HomeMy WebLinkAboutAgenda Packet - October 23, 2006 - UBAGENDA
REGULAR MEETING OF
AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL
AZUSA LIGHT & WATER
729 N. AZUSA AVENUE
AZUSA, CA 91702
AZUSA UTILITY BOARD
DIANE CHAGNON
CHAIRPERSON
DAVE HARDISON
VICE CHAIRPERSON
KEITH HANKS
BOARD MEMBER
MONDAY, OCTOBER 23, 2006
6:30 PM
IOSEPH R. ROCHA
BOARD MEMBER
ANGEL A. CARRILLO
BOARD MEMBER
6:30 p.m. - Convene to Regular Meeting of the Azusa Utility Board and Azusa City Council
• Call to Order
• Pledge to the Flag
• Roll Call
A. PUBLIC PARTICIPATION
(Person/Group shall be allowed to speak without Interruption up to five (5) minutes maximum
time, subject to compliance with applicable meeting rules. Questions to the speaker or
responses to the speaker's questions or comments shall be handled after the speaker has
completed his/her comments. Public Participation will be limited to sixty (60) minutes time.)
The Consent Calendar adopting the printed recommended action will be enacted with one vote. if Staff or
Councilmembers wish to address any Item on the Consent Calendar individually, it will be considered under
SPECIAL CALL ITEMS.
001
B. CONSENT CALENDAR
1. Minutes. Recommendation: Approve minutes of regular meeting of September 25, 2006 as written.
B-1. UB Sept Mm.doc
2. Black & Veatch Contract Extension. Recommendation: Approve the extension of Black i;_ Veatch
Engineers' design contract for Water Treatment Plant Expansion Project from October 30, 2006 to
December 31, 2006.
ELJ
B-2. Blk&Veatch
Contract Ext.doc
3. Award Contract for Prosect W-178, Water Main Replacement. Recommendation: Approve the
award of contract for Water Project W-178 to J.A. Salazar Construction and Supply Co. in amount of
$816,290.20, for replacement of water mains in 6' and Barbara Streets, and services in Virginia Street.
ELJ
B-3. Bid Award
W-178.doc
4. Award Professional Services Agreement for Inspection Services on Project W-178.
Recommendation: Approve a Professional Service Agreement with SA Associates, Inc. to perform
inspection services on Project W-178, water main replacements in 6`h and Barbara Streets, and
services in Virginia Street, in amount of $42,000.
Insptn Svc
Contract.doc
5. Bid Request for Project W-238, Water Main Replacement. Recommendation: Approve bid
specifications, and authorize advertising and solicitation of bids for Project W-238, Water Main
Replacements, in Cypress Street in Covina, and Sunset Avenue in West Covina.
E
B -S. Authorization to
Bid W-238.doc
2
002
6. Energy a Credit Risk Management Policy Amendment. Recommendation: Approve proposed
amendment to the Energy & Credit Risk Management Policy and authorize staff to exercise functions
permitted by amended policy.
B-6. Risk Mgt Porcy
Andnt.doc
Request for Qualifications and Proposals (RFQ/P) on Water Rate Study. Recommendation:
Authorize staff to issue Request for Qualifications and Proposals for cost of service study for water
rates effective July 1, 2007.
B-7. RFQ for Water
Rate Study. doc
8. First Annual Powerline Skills Rodeo Donation. Recommendation: Authorize a donation of $100 to
the East Los Angeles Skills Center for their First Annual Powerline Skills Rodeo.
B-8. Donatbn
Approval.doc
9. LivinsWise Conservation Education Program. Recommendation: Waive formal bidding
requirements and award purchase of turnkey interactive conservation program for Azusa 6`^ grade
students to LivingWise in amount of $37,650.
B-9. LivingWise
Programdoc
10. Apple One Blanket Purchase Order Amendment. Recommendation: Authorize an amendment to
the Blanket Purchase Order issued to Apple One for fiscal year ending June 30, 2007 in amount not -
to -exceed $15,000. .
B-10. AppleOne.doc
1 I . Annual Bi -tech Software Maintenance Service Contract. Recommendation: Waive formal bidding
requirements and approve the software maintenance and support contract with Sungard Bi -tech Inc.
in the amount of $42,560.18.
Un
B-li. BI -Tech
Pyrmt.doc
M,
I
C. SCHEDULED ITEMS
I.... Financing of Water Treatment Plant and Other Water Facilities. Recommendation: Approve the
following resolution:
A RESOLUTION OF THE UTILITY BOARD AND CITY.COUNCIL OF THE CITY OF AZUSA, APPROVING
THE FINANCIAL PLAN FOR THE NEW WATER TREATMENT PLANT AND OTHER WATER FACILITIES.
whVI
C-1. WTP Financing
- Plan.doc -
2. Underground Electrical System Repair at 600 West Gladstone Street. Recommendation: Authorize
the City Manager or Director of Utilities to award a contract for urgent electrical repair work at 600
West Gladstone Street pursuant to Azusa Municipal Code Section 2-523(a).
C-2 Urgent Elec
Repair.doc
D. STAFF REPORTS/COMMUNICATIONS
Power Resources Monthly Update
E
__.._ o-1. My Power
Res. ppt
2. Legislative Report
D-2. legislative
Report.doc
3. Follow-up Report on AB 939 waste diversion shortfall (verbal)
4. Paving project and waterline project coordination (verbal)
5. November Key Accounts breakfast meeting schedule (verbal)
4 004
E. DIRECTORS' COMMENTS
F. CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION
Government Code Section 54956.9(a)
SDG&E v. Anaheim, Azusa, et al.
Case 2:06 -CV -00592
2. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION
Government Code Section 54956.9(x)
PG&E, SCE et al. v. Anaheim, Azusa, et al.
Case 2:06 -CV -00559
G. ADIOURNMENT
Adjournment.
%n compliance with the Americans with Disabilities Act, ifyou need special assistance to participate in
a city meeting, please contact the City Clerk at 626-812-5229. 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 he made to provide access to the meeting "
005
CITY OF AZUSA
MINUTES OF THE REGULAR
MEETING OF THE AZUSA
UTILITY BOARD
MONDAY, SEPTEMBER 25, 2006 - 6:30 P.M.
The Utility Board Members of the City of Azusa met in regular session, at the above date and time
in the Azusa Light and Water Conference Room located at 729 N. Azusa Avenue, California.
Chairperson Chagnon called the meeting to order. Call to Order
ROLL CALL Roll Cali
PRESENT: BOARDMEMBERS: HARDISON, CARRILLO, ROCHA, HANKS, CHAGNON
ABSENT: BOARDMEMBERS: NONE
ALSO PRESENT: Also Present
City Attorney Ferre, City Manager Delach, Director of Utilities Hsu, Assistant City Manager Person,
Assistant to the Utilities Director Kalscheuer, Assistant Director of Resource Management Tang,
Assistant Director of Water Operations Anderson, Electrical Engineer Langit, Assistant Director of
Customer Care and Solutions Vanca, Police Captain Streets, City Clerk Mendoza, Deputy City
Clerk Toscano.
Pub Part
Public Participation
J. Rosales
Mr. Jorge Rosales addressed the Board Members regarding the Home Energy Assistance Program Comments
(HEAP), stating that he hopes the City promotes the service to the community, and that they
take advantage of this program. He addressed Professional Services Agreement with Huls
Environmental LLC, stating that they were $5,000 more than the low bidder, but staff explained
why; he thanked staff. In item regarding Bid Solicitation for Water Main Replacement Project W-
178; he expressed concern regarding a proper bid process and meeting State requirements. He
noted that the City would be receiving $350,000 Fuel Cost Adjustment, which would amount to
$0.57 center per kWh, or a 5.2% reduction of retail rates for utility bills from October 1 through
December 31, 2006. Lastly, he expressed concern about a possible penalty from the state for
e'non compliance with AB 939 recycling mandate; he stated that Rosedale should be penalized as
the large amounts of debris disposed from the site was not recyclable.
006
Mr. Mike Lee addressed the Board Members expressing thanks for the open house gathering at M. Lee
the Rosedale Project over the weekend; he thanked Mr. Rosales for the work he does to inform Comments
the citizens about what is going on in the community.
