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HomeMy WebLinkAboutAgenda Packet - November 22, 2010 - UB A Aik At1°„ : i A ZUS.A ifGf1T d 'WATEIt AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AZUSA LIGHT & WATER NOVEMBER 22, 2010 729 N. AZUSA AVENUE 6:30 P.M. AZUSA, CA 91702 AZUSA UTILITY BOARD ROBERT GONZALES CHAIRPERSON KEITH HANKS JOSEPH R. ROCHA VICE CHAIRPERSON BOARD MEMBER URIEL E. MACIAS ANGEL CARRILLO BOARD MEMBER BOARD MEMBER 6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board • Call to Order • Pledge to the Flag • Roll Call A. PUBLIC PARTICIPATION 1. (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.) 1 001 B. UTILITIES DIRECTOR COMMENTS C. UTILITY BOARD MEMBER COMMENTS 1. Consideration of a Certificate of Gratitude from the City of Azusa to Mr. Bill Baca, Field Representative for Senator Gloria Romero, to be awarded at the December 6 City Council Meeting. D. CONSENT CALENDAR 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. 1. Minutes. Recommendation: Approve minutes of regular meeting on October 25, 2010 as written. Oct Mins.pdf 2. Azusa Substation Circuit Breakers Maintenance Contract. Recommendation: Approve the selection of Applied Engineering Concepts (AEC) to perform maintenance on seven outdoor vacuum circuit breakers at the Azusa Substation 12kV East in amount not-to-exceed $16,660. L Circuit Brkr Maint Award.pdf 3. New Hydraulic Aerial Service Truck Purchase. Recommendation: 1) Approve the purchase of a new 40' insulating hydraulic aerial service truck for Electric Division; and 2) award the bid to Terex Utilities Incorporated in amount not-to-exceed $ 124,984.40 including tax. Service Truck Purchase.pdf 4. Communication Site Lease Agreement with T-Mobile. Recommendation: 1) Approve the lease of City owned property at the Heck Reservoir on San Gabriel Canyon Road; and 2) authorize the City Manager to enter into and sign the communication lease agreement with T-Mobile. T-Mobile Lease.pdf Lease Agmnt.pdf 2 002 • E. SCHEDULED ITEMS 1. Net Generator Payment Schedule. Recommendation: Approve the following resolution amending the Electric Rules and Regulations with the addition of a Net Generator Payment Schedule to provide financial incentives for customers that install solar panels and generate more electricity than they consume from Azusa Light& Water: A RESOLUTION OF THE AZUSA UTILITY BOARD OF THE CITY OF AZUSA, AMENDING AZUSA LIGHT & WATER'S RULES AND REGULATIONS TO INCLUDE A NET GENERATOR PAYMENT SCHEDULE FOR ELECTRIC UTILITY CUSTOMERS. 4. AB 510 Schedule.pdf 2. Modification of Distributed Solar Program in Compliance with State Senate Bill 1 (SBI). Recommendation: Approve the updated Solar Partnership Program, which includes a 7% reduction in solar rebate level. rte'- tq SPP Update.pdf SPP Application.pdf 3. Advanced Utility Meter Infrastructure and Smarter Grid Plan Development. Recommendation: 1) Approve the Request for Proposals (RFP) scope of work for Advanced Utility Meter Infrastructure and Smarter Grid Plan; and 2) authorize staff to finalize and issue the RFP to solicit proposals. illi AMI&SG RFP.pdf RFP Scope.pdf AMR Findings.pdf 4. Agency Agreement Between Financing Authority for Resource Efficiency in California (FARECaI) and the City of Azusa. Recommendation: 1) Approve the Agency Agreement between FARECa1 and the City of Azusa; and 2) authorize staff to issue a Request for Proposal (RFP) on behalf of FARECaI for auditing, accounting and record-keeping services, in compliance with the agreement. PDF FARECaI Rpt.pdf FARECaI Agrmt.pdf 3 ( 03 • F. STAFF REPORTS/COMMUNICATIONS 1. Electric Vehicle Opportunities and Challenges EV Report.pdf 2. Electric and Water Funds FY 2010-11 First Quarter Report tzi l 1st Qtr Fin Rpt.pdf Electric.pdf Water.pdf 3. California Resource Connections (CRC) Program Reports 1n4 I.t. CRC Project 2010 CRC Program Report.pdf Rpt.pdf G. ADJOURNMENT 1. Adjournment. "In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a city meeting, please contact the City Clerk at 626-812-5229. 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 be made to provide access to the meeting." "In compliance with Government Code Section 54957.5, agenda materials are available for inspection by members of the public at the following locations: Azusa City Clerk's Office - 213 E. Foothill Boulevard, Azusa City Library- 729 N. Dalton Avenue, and Azusa Light& Water-729 N. Azusa Avenue,Azusa CA." 4 004 AZUSA LIGHT R ,PATER CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY,OCTOBER 25,2010—6:30 P.M. The Utility Board/City Council of the City of Azusa met in regular session,at the above date and time,at the Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue,Azusa, California. Chairman Gonzales called the meeting to order. Call to Order ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS,ROCHA ABSENT: BOARD MEMBERS: HANKS ALSO PRESENT: Also Present City Attorney Ferre,City Manager Delach,Assistant City Manager Makshanoff,Director of Utilities Morrow, Assistant to the Director of Utilities Kalscheuer,Director of Customer Care and Solutions Vanca,Assistant Director of Resource Management Lehr, Business Development/Public Benefits Coordinator Reid, Administrative Services Director — Chief Financial Officer Kreimeier, Assistant Director of Electric Operations Langit, Captain Momot, City Clerk Mendoza, Deputy City Clerk Toscano. PUBLIC PARTICIPATION Pub Part None. None UTILITIES DIRECTOR COMMENTS Dir Comments Director of Utilities Morrow provided an update on his San Juan Tour,stated that electric sales down 5%for Dir of Utilities the first quarter,provided information on a decision regarding the City of Los Angeles and Court of Appeals Comments regarding service areas, and noted the new Energy Star Rebates via the Energy Efficiency Program. UTILITY BOARD MEMBER COMMENTS Brd Mbr Cmts Moved by Board Member Carrillo,seconded by Board Member Macias and unanimously*carried to approve a Morrow $100 donation to Berylyn and Brianna Ruiz of Hodge Elementary School for trip to Washington D.C. • Comments The CONSENT CALENDAR consisting of Items D-1 through D-8, were approved by motion of Board Consent Cal Member Carrillo, seconded by Board Member Macias and unanimously*carried. Appvd 1. The minutes of the regular meeting of September 27, 2010, were approved as written. Minutes 005 2. Approval was given to award a Professional Services Agreement to SA Associates, Incorporated, for PSA w/SA the preparation of the City of Azusa's 2010 Urban Water Management Plan Update in amount not-to- Associates exceed$20,000. 3. Approval was given to award the Azusa Light&Water administration building roof maintenance formal Midwest bid to Midwest Roofing Company,Incorporated,in the amount not-to-exceed$50,100 and the Mayor was Roofing Co. authorized to execute a three-year maintenance contract. L&W Roof 4. Approval was given for the extension of current landscape and irrigation maintenance contract with E&L E&L Landscape Services for two years including a 2.14 %cost of living adjustment and to authorize future Landscape adjustment after one year based on a change in the Consumer Price Index not-to-exceed 5% annually. Contract 5. Specifications for a new service truck for Electric Division were approved and authorizations to solicit Specs new formal competitive bids were also approved pursuant to Azusa Municipal Code(AMC)Sec. 2-518-f. Truck Elect 6. Modifications to the Public Benefit - Residential Rebate program were approved through the Supplemental implementation of the Supplemental Residential Rebate Programs. Res Rebate 7. The Long Term Power Purchase Agreement(Wind Power)with Iberdrola Renewables,Incorporated and Pur Agmt Replacement Guaranty Agreement with Iberdrola Holdings,Incorporated were approved and the Mayor Iberdrola was authorized to execute both documents. Renewables 8. Approval was given for the purchase of Itron Meters for commercial and industrial customers from Purchase Itron McAvoy and Markham Engineering and Sales Company in amount not-to-exceed$18,880 including sales Meters tax. SCHEDULED ITEMS Sched Items Electric and Water Rules and Regulations Amendment. Elect/Water Rules Director of Customer Care and Solutions Vanca presented the amendment to the Rules and Regulations noting K. Vanca that currently customers are allowed different forms of prepayment options and have found some do not secure Comments a final payment. Staff is proposing to only allow the prepayment requirement to be met by cash payment,i.e., Prepayment cash, money order, check, debit card or credit card. The second area of Amendment is that"Disputed Bill" Options rules do not clearly set forth steps or a process to be followed. She outlined the proposed three step process. Board Member Macias offered a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, AMENDING Res. 10-C79 THE ESTABLISHMENT OF CREDIT AND DISPUTED BILLS IN AZUSA LIGHT&WATER'S RULES Establish AND REGULATIONS GOVERNING ELECTRIC AND WATER SERVICES. Credit& Disputed Bills Moved by Board Member Macias, seconded by Board Member Carrillo to waive further reading and adopt. Regulations Resolution passed and adopted by the following vote of the Board Members: AYES: BOARD MEMBERS: GONZALES,CARRILLO,MACIAS,ROCHA NOES: BOARD MEMBERS: NONE ABSENT: BOARD MEMBERS: HANKS Landfill Rates/Waste by Rail Update. Landfill Rates Assistant to the Director of Utilities Kalscheuer presented subject item stating that Puente Hills Landfill is C. Kalscheuer scheduled to close in October 2013, and that LA County has purchased the Mesquite gold mine south of Landfill Rates Salton Sea and is converting it to a landfill and developing a rail transfer station near the Puente Hills landfill Waste by Rail to transport waste by rail to the Mesquite landfill. 006 10/25/10 PAGE TWO Options He stated that the cost to dispose of waste by rail will be significantly higher than current rates and presented Levelization the Rate Levelization Plan stating that without levelization Waste by Rail disposal costs were estimated at$75- Plan 80/ton in 2012-13 and Azusa waste disposal costs could increase over$1 million/year(10+%). He stated that LACSD reports that its disposal volume at Puente Hills has decreased dramatically and they are discussing a price discount for large haulers like Athens and discount may be 7%and could reduce charges to Azusa for waste disposal by about$250K; he recommended supporting LACSD discount of Puente Hills gate fees. Support LA Moved by Board Member Macias,seconded by Board Member Carrillo and unanimously*carried to adopt a County Sani motion supporting a discount of landfill rates at Puente Hills Landfill in order to increase the amount of Dist bldg tonnage disposed of at the Puente Hills landfill for the purpose of helping the Los Angeles County Sanitation subsidy Districts build up a subsidy fund to reduce the long term cost of Waste by Rail. Corn Recycle Commercial Recycling Program Request for Proposals(RFP). C. Kalscheuer Assistant to the Director of Utilities Kalscheuer stated with the closure of Puente Hills Landfill there will be Commercial increased disposal costs to businesses and proposed a technical assistance program to set up a source separated Recycling recycling program. The city would obtain a consultant to assist with creation of a Technical Assistance Program Handbook, hold workshops to target top 200 waste generators and encourage them to sign up for a Waste Audit,perform Waste Audits and provide program reports to allow staff to monitor the program. Program is eligible for funding from AB 939 fees paid by commercial waste generators. RFP Moved by Board Member Rocha,seconded by Board Member Macias and unanimously*carried to approve a Approved Request for Proposals(RFP)scope of work for a commercial recycling program and authorize staff to solicit proposals. Residential Approval of Residential Electric Meter Specifications for Automated Meter Reading and Solicitation of Meters Specs Formal Bids. G. Morrow Director of Utilities Morrow presented the Residential Electric Meters detailing the background on the use of Comments automated meter reading meters. He talked about the implementation and statistics regarding the meters i.e. AMR and new customers, cost, etc. He explained a new product called smart meters also called Advanced Metering Automated Infrastructure which allow 2 way communications between meter and utility. He talked about the strategy and Meter Rdg plans to update one day,but plans are to continue AMR. Specs for Moved by Board Member Carrillo,seconded by Board Member Macias and unanimously*carried to approve AMR specifications for residential electric meters for Automated Meter Reading(AMR)and authorize staff to solicit Approved formal bids for 800 new AMR meters. Staff Rpts STAFF REPORTS/COMMUNICATIONS New CNG tr Performance of New CNG Bucket Truck Update F. Langit Assistant Director of Electric Operations Langit provided information regarding problems with the 55' aerial Comments bucket truck which included warranty repairs on several occasions, limited use due to recall notices for the Truck CNG engine, and malfunctions of the boom/lift. The Utility personnel has been meeting with the truck Problems provider, is seeking to address problems, is requesting reimbursement for rental expenses and is considering legal recourse if problems continue. This was an information item. New Banner Street Banner Policy Update Policy G. Morrow Director of Utilities Morrow presented the updated specifications for banners hung by the Department at three Presented new designated locations. Lengthy discussion was held regarding the issue and suggestions were made regarding Policy additional locations; staff noted that locations need to be built separate from power lines, special poles. Director of Utilities Morrow advised that he would look into suggested options. 007 10/25/10 PAGE THREE APPA American Public Power Association (APPA)2011 Legislative Rally Leg Rally Feb 28th— Director of Utilities Morrow advised that he will be attending the American Public Power Association 2011 Mach 3, 2011 Legislative Rally in Washington,DC from February 28-March 3,2011. He stated that if any Board Member is interested in attending they could contact Liza Cawte. Adjourn Moved by Board Member Carrillo, seconded by Board Member Gonzales and unanimously* carried to adjourn. TIME OF ADJOURNMENT: 7:29 P.M. SECRETARY NEXT RESOLUTION NO. 10-059. *Indicates Hanks absent. 10/25/10 PAGE THREE 008 AZ LJSA .nr t srro CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: AWARD CONTRACT FOR PERFORMING MAINTENANCE ON SEVEN OUTDOOR VACUUM CIRCUIT BREAKERS AT THE AZUSA SUBSTATION 12KV EAST BUS RECOMMENDATION It is recommended that the Utility Board approve the selection of Applied Engineering Concepts (AEC) at a cost not-to-exceed $16,660 to perform maintenance on seven outdoor vacuum circuit breakers at the Azusa Substation 12kV East. BACKGROUND In the electric distribution substation, circuit breakers are one of the main components used in feeder protection. They are used as an electric "gate" to allow or disrupt the flow of electricity on a feeder. Circuit breakers are normally in a closed position. When there is an electrical fault on a circuit, electronic sensor/relay will trigger the circuit breaker to open and disrupt the flow of the electrical current in order to protect lives and properties. Much like an insurance policy, unless there is a fault, circuit breakers are there but are rarely triggered. The manufacturer's recommendation for circuit breaker maintenance interval is three years or 3,000 operations, whichever occurs first. These seven circuit breakers on the 12kV east bus at Azusa Substation were tested and maintained in December 2005 and are due to be re-tested and re-inspected. It will require approximately 7 working days to complete this project. The scope of work, based on guidelines by the International Electrical Testing Association (NETA), was used to solicit proposals from specialized contractors. Subsequently, staff received only one price quote from Applied Engineering Concept (AEC) in the amount of$16,660 for the circuit breakers preventive maintenance work. 009 Circuit Breaker—Preventive Maintenance November 22, 2010 Page 2 The sole bidder, AEC, has previously performed the same type of work with different circuit breakers at Azusa Substation, most recently in May 2010. In that project, AEC was the low bidder of three bidders with an average price per circuit breaker of$2380. In comparison, the average price per circuit breaker bid by AEC for this project is also $2380. Thus, staff is comfortable that AEC has submitted a competitive bid and have determined that the sole bid of AEC has met all requirements for this work and is thereby recommended for contract award. Staff will prepare the Maintenance Agreement to be entered by AEC and the City. FISCAL IMPACT Adequate funds are included in Electric Fund Capital Improvement Program budget for Fiscal Year 2010-2011 under project number 73010-A. Prepared by: Hien K. Vuong— Electrical Engineer 010 A7_ U r:nr• waSrry A CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MOROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: APPROVE THE PURCHASE OF A NEW 40' INSULATING HYDRAULIC AERIAL SERVICE TRUCK AND AWARD THE BID TO TEREX UTILITIES INCORPORATED. RECOMMENDATION It is recommended that the Azusa Utility Board 1) Approve the purchase of a new 40' Insulating Hydraulic, Aerial Service Truck and 2) Award the bid to Terex Utilities Incorporated, in the amount no- to-exceed $ 124,984.40 including tax. BACKGROUND During the regular Utility Board meeting held on October 25, 2010, the Azusa Utility Board authorized staff to solicit formal bids in order to purchase a new service truck for use by the Electric Division. Bids were solicited and there were two bids received which were publicly opened on November 10, 2010 at the office of the City Clerk. The bids inclusive of tax are: Company/Vendor Bid Amount 1) Terex Utilities, Inc. $124,984.40 2) Altec Industries, Inc. $126,804.05 Staff reviewed the lowest bid by Terex Utilities and determined that it is in compliance with the • approved new service truck specifications and requirements. FISCAL IMPACT This purchase of a new service truck is budgeted this fiscal year under the Capital Outlay and budgeted funds are available in the Electric Operations Budget Account 33-40-733-920-7135. Prepared by: Dan Kjar - Electric Operations Supervisor F. Langit - Assistant Director—Electric Operations. 011 AZ LI SA cI1 a w'411.1 CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZ A UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: NOVEMBER 22, 2010 SUBJECT: APPROVE THE LEASE OF CITY OWNED PROPERTY AT THE HECK RESERVOIR SITE ON SAN GABRIEL CANYON ROAD TO T-MOBILE COMPANY AND AUTHORIZE THE CITY MANAGER TO ENTER INTO AND SIGN THE COMMUNICATION SITE LEASE AGREEMENT. RECOMMENDATION It is recommended that the Azusa Utility Board (1) Approve the lease of City owned property at the Heck Reservoir on San Gabriel Canyon Road; and (2) Authorize the City Manager to enter into and sign the Communication Site Lease Agreement subject to final review and approval by legal counsel. BACKGROUND T-Mobile Company, a cellular communication service provider, desires to construct a cell tower at the Heck Reservoir site owned by Azusa Light & Water. T-Mobile is concurrently seeking approval from the City's Planning Division regarding this project. As part of project approval process at the City's Planning Division, the Applicant (T-Mobile) will have to demonstrate that they have secured, acquired or leased the land wherein the proposed cell tower will be constructed. As a result, T-Mobile wants to lease 694 square feet of land at the Heck Reservoir, adjacent to the existing Verizon cell tower, for purposes of constructing the cell tower. The major deal points contained in the T-Mobile Communication Site Lease Agreement are as follows: • Initial 5 year lease term; • $2,500 per month lease with 3% annual escalation payment; and • Option to renew lease for up to three additional five year terms (20 year maximum term). 012 T-Mobile Lease Agreement November 22, 2010 Page 2 The attached Communication Site Lease Agreement was prepared by the utility's legal counsel, reviewed by T-Mobile and is in substantially final form. The terms, conditions and price are similar when compared with prior cell tower siting agreements entered into by the City. It is also consistent with a lease signed a few years ago for an adjacent Verizon cell tower at the reservoir site. FISCAL IMPACT Approval and signing of the Lease Agreement will result in additional revenue stream to Azusa Light & Water consisting of the lease payments and additional electricity sales from operating the cell tower. As noted earlier, annual revenues will be $30,000 plus escalation. Prepared by: F. Langit Jr. —Assistant Director of Electric Operations 013 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire CITY OF AZUSA COMMUNICATIONS SITE LEASE AGREEMENT WITH T-MOBILE 1. Parties and Date. This Communications Site Lease Agreement ("Lease") is made and entered into this day of , 2010, by and between the City of Azusa, a California municipal corporation (hereinafter referred to as "Lessor"), with its principal place of business at 213 East Foothill, Azusa, CA 91702-1295, and T-Mobile West Corporation, a Delaware corporation (hereinafter referred to as "Lessee"), with its principal place of business at 2008 McGaw Avenue, Irvine, CA 92614. Lessor and Lessee are sometimes collectively referred to herein as the "Parties" or individually as the "Party." 2. Recitals. 2.1 Description of Leased Land. Lessor represents and warrants that it is the owner of a piece of land generally located at 1964 N. San Gabriel Canyon Road, Azusa, County of Los Angeles, California, APN 8684-008-904, as more particularly described in Exhibit "A-1" attached hereto and made a part hereof ("Lessor Property"). Pursuant to this Lease, Lessor hereby leases to Lessee, and Lessee leases from Lessor an approximately three hundred seventy- nine (379) square foot parcel of the Lessor Property, measuring fifteen feet, two inches (15'-2") by twenty-five feet (25'), for Lessee's equipment (the "Ground Space"), plus approximately three hundred fifteen (315) square feet for Lessee's tower together with an aerial easement above those portions of the Lessor Property over which the antennas, related appurtenances, and branches of Lessee's antenna support structure may extend, plus a five foot (5') wide right-of- way for underground coax and conduit to connect the equipment and tower areas, together with the non-exclusive right for ingress and egress, seven (7) days a week, twenty-four (24) hours a day for the purpose of installation and maintenance of the demised premises over, under or along a five foot (5') wide pedestrian right-of-way and twelve foot (12') wide vehicular right-of-way extending from the nearest public right-of-way, that being San Gabriel Canyon Road, to the demised premises, together with exclusive five foot (5') wide rights-of-way for underground utility wires, conduit and pipe from the Ground Space to existing utility points of connection, all of which are more particularly described and depicted on Exhibit "A" attached hereto and incorporated herein by reference. The Ground Space and all aerial, access and utility easements shall collectively be referred to as the "Leased Land." The Leased Land shall also include the right and sufficient space for the installation and maintenance of wires, cables, conduits and pipes generally as shown in Exhibit "A" and to install, maintain, replace and repair wires, cables, conduits and pipes from the Premises to the nearest appropriate utilities provider if Lessor is not providing adequate power and telephone access in the Leased Land. All such rights shall vest in Lessee for the entire term of this Lease. 2.2 Purpose of Lease. Lessor desires to allow Lessee to use the Leased Land and Lessee desires to use the Leased Land in exchange for due and adequate consideration, the receipt and sufficiency of which are acknowledged by the Parties and further described and set forth in this Lease. The purpose of the Lease is to allow Lessee to construct and operate a mobile/wireless communications facility of no greater than sixty feet (60') in height on the Leased Land to provide communication services to its customers. 1 014 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3. Terms. 3.1 Leased Land. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Leased Land, on the terms hereinafter set forth, for the purpose of constructing, maintaining, repairing, replacing, enhancing, operating and removing the Lessee Facilities, as defined below, to provide communication services to its customers. 3.2 Term. The initial term of this Lease shall be for five (5) years, commencing upon the earlier of: (a): (i) the commencement of Lessee's construction of the Lessee Facilities or (ii) the first day of the month following the month in which Lessee receives issuance of a local building permit allowing Lessee to construct its Lessee Facilities on the Leased Land, or (b) twelve (12) months from the date on which this Lease has been fully executed by the Parties, whichever is earlier("Commencement Date"). This Lease may be terminated in accordance with the provisions of Section 3.10 herein. 3.3. Option to Renew. This Lease shall automatically be extended on the terms and conditions herein contained for three (3) additional five (5) year periods (each a "Renewal Term") unless Lessee notifies Lessor of Lessee's election not to renew this Lease for the next Renewal Term by giving written notice to Lessor of such intent at least six (6) months prior to the expiration of the preceding term. Such notice shall be deemed given upon the mailing of such notice to Lessor. 