the City's participation in Phase 2B planning and development activities of Lodi #2 Project at a budget not -to -exceed $250,000; and authorize staff to vote affirmatively when Lodi #2 Project Participant Committee seeks a vote to proceed with Phase 2B. rVAaI j ■ 1 C-1. indl Proiect.doc Recommendation: Approve Amendment No. 1 to Water Supply Agreement with Miller Breweries West, L.P. and authorize the Mayor to execute agreement. MillerAn-e .DOC District (S'GVMWD) to manage water and electric power generation operation. Recommendation: Approve MOU with SGVMWD to jointly manage the water and electric generation operations this summer and authorize the Mayor to execute MOU. i l!5 -A 1 C-3. SGI MOU-Water I" D. STAFF RI I.. Monthly 2. Monthly D-2. WTP Rpt a I on Drought - Water Supply Outlook on Water Treatment Plant 3 ©03 3. California Resource Connections Update BVI -I 63. CRC Update.doc E. F. ADIOURNMENT Adjournment. "!n compliance with the Americans with Disabilities Act, if you need special assistance to participate in a city meeting, please contact the City Clerk at 626-8/1-5229. Notification three (3) working days prior to the meeting or time when special services are needed will assist staff in assuring that reasonable arrangements can be made to provide access to the meeting. " 004 The Utility Boa time, at Azusa [California. !Vice Chairman 1 I ROLL CALL PRESENT: ABSENT: a-1 AZUSA 11G41 4 WAf1R CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, APRIL 28, 2008 — 6:30 P.M. Members of the City of Azusa met in regular session, at the above date and ght and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, i a rrillo called the meeting to order. Call to Order Roll Call 1 MEMBERS: GONZALES, CARRILO, MACIAS, ROCHA MEMBERS: HANKS ALSO PRESENT: 1 ; Also Present City Attorney Fe re, City Manager Delach, Director of Utilities Hsu; Assistant to the Utilities Director Kalscheuer, Assistant Director of Resource Management Tang, Assistant Director of Water Operations Ande"son, Assistant City Manager Makshanoff, Azusa Police Chief Garcia, Finance Controller Aguilar, City Clerk Mendoza, Deputy City Clerk Toscano. I Election of Officers Election of Officers Moved by Board Member Macias, seconded by Board Member Rocha and unanimously* that Carrillo Board Member Carrillo be nominated and appointed as Chairperson of the Utility Board. Chairperson Vloved by Board :hat Board Mem Mr. Art Morales e Benefits Fund be mber Rocha, seconded by Board Member Gonzales and unanimously* carried Macias Macias be nominated and appointed as Vice Chairperson of the Utility Board. Vice Chair Pub Part d, the Board Members suggesting that the Azusa Light and Water Public A. Morales to structure a program for free swim. i Comments i 005 Mr. Jorge Rosales addressed item D-1, Agreement for Renewable Energy, thanking staff for J. Rosales meeting the 20% standard and congratulated them. He spoke in favor of the grant application for Comments SGMRC. He commended staff for the excellent report regarding Solis Waste Issues and Refuse Rate Adjustment, The CONSENT CALENDAR consisting of Items C- I through C-8 was approved by motion of Consent Cal Board Member Gonzales, seconded by Board Member Carrillo and unanimously* carried with the Approved exception items C-4, through C-6, which was considered under the Special Call portion of the C4, 5, &6 Agenda. Spec Call 1. The Minutes of the regular meeting of March 24, 2008, were approved as written. Min Appvd 2. Approval was given for a Quit Claim to Watt Communities for waterline easement by Quit Claim adoption of the following resolution: Watt Comm A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA QUIT Res. 08-C35 CLAIMING A CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. Grant of Esmt 3. Approval was given for acceptance of Grant of Easement from 1303 Optical Drive LLC by Accepting adoption of the following resolution: 1303 Optical • RESOLUTION OFTHE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING Res.08-C36 A CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. Grant of Esmt 4. SPECIAL CALL ITEM. 5. SPECIAL CALL ITEM. 6. SPECIAL CALL ITEM. Spec Call Spec Call Spec Call 7. The Noticed of Completion for Project WVF-239, Gladstone Yard Improvements, by MG NOC Enterprizes, was approved and the City Clerk's Office was directed to execute Notice of Gladstone Yd Completion and also have same recorded at the Office of Los Angeles County Recorder. Enterprizes 8. Approval was given for the Canyon Water Filtration Plant Wastewater Connection Fee at Wastewater $28,214.81 to be paid to Los Angeles County Sanitation District. Connect fee Special Call Items Special Call Assistant Director of Water Operations Anderson responded to questions regarding reimbursable Add'I Comp compensation to Civiltec stating that the City will be paying 72% for the inspections, the $20,000 Civiltec should be enough to complete the project, and it should be completed by July. Moved by Board Inspection Member Rocha, seconded by Board Member Gonzales and unanimously* carried to approve the Services additional reimbursable compensation to Civiltec Engineering for inspection of the Rosedale Rosedale Development water storage reservoirs and water pump stations in amount of $20,000. Board Member Rocha asked what the difference between the services provided by Civiltec and Rocha Wren & Associates. Director of Utilities Hsu responded stating that Civiltec inspection is water Question production and water storage and Wren and Associations inspection is waterlines and transmission lines. Board Member Rocha addressed item regarding additional compensation to Civiltec Engineer Add'] Comp questioning the increases and the non -justified additional days being $500 per day. Civiltec 04/28/08 PAGE TWO MM Assistant Director, of Water Operations Anderson responded noting the current contractor is taking Replace more time to do the project and therefore Civiltec has had to spend more inspection time on the Pipeline project. Additional discussion was held and it was moved by Board Member Rocha, seconded by Cypress & Board Member Gonzales and unanimously* carried to approve the addition of $45,000 to the Sunset Civiltec Engineering contract for inspection of Project W-238, replacement pipeline installation on Cypress and Sunset et. al., and extend contract to June 30, 2008. .Moved by Board Member Rocha, seconded by Board Member Gonzales and unanimously* carried Add'I Comp .to approve the additional reimbursable compensation to Wren & Associates for continuing Wren & 'inspection services for the Rosedale Development pipeline installation in amount of $20,000. Associates Rosedale Sched Items (SCPPA) for Renewable Energy. Director of Utilities Hsu addressed the item stating that SCPPA Long Term ,issued an RFP for fenewable energy projects and MWD responded and negotiations were at time Power Sales uncertain due to competition for same resources. He responded to questions that there won't be Agreement additional costs at this time, but may impact revenue cost at a later time. Moved by Board With SCPPA Member Macias, seconded by Board Member Gonzales and unanimously* carried to approve the Renewable long term power sales agreement with SCPPA for the renewable energy output from small conduit Energy hydro facilities operated by the Metropolitan Water District and that the Mayor be authorized to execute agreeme i t. Adoption of Legi3lative Positions. Director of Utilities Hsu addressed the issue stating that in 'order to expedite the process they have provided a list of Legislative Positions on certain Legislative Assembly and Se, ate Bills and he asked the Board Members for their endorsement. Assistant to Positions :the Utilities Director Kalscheuer noted that AB 2640 was amended and now recommends a Approved support position nd noted other bills that are relevant to the City and explained support and oppose positions. Moved by Board Member Carrillo, seconded by Board Member Gonzales and ;unanimously* carried to adopt the legislative positions in the report and authorize the Mayor to sign letters addressed to legislators as may be required during the remainder of legislative session to advocate the adopted positions. Dis re: SGMRC Application City Manager De lach addressed the item stating that the San Gabriel Mountains and Rivers Conservancy applied for the same grant as the City of Azusa and both applications have the same Lengthy intention to secure open space land; he asked the Board Members for guidance and policy discussion direction. Lengthy discussion was held regarding the issue and the following options were and options proposed: 1) No action on the SGMRC grant application and support the City's grant application. •. 2) No action on the SGMRC grant application and defer the City's grant application. 