The CONSENT CALENDAR consisting of items B-1 through B-7 was approved by motion of Board Consent Cal
Member Rocha, seconded by Board Member Hanks unanimously carried with the exception of approved
item B2, which was considered under the Special Call portion of the meeting. B-2 Spec Call
1. The Minutes of the regular,meeting of June 24, 2006, were approved as written. Min appvd
2. SPECIAL CALL ITEM.
3. The professional services agreement with Huls Environmental LLC, for a three-year Agmt w/Huls
agreement for administration of used oil block grant program in the amount of $23,760, Environmental
was approved. Used Oil
4. Approval was given for the issuance of a contract purchase order in the amount of $23,700 Royal Crest
to Royal Crest Building Maintenance to paint steel street light standards. Bldg Maint
Director of Utilities was authorized to sign a quitclaim of Electric Utility Easements on 572- Quitclaim
647 Foothill Boulevard as part of the Electric Service Agreement between the City and Azusa Elect Util APU
Pacific University and the City Clerk was directed to have same recorded.
6. Approval was given for the advertisement for bids for Project W-178, water main Advertise bids
replacement in 6t' Street and Barbara Street, and replacement of water service lines from Project W -
customers to the main in Virginia Street. 178
7. Approval was given to advance engineering fee payment to Verizon for their estimated cost Verizon
to relocate telephone lines crossing the site of Canyon Filtration Membrane Treatment Relocation
Upgrade and expansion Project in the amount of $39,242.89 and Director of Utilities was Telephone
authorized to sign letter accepting terms of relocation. lines
Special Call Items Spec Call Itms
Board Member Rocha questioned why there was a decrease in participants in the HEAP program HEAP
from 2005 to 2006. Assistant Director of Customer Care and Solutions Vanca responded stating Program
that every other year the State send representatives to help solicit the program to senior citizens questions
which makes it easy to apply to the program; she assured the Board Members that she would
arrange for State representatives to come during 2007. Board Member Hanks asked a question
regarding utility bill and staff advised they would follow up on it.
Board. Member Rocha offered a Resolution entitled:
A RESOLUTION OF UTILITY BOARD/CIN COUNCIL OF THE CITY OF AZUSA, EXTENDING THE Res. 06-C82
LOW INCOME HOME ENERGY ASSISTANCE PROGRAM FOR AZUSA RESIDENTS. HEAP
Program
Moved by Board Member Rocha, seconded by Board Member Hanks to waive further reading and
adopt. Resolution passed and adopted by the following vote of the Board Members:
AYES: BOARD MEMBERS: HARDISON, CARRILLO, ROCHA, HANKS, CHAGNON
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
09/25/06 PAGE TWO
007
Staff Reports/Communications Staff Rpts
Assistant Director of Resource Management Tang presented the Monthly Power Resources . B. Tang
Update, highlighting the 10 -year renewable energy contract with San Gabriel Valley Municipal Comments
Water District (SGVMWD); the contract will provide an additional 1.5% renewable energy toward Power
the goal of 20% renewable energy by 2017. He also noted an attached Environmental Project Resources
Status Report of the San Juan Generating Station, with photographs and project costs.
Director of Utilities Hsu responded to questions regarding possible tours of the San Juan J. Hsu
Generating Station, stating that it would take about three days and two nights, it could be Comments
coordinated with other cities and the best time would be spring or fall. Tours
The 2007 Annual Resource Adequacy Plan was presented, but, there were no comments 2007 Annual
regarding the plan. Resource Plan
Director of Utilities Hsu highlighted AB 2951, the Capital Facility Fee, stating that it will help with Legislative
the dispute between the City and Citrus College. . Update
Director of Utilities Hsu addressed quarterly Fuel Cost Adjustment for San Juan Resource stating : Quarterly
that when there is anticipated cost it is passed onto customers, but when there is savings, It is Fuel Cost
also passed onto customers; in this case on an average the savings will be approximately $3.
Director of Utilities Hsu addressed the AB 939 2005 Status Report stating that they don't know at AB 939
this time whether the State will be penalizing the City for not meeting the AB 939 mandated goal Assist Dir Util
of 50% waste diversion from the landfills due to the large amount of debris disposed of from the Comments
Monrovia Nursery site. He advised that he would keep the Board Members apprised regarding
the matter. Assistant to the Director of Utilities Kalscheuer responded to questions from Board
Members regarding the methodology and tracking of the waste.
Director of Utilities Hsu advised that the Azusa Light and Water Office Building Roof Repair is Roof
complete and invited Board Member Hardison and anyone else who is interested to come and Repair
see it; further he advised that there is a one year warranty on it. Complete
Director of Utilities Hsu presented selection of date for Key Accounts Breakfast Meeting; it was Key Accts
consensus that the meeting be tentatively set for Thursday, November 2nd. Meeting
Director of Utilities Hsu presented a status report on meeting with Citrus College regarding the Status Citrus
Water System Development Fee, stating that a meeting was set up, but cancelled by Citrus College Wtr
College. Discussion was held regarding the matter noting that there is a need to work out an Sys Dev Fee
agreement with them for the Fee, that the City is not obligated to give them service although they
can occupy the building and safety is not an issue.
Director of Utilities Hsu provided an update regarding the temporary waterline installed above Update
ground on Northrop's parking lot; this line is intended as a temporary replacement for the Northrop
underground water mains that broke due to a landslide into Cemex's pit during a rainstorm; the Easement
City entered into a temporary license agreement with Northrop on July 6" which will expire on On prop
October 4`"; there is still no permanent easement with Northrop or Cemex and staff is still
working on this; three thirty day extensions are allowed. Additional discussion was held
regarding the need to obtain agreements between Northrop, Cemex and the City.
09/25/06 PAGE THREE
M
Director's Comments
Dir Cmts
Director of Utilities Hsu provided -the. Board Members with copies of a document containing Info items
information on the history of water in Azusa and the history of the San Gabriel River Water
Committee of Nine.
City Manager Delach addressed the Board Members stating that ALP sent their structural City Mgr
engineers to do a full assessment on the retaining walls on their property and they are structural Comments
sound; and further he would provide a copy of neighbors in that community.
Moved by Board Member Carrillo, seconded by Board Member Hanks and unanimously carried to Adjourn
adjourn.
TIME OF ADJOURNMENT: 7:09 P.M.
SECRETARY
Next Resolution No. 06-C83.
09/25/06 PAGE FOUR
009
TO:
FROM:
DATE:
SUBJECT:
AZUSA
LIGHT &'RATER
CONSENT CALENDAR
HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
JOSEPH F. HSU, DIRECTOR OF UTILITIES
OCTOBER 23, 2006
EXTENSION OF TIME TO BLACK & VEATCH CONTRACT FOR WATER TREATMENT
PLANT EXPANSION PROJECT
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council approve the extension of Black &
Veatch Engineers' design contract for the Water Treatment Plant Expansion Project from
October 30, 2006, to December 31, 2006.
BACKGROUND
At its regular meeting held on February 28, 2005, the City Council approved the award of the
contract for the consultant design services for the Water Treatment Plant Expansion Project at
the Canyon Filtration Plant to Black & Veatch Corp. The contract termination date was April
1 1, 2006. On June 20, 2006, the contract for the design services was extended by the City
Council to October 30, 2006, with an anticipated bid date of August 2, 2006. Bids were
accepted August 2, 2006, and, due to an error in the bidding documents, City Council
rejected all bids at its September 18, 2006 meeting. Council directed that a re -solicitation of
bids be conducted. Bids are scheduled to be received on October 31, 2006.
This extension of Black & Veatch's design contract will allow Black & Veatch to review the bids
and make a recommendation of award for acceptance by the City Council at its November
20, 2006, meeting.
FISCAL IMPACT
There is no fiscal impact from the extension of time of this contract.
Prepared by:
Chet Anderson, Assistant Director - Water Operations
01.0
a-3
A7CJS.A
EIGHT &'EATER
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: AWARD OF CONTRACT FOR PROJECT W-178, WATER MAIN REPLACEMENT IN
6T" AND BARBARA STREETS, AND SERVICES IN VIRGINIA STREET IN THE CITY OF
AZUSA
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council approve the award of contract for
Water Project W-178 to JA Salazar Construction and Supply Co. for installation of 3,514
Linear Feet of 8 -inch Distribution Main in 6T" and Barbara Streets, and services in Virginia
Street.
BACKGROUND
The Water Division has a program of replacing water mains that are experiencing problems
with leaks and that are, for various reasons, experiencing Flow and pressure problems. The
mains to be replaced in this project have leak problems requiring constant repair and
excessive staff time to make repairs. Also, the mains to be replaced in 6`" and Barbara Streets
are in streets designated by Public Works to be resurfaced this year. This project will allow the
Water Division to lessen the probability of leaks in the newly paved streets.