3.3.1 Governmental Approvals. Prior to the Commencement Date, and during the term of this Lease, Lessor agrees to cooperate with Lessee in obtaining, at Lessee's expense, all licenses and permits or authorizations required for Lessee's use of the Premises (as defined below) from all applicable government and/or regulatory entities (including, without limitation, zoning and land use authorities, and the Federal Communications Commission ("FCC") ("Governmental Approvals"), including all land use and zoning permit applications, and Lessor agrees to cooperate with and to allow Lessee, at no cost to Lessor, to obtain a title report, zoning approvals and variances, land-use permits, and Lessor expressly grants to Lessee a right of access to the Property to perform surveys, soils tests, and other engineering procedures or environmental investigations on the Property necessary to determine that Lessee's use of the Premises will be compatible with Lessee's engineering specifications, system design, operations and Governmental Approvals. Notwithstanding the foregoing, Lessee may not change the zoning classification of the Property without first obtaining Lessor's written consent, which consent may be granted or denied in Lessor's discretion, and nothing herein shall be interpreted to require Lessor to process any permits or approvals other than as would normally be done by Landlord as a governmental entity. 3.4 Facilities; Utilities; Access. 3.4.1 Subject to the provisions of this Lease, Lessee has the right to construct, maintain, repair, replace, enhance, operate and remove on the Leased Land wireless telecommunications facilities, such as an antenna tower or pole and foundation, utility lines, transmission lines, air conditioned equipment shelter(s), electronic equipment, radio transmitting, amplifying and receiving antennas, a generator and power source, emergency power backup batteries and all supporting equipment and structures thereto (collectively, the "Lessee Facilities"). In connection therewith, Lessee has the right to do all work necessary to prepare, maintain and alter the Leased Land for Lessee's business operations and to install transmission lines connecting the antennas to the transmitters and receivers. All of Lessee's construction and installation work shall be 2 015 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire performed at Lessee's sole cost and expense, and in a good and workmanlike manner. Title to the Lessee Facilities shall be held by Lessee. All Lessee Facilities shall remain Lessee's personal property and are not fixtures and Lessor waives any and all lien rights it may have now or in the future in relation thereto whether statutory or otherwise. Upon the expiration or earlier termination of this Lease, Lessee shall remove all Lessee Facilities, at its sole expense, and shall repair any damage to the Lessor Property or Leased Land caused by such removal in accordance with Sections 3.13 and 3.14 below. Lessee shall be responsible, at its sole cost and expense, for compliance with any and all legal and regulatory requirements which may apply to the construction, maintenance, repair, enhancement, operation and removal of said facilities. For example, and not by way of limitation, there may be air quality and related requirements which apply to the Lessee Facilities and operations contemplated herein. Notwithstanding the foregoing however, nothing herein shall obligate Lessee to remedy any prior existing condition of non-compliance with applicable laws, rules, ordinances or regulations. Any enhancement, expansion of the Lessee Facilities which is different than the description set forth in Exhibit "A" shall be subject to the prior written approval of Lessor which consent shall not be unreasonably withheld unless otherwise permitted under Section 3.11 below without Lessor's consent. 3.4.2 Lessee shall pay for the electricity it consumes in its operations at the rate charged by the servicing utility company. It is hereby acknowledged that the servicing utility company from which Lessee shall draw separate utility services for electricity and water service (if applicable) shall be Lessor. Lessor agrees to sign such documents or easements as may be required to provide such other service to the Leased Land, including the grant to Lessee or to the servicing utility company at no cost to the Lessee of an easement in, over, across or through the Leased Land as required, at such location acceptable to Lessor and the servicing utility company. 3.4.3 Lessee, Lessee's employees, agents, subcontractors, lenders and invitees shall have access to the Leased Land without notice to Lessor twenty-four (24) hours a day, seven (7) days a week, at no charge. Lessor grants to Lessee, and its agents, employees, contractors, guests and invitees, a non-exclusive right and easement for pedestrian and vehicular ingress and egress across the Lessor Property in accordance with Section 2.1 above. 3.4.4 Lessee, at its expense, may use any and all appropriate means of restricting access to the Lessee Facilities, including, without limitation, the construction of a fence subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed. Lessor shall have access, through a key or other means, through such fence 24 hours a day, seven days a week, at no charge but shall not use such access to interfere with Lessee's operations in any manner. 3.5 Use. The Leased Land may be used for any activity directly connected with the provision of telecommunications services and the operation of the Lessee Facilities. Lessee's use of the Leased Land shall comply with all applicable laws, ordinances and regulations related to Lessee's use of the Leased Land, as described herein. If technically feasible, Lessor may Lease the Lessor Property (other than the Leased Land) to other communication users, provided that such users do not interfere with Lessee's communications operations, as provided in Section 3.12 herein or otherwise violate the terms of this Lease. Similarly, Lessee shall not interfere with the communications operations of any other persons of entities who may have equipment installed on the Property which pre-dates Lessee's, as discussed in more detail in Section 3.12. 3 016 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3.6 Consideration. As consideration for the issuance of this Lease, Lessee shall pay to Lessor the annual amount of Thirty Thousand and NO/100 Dollars ($30,000.00), to be paid in equal monthly installments of Two Thousand Five Hundred and NO/100 Dollars ($2,500.00) ("Rent"), on the first day of the month, in advance provided that the first installment of Rent shall be due and payable within twenty (20) days of the Commencement Date. 3.7 Future Consideration. The annual consideration shall increased by three percent (3%) each year throughout the term of this Lease and any extensions or renewals thereof, effective on each anniversary of the Commencement Date. 3.8 Rental Payments. All Rent and other payments shall be made payable to Lessor at the following address: City of Azusa, Azusa Light & Water, Attention: Director Of Utilities, 729 North Azusa Avenue, Azusa, CA 91702. [OR] All Rent and other payments shall be made to Lessor by automatic electronic funds transfer. 3.9 Late Payment Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of consideration and other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, if any installment of consideration or any other sum due from Lessee shall not be received by Lessor within twenty (20) days after such amount is overdue, Lessee shall pay to Lessor a late charge equal to ten percent (10%) of such overdue amount, as well as interest on the outstanding amount which shall accrue at the rate of ten percent (10%) per annum calculated as of the date due. In no event shall the late charge exceed the maximum allowable by law. The parties hereby agree that such late charge will automatically accrue by reason of any late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's default with respect to such overdue amount, nor shall it prevent Lessor from exercising any of the other rights and remedies granted hereunder. 3.10 Termination. 3.10.1 Termination by Lessor. This Lease may be terminated by Lessor upon a default by Lessee of any covenant, condition, or term hereof, which default is not cured within thirty (30) days of receipt of written notice of default, or if such default cannot be cured within the thirty (30) day period, then such time as reasonably necessary so long as the defaulting party commences such cure within the thirty (30) day period and diligently prosecutes such cure thereafter. Notwithstanding the foregoing, late payment is cause for termination of the Lease, at the sole discretion of Lessor, unless payment is made along with all applicable penalties and interest within twenty (20) days after Lessor provides written notice of default under this provision. 3.10.2 Termination by Lessee. This Lease may also be terminated upon sixty (60) days prior written notice if Lessee is unable to occupy or utilize the Leased Land due to a ruling or directive of the FCC or other governmental agency, or if any certificate, permit or other approval required by Lessee to operate the Lessee Facilities is not obtained or is rejected, terminated or lapses, which cannot be reasonably corrected by Lessee, including but not limited to, a take back of channels or roadways or change in frequencies, or if Lessee determines, in its sole discretion, that the Leased Land is not appropriate for its operations for economic, environmental or technological reasons, including signal strength or interference. In the event of a termination 4 017 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire pursuant to said economic, reasons, Lessee shall pay to Lessor an additional sum of money as liquidated damages equal to six (6) months of the then current monthly Rent. In the event of a termination pursuant to said environmental or technological reasons, not caused by Lessor's breach of this Lease, Lessee shall pay to Lessor an additional sum of money as liquidated damages equal to three (3) months of the then current monthly Rent. 3.10.3 Termination Due to Casualty. In the event of damage by fire or other casualty to the Leased Land that cannot reasonably be expected to be repaired within forty-five (45) days following same or, if the Lessor Property is damaged by fire or other casualty so that such damage may reasonably be expected to disrupt Lessee's operations at the Leased Land for more than forty-five (45) days, then Lessee may at any time following such fire or other casualty, provided Lessor has not completed the restoration required to permit Lessee to resume its operation at the Leased Land, terminate this Lease upon fifteen (15) days written notice to Lessor. Any such notice of termination shall cause this Lease to expire with the same force and effect as though the date set forth in such notice were the date originally set as the expiration date of this Lease and the Parties shall make an appropriate adjustment, as of such termination date, with respect to payments due to the other under this Lease. Notwithstanding the foregoing, all rental shall abate during the period of repair following such fire or other casualty. 3.11 Improvements. No subsequent improvements or modifications to the Lessee Facilities shall be constructed and/or maintained on the Leased Land without Lessor's prior written approval of plans and specifications (the "Plans"), including the aesthetic and visual nature of the Lessee Facilities, which approval shall not be unreasonably withheld, conditioned or delayed. In the event that Lessor does not either: (i) object to the Plans in writing; or (ii) furnish Lessee with written approval, within fifteen (15) days of the date of submission of the Plans, Lessor will be deemed to have approved them. The aesthetic and visual nature of the Lessee Facilities, including color and composition, shall compliment and blend into the Lessor Property and surrounding community to the extent reasonably feasible. Lessee shall not change the existing grade or otherwise modify the topography of the Leased Land or the Lessor Property affected by this Lease without prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Lessor's prior approval shall not be required for modifications to Lessee's equipment of a "like-kind" or "substantially-similar" nature or for equipment contained within the interior of the ground based portion of the enclosed Premises. 3.12 Interference. 3.12.1 Lessee shall operate the Lessee Facilities in a manner that will not cause measurable interference to the equipment of Lessor, or Lessor's use of the Lessor Property, as well as to the equipment of other lessees of the Lessor Property, or other lessees' use of the Lessor Property, provided that the installations of Lessor and such other lessees and such uses predate that of the Lessee Facilities. Except in emergencies agreed to by Lessor, Lessee shall not perform or have performed any tests, construction, installation, operation, maintenance or repair activities on the Leased Land or the Lessor Property which will unreasonably interfere with Lessor's quiet enjoyment of the Lessor Property. All operations by Lessee shall be in compliance with all Federal Communications Commission ("FCC") requirements, as well as other applicable Federal, State and local laws, rules and regulations, as the same specifically apply to Lessee's use of the Leased Land, as described herein. In the event measurable interference occurs, and after Lessor has notified Lessee of such interference in writing, Lessee 5 018 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire agrees to take all reasonable steps necessary to eliminate such interference promptly. If Lessee cannot eliminate such interference, Lessor shall have the right to terminate this Lease pursuant to Section 3.10. Lessor agrees that Lessor and/or any other lessees of the Lessor Property who currently have or in the future take possession of all or a portion of the Lessor Property or have rights therein will be permitted to install only such equipment and improvements that is of the type and/or frequency which will not cause measurable interference with the Lessee Facilities. Prohibited interference shall be deemed a material breach by the interfering party, who shall, upon written notice from the other, be responsible for terminating said interference. In the event any such interference does not cease promptly, the parties acknowledge that continuing interference may cause irreparable injury and, therefore, the injured party shall have the right, in addition to any other rights that it may have at law or in equity, to bring a court action to enjoin such interference or to terminate this Lease immediately upon written notice. 3.12.2 There is reserved to Lessor the right to construct or reconstruct facilities and appurtenances in, upon, over, under, across and along the Lessor Property, and in connection therewith, the right to grant or convey to others rights and interest to the Lessor Property; provided such rights and interests do not cause interference with Lessee's operations as described in Section 3.12.1 above or otherwise violate the terms and conditions of this Lease. 3.13 Removal of Improvements. All structures and/or other improvements placed on the Leased Land or the Lessor Property by Lessee shall be the personal property of Lessee and shall be removed by Lessee from the Leased Land or the Lessor Property within ninety (90) calendar days following the expiration or earlier termination of the Lease. Lessor may keep, or dispose of, at Lessee's expense, any real or personal property not so removed. Lessor shall be the sole owner of improvements remaining on the Leased Land or the Lessor Property after said ninety(90) day period. 3.14 Vacating the Property. At the expiration or at any sooner termination of this Lease, Lessee shall quit and surrender possession of the Leased Land and the Lessor Property, to Lessor in as good order and condition as they were delivered to Lessee, reasonable wear and tear, casualty and damage by the elements excepted; provided, however, that Lessee shall have the right to remove the Lessee Facilities pursuant to Section 3.13 above. Lessee agrees to pay any costs reasonably incurred by Lessor if Lessee fails to comply with this provision. To this end, if Lessee shall not restore the Leased Land and the Lessor Property as required, Lessor may proceed with such work, at Lessee's sole cost and expense and/or assume title and ownership to the Lessee Facilities in their as is and where is condition. 3.15 Maintenance. Lessee shall, at its sole cost and expense, keep the Leased Land free of noxious weeds and trash, and in good and proper condition in compliance with all applicable laws and regulations concerning the use of the Leased Land. Lessee shall also not cause trash or other debris to be placed on the Lessor Property by Lessee. In addition, Lessee shall keep the Leased Land in good condition, reasonable wear and tear and casualty excepted. Lessee shall make any repairs to the Leased Land or the Lessor Property caused by or incident to Lessee's use of the Leased Land or implementation of this Lease but shall not be required to remedy any prior existing condition of non-compliance with applicable laws, rules, ordinances or regulations related thereto. 019 6 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3.16 Hazardous Substances. 3.16.1 For purposes of this Lease, the term "Hazardous Substances" means: (a) any substance, products, waste, or other material of any nature whatsoever which is or becomes listed, regulated, or addressed pursuant to any federal, state, or local statute, law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Substance, now or at any time hereinafter in effect; (b) any substance, product, waste or other material of any nature whatsoever which may give rise to liability under any of the above statutes or under any statutory or common law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under any reported decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and petroleum products which are contained within regularly operated motor vehicles and other than petroleum that may be contained in the generator installed by Lessee; and (d) asbestos. 3.16.2 Lessor warrants and represents that, to its knowledge as of the date hereof, there are no Hazardous Substances in or about the Leased Land and the Lessor Property, the improvements thereon do not violate any applicable Federal, State, or local statutes, ordinances, regulations, rules or other requirements, and there is not presently pending any proceeding before any Federal, State or local tribunal or agency, the outcome of which would diminish or preclude Lessee's use of the Leased Land as permitted under the terms of this Lease. Except as otherwise expressly set forth herein, Lessor makes no warranty or representation whatsoever concerning the Leased Land or the Lessor Property, including without limitation, the condition, fitness or utility for any purpose thereof, of any improvements thereto with applicable laws, ordinances or governmental regulations. Unless otherwise expressly set forth herein, Lessee's right to use the Leased Land and the Lessor Property is strictly on an "as is" basis with all faults. Lessor hereby disclaims all other warranties whatsoever, express or implied, the condition of the soil (or water), geology, and any warranty of merchantability or habitability or fitness for a particular purpose. 3.16.3 Lessor will be responsible for all obligations of compliance with any and all environmental and industrial hygiene laws, including any regulations, guidelines, standards, or policies of any governmental authorities regulating or imposing standards of liability or standards of conduct with regard to any environmental or industrial hygiene conditions or concerns as may now or at any time hereafter be in effect, that are or were in any way related to activity now conducted in, on, or in any way related to the Property, unless such conditions or concerns are caused by the activities of the Lessee. Lessor shall hold Lessee harmless and indemnify Lessee from and assume all duties, responsibility and liability at Lessor's sole cost and expense, for all duties, responsibilities, and liability (for payment of penalties, sanctions, forfeitures, losses, costs, or damages) and for responding to any action, notice, claim, order, summons, citation, directive, litigation, investigation or proceeding which is in any way related to: (i) failure to comply with any environmental or industrial hygiene law, including without limitation any regulations, guidelines, standards, or policies of any governmental authorities regulating or imposing standards of liability or standards of conduct with regard to any environmental or industrial hygiene concerns or conditions as may now or at any time hereafter be in effect, unless such compliance results from conditions caused by the Lessee; and (ii) any environmental or industrial hygiene conditions arising out of or in any way related to the condition of the Property or activities conducted thereon, unless such environmental conditions are caused by the Lessee. 7 020 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3.16.4 Except as otherwise specifically permitted under the terms of this Lease, Lessee shall not use, create, generate, store, deposit, dispose of or allow any Hazardous Substances on, under, about or within the Leased Land or the Lessor Property in violation of any federal, state, or local law, rule, regulation, order, decree or other requirement referenced in sub-section 3.16.1. Storage batteries for emergency power, fuel for temporary generators during power outages, and ordinary paints, solvents and similar substances commonly used in small quantities and necessary for maintenance of the Lessee Facilities are excepted from the preceding prohibition of use by Lessee of Hazardous Substances on the Leased Land, so long as Lessee complies with all applicable federal, state and local laws rules and regulations governing the use of such items. 3.16.5 No permanent underground or above ground storage tanks shall be installed on the Leased Land or the Lessor Property. 3.16.6 Lessee shall, within a reasonable time, either prior to the release by Lessee, or following the discovery by Lessee, of the presence of, or believed presence of, a Hazardous Substance as defined herein, give written notice to Lessor in the event that Lessee knows or has reasonable cause to believe that any release of Hazardous Substance has come or will come to be located on, under, about or within the Leased Land or the Lessor Property. The failure to disclose in a timely manner the release of a Hazardous Substance, including but not limited to, an amount which is required to be reported to a state or local agency pursuant to law (e.g., California's Hazardous Materials Storage and Emergency Response Act, Health and Safety Code Section 25550 et seq.) may subject Lessee to a default under this Lease in addition to actual damages and other remedies provided by law. Lessee shall immediately clean up and completely remove all Hazardous Substances placed by Lessee on, under, about or within the Leased Land or the Lessor Property, in a manner that is in all respects safe and in accordance with all applicable laws, rules, regulations; otherwise, Lessor shall immediately clean up and completely remove all Hazardous Substances not placed by Lessee on, under, about or within the Leased Land or the Lessor Property, in a manner that is in all respects safe and in accordance with all applicable laws, rules, regulations. 3.16.7 In the event Hazardous Substances are discovered by Lessee, Lessee shall disclose to Lessor the specific information regarding Lessee's discovery of any Hazardous Substances placed on, under, about or within the Leased Land or the Lessor Property and, if caused by Lessee, provide written documentation of its safe and legal disposal. 3.16.8 Breach of any of these covenants, terms, and conditions shall give Lessor the right, after the giving of written notice and following the expiration of the applicable cure period, to terminate this Lease or to shut down Lessee's operations thereon, at the sole discretion of Lessor. In either case, Lessee will continue to be liable under this Lease to remove and mitigate all Hazardous Substances released or otherwise caused by Lessee on, under, about or within the Leased Land or the Lessor Property. Lessee shall be responsible for, and bear the entire cost of removal and disposal of, all Hazardous Substances released into the Leased Land and the Lessor Property by Lessee during Lessee's period of use and possession of the Leased Land or the Lessor Property. Lessor may pass through to Lessee any and all costs of removal and mitigation or decontamination, on or off the Leased Land or the Lessor Property, necessitated by the release of such Hazardous Substances on the Leased Land or the Lessor Property by Lessee should Lessee not satisfactorily remove the same. Upon termination of this Lease, Lessee is required, in accordance with all laws, to remove from the Leased Land or the Lessor Property any equipment 8 021 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire or improvements placed on the Leased Land or the Lessor Property by Lessee that could be contaminated by Hazardous Substances. 