3) Support the SGMRC grant application and defer the City's grant application, and 4) No take action on either grant appli ation in which case both grant applications will face'a difficult time in getting jfunded. I Moved by Board Member Macias, seconded by Board Member Gonzales and carried to approve option 1) No action on the SGMRC grant application and support the City's grant application. Option ! Board Member Rocha dissenting. approved I i 04/28/08 PAGE 007 Staff Reports/Communications Monthly Update on Drought -Water Supply Outlook. Director of Utilities Hsu provided an update on the drought stating that as of April I" the City has been at Phase 11 of the drought and as of May 1" the City will be going to Phase I. He stated that in April the County stopped releasing water into the basin due to a leak in an underground pipe, but, water levels are steady at this time. Also water is being diverted to the main basin and not into the local basin; he will be meeting with the County to talk about their plan. Further, there is a need for flexibility to go back to Phase II if needed by June I". He stated that they are in the process of amending the existing drought ordinance and may change the two day water use in Phase II to three days. Monthly Update on Water Treatment Plant. Director of Utilities Hsu stated that the completion date for the WTP is October/November and it is 67% complete at this time. Update on Solid Waste Issues and Refuse Rate Adjustment. Director of Utilities Hsu stated that notices will soon go out to customers to meet the 45 day deadline and rate adjustment is less than 2%. Assistant to the Utilities Director Kalscheuer noted that the 1.98% increase for cost of diesel fuel is actually 1.94%; staff is still awaiting supporting documentation that the Increase is needed; Athens has a right to request the increase and the City has the option to approve it and it will be covered in the report at the Public Hearing. Staff Rpts Monthly Update Drought Wtr Trmt Plant Solid Waste Refuse Rate Adjust Mr. Chris Carlos of Athens Service addressed the Board Members asking that they hold any C. Carlos analysis until the public hearing and offered comments on the opposition of SB 1020, which will Athens increase the diversion, stating that they don't support any legislation which will increase AB 939 diversion and detailed the things they are doing to assist with diversion efforts. Director of Utilities Hsu presented the Residential Electric Rates Comparison as of April 2008, Res Rates noting that Azusa is in the middle of the entities listed. Comparison Director of Utilities announced that the May Offsite Meeting on Tuesday, May 27" will be Offsite Mtg held at Magnolia Elementary School, located at 945 E. Nearfield, Azusa. May 27`" Directors Comments Dir Cmts Director of Utilities Hsu announced that the City of Azusa has received the CMUA Annual Award Anncmts for the third time. He announced the large electric customer meeting on May 81" at 8 a.m. at the Azusa Woman's Club to talk about greenhouse gas issues. He announced that the Wind Program in Palm Springs is moving a long and ribbon cutting will be held in late May or early June on a Saturday morning; he will provide details at a later date. Moved by Board Member Rocha, seconded by Board Member Macias and unanimously carried to Procto approve the request for Proclamation for Saint Frances of Rome, Father Gus Castillo, in Father celebration of his birthday on April 30. Castillo Moved by Board Member Carrillo, seconded by Board Member Gonzales and unanimously* Cert of Rec carried that request for Certificates of Recognition for Students of the Azusa Unified School Students District who took a trip to Washington D.C., for educational purposes, be approved. Slauson Board Member Macias requested sponsorship for Gladstone High School Cheer, c/o David Sponsorship Cassarubias, in the amount of $100 to attend Cheer Camp; City Manager Delach was directed to Gladstone comply with that request. 04/28/08 PAGE FOUR Cheer I Board Member Miss Outstandir update on the Connections, to the recruitment asked about the the issue and or An item of sub i Board Member the agenda. i unanimously* < I Wedding Anniv f It was consen following: r CONFERENCE 154956.9 (b) C CONFERENCE 54956.9 (b) C The Board Mem It was TIME OF ADJOU SECRETARY NEXT Indicates PAGE xha requested sponsorship in the amount of $100 for both Miss Azusa and Rocha Teen for advertisement, who will be traveling to Sacramento. He requested an Requests for atus of the Memorandum of Understanding with CRC, California Resource Sponsorship �e how much money is remaining. He asked if the City is being competitive in and updates Linemen; and he also asked for an update on the Rubber Glove program. He CRC, Rubber zusa Villa rent increases; City Manager Delach responded that BBK is handling Glove, and problem is that they are seeking original residents of the program. Villa Azusa it need arose regarding a request for proclamation and it was moved by Proc to J. 8. seconded by Board member Carrillo and unanimously* carried to add it to G. Cornejo by Board Member Rocha, seconded by Board Member Carrillo and 60" to approve a proclamation to Jesse and Ginny Cornejo in honor of their 60'" Anniversary of Board Members to recess to Closed Session at 8:23 p.m. to discuss the TH LEGAL COUNSEL -ANTICIPATED LITIGATION Government Code Section Potential Case I TH LEGAL COUNSEL -ANTICIPATED LITIGATION Government Code Section Potential Case reconvened at 9:00 p.m. There was no reportable action taken. of Board Members to adjourn. 9:01 P.M. NO. 08-C37. absent Adjourn 009 TO: FROM: DATE: SUBJEC It is District facilitie The Cit. electric The i qr 6-a AZUSA CONSENT CALENDAR HONORABLE MAYOR AND MEMBERS OF THE AZUSA CITY COUNCIL JOSEPH F. HSU, DIRECTOR OF UTILITIES - MAY 27, 2008 APPROVAL OF MEMORANDUM OF UNDERSTANDING WITH SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT FOR FEASIBILITY STUDIES OF SMALL HYDRO GENERATION i /IENDATION mmended that the Azusa Utility Board/City Council approve the ndum of Understanding ("MOU") with the San Gabriel Valley Municipal Water "District") to conduct feasibility studies of small conduit hydro generating and authorize the Mayor to execute the MOU once the execution copies are DUND currently has a 10 -year power purchase agreement with the District for the iutput of District's San Dimas Wash small conduit electric generating facility. ement was approved on September 18, 2006. Early this year the District approached staff and sought technical assistance to conduct technical and cost -benefit feasibility studies for potentially new small conduit hydro generating facilities along the water pipeline District has access to, including locations near the Canyon spreading grounds. In the past few months staff provided preliminary assistance to District in identifying suitable water engineering firms capable in providing the technical assessment and shared this information with District. with further discussions with District, both parties felt that the best way to proceed :h feasibility studies is through a mutually beneficial joint effort approach a MOU. The terms of the MOU are as follow: r District's responsibili District is to contract the service of an engineering consultant at a not -to - exceed cost of $15,000 to update the previous feasibility studies performed in the early 1980's. The City is to share half of the cost. City's responsibility: The City will conduct the economic feasibility studies based on the technical information provided by the engineering consultant. The City is to provide this service at no charge if performed internally, or will share half of the cost with District if outside consultants are used. The staff does not envision outside consultants are required at this time. Mutual Covenant The City has the first right of refusal for a long term power purchase agreement to purchase the output of additional small hydro generating facilities built as the result of this effort. On May 12`h, District's Board approved an engineering consulting agreement with Stetson Engineering to engage in the technical feasibility studies for the project, demonstrating District's commitment to this project. Staff believes this effort is worth pursuing as the City will continue to need to develop renewable resources locally to meet future power needs in an environmentally friendly manner. FISCAL IMPACT The fiscal impact is $7,500 under the MOU. Funds have been budgeted in FY 08-09 power resource budget to pay for the cost under the MOU. Prepared by: Bob Tang, Assistant Director of Resource Management C] MOV_SGVMWD.doc - 011 This MEMORANDUM OF UNDERSTANDING TO CONDUCT FEASIBILITY STUDIES FOR SMALL CONDUIT HYDRO GENERATING FACILTIES irandum of Understanding ("MOU") is entered into this day of , 2008, by and between the City of Azusa, a municipal public agency and the San Gabriel Valley Municipal Water District, a public water district . Azusa and District shall hereinafter be collectively referred to herein as "the RECITALS j A. Azusa is a municipal corporation duly organized and existing under the laws of the State of California. Azusa, by and through Azusa Light and Water, is empowered to provide electric service to residential, commercial, and industrial customers within Azusa's jurisdictional boundaries. B. District is a water district duly organized and existing under the laws of the State I f California. District, is empowered to provide reliable water supplies to the I ember cities of Alhambra, Azusa, Monterey Park, and Sierra Madre. C. Azusa has established a Renewable Portfolio Standard ("RPS") to achieve the I oal of having 20% in renewable resources to serve Azusa's customers by 2010, and no less than 33% in renewable resources by 2020. D. District owns and operates the San Dimas Wash small conduit hydro generating facility and sells the electric output to Azusa under a 10 -year long term power sale E. In an effort to continue cooperative management of water resources and the generation of electricity from small conduit hydro generating facilities, the Parties hereto desire to enter into this MOU for the purpose of exploring additional cost effective small conduit hydro generating facilities along District's water conveyance system. COVENANTS NOW, THEREFORE, in consideration of the preceding Recitals and mutual Covenants contain�d herein, the Parties hereto agree as follows: Section)1. COOPERATION. Subject to Parties' strict compliance with all of the conditidns contained herein, the Parties agree to work cooperatively to conduct technical and eco6omic feasibility studies for additional small conduit hydro generating facilities along the District's water conveyance system. 