Advertisement for Bids for this project was approved at the September 25, 2006, Utility
Board meeting. Bids were publicly opened October 17, 2006. Eight contractors submitted
bids, with each contractor submitting three bids, one for each of three completion times. The
bids submitted were as follows with low bids highlighted:
Contractor
60 Day Completion
75 Day Completion
90 Day Completion
Herman Weissker
$1,362,740.65
$1,244,286.38
$1,184,952.01
Highland Engin'ring
$1,127,108.15
$1,127,108.15
$1,106,842.36
J. A. Salazar
$1,313,371.40
$1,156,278.64
$816;290'20
Ma'ic Brothers
$949,869.80
$930,542.80
$872,561.80
J. DeSi io Constr.
$928,433.00
$928,433.00
$928,433.00
Robert Brkich Const
$926,578.40
$871°578.'40
$871,578.40
Gentry Bros.
$897;806:80'
$886,806.80
$875,806.80
Allison Co.
$1,526,984.80
$1,370,421.80 1
$1,210,338.80
011
FISCAL IMPACT
The fiscal impact of this item is $816,290.20. Adequate funding is available for this project
through the approved FY 2006-2007 Capital Improvement Project budget, Account 32-80-
000-721-7130/721076-7130.
Prepared by:
Chet Anderson, Assistant Director - Water Operations
l
012
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES < 1`
DATE: OCTOBER 23, 2006
SUBJECT: APPROVAL OF A PROFESSIONAL SERVICES CONTRACT WITH SA ASSOCIATES,
INC. TO PERFORM INSPECTION SERVICES ON PROJECT W-178, WATER MAIN
REPLACEMENT IN 6T" AND BARBARA STREETS, AND SERVICE REPLACEMENTS
IN VIRGINIA STREET.
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council approve of a Professional
Services Contract in the amount of $42,000 with SA Associates, Inc. to provide inspection
services on Project W-178.
BACKGROUND
Construction of Project W-178, Water Main Replacement Project on various streets, has been
bid and will require inspection. SA Associates has performed past inspection services for the
Water Division. Five consultants were requested to submit letter proposals for this project and
three consultants responded: SA Associates, $42,000; Civiltec, $45,000; and Willdan,
$57,480.
FISCAL IMPACT
The fiscal impact of this item is $42,000. Adequate funding is available for this project
through the approved FY 2006-2007 Capital Improvement Project budget, Account 32-80-
000-721-7130/72107B-7130.
Prepared by:
Chet F. Anderson, Assistant Director- Water Operations
013
AZUSA
414NT l %'ATER
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006 W
SUBJECT: APPROVAL TO SEEK BIDS FOR THE INSTALLATION OF PROJECT W-238, WATER
MAIN REPLACEMENT IN CYPRESS STREET IN THE CITY OF COVINA AND SUNSET
AVENUE IN THE CITY OF WEST COVINA
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council approve the bid specifications
and authorize advertising for, and solicitation of bids for Project W-238, Water Main
Replacements in Cypress Street in the City of Covina and Sunset Avenue in the City of West
Covina.
BACKGROUND
The Water Division has a program of replacing water mains that are experiencing problems
with leaks and that are, for various reasons, experiencing Flow and pressure problems. The
mains to be replaced in this project have both leak problems requiring constant repair and
deliver less flow than is optimal for current residential area standards. The mains to be
replaced include 3,100 linear feet of 12 -inch lines and 5,200 linear feet of 8 -inch lines. The
bid specifications are available for public review at the 2nd floor front desk of the Azusa Light &
Water offices located at 729 N. Azusa Avenue, Azusa, CA 91702.
FISCAL IMPACT
There is no immediate fiscal impact to bidding of this project. A budget item for this project
has been approved by the Board in the FY 2006-2007 Capital Budget Account 32-80-000-
721-7130/72107B-7130.
Prepared by:
Chet Anderson, Assistant Director- Water Operations
014
AZUSA
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD AND AZUSA CITY COUNCIL
FROM: JOSEPH F, HSU, DIRECTOR OF UTILITIE�
DATE: OCTOBER 23, 2006
SUBJECT: AMENDMENT TO THE ENERGY & CREDIT RISK MANAGEMENT POLICY
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council approve the proposed
amendment to the Energy & Credit Risk Management Policy ("Risk Management
Policy") and authorize staff to exercise functions permitted by amended policy.
BACKGROUND
In 1999, the City Council approved a Risk Management Policy setting forth
specific guidelines for Electric Utility personnel to follow in purchasing
and selling electricity. The Risk Management Policy was amended in July and
December of 2002 to update the authority to conduct short term power
transactions. The current Risk Management Policy only allows physical and
financial electricity products as authorized trading products described in
Appendix D.1 of the Policy.
However, in recent years a need has arisen to use natural gas as trading product
to hedge the cost of electricity. An example of such need can be. exemplified by
the recent transactions the City has entered into with California Department of
Water Resources (CDWR) for summer peaking power and the renewable energy
Contract with the San Gabriel Valley Municipal Water District. Under these
transactions, the sellers were not willing to provide electricity at a fixed price
agreeable to the City but instead tied the pricing for electricity to the pricing of
natural gas in the spot market. The rationale for seller is simple: natural gas
price has been very volatile and at historically highs at times, tying price of
electricity to natural gas price tends to maximize revenues for the
sellers. This creates the need for us to manage the unavoidable exposure to
volatile natural gas prices.
015
One product that will assist us in managing such exposures is fixed for floating
price swaps on natural gas prices. As natural gas prices decline from time to
time, we might enter into a price swap to layoff the risk of spot market natural
gas price for a fixed natural gas price. Through this type of swap, we can
"convert" the pricing for electricity tied to spot market gas price to a fixed price
that we are comfortable with without buying the physical gas. Without the ability
to do price swap on natural gas, we will have very limited ability to manage the
ups and downs of spot market gas prices.
The amended Appendix D. I (attached) will include fixed for Floating swaps for natural
gas. as one of the Authorized Trading Products. All other aspects of the Policy Will
remain unchanged.
FISCAL IMPACT
The amended Policy provides additional means for the utility to manage its risks and
thus it is expected to have a beneficial fiscal impact overall.
Prepared by:
Bob Tang, Assistant Director of Resource Management
I RE
AMENDEDAPPENDIX
Dt.doc
016
'e
AMENDED APPENDIX D.1 (amendment in Bold and Underline)
D.1 AUTHORIZED TRADING PRODUCTS & GEOGRAPHIC MARKETS
Physical Markets
• Electric Power (energy, capacity, and transmission)
• US markets accessible to Azusa for physical delivery of power
Financial Instruments
Electricity:
• Fixed for floating swaps on underlying physical markets
• Basis swaps on locations traded in the physical markets
• Options (puts and calls) for caps, collars, and floors on underlying physical
markets
Natural Gas:
• Fixed for floating swaps on underlying physical markets
017
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES, \
DATE: OCTOBER 23, 2006
SUBJECT: REQUEST FOR QUALIFICATIONS AND PROPOSALS ON WATER RATE STUDY
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council authorize staff to issue a Request
for Qualifications/Proposals (RFQ/P) to have a cost of service study conducted for water rates
effective July 1, 2007.
BACKGROUND
Recent court cases and legislation dictate that the Utility conduct a cost of service study for
water services to justify the level of any proposed increase. AB 2951, approved on
September 30, 2006, requires that such studies be conducted at least every 10 years, and be
made available for review by public agencies affected by proposed increases. Also, in the
California Supreme Court case of Bighorn -Desert View Water Agency v. /Car! Verj!!,• E.W. Ke/%y,
Proposition 218 was interpreted to apply to water service rates, and thus now requires early
notification to property owners of pending water rate adjustments. Given these
requirements, and the upcoming Water Treatment Plant project, staff is recommending that
Azusa Light & Water issue a Request for Qualifications/Proposals to have a cost of service
study conducted by a third party to satisfy the requirements of AB 2951 and to prepare a
report that can be made available for public review at the time public notices are sent out to
alert the public and property owners of proposed water rate adjustments.
FISCAL IMPACT
There is no fiscal impact of issuing the RFQ/P other than mailing costs. The cost to conduct
the study will be reported when the consulting contract is awarded.
Prepared by:
Cary I(alscheuer, Assistant to the Director of Utilities
018
a -S
AZUSAant a worn
CONSENT CALENDAR
TO: - HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: DONATION TO EAST LOS ANGELES SKILLS CENTER FOR FIRST ANNUAL
POWERLINE SKILLS RODEO
RECOMMENDATION
It is recommended that the Utility Board/City Council authorize a donation in the amount of
$100 to the East Los Angeles Skills Center for their First Annual Powerline Skills Rodeo.