3.16.9 Lessee shall defend, indemnify and hold Lessor and its officials, officers, employees, contractors and agents free and harmless from any and all claims, liability, injury, damage, costs, or expenses (including, without limitation, the cost of attorney's fees) to the extent caused by any release of any Hazardous Substances by the Lessee or its partners, affiliates, agents, officials, officers, contractors or employees on the Lessor Property or Leased Land. 3.16.10 Additionally, Lessee shall defend, indemnify, and hold harmless the Lessor and its officers, employees, and agents from and against any claim, action, or proceeding by a third party against Lessor, its officers, employees, or agents to attack, set aside, void, or annul this Agreement or any approval or condition of approval of the Lessor concerning this Lease, including but not limited to any approval or condition of approval of the City Council, Planning Commission, or Community Development Department. Lessor shall promptly notify Lessee of any such claim, action, or proceeding concerning this Lease and Lessor shall cooperate fully in the defense of the matter. 3.17 Intentionally omitted. 3.18 Entry by Lessor. Lessor or its officers, employees, contractors, or agents shall have the right to go upon and inspect the Leased Land and the operations conducted thereon to assure compliance with the requirements herein stated. Except in the case of an emergency, Lessor shall provide Lessee at least five (5) business days' notice of Lessor's desire to so inspect the Leased Land and shall allow a representative of Lessee to accompany Lessor on such inspection. This inspection may include taking samples for chemical analysis of substances and materials present and/or testing soils on the Leased Land and taking photographs, so long as such inspection does not adversely affect the operation of any of the Lessee Facilities. 3.19 Previous Leases. In the event there is an existing Lease between Lessee (or its predecessor-in-interest) and Lessor(or its predecessor-in-interest) covering the Leased Land, it is agreed and understood that this Lease shall cancel, supersede and terminate said prior Lease as of the effective date of this Lease. 3.20 Subordination and Non-Disturbance. At Lessor's option, this Lease shall be subject and subordinate to any mortgage or other security interest by Lessor which from time to time may encumber all or part of the Lessor Property or right-of-way; provided, however, every such mortgage or other security interest shall recognize the validity of this Lease in the event of a foreclosure of Lessor's interest and also Lessee's right to remain in occupancy of and have access to the Leased Land as long as Lessee is not in default of this Lease (after the giving of written notice and following the expiration of any applicable cure period). Lessee shall execute whatever commercially reasonable instruments may reasonably be required to evidence this subordination clause. In the event the Lessor Property is encumbered by a mortgage or other security interest, the Lessor immediately after this Lease is executed, will obtain and furnish to Lessee, a non-disturbance agreement for each such mortgage or other security interest in recordable form. This Lease is subject to all leases, easements, restrictions, conditions, covenants, encumbrances, liens, claims, and other matters of title ("Title Exceptions") which predate this Lease and may affect the Leased Land. At Lessor's option, this Lease shall be 9 022 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire subject to and subordinate to the prior and future rights and obligations of Lessor, its successors and assigns, to use the Lessor Property in the exercise of its powers and in the performance of its duties, provided that the foregoing not interfere with Lessee's use of the Leased Land provided in this Lease. Accordingly, there is reserved and retained unto Lessor, its successors, assigns, grantees, and permittees, the right to construct and reconstruct facilities and appurtenances in, upon, over, under, across, and along the Lessor Property, and in connection therewith, the right to grant and convey to others, rights and interests to the Lessor Property, provided that the foregoing not interfere with Lessee's use of the Leased Land as provided in this Lease. 3.21 Assignment or Subletting. Lessee shall not assign this Lease without the prior express written consent of Lessor, which consent shall be granted or denied in Lessor's sole discretion; provided, however, Lessee may assign this Lease, without securing Lessor's prior written consent, to any of its subsidiaries, affiliates or successor legal entities, to any entity acquiring substantially all of the assets of Lessee. Lessee may assign this Lease upon Lessor's prior written consent, which consent shall not be unreasonably withheld, conditioned, delayed or denied, to any entity whose business involves the operation or management of wireless communication facility support structures. Additionally, Lessee may, upon notice to Lessor, collaterally assign or grant a security interest in this Lease and the Lessee Facilities, and may assign this Lease and the Lessee Facilities to any mortgagees or holders of security interests, including their successors or assigns (collectively "Secured Parties"). In such event, Lessor shall execute such consent to leasehold financing as may reasonably be required by such Secured Parties. Except in the case of an assignment to a Secured Party as set forth herein, upon assignment, Lessee shall be relieved of all liabilities and obligations accruing thereafter hereunder and Lessor shall look solely to the assignee for performance under this Lease and all obligations hereunder accruing thereafter provided such assignee is of substantially similar financial strength or credit worthiness as Lessee. Lessee may sublease all or any portion of the Leased Land subject to the express written consent of Lessor, which consent shall not be unreasonably withheld, conditioned, delayed or denied provided that Lessee shall require each such collocator to first obtain ground space in relation thereto from the Lessor. In such event, Lessor shall be entitled to retain all revenue derived from its lease of ground space to such collocator(s) and Lessee shall be entitled to retain all revenue derived from its sublease of space on the tower. 3.22 Taxes. The possessory property interest created by this Lease may be subject to property taxation, and Lessee may be subject to the payment of property taxes levied on such interest by the appropriate taxing authority. Lessee is required to pay any such tax directly to the appropriate taxing authority. In addition, if personal property taxes are assessed, Lessee shall pay any portion of such taxes directly attributable to the Lessee Facilities. Lessor shall provide to Lessee a copy of any notice, assessment or billing relating to any taxes for which Lessee is responsible under this Section within a reasonable time after Lessor's receipt of the same. Lessee shall have no obligation to make payment of any real estate taxes until Lessee has received the notice, assessment or billing relating to such payment either directly from the appropriate taxing authority, or from Lessor as provided for herein. Lessor shall pay all real property taxes, assessments and deferred taxes on the Leased Land. Lessor hereby grants to Lessee the right to challenge, whether in a Court, Administrative Proceeding, or other venue, on behalf of Lessor and/or Lessee, any personal property or real property tax assessments that may affect Lessee. 10 023 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3.23 Mechanic's Liens. Lessee shall keep the Leased Land and the Lessor Property free from any liens arising out of any work performed, material furnished, or obligations incurred by Lessee, or any tenant or subtenant thereof. Lessee shall not be considered in violation of this provision if it provides a bond in lieu of the lien which is in conformance with applicable law and which is in an amount and form acceptable to Lessor. 3.24 Waiver. The waiver by Lessor or Lessee of any breach of any term, covenant, condition or provision contained herein ("Terms"), shall not be deemed to be a waiver of such Terms for any subsequent breach of the same or any other Terms contained herein. The subsequent acceptance of consideration by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of any Terms of this Lease, other than the failure of Lessee to pay the particular consideration so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such consideration. 3.25 Attorneys' Fees. The prevailing Party in any action brought by either Party hereto, based on any claim arising under this Lease, shall be entitled to reasonable attorneys' fees and costs. 3.26 Insurance. 3.26.1 Types; Amounts. Lessee shall obtain, and shall require any subcontractor to obtain, insurance in the amounts described below unless specifically altered or waived by Lessor ("Required Insurance"). (i) General Liability Insurance. Lessee shall maintain commercial general liability insurance, or equivalent form, on a per occurrence basis, with a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence. (ii) Business Automobile Liability Insurance. Lessee shall maintain occurrence version business automobile liability insurance, or equivalent form, with a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence. Such insurance shall include coverage for the ownership, operation, maintenance, use, loading, or unloading of any auto owned, leased, hired, or borrowed by the insured or for which the insured is responsible (iii) "All Risk" Property Insurance. Lessee shall maintain a policy of property insurance for perils usual to a standard "all risk" insurance policy on all its improvements or alterations in, on, or about the Leased Land, with limits equal to ninety percent (90%) of the value of all such improvements or alterations. (iv) Lessor's Insurance. Lessor shall, at its own cost and expense, maintain commercial general liability and property liability insurance with liability limits of not less than One Million dollars ($1,000,000) for injury to or death of one or more persons, or damage or destruction to property, in any one occurrence and shall name Lessee as an additional insured thereunder. 3.26.2 General Provisions. The commercial general liability insurance policy and the business automobile liability insurance policy of Lessee shall name Lessor, its elected officials, officers, employees, agents, and volunteers as additional insureds. 024 11 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire 3.26.3 Certificates; Insurer Rating; Cancellation Notice. Prior to the Commencement Date, Lessee shall furnish to Lessor properly executed certificates of insurance which evidence all Required Insurance. Lessee shall maintain the Required Insurance at all times while this Lease is in effect, and shall replace any certificate, policy, or endorsement which will expire prior to that date. All policies shall contain a provision providing Lessor thirty (30) days prior written notice with respect to cancellation or expiration of such policy. Unless approved in writing by Lessor, Lessee shall place the Required Insurance with insurers authorized to do business in the State of California and with a current A.M. Best rating of at least A-:VII. 3.26.4 Waiver of Subrogation. Lessor and Lessee release each other and their respective officials, directors, employees, representatives, and agents from any claims for damage or harm to any person, the Leased Land, the Property, or the Lessee Facilities caused by, or which result from, risks required to be insured hereunder under any insurance policy carried by the Parties at the time of such damage or harm. Lessor and Lessee shall cause each insurance policy obtained by them concerning the Leased Land and/or Lessor Property to provide the insurance company waives all right of recovery by way of subrogation against the other in connection with any damage or harm covered by such policy. 3.27 Intentionally omitted. 3.28. Indemnity. Lessee hereby agrees to defend, indemnify and hold Lessor and its directors, officials, officers, agents and employees free and harmless from and against any and all claims, demands, causes of action, costs, liabilities, expenses, losses, damages or injuries of any kind in law or equity, including the payment to Lessor of all reasonable expenses of legal representation, whether by special counsel or by Lessor's staff, to persons or property, including wrongful death, to the extent caused by the negligent acts, omissions or willful misconduct of Lessee, its partners, affiliates, agents officials, officers or employees in performance of this Lease or negligent use of the Leased Land or the Lessor Property, excepting, however, any such claims or damages due to or caused by the acts or omissions of Lessor, its directors, officials, officers, agents and employees. Lessee shall pay and satisfy any judgment, award or decree that may be rendered against Lessor, its directors, officials, officers, agents or employees covered by Lessee's indemnity obligations. Notwithstanding the foregoing, this indemnification shall not extend to indirect, special, incidental or consequential damages, including, without limitation, loss of profits, income or business opportunities to the indemnified party or anyone claiming through the indemnified party. Lessee's obligations shall survive termination or expiration of this Lease, and shall not be restricted to insurance proceeds, if any, received by Lessor or its directors, officials, officers, agents or employees. Lessor hereby agrees to defend, indemnify and hold Lessee and its directors, officials, officers, agents and employees free and harmless from and against any and all claims, demands, causes of action, costs, liabilities, expenses, losses, damages or injuries of any kind in law or equity, including the payment to Lessee of all reasonable expenses of legal representation, whether by special counsel or by Lessee's staff, to persons or property, including wrongful death, to the extent caused by the negligent acts, omissions or willful misconduct of Lessor, its directors, officials, officers, agents and employees in performance of this Lease or use of the Leased Land or the Lessor Property. The indemnifying Party's obligations under this section are contingent upon (i) its receiving prompt written notice of any event giving rise to an obligation to indemnifying the 12 025 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire other party; and (ii) the indemnified Party's granting it the right to control the defense and settlement of the same provided no liability or admission on the part of the indemnitee may be agreed to by the indemnitor unless and until such indemnitee has previously and expressly consented thereto in writing. Notwithstanding anything to the contrary in this Lease, the Parties hereby confirm that the provisions of this Section shall survive the expiration or termination of this Lease. Lessee shall not be responsible to Lessor, or any third-party, for any claims, costs or damages (including, fines and penalties) attributable to any pre-existing violations of applicable codes, statutes or other regulations governing the Lessor Property, including the Leased Land. 3.29 Amendments. The provisions of this Lease may be amended by mutual written consent of both Parties. 3.30 No Relocation Assistance. Lessee acknowledges that Lessee is not entitled to relocation assistance or any other benefits under the Uniform Relocation Assistance Act from Lessor upon termination of this Lease other than due to Lessor's default hereunder. Notwithstanding the above, in case of condemnation of the Leased Land or transfer by a deed in lieu of condemnation, Lessee shall be entitled to pursue a claim against the condemning authority for the loss of any Lessee Facilities, costs of relocation, bonus value of this Lease, or loss of goodwill, if any are due to the condemnation proceeding, as permitted under condemnation law. 3.31 Time. Time is of the essence of this Lease. 3.32 Notices. All notices permitted or required under this Lease shall be given to the respective Parties at the following address, or at such other address as the respective Parties may provide in writing for this purpose: Lessee: T-Mobile USA, Inc. 12920 SE 38th Street Bellevue, WA 98006 Attention: PCS Lease Administrator/Site#IE24372B With a copy to: Attn: Legal Dept. /Site#IE24372B And with a copy to: T-Mobile West Corporation 2008 McGaw Avenue Irvine, CA 92614 Attn: Lease Administration Manager/ Site # IE24372B Lessor: Azusa Light &Water 729 N. Azusa Avenue Azusa, CA 91702 Attention: Director of Utilities 13 026 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire And with a copy to: Azusa Light& Water P.O. Box 9500 Azusa, CA 91702 Attention: Director of Utilities Such notice shall be deemed made when personally delivered or when received or refused if sent by registered or certified mail, return receipt requested and addressed to the Party at its applicable address. 3.33 Entire Agreement. This Lease constitutes the entire agreement and understanding between the parties, and supersedes all offers, negotiations and other agreements concerning the subject matter contained herein. Any amendments to this Lease must be in writing and executed by both Parties. 3.34 Invalidity. If any provision of this Lease is invalid or unenforceable with respect to any party, the remainder of this Lease or the application of such provision to persons other than those as to whom it is held invalid or unenforceable, shall not be affected and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 3.35 Successors and Assigns. This Lease shall be binding on and inure to the benefit of the successors and permitted assignees of the respective Parties. 3.36 Consent to Jurisdiction and Venue. This Lease shall be construed in accordance with and governed by the laws of the State of California. Any legal action or proceeding brought to interpret or enforce this Lease, or which in any way arises out of the Parties' activities undertaken pursuant to this Lease, shall be filed and prosecuted in the appropriate California State Court in the County of Los Angeles, California. Each Party waives the benefit of any provision of state or federal law providing for a change of venue to any other court or jurisdiction including, without limitation, a change of venue based on the fact that a governmental entity is a party to the action or proceeding, or that a federal right or question is involved or alleged to be involved in the action or proceeding. Without limiting the generality of the foregoing waiver, Lessee expressly waives any right to have venue transferred pursuant to California Code of Civil Procedure Section 394. 3.37 Title Insurance. Lessee may obtain title insurance on its interest in the Leased Land at its sole expense. Lessor shall cooperate by executing documentation required by the title insurance company. 3.38 Exhibits. All Exhibits annexed hereto form material parts of this Lease. 3.39 Recording. Lessor agrees to execute a Memorandum of this Lease which Lessee may record with the appropriate Recording Officer. The date set forth in the Memorandum of Lease is for recording purposes only and bears no reference to commencement of either term or rent payments. 3.40 Survival. All obligations of either Party hereunder not fully performed as of the completion or termination of this Lease shall survive such completion or termination, including 14 027 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire without limitation, in the case of Lessee, all payment obligations and all obligations concerning the condition of the Leased Land and the Lessor Property. 3.41 Nondiscrimination. Lessee certifies and agrees that all persons employed by it, its affiliates, subsidiaries, or holding companies and any of its contractors retained with respect to this Lease are and shall be treated equally without regard to or because of race, religion, ancestry, national origin or sex, and in compliance with all federal and state laws prohibiting discrimination in employment. 3.4.2 The persons who have executed this Lease represent and warrant that they are duly authorized to execute this Lease in their individual or representative capacity as indicated. CITY OF AZUSA T-Mobile West Corporation, a California municipal corporation a Delaware corporation By: By: F.M. Delach Christopher Eldridge City Manager Regional Development Director 15 028 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire Exhibit"A-1" Legal Description of Lessor Property All that certain real property located in the County of Los Angeles,State of California,being more particularly described as follows: Lot 4 in Section 22, Township 1 North, Range 10 West, San Bernardino Base and Meridian, in the City of Pasadena, County of Los Angeles, State of California, according to the Official Plat of said land filed in the District Land Office. Except therefrom that portion lying Northerly of the Southerly line of that certain strip of land 100 feet wide described in the Quitclaim Deed recorded in Book 14763, Page 284, Official Records, of said County. Also except such water in and under said Parcel as may have been conveyed to Vineland Irrigation District, a Corporation, by deed recorded in Book 585, Page 147, of Deeds. Also except from the above described Parcel any portion thereof which lies within any public road or highway, on May 26, 1917, in Book 1359, Page 265, of Deeds. 16 029 Site Number: IE24372B Site Name: Heck Tank Monopine Market: Inland Empire Exhibit "A" Site Plan Depicting Leased Land and Lessee Facilities However, it is expressly agreed and understood by and between the Lessor and Lessee that the exact and precise location of the Lessee Facilities is subject to review and approval by the planning and/or zoning Boards having jurisdiction over the "Leased Land". Therefore, it is expressly agreed and understood by and between Lessor and Lessee that the precise location of the Leased Land as shown on Exhibit "A" may be modified by the Lessee in order to comply with and obtain necessary planning and/or zoning approvals, and any and all other approvals necessary for Lessee's intended use of the Property. The Leased Land as described herein may therefore be modified by the Lessee to reflect the final engineering design. An amended Exhibit "A" (if necessary) will be provided by the Lessee and attached to the Lease in place of the existing Exhibit "A", a copy of which will be provided to the Lessor for review prior to being incorporated into the Lease. See the attached drawings dated 09/16/10, Sheets A-1, A-2, A-3 and A-4, identified with Site Information: IE24372B, Heck Tank Monopine. 17 030 v AZUSA FIIT • W.bffi SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: RESOLUTION TO ADOPT NET GENERATOR PAYMENT SCHEDULE FOR ELECTRIC CUSTOMERS WITH SOLAR SYSTEMS RECOMMENDATION It is recommended that the Azusa Utility Board adopt the attached resolution to amend Electric Rules & Regulations with the addition of a Net Generator Payment Schedule to provide financial incentives for customers that install solar panels and generate more electricity than they consume from Azusa Light & Water. BACKGROUND In February 2010, the Governor signed AB 510, which requires, among other things, that electric utilities adopt a per kWh rate by January 1, 2011, that will be paid to qualifying customers who have installed solar systems. Qualifying customers include those that generate net surplus power over a 12 month period, or more electricity than they consume annually. The special rate has been calculated and is set forth in Exhibit A to the attached resolution in order to fulfill the requirements of AB 510 by the statutory deadline. In general, the payment rate for ongoing net generation, referred to in the attached as the "Net Generator Payment", is further development of the California Solar Initiative, which was adopted in August 2006 when the State approved Senate Bill 1. The California Solar Initiative sought to encourage development of 3,000 megawatts of photovoltaic solar energy generation on customer premises over 10 years by requiring electric utilities to offer incentives to customers. The Azusa Utility Board adopted a program in 2006 to comply with SB 1 and the utility has been offering incentives for installation of solar power systems since July 1, 2006. 031 Net Generator Payment Schedule November 22,2010 Page 2 For public utilities, SB 1 specified an initial incentive of$2.80 per installed watt of photovoltaic power, which was to decline 7% per year and be zero by December 31, 2016--or earlier if total generating capacity of eligible customer-generators exceeded 2.5% of the electric utility's aggregate customer peak demand. AB 510 expanded this percentage to 5% of a utility's aggregate customer peak demand, further obligating utilities to continue the incentives for installation of solar power by customers. The Net Generator Payment Amount of$0.09041 per kWh that is set forth in attached Exhibit is based on our purchased power cost budget for FY 2010-11 divided by the sales forecast. Adoption of the Schedule would allow staff to administratively update the schedule on annual basis following approval of power purchase budget and after the sales forecast has been administratively determined. The Schedule includes a disclosure that the Net Generator Payment may change at any time and that Azusa Light & Water is not responsible for any customer's financial losses associated with changes in the Net Generator Payment amount. AB 510 requires the utility to meter solar customers, track their consumption and generation on monthly basis, and annually calculate any net power produced or consumed by the customer. Only those customers that generate net power on annual basis beginning with the initial month of production would be eligible to receive the Net Generator Payment amount. Thus, monthly net balances of energy generated will be carried forward to the subsequent month and the balance would be reduced by any net consumption in the following month, and so on for twelve months, when the annual payment would be determined. Annual payments, if any, would be based on the effective period of the net generator payment as administratively updated to coincide with each fiscal year, from July 1 thru June 30. FISCAL IMPACT The Net Generator Payment will only be paid to those customers that generate net electricity on annual basis from the initial month of production. As of the writing of this report, there are no such qualifying customers and so the fiscal impact of adopting the Net Generator Payment Schedule is zero. This may change, however, if certain customers oversize their solar systems or install larger ones in the future. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities 032 Net Generator Payment Schedule November 22,2010 Page 3 RESOLUTION NO. A RESOLUTION OF THE AZUSA UTILITY BOARD OF THE CITY OF AZUSA, AMENDING AZUSA LIGHT & WATER'S RULES AND REGULATIONS TO INCLUDE A NET GENERATOR PAYMENT SCHEDULE FOR ELECTRIC UTILITY CUSTOMERS. WHEREAS, pursuant to Section 2-414 of the Azusa Municipal Code, the Utility Board is empowered to adopt rules regarding various utility related services; and WHEREAS, on February 26, 2010, the State of California approved AB 510, which requires electric utilities to set payment amounts to compensate customers with solar power systems that generate more electricity than they consume on an annual basis for the net energy produced; and WHEREAS, Azusa Light &Water staff have calculated the value of electricity produced by net-customer-generators based on purchase power costs for FY 2010-11; and WHEREAS, the value of electricity produced by net-customer-generators is set forth in "Exhibit A— Schedule NGP - Net Generator Payment" attached to this Resolution and made a part hereof; and WHEREAS, AB 510 requires that such Net Generator Payment schedule be adopted and effective by January 1, 2011; NOW, THEREFORE, THE UTILITY BOARD OF THE CITY OF AZUSA, CALIFORNIA, DOES FIND AND DECLARE THAT: SECTION 1. Adoption of Net Generator Payment Schedule. That the Azusa Light &Water Rules and Regulations are hereby amended to include the attached Net Generator Payment schedule as set forth in Exhibit "A" which is attached to this Resolution and made a part hereof. SECTION 2. Effective Date. The attached Net Generator Payment schedule shall be effective on January 1, 2011. PASSED, APPROVED AND ADOPTED this 22nd day of November, 2010. Joseph R. Rocha Mayor 033 Net Generator Payment Schedule November 22,2010 Page 4 ATTEST: Vera Mendoza City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the foregoing Resolution No. was duly introduced and adopted at a regular meeting of the Azusa Utility Board/City Council on the 22nd day of November 2010, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza City Clerk 034 Net Generator Payment Schedule November 22,2010 Page 5 EXHIBIT "A" SCHEDULE NGP NET GENERATOR PAYMENT Applicability: The purpose of this Schedule is to establish a per kilowatt hour rate that will be paid by Azusa Light & Water to electric customers that generate an annual net surplus of electricity. This rate is intended to provide an incentive to customers for installation of solar generation systems and to comply with Assembly Bill 510 which was signed into law on February 26, 2010. Territory: Within the electric service territory of the City of Azusa. Net Generator Payment Amount Effective January 1, 2011 thru June 30, 2011: Net Generator Payment per kWh: $0.09041 Special Conditions: 1. Each eligible customer is to have an approved interconnection agreement with Azusa Light & Water and be in compliance with said agreement. 2. Each eligible customer must generate more electricity than customer consumes from Azusa Light & Water during each twelve month period beginning with the month of initial production. 3. Any net surplus of electricity generated by customer in one month shall be carried forward to the next month. 4. All monthly carried forward net surpluses of electricity will be reduced by any net consumption in the following month(s). 5. Payments by Azusa Light & Water for net surplus of electricity will be made annually within 30 days following the month of initial production. 6. The Net Generator Payment Amount shall be administratively updated on July 1 of each year with the signature of the Director of Utilities and shall be based on the approved budget for purchased power costs divided by forecasted consumption. 7. The Net Generator Payment shall be effective from July 1 through June 30, unless otherwise indicated, and the effective period shall be used to calculate the Net Generator Payment Amount. 8. Customers should be aware that purchased power costs can vary significantly and Azusa Light & Water reserves the right to change the Net Generator Payment Amount at any time. 9. Azusa Light & Water is not responsible for any customer financial losses associated with decisions by the customer to invest in solar power generation based on the Net Generator Payment Amount. 035 AZ LISA -CMI & 'w'RIE1. CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: MODIFICATION OF DISTRIBUTED SOLAR PROGRAM FUNDING IN COMPLIANCE WITH STATE SENATE BILL 1 (SB1) RECOMMENDATION It is recommended that the Utility Board approve the attached updated Solar Partnership Program, which includes a 7% reduction in solar rebate level. BACKGROUND In 2006, the California Legislature enacted distributed solar power legislation (SB 1) to further the State's commitment to achieving 3,000 MW of distributed solar power by 2017. SB1 mandated all electric utilities in California to make available up to $3 billion dollars in rebates over a 10-year period to fund distributed solar power installations in California. This legislation envisioned that this funding would spur technology innovations in the solar power industry and ultimately would enable solar power to be cost competitive with conventional sources of electricity. SB 1 specifies that municipal utilities in aggregate be responsible for $750 million in funding and that the funding obligation be allocated among the municipal utilities proportionally to retail electricity sales. Azusa's share of the SB 1 funding requirement is about $3 million over 10 years. Since inception, Azusa Light & Water has paid out Solar Partnership rebates of approximately $330,000 for about 83 KW of installed solar production and has a current commitment for additional rebates of$403,000 for another 125 KW of solar power production. Azusa Light & Water's solar partnership program that was established in June 2006 has been modified annually with the following elements: • Beginning with the program implementation in 2006, the Solar Partnership Program provided a premium rebate at $4 per Watt. Under this option, a customer would agree via a contract to transfer the environmental and renewable energy attributes of a solar 036 Modification of Solar Program November 22,2010 Page 2 installation to the City. The basic rebate amount was $2.80 per Watt and there was an additional rebate premium amount of $1.20 per Watt being paid for the Renewable Energy Credits (REC's). The programhas since been modified to provide a premium rebate at $3 per Watt, with the basic rebate amount is $2.42 per Watt and an additional rebate premium amount of$0.58 per Watt for the REC's. • An annual budget of$300,000 that meets the SB 1 funding requirement. • Funding is allocated equitably among the different customer classes depending on customer demand, initially equal allocation among residential, commercial, and industrial customer classes. Any unspent funding in one class is either made available to other classes or carried over to be used in the following years. SB 1 suggests that the Utilities reduce their program funding, on average, 7% per year until the funding reaches zero toward the end of the 10 year period. In light of the SB 1 suggestion, staff has updated the attached Solar Partnership Program application and is recommending that the Utility Board adopt the new program application making it effective upon adoption. Following summarize proposed changes to Azusa's existing program to stay consistent with SB 1's intent of reducing the rebate amounts over time for PV installations: • Reduce the current basic $2.42 per Watt rebate level to $2.25 per Watt for calendar year 2011, with annual reductions of $0.40 per Watt through year 2016 when the final basic rebate step will reach zero. • Reduce the current premium of $0.58 per Watt for the REC's to $0.50 per Watt. Re- evaluate on an annual basis to determine if the REC premium is at an appropriate cost effective level and adjust as necessary. • Continue to explore innovative and cost effective solar installations that further the state solar goal. • Staff will make conforming changes to the current solar program guidelines, forms, and agreements to reflect legislative changes, including those imposed by AB 510, which was adopted earlier this year and clarified other program requirements. FISCAL IMPACT SB 1 is an unfunded mandate which Azusa Light & Water has funded out of electric utility rate revenue. Funds have been budgeted in the amount of$300,000 annually for the 10 year program cycle in Power Resource account number 33-40-775-570-6625 to comply with the requirements of SB 1. Prepared by: Paul Reid, Business Development/Public Benefit Programs Coordinator 037 AZUSA LIGHT & WATER Solar Partnership Program OVERVIEW Azusa Light & Water finds a utility partnership with its customers to be very important. To better serve its customers, Azusa Light &Water has designed a program to help reduce the cost of installing distributed solar photovoltaic systems. Customers interested in installing a photovoltaic system may want to contact a solar contractor first, before contacting Azusa Light & Water. Detailed information regarding solar systems and contractors can be found on the California Energy Commission's (http://www.energv.ca.gov/renewables/emerging renewables.html) website. Additional information can also be found on the Consumer Education in Renewable Energy website (http:r'www.energy.ca.gov/renewablesiconsumer education.html). Solar Partnership Program Procedures: Step I Customer chooses a contractor to help identify system needs, cost and complete the system design. Step 2 Customer requests incentive reservation from Azusa Light & Water based on proposed system design. Step 3 Azusa Light & Water determines the incentive based on system design and issues the incentive reservation confirmation and claim form. Step 4 Customer completes and signs an Interconnection and Net Metering Agreement with Azusa Light & Water. Step 5 Customer obtains necessary permits, installs the system and places the system into service. Step 6 Customer submits completed Reservation Confirmation and Claim Form to Azusa Light & Water along with appropriate documentation and W-9 Request for Taxpayer Identification and Certification Form to receive incentive payment. Step 7 Azusa Light & Water verifies the paperwork and the system installation and then issues an incentive check. 038 Recommended Solar Web Links: Tax Incentives Assistance Project www.energytaxincentives.org California Solar Center www.californiasolarcenter.org U.S. Dept. of Energy- Energy Efficiency and Renewable Energy www.eere.energy.gov/solar National Center for Photovoltaics www.nrel.gov/ncpv National Renewable Energy Laboratory www.nrel.gov/solar Solar Electric Power Association www.solarelectricpower.org 039 Azusa Light & Water SOLAR PARTNERSHIP PROGRAM FOR SOLAR PHOTOVOLTAIC SYSTEMS REBATE AGREEMENT 1 . CUSTOMER NAME ACCOUNT NUMBER 2. CONTACT PERSON PHONE NUMBER 3 . INSTALLATION ADDRESS 4. SEND REBATE TO 5. SOCIAL SECURITY OR FEDERAL TAX I.D. NUMBER 6. MANUFACTURES RATED PRODUCTION (WATTS) 7. SYSTEM COST 8. *REBATE AMOUNT ($2.75 w/o retained RECs or $2.25 w/ retained RECs) x Watts 9. CUSTOMER NAME - PRINT SIGNATURE DATE 10. UTILITY AUTHORIZATION NAME TITLE DATE The above named customer agrees to abide by the rules and regulations of the Azusa Light and Water's Solar Partnership Rebate Program and agrees that the customer may elect to retain ownership of the Renewable Energy Credits (RECs). If the customer chooses to have ownership of the RECs, the incentive will be reduced to $2.25 per installed Watt. By accepting the higher incentive payment from Azusa Light and Water, the customer agrees that Azusa Light and Water may count 100% of the renewable energy and associated renewable attributes generated by the PV system for reporting purposes, including any environmental attributes. When the work is completed, itemized invoices and a post installation inspection are required before a check can be issued. Return this agreement to: Azusa Light & Water, 729 N. Azusa Ave., PO Box 9500, Azusa, CA 91702-9500. Paul Reid, Public Benefit Programs Manager Phone: 626-812-5154 Fax: 626-812-5125 Email: preid(4 ci.azusa.ca.us *There are a limited amount of funds for incentives. All programs are subject to modification or immediate termination at the sole discretion of Azusa Light & Water. Azusa Light & Water does not endorse or recommend specific brands, products or dealers, nor does it guarantee material or workmanship. 040 AZUSA LIGHT AND WATER SOLAR ENERGY PARTNERSHIP PROGRAM REBATE TERMS AND CONDITIONS REBATE Customers of Azusa Light&Water are eligible to apply for rebates if they install a qualifying photovoltaic system that is connected to Azusa Light&Water's electric system. The *incentive is$2.75 per rated Watt.The customer may elect to have ownership of the Renewable Energy Credits(RECs). If the customer chooses to retain ownership of the RECs the incentive will be reduced to$2.25 per installed Watt.By accepting the higher incentive payment from Azusa Light and Water, the customer agrees that Azusa Light and Water may count 100%of the renewable energy and associated renewable attributes generated by the PV system for reporting purposes, including any environmental attributes. METERING The customer must provide a meter socket at a location and of a type specified by the utility so the utility can install a meter to measure actual renewable energy production. CONTRACTOR The PV system provider/installer shall have one of the following: • General Engineering"A"Contractor • C-10 Electrical Contractor • C-46 Solar Contractor WARRANTIES All systems must have a minimum 10-year warranty provided in combination by the manufacturer and installer to protect the purchaser against system or component breakdown and to protect against defects and undue degradation of electrical generation output. Warranty must provide for no-cost repair or replacement of the system or system components, including any associated labor during the warranty period. A copy of the warranty must be submitted with the incentive reservation application. Systems eligible for incentive payments under this program shall be warranted with the following conditions: • A minimum of a twenty-year warranty on modules against failure,at industry standards,and a ten-year warranty to the customer against breakdown on balance of system components. • The warranty must cover all of the components of the photovoltaic generating system against breakdown or degradation in electrical output of more than ten percent from their minimum power specified at time of delivery. • The warranty shall cover the full cost of repair or replacement of defective components or systems. • Where the system is professionally assembled and installed, the warranty shall also include the labor to remove and reinstall defective components or systems. • Performance meters must have a minimum one-year warranty. Be aware that Azusa Light and Water does not install, maintain, or repair customer installed PV systems. Also, Azusa Light and Water does not endorse or recommend PV installers, contractors, or manufactures. 041 ELIGIBLE SYSTEMS,MATERIALS AND COSTS Eligible Systems-The Incentive Program is open only to Azusa Light and Water electric customers,and the generating systems must be connected to the Azusa Light and Water's electrical grid. Systems should be sized to produce no more than 100%of the average annual energy consumption as shown on the Azusa Light and Water billing record for the two years previous to the issuance of the application for the rebate. If the customer's account has less than two year's history,the average will be calculated with available data. Systems may be larger,but the maximum incentive available will be based on historical consumption. Permanent Installations-Equipment that receives an incentive payment must be permanently installed and must remain in place for the duration of the useful life. Only permanently installed systems are eligible for incentives. This means that the equipment must have electrical connections in accordance with industry practice for permanently installed equipment and be secured to a permanent surface. Customers who fail to maintain a valid interconnection agreement for the operating life of the system may be required to reimburse Azusa Light and Water for all or part of the incentive received. System Size-When determining maximum or minimum system size and funding category,the nameplate rating in Watts-PTC-I shall be used to define system capacity. To be eligible under this program the minimum size is One Kilowatt. Systems should be sized to produce no more than 100%of the average annual energy consumption as shown on the Azusa Light and Water billing record for the two years previous to the rebate application. If the customer's account has less than two year's history,the average will be calculated with available data. Systems may be larger than 100%of historic consumption but the maximum incentive available will be based on historical consumption. If a home,building,or facility is under construction,expansion or renovation,an expected load profile must be submitted with the application.The anticipated load must be verifiable prior to payment of the incentive in order to claim total confirmed incentive amount. For new construction incentive reservation applications,the maximum system size may be calculated at two Watts per square foot of new construction,as an alternative to doing a projected energy load calculation.This applies to projects with a system size of 10 kW or less. Acceptable methods of demonstrating future electrical need include: Application for service with corresponding equipment schedules and single line diagram;building simulation program reports such as eQuest,Energy Pro,DOE- 2 and VisualDOE;or detailed engineering calculations. The incentive payment will be limited to 100%of the historical two-year average if the projected load growth conditions have not been put in place at the time the incentive payment is requested. The installation must comply with California Energy Commission Standards for PV systems and all applicable national, state and local building and safety codes. Azusa Light&Water must approve the plans. The submittal package must include: • AZUSA LIGHT AND WATER INTERCONNECTION AGREEMENT • SITE PLAN • SINGLE LINE DRAWINGS • DESCRIPTION OF PV OPERATION AND PROCEDURE • ALL ELECTRICAL DIAGRAMS, INCLUDING SAFETY FEATURES ELECTRICAL /MECHANICAL DEVICES INSTALLED TO DEENERGIZE OR DISCONNECT PV SYSTEM FROM THE UTILITY • MANUFACTURER'S SPECIFICATIONS INCLUDING MODULES,INVERTERS,DISCONNECTS AND WARRANTIES. The plans must be submitted to the City of Azusa,satisfy a plan check process and a building permit must be issued. 042 Azusa Light&Water must inspect the completed system to ensure the equipment is installed properly and is working efficiently. *There are a limited amount of funds for incentives. All programs are subject to modification or immediate termination at the sole discretion of Azusa Light&Water. Azusa Light&Water does not endorse or recommend specific brands,products or dealers,nor does it guarantee material or workmanship. EQUIPMENT LEASING As an alternative to customer ownership of the photovoltaic system,the customer may choose to lease the photovoltaic system from a third party,provided that the following conditions are met: 1.The lease is guaranteed for at least 20 years(to cover the anticipated period of energy production that the incentive is based on. 2. The photovoltaic system is operational and operated at the expected generation capacity for a 20 year term. 3. The lease provides for customer ownership by the end of the 20 year term. 4.The lease payments may not be based on energy production from the equipment,which could be interpreted as retail sale of electricity. 5.The incentive payment will be paid directly to the customer and is not assignable to a third party. If the customer chooses to lease the equipment from a third party,the lease agreement shall be provided to Azusa Light and Water for review.The Azusa Light and Water will determine whether the lease agreement is acceptable as a condition of providing the incentive payment to the customer.The determination of acceptability of the lease agreement for incentive payment is at the sole discretion of the Azusa Light and Water. • 043 City of Azusa Light & Water Department Interconnection and Net Metering Agreement This Interconnection and Metering Agreement for Solar or Wind Turbine Electric Facilities ("Agreement") is made and entered into by and between ("Customer"), whose mailing address is and the City of Azusa, a municipal corporation acting by and through its Azusa Light and Water Department ("Azusa"), sometimes also referred to herein jointly as "Parties" or individually as "Party." 1. APPLICABILITY This Agreement is applicable only to customers who satisfy all requirements of the definition of an Eligible Customer-Generator as set forth in Section 2827(b)(2) of the California Public Utilities Code on the effective date of this Agreement. Customer represents that customer is an Eligible Customer-Generator. 2. DESCRIPTION OF CUSTOMER'S SOLAR OR WIND ELECTRIC GENERATING FACILITY 2.1 Customer elects to interconnect and operate a generating facility capable of generating electricity from solar or wind turbine electric generating facility, or hybrid system of both, located on Customer's owned, leased or rented premises within Azusa's service area ("Generating Facility") in parallel with Azusa's electric grid. Customer represents that the Generating Facility is intended primarily to offset part or all of the Customer's own electrical requirements. 2.2 Generating Facility Identification Number: 2.3 Customer Meter Number: 2.4 Customer Service Account Number: 2.5 Applicable Rate Schedule: 2.6 Generating Facility Location: 2.7 Generating Facility Technology (Solar or Wind): 2.8 Generating Facility Nameplate Rating (kW): 2.9 Estimated monthly energy production of Generating Facility (kWh): 2.10 Estimated date when Generating Facility will be ready to commence parallel operation with Azusa's electric system: 044 3. INTERCONNECTION, DESIGN AND CUSTOMER REQUIREMENTS 3.1 Customer shall deliver the available energy to Azusa at the Required Meter (as defined in Subsection 4.1 below) located on the Customer's premises. 3.2 Customer shall be responsible for the design, installation, operation, and maintenance of the Generating Facility and shall obtain and maintain any required governmental authorizations and permits. 3.3 Customer shall conform to all applicable solar or wind electrical generating system safety and performance standards established by the National Electrical Code ("NEC"), the Institute of Electrical and Electronics Engineers ("IEEE"), and accredited, nationally recognized testing laboratories such as Underwriters Laboratories, applicable building codes, and to all applicable Azusa's Electric Service Requirements (Regulation 21), as may be amended from time to time. 3.4 Customer shall not commence parallel operation of the Generating Facility until Customer receives written approval from Azusa's Authorized Representative. Azusa's Authorized Representative shall consider such written approval upon Azusa's receipt of a copy of the final inspection or approval of the Generating Facility that has been issued by the governmental authority having jurisdiction to inspect and approve the installation. Such approval shall not be unreasonably withheld. 3.5 Azusa shall have the right to have its representatives present at the final inspection made by the governmental authority having jurisdiction to inspect and approve the installation of the Generating Facility. Customer shall notify Azusa in accordance with the terms of Section 12, herein, at least five days prior to such inspection. 3.6 Customer shall not add generation capacity in excess of the Nameplate Rating set forth in Section 2.8 of this Agreement, or otherwise modify the Generating Facility without the prior written permission of Azusa. 3.7 Customer shall install a visible disconnect switch for the Generating Facility. The disconnect switch shall be lockable in the open position and directly accessible to Azusa employees at all times. Disconnect shall be installed in close proximity to, or no more than eight (8') feet from the utility's electric meter. 3.8 The Customer's inverter shall have the following minimum specifications for parallel operation with Azusa Light and Water: (a) Inverter output shall automatically disconnect from Azusa Light and Water source upon loss of Azusa Light and Water voltage and not reconnect until Azusa Light and Water voltage has been restored by Azusa. [CEC 690-61]. (b) Inverter shall meet the applicable requirements of IEEE 929, "Recommended Practice for Utility Interface of Photovoltaic (PV) 045 Systems," IEEE 519, "Recommended Practices and Requirements for Harmonic Control in Electrical 4. METER REQUIREMENTS 4.1 In accordance with Azusa's Rules and Regulations for Electrical Service, Azusa shall own, operate and maintain on Customer's premises a single meter capable of registering the flow of electricity in two directions ("Required Meter"). In addition, the meter shall be capable of recording time-of-use information for all customers except those currently in the Residential rate where a time-of-use meter is optional in Azusa's sole discretion. Azusa may waive metering requirements of this Section; provided such waiver shall be applied in a non discriminatory manner. 