012 Section 2. PARTIES' RESPONSIBILITIES The Parties shall have the responsibilities set forth herein. Section 2.1. DISTRICT'S RESPONSIBILITIES The District shall engage independent technical consultant(s) to conduct preliminary technical feasibility studies for additional small conduit hydro generating facilities along District's water conveyance system. The District will share the result of the studies with Azusa and discuss the feasibility of conducting further engineering design and construction activities if mutually agreed to by the Parties. Section 2.2 AZUSA'S RESPONSIBILITIES Azusa shall assist the District and its technical consultant(s) in establishing the economic parameters for additional small conduit hydro generating facilities including but not limited to the forecast of market pricing for renewable resources for study period; the preliminary cost of electric interconnection for such facilities; the financial model for such facilities including operating and maintenance cost, capital cost, electric interconnection cost, electric transmission cost. Azusa will share the result of the studies with District and discuss the feasibility of conducting further economic and financial activities if mutually agreed to by the Parties. Section 2.3 COST SHARING Azusa shall reimburse the District fifty percent (50%) of the cost incurred by the District under Section 2. 1, provided that the cost shall not exceed seven thousand and five hundred dollars ($7,500) without prior authorization by Azusa. Azusa shall engage in activities under Section 2.2 at no cost to the District if it uses its own staff resources to conduct such economic studies. To the extent Azusa believes it requires independent consultants to engage in such studies, Azusa will share with the District the cost of the independent consultant(s) before engaging the consultant(s) and Parties will use best efforts to agree on a cost sharing arrangement. Section 2.4 RIGHT TO BUY ELECTRIC OUTPUT by entering into this MOU, Parties acknowledge that Azusa has the right of first refusal to buy the electric output from the District if additional small conduit hydro generating facilities are proven to be cost effective and are ultimately constructed and commissioned to generate electricity. Parties further acknowledge that such power purchase arrangement shall be memorialized in a separate power purchase agreement duly approved by the Parties' governing bodies. IN WITNESS WHEREOF, the Parties hereto have executed this MOU to be in effect as of the date set forth above. City of Azusa wo Name: Joseph R. Rocha Title: Mayor, City of Azusa San Gabriel Valley Municipal Water District LM Name: Title: 013 TO: FROM: DATE: SUBJECT: It is recc coverage 30, 2009 The City's up to 60% unit 3 and could have AZUSA CONSENT CALENDAR HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL JOSEPH F. HSU, DIRECTOR OF UTILITIE,% y MAY 27, 2008 AUTHORIZATION TO PROCURE SAN JUAN OUTAGE INSURANCE COVERAGE i NDATION i mended that the Utility Board authorize the 'staff to .procure outage insurance �r San Juan Unit 3 for the coverage period commencing July 1, 2008 through June a cost not -to -exceed $300,000. 1 IND: i ian Juan unit 3 is the single largest resource in City's resource portfolio providing )f City's annual electric energy requirement. The operational availability of San Juan he cost of replacement power when the unit is not available due to forced outages significant adverse impacts to the electric utility's finances. Customarily, staff assumes for budget purposes that the unit would have an availability factor of no less than 85%. However, if the unit availability turns out to be lower than 85% and/or spot market prices turn out to be significantly higher than forecasted, then the cost of replacement energy might turn out significantly higher than the budgeted amount causing adverse impacts to electric utility's finances. With the current upswing in fuel prices such as crude and Inatural gas, electricity prices have become increasingly volatile thus malting the cost of replacement power considerably more sensitive to any outages. Back in Jarivary 2007, staff recommended to delay the procurement of insurance until the premiums decline to levels comparable to previous fiscal year's level and not -to -exceed $250,000. At that time, staff felt that wholesale power prices were trending downward and the procurement of insurance could be postponed with' the eventual decline in premium. However, has energy commodity prices in the recent months have escalated to historical levels, and reassessment of insurance coverage is warranted. It is against this backdrop that staff has evaluated San Juan outage insurance coverage to mitigate such potential adverse financial impacts. Typically, the insurance coverage has the following components: 1. A strike price for replacement power in $/MWh I 2. A deductible amount in $ 014 3. A maximum coverage limit in $ 4. A premium payment in $ The following example illustrates how the insurance coverage would work: Assume the insurance coverage has the following structure: 1. Strike price = $40/MWh 2. Deductible amount = $1,500,000/year 3. Maximum coverage limit = $4,000,000 4. Premium payment = $300,000 Further assumes that San Juan unit is unavailable for 25% of the time during a year and the cost of replacement power is $88/MWh, thus the cost of replacement power above the strike price is 30 MW x 8,760 hours x 0.25 x ($88 - $40) = $3,153,600. Therefore, the insurer would pay the City $1,653,600 ($3,153,600 less deductible of $1,500,000) for cost of replacement power for San Juan outages. The benefits of the insurance coverage are: 1. It reduces the cost of replacement power in a high spot market price environment 2. It significantly reduces, but not completely eliminates the adverse financial impacts if unit availability turns out to be lower than budgeted amount and spot market price for replacement power turns out to be substantially higher than the budgeted amount 3. In an extremely adverse scenario, i.e., very high unavailability factor of the unit and very high spot market prices, the insurance coverage significantly reduces the possibility of cash Flow problems to the electric utility's Thus, staff recommends the procurement of San Juan outage insurance coverage along the parameters specified above given the benefits of such outage insurance coverage in protecting the electric utility against severe financial dislocations that might result due to San Juan unit operational issues and/or severe spot market price run -ups. Staff is currently negotiating with two insurance policy providers within the parameters set forth above. Final arrangement would be triggered when all the parameters set forth above are satisfied. FISCAL IMPACT Said insurance coverage will cost about $300,000 for the coverage period of July 1, 2008 through June 30, 2009. Funds remain available in FY 08-09 Electric Capacity and Energy Account to pay for the purchase of said insurance coverage. Prepared by: Bob Tang, Assistant Director of Resource Management 0.15 MR AZUSA lI4Ml L %'ATFQ i i 1 CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL 9 FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES�pr1 DATE: MAY 27, 2008 SUBJECT: RESOLUTION TO DESTROY UTILITY SERVICE APPLICATIONS AND METER READING BOOKS RECOMMENDATION i r It is recom ended that the Azusa Utility Board/City Council 1 approve destruction of utility service applications from 1956 through 1990 and meter reading books from 1941 through 1988. According to the City's record retention schedule revised in April 2006, the legal retention period for these records is two years. Azusa Light & Water, has 40 boxes of utility service application from 1956 through 1990. In 1991, this information was transferred to our Customer Information System and continues to be maintained electronically. Therefore, the paper cards are no longer needed. Additionally, there are 9 boxes of meter reading books from 1941hrough 1988. In 1988 we began reading meters with electronic hand-held devices an j uploading reading information to the Customer Information System for billing. The cost to' store each box is $3.74 per year, so total future cost savings for destruction of 49 boxes is $1 i 3.26 per year. t Prepared Karen Vanca, Assistant Director Customer Care & Solutions i 016 RESOLUTION NO A RESOLUTION OF THE AZUSA UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA, AUTHORIZING THE DESTRUCTION OF CERTAIN CITY RECORDS WHEREAS, the Utility Board/City Council requires maintaining appropriate and legal records; and WHEREAS, the Utility Board/City Council supports maintaining adequate records to provide good customer service; and WHEREAS, Azusa Light & Water desires to comply with the records retention policy of the City. WHEREAS, Section 34090 of the Government Code of the State of California authorizes the destruction of certain City records upon written approval of the City Attorney and the adoption of a resolution by the City Council authorizing such action; and WHEREAS, the City Attorney has filed his written consent to the destruction of records, documents, instruments, books and papers described herein. NOW, THEREFORE, THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The following City records, documents, instruments, books or papers are no longer required: 1. Azusa Light & Water utility service applications from 1956 through 1990. 