BACKGROUND
The East Los Angeles Skills Center is a vocational school that provides, among other things,
training for linemen. On November 4`h, students from the East Los Angeles Skills Center's
Electrical Powerline Mechanic Trainee program, which includes one of our employees, will
participate in an event called the First Annual Powerline Skills Rodeo. Some of the skill
performance activities at the rodeo include pole climbing demonstrations, hurtman rescue,
physical fitness demonstrations, and power flow demonstrations (see attachment). The East
Los Angeles Skills Center has requested donations for door prizes and it is recommended that
Azusa Light & Water donate $100 for this event.
FISCAL IMPACT
$100 would be donated from account 31-40-702-921-7050.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
Powerrine Skills
Rodeo. pdf
019
EO [
LOS ANGELES UNIb'[ED SCHOOL DLi7RICT
t� r EAST LOS ANGELES SKILLS CENTER
_neo,d! 3921 SELIG PL9CE, LOS ANGELES, CALIFORNIA 90031
07 _. PHONE: (323) 227-0018 FAX:(323)22-1-2351 --
•[001 [OVO/`
East Los Angeles Skills Center
3921 Selig Place
Los Angeles, CA- 90031
September 21, 2006
Dear Local Business Owner/Community Partners,
ROY ROMER
SUPFRWS ND[%70VS Hf=q
- ROWLNAIJ.GRORA
DiM2T SUPERINTENDENT
EOIGVtOSAL SERVICES
$ANTNGOJACRSnN
AIIISTMT SLPERNY ZDEST
wer YRAM1Raz
PRIKOPAL
On Saturday, November 4tb, students from East Los Angeles Skills Center's (ELASC) Electrical
Powerline Mechanic Trainee program will participate in the first Annual Powerline Skills Rodeo. The
community fundraising drive will be seeking monetary`donataon 0 -f -I eros fordoorprizes:for our First
Annual Powerline Skills Rodeo at ELASC.
The East Los Angeles Skills Center was established in 1966 as one of eleven Employment Preparation
Centers operated by the Division of Adult and Career Education of the Los Angeles Unified School
District. The ELASC has served our communities with 40 years of quality service incorporating a
comprehensive approach to education, which includes options academic and vocational training, career
awareness, and a strong network of partners, providing support services to ensure our students success
in reaching their goals.
The Electrical Powerline Mechanic Training program at ELASC provides trainees for entry-level
employment in the Powerline Mechanic Training field. It covers the basic mechanical and electrical
principles associated with the electrical line working trade. Skills taught include overall safety
considerations, power pole climbing skills, knowledge of basic tools and materials involved with the
electrical line crafts.
We appreciate any support you are able to offer. We have made a commitment to this school and
program, and we cannot continue our tradition of success without help from industry and the
community. Please remember that any amount helps! All donations are tax deductible.
We are asking that all contributions be sent by October 20th to the following address:
East Los Angeles Skills Center (323) 224-5970
3921 Selig Place
Los Angeles, CA 90031
Thank you for your continued support.
Sincerely,
,i 4
dy raw
Wendy RaRamifez, Principal
"We are an educational facility committed to excellence in providing academic
education, skills training, and job placement enhanced by community involvement and
support resources enabling all students to become responsible and productive individuals."
t1 1
First Annual
Towerfine Mechanic Skiffs Robeo"
East Los Angeles Skills Center
Los Angeles Unified School District
Division of Adult & Career Education
Saturday, November 4th
9 am to 3:30 pm
3921 Selig Place, Los Angeles, CA 90031
Contact Ph. No. 323.224.5970
Students Skill Performance Activities:
■ Pole Climbing Demonstration
■ Hurtman Rescue
■ Pole Climbing Skills Relay
■ Pole Climbing & Knot Tying Skills Relay
■ Physical Fitness Demonstration
■ Synchronized Climbing
■ Power Flow Demonstration
Plus: Little Linepeople Games & Future Student Adult Challenges
Come -join
Southern California Edison Co.
Los Angeles Department of Water & Power
Cities of: Burbank, Glendale, and Pasadena Power Companies
IBEW Local 47
California/Nevada Joint Apprentice Training Committee
And watch the next Generation of
"Power Lineman'
Proudly Demonstrate their Knowledge & Skills
021
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: LIVINGWISE CONSERVATION EDUCATION PROGRAM
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council:
1. Waive formal bidding procedures for turnkey interactive conservation program for
Azusa sixth grade students; and
2. Award the purchase of a turnkey interactive conservation program for Azusa sixth
grade students to LivingWise at a cost of $37,650 to be paid from Public Benefit fund
account number 24-40-739-082-6625/RLvWis-6625.
BACKGROUND
For the last several years Azusa Light & Water Public Benefit funds have funded the LivingWise
student interactive conservation program for almost 900 sixth grade students throughout the
city each year. The overall goals of the program are to generate immediate savings to
residents in the form of lower utility service costs while building resource awareness and
environmental responsibility amongst students and their families. Using a teaching plan
developed by LivingWise, students are taught about natural resources In their daily lives,
reinforced by real-life activities. Each student receives a Resource Action Kit containing a
LimeLite NiteLite that uses 3/100`" of a watt, an air filter alarm, a low flow showerhead, and a
faucet aerator. Students install these items at home with parental involvement. Students are
also provided with a household report card and home checkup.
022
Additionally, each year pre and post surveys are conducted to measure the learning impact
and the knowledge gained through the program. The 2005-06 program activities resulted in
the following estimated lifetime resource savings:
• 4,925,567 kWh of electricity
• 225,139 therms of natural gas
75,707,205 gallons of water and waste water
FISCAL IMPACT
The cost of the program will be $37,650 which is about $1,000 lower than last year. The
lower cost is based on lower sixth grade class enrollments and has been adjusted for a slightly
higher per unit cost of $40.25. The slight increase in the unit cost is due to higher labor and
component costs. The LivingWise program has been budgeted and will be paid out of the
Public Benefit Fund account number 24-40-739-082-6625/RLvWis-6625.
Prepared by:
Paul Reid, Business Development / Public Benefits Coordinator
023
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: AMENDMENT OF BLANKET PURCHASE ORDER IN AMOUNT OF $15,000 TO
APPLE ONE, A TEMPORARY EMPLOYMENT SERVICE
RECOMMENDATION
It is recommended that the Utility Board/City Council authorize an amendment in the amount
not to exceed $15,000 to the Blanket Purchase Order issued to Apple One for the fiscal year
ending June 30, 2007.
BACKGROUND
The Customer Service Division has supplemented its workforce with two Apple One agency
employees to temporarily fill-in for two vacant part-time and one full-time Customer Service
Representative positions that are in the process of being filled. Due to unexpected delays in
the hiring process, temporary fill-in help needs to be extended until the end of the calendar
year. Customer contact with Customer Service has increased significantly and continued
support is needed to handle the large volume of customer calls and walk-ins, and to fill-in for
staff vacancies and absences. Because of the variation in demand for temporary employees,
blanket purchase orders are used as opposed to going through a formal bid process. Apple
One has proved to be a good resource to the City for temporary help and was issued a
blanket purchase order at the outset of the fiscal year.
FISCAL IMPACT
Allowable expenditures to Apple One will be increased by $15,000. Funds are available in
Customer Service Division's outside services budget in account number 31-40-711-903-
6493.
Prepared by:
Karen Vanca, Assistant Director Customer Care & Solutions
024
s,
AZLJSA
rrrt + eerrr
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES -,4
DATE: OCTOBER 23, 2006 �P
SUBJECT: ANNUAL BI -TECH SOFTWARE MAINTENANCE CONTRACT
RECOMMENDATION
It is recommended that the Azusa Utility Board / City Council waive formal sealed bids in
accordance with Azusa Municipal Code Section 2-523 section C, and approve the software
maintenance and support contract with Sungard Bi -Tech Inc., in the amount of $42,560.18
BACKGROUND
The City currently uses Bi -Tech Software as their financial system. The city needs to retain
software support from the vendor to troubleshoot issues or questions in order to limit any
potential down time and to continue to receive product enhancements for this software.
Since there is no competitive market for maintenance of the proprietary system, use of the
alternate purchasing procedure is recommended.
FISCAL IMPACT
Funding for requested purchase will be provided by the Information Technology Department's
approved operating budget for FY 2007, account 48499300006504.