4.2 If the existing electrical meter of Customer is not capable of measuring the flow of electricity in two directions (or supplying time-of-use information for commercial customers), Customer shall be responsible for all expenses involved in Azusa's purchase and installation of such, Required Meter. Azusa may waive metering expenses of this Section; provided such a waiver shall be applied in a non discriminatory manner. 4.3 An additional meter or meters to monitor the flow of electricity in each direction may be installed with the consent of Customer, at the expense of Azusa, and the additional metering shall be used only to provide the information necessary to accurately bill or credit Customer pursuant to Section 9 below, or to collect generating system performance information for research purposes. 4.4 If an additional meter or meters are installed, the Net Energy Metering(as defined in Subsection 9.1 below) calculation shall yield a result identical to that of a single meter. 4.5 The customer must provide a meter socket at a location and of a type specified by the utility so the utility can install a meter to measure actual renewable energy production. 5. DISCONNECTION, INTERRUPTION OR REDUCTION OF DELIVERIES 5.1 Azusa shall not be obligated to accept or pay for, and may require Customer to curtail, interrupt or reduce, deliveries of available energy from its Generating Facility: (a) Whenever Azusa deems it necessary in its sole judgment, to construct, install, maintain, repair, replace, remove, investigate, or inspect any of its equipment or any part of its electric system; or (b) Whenever Azusa determines in its sole judgment, that curtailment, interruption, or reduction of Customer's electrical generation is otherwise necessary due to emergencies, forced outages, force majeure, or compliance with prudent electrical practices. 5.2 Whenever reasonably possible, Azusa shall give Customer reasonable notice of the possibility that curtailment, interruption or reduction of such deliveries may be required. 046 5.3 Notwithstanding any other provision of this Agreement, if at any time Azusa determines that either(a) the Generating Facility or its operation may endanger the health, safety or welfare of Azusa personnel, any person or the public, or(b) the continued operation of the Generating Facility may endanger the integrity of Azusa's electric system, any property or the environment, Azusa shall have the right to enter onto Customer's premises and disconnect Customer's Generating Facility from Azusa's system. Customer's Generating Facility shall remain disconnected until such time as Azusa is satisfied that the condition(s) referenced in (a) and (b) of this Subsection 5.3 have been corrected. 6. ACCESS TO PREMISES Azusa may enter Customer's premises at all reasonable hours without notice to Customer for the following purposes: (a) To inspect Customer's protective devices and read or test meter(s); and (b) To disconnect the Generating Facility and/or service to Customer, whenever in Azusa's sole opinion, a hazardous condition exists and such immediate action is necessary to protect persons, Azusa's facilities, or property of others from damage or interference caused by the Generating Facility, or the absence or failure of properly operating protective devices. 7. PERMITS AND MAINTENANCE Customer shall, at its sole cost and expense, (a) maintain the Generating Facility and interconnection facilities in a safe and prudent manner and in conformance with all applicable laws and regulations including, but not limited to Section 3, and (b) obtain any governmental authorizations and permits required for the construction and operation of the Generating Facility and interconnection facilities and performance of this Agreement. Customer shall reimburse Azusa for any and all losses, damages, claims, penalties, or liability it incurs as a result of Customer's failure to obtain or maintain any governmental authorizations and permits required for construction and operation of Customer's Generating Facility and performance of this Agreement. 8. INDEMINTY AND LIABILITY 8.1 Each Party as indemnitor shall defend, hold harmless, and indemnify the other Party and the directors, officers, employees, and agents of the other Party against and from any and all loss, liability, damage, claim, cost, charge, demand, or expense (including any direct, indirect or consequential loss, liability, damage, claim, cost, charge, demand, or expense, including attorneys' fees) for injury or death to persons, including employees of either Party, and damage to property, including property of either Party, arising out of or in connection with (a) the engineering, design, construction,maintenance, repair, operation, supervision, inspection, testing, protection or ownership of the indemnitor's facilities, or (b) the making of replacements, additions, betterments to, or reconstruction of the indemnitor's facilities. This indemnity shall apply notwithstanding the active or passive 047 negligence of the indemnitee. However, neither Party shall be indemnified hereunder for its loss, liability, damage, claim, cost, charge, demand, or expense resulting from its sole negligence or willful misconduct. 8.2 The indemnitor shall, on the other Party's request, defend any suit asserting a claim covered by this indemnity and shall pay for all costs, including reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity. 8.3 The provisions of this Section shall not be construed to relieve any insurer of its obligations to pay any insurance claims in accordance with the provisions of any valid insurance policy. 8.4 Except as otherwise provided in Section 8.1, neither Party shall be liable to the other Party for consequential damages incurred by that Party. 8.5 Nothing in this Agreement shall create any duty to, any standard of care with reference to, or any liability to any person who is not a Party to it. 8.6 Notwithstanding the provisions of Section 8.1, Customer shall be responsible for protecting its Generating Facility from damage by reason of the electrical disturbances or faults caused by the operation, faulty operation, or non-operation of Azusa's facilities and Azusa shall not be liable for any such damage so caused. 9. RATES AND BILLING 9.1 All rates charged will be in accordance with Customer's otherwise applicable tariff(Rate Schedule), as in effect from time to time, on a Net Energy Metering basis. "Net Energy Metering"means measuring the difference between the electricity supplied through the electric grid to the Customer and the electricity generated by Customer's Generating Facility and fed back to the electric grid over the one-month billing period as described in Subsection 9.4 below. 9.2 Customer's otherwise applicable tariff(Rate Schedule) or"Rate Schedule" means the Rate Schedule in Azusa's published Electric Rate Schedules that would otherwise apply to Customer from time to time in the absence of this Agreement. 9.3 Customer is responsible for paying all charges in its Rate Schedule including the minimum charge (such as Distribution and Customer Charge) and demand charge, when applicable, regardless of Customer's monthly or annual net generation. 9.4 The customer will be billed on a monthly basis, regardless of the customers previous billing cycle. The monthly Net Energy Metering calculation shall be made by measuring the difference between the electricity supplied to the Customer and the electricity generated by the Customer and fed back to the grid over a normal one-month billing period. At the end of each one-month billing period following the date of first interconnection, Azusa Light and Water shall determine if Customer was a net consumer or a net producer of electricity during the one-month time period. In the event the 048 electricity supplied by Azusa during the one-month period exceeds the electricity generated by Customer during the same period, Customer is a net energy consumer. 9.5 Billing and Credits for Net Energy Generation (a) Customer shall be billed for electrical service and credited for net energy generation, if any, as provided in Azusa Light and Water's policies and procedures. (b) Customer may elect to receive payment from Azusa Light and Water for net generation under the terms and conditions set in Azusa Light and Water's policies and procedures. (c) Customer may elect to be billed and to make payments to Azusa Light and Water for Net Energy Metering and any kWh credit will be rolled over from one year to the next based on the month the system was put into service. 9.6 Intentionally left blank (TOU Customers) 9.7 Intentionally left blank (G1/G2 Baseline Over Baseline Customers) 9.8 Azusa shall provide Customer with Net Energy Metering consumption information on a monthly basis. 9.9 If Customer terminates service under this Agreement prior to the end of any twelve month period, Azusa shall reconcile Customer's consumption and production of electricity and bill Customer for Net Energy Metering charges, if any, and adjust the excess energy to zero, if any. 9.10 If Customer is a net energy consumer during the applicable billing period, the UUT/General Fund Transfer that is applicable to Customer under Customer's Rate Schedule shall be calculated based upon the Customer's Gross Energy Consumption, and monthly demand, if applicable, for such billing period. Gross Energy Consumption is defined as the sum of the net energy provided by Azusa and the total production at the Generating Facility within the billing period. 9.11 All customers will be assessed the appropriate monthly Public Benefit Charge as stated under the terms and conditions set forth in Azusa Light and Water's policies and procedures. 10. GOVERNING LAW, VENUE This Agreement shall be interpreted under, governed by, and construed in accordance with the laws of the State of California as if executed and to be performed wholly within the State of California, without regard to conflicts of law rules thereof. Any action at law or 049 equity brought by either Party for the purpose of enforcing a right or rights provided in this Agreement shall be brought only in a court of proper jurisdiction in the County of Los Angeles, State of California, and the Parties hereby waive all other provisions of law providing for a change of venue in such proceedings to any other county. In event of a conflict between this contract and applicable provisions of state law, the later shall apply. 11. MODIFICATIONS, WAIVER, INTERPRETATION 11.1 No amendment or modification to this Agreement shall be effective unless in a writing duly executed by both Parties. The failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any Party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, shall be deemed to be construed as a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant unless such waiver is in writing. 11.2 This Agreement shall supersede any existing agreement with Azusa under which Customer is currently operating the Generating Facility identified in Section 2, herein, and any such agreement shall be deemed terminated as of the effective date of this Agreement. 11.3 This Agreement constitutes the final, complete and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement, and supersedes all prior and contemporaneous understandings or agreements of the Parties. Neither Party has been induced to enter into this Agreement by, and neither party is relying on, any representation or warranty outside those expressly set forth in this Agreement. 11.4 Except as expressly modified herein, Azusa's Rules and Regulations for Electrical Service as adopted from time to time by Azusa shall continue to be applicable to Azusa's provision of electrical service to Customer and performance of this Agreement. 12. NOTICES 12.1 Any notice required under this Agreement shall be in writing and mailed at any United States Post Office with postage prepaid and addressed to the Party, or personally delivered to the Party, at the address below. Changes in such designation may be made by notice similarly given. All written notices shall be directed as follows: Azusa: Azusa Light & Water Dept. Attn: Public Benefit Coordinator 729 N. Azusa Ave. Azusa, CA 91702 Customer: To the mailing address listed on page 1 of this Agreement. 050 12.2 Customer's notices to Azusa pursuant to this Section shall refer to the Generating Facility Identification Number that is set forth in Section 2.2. 12.3 In the event of an emergency, Customer shall immediately notify Azusa Light and Water at its 24-hour emergencies number, 626-812-5225, of any emergency situation related to the Generating Facility. 13. TERM AND TERMINATION OF AGREEMENT 13.1 This Agreement shall become effective on the date this Agreement is duly executed by both Parties as set forth in Section 16 below, and shall continue in full force and effect until terminated as provided herein. 13.2 This Agreement shall terminate on the earliest to occur of: 13.2.1 The thirtieth day after Customer gives Azusa prior written notice of termination with or without cause in accordance with Section 12; 13.2.2 The date both Parties agree in writing to terminate this Agreement; 13.2.3 The first day after Azusa gives Customer written notice of termination for cause, provided that Azusa shall first have given Customer written notice of Customer's breach of this Agreement and within thirty days of Azusa's sending notice of such breach, Customer fails to cure such breach or, if such breach requires more than thirty days to cure, Customer fails to promptly commence cure of such breach and diligently prosecute such cure to completion; 13.2.4 The date Azusa is no longer the electric supplier to Customer's premises; or 13.2.5 The date changes to Customer's electric load, or other circumstances, cause Customer to no longer satisfy all requirements of the definition of an Eligible Customer-Generator, as set forth in Section 2827(b)(2) of the California Public Utilities Code on the effective date of this Agreement. 13.3 Early termination of this agreement may result in the Customer being required to reimburse Azusa Light and Water for all or part of the incentive received. 13.4 After termination of this Agreement, any electric service provided by Azusa to Customer shall be pursuant to and in accordance with Customer's Rate Schedule. 14. AUTHORIZED REPRESENTATIVE Azusa's Authorized Representative is the Director of the Light and Water Department, or his designee. Azusa may change its Authorized Representative by giving Customer notice pursuant to Section 12. 051A 15. ASSIGNMENT PROHIBITED Customer understands and agrees that this Agreement is personal to Customer and that Customer shall not assign or transfer in any way all or any portion of this Agreement to any other person or entity of any kind. Any attempt by Customer to assign or transfer in any way all or any portion of this Agreement shall be void ab initio. 16. SIGNATURES IN WITNESS WHEREOF, the Parties hereto have caused two originals of this Agreement to be executed by their duly authorized representatives on the dates set forth below. This Agreement is effective as of the latter of the two dates set forth below. Customer Azusa Light & Water By: By: Name: Name: Title: Title: Date: Date: SUBMITTALS REQUIRED: 1. Building Permit 2. Electric Single Line Diagram 3. Electric Load Schedule 4. Site Plan 5. Solar or Wind Generating System Electric Specifications 6. Solar or wind electrical generating System Certification 051 S Utility Board Meeting 4...till .,..., _ _ __Atil a tin IlLibd____Wio, November 22, 2010 Chair Robert Gonzales AZUSA Consent Agenda October 25, 2010 Minutes Azusa Substation Circuit Breaker Maintenance Aerial Service Truck Purchase T-Mobile Site Lease Agreement AZUSA Net Generator Payment Schedule 4/11 Azusa Utility Board November 22, 2010 AZUSA Background Presently, electric utilities are not required to pay for annual excess or "net" solar energy generated by customers. AB 510 (signed in February 2010) requires utilities to adopt a net solar energy buy-back rate by January 1 , 2011 AZUSA Proposed Buy-Back Rate Staff is proposing a "net" solar energy buy-back rate of 9.041 cents per kWh for FY11 Rate equals AL&W's average power supply projection (budget) for FY11 Rate applies only if customer generates more than they consume over a 12 month period Rate would be administratively recalculated based on future fiscal year budgets /.\\ihti AZUSA LIG H T & V+ Ar EI? Recommendation It is recommended that the Utility Board : — Approve resolution adopting NGP Schedule which provides for a Net Generator buy-back rate of 9. 041 cents/kWh for FY11 — Authorize administrative update of this rate on July 1 of subsequent fiscal years based on that year's approved power supply budget Ftp AZUSA Update of SB1 Solar am Partnership „h. i,. -- ;I 1101 1 ar- • 11111 A1111111111 I'Il1I lllII L I !II i111'I IIIIIIIII ; ��!�!11111 ' � , , w. I; • 11111 . 1 t Azusa Utility Board November 22 2010 , AZUSA Background In 2006, Senate Bill 1 was adopted to make available up to $3 billion in solar rebates over ten years to promote distributed solar in California. Azusa's share of the state rebate goal is —$3 million or about $300K per year. In June 2006, the Utility Board approved implementation of a solar rebate program in compliance with Senate Bill 1 . Azo.; .a Azusa To Date Since program inception, Azusa has paid $330K in rebates for 83 KW of production. Current rebate reservations total $403K for about 125 KW of solar power. Solar Rebates Levels 2007 $2.80 $1 .20 $4.00 2008 $2.80 $1 .20 $4.00 2009 $2.80 $1 .20 $4.00 2010 $2.42 $0.58 $3.00 2011 $2.25 $0.50 $2.75 (proposed) 10 AZUSA Other Program Updates Program Materials updated to include the following key changes: — Clarification of customer Net Metering requirements — Incorporation of Net Solar Buy-Back Rate — 7% reduction of program rebate amount — 8 cent reduction in Renewable Energy Credit premium 11 AZUSA Recommendation That the Utility Board approve the updated Solar Partnership Program which includes a 7% annual reduction in solar rebate levels and 8 cent reduction in REC premium . 12 AZUSA . . . . Advanced Metering and " Smarter" Grid Planning I A----d AO, ../.,‘ I. ..,, _ . .. , . / / • f ..... y, \ W Cieff10''' . Co.:----- ------*/" •\ •. - ._ T _... , ..1 ... . . 0 ,,, ,. .. .,. Azusa Utility Board November 22 2010 , ....., .".".. ....~. AZUSA Background In 2005, Azusa commissioned a study to develop appropriate meter strategy Based on study, utility began installing AMR meters AMR meters may be read remotely by handheld unit, by vehicle drive-by or by stationary collectors Today, they are read by handheld unit only Approximately 25% of Azusa electric meters are AMR capable today AZL.` S :� Smart Meters Recently, there has been a rush nationally to install "smart" meters Also called "AMI" or Advanced Metering Infrastructure These meters allow 2 way communications between meter and utility Cost may be as much as $300 per customer for each of water and electric 15 AZUSA AMI and Smart Grid 0, i, ,,, .. ..... . ,,.. ......... .,, ..$ ., _„. .• ... ...., ..,. ... .,: ....„ . , . .. . .. ,.... ..• , e ,..-0- ,„.„, . . .. . . It • . ...::::•--;- . . , • . . • • 4 ,•' '',,, -,, 1 ''' t ,. \ • .•• . ..4k , • • • . `,•'• --,'" _..... ...., -- ..........,..... "--77-------........ ,7 '.' C.1 ( , , . . . 1' iiiii• ,,.!e, ----•01\•••0041,4t.,,,. ---.... ft-%-,... ---------- ,116,.,,*.„i.,%.•,„•1.,)..1i00.,.z,.,11',-l,.."ti.•P4,-,,/4‘"411"'00,--,1...1."7 *. -'1• '. -....'.`,'. . --. 41111111110- -r 1' • ... . ... - ----... •-•.'-r- ''''' . , .... . . • •.: -,.,t, . . . , . -.. . .-- . . OW 0%0%0 011%01%, AZUSA ., ., Smart Grid Title XIII : Smart Grid Section 1301 establishes a federal policy to modernize the electric utility transmissioon and distrihutbn system to maintar:l reliability and infrastructure protection. The term .Smart Grid" refers to a distribution system tl:at allows for flow of information from a customer`s meter in two directions: both inside the house to thermostats_ appyiances_ anr: other devices. and fi'orn the ]house back to tli211rilit Smait Grid is defined to include a variety of operational and energy 1:lea su:es including smut meters. smart appliances. renewable energy resources. and energy efficiency resources. Section 1302 calls for DOE tc report to C•omlg•ess on the deployment of Smut Grid technologies avid any barriers to deployment. 17 AZt: SA tI g LL ell 5. > W ; it 4 J iv � ' . C 1 r+ Cl, "y :"tr •111 a •Lr 14- r ., 1 0 51 it. ea° cc 7.1 : ,. 3 _ % 74: ht O 0. �1' 1 ' i ' 1 ' ' l 1 I I I 1 00 ..�. 1 C •▪ • 4 I (111) •4 ch--„, 1 iv CD r w y ._ , Cliii) ffil T; 1 I71 i 0/ mg rte+ i :` - 1 . cc-- op r F1 0 r- z NI Strategy As noted in last Utility Board meeting , the Utility plans to revisit & update its Meter Infrastructure Plan in light of industry changes Staff believes it is prudent to obtain outside expertise for this complex activity ��----�' 19 A Z U ti A Scope of Work • Evaluate/propose advanced metering devices • Evaluate economical/prudent 2-way communication approach • Evaluate data management systems • Study impact on existing CIS (billing system) • Propose AMI implementation plan • Develop plan for advanced distribution system management • Evaluate possible funding sources for Smart Grid 20 .1Z1 � ,1 Recommendation That the Utility Board : — approve the proposed RFP Scope of Work to analyze and develop an AMI and Smart Grid Plan for the utility — Authorize staff to issue the RFP • • 21 AZUSA FARECaI Agency Agreement -4,‘„y) `amu, Azusa Utility Board November 22, 2010 AIt_' SA Background FARECaI — Financing Agency for Resource Efficiency in California Formed in 1993 . Besides Azusa , 15 other members Joint action agency under California law Authority to issue debt for utility projects 23 AZUSA FARECaI Debt Presently, Azusa , Colton and Trinity Public Utilities District have outstanding FARECaI indebtedness Azusa is largest debt holder. Colton and Trinity are close to paying off or refunding their FARECaI debt obligations tti. IAF - _ , ..,.. 24 AZUSA CMUA Request California Municipal Utilities Association is the administrator and Treasurer for FARECaI CMUA has requested Azusa ' s assistance in providing and overseeing auditing and accounting of FARECaI Services to be provided pursuant to Agency Agreement - - 25 Azc , .a Proposed Agency Agreement Agency Agreement is an "umbrella type" agreement between FARECaI and Azusa Under AA, Azusa would provide auditing , accounting and associated record-keeping services to FARECaI Azusa would be reimbursed for all costs (including labor overheads) for services provided , although its share of costs proportional to its share of FARECaI debt 26 AZUSA LIGHT & W A E P Approach Azusa would contract for auditing and accounting services with qualified CPA Staff would issue RFP for these services 27 ALt: S :\ Recommendation That the Utility Board approve : — signing of FARECaI Agency Agreement by Mayor — issuance of RFP for FARECaI auditing , accounting and associated record-keeping services .,..„,• 28 A L V J A Electric Vehicles are Coming ! ! , ..E. . ,. . ih • ' s � oh _ 2 ' -+�4 via , , j! • t • 4. \ �'It,, _X.j. -Av.'. .� ng h.c.F.Porsche AG Azusa Utility Board November 22 , 2010 . 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A Readiness Activities Utility Board, employees customer education efforts Utility Rules & Policies Changes Marketing & promotional materials via print and web Technical enhancements including possible service and meter upgrades Industry monitoring and joint efforts What's Next Staff to continue work to develop EV charging policies Return to Utility Board early in 2011 with recommendations Issues include: — whether to separately meter — whether to establish TOU rate to encourage off peak charging — AL&W's role, if any, in installing home charging equipment — Who pays for external electric system improvements if any — Promotion/funding of community charging stations Questions/comments .., .... ....)II 111.1011. kW"\II 0.19°.: 111,4%.fill 1111 '1Wra100......... ....) .‘41..1.1.- -71 %‘‘.M1.ftliI4IP".112.1 0 A 1, 14 . k dr .•••• lir 410011010.1141sh CP" 401/Nir CO V. -^ •• a. t _ --... k 0 --- Or -. ....," I. t 0%0%0 GIONI"Ol LI..et1TO.Itr0 rjr..4010:CF3 44 A Z U S A 1st Quarter Financial Reports 4ftx- 4ftwl.;44r-Eftleflp Azusa Utility Board November 22, 2010 AZUSA Background Staff computes quarterly financial snapshots for both water and electric utilities Based on best available information at time of report AZUSA 1st Quarter Electric Sales FY kWh Sales Billings 04-05 71,964,573 7,926,646 05-06 69,355,197 7,739,171 06-07 77,315,637 9,607,056 07-08 74,574,610 8,636,012 08-09 74,709,048 9,921,295 09-10 71,339,048 8,787,362 10-11 66,556,732 9,579,024 47 AZUSA Electric Summary 1St Quarter Statistics : — Sales at 26% of budget — Revenues at 28% of budget — Operating Expenses at 26% of budget — Capital Outlays at 6% of budget — Net "income" +$571K (vs -$3. 1M FY budget) — Debt Coverage of 8.08 ( 1 . 10 is min.) — Cash of $11 .7M ($12.6M min . target) Conclusion — modest progress AZUSA Consum• Consumption - kWh: 233,116,301 66,556,732 -,6.