2. Azusa Light & Water meter reading books from 1941 through 1988. SECTION 2. The Utility Board/City Council authorizes the Director of Utilities, or his designee, to destroy the above described City records without making a copy thereof. SECTION 3. This Resolution shall become effective upon its adoption. PASSED, APPROVED AND ADOPTED this 27th day of May 2008. Joseph R. Rocha Mayor 017 ATTEST: Vera Men City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) foregoing meeting o following + AYES: NOES: ABSENT: `7 + I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the Resolution No. was duly introduced and adopted at a regular k the Azusa Utility Board/City Council on the 27th day of May 2008 by the tote, to wit: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: + Vera Mendoza i City Clerk i i 018 Ice, FROM: DATE: SUBJECT: RECOMM It is recon not-to-exc ending Jur CONSENT CALENDAR HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL JOSEPH F. HSU, DIRECTOR OF UTILITIES _ MAY 27, 2008 i i AMENDMENT OF BLANKET PURCHASE ORDER IN AMOUNT OF $5,000 TO APPLE ONE, A TEMPORARY EMPLOYMENT SERVICE ended that the Utility Board/City Council authorize an amendment in the amount :d $5,000 to the Blanket Purchase Order issued to Apple One for the fiscal year 30, 2008. The Customer Service Division has supplemented its workforce with an Apple One agency employee i]o temporarily fill-in for a part-time Cashier position that was vacated last fall and will be filled by late May. Apple One, one of the two temporary agencies used by the Customer Service Division, was issued a blanket purchase order at the outset of the fiscal year in amount of $15,000. 0 The current Apple One temporary employee was selected to fill the vacant part-time Cashier position and is under Apple One contract and must complete a certain number of hours as specified in the contract or the City will have to pay an early release penalty. Since the continued services will exceed the existing blanket purchase order amount and the original purchase oder was over $10,000, Board approval is required to amend the purchase order so that thelCity can cover pending April through mid-May invoices. Allowable expenditures to Apple One will be increased by $5,000. Funds are available in Customer Service Division's outside services budget in account number 31-40-711-903- 6493. 1 Prepared by: Karen Vanch, Assistant Director Customer Care 8 -Solutions 019 TO: I i i FROM: DATE: A i SUBJECT lr 4 It is re< project The Ki named to be exte along rou and tying capacity. the Azusa This pr( Budget Prepared AZUSA fZ SA CONSENT CALENDAR HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL JOSEPH F. HSU, DIRECTOR OF UTILITIES��/ May 27, 2008 APPROVE PLAN AND SPECIFICATIONS FOR PROJECT LD2008-2 - FURNISH AND INSTALL UNDERGROUND ELECTRIC SUBSTRUCTURES AT VARIOUS LOCATIONS AS SHOWN ON PLAN # ED2008-2 TO EXTEND GLADSTONE CIRCUIT FROM KIRKWALL SUBSTATION I that the Utility Board/City Council approve the plan and specifications for and authorize City Clerk to advertise this project for bid. I substation currently has four 12 kilovolt (IM feeder circuits, one of which is ]stone circuit. When Kirkwall substation was completed in 2004, the underground �s for Gladstone circuit were terminated on Gladstone Street near Vernon Avenue, ded at later time. Staff have now prepared plan ED2008-2 to install substructures s shown on the plan to achieve the circuit extension. Extending Gladstone circuit with existing distribution system will further improve service reliability and increase he plan and specifications are available for public review at the 2ntl Floor counter of ight & Water office located at 729 N. Azusa Avenue, Azusa, CA 91702. is budgeted this fiscal year and funds are available in Capital Improvement Project unt # 73007A Fund 33. , Federico Langit - Senior Electrical Engineer Hien K. Vuong - Electrical Engineer LIM IW1 FROM: DATE: SUBJECT: RECOMN It is recon participat exceed b Project P, Project. SCHEDULED ITEM HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL JOSEPH F. HSU, DIRECTOR OF UTILITIES^� MAY 27, 2008 �y I PARTICIPATION IN THE PHASE 26 OF PLANNING AND DEVELOPMENT OF THE LODI POWER PROJECT ended that the Utility Board/City Council approve the city's continued in Phase 2B planning and development activities of Lodi #2 Project at a not-to- �t of $250,000; and authorize the staff to vote affirmatively when Lodi #2 ipant Committee ("PPC") seeks a vote to proceed with Phase 2B of Lodi #2 At its November 26, 2007 Utility Board meeting, the Utility Board/City Council approved in the City's participation in Phase 2A planning and development activities of Lodi #2 Project. Lodi #2 Project is a 255 MW combined cycle natural gas fueled generation project being developed by the Northern California Power Agency (NCPA) at a site in the City of Lodi located ab i ut 50 miles southeast of Sacramento. The proposed City's participation in the planning and development phase is for 7 MW of electric power or about 2.8% of the total project. Lodi #2 Project became a formal project in mid March, 2008 when all the project participants obtained the appropriate authorization and executed the Phase 2 planning and development agreement. The City's financial commitment through the Phase 2A of the agreement is $450,000. Since the execution of the project planning and development agreement, the project manager, Northern California Power Agency (NCPA), has proactively pursued the comDletionof Phase 2A activities as follow: + I. Purchased sufficient Emission Reduction Credits (ERCs) for the project to support the permit application with California Energy Commission; 2. Eng Iged consultants for the permit application preparation process (a) environmental 021 consultants (Sierra Research); (b) application for certification (AFC) preparation l (CH2MHill); (c) owner's engineer (Worley Parson); (d) legal and regulatory consultants (Grenier & Associates, Galati/Blek); 3. Submitted the electric interconnection application to the California Independent System Operator ("CAISO") and held several meetings with the CAISO and Pacific Gas and Electric ("PG&E") regarding the project interconnection. The project is placed in the CAISO transmission interconnection queue for technical studies; 4. Formed a transmission interconnection study group consisting of project participants to optimize the electric interconnection with the CAISO. This group is to report the findings by late May; It is anticipated that the Phase 2A of Lodi #2 Project will be completed on time by early August, 2008 and within budget. NCPA is planning to file the permit application with the CEC on behalf of the project in early August to officially start the project review process by CEC and the public. The latest project timeline and the cash Flow projection for planning and development activities are attached herein for reference. In order to timely transition to provide technical; environmental; regulatory; and legal support during the permit application review process, NCPA will soon recommend the Project Participation Committee to approve the initiation of Phase 213 activities with additional financial commitment pursuant to section 3.(b) of the project planning and development agreement. The total budget for Phase 2B is $9 million, the City's share is approximately $250,000. Phase 213's activities will commence immediately after the permit application process in early August. Staff has actively participated in the deliberations and preparation of Phase 2A activities and believes that the project is on track, within budget (from planning standpoint), and well managed without major fatal Flaws identified. Staff believes our continued participation in Phase 26 is warranted through the permit application process until the permit is issued by CEC. As the project manager NCPA will be seeking the project participants' authorization to proceed with Phase 2B in late June, staff hereby seeks the authority from the Utility Board/City Council to provide an affirmative vote when this item comes up for a vote. FISCAL IMPACT The City's continued participation in Phase 2B of the Lodi Project is estimated to cost up to $250,000. Funds are currently being budgeted as a placeholder item in the FY 08-09 power resource budget subject to budget approval. Prepared by Bob Tang, Assistant Director of Resource Management LEC Cashf low and tirreline 5 2 08. ppt 022 $30,000,000 $25,000,000 $205000,000 $15,000,000 $1070005000 $5,000,000 M LEC Proiect Estimated Cashflows LEC Project Participant Major Activities Timeline 3/6/08 PPC Formed Phase 2A Starts 3/08 NCPA Issues $16M Cash -Call Hires CEC AFC Consultants Seeks ERCs � 2A I /2BNCPA Issues $9M 2A ICash-Calls for 2B Jan♦ Mar Jun 08 I 08 t 08 11/07-3/08 Participant Subscriptions and Approvals, LEC Fully Subscribed At 255MW 6/08-7-08 LEC Participants Attain Needed Phase 2B Approvals, 8/1/08 Phase 2B Starts 9/09 CEC 12/09 Approves Debt AFC Issued 6/1/08 NCPA Issues Phase 2B Notice 4/30/08 All Project ERCs Acquired ($12.5M) Jan 09 11/08 CEC Data Adequate 8/5/08 CEC AFC Filed 11/09 Phase 3 Approved Mar Jun Sep 09 09 09 PPC Develops Finance Plan and Phase 3 PPAs And Contracts 10 1/2010 Construction Begins Como 2*10 1 nzuSA i J SCHEDULED ITEM TO: HONORABLE MAYOR AND MEMBERS OF THE AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIE� DATE: MAY 27, 2008 1 t SUBJE IT: APPROVAL OF AMENDMENT NO. I TO WATER SUPPLY AGREEMENT WITH MILLER BREWERIES WEST, L.P. It is recommended that the Azusa Utility Board/City Council approve the Amendment No. I to Water Supply Agreement with Miller Breweries West, L.P. ("Amendment No. 1 ") and authorize the Mayor to execute the Amendment No. I once the execution copies.6re prepared. BACKGROUND I The City entered into a Water Supply Agreement ("Agreement") with Miller Brewing Company in 2002. Said Agreement was subsequently assigned to Miller Breweries West, L.P. ("Miller") in 2004 with the City's consent. In general, the Agreement provides, among other things, for the delivery of water to Miller from the City at a certain water service rate and the use by the City of certain water rights of