Prepared by:
Ann Graf, Director of Information Technology
Invoioe.pdf
025
SUNGAiRDO
SunGard Bi -Tech
890 Fortress Street
Chico, CA 95973
530 891 5281
City of Azusa
e
AttAccounts Payable
P.O. Box 1395
Azusa, CA 91702-1395
Phase send this portion with your remittance
Rcmit to:
SunGard Bi -Tech
CO. Box 99023 DATE: 08/23/66
Chicago, IL 60693
INVOICE fl: AR142010
ACCOWr ID: AZUCITY
Amount Enclosed:
DESCRIPTIONAN X=
syssvvvvavcxsrsc=s_-sccsv svvsvv�xacvvscss_vvsyssessssxsvccvz--ssssasvco
IFAS 9/1/06-8/31/07 Support 39,845.09
Openlink 9/1/06-8/31/07 Supp. - 1,029.03
CA Sales Tax 0 50%; 1,686.06
Your annual support for
IFAS/Openlink has increased 6.1 %.
This increase was calculated by
adding 2% to the BLS CPI for the 12
month period ending 5/30/06.
DELIVERED SEP I 12006
AUG 29 AM11.46
esys_-r�xxs-r_�x-___-�_—_ cosec—vxmx=vamssevcmvxr_xecxxv_ xcvsvexcovvv
TOTAL $ 42,560.18
SUNGARDO
026
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND
AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: FINANCING OF WATER TREATMENT PLANT AND OTHER WATER FACILITIES
RECOMMENDATION
It is recommended that the Utility Board/City Council approve the attached resolution and financial
plan for the water treatment plant and other water facilities.
BACKGROUND
On September 11, 2006, the Utility Board held a workshop to consider various ways to finance the
proposed water treatment plant and other water infrastructure to be constructed over the next two
years, amounting to about $50 million in cost. While the treatment plant project is being re -bid and
bids have not yet been received, adoption of a financing plan is proposed at this time to permit staff
and its financial team to prepare all the documents and take certain actions necessary so that when
the bid award is made, all the financial documents can be ready for adoption at or around the same
time.
In reviewing financing options, staff is recommending that the City of Azusa use a fixed rate financing
structure with a graduated payment schedule in the initial period of debt repayment, but one that
levelizes by the year 2015. This proposed financing structure is a combination of both the level debt
structure and wrap debt structure discussed at the September Utility Board workshop. This structure
allows the Utility to gradually adjust rates in the initial term of the bond Issuance to meet debt
coverage obligations. In fiscal year 2024, when our 2003 debt is fully amortized, our total combined
debt service payments will step down by about $1.5 million annually allowing the Utility additional
financing options at that time. Staff and the City's Financial Advisor believe selection of this structure
is a good business decision since it minimizes risks and takes advantage of the generally low bond
rates available at this time.
Attached to this report are various charts and graphs depicting key information associated with the
recommended, financing structure: (1) debt service repayment schedule; (2) forecasted rate
adjustments required to meet debt coverage requirements; (3) forecasted debt coverage; and (4)
forecasted annual reserve fund balance. These charts incorporate many of the assumptions presented
027
during the September workshop, however, also reflect updated debt payment schedules based on
more recent bond rates, capitalized interest income, and updates to some formulas included in the
prior forecast.
The Financial Plan consists of the attached resolution and Exhibit A to the resolution, and is intended
to provide guidance and authorization to staff to move forward with preparation of documents for the
subject financing. These subsequent documents will require approval by the City Council and Azusa
Public Financing Authority before any debt can be formally issued. Additionally, future water rate and
service fee adjustments will be analyzed, in some cases by third parties, and would also be subject to
future approvals by various City Councils over the 30 -year term of debt repayment.
-----Highlights of the Financial Plan are outlined below:
In order to construct a 16-milllon gallon per day membrane water treatment plant, a 4 -million
gallon reservoir, and other water related facilities including the cost of the 890 reservoirs, the
following financial plan is proposed:
• Issue debt in the amount of approximately $50 to $55 million, subject to final bid
amount/award on the water treatment plant project
• Issue tax exempt bonds with a fixed rate, stepped financing structure as described in this
report
• Make commitment to maintain a debt coverage ratio of 160% as a target during the term of the
debt for water rate adjustment purposes
• That water rates be adjusted effective July 1, 2007, in the amount of about 5%, pursuant to
Proposition 218 requirements
• That subsequent biennial rate adjustments be made in order to maintain the debt coverage
commitment, subject to review at the time of the proposed adjustment
- • —That half of the interest income on water reserve funds be used for debt repayment purposes
• That the legal issuer of this debt be the Azusa Public Financing Authority
FISCAL IMPACT
The fiscal impact of this debt issuance will be approximately $105.8 million for principal and interest
over 30 years, less capitalized interest; the present value of this expense is about $56.6 million based
on a 4% discount rate. In the next ten years, based on the assumptions, water rates would likely have
to be increased by about 19% or approximately 2% per year in order to meet debt payments and debt
coverage obligations set forth in the attached plan.
Prepared by:
Joseph F. Hsu, Director of Utilities
Chet Anderson, Assistant Director of Water Operations
Bob Tang, Assistant Director of Resources Management
Cary Kalscheuer, Assistant to the Director of Utilities
Reso-Fin9 Plan. doc Financial
Forecast.ppt
r
RESOLUTION NO.
A RESOLUTION OF THE UTILITY BOARD AND CITY COUNCIL OF
- - THE CITY OF AZUSA, APPROVING THE FINANCIAL PLAN FOR THE
NEW WATER TREATMENT PLANT AND OTHER WATER FACILITIES.
WHEREAS, the City of Azusa and Azusa Light & Water desire to comply with Department
of Health Services regulations pertaining to the operation of water treatment facilities; and
WHEREAS, the City of Azusa and Azusa Light & Water have reached a maximum water
_-production capacity of existing water facilities, including pump stations, reservoirs, and the existing
water treatment plant; and
WHEREAS, Azusa Light & Water has designed through its engineering consultants a 16 -million
gallon per day water treatment plant incorporating membrane water filtration technology and estimates the
construction cost of the facility to be anywhere from $35 to $40 million; and
WHEREAS, Azusa Light & Water faces other project obligations including the
construction of reservoirs, transmission lines, and other water pipelines/connections which are
estimated to cost between $10 to $15 million; and
WHEREAS, the City of Azusa and Azusa Light & Water desires to finance the construction of a
new water treatment plant and other water facilities needed to meet future water demand and
environmental regulations.
NOW, THEREFORE, THE UTILITY BOARD AND CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, DOES FIND AND DECLARE THAT:
SECTION 1: Adoption of Financial Plan. The Financial Plan attached to this resolution as
"Exhibit A," to issue debt in the amount of approximately $50 to $55 million,
is hereby adopted.
SECTION 2: Effective Date. This Resolution shall become effective upon its adoption.
SECTION 3: Authorization. That the Mayor shall sign and the City Clerk shall certify
the passage and adoption of this Resolution.
PASSED AND APPROVED on this 23rd' day of October 2006.
Mayor
029
I HEREBY CERTIFY that the foregoing resolution was duly Passed by the City Council of the City of
Azusa at a regular meeting of the Utility Board/City Council thereof on the 23rd day of October 2006,
by the following vote of the City Council:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
Vera Mendoza, City Clerk
APPROVED AS TO FORM:
Best Best & Kreiger, City Attorney
030
v
EXHIBIT A
FINANCIAL PLAN
WATER TREATMENT PLANT AND OTHER WATER FACILITIES
In order to construct a 16 -million gallon per day membrane water treatment plant, a 4 -million
gallon reservoir, and other water facilities including the cost of the 890 reservoirs, the following
financial plan is adopted:
Debt Amount and Instrument
• Issue debt in the amount of approximately $50 to $55 million, subject to final bid
amount/award on the water treatment plant, in the form of tax exempt municipal bonds
Debt Structure
• Issue debt consisting of a fixed rate, stepped wrap financing structure with levelized
payments commencing around the year 2015
Debt Coverage Ratio
• Make commitment to maintain a debt coverage ratio of 160% as a target during the term
of the debt for water rate adjustment purposes
Water Rate Adiustments
• That water rates be adjusted effective July 1, 2007, in the amount of 5%, pursuant to
Proposition 218 requirements
That subsequent biennial rate adjustments be made in order to maintain the debt
coverage ratio commitment
Use of Reserve Funds
• That the interest income on half of all water reserve funds be used for debt repayment
Debt Legal Issuer
• That the legal issuer of this debt be the Azusa Public Financing Authority
031
Water Treatment Plant
Financial Plan
rr October 23, 2006
4 �7Q
AZUSA
L I G H T & W AT E R
1
032
r
$4.0
$3.5
$3.0
$2.5
N
C
$2.0
$1.5
$1.0
$0.5
$00
Debt Service Payments
2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 .2040
Year
031
$6
$5
$4
m
c
o $:3
$2
$1
$0
rypp'1 ION", tipNI tip1p IONC,, ryp'1�' ry00 le Ol lie tipA� ryppp
Years
Combined Debt Service
O Existing Debt ■ New Debt
3
034
Forecasted Rate Adjustments
6%-
5%-
0 Biennial Rate Adjustment
4%
3%
2%
1%
0%
2008 2012 2016 2020 2024 2028 2032 2036 2040
Years
035
Forecast Assumptions
Available FY 2006 Budget Actual
revenues and expenses used as
starting year, adjusted by other
assumptions.