-0,,, Cash/Reserve Prior Fiscal Year End"' $11,101,181 $11,672,335 105 FY 2009-2010 Budget Information 4. o Budget Actual Thru ' ' 10-10 9/30/10 Bud. . Revenue Retail Billing Amotmts''' $31,313,900 $9.379.024 30°0 EI e ct ri c Resale Revenue 6,364,02.3 1,01.1,630 16% Other Miscellaneous Revenue 303,300 99,62.1 3.3°o Interest Income 243,715 135,808 55% Total Revenues $38,428,940 $10,829.103 28°o Expenses Purchased Power'3' $23,364,120 $6,878,679 27°0 Transmission Dispatching 3,942,013 820.315 21°o Operations and Maintenance 3,302,793 638,904 19°0 Administrative and General';' 2,239,810 574.563 25x0 Franchise and In-Lieu-Tax 3,436.260 974,705 28% Subtotal Expenses $38.323.000 $9,887,169 26% Capital Expenditures / Debt Service Long Term Debt Service`,' $948,C,15 $237.154 250,c, Capital Outlays and Projects' 2,082,749 131.4286% Total Expenditures $41,336.364 510,237.931 2500 Adjustments Transfers Chit`'' 9,430 0 0% Total Expenditures and Transfers Out $41,365,814 $10,257,931 25°0 Change in Cash/Reserve ($3,136,874) 5571,13 5°0 Debt Coverage Ratio's' 3.54 8.08 OW OW 0%,.....0 49 AZUSA 1st Quarter Water Sales FY CCF Sales Billings 04-05 2,982,785 4,638,801 05-06 2,911,324 4,242,006 06-07 3,136,153 4,781,394 07-08 2,875,872 4,659,711 08-09 2,498,047 4,07 3,146 09-10 2,490,393 4,622,114 10-11 2,428,273 5,111,232 50 AZUSA Water Summary 1st Quarter Statistics: — Sales at 31 % of budget — Revenues at 28% of budget — Operating Expenses at 21 % of budget — Capital Outlays at 2% of budget — Net "income" +$ 1 . 1M (vs -$2.4M FY budget) — Debt Coverage of 2. 13 ( 1 .25 min . ) — Cash of $26.2M ($25M min. target) Conclusion — all is well 51 AZUSA Consumption and Reserve Info Prior FY End 1st Qtr Ended Percent Consumption - CCF: 7,853,732 2,428,273 310° Cash and Investments:i1' $ 25,077,890 $ 26,231,926 103°0 • FY 2009-2010 Budget Information Budget Actual Thin Perce�ttt ._ 10-11 1st Qtr B Revenues Retail Billing Amounts ''' $17,321,365 $ 5,111,232 '_9% Other Revenues 315,000 146,296 2S°0 Water Interest Income 500,000 81 0°0 Total Revenues $ 18,536,363 $ 3.237609 28°0 Expenses Production $3,203,403 $663,871 21°0 Purchased IVater'33,212,415 421,993 1.3°0 Transmission and Distribution 2,303,270 611,349 24% Customer Accounting and Sales f4' 4,062,145 1,015,536 3% Administrative and Engineering 983,103 132.381 13% Franchise Fees 390,663 103.328 ,--0o Subtotal Expenses $ 14,357,003 5 2,930,657 21°0 Capital Expenditures 1 Debt Service: Debt Service Payments ('' $4,520,170 $ 1,130,043 2'_x°0 Capital hnprovement Budget'°' 2,140,000 46,382 20° Capital Projects Funded 1w Bond (23,508) (23,308) 100°0 Total Expenses (Less Bond Funding) $ 20,993,667 $ 4,10 3,374 2000 Adjustments Transfers Out'' $0 $0 0°0 Total Expenditures and Transfers Out $ 20,993,667 $ 4,103,374 2000 Net Change in Cash (Negative) $ (2,437.302) $ 1,134,036 5°0 Debt Coverage Ratio'' 1.01 .13 NOW 52 AZUSA L ; GH ' . . Comments/Questions ��« r•4 53 AZLS:\ CRC River Walk and Compost Workshop Report gjau at\ 0%.111k re, Azusa Utility Board November 22, 2010 AZUSA Background On January 25 , 2010 , the Utility Board approved a request to fund 2 CRC programs CRC — California Resource Connections • R .0%."• A Z L L ,A River Walk & Litter Clean - up April 17 , 2010 Clean - up of portion of San Gabriel River Total event cost was $ 31 , 912 AL &W share was $ 7 , 400 Attendance 85 people . Ages 3 to 65 . 500 pounds trash collected 0,,0;04 !j' 56 ALUSA Backyard Composting Workshop April 10, 2010 . North Recreation Center • 77 attendees (including 15 volunteers) Total event cost was $17,925 • AL&W share was $7,425 Water conservation and composting education provided 55 composting bins distributed AZUSA Comments/Questions , ., , - rrilriCITIICS,g,CDrng -r-Trr-r) , ..,--- - C'N(ecThb M((f74 fxcccc 58 AZUSA • . F Y "W -. t� a 0y s,. �°„ 1f .1 ; :y« tp ` Qg • ,..,.. ..,. AZ USA 17.11T1► rl,'Lrrp SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: APPROVE THE PROPOSED SCOPE OF WORK AND AUTHORIZE STAFF TO SOLICIT PROPOSALS (RFP) FOR ADVANCED UTILITY METER INFRASTRUCTURE DEVELOPMENT AND SMARTER GRID PLAN RECOMMENDATION It is recommended that the Utility Board (1) Approve the Request for Proposals (RFP) Scope of Work for Advanced Utility Meter Infrastructure Development and Smarter Grid Plan, and (2) Authorize staff to finalize and issue the RFP to solicit proposals. BACKGROUND In 2005, Azusa Light & Water completed a Meter Strategy Report for Automated Meter Reading (AMR) of both electric and water meters. The findings and recommendations contained in the Meter Strategy Report are shown on the attached Section 10 portion of said report. At that time, Azusa Light & Water decided to get on board with AMR, by employing a slow to moderate pace in changing old conventional meters to AMR meters. This gradual approach enabled Azusa Light & Water to conserve valuable resources, while anticipating future changes in metering technology. Azusa Light & Water has replaced 23% of its old electric meters with AMR meters. Only a handful of AMR water meters have been installed. Over the past several years, utility metering has changed its focus from Automated Meter Reading (AMR) to Advanced Meter Infrastructure (AMI) metering devices. These advanced meters are capable of providing two-way wireless communication between the customer and the serving utility company. In addition, AMI can perform remote disconnect of services, interact with home area networks for automated control of various household appliances and monitor consumption. 052 Advanced Meter Infrastructure& Smarter Grid November 22, 2010 Page 2 The change from the AMR to AMI was precipitated by a combination of developments, foremost of which was the 2009 American Recovery & Reinvestment Act (ARRA). This Act contained provisions where Federal government funds were competitively awarded to a handful of utilities in the form of matching grant funds in order to implement smart grid by deploying advanced meter infrastructure. In addition, the California Public Utilities Commission allowed Investor Owned Utilities (IOU) to invest in AMI with the proviso that such utility metering investments were recovered by just and reasonable rates charged to their ratepayers. Thus after only 5 years, AMR technology is starting to become obsolete. As an example, a utility company in the Midwest that was one of the early adopters of AMR, has decided to discontinue installation of the one-way AMR meters. Recently, the California State Legislature approved Senate Bill 17 which requires electric utilities with more than 100,000 customers to prepare and submit a "Smart Grid Plan". Although the approved legislation isn't specific to small municipals, Azusa Light & Water believes it to be an important business component of its core mission in providing safe, reliable and economical utility services. Thus, Azusa Light & Water intends to develop a smarter grid plan. In view of the above, it was visionary of Azusa Light & Water when it slowed down its AMR deployment while all these industry changes were underway. Staff is now desirous to re-visit the 2005 Meter Strategy Report and come up with an updated plan. This Plan would consider the ongoing developments in the utility industry such as AMI, Integration of Electric Vehicle Charging & Solar Partnership Program, and Advanced Distribution System Management and incorporate these into the overall smarter grid plan for the utility. Staff recommends to the Utility Board to approve the proposed RFP Scope of Work as outlined in the attachment and authorize staff to finalize the RFP, issue and solicit proposals for Advanced Meter Infrastructure and Smarter Grid Plan. FISCAL IMPACT There is very little cost associated with finalizing and issuing the RFP to solicit proposals. Once proposals are received, staff will evaluate the proposals and report back to the Board the fiscal impact of the proposed study along with a recommendation regarding the project award. Prepared by: F. Langit—Assistant Director— Electric Operations 053 RFP PROPOSED SCOPE OF WORK ADVANCED UTILITY METER INFRASTRUCTURE & SMARTER GRID PLAN This proposed scope of work is intended to cover the integration of advanced utility meter infrastructure (AMI) for both electric & water into an overall "smarter grid" plan (SGP). Scope includes meters, communication systems, distribution system management, and customer information systems to interact with the new advanced meters and existing utility billing system. • Identify, assess, evaluate, and propose advanced meter devices (water and electric) suitable for implementation by a small municipal utility entering into AMI. • Identify, assess, evaluate, and propose an economical/efficient/prudent two-way communication system between customer meters and serving utility company. • Identify, assess, evaluate and propose a meter data management system and/or strategy, including whether it could/should be managed in-house or provided by an outside third party service. • Identify, assess, evaluate and come up with a plan and/or strategy to integrate/interface the new AMI meters and data management system with the existing utility billing system. • Prepare and develop an implementation plan to deploy the new advance meters for both electric and water, including an estimate of the economic cost/benefit • Prepare, develop, evaluate and submit a SGP for an Advanced Distribution Management system for the electric and water systems. • Prepare, develop and assist Azusa Light & Water in completing its SGP for submission to governmental agencies pursuant to approved legislation. • Identify, assess and evaluate alternative sources of funding for the AMI and the SGP. • Submit overall report in a formal document incorporating the AMI and SGP satisfactory for submission to regulatory authorities. 054 1 0 FINDINGS AND RECOMMENDATIONS FINDINGS The following findings were discovered through the process of developing the AL&W Meter(AMR)Strategy. 1. AMR is currently being installed at AL&W for the meters that are in hazardous or hard-to-read sites. Approximately 1,348 metering devices are read"remotely"through walk-by technology. This methodology is a conservative approach to AMR implementation,using current technology and standard Itron meters(Itron is the major meter producer). Essentially, every installation is ascertained as to the cost of installation versus the risk of dangers such as dog bites or other hazardous situations. 2. While there was extensive discussion relative to AMR using different communication platforms,the decision to move ahead with a BPL or WiFi solution does not require implementation of AMR at AL&W. A broadband solution could be installed first,with an AMR solution rolled out over time. 3. The electric service territory does not coincide completely with the water service territory,resulting in approximately 60 percent of the water meters located outside of the electric area. This fact drives up the cost and extends the payback period for water meter AMR solutions,as the electric meter cannot be used to collect and transmit water metering data. Also, use of AMR for reading water meters in only a portion of the service territory will cause both different service costs and different service levels within the one water service territory. 4. The AL&W electric distribution system is largely a manually operated installation,with two 12.5 kV distribution substations serving a combined peak summer load in excess of 59 MW to 15,514 electric customers. While AMR solutions typically provide a significant portion of benefits to electric operations,this was not feasible at AL&W. Typical savings would have been anticipated through: • Better load forecasting to maximize use of existing facilities,resulting in less capital expenditures • Better power factor correction,resulting in less system losses • Use of automated switching to reduce outage durations and improve reliability metrics 055 5. A significant savings for installing AMR for the water distribution system is typically achieved through gains in metering more accurately, resulting from replacement of the older "slow"water meters. However, replacement of slow water meters can be pursued whether or not an AMR system is installed. Therefore, there were no savings allocated to this benefit element in evaluating the cost/benefit of AMR for AL&W. 6. Load Management Programs could be implemented in many ways with AMR; however the savings realized by AL&W would be only about $35,000 due to the existing transmission and generation contracts. Transmission contracts on energy purchases are flat up to 48.7 MW, and then increase slightly thereafter. For a 59 MW peak, the added transmission component is about $3,000 per month. The spot market pricing for energy is assumed to be $70/MWh. The energy sales over 50 MW in 2004 were about 650 MWH. Assuming there were 1,000 MWH when over 48.7 MW, the total incremental transmission and generation cost would be less than $35,000 annually. 7. The City has an extensive fiber optic network that could be used for community benefit. Expansion to implement a broadband network that would serve the needs of AL&W, and provide high-speed Internet,. telephone, and monitored home security to the community has been underway for some time. Various business options exist for the City to maximize use of their existing communication network. 8. Azusa is situated in a geographic area, near Los Angeles, and consists of a small footprint (only a few square miles). At this point in time, this is a large positive factor to new technology companies searching to declare they have, "implemented their BPL AMR solution "city-wide" in a city located adjacent to Los Angeles." As these new technologies either flourish (everyone sees the value and jumps on the bandwagon), or falter (massive bankruptcies occur) from this point forward, the attraction to provide Azusa a "good deal"will wane. In other words, the window of opportunity will be closed in about 24 months. A similar market situation does not exist with a WiFi infrastructure. WiFi infrastructures are currently in operation, but the WiFi-enabled meter is not available. 9. The AMR meters for use on WiFi are currently under development and commercialization. At the present time a converter box is added to the system to create an IP address at the meter site for the WiFi communication platform to recognize the data. This adds hundreds of dollars to the cost of every meter location. Customer demand would obviously generate new hardware over time. AL&W Meter(AMR)Strategy EMA,INC. 1I1-2 056 1 j ) 10. The AMR meters for use on BPL communication platforms are being developed at the current time; therefore there are no commercially available units. ACcess Broadband is developing them with Sensus. This indicates a higher cost per meter will be initially presented to any purchaser. ) 11. The City of Azusa works four ten-hour days each week from Monday through Thursday. While this is adequate to provide normal City services, it would be insufficient to marketing and delivering value-added competitive services such as high-speed Internet, telephone, and monitored home security. If the support for those services were not outsourced, Call Centers and service personnel would need to be on call for extended hours to be competitive in such markets. 12. Home security service personnel are typically not as qualified as the Police Department personnel currently on staff. There would need to be new job classifications instituted to satisfy the job descriptions developed. 13. There is currently no Marketing Department within AL&W or the City of Azusa. Any value-added services would require a significant marketing effort to achieve optimum "take rate" numbers. 14. Typically municipalities take on the responsibility of installing and 1 maintaining a city-wide broadband network when no providers of such a service exist or when those that do exist are very high priced. Moorhead, Minnesota is a recent example of this principle (similar in size to Azusa and also a college town). However, the area in and around Azusa is not an "under served" area in regard to the type of value-added services ? under consideration at the time of developing this strategy. There were 1 found to be at least two local home security companies and up to 17 Internet providers, some of which likely provides high-speed Internet services. There are also local telephone providers. Installation of a municipal broadband system in Azusa might provide a basis for negotiation of more favorable franchise agreement terms with other providers. 15. The time period between reading the meter and billing the customer is } longer than the ideal of one day. AMR systems facilitate the expeditious resolution of billing questions so this time period can be minimized, but } business processes can also be modified to address this issue without AMR. 16. The new enQuesta CIS will be implemented in the near future, followed by a installation of upgraded MV-90xi software and re-design of existing meter AL&W Meter(AMR)Strategy EMA,INC. 10-3 057 reading routes. In addition, new Itron FC200 handheld computers will be purchased to replace the outdated FS3 units currently in use. These initiatives provide AL&W with opportunities to further enhance the efficiency of current meter reading and billing activities, by reducing manual processes in the flow of billing data from the meter to the CIS. 17. Remote disconnect/reconnect capabilities are sometimes built onto AMR infrastructure. However, stand-alone remote disconnect/reconnect systems are available and may be cost-effective whether or not AMR is implemented. 18. AL&W's cost-per-read for existing meter reading is an important factor in the analysis of return-on-investment (ROI) for AMR. Based on information provided, a cost-per-read of $1.30 has been used in the financial models developed for this study. However, additional detailed research into the accounting for meter reading activities would enable more precise analysis of AMR ROI. 19. AL&W uses customer keys to access customer properties for reading meters at a number of customer sites. This practice is common in the utility industry, but raises security and liability issues. These sites may be promising locations for installing AMR capabilities, either with a large AMR deployment or using existing Itron handheld computers. RECOMMENDATIONS The following recommendations are provided for AL&W and the City of Azusa to implement as a Metering (AMR) Strategy. 1. Continue with the current practice of installing AMR-ready meters at new properties and high-cost-to-read locations, including both water and electric meters at all installations in the new Rosedale development. Use walk-by technology until BPL is installed or has been eliminated as an option. Consider installation of AMR modules at customer sites currently accessed with customer keys. Delay further consideration of a stand- alone Fixed Network AMR system until a decision is made on a BPL communication infrastructure. 2. Implement improvements to existing meter reading and billing processes to minimize the time period between reading the meter and billing the customer. For example: • Optimize automated processes between enQuesta, MV-RS and MV- 90xi for management of metering data AL&W Meter(AMR)Strategy EMA, INC. 10.4 058 • Utilize the expanded memory in the new Itron FC200 handheld computers to integrate TOU meter reading into the newly designed meter reading routes, and utilize FC200's for re-reads, turn-ons and tum-offs • Levelize the daily workloads for Meter Readers and Customer Service Representatives • Utilize enOuesta capabilities to automate estimation of bills when meter reads are not obtained on the first attempt, reducing the labor costs associated with multiple attempts to read meters 3. Develop a Business Plan for broadband services, including Internet, Voice over Internet Protocol (VoIP) and Monitored Home Security Services. The Business Plan should include additional market research, organizational impacts and required resources, marketing plans, and detailed revenue and cost projections. This is to better understand the provisioning requirements of Azusa offering such value-added services to the community. As input to the Business Plan, conduct a study of all existing and potential third-party service providers in and surrounding the City of Azusa. Survey them to determine their needs and abilities to partner with the City on delivering services via the new broadband communication platform. Alternately, if franchising a communication infrastructure, this recommendation would not be necessary except to possibly validate the final management decision. 4. If the City seeks to provision value-added services, develop contractual arrangements with the third-party service providers prior to issuing an RFP to any broadband providers. It is not recommended that the City take on the role of a competitor in any value-added service, as providers currently exist in the local area. 5. Aggressively pursue BPL vendors to provide solutions to the City of Azusa through the creation of an RFI. The RFI should be specific in describing the value the City provides to the vendors and it should describe the intentions of the City to install infrastructure for third-party service providers to utilize. The RFI should include the value of any available capacity on the City's existing fiberoptic network, and should require vendors' submittals to project detailed calculations for ROI, including revenues, expenses and margins. 'Alternative solutions should be actively solicited through the RFI. AL&W Meter(AMR)Strategy EMA,INC. 10.5 059 6. Issue an RFP to obtain installation of broadband services for the City of Azusa. 7. Install or franchise the broadband communication network. 8. If the City is provisioning the value-added services, implement third-party service provider's contracts as the system is developed. 9. Issue an AMR RFP to determine the AMR solution that will work efficiently and cost effectively for AL&W's applications consistent with risk and reward profiles established by AL&W. If the chosen AMR solution utilizes the new broadband network, roll out as the AMR meters for that technology as they meet the specified target price. Accomplish detailed assessment of the potential risks (technology, market, security, and regulatory) and the potential rewards, for example lower operating costs in manpower and energy procurement costs, and lower system water and electricity losses. Scenario #1 indicated a higher value to AL&W for implementing AMR for the electric meters only and, furthermore, the BPL-enabled electric meters are more readily available at this time. At a later date, further analysis can be done through vendor proposals that indicate an agreeable time to proceed with AMR for the water meters. These meters are in a harsher environment and lessons learned in rolling out AMR for the electric meters will be useful for installing AMR for the water meters. 10. Continue to replace slow water meters on a case-by-case basis, when the increased revenue resulting from more accurate measurement exceeds the cost of the meter replacement. Outside the electric service territory, consider installation of AMR-equipped water meters capable of being read either by the broadband system or the existing walk-by AMR, or drive-by AMR. 11. Evaluate the following characteristics in selecting an AMR vendor. Even if no vendor meets all of these qualifications, the more closely a vendor matches this profile, the more likely they are to provide superior AMR service and support over the life of the AMR system. • Demonstrated stability in a turbulent operating environment • Strong commitment to emerging technology interoperability standards • Constructive software and hardware upgrade methodologies AL&W Meter(AMR)Strategy EMA,INC. 10-6 060 • • • • • • • • • • • • • • • . • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Ability to leverage existing AL&W meter reading infrastructure • Capability for coherent integration with other AL&W IT systems, including enQuesta and ESRI. • Professionally developed and managed training programs • Flexible contractual terms and conditions 12. After AL&W has chosen an AMR system for widespread deployment, consider incorporating the cost of AMR-equipped meters into the cost of connecting to the AL&W system, and include those meters on all new � properties (like Rosedale). Such an approach appears to already be authorized in the existing AL&W Water Tariffs in the paragraph entitled "Domestic Meter Installation Charge". 13. Assess the cost-effectiveness of remote disconnect/reconnect capabilities, either as an integral part of the AMR system, or as a stand- s alone application for targeted properties. Figure 10.1 is the recommended timeline for AL&W to follow relative to the AMR and Broadband technologies. 2005 ! 2006 2007 ♦ • ar2005 9^0%5 'o'2 t';27Cti 4eicG5 2iC0€ 120):1 42052006 6,200E 7s2006 62006 9'2[06 10.20[6 1=6 121xCe V2007 2?C07 121:07 4,2CC7 5::X'1 1.1•/ `y Develop A Business Plan For Third Party Service Providers ' Ii ''ef Create & I Create& Issue RFl ; Issue RFP .Install the 8' a 4',. for BPL j for BPL Vendor I( Vendor Create 8 ,.: ' issue RFP 1 install the AMR Solution as Required over 1-5 1 for BPL Years Vendor Board Approval of BPL Vendor December 2005 !rrl1zil:+r.t•Nartj S-, .r ce Provider Contracts tl' I Board Approval of BPL. Vendor 912006 Figure 10. 