Miller. Under I he Agreement, Miller has the right to extend the term for an additional 5 years and Miller has exercised that right. The Agreement also provides that the City can call for an increased rate for water service under certain circumstances. In addition to Amend{nent No. 1, City Staff and representatives of Miller have been discussing the possibility of further amending the Agreement but both parties believe more time is necessary negotiate any additional revisions. Such potential amendments may provide for Miller to receive increased deliveries and for the City to have the right to use wells owned Iby Miller and for the connection of said sources to the City's water system for the benefit of the City. The prdposed Amendment No. 1 would provide for the following: (a) documenting the extended term as exercised by Miller; (b) establishing an increased rate for water service Ito be paid by Miller; (c) permitting the assignment of the Agreement by Miller Breweries West L.P. to Miller Coors LLC, due to an anticipated merger by Miller; and 025 (d) setting forth a time period for potentially amending the Agreement further in order to address the issues set forth above. It should be noted that if further amendments are not agreed upon by both the City and Miller, Miller can elect to either terminate the Agreement, as amended by Amendment No. 1, or allow the Agreement, as amended by Amendment No. 1, to remain in place. FISCAL IMPACT The new "Permitted Rate" is about 38% higher than the current rate and would result in an increase of about $350,000 in water sales revenue in FY 08-09. The new "Permitted Rate" would be effective as of May 1, 2008. Prepared by: Joseph F. Hsu, Director of Utilities L Amendnent No. 1 to Water Suppry Agreen 026 AMENDMENT NO. 1 TO WATER SUPPLY AGREEMENT This Amendment No. 1 to Water Supply Agreement, entered into as of May 1, 2008 (this "Amendment"), is between MILLER BREWERIES WEST, L.P., a Wisconsin limited partnership ("Miller"), as successor in interest to Miller Brewing Company, and the CITY of AZUSA, CALIFORNIA, a California municipal corporation ("City"). WITNESSETH WHEREAS, Miller Brewing Company and the City entered into a Water Supply Agreement dated February 26, 2002 (the "Agreement'); i j WHEREAS, Miller Brewing Company assigned all of its rights and obligations under the Agreement, with the written consent of the City, to Miller on June 1, 2004; WHEREAS, Miller intends to assign all of its rights and obligations under the Agreement to Miller Coors LLC, a Delaware limited liability company; ("Miller Coors") on or about June 30, 2008; WHEREAS, pursuant to Article VI Section B of the (Agreement, Miller has exercised its right to extend the term of the Agreement for an additional five years; WHEREAS, Miller and the City are negotiating certain modifications to the Agreement in connection with the extension, and wish to amend the' Agreement while continuing such negotiations; and WIHEREAS, Article VIII Section D of the Agreement provides that the Agreement may be amended as follows. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Miller and the City hereto agree as follows: SECTION 1. Defined Terms. Unless otherwise expressly set forth herein, capitalized terms used herein shall have the meaning set forth in the Agreement. SECTION 2. Amendments. i (a) Article I of the Agreement is hereby amended, effective as of May 1, 2008, by replacing the definition of the term "Permitted Rate" in its entirety with the following: "Permitted Rate" shall mean the rate as determined using the formula set forth on to Amendment No. 1 to Water Supply Agreement., (b) Article XV Section A of the Agreement is hereby deleted. OHS West: 260431973.5 027 SECTION 3. Consent. The City consents to Miller assigning all of its rights and obligations under the Agreement to Miller -Coors on the terms set forth on Exhibit B. The City agrees to execute the consent to assignment in the form set forth in Exhibit B as attached hereto and incorporated herein, upon Miller's request. SECTION 4. Effect of Amendment. (a) Upon execution of this Amendment, the Agreement shall be modified and amended in accordance herewith and the respective rights, limitations, obligations, duties, liabilities and immunities of the parties shall hereafter be determined, exercised and enforced subject to such modifications and amendments. The terms and conditions of this Amendment shall be deemed to be part of the terms and conditions of the Agreement for all purposes. Except as modified and expressly amended by this Amendment, the Agreement is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect. (b) In the event that the negotiations described in the fifth recital are not completed within 150 days of the execution of this Amendment, and without further amendment as mutually agreed upon by the parties, Miller, at its sole option, by providing written notice to the City within 60 days following such date, may 1) terminate the Agreement, as amended by this Amendment or 2) allow the Agreement, as amended by this Amendment, to remain in effect. SECTION 5. BindingEffect. ffect. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and each of their respective successors and assigns. [Signature Pages Follow] OHS West260431973.5 2 1 , I1` hereto by i , i WITNESS WHEREOF, Miller and the City have caused their names to be signed their respective officers thereunto duly authorized, all as of the date first written above. I MILLER BREWERIES WEST, L.P., a Wisconsin limited partnership i By: MCB 2, LLC, its General Partner By: Name: Title: + i i CITY of AZUSA, CALIFORNIA, i By: Name: Title: City Manager APPROVED AS TO FORM: OHS WesC260431973.5 I♦ By: Name: ' Title: City Attorney, City of Azusa I i 0 9 3 029 EXHIBIT A FORMULA FOR DETERMINING PERMITTED RATE The following terms and conditions shall govern payments by Miller under the Water Supply Agreement. • As of May 1, 2008, and continuing through June 30, 2009, a Meter Service Charge payable by Miller will equal $1,098.44 per month and a Commodity Rate payable by Miller will be S 1.336 per ccf. • The Meter Service Charge and Commodity Rate will be adjusted as of July 1, 2009 in accordance with the methodology found in the "Technical Memo: Water Rates for Miller Brewery", dated September 7, 2007 (the "Technical Memo"), attached hereto as Schedule 1, based on the City's then actual cost structure. • Rate changes following July 1, 2009 will be determined using the methodology in the Technical Memo and such changes shall occur when and if the City adjusts commercial water rates charged to customers of the City generally. OHS West260431973.5 030 FORESIGHT CONSULTING Azusa tight 8 Water Rate Technical Memo: Water Rates for Miller Brewery To: Joseph Hsu, Director of Utilities, Azusa Light & Water Cary Kalscheuer, Assistant to the Director, Azusa Light & Water FROM: Greg Clumpner, Foresight Consulting DATE: September 7, 2007 BACKGROUND The Azusa Light & Water (AL&W or City) recently completed a water rate study that updated water rates for all City water customers except Miller Brewery and the Azusa Greens Golf Course, which have water rates that are established through separate contracts with the City. Miller's water contract obligated the City to construct, own and maintain the 12 -inch pipeline which is dedicated to providing Miller with water service, and obligated Miller to pay for the pipeline, pay for water delivered to Miller, and included a number of additional obligations for each party. However, the non -water rate provisions of the contract are not relevant to the scope of this analysis. The purpose of this technical memo is to evaluate how Miller's water rates are calculated per its contract with the City. According to this contract, Miller has agreed to pay for the City water provided through the pipeline at a "Permitted Rate" which Miller and the City have agreed will be determined using the same formula and methodology used to calculate the Golf Course's water rate. That fnrtnrda and methodology are described in detail in a water rate analysis Watson ng 996. Therefore, this lille?s water service. of RESULTS OF WATER RATE ANALYSIS Based on the methodology Miller and the City have agreed to, the projected water rates the City of Azusa should charge the Miller Brewing Company are summarized in Table 1. Miller a. Miller's current Meter Service Charge reflects the 2006 annual total of $9,051 (or an average of $7541in0 j. b. Meter Service Charges ars from the AL&Ws water rate study report dated April 17, 2007. Commodity rates are from Table 2. Commodity rates atferFrO7-08 will need to be re -calculated each year with data from the previous year. c. Projections assume McBer continves using water of its 2006 consumption level and City cosh and consumption levels are those projected in Tables 2 and 3. The methodology used to calculate these rates is outlined in the remainder of this memo. However, the projected rates will need to be recalculated each year based on the previous years actual costs and water consumption using the same Calculations and methodology. Additional instructions for this process are outlined in the Appendix at the end of this memo. Pagel of 7 032 Current Rate Calculated FY'07-08 Projected Frog -09 Projected FY'09-10 Protected FYY0-11 Projected Frll-12 Total Miller Charges $1,388,085 $1,403,910 $1,472,771 $1,800,872 $1,834,865 Miller Water Rates Meter ServiceChargesal $754 $1,098.44 $1,098.44 $1,164.35 $1,164.35 $1,234.21 Commodity Rates $0.968 $1.336 $1.351 $1.417 $1.733 $1.766 ' %Chance In Rare 38.0% 1.1% 4.9% 22.3% 1.9% a. Miller's current Meter Service Charge reflects the 2006 annual total of $9,051 (or an average of $7541in0 j. b. Meter Service Charges ars from the AL&Ws water rate study report dated April 