Starting year costs adjusted for
COLAs effective 7/1/2006
Residential growth will be 20/o/year
until 2011, and 0.50/6/year
thereafter
Expenses, generally, will increase
by 3% per year, including costs
for purchased water
Utility will average about $2.5
million/year on capital
improvements related mostly to
system maintenance (not
adjusted annually)
Interest income will be 4%
annually on reserve balance
• Half interest income will be
transferred to City for Capital
Projects
• Other half of interest income will
be used for debt service on 2006
issuance
• Leased water costs of 8% on
retail sales will continue
• Franchise fee of 2% on retail
sales will continue
• Replacement water costs will be
$500,000/year, not offset by same
amount of revenue
• Rates will be increased by 5% in
years 2008 and 2010, then 3%
biennially thereafter
• Miscellaneous revenues will
increase by about 2% per year
r,
J
Forecasted Debt Coverage Ratios
With Rate Adjustments —A—No Rate Adjustment — — Minimum Required
600%
500%
400%
– 300%
w
� 200% Nks
W
y 100% — — —
0
U 0%
a .
o -t00%
-200%-
-3001/6
-400%
2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040
Year
6
037
Forecasted Annual Reserves
With Biennial Rate Adjustments
Nominal Dollars — — Real Dollars
$45
$40
$35
$30
$25
.�
$20-
$15
s10
2007 2010 2013 2016 2019 2022 2025. 2028 2031 2034 2037 2040
Years
7
038.
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL ,Q
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIOS 7 �D feph
I
DATE: OCTOBER 23, 2006
SUBJECT: APPROVAL OF REPAIR WORK TO INSTALL A PERMANENT UNDERGROUND
ELECTRIC SYSTEM ON URGENT BASIS AT 600 WEST GLADSTONE STREET IN
THE CITY OF AZUSA.
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council, authorize the City Manager or
Director of Utilities to award a contract for urgent electrical repair work at 600 West
Gladstone Street pursuant to Azusa Municipal Code (AMC) Section 2-523(a).
BACKGROUND
An underground, three phase, 12kV medium voltage cable that was installed many years ago,
failed during the early morning hours on Monday, October 16, 2006. The location of the
damaged cable is 600 West Gladstone Street. The failed cable provides a feed to a
transformer filch serves electricity to mobile homes located at the same address.
Because the cable was buried, repair work was not easy to do, and in an attempt to restore
electricity to the affected mobile homes, a temporary remedy was installed by the field
operations crew on the same day—after all efforts to fix the damaged underground cable
were exhausted. The temporary energized 12kV cable is currently lying on the ground
protected only by PVC pipes.
This temporary fix is inconsistent with prudent utility construction methods and may pose a
potentially unsafe condition if the pipes/conduit remains on the ground for an extended
period of time. Repair work is therefore imperative. Field crews are aware of the safety
concerns and noted that this is only a temporary repair until such time that a new permanent
conduit can be installed to the transformer.
ME
Staff considers this a maintenance repair pursuant to AMC section 2-511, however, given
safety concerns, staff is recommending that the City Manager or Director of Utilities be
authorized to approve a contract for replacement of underground electric system pursuant to
the alternate purchasing procedure included in AMC Section 2-523(a).
FISCAL IMPACT
At the writing of this report, quotes are being solicited to carryout the needed repairs. It is
estimated at this time that repair costs will not exceed $50,000. If this proves to be the case,
account number 33-40-733-660-7130 includes sufficient funds.
Prepared by:
F. Langit Jr., Senior Electrical Engineer
041
Other Capital Projects
• WTP Transmission lines $1.5 million
• Project W-237 - Water Mains 2.0 million
• Project W-238 — Water Mains 2.0 million
• Cement Pipe Relining 1.5 million
• Street Maint -- Water Mains 2.0 million
TOTAL $9.0 Million
Power Resources Division Monthly Report
■ Power
Resource Update
■ Power Consumption Comparison
■ Wholesale Market Trend
0 Power Resource Budget Update
Power Resource Update
■ Substantially ramped up the activities in preparation for the California
Independent System Operator (CAISO) market design changes. Various
market testing and simulation activities are under way and are expected
to continue through. summer 2007 in preparation of November 1, 2007
new market launch date
■ Continue to participate in Southern California Public Power Authority's
(SCPPA) Request for Proposal (RFP) for power scheduling and
dispatching services. We are looking for alternatives to the current
service provider in case existing service cannot be renewed satisfactorily.
SCPPA's RFP proposals were received on October 13th and review is
under way
■ Continue to participate in Southern California Public Power Authority's
(SCPPA) Request for Proposal (RFP). for renewable energy. SCPPA's
RFP proposals were received on October 16th and review is under way
■ Continue to represent the Southern California munis on selective CAISO
and Federal Energy Regulatory Commission (FERC) matters. Staff is
serving as a member in CAISO technical advisory committee on 2008
Local Capacity Requirement
■ Continue to strategize with Southern California munis for operational
alternatives to the CAISO operations. A whitepaper is under preparation
formulating the strategic alternatives
■ Evaluating the implications of new energy legislations and making
preparations for timely compliance
■ Evaluating the use of natural gas hedging strategies to manage power
costs
■ Completing various annual regulatory and financial reports
w
SEP
.,OCT
NOV
DEC
57.9
54.9
48.0
41.1
36.2
60.8
55.2
63.7
5.780/6
16.00%
-100.00%
-100.00%
-100.000/
PEAK DEMAND N MW
CITY OF AZUSA ENERGY CONSUMPTION COMPARISON
d
ENERGY CONSUMPTION IN MWH
PERCENT
MONTH
FY 05-06
FY 06-07 CHANGE
JUL
25,839
29,287 13-349/6
AUG
26,758
25,912 -3.160/
SEP
22,725
24,376 7.289/6
OCT
21,746
-100.000/
NOV
19.9-4-2--
-100,000%
DEC
20,163
-100-w/.
JAN
20,676
-100.00/.
FEB
18,397
-100.00%
WAR
20,326
-100.000/
APR
100.00%
NAY
21.021
-100POPI/ ----- --
JUN
-100.00
r/.
TOTAL
260,184
79,578 5.829/6
CITY OF AZUSA PEAK DEMAND COMPARISON
PERCENT
MONTH
FY 05-06 FYO&107 CHAN(4i
SEP
.,OCT
NOV
DEC
57.9
54.9
48.0
41.1
36.2
60.8
55.2
63.7
5.780/6
16.00%
-100.00%
-100.00%
-100.000/
PEAK DEMAND N MW
WHOLESALE ELECTRICITY SPOT MARKET
PRICES IN CALIFORNIA
ALL PRICES IN $/MWH
C.J1
AVERAGE
AVERAGE
MONTH
ON PEAK PRICE
OFF PEAK PRICE
AUG 05$76.80
$54.14
-- ...SEP
$64.96.....
OCT 05
-NOV
$89.57
$71.27
-$55.39
05
$64.84
DEC 05
$94.47
$80.52
JAN 06
$59.76
$46.30
FEB 06
$53.77
_ ,$46.34 .
MAR 06
$46.28
$36.28
APR 06
$49.04
$32.41
MAY06
$48.92
$26.27
JUN 06
$59.52
$30.03
JUL 06
$83.86
$43.66
AUG 06
$63.02
$43.84
SEP 06
$43.70
$31.36
ALL PRICES IN $/MWH
C.J1
Power Resource Cost Accounting
FY '06-07'
-- _
(s) -.. (4) -, ._(5)
LONGTERM-' SHORTTERMTRPNSMSSION ANCILLARY SCHEDULING
TOTPL WHOLESALE
NET
MONTH CONTRACTS PURCHASES COSTS SEFYMCE COSTS DISPATCHING
COSTS COSTS RE�EI4UES .� COSTS
,
Jul -06 1,182751521 2,37869535 267,05845
�.Aig-06 � 1,17461023 194335923 24013210
6959148.