1: Recommended Timeline for Sequential Actions for the AL&W Meter (AMR) Strategy I ' AL&W Meter (AMR) Strategy EMA, INC. 10 - 7 I ) 061 FYq. ' , T 4 AZl4JSA f.IIT Y.'L frP SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES i0' DATE: NOVEMBER 22, 2010 SUBJECT: APPROVAL OF AN AGENCY AGREEMENT BETWEEN THE FINANCING AUTHORITY FOR RESOURCE EFFICIENCY IN CALIFORNIA AND THE CITY OF AZUSA, AS AGENT, AND AUTHORIZATION TO ISSUE AN RFP FOR FARECAL AUDITING,ACCOUNTING AND RECORD KEEPING SERVICES RECOMMENDATION It is recommended that the Azusa Utility Board approve the Agency Agreement between the Financing Authority for Resource Efficiency of California (FARECa1) and the City of Azusa, and authorize staff to issue a Request for Proposals (RFP) on behalf of FARECaI for auditing, accounting and record-keeping services, in compliance with the Agency Agreement. BACKGROUND The City of Azusa is a member of the Financing Authority for Resource Efficiency of California (FARECaI) which was formed on July 1, 1993. Besides Azusa, there are fifteen other members. FARECaI is a joint exercise of power agency under the Governmental Code of California. As such, it has broad powers related to the planning, development, financing, construction, repair, maintenance of facilities for the generation, production, transmission, conservation, reuse, recycling, storage, treatment or distribution of electrical energy/capacity, natural gas, water, wastewater or recycled water, and resource efficiency projects and facilities. FARECaI has the authority to issue, on behalf of participating members, tax exempt debt for financing of capital improvements or resource efficiency projects. Presently, Azusa, Colton and the Trinity Public Utilities District have debt outstanding that was issued by FARECa1. Azusa is the largest holder of FARECaI debt. Colton and Trinity are close to paying off and/or refunding 062 FARECaI Service Agreement/RFP November 22,2010 Page 2 their FARECa1 debt. The administrator and Treasurer for FARECa1 is the California Municipal Utilities Association (CMUA). FARECa1's bylaws require the Authority to perform biennial audits of its accounts and records. CMUA has requested that Azusa, as the largest holder of FARECa1 indebtedness, to undertake responsibility for the auditing, accounting and related record-keeping of the Authority. The attached Agency Agreement contains the terms and conditions for the provision of such services by Azusa. Azusa's costs, including internal costs, would be reimbursed by FARECa1 although Azusa, as the largest beneficiary of the Authority, would have a significant/proportional responsibility for these costs. Azusa Light & Water intends to contract with an independent certified public accountant to perform the preponderance of its duties under the Agency Agreement. As such, staff is requesting authorization to issue an RFP consistent with the Agency Agreement to solicit proposals from qualified entities for the required services. FISCAL IMPACT Azusa's costs for providing auditing, accounting and record-keeping services to FARECa1 will be reimbursed by the benefitting members of the Authority. Azusa's share of these costs will be better known following receipt of proposals in response to our RFP. Prepared by: George F. Morrow, Director of Utilities 0.6 3 AGENCY AGREEMENT BETWEEN FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF CALIFORNIA AND THE CITY OF AZUSA,ACTING BY AND THROUGH ITS LIGHT&WATER DEPARTMENT,AS AGENT November 2010 Execution Copy 064 TABLE OF CONTENTS 1 . PARTIES 4 2. RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS 4 3. AGREEMENT 5 4. DEFINITIONS 5 4. 1 Agency Costs 5 4.2 Agency Work 5 4.3 Agent 6 4.4 Agreement 6 4.5 Effective Date 6 4.6 Indebtedness 6 5. APPOINTMENT OF AGENT 6 5. 1 Appointment of Agent 6 5.2 Agent's Performance of Agency Work in Accordance with Applicable Laws, Rules and Regulations 6 5.3 Other Agents 6 5.4 Procurement 6 5.5 Compliance with the Federal Tax Law Requirements 6 6. RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL 6 6. 1 FARECAL's Role 6 7. ACTIVITIES TO BE PERFORMED BY AGENT 7 7. 1 Inform FARECAL 7 7.2 Expend Funds for Agency Costs 7 7.3 Arrange Services for Agency Work; Administer Contracts; Agent's Employees 7 7.4 Prepare and Submit Estimates of Agency Costs 7 7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records 7 7.6 Furnish Additional Assistance and Information 7 8. AGENCY COSTS 8 8.1 Agency Costs 8 8.2 No Profit 8 9. PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS 8 9. 1 Payment and Audit Procedures 8 9.2 Disputed Invoices 9 10. LIABILITY 9 10. 1 No Liability of FARECAL or Agent, Their Directors, Officers, Etc.; FARECAL and Agent's, Directors, Officers, Employees, Not Individually Liable. 9 10.2 Extent of Exculpation; Enforcement of Rights in Equity 10 10.3 No Relief From Insurer's Obligations 10 2 065 10.4 No General Liability of FARECAL 10 10.5 No Warranty for Agent Services 10 11. ALTERNATIVE DISPUTE RESOLUTION 10 11.1 NonBinding Dispute Resolution 10 11.2 Role of FARECAL Board of Directors; Nonbinding Mediation Procedure 10 12. RELATIONSHIP OF THE PARTIES 10 12.1 Separate and Several Interests 10 13. UNCONTROLLABLE FORCES 11 13.1 Excuse of Performance by Reason of Uncontrollable Forces 11 14. BINDING OBLIGATIONS I 1 14.1 All Obligations Binding 11 15. GENERAL PROVISIONS GOVERNING AGREEEMENT 11 15.1 Waiver Not to Effect Subsequent Events 11 15.2 Headings Not Binding 11 16. INDEMNITY AND RELATED MATTERS 11 16.1 Indemnification of Agent 11 16.2 Separate Legal Capacities 12 17. GOVERNING LAW 12 18. TERM AND EXPIRATION 12 18.1 Effective Date 12 18.2 Termination 12 19. SEVERABILITY 12 20. REPRESENTATION AND NOTICES 13 21. AMENDMENTS 13 3 066 AGENCY AGREEMENT 1. PARTIES. This Agency Agreement, effective as of this _day of , 2010, by and between the FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF CALIFORNIA, a joint powers agency and a public entity organized under the laws of the State of California, hereinafter referred to as "FARECa1," or "the Authority" created under the provisions of the Act, and the CITY OF AZUSA acting by and through its LIGHT & WATER DEPARTMENT a California municipal utility under California law hereinafter referred to as the "City" or the "Agent." The City and FARECa1 are also sometimes referred to herein, with respect to this Agreement, individually as the "Party" and together as the "Parties". 2. RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS. The Recitals set forth herein and the facts which follow are incorporated into this Agreement by reference for all purposes. This Agreement has been reviewed by both Parties and shall not be interpreted with reference to the rules of construction providing for construction against a Party responsible for drafting or creating a particular provision or section, but should instead be interpreted in a manner which broadly carries forth the goals and objectives of the Parties as expressed herein. References to "Sections," "Annexes," "Appendices," "Schedules" and "Exhibits" shall be to Sections, Annexes, Appendices, Schedules and Exhibits, as the case may be, of this Agreement unless otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word "include" or "including", when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. All terms capitalized and not otherwise defined herein shall have the meaning set forth in the Joint Powers Agreement or Bylaws of FARECa1. This Agreement is made with reference to the following facts among others: 2.1 FARECa1 was created pursuant to provisions contained in the Joint Exercise of Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code of California, as amended from time to time (the "Act"), by its members, which are municipalities, water districts,joint action agencies, municipal utility districts, public utility districts, irrigation districts and an irrigation district that supply, among other things, electrical energy and water, in the State of California, for the purpose of jointly and cooperatively undertaking the planning, ,development financing, purchase, lease construction, operation and maintenance of Resource Efficiency Programs and Facilities. 067 50305946.1 4 2.2 The City is a California municipal utility which provides electric energy and water to its citizens through its municipally-owned electric and water system. The City is one of the parties to the FARECa1 Joint Powers Agreement. 2.3 FARECa1 was established, designed and brought to fruition in order to create a viable joint powers authority with the objective of representing and carrying forth the common goals, the common aspirations and the common objectives of any public agency eligible for membership in the California Municipal Utilities Association ("CMUA") and located in California. 2.4 Pursuant to the terms of the Act, and its Joint Power Agreement, FARECa1 has any and all powers authorized by law to two or more of its Members relating to the planning, development, undertaking, purchase, lease, acquisition, construction, financing, disposition, use, operation, repair, replacement or maintenance of facilities for the generation, production, transmission, conservation, reuse, recycling, storage, treatment or distribution of electrical or other energy or capacity, natural gas, water, waste water or recycled water, or Resource Efficiency Programs and Facilities, or any combination thereof. 2.5 Over the course of the past several years members of FARECa1, including the City, have untaken projects through FARECaI for which FARECaI has issued Indebtedness. Under California Government Code Section 6505 and Section 4.5 of the FARECa1 Joint Powers Agreement, FARECa1 is required to have its accounts and records audited by independent certified public accountants. Auditors have advised FARECa1 that the audit should include financial records relating to outstanding FARECa1 Indebtedness.nce its inception, FARECa1 administrative tasks, including the maintenance of FARECa1's books and records and the administration and oversight of related audits, have been carried out and/or administered by the staff of CMUA. CMUA staff has requested assistance with respect to the maintenance of FARECa1 accounts and records and all related auditing activities. 2.6 The City has offered to assist with respect to the maintenance of FARECaI's accounts and records and related auditing activities provided it is made whole for all of its related costs. 3. AGREEMENT. For and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, and in order to carry forth certain objectives of FARECa1 and to appoint as agent for FARECAL for the purposes set forth herein, the Parties agree as follows. 4. DEFINITIONS. The terms set forth below, when initially capitalized, shall have the respective meaning set forth below: 4.1 Agency Costs. The costs, as set forth in Section 8 hereof, of carrying out Agency Work. 4.2 Agency Work. Agency shall be responsible for providing accounting and auditing services for FARECa1 and such other activities denoted under Section 7 of this 5 068 Agreement. Such work may be performed in whole or in part, as determined by Agent, by its own employees or by outside contractors. 4.3 Agent. The City of Azusa acting by and through its Light & Water Department, which shall be responsible, in accordance with the terms of this Agreement, for carrying out the Agency Work as Agent for and on behalf of FARECa1. 4.4 Agreement. This Agreement, as it may be amended, modified or supplemented from time to time. 4.5 Effective Date. The date first set forth above. 4.6 Indebtedness: Indebtedness shall have the meaning as ascribed thereto in the Joint Powers Agreement for FARECa1. 5. APPOINTMENT OF AGENT. 5.1 Appointment of Agent. In accordance with the terms and conditions of this Agreement FARECaI hereby appoints, designates, authorizes and directs the City to carry out, as agent for and on behalf of FARECa1, Agency Work in accordance with the terms of this Agreement. The City hereby accepts such appointment, designation, authorization and direction. 5.2 Agent's Performance of Agency Work in Accordance with Applicable Laws, Rules and Regulations. In carrying forth its Agency Work pursuant to the terms of this Agreement Agent shall, in all material respects, observe all applicable laws, rules and regulations. 5.3 Other Agents. The Authority shall at all times have the right to appoint another agent or agents to perform, apart from and concurrent with this Agreement. 5.4 Procurement. In carrying out its duties under this Agreement, the City shall utilize the procedures, protocols and restrictions of the City of Palo Alto or the City of Riverside (as determined by FARECa1's Board of Directors) which either Palo Alto or Riverside use when exercising similar powers, including but not limited to procurement and contracting powers. 5.5 Compliance with the Federal Tax Law Requirements. Notwithstanding anything to the contrary in this Agreement, each of the Parties shall take such actions in the administration and the performance of this Agreement as may be necessary, if applicable, to comply with the Federal tax law requirements on the Indebtedness, and each shall refrain from taking any action that would adversely affect compliance with the Federal tax law requirements. 6. RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL. FARECAL shall have the following rights, duties and responsibilities under this Agreement: 6.1 FARECaI's Role. FARECa1 acting by and through its Board of Directors shall have the following rights duties and responsibilities under this Agreement: 6 069 6.1.1 Review Agency Cost Estimates: Review, modify and approve the estimates of Agency Costs submitted by the Agent pursuant to this Agreement. 6.1.2 Monitor Agency Work: Monitor the continuation and completion of Agency Work. 6.1.3 Make Recommendations and/or Modifications Regarding Agency Work: Make (i) recommendations to the Agent with respect to Agency Work and/or(ii) modifications to Agency Work undertaken by Agent. 6.1.4 Provide Assistance: Provide such other assistance to the Agent in carrying out Agency Work as the Board of Directors shall deem reasonable and proper and as the Agent shall request. 6.1.5 Perform Other Functions and Duties: Perform such other functions and duties as may be required of FARECa1 in connection with this Agreement. 7. ACTIVITIES TO BE PERFORMED BY AGENT. 7.1 Inform FARECa1. Promptly inform FARECa1 regarding significant factors which may affect or have affected Agency Work. 7.2 Expend Funds for Agency Costs. Expend moneys for Agency Costs in accordance with this Agreement; provided, however, in no event shall Agent expend money or incur costs for Agency Costs that exceed the estimate of Agency Costs previously approved by FARECa1. 7.3 Arrange Services for Agency Work; Administer Contracts; Agent's Employees. Negotiate, arrange for, administer, perform and enforce all contracts necessary for the performance and completion of Agency Work and furnish conformed copies of such contracts or other related documentation to FARECa1. In performing Agency Work, the Agent may use its own employees and equipment and facilities owned or directly leased by the Agent without obtaining any consent or approval of FARECa1. 7.4 Prepare and Submit Estimates of Agency Costs. Prepare and submit to FARECa1 for each fiscal year, the Agent's estimate of Agency Costs. 7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records. Keep and maintain records of moneys expended, obligations incurred, and credits accrued; and maintain for auditing those accounting records prepared, or caused to be prepared, by the Agent with respect to FARECa1's moneys and Indebtedness; direct and oversee fiscal audits of FARECaI. 7.6 Furnish Additional Assistance and Information. In addition to the services set forth in Section 7.5, furnish, upon request, to FARECaI any assistance requested by FARECaI's Board of Directors and agreed to by the City. 7 070 8. AGENCY COSTS. 8.1 Agency Costs. Agency Costs shall include the following: 8.1.1 All costs approved by the Agent of labor and services, performed by the Agent or by others, in connection with this Agreement. 8.1.2 Payroll and other expenses of employees of the Agent while performing work in connection with this Agreement, including applicable overhead costs and labor loading charges, including but not limited to time-off allowances, assignment pay, payroll taxes, workers' compensation insurance, retirement and death benefits and other employee benefits. 8.1.3 Costs of the Agent, to the extent not provided for by insurance, of discharging or paying any liability and loss, damage and expense, including costs and expenses for attorneys' fees and other costs of defending, settling or otherwise administering claims, liabilities or losses arising out of workers' compensation or employer's liability claims or by reason of property damage or injuries to or death of any person or persons or by reason of claims of any and every character, or costs that should be paid or provided to Agent to satisfy indemnification obligations under Section 16 of this Agreement or other costs that should be paid or provided to Agent to satisfy indemnification obligations resulting from, arising out of or connected with the performance of Agency Work, including negligent or grossly negligent acts or omissions, but excluding willful misconduct of the Agent, its City Council, or its respective officers or employees. 8.2 No Profit. The Agent shall not receive any profit under this Agreement, nor shall the Agent be obligated to make any expenditure or incur any obligation regarding Agency Work with respect to which it shall not be entitled to reimbursement under this Agreement. 9. PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS. 9.1 Payment and Audit Procedures. From time to time, and at such times (not more than twice annually) as the Agent shall determine, it shall submit to FARECa1 requests and requisitions for payment of items of Agency Costs incurred or paid; provided, however, such Agency Costs do not exceed the estimate of Agency Costs previously approved by FARECa1 as provided in Section 6.1.1. FARECa1 agrees to raise funds sufficient to pay all Agency Costs through whatever means authorized under the FARECa1 Joint Powers Agreement, including Section 4.4 of the Joint Powers Agreement which provides that Members shall make such contributions, payments and advances to the Authority as are approved from time to time by the Board of Directors of FARECa1. FARECa1 shall pay or cause to be paid the amount of each such request or requisition within 60 days after its receipt thereof. At such reasonable times as shall be requested by FARECa1, the books and cost records of the Agent relevant to Agency Costs shall be subject to audit by or on behalf of FARECa1. 8 071. 9.2 Disputed Invoices. In case any portion of any invoice received by FARECaI from Agent shall be in bona fide dispute, FARECa1 shall pay Agent the full amount of such invoice and, upon determination of the correct amount, the difference between such correct amount and such full amount, if any, including interest at the rate received by Agent on any overpayment, will be credited to FARECa1 by Agent after such determination; provided, however, that such interest shall not accrue on any overpayment that is acknowledged by Agent and returned to FARECa1 by the fifth calendar day following the receipt by Agent of the disputed overpayment. In the event such invoice is in dispute, Agent will give consideration to such dispute and will advise FARECa1 with regard to Agent's position relative thereto within 30 days following receipt of written notification by FARECa1 of such dispute. 10. LIABILITY. 10.1 No Liability of FARECa1 or Agent, Their Directors, Officers, Etc.; FARECa1 and Agent's Directors, Officers, Employees, Not Individually Liable. Both Parties agree that neither FARECaI nor the Agent, nor any of their past, present or future directors, officers, employees, board members, agents, attorneys or advisors (collectively, the "Released Parties") shall be liable to any other of the Released Parties for any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys' fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise (including, without limitation, death, bodily injury or personal injury to any person or damage or destruction to any property of the City, FARECaI or third persons) suffered by any Released Party as a result of the action or inaction or performance or non-performance by any of the Released Parties under this Agreement (including negligent or grossly negligent acts or omissions and excluding willful misconduct which, unless otherwise agreed by the Parties, is to be determined and established by a court of competent jurisdiction in a final, nonappealable order). Each Party shall release each of the other Released Parties from any claim or liability that such Party may have cause to assert as a result of any action or inaction or performance or non-performance by the Released Parties under this Agreement (including negligent or grossly negligent acts or omissions and excluding willful misconduct which, unless otherwise agreed by the Parties, is to be determined and established by a court of competent jurisdiction in a final, nonappealable order). Notwithstanding the foregoing, no such action or inaction or performance or non-performance by any of the Released Parties shall relieve either Party from its respective obligations under this Agreement, including either Party's obligation to make payments required under this Agreement. The provisions of this Section 10.1 shall not be construed so as to relieve the Agent from any obligation under this Agreement or any agreement related to FARECa1 Indebtedness. It is also hereby recognized and agreed that no member of the FARECaI Board of Directors, the Agent nor their officers, employees, board members, agents, attorneys or advisors, or member of FARECa1 in its capacity as a member of FARECa1, shall be individually liable in respect of any undertakings by any of the Released Parties under this Agreement or any agreement related to FARECa1 Indebtedness. 9 072 10.2 Extent of Exculpation; Enforcement of Rights in Equity. The exculpation provision set forth in Section 10.1 hereof shall apply to all types of claims or actions including, but not limited to, claims or actions based on contract or tort. Notwithstanding the foregoing, either Party may protect and enforce its rights under this Agreement by a suit or suits in equity for specific performance of any obligation or duty of the other Party and the Agent may enforce by any legal means its right to payment for Agency Costs in accordance with the terms of this Agreement. 10.3 No Relief From Insurer's Obligations. The provisions of Section 10.1 shall not be construed so as to relieve any insurer of its obligation to pay any insurance claims. 10.4 No General Liability of FARECa1. The undertakings by FARECa1 under this Agreement shall never constitute a debt or indebtedness of FARECa1 within the meaning of any provision or limitation of the constitution or statutes of the State of California. Any provision of this Agreement to the contrary notwithstanding, the obligation of FARECa1 under this Agreement to make or cause to be made payments shall be limited to those payments permitted by and monies available under a FARECAI indenture or any agreement related to FARECa1 Indebtedness or as provided for in this Agreement. 10.5 No Warranty for Agent Services. All services provided by Agent are provided on an "as is" basis. Agent disclaims all warranties, express or implied, statutory or otherwise, including, without limitation, any implied warranties of merchantability or fitness for a particular purpose. 11. ALTERNATIVE DISPUTE RESOLUTION. 11.1 Nonbinding Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the asserted breach thereof, the Parties agree that the Parties shall first employ the non binding mediation process which is set forth in this Section 11 before initiating any other type of legal action. 11.2 Role of FARECa1 Board of Directors; Nonbinding Mediation Procedure. If a dispute arises between the Parties under this Agreement, the Parties may submit the dispute to the FARECa1 Board of Directors. If the Board of Directors is unable to resolve the dispute, the Parties may then submit the dispute to non binding mediation. 12. RELATIONSHIP OF THE PARTIES. 12.1 Separate and Several Interests. The covenants, obligations and liabilities of the Parties are intended to be several and not joint or collective and nothing herein contained shall ever be construed to create an association, joint venture, trust, partnership or other legal entity, or to impose a trust or partnership covenant, obligation or liability on or with regard to either or both of the Parties. Each Party shall be individually responsible for its own covenants, obligations and liabilities under this Agreement. Neither Party shall be under the control of or shall be 10 073 deemed to control any other Party. Neither Party shall be the agent of or have a right or power to bind the other Party without its express written consent, except as expressly provided in this Agreement. 13. UNCONTROLLABLE FORCES. 13.1 Excuse of Performance by Reason of Uncontrollable Forces. Other than with respect to the obligation of a Party to make payments as provided in this Agreement, neither Party shall be considered to be in default in the performance of any of its obligations under this Agreement when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force" shall be any cause beyond the control of the Party affected, including but not limited to failure of or threat of failure of facilities, flood, earthquake, tornado, storm, fire, lightning, epidemic, war, terrorism, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by court order or public authority, and action or non-action by, or inability to obtain the necessary authorizations or approvals from, any governmental agency or authority, which by exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it shall be unable to overcome. Nothing contained herein shall be construed so as to require a Party to settle any strike or labor dispute in which it may be involved. In the event a Party is rendered unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force, such Party shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch. In such event, the Parties shall diligently and expeditiously determine how they may equitably proceed to carry out the objectives of this Agreement. 14. BINDING OBLIGATIONS. 14.1 All Obligations Binding. All of the obligations set forth in this Agreement shall bind the Parties and their successors and assigns. 15. GENERAL PROVISIONS GOVERNING AGREEMENT. 15.1 Waiver Not to Effect Subsequent Events. Any waiver at any time by a Party of its rights with respect to a default or any other matter arising in connection with this Agreement shall not be deemed a waiver with respect to any subsequent default or matter. 