17, 2007. Commodity rates are from Table 2. Commodity rates atferFrO7-08 will need to be re -calculated each year with data from the previous year. c. Projections assume McBer continves using water of its 2006 consumption level and City cosh and consumption levels are those projected in Tables 2 and 3. The methodology used to calculate these rates is outlined in the remainder of this memo. However, the projected rates will need to be recalculated each year based on the previous years actual costs and water consumption using the same Calculations and methodology. Additional instructions for this process are outlined in the Appendix at the end of this memo. Pagel of 7 032 FORESIGHT CONSULTnNG Azusa Light B Water Rate. Study RATE ANALYSIS ASSUMPTIONS There are several key assumptions affecting how Millers rates should be calculated: (1) Permitted Water Rate — Millers contract with the City specifies: "... Miller is prepared to pay the City the Permitted Rate for the City Water, as such Permitted Rate may be increased on an annual basis pursuant to the formula set forth in Exhibit G subject to the limitation that such increases do not cause the applicable rate to exceed the applicable Excess Rate;" (2) Methodology Used to Calculate the Permitted Rate — Although the Permitted Rate specified in the contract was to be defined in Exhibit G of the contract, the City and Miller have agreed to calculate the Permitted Rate using the same methodology that was used to calculate the water rate for the Azusa Greens Golf Course. That rate 4 calculation is defined in an analysis prepared by Montgomery Watson (documented in e letter dated July 12, 1996), which presents a "Simplified Method to Determine Rates" n pages 6 and 9, and summarized in Table 6 of that analysis. (3) Simplified Method to Determine Rates — As discussed and demonstrated in Montgomery Watson's analysis, there are several ways that the "actual costs" of �roducing and delivering water could be calculated. However, the Simplified Method presented in their analysis produces what AL&W has indicated is considered a fair and equitable rate by both the.City and Miller. That method relies on AL&Ws budgeted operating cost and consumption records used in the City's recent water rate study'. RESULTS OF THE WATER RATE ANALYSIS t Table 2 on the next page summarizes the calculation of Millers projected water rates for the next five years. These calculations follow the "Simplified Method to Determine Rates" in Montgomery Watson's analysis. Although we will defer to Montgomery Watson's memo for a more detailed explanation of this methodology, essentially it determines Millers relative share, or equitable allocation, of the City's fixed and variable costs of producing water for the rest of the Cityjs customers and sets the water rate at six percent (6%) above the "actual cost." That is, this methodology allows the City to charge a rate "...not in excess of 6 percent above the actual cost of producing and delivering irrigation water, including administration, depreciation and overread. 2 Therefote, we have taken this methodology as it was originally applied to the Golf Course and adapted it to Millers circumstances and current City data. I Tables 3 and 4 provide supporting data used in the calculations shown in Table 2. For example, Table 3 summarizes: (1) Millers share of transmission/distribution capacity, which is Millers Capacity divided by total capacity for the rest of the City's customers, and (2) Millers share of consumption based on actual water consumption data for the previous year (2006). When Millers delivery capacity and water consumption are divided by the City's totals, the resulting ratios are the percentages shown in Table 2 as "Millers Share" that are used to calculate Millers water rates. Table 4 shows the calculation of the total capacity of the City's water system to deliver water based o the number of meters and the individual capacities of the various meter sizes. 1 Final Report: COS Study for Municipal Water Rates for Azusa Light a Water, April 17, 2007 2 Water Rate Analysis — Azusa Greens Golf Course, Montgomery Watson, page 1. July 12, 1996. Page 2 of 7 033 FORESIGHT CONSULTING Table M. Azusa lluht 6 Water Rate KaiIOSO) 1-7'07-08 FY'08-09 FY'09-10 FY'10-11 FY'11-12 Calculation of Availability Availability (meter service) Charges 32.9% and Commodity $5,068,139 omnonents $5,135,292 of qeryire r'harges $5,515,534 $5,588,615 $6,002,424 Commodity Charges 671°b Total Service Charge Revenue $10,322370 $10,466 995 $11 42 1 907 $11 San 153 $1223353 100.0% $15,397,509 $15,601,526 $16,756,741 $16,978,768 $18,235,961 Operating Expenses Non -Operating Expensao $15,245,861 $15,608,169 $16,567,598 $20,579,426 $21,208,859 Total Expensest) $302250 $15,553,811 $312(131 $15,920,199 $335,135 $16,902,733 S339T575 $20,919,002 $364,719 $21,573,579 Allocation of Availability and Commadity Fxnense-t to Miller Availability (meter service) Charges $5,119,586 $5,240,184 Entire City $5,563,588 $6,885,555 $7,101,011 Commodity Charges $10 4�4 79F Total Expenses $15,553,811 $10,680 015 $15,920,199 $11 339 14F $16,902,733 $1433 44 06 $20,919,002 $14 479 567 $21,573,579 Allocation to Miller Miller's Share: Availability (meter service) Charges 0.331% 0.328% 0.324% 0.321% 0.317% Miller's Share: Commodity Charges 12.388% 12.240% 12.094% 11.949% Availability (meter service) Charges 11.805% $16,949 $17,165 $18,031 $22,077 Commodity Charges S1222.5& 566 $1 30_ 7278 $137137 $22,523 $167686 Total Expenses — $1.309,515 $1.324.443 $1.389.406 $1.698.936 Total to be Charged to Mi1149°/n more) $170848 _ $1.731.005 $1,388,085 $1,403,910 $1,472,771 $1,800,872 Miller Water RaWkssumes2006ConsumpUonLevep $1,834,865 $1336 $1351 $1417 $1733 rtenects the S mplrfied Method to Determine Rales in Table B, Water Rate Analysis - Azusa Greens —Goff Course, Montgomery Watson, 7-12-96. $1766 a. Relative Ratios are the functional cost allocations from Table CA -2, Foresight rate study. Final Report -Appendix, 4-17-07. b. Rale revenue from current rates plus rate increases from Table 9, Final Report: COS Study for Municipal Water Rates, 4-17-07. c. Franchise fee expenses from ALBW budget projections, Table 3, final Report: COS Study for Municipal Water Rates, 4-17-07. d. Baseline Net Revenue Requirements from Table 9, Final Report. COS Study for Municipal Water Rates, 4-17-07. Page 3 of 7 W r.D I FORESIGHT CONSULTING f Azusa Light & Water Rate Study Units in the City of Azusa potable Capacity Total Capacity eter Size Table 3 Unita (a] [b] [cp[ap[b] ' 5/8" Meter;Capacity Units and Water Consumption - 2006 and Projections Through 2010 3,136 3/4" 14,120 Potabfe Meters 14,120 Achial ___7o_[aFi7a­p—a6tV-- 1.67 Melter Size (Feb 2007) 333 Capacity Ratio Units Miller Capacity(12"N 1 •143.33 143 Total City Capacity (Miller 20,37243,295 f _Ratio of Capacity to Total System Capacity (2006) 0.331% 2006 -Actual 2007-Ftofeded 2008-Rroleded 2009-Profeded 2010-Rmreded Mi ller'sCapacity Capacity - Rest of Cit 143 43,295 143 43,757 r 143 143 143 44,226 44,703 45,188 Miller's Share (b): 0.331% 0.328% 0324% 0321% 0317% Annual Water Consumption 2006 -Actual 2007-Rdeded 2008-Rbleded 2009-ptoleded 1010-Proieded Miller, ccf(e) Rest of 1,039,200 8,388.932 1,039,200 1,039,200 1,039,200 1,039,200 11ICity,ccffd) 8,489.907 8.59Z568 8.696.946 8,803.075 Mlller'sShare(b): 12.388% 12.240% 12094% 11.949% 11.805010 -- -•••-.•r-••••+ oma= orris".,�urne rv�vennn wnsumpoon 9MWU?IS2%yeer end non-residential Is 0.5961year b, MiOer Cepacify divided by Total Capacity. i c. Assumes Millers water use remains constant in the future. This needs to be updated each year wim Previous year's actual data. d. Excludi a Goff Course and Miller water use. ( Table Total a. Soum b. From I Water NEED As mel Iconsun project j' to be rf operatic custom that hig 2" 864 5.33 4,605 3" 114 11.67 1,330 4" . 116 20.00 2,320 t 3" 154 41.67 6,417 3" 99 60.00 5,940 0" 20 96.67 1,933 2" 1 143.33 1433 106) 20,372 — 43,295 Data. Cfty Records as of 2-20-07 (Customer Count Summary) i, esight Consu/8ng's Report -Cosf-of-S9rdce Study for Munldpal tes - AL&W, - Rnal Report - Appendix. Table MC -2, Apn'117, 2007. UPDATE THE WATER RATE ANALYSIS s oned above, the methodology used to calculate Millers water rate relies on cost and tion data from the preceding year. Therefore, water rates after FY'07-08 are only 1s, not the actual rates that will be used. Consequently, rates after FY'07-08 will need :alculated using the most recent "previous -year' data. These data consist of AL&W's and non-operating costs, and total annual consumption for Miller and all other City S (excluding Miller and the Golf Course). We have included tables in the Appendix ght the data that will need to be update, as well other additional data. i Page 4 of 7 035 Meters and Capacity Units in the City of Azusa potable Capacity Total Capacity eter Size Meters (a) Ratio (b) Unita (a] [b] [cp[ap[b] ' 5/8" 3,136 1.00 3,136 3/4" 14,120 1.00 14,120 1" 1,489 1.67 2,487 1 112" 259 333 862 2" 864 5.33 4,605 3" 114 11.67 1,330 4" . 