2000000 -_ --
27536931 3925633.73 (1963,923.35)1 1,98171038 j
_.— __
2915408 3407255.64 - (1718,72274)1 1,68853290
{
_
Sep -06 1,185 734 80 1 1 860 286 26 240 132 10
20 00000
29154 08 3335 30724 (1648,32240) 1.686,98484--
,686 984ea
Oct-06�
F NO*06 f
_
000 _
.r -..._ 000 --t-
000
000 {
( Deo-08.�
0.001
Jan -07
0.00
000
Feb -07
Mar -07
r
0.00
0.00.
r____
000
0.001
Jun -07
0.00
m6l
TOTAL $3,543,096551— $6,182,340.84 $747,32265 1 $10959148'.
$8584509 $10,668,196.61 ($5,330968.49) $5
337228 12 1
_
1
ii
(1) INCLUDESSCPPALONG TERM CO_NTRPGTS
, [2) INCLUDES ALL SHORTTERM PURCHASES FOR HEDGING, LOAD BALANCING PURPOSES, RAR CAPALRY
? (3) :INCLUDES ALL SHORTTEAMPND LONGTRNJSMSSION CONTRACT COSTS J
!
_
(4) •COSTS CHPRGED BYCALIFORNIA INDEPENDENT SYSTEMOPERATOR FOR SYSTEM RELIABILITY FUNCTIONS .
(5) INCLUDES COSTS FOR SCHEDULING AND DISPATCHING OF ELECTRICfTV
,
r (6) SUMOF(1) THROUGH
L_,. .._... ..._ ...... i._.
___.
i (7) WHOLESALE REVENUES DERIVED FROM SALES OF EXCESS POWER+PTO BENEFITS
DIFFERENCE OF(6)M1D
_
I
INFORMATIONAL ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD
AND AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: OCTOBER 23, 2006
SUBJECT: LEGISLATIVE REPORT
Attachments include: (1) a powerpoint presentation prepared by Bob Tang on some energy
legislation and its potential impacts on Azusa, and (2) a document from Southern California
Public Power Association (SCPPA) on energy and other legislation, including timelines for
some key milestones.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
Attachments:
047
Energy Leg
NEW LAWS -
Update. ppt
TIMELINES.doc
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New Energy Legislations:
• SB 1— Solar Bill
. AB 32 — Greenhouse Gas Reduction
. SB 1368 - Greenhouse Gas Limitation in Resource
Procurement Process
• SB 107 — Renewable Energy
. AB 2021 — Energy Efficiency
4 .4
2
Expected Implications to the City
SB 1—
Imposes requirements on munis to Implement distributed solar programs and assigns financial obligations
of about $3 million over a 10 -year period to the City for the program
AB 32 —
It will eventually impose limits on GHG emissions once the regulations are established in about 18 months.
Compliance cost is unknown at this time but potentially significant starting FY 2010-11
SB 1368 —
It restricts City's ability toprocure long term baseload resources only to those considered environmental
friend )y and potentially at higher costs. Cost and operational impacts are unknown at this time. No
immediate impact expected
SB 107—
It accelerates 20% renewable target from 2017 to 2010 for California Public Utilities Commission (CPUC)
regulated entities. The munis are expected to be under pressure to comply with spirit of the law as well.
Accelerating the compliance date by 7 years may cause the cost of renewable resources to be higher and
increase our renewable power costs
AB 2021—
It will identify through a public process to be conducted by California Energy Commission all achievable
cost-effective energy efficiency programs for implementation by munis and Investor Owned utilities alike.
Results of the programs will be verified by independent third parties. It is expected that the City may be
required to undertake additional energy efficient programs and incur costs to hire independent entities to
audit our programs. Higher cost is expected
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e4 AB 32 (Nunez)
12/31/06 Entities registered with the CA Climate Action Registry by this date and
with a GHG reporting/verification program will not have to alter that
program, except as necessary to ensure compliance
01/01/07 SB 1368 takes effect
01/01/07 ARB to adopt a list of early action emission reduction measures
achievable prior to adopting market-based compliance mechanisms
required by AB 32
02/01/07. PUC, through rulemaking, must establish the GHG emission performance
standard for all baseload generation, with the emissions rate not higher
than the rate for combined -cycle natural gas baseload generation
02/01/07 Enforcement begins immediately after the standard is established
06/01/07 CEC, with PUC, ARB and other stakeholders shall establish GHG
standard for municipal utilities, consistent with the PUC standard for IOUs
06/30/07 ARB must publish a list of early action gas emissions reduction measures
01/01/08 ARB to adopt statewide emissions limit on GHG emissions, including
process and criteria, effective after 2020 unless amended or repealed; by
01/01/10 must adopt and enforce those measures... authorizes ARB to
impose administrative, civil and criminal penalties
01/01/08 ARB to adopt regulations requiring GHG emission sources to monitor and
report their emissions to the ARB
01/01/09 ARB to prepare and adopt a rulemaking scoping plan for rules and
regulations and update the plan every five years
01/01/10 ARB to adopt regulations to implement measures published 06/30/07
01/01/11 ARB must adopt GHG emission limits and measure to achieve the
maximum feasible and cost-effective reductions in GHG, allows the ARB
to adopt "a system of market-based declining annual aggregate emission
limits" or cap and trade, applicable from 01/01/12 to 12/31/20
Additional Considerations
1) The Governor is authorized, in the event of extraordinary
circumstances, catastrophic events or threat of significant economic harm,
to adjust deadlines for a period not to exceed one year
2) ARB must consider environmental justice, best available science,
economics as well as consult with other state agencies with jurisdiction
over utilities
0:51
3) State's retail sellers of electricity must achieve at least 20% of energy
sales from renewables
4) PUC, with the ISO, must consider the effects on system reliability and
costs to consumers
AB 1925 (Blakeslee)
01/01/07 AB 1925 takes effect
11/01/07 CEC must .
1) report to the legislature and recommend how the state can develop
parameters on cost-effective geologic sequestration of industrial carbon
dioxide, meeting with specific groups to formulate recommendations
2) evaluate potential risks from sequestration of carbon dioxide, potential
risks if sequestered carbon dioxide leaks into aquifers and liability from
leakage of sequestered carbon dioxide and potentially responsible parties
3) include the report required by AB 1925 in its 2007 Integrated Energy
Policy report to the legislature .
AB 2021 (Levine)
01/01/07 AB 2021 takes effect
11/01/07 By 11/01/07, and each November 1 every three years thereafter, CEC
with the PUC and municipal utilities in a public process, input from other
stakeholders, to identify potentially achievable cost-effective energy
efficiency savings and establish annual targets for the next 10 years
01/06/08 Within 60 days of adopting annual targets, requires municipal utility to
report targets to the CEC; requires the PUC to base its estimate on most
recent targets of the PUC and municipal utilities
Reporting Each municipal utility must annually report
1) to customers and the CEC, for use in Integrated Energy Policy Report,
on investments in energy efficiency and demand reduction programs
describing programs, expenditures, cost-effectiveness and savings
reductions
2) to the CEC sources of funding energy efficiency and demand reduction
investments and assumptions used to determine cost-effectiveness
Additional Requirements
1) Independent evaluation, measurement and verification of energy
efficiency savings achieved by municipal utility programs
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2) Requires the CEC to provide recommendations to the municipal utility,
the legislature and the Governor if improvements can be made regarding
the level of annual targets or annual targets
AB 2189 (Blakeslee)
01/01/03 When efficiency improvements are undertaken after 01/01/03 to a small
hydroelectric generation facility that already meets the definition of eligible
renewable resource, and if those improvements exceed 30 MW but do not
increase appropriation or diversion of water, then the entire generating
capacity of the facility is an eligible renewable resource.
01/01/07 AB 2189 takes effect
AB 2951 (Goldberg)
01/01/07 AB 2951 takes effect
AB 2951 allows a municipal utility to impose a fee upon a public agency - comparable to
nonpublic users - for any product, commodity or service. Prior to imposing a fee, parties
must meet these timelines:
1) 60 days advance notice, in writing, when fees will be increased during a
public meeting
2) 30 days prior to public meeting, a public agency may request data on
which the increase is based, including a meet and discuss if requested
3)120 day Statute of Limitations from the effective date of the change for
the public agency to challenge. If public agency fails to pay, etc.,
municipal utility can take no action before 120 days has lapsed.
4) Cost of service study at least once every 10 years
Burden of Proof
Municipal utility must prove it has met the procedural requirements above,
as well as the cost of service study
01/01/10 Sunset date
SB 1 (Murray)
01/01/07 SB 1 takes effect
06/01/08 Requires municipal utilities to adopt, implement and finance a solar
initiative program, consistent with the CA Solar initiative adopted by the
PUC for the IOUs, annually thereafter to report to customers, the
legislature and the CEC related to the program and sets $784 M as the
statewide expenditure for municipal utilities
053
SB 107 (Simitian)
01/01/05 Expands the definition of "eligible renewable resource" to include out-of-
state generation if the facility began operating after 01/01/05
01/01/07 SB 107 takes effect
10/31/10 Legislature intends that the PUC and the CEC implement the RPS to
attain a target of 20% of retail sales of electricity from eligible renewables
by 2010. Municipal utilities are excluded from the definition of retail seller.
(Legislative intent language does not have the force and effect of statutory
language, but the courts may consider it if the statutory language is
unclear.)
Reporting While municipal utilities are excluded from the definition of retail seller,
each municipal utility must annually report to the CEC on its mix of eligible
renewable resources and their progress toward meeting their RPS.
Target Municipal utility must have an established annual RPS standard target
comparable to those for the IOUs in order for the CEC to certify eligible
renewable energy resources
Authorizes municipal utilities to sell renewable energy credits
Requires the CEC to use eligibility criteria and conditions (under existing law developed
by the CEC in consultation with the PUC and municipal utilities) for solar energy
systems applicable to the CSI
Authorizes, if the CEC provides funding for a system to verify compliance with the RPS
by retail sellers, to recover all costs from user fees
SB 1210 (Torlakson)
01/01/07 SB 1210 takes effect.
Eminent Domain
SB 1210 prevents issuance of a pre -judgment order of possession
(public entity taking possession of property without prior notice or without
the opportunity for the owner to respond or seek a hearing)
30 days Thirty days after service of a motion for pre -judgment possession,
the record owner of the property must file written opposition. An order of
possession will be granted by the court if the owner does not oppose
within 30 days, the public entity/plaintiff is entitled to take by eminent
domain and the public entity/plaintiff has deposited with the court an
amount meeting the statutory requirements of just compensation
60 days Not less than 60 days after service, the public entity/plaintiff must set the
court hearing on the motion
4 054
S 90 days If the property is occupied, SB 1210 requires service of the motion on the
owner 90 days prior to the hearing. The owner has 30 days to oppose the
motion, which the public entity/plaintiff must reply to in not less than 15
days prior to the hearing. An order of possession will be granted by the
court if the owner does not oppose within 30 days, the public entity/plaintiff
is entitled to take by eminent domain, and has deposited with the court an
amount meeting the statutory requirements of just compensation.
Motion Opposed
The court will grant an order of possession if the public entity/plaintiff is
entitled to take by eminent domain and has deposited with the court an
amount meeting the statutory requirements of just compensation. There is
an overriding need for the public entity/plaintiff to take possession of the
property before final judgment and substantial hardship results if the
motion of possession is denied and the hardship to the public
entity/plaintiff outweighs the hardship to the owner to take possession.
SB 1359 (Torlakson)
14 Calendar Days
Any person planning an excavation must contact the regional notification
center at least 2 working days, and not more than 14 calendar days, prior
to starting an excavation. The regional notification center will provide an
inquiry identification number valid for 28 days and maintain records for no
less than 3 years, and, when within 10 feet of a high priority subsurface
installation, must notify the excavator and meet on site
SB 1368 (Perata)
01/01/07 SB 1368 takes effect
02/01/07 PUC, through rulemaking, must establish the GHG emission performance
standard for all baseload generation, with the emissions rate not higher
than the rate for combined -cycle natural gas baseload generation
02/01/07 Enforcement immediately after the standard is established
06/01/07 CEC, with PUC, ARB and other stakeholders shall establish GHG
standard for municipal utilities, consistent with the PUC standard for IOUs
No IOU or municipal utility may enter into a long-term contract (5 years) unless the
baseload generation complies with the GHG emission performance standard
established by the PUC and CEC.
The CEC must approve municipal utility contracts.
PUC with the ISO must consider the effects on system reliability and costs to
consumers.
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The PUC is also authorized to, through rulemaking, to continue, modify or replace the b
GHG emissions standard applicable to load serving entities ... no requirement to go back
to the legislature to seek further authorization.
There is no sunset date for this bill.
6 056
Azusa Light & Water
Key Accounts Breakfast Meeting
A Z U S A
LIGHT & WATER
November 2, 2006
8:00 a.m.
Azusa Women's Club
1
. Electric System & Projects
. Energy Mandates & Costs
. Electric Rates
. Water System & Challenges
. Water Projects
. Water Rates
2
Electric Utility serves about 15,500 customers
. 12% of customers are Commercial & Industrial
consumers
69% of sales are to Commercial & Industrial
Customers
80% of the electricity supplied by Azusa comes
from long term contracts
System includes 2 substations, 20 circuits, and
about 100 miles of electric lines
3
Electric System Improvements
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Electric Rate Comparison
Comparison of Monthly Electric Bills (in Dollars)
(Small-Medium Commercial/industrial Customers)
ANSA
Pasadena
Burbank
Glendale
Edison
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000
O 50,000 kWh 150 kW
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Edison
Glendale
Burbank
Pasadena
Azusa
$8,311
$6,173
$6,875
$5,104
$5,083
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Edison
Glendale
Burbank
Pasadena
Azusa
$8,311
$6,173
$6,875
$5,104
$5,083
5
Electric Rate Comparison (cont.)
Comparison of Monthly Electric Bills (in Dollars)
(Medium -Large Commercial/Industrial Customers)
AZUSA
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Pasadena
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$12,549
� $11,446
$12,839
$10,007
$8,817
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Annual Cost Impacts
• SB 1 - Solar Mandate $3009000
. AB 107 - Renewables Mandate $1505000
. AB 2021 -Energy Efficiency $50,000
• AB 32 - Green House Gases Unknown
. Localize Power Purchasing $5009000
• Higher Fuel Costs $5009000
• System Maintenance $500,000
Total: $2,000,000 +
Good News About Electric
■ No increase for 2006
■ 5% Rate increase likely July 1, 2007
■ No increase for 2008.
■ 5% rate increase likely July 1, 2009
Good News:
Rate adjustments Modest and Predictable
Keeps your business competitive
. Water Utility Serves about 22,000
customers, and 40% are located in Azusa
. 14% of Water Customers are Commercial
& Industrial customers
. 48% of water sales are to Commercial &
Industrial customers
• System consists of 11 wells, 7 booster
pumps, 10 reservoirs, 243 miles of water
mains and transmission lines
• Water demand increasing
• Water production limited
• Water costs are high
• Environmental regulations
more stringent
• Capital costs for system
maintenance very high
10
Major Water Projects
404 new reservoirs will
add 11.85 million
gallons of storage —
cost >$8 million
16 million gallon/day
Water Treatment
Plant (WTP) — cost
$40 million
11
Other Near -Term Capital Projects
• Transmission lines
• Project W-237 - Water Mains
• Project W-238 - Water Mains
• Cement Pipe Relining
• Street Maint -- Water Mains
$1.5
million
2.0
million
2.0
million
1.5
million
2.0
million
$9.0 Million
12
Water Rate Comparison
2" Meter / 50 ccfs / month
Monthly Average Cost
$0 $50 $100 $150 $200 $250
San Dimas
Claremont
City of Covina
Covina
West Covina
c
d
Q Walnut
Duarte
Rowland Water District
City of Glendora
Cityof Azusa W
13
Water Rate Comparison
4" Meter / 200 ccfs / month
Monthly Average Cost
$0 $100 $200 $300 $400 $500 $600 $700 $800
San Dimas
Claremont
City of Covina
Covina _. , .
West Covina "
c
d
rn
Q Walnut
Duarte
Rowland Water District
Cityof Glendora
Cityof Azusa r
14
Water Rate Comparison
8" Meter / 600 ccfs / month
Monthly Average Cost
$0 $500 $1,000 $1,500 $2,000 $2,500
San Dimas
Claremont
City of Covina
Covina
West Covina
c
d
O1 Walnut
Q
Duarte
Rowland Water District
Cityof Glendora
City of Azusa _
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Projected .Water
Rate Adjustments
6%-
%5%O
5%-
C3Biennial Rate Adjustment
4%
3%--
2/0
Y
I
1%
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N
0%
2008 2012 2016 2020
2024 2028
2032 2036 2040
Years
16
r.
Good News Abut Nater
■ Utility is planning ahead to meet future growth
■ New Water Filter Plant will be able to treat all types of water,
including LOW COST San Gabriel River Water
■ Will meet anticipated water demand and all regulatory
requirements
Good News:
Rate adjustments Modest and Predictable
Keeps your business competitive
17
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