116 20.00 2,320 t 3" 154 41.67 6,417 3" 99 60.00 5,940 0" 20 96.67 1,933 2" 1 143.33 1433 106) 20,372 — 43,295 Data. Cfty Records as of 2-20-07 (Customer Count Summary) i, esight Consu/8ng's Report -Cosf-of-S9rdce Study for Munldpal tes - AL&W, - Rnal Report - Appendix. Table MC -2, Apn'117, 2007. UPDATE THE WATER RATE ANALYSIS s oned above, the methodology used to calculate Millers water rate relies on cost and tion data from the preceding year. Therefore, water rates after FY'07-08 are only 1s, not the actual rates that will be used. Consequently, rates after FY'07-08 will need :alculated using the most recent "previous -year' data. These data consist of AL&W's and non-operating costs, and total annual consumption for Miller and all other City S (excluding Miller and the Golf Course). We have included tables in the Appendix ght the data that will need to be update, as well other additional data. i Page 4 of 7 035 FORESIGHT CONSULTING APPENDIX Azusa Light 8 Wafer Rate Appendix Tables 1, 2 and 3 below highlight the data that will need to be updated in order to re- calculate Miller's water rate after FY'07-08. We have provided AL&W staff with an. Excel spreadsheet that includes these tables in order to facilitate this recalculation process. Appendix Tables 4 and 5 provide projections of the number of customers through 2010 by meter size (Table 4) and the total capacity units for those projected customers (Table 5), which are used to calculate supporting data, including the ratios of Miller's share of service and commodity charges shown in Table 2 above. nppom,. ,o— , Calculation of CommoditylCapacity Based Charges to Miller Brewery' (R�talcula8on Data Needed) Calculation of Availability and Commodity Components of Service Charges 0.321% 0.317% Availability (meter service) Charges 32.9% $5,068,139 $5.135,292 $5515,534 $5,568,815 $6.002,424 Commodity Charges 67.1 $10.329.370 510,466.235 $11241207 $11,390,153 $12,233,537 Total Service Charge Revenue IN 100.0% $15,397,509 $16,601,626 $16,756.741 $16,978,768 $18,236,901 Operating Expanses $15,245,861 $16,608,169 $16,667,698 $20,679,426 $21,208,669 Non-Opara inp Expenses (q)$307,950 $312.031 $336.136 $339,575 $361.719 Total Expenses (d) $15,553,811 $15,920,198 $16,902,733 $20,919,002 $21,573,579 Availability (motor service) Charges Commodity Charges Total Expenses M)Dses Share: Avaeab18ry ("fur service) Charges Millers Share: Commodity Charges Availabililyfineter service) Charges Commodity Charges Total Expenses — $10434.225 $10,680,015 $11.339.145 $14.033.446 $11472567 $15.553,811 $15,920,199 $16,902,733 $20,919,002 $21,573,579 Affocatlon to MAbr 0.331% 0.328% 0.324% 0.321% 0.317% 12388% 12,240% 1LO94% 11.949% 11.905% $16,849 $17,165 $18,031 $22,077 $22.523 $1.292.566 $1307278 $1.371.376 $1676850 $1.708.452 Total to be Charged to Miller (6%more) $1,388,005 $1,403,910 57,472,771 $1,800,672 $1,834,856 MillerWater Rale 1Asyrmas2006CoruanvVan Leve0 $1.336 _$1.351 $1.417 $1.733 $1.766 Appendix Table 2 Meter Capacity Units and Water Consumption - (afculatlon Data Needed? o a Meters c o R.apac Meter Size (Feb 2007) CapacityRatio Units Miller Capacity (17 Metar) 1 143.33 143 Total City Capacity 20,372 — 43,295 Ratio of Miller Capacity to Total System Capacity(2036) 0.331% 2008-Actud 2007-Rolectad 2008-Fio)scled 7009-Adecfed 2010 -Protected Millers Capacity 143 143 143 143 143 Capacity - Rest of City (e) 43,295 43,757 44,226 44,703 45,188 Miller's Share 7b): 0.331% 0.328% 0.324% 0.321% 0.31 PA Miller, ccf (c) Rest of City, ccf (d) Miller's Share (b): 1,039,200 1,039, 200 1,039,200 1,039,200 1,039,200 838893 8.489,907 8.592,568 8.696.946 8,803.075 12.388% 12.24056 12.094% 11.949% 11.805% Page 5 of 7 036 FORESIGHT CONSULTING Appendix Table 3 Total Meters and Capacity Units (Re calculation Data Needed) Potable Capacity Total Capacity Meter Size Meters Ratio Units [a] [bj [cj=(aj•[bj 5/8" 3,136 1.00 3,136 3/4" 14,120 1.00 14,120 1" 1,489 1.67 2,487 11/2" 259 3.33 862 2" 864 5.33 4,605 3" 114 11.67 1,330 4" 116 20.00 2;320 6" 154 41.67 6,417- 8" 99 60.00 5,940 10" 20 96.67 1,933 12" 1 143.33 143 Total I Page6 of 7 Azusa Uqhf 8 Watei Rafe 037 FORESIGHT CONSULTING Appendix Table 4 Current and Projected AL&W Customer Accounts Azusa Licht 8 Water Rafe M ecords as of 2-20-07 (Customer Coad Summary) a. Assumes that 95% of consumpbon in &8-.V4' maters is resldential and the coatis wnimeidal. b. Assumes 5% of" -3r4' meters and all other metars aro cwwwwal. c. Assumes Residential powth in consumption is 274 6w and Noo-Reaidentlal is 0.5°6ryear. Current and Pro'ected ALBW Customer Accounts 2007 c 2008 2008 c) 2009 2009 (c Meter Size 518" 314" V 1.5" 2" 3" 4" 6" 8" 10" 12" Capacity Ratio 2010 (c) Total Capacity Units (a) 3,196 14,392 2,499 867 4,628 1,337 2,332 6,449 5,970 1,943 1441 Total Meters 3,258 14,669 1,504 262 873 115 117 156 100 20 Total 2006 Residential Non- Total Meters 3,385 15,240 1,519 264 881 116 118 157 101 20 1 Residential Non- Total Residential . Non- 43757 Residential Non - 21,435 Meter Size Accounts 5/8„-3/4"(s) 3,039 gesiden5al (b) 158 Total 3,196 5/8"-314„(a) 3,100 Residential (b) 158 Total 3,258 5/8"3/4"!81 3,162 Residential (e) 159 Tota 3,321 �(a) 3,225 Resi (o) 160 Total 3,365 5/8" 3,136 3/4" 14.120 13,682 710 14,392 13,956 713 14,669 14,235 717 14,952 14,520 720 15,240 1" 1.489 0 1,496 1,496 0 1,504 1.504 0 1,511 1,511 0 1,519 1,519 1.5" 259 0 260 260 0 262 262 0 263 263 0 264 264 2" 864 0 868 868 0 .873 873 0 877 877 0 881 881 t 3" 114 0 115 115 0 115 115 0 116 116 0 116 116 4" 116 0 117 117 0 117 117 0 118 118 0 118 116 6" 154 0 155 155 0 156 15@ 0 156 156 0 157 157 8' 99 0 99 99 0 100 100 0 100 100 0 101 101 i 10, 20 0 20 20 0 20 20 0 20 20 0 20 20 I 12" 1 0 1 1 0 1 1 0 1 1 0 1 1 Total Source of Liars: 20,372 R 20,720 21074 21,435 21,804 M ecords as of 2-20-07 (Customer Coad Summary) a. Assumes that 95% of consumpbon in &8-.V4' maters is resldential and the coatis wnimeidal. b. Assumes 5% of" -3r4' meters and all other metars aro cwwwwal. c. Assumes Residential powth in consumption is 274 6w and Noo-Reaidentlal is 0.5°6ryear. Current and Pro'ected ALBW Customer Accounts a. ,.dNduay nauo times me 10161 meters by size. Residential consumption assumes a 295year growth rate and Non -Residential growth rate of 0.5%.year. Page 7 of 7 2007 2008 2009 2010 Meter Size 518" 314" V 1.5" 2" 3" 4" 6" 8" 10" 12" Capacity Ratio Total Meters 3,196 14,392 1,496 260 868 115 117 155 99 20 1 1 Total Capacity Units (a) 3,196 14,392 2,499 867 4,628 1,337 2,332 6,449 5,970 1,943 1441 Total Meters 3,258 14,669 1,504 262 873 115 117 156 100 20 Total Capacity Units (a) 3,258 14,669 2,512 871 4,651 1,344 2,343 6,482 6,000 1,953 145 Total Meters 3,321 14,952 1,511 263 877 116 118 156 100 20 1 Total Capacity Units (a) 3,321 14,952 2,524 875 4,675 1,350 2,355 6,514 6,030 1,963 145 Total Meters 3,385 15,240 1,519 264 881 116 118 157 101 20 1 Total Capacity Units (a) 3,385 15,240 2,537 880 4,698 1,357 2,367 6,546 6,060 1,972 146 1.00 1.00 1.67 3.33 5.33 11.67 20.00 41.67 60.00 96.67 143.33 Total - 20,720 43757 21,074 44226 21,435 44,703 21,804 45,188 a. ,.dNduay nauo times me 10161 meters by size. Residential consumption assumes a 295year growth rate and Non -Residential growth rate of 0.5%.year. Page 7 of 7 OHS West 260431973.5 EXHIBIT B FORM OF CONSENT TO ASSIGNMENT [See attached] i i i i 039 ASSIGNMENT OF WATER SUPPLY AGREEMENT THIS ASSIGNMENT OF WATER SUPPLY AGREEMENT ("Assignment") is made as of the day of May, 2008 by and between MILLER BREWERIES WEST, L.P, a Wisconsin limited partnership ("Assignor") and MILLER COORS LLC, a Delaware limited liability company ("Assignee"). RECITALS WHEREAS, Assignor, and the City of Azusa, California (the "City"), entered into that certain Water Supply Agreement (the "Original Agreement") dated February 26, 2002, a copy of which is attached hereto as Exhibit A, as amended by that certain Amendment No. 1 to Waster Supply Agreement dated May _, 2008, a copy of which is attached hereto as Exhibit B ("Amendment No. I", and together with the Original Agreement, collectively, the "Water Supply Agreement"), pursuant to which Assignor and the City set forth certain rights and obligations regarding the use of Assignor's prescriptive pumping rights to the Main San Gabriel Basin (the "Prescriptive Pumping Rights"), the City's supply of water to Assignor, and other related matters as more particularly described therein; and WHEREAS, Assignor has assigned to Assignee its Prescriptive Pumping Rights and in connection therewith desires to assign to Assignee and Assignee desires to assume from Assignor all right, title, obligations and interest in, to, and under the Water Supply Agreement. NOW, THEREFORE, in consideration of the parties' mutual promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 6. Assignment. Assignor hereby grants, assigns, sets over and conveys to Assignee all of Assignor's obligations, right, title, and interest in the Water Supply Agreement. SECTION 7. Assumption. Assignee hereby assumes and agrees to perform and fulfill all of Assignor's duties, responsibilities and obligations under the Water Supply Agreement arising or occurring from and after the date hereof (the "Assumed Obligations"). SECTION 8. Indemnity. Assignee hereby indemnifies and agrees to defend and hold harmless Assignor from any loss, cost, claim, liability, expense or demand of whatever nature arising from any breach or failure of Assignee to observe or perform any of the Assumed Obligations arising or accruing after the date hereof. Assignor hereby indemnifies and agrees to defend and hold harmless Assignee from any loss, cost, claim, liability, expense or demand of whatever nature arising from any breach or failure of Assignor to have observed or performed any of the Assumed Obligations arising or accruing on and prior to the date hereof. OHS West260431973.5 WE OHS Wi SECTION 9. Binding Obligation. This Assignment shall bind Assignor and tee and their respective successors and assigns. IN WITNESS WHEREOF, Assignor and Assignee have executed this tment as of the date first set forth above. ASSIGNOR: MILLER BREWERIES WEST, L.P., a Wisconsin limited partnership I By: MCB2, LLC, its General Partner By: Name: Michael T. Jones Title: Vice President and Secretary t ASSIGNEE: MILLER COORS LLC, a Delaware limited liability company By: Name: Michael T. Jones Title: Vice President and Assistant Secretary By: Name: Cornell Boggs Title: Vice President and Secretary I l 1973.5 041 The undersigned hereby consents to the assignment of the Agreement by Miller Breweries West, L.P. to Miller Coors, LLC, as described herein, in accordance with the terms and conditions of the Agreement and hereby agrees to continue to be bound by all of the covenants, terms, and obligations under the Agreement. EXECUTED as a sealed instrument this _ day of 2008. THE CITY OF AZUSA M Name: Title: City Manager APPROVED AS TO FORM: Name: Title: City Attorney, City of Azusa OHS West:260431973.5 042 v OHS We! 19735 EXHIBIT A Original Agreement [See Attached] a I 043 EXHIBIT B Amendment No.l . [See Attached] OHS Wcst260431973.5 .S 044 Q r_ z SCHEDULED ITEM TO: HONORABLE MAYOR AND MEMBERS OF THE AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES�� j DATE: MAY 27, 2008 SUBJECT: APPROVAL OF MEMORANDUM OF UNDERSTANDING WITH SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT TO MANAGE WATER AND ELECTRIC POWER GENERATION OPERATION a RECOMMENDATION j It is recommended that the Azusa Utility Board/City Council approve the Memorandum of Understanding ("MOU") with the San Gabriel Valley Municipal Water District (District) to jointly manage the water and electric generation operations this summer and authorize the Mayor to execute the MOU once the execution copies are prepared. + I i BACKGROUND i The City receives water allotment from District's State Water Project allocation. Such water when received is spread in the Upper Canyon Water Basin for City's use. Also, the City has a 10 -year power purchase agreement with the District for the electric output of District's San Dimas Wash small conduit electric generating facility. The agreement was approved on September 18, 2006. Whenever the District generates electricity at San Dimas Wash, water is diverted from the Canyon Basin spreading ground. Moreover, staff has learned that the District is in the process of making repairs to its inlet pipeline at the Canyon spreading ground in the months of July and August this year, which will further impact the water spreading operation. Given the above, staff initiated discussions with the District and has reached an agreement in principle memorialized in the MOU to jointly and optimally operate respective parties' water and power generation operations for this summer. The main points of the agreement are as follow: f. • The District will use its best efforts to complete its pipeline repair work by September 1, 2008; The District will only generate electricity for sale to the City in the month of June under the 10 -year power purchase agreement; The District will forego electricity generation during the summer and reserve District's remaining State Water Project allocation (approximately 4,400 acre- feet or about 20% of AL&W customers' annual water consumption) for spreading on City's behalf commencing on or about September 1, 2008; The City will reimburse the District for the lost electricity sales that the District would otherwise have based on an agreed upon methodology The MOU provides a win-win solution to both parties given the operational constraints faced by both parties in the coming summer season, and is made possible only when water and power operations are planned in an integrated fashion. The arrangement will provide an affordable and reliable source of water while allowing reasonable generation of renewable energy and allowing the needed repairs to take place. FISCAL IMPACT The fiscal impact to the City is estimated not to exceed $100,000 under the MOU. Funds are available in the Purchased Water account to pay for the cost of reimbursement to the District. Prepared by: Joseph F. Hsu, Director of Utilities MOU SGUMWD Wat er and Power Operati MEMORANDUM OF UNDERSTANDING TO MANAGE WATER USE AND ELECTRIC POWER GENERATION I This Memorandum of Understanding ("MOU") is entered into this day of , 2008, by and between the City of Azusa, a municipal public agency ("Azusa"), and the San Gabriel Valley Municipal Water District, a public water district ("District"). Azusa and District shall hereinafter be collectively referred to herein as "the Parties". RECITALS A. Azusa is a municipal corporation duly organized and existing under the laws of the State of California. Azusa, by and through Azusa Light and Water, is empowered to provide electric service to residential, commercial, and industrial customers within Azusa's jurisdictional boundaries. B. District is a water district duly organized and existing under the laws of the State of California. District is empowered to provide reliable water supplies to the member cities of Alhambra, Azusa, Monterey Park, and Sierra Madre. C. Azusa receives water allotment from the District which is spread in the Upper Canyon Water Basin for Azusa's use. D. Azusa has entered into 10 -year power purchase agreement with the District to purchase the electric output of District's San Dimas Wash small conduit hydro generating facility. E. The District is currently planning to conduct repair of its inlet pipeline at Upper Canyon spreading ground in the months of July and August, 2008. F. The Parties hereto desire to enter into this MOU for the purpose of optimally coordinate the District's pipeline repair work, the'water use and the electric power generation for the coming summer season. > COVENANTS NOW, THEREFORE, in consideration of the preceding Recitals and mutual Covenants contained herein, the Parties hereto agree as follows: Section 1. PARTIES' RESPONSIBILITIES The Parties shall have the responsibilities set forth herein. Section 1.1. DISTRICT'S RESPONSIBILITIES The District shall use its best efforts to complete the District's pipeline repair work by September• 1, 2008 (is this date workable for the District?). During the period of repair work, the District shall generate electricity from its San Dimas Wash small conduit hydro generating facility only during the month 047 of June, 2008 and shall reserve the District's remaining State Water Project allocation (approximately 4,400 acre-feet) that would otherwise be used in the electricity generation for spreading on Azusa's behalf commencing on or about September,l, 2008. The District will timely inform Azusa of any delays in completing the District's pipeline repair work. Section 1.2 AZUSA'S RESPONSIBILITIES Azusa shall reimburse the District for the revenue loss incurred by the District in foregoing electricity generation in lieu of reserving the water allotment for Azusa's later use. Such reimbursement shall be based on the projected hourly electricity generation for the month of July, 2008 and energy contract prices under the 10 -year power purchase agreement. Azusa shall prepare the billing with sufficient detail for District's review and shall pay within ten days upon the receipt of the invoice. IN WITNESS WHEREOF, the Parties hereto have executed this MOU to be in effect as of the date set forth above. City of Azusa an San Gabriel Valley Municipal Water District M Name: Joseph R. Rocha Name: Title: Mayor, City of Azusa Title: M'. _ MONTHLY REPORT APRIL PROGRESS PAYMENT REQUEST: $2,160,344.97 APRIL PTD TOTAL PAID TO DATE $26,394,943.76 $24,234,598.79 AMOUNT TO ESCROW' $2,189,109.46 `Fixed amount PROJECT PERCENT COMPLETE 72.81% 114.4 MAY, 2008 PROJECT: MEMBRANE TREATMENT UPGRADE OF THE CANYON FILTRATION PLANT PROJECT NO.: WVF-207 GENERAL CONTRACTOR: SSC CONSTRUCTION INC. DESIGN ENGINEER: BLACK & VEATCH INC. CONSTRUCTION MANAGER: BLACK & VEATCH, INC. PROJECT CONTRACT AMOUNT: $35,905,500.00 $36,251,072.84 CHANGE ORDERS TO DATE: $100,642.76 10 DAYS Approved July 23, 2007 $164,975.54 14 DAYS Approved Sept 24, 2007 $57,261.33 4 DAYS Approved Nov 26, 2007 $22,693.21 0 DAYS Approved Feb 25, 2008 MONTHLY ACTIVITIES Construction progress meetings were held May 8 & May 22 As of 5/21/08 Pretreatment Structure tested for leakage, membrane feed pumps installed Various plant piping and electric conduit installed DYK reservoir wall preparation complete and wrapping began May 21 . O&M Building roof installed and interior work continues Chemical Feed Building interior installations continue Genarator installed - load testing will take place in summer. Canal Diversion Structure in operation- connection of plumbing and electric underway APRIL PROGRESS PAYMENT REQUEST: $2,160,344.97 APRIL PTD TOTAL PAID TO DATE $26,394,943.76 $24,234,598.79 AMOUNT TO ESCROW' $2,189,109.46 `Fixed amount PROJECT PERCENT COMPLETE 72.81% 114.4 INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIE" DATE: MAY 27, 2008 SUBJECT: CALIFORNIA RESOURCE CONNECTIONS UPDATE I At the April 28, 2008, the Mayor requested status of payments made to California Resource Connections under its Memorandum of Understanding (MOU) adopted by the City Council in August 2007. As you may recall, the MOU provided $52,500 in funding to the CRC for improvements to the Taylor House and to help with some operating expenses and project management, e.g., volunteer coordination and grant writing, so the Taylor House could become self sufficient. i At the writing of this report, one payment has been made to CRC in the amount of $23,200. The MOU was very specific with respect to which costs were being funded based on a proposal from CRC. While staff have received a second invoice from CRC, the billing amounts appear to vary with the MOU and so staff has requested clarification from CRC. Staff are also seeking to check work completed at the Taylor House to ensure compliance with the MOU. In addition to the core MOU amounts committed to the improvement of the Taylor House, funding was approved for environmental programs like the Think River event held in April. $7,325 was paid to CRC for the Think River program, in addition to the $23,200. Per the MOU terms, CRC is to provide a report to the City Council by July 31, 2008, on what improvements it has made to the Taylor House/Property. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities 050