15.2 Headings Not Binding. The headings and captions in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement 16. INDEMNITY AND RELATED MATTERS. 16.1 Indemnification of Agent. In its capacity as Agent under this Agreement, Agent shall be entitled to indemnification from FARECaI as set forth herein. FARECa1 shall, to the extent permitted by law, indemnify and hold harmless Agent, its City Council members, officers, employees, agents, attorneys and advisors, past, 11 074 present or future when acting for Agent (collectively, "Agent Indemnitees") from and against any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys' fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise (including, without limitation, death, bodily injury or personal injury to any person or damage or destruction to any property of the City, FARECa1 or third persons) (collectively, "Losses") arising by reason of any actions, inactions, errors or omissions incident to the performance of this Agreement (including negligent or grossly negligent acts or omissions and excluding willful misconduct which, unless otherwise agreed by the Parties, is to be determined and established by a court of competent jurisdiction in a final, nonappealable order) on the part of Agent Indemnitees. At Agent's option, FARECa1 shall defend Agent Indemnitees from and against any and all Losses. If FARECa1, with Agent's consent, defends any Agent Indemnitee, Agent shall approve the selection of counsel, and Agent shall further approve any settlement or disposition, such approval not to be unreasonably withheld 16.2 Separate Legal Capacities. The Parties acknowledge that the City, as Agent under and a Party to this Agreement, acts in a legal capacity that is" separate from its capacity as a member of FARECa1 or a participant in any FARECa1 Indebtedness. Accordingly, for purposes of this Agreement, the rights, entitlements, obligations and liabilities of the City, as Agent and a Party to this Agreement, shall not apply to or otherwise be affected by, and shall be legally separate from the rights, entitlements, obligations, and liabilities of the City as a participant in any FAREC al Indebtedness. 17. GOVERNING LAW. This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of California, without regard to conflict of law principles. 18. TERM AND EXPIRATION. 18.1 Effective Date. This Agreement shall become effective and in full force and effect on the date first set forth above (the "Effective Date"). 18.2 Termination. This Agreement shall continue in force and effect from the Effective Date until terminated by either Party, for any reason, upon not less than sixty (60) days prior written notice to the other Party. Payment obligations of the Parties hereunder shall survive any termination of the Agreement until satisfied. Upon termination of this Agreement, Agent shall deliver FARECa1's books and accounts maintained by the Agent to CMUA or such other entity as directed by FARECa1. 19. SEVERABILITY. In case any one or more of the provisions of this Agreement shall for any reason be held to be illegal or invalid by a court of competent jurisdiction, it is the intention of each of the Parties hereto that such illegality or invalidity shall not affect any other provision hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had not been contained herein unless a court holds that the provisions 12 075 are not separable from all other provisions of this Agreement. 20. REPRESENTATION AND NOTICES. Any notice, demand or request provided for in this Agreement shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below: Financing Authority for Resource Efficiency of California do Executive Director of CMUA 915 L Street, Suite 1460 Sacramento, California 95814 City of Azusa, Light and Water Department Director of Utilities 729 North Azusa Avenue, P.O. Box 9500 Azusa, California 91702-9500 21. AMENDMENTS. The Parties acknowledge and agree that any amendment to this agreement shall be in writing and duly executed by the Parties. IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be executed on their respective behalves by their duly authorized representatives. FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF CALIFORNIA Dated: By: George F. Morrow President CITY OF AZUSA acting by and through its LIGHT AND WATER DEPARTMENT Dated: By: Joseph R. Rocha Mayor 13 076 raw • A7 USA r.ur ,. Y rr7 Tr" INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: ELECTRIC VEHICLE OPPORTUNITIES AND CHALLENGES FOR SMALL MUNICIPAL ELECTRIC UTILITY—AZUSA LIGHT & WATER About hundred years ago, the electric propulsion vehicle was in its infancy. At the same time period, there were other car companies which were engaged in the manufacture of internal combustion engines used for vehicle propulsion. For many years, fossil fuel fired engines were the preferred means to propel a vehicle. Today, due to diminishing sources of fossil fuel and the consequential impacts of vehicle emissions to the environment, the electric propulsion vehicle is making a comeback. Government regulatory agencies see electric vehicles (EV) as essential in reducing carbon-dioxide (CO2) emissions and thereby reduce pollution in cities. In the coming months, the world's major car manufacturers will introduce new and modern EV in the market. Contained inside these EV are batteries which are used as energy source to drive the electric motors. When using an EV, instead of fueling with conventional gasoline or other fossil fuel, EV owners/drivers will need to charge their EV before or after it runs out of"juice". Although the demand for EV could be predicted via marketing studies, there is still uncertainty on the widespread use of EV at this stage, including the fact that no one has yet to predict with precision as to how often or when consumers will charge and use EV. Because of this uncertainty, EV use will pose some challenges and opportunities for electricity service providers. Consequently, staff is looking into and keeping abreast of potential impacts EV may pose upon Azusa Light & Water. The purpose of this memo is to inform the Utility Board that with the introduction of EV, the following points will be potential areas of concern: • Increased electricity demand in existing residential homes or businesses • Potential upgrades of existing electric facilities serving the premises of EV owners when 077 Electric Vehicle—Challenges & Opportunities November 22,2010 Page 2 multiple EV chargers are used concurrently within an area • Utility Rules & Regulations pertaining to sale of electricity solely used for EV charging • Advanced metering and accounting of EV charging consumption • Integration of EV in the overall development of smarter electric distribution system • Potential economic development for cities that embrace EV Staff anticipates by next year, that new polices and utility programs to address these concerns will be presented to the Utility Board for their consideration and subsequent approval. New policies and/or utility programs will address the anticipated EV impacts and thereby bring Azusa Light & Water up to speed in dealing with new EV owners and customers. Prepared by: F. Langit, Assistant Director—Electric Operations. 078 Flifie,o- of& * Ariv Lir" AZUSA IGdT R 'WATER INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES /� DATE: NOVEMBER 22, 2010 SUBJECT: FIRST QUARTER BUDGET REPORT FOR WATER AND ELECTRIC FUNDS FOR FISCAL YEAR 2010-11 Attached reports include unaudited budget information regarding the water and electric funds for first quarter of FY 2010-11. In general, due to budget deficits in both the water and electric funds, management staff have been very conservative with respect to spending budgeted capital improvements funds so far this fiscal year. Conservative spending combined with previously approved rate adjustments for both water and electric utility services have resulted in both the electric and water funds having positive net revenue for the first quarter of this fiscal year. However, significant capital projects are on hold by the water utility, including main line replacements and a reservoir replacement project. On the electric side, the San Juan power plant is having a forced outage, November 1-28, and replacement power is expected to cost about $600,000. Hence, it is too early in the fiscal year to draw many conclusions from attached information, however, the general trends are positive, with both funds having net positive revenue, meeting reserve requirements, and meeting debt-coverage requirements so far this fiscal year. Some sales and billing information is provided on the next page for the water and electric utilities through the first quarter of FY since FY 2004-05. 079 Quarterly Financial Report September 27, 2010 Page 2 Below table shows sales and billing trend for electric utility since FY 04-05 through first quarter of fiscal year: 1st Quarter Electric Sales/Billings FY kWh Sales Billings 04-05 71,964,573 7,926,646 05-06 69,355,197 7,739,171 06-07 77,315,637 9,607,056 07-08 74,574,610 8,636,012 08-09 74,709,048 9,921,295 09-10 71,339,048 8,787,362 10-11 66,556,732 9,579,024 Below table shows sales and billing trend for water utility since FY 04-05 through first quarter of fiscal year: 1st Quarter Water Sales/Billings FY CCF Sales Billings 04-05 2,982,785 4,638,801 05-06 2,911,324 4,242,006 06-07 3,136,153 4,781,594 07-08 2,875,872 4,659,711 08-09 2,498,047 4,073,146 09-10 2,490,393 4,622,114 10-11 2,428,273 5,111,232 Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities Liza Cawte, Sr. Administrative Technician AEI Electric-1ST Qtr.pdf Water-1ST Qtr.pdf 080 Electric Utility Quarterly Budget Report 1st Quarter Ended Sept 30,2010 (UNAUDITED) 1st Qtr Ended Consumption and Reserve Info Prior FY End 9/30/10 Percent Consumption-kWh: 253,116,501 66,556,732 26.29% Cash/Reserve Prior Fiscal Year End") $11,101,181 $11,672,335 105% FY 2009-2010 Budget Information Budget Actual Thru Percent of 10-10 9/30/10 Budget Revenue Retail Billing Amounts(2) $31,515,900 $9,579,024 30% Resale Revenue 6,364,025 1,014,650 16% Other Miscellaneous Revenue 303,300 99,624 33% Interest Income 245,715 135,808 55% Total Revenues $38,428,940 $10,829,105 28% Expenses Purchased Power(3) $25,564,120 $6,878,679 27% Transmission/Dispatching 3,942,015 820,518 21% Operations and Maintenance 3,302,795 638,904 19% Administrative and General(4) 2,259,810 574,563 25% Franchise and In-Lieu-Tax 3,456,260 974,705 28% Subtotal Expenses $38,525,000 $9,887,369 26% Capital Expenditures/Debt Service Long Term Debt Services) $948,615 $237,154 25% Capital Outlays and Projects(6) 2,082,749 133,428 6% Total Expenditures $41,556,364 $10,257,951 25% Adjustments Transfers Out(7) 9,450 0 0% Total Expenditures and Transfers Out $41,565,814 $10,257,951 25% Change in Cash/Reserve ($3,136,874) $571,154 5% Debt Coverage Ratio(8) 3.54 8.08 (1)Source:4th Quarter Report. Reserve Policy is$12.6 million. (2)Actuals represent amounts billed based on Customer Information System report thru Sept 30,2010. (3)Source:Power Resources Division. (4)Consumer Service Allocation and Uncollectible Accounts budget multipled by 25%. (5)Based on annual debt service payments for Series B and C,2003 Certificates of Participation. (6)Capital Outlay Accts and Capital Improvement Project budget figures. (7)Interest Income is transferred after fiscal year end if there is positive net income. (8)Total Revenue less Cost for Purch'd Pwr,Trans,O&M,and A&G,divided by debt service. Minimum debt coverage requirement is 1.10 per bond financing agreements. This is preliminary d/c ratio and it may vary with Disclosure Report prepared after the audited financial reports are available,around December 2011. 081 Water Utility Quarterly Budget Report First Quarter Ended Sept 30, 2010 (UNAUDITED) Consumption and Reserve Info Prior FY End 1st Qtr Ended Percent Consumption-CCF: 7,853,732 2,428,273 31% Cash and Investments:w $ 25,077,890 $ 26,231,926 105% Revenues Retail Billing Amounts(2) $17,521,365 $ 5,111,232 29% Other Revenues 515,000 146,296 28% Interest Income 500,000 81 0% Total Revenues $ 18,536,365 $ 5,257,609 28% Expenses Production $3,203,405 $663,871 21% Purchased Water(3) 3,212,415 421,993 13% Transmission and Distribution 2,505,270 611,349 24% Customer Accounting and Sales(4) 4,062,145 1,015,536 25% Administrative and Engineering 983,105 132,381 13% Franchise Fees 390,665 105,528 27% Subtotal Expenses $ 14,357,005 $ 2,950,657 21% Capital Expenditures/Debt Service: Debt Service Payments(5) $4,520,170 $ 1,130,043 25% Capital Improvement Budget(6) 2,140,000 46,382 2% Capital Projects Funded by Bond (23,508) (23,508) 100% Total Expenses (Less Bond Funding) $ 20,993,667 $ 4,103,574 20% Adjustments Transfers Out" $0 $0 0% Total Expenditures and Transfers Out $ 20,993,667 $ 4,103,574 20% Net Change in Cash(Negative) $ (2,457,302) $ 1,154,036 5% Debt Coverage Ratio191 1.01 2.13 Notes: (1)Source:4th Quarter Report for FY 09-10(Unaudited). Reserve Policy is$25 million. (2)Based on Customer Information System Billing Amounts through September 30,2010. (3)Includes water right lease payment to City of about$1.3 million. (4)Customer Service Allocation to Water Fund-less misc offsetting revenues recorded in fund 31. (5)Principal and Interest on 2003 COP and 2006 Revenue Bonds thru 1st quarter of fiscal year. (6)Approved appropriations for multi-year projects,some of which are carryovers from prior year. (7)Half of Interest Income may be transferred by policy if there is positive net income. As of 9/30/2010,no transfers have been made. (8)Total Revenues less Production,Purch'd Wtr,T&D,Cust Acctg,&A&G divided by Debt Svc Pymnts. Minimum debt coverage requirement is 1.25 per bond financing agreements. 082 Utility Board Meeting 141117 4wisit, November 22, 2010 Chair Robert Gonzales Z t Consent Agenda • October 25, 2010 Minutes • Azusa Substation Circuit Breaker Maintenance • Aerial Service Truck Purchase • T-Mobile Site Lease Agreement 1 A7U5A Net Generator Payment Schedule *(tr..11 Azusa Utility Board November 22, 2010 1 Background • Presently, electric utilities are not required to pay for annual excess or "net" solar energy generated by customers. • AB 510 (signed in February 2010) requires utilities to adopt a net solar energy buy-back rate by January 1 , 2011 ® 3 Proposed Buy-Back Rate • Staff is proposing a "net" solar energy buy-back rate of 9.041 cents per kWh for FY11 • Rate equals AL&W's average power supply projection (budget) for FY11 • Rate applies only if customer generates more than they consume over a 12 month period • Rate would be administratively recalculated based on future fiscal year budgets /NIL m ® 4 7 . 2 Recommendation • It is recommended that the Utility Board: — Approve resolution adopting NGP Schedule which provides for a Net Generator buy-back rate of 9.041 cents/kWh for FY11 — Authorize administrative update of this rate on July 1 of subsequent fiscal years based on that year's approved power supply budget - _ow w 5 a I l'ti:a Update of SBI Solar Partnership Program Azusa Utility Board November 22, 2010 _ AZL A 3 Background • In 2006, Senate Bill 1 was adopted to make available up to $3 billion in solar rebates over ten years to promote distributed solar in California. • Azusa's share of the state rebate goal is -$3 million or about $300K per year. • In June 2006, the Utility Board approved implementation of a solar rebate program in compliance with Senate Bill 1 . `� rw 7 .g7_ USA A 1.1 Sa 0 Date • Since program inception, Azusa has paid $330K in rebates for 83 KW of production. • Current rebate reservations total $403K for about 125 KW of solar power. • Mtn4 8 AZtJSA 4 Solar Rebates Levels 2007 $2.80 $1.20 $4.00 2008 $2.80 $1.20 $4.00 2009 $2.80 $1.20 $4.00 2010 $2.42 $0.58 $3.00 2011 (proposed) $2.25 $0.50 $2.75 9 Other Program Updates • Program Materials updated to include the following key changes: — Clarification of customer Net Metering requirements — Incorporation of Net Solar Buy-Back Rate — 7% reduction of program rebate amount — 8 cent reduction in Renewable Energy Credit premium tilt N 10 AZUSA 5 Recommendation • That the Utility Board approve the updated Solar Partnership Program which includes a 7% annual reduction in solar rebate levels and 8 cent reduction in REC premium. 11 Advanced Metering and "Smarter" Grid Planning Azusa Utility Board November 22, 2010 6 Background • In 2005,Azusa commissioned a study to develop appropriate meter strategy • Based on study,utility began installing AMR meters • AMR meters may be read remotely by handheld unit,by vehicle drive-by or by stationary collectors • Today,they are read by handheld unit only • Approximately 25%of Azusa electric meters are AMR capable today 13 7l'F=� Smart Meters • Recently, there has been a rush nationally to install"smart" meters • Also called "AMI"or Advanced Metering Infrastructure • These meters allow 2 way communications between meter and utility • Cost may be as much as$300 per customer for each of water and electric 14 7 AAE and Smart Grid „, . r. • jir 4"41 ♦F i::� `` \! 4 fes,• /-44V, t 15 AZUSA Smart Grid Title XIII: Smart Grid Section 1301 establishes a federal policy to modernize the electric utility transmission and distribution system to maintain reliability and infrastructure protection, The term"Smart Grid”refers to a distribution system that allows for flow of information from a customer's meter in two directions: both inside the house to thermostats, appliances, and other devices, and from the house back to the utility.' Smart Grid is defined to include a variety of operational and energy measures — including smart meters. smart appliances. renewable energy resources. and energy efficiency resources. Section 1302 calls for DOE to report to Congress on the deployment of Smart Grid technologies and any barriers to deployment. ,11 16 AZUSA 1 Or A Y:P'tF 8 AMI Uses Enhanced customer service Tamper detection P w rDualitymortaring. . Outage.r 9 or long lama sting jgoommoso Asset tngrnt including transformer sizing iiiiminum Reduce fine loses MEM. Premise device-,gad control irrerfaoe oreapabi'ity Rernotey ehanpt m?terin paramotbrs rrl P,ioe responsive DR joiggmi I1Yrtaoe with water or Das meters!. arising evert notficatoncatabiliq F 0°: t@!1 23!0 50% 93% 7% 60% *fes Entity Uses Capability] 17 AZUSA tI` iegy • As noted in last Utility Board meeting, the Utility plans to revisit & update its Meter Infrastructure Plan in light of industry changes • Staff believes it is prudent to obtain outside expertise for this complex activity 18 9 Scope of Work • Evaluate/propose advanced metering devices • Evaluate economical/prudent 2-way communication approach • Evaluate data management systems • Study impact on existing CIS (billing system) • Propose AMI implementation plan • Develop plan for advanced distribution system management • Evaluate possible funding sources for Smart Grid 19 Recommendation • That the Utility Board: — approve the proposed RFP Scope of Work to analyze and develop an AMI and Smart Grid Plan for the utility — Authorize staff to issue the RFP r. • 1 we t, 20 AZUSA 10 FARECai Agency Agreement Azusa Utility Board November 22,2010 Background • FARECaI — Financing Agency for Resource Efficiency in California • Formed in 1993. Besides Azusa, 15 other members • Joint action agency under California law • Authority to issue debt for utility projects 22 11 FARECaI Debt • Presently, Azusa, Colton and Trinity Public Utilities District have outstanding FARECaI indebtedness • Azusa is largest debt holder. • Colton and Trinity are close to paying off or refunding their FARECaI debt obligations 23 CMUA Request • California Municipal Utilities Association is the administrator and Treasurer for FARECaI • CMUA has requested Azusa's assistance in providing and overseeing auditing and accounting of FARECaI • Services to be provided pursuant to Agency Agreement r4:771 24 Azli `A 12 Proposed Agency Agreement • Agency Agreement is an "umbrella type" agreement between FARECaI and Azusa • Under AA, Azusa would provide auditing, accounting and associated record-keeping services to FARECaI • Azusa would be reimbursed for all costs (including labor overheads) for services provided, although its share of costs proportional to its share of FARECaI debt 611.1 Ai25 Approach • Azusa would contract for auditing and accounting services with qualified CPA • Staff would issue RFP for these services 26 A7VV- 13 Recommendation • That the Utility Board approve: — signing of FARECaI Agency Agreement by Mayor — issuance of RFP for FARECaI auditing, accounting and associated record-keeping services _.. 27 All' .A Electric vehicles are Coming ! ! , 4*- f .* . , •.;�► • 1 :8. - _. Azusa Utility Board November 22, 2010 14 EV Opportunities & Challenges • Reduction of CO2 emissions-utility credit? • Increase electricity sales-off peak? • Smart Grid Impacts • Energy Storage opportunities from EV battery • Possible need for time-of-use rates or other rate impacts • Separate circuit and metering of EV? • Charging scenarios and corresponding system impacts • Who pays for system upgrades? • Community charging-who,what,where,cost? �� 29 ^/,.',^ EV Adoption cirir -Ej-fiZI t_ ti7 iip i_k~7]���]��� ^�Q�1_J±~ �r 4k— � `n AZW.A. Electric System Impacts • Pad Mount ' Transformers - • Overhead Transformers • Electric Panel and Service Lines b......_- I 31 A Some EV's • • _, - , aik M� rv....0 32 . . 16 • inside an EV 5E • v • • 40,4 • çt \I. • 33 AZUSA EV ChargIng Charging Types Level 1 Level 2 DC Fast Charge Voltage 120 VAC, 240 VAC; Up to 600 single phase sirgle phase VDC Electric Load 2 K''V E KW 150 KW Charging Time 12+ hours 4+ hours Minutes Industry Standard Yes Yes No. Al lees Exists? 1 year away. 34 A 7. t: A 17 How to Charge EV liow to 0• Power reed r 44444tkilia _ e, rt;-:;,1.1 .f, iltio 1, t ;i_ 1 u - sF .,`„,k-'''` r.. ( 1 4'_ rt. -af�' 3 35 c q EV and Charging Unit Wal:- . _ hL. sii; 1, • • 0/ ...----• ^Y 36 AZUSA 18 EV Charging 1111 • 44100 37 AZUSA • Level I Home Charging (120V) 4), /111?ij _fr5% 38 AZL . 19 Level 2 Home Charging (240V) i al . , 39 Level 3 Charging (480V) 4 _ • ,41 e II °;:„V- --;:t7;741-:1 --......... ......".-0 40 A L "-• ‘ 20 Readiness Activities • Utility Board,employees customer education efforts • Utility Rules&Policies Changes • Marketing&promotional materials via print and web • Technical enhancements including possible service and meter upgrades • Industry monitoring and joint efforts µ 41 n,7 us a What's Next • Staff to continue work to develop EV charging policies • Return to Utility Board early in 2011 with recommendations • Issues include: — whether to separately meter — whether to establish TOU rate to encourage off peak charging — AL&W's role,if any,in installing home charging equipment — Who pays for external electric system improvements if any — Promotion/funding of community charging stations 42 P,7U5T, 21 Questions/Comments L111111- 3t h ..3. - 4) t . ,:,.._ ,._ -1,..,- - :. _ 1 ���,,,,,,��pp,,���ma�yy�.. /�,.1 IYe.L4:J_V W'UAJS 43 1st Quarter Financial Reports moi . Azusa Utility Board November 22, 2010 Alt tiA 22 Background • Staff computes quarterly financial snapshots for both water and electric utilities • Based on best available information at time of report sF 45 AZI.JSA 1st Quarter Electric Sales FY kWh Sales Billings 04-05 71,964,573 7,926,646 05-06 69,355,197 7,739,171 06-07 77,315,637 9,607,056 07-08 74,574,610 8,636,012 08-09 74,709,048 9,921,295 09-10 71,339,048 8,787,362 10-11 66,556,732 9,579,024 46 AZLSA 23 Electric Summary • 1St Quarter Statistics: — Sales at 26% of budget — Revenues at 28% of budget — Operating Expenses at 26% of budget — Capital Outlays at 6% of budget — Net "income" +$571 K (vs -$3.1 M FY budget) — Debt Coverage of 8.08 (1 .10 is min.) — Cash of $11 .7M ($12.6M min. target) • Conclusion — modest progress to fir...,.. 47 AZUSA rosmmon end Rosen,roto 1'nor f t I nal 1>t 555 boded anPon eni 43010 onsumption-kWh: 253,116,501 66556,732 2629% ash/Reserve Prior Fiscal Year EM" 511,101,181 511,672,335 105% l's 7001-20108odg,t InformationUudgrt 5,mat Ihni Pw.rnt o! /4-IL 9r10 in Ruda.» 140.11110 Billing Amountsn' 531,515 900 59,579,024 30% Electric °e Re mur 6,361,025 1,014,650 16% us 50,l auouc Revenue 303,300 99,624 33% I serest biome 2245.715 135,605 55% Total Revenues 536,425,940 $10,1329,105 28% •Mussed Powers' 525564.1^5 56,878,679 27% rasssmtssion'Dispetching 3,942.015 8'.'0,518 21% s,rration and Maintenance 3,302795 638,914 19% sbrtinistrativa and General. 2,259,810 574,563 25% ran.hise and in-Lieu-Try 3,456,260 974.705 25% Subtotal Expenses 538,5+5,000 59,867,369 26% apital Expenditures/Debt Service ong Term Debt Service' $948,615 5237,154 25% pital Outlays and Projects•' 2082,749 133,431 6% Total Expenditures 541556,364 510,257.951 25% Adjustments run6ers Out" 9,450 0 0% Total Expenditures and Transfers Out 511,565,814 510 ,951 25% Change in Cashiteserve (53.136,674) =I 5% Debt Coverage Ratio" 354 48 A 24 1st Quarter Water Sales FY CCF Sales Billings 04-05 2,982,785 4,638,801 05-06 2,911,324 4,242,006 06-07 3,136,153 4,781,594 07-08 2,875,872 4,659,711 08-09 2,498,047 4,073,146 09-10 2,490,393 4,622,114 10-11 2,428,273 5,111,232 49 Water Summary • 1st Quarter Statistics: — Sales at 31%of budget — Revenues at 28%of budget — Operating Expenses at 21%of budget —Capital Outlays at 2%of budget — Net"income"+$1.1M (vs-$2.4M FY budget) — Debt Coverage of 2.13 (1.25 min.) — Cash of$26.2M ($25M min.target) • Conclusion—all is well 50 25 Consumption and Reserve Info him Is Ind 1st Qtr I ruled Percent Consumption•CCF: 7,853,732 2,428,273 31°• Cash and Investntents:o' 5 25,077,890 S 26,231,926 105!• Il'2009-2010 Budget InformationRudgr! Actual 71tn� Penrnt of 10-11 1st OI: Budget Revenues Retail Billing Amounts c‘ $17,521365 $ 5,111,232 a ter Revenues 515,000 146,296 28 WaterI serest Income 500,000 81 t' Total Revenues $ 18,536,365 5 5,257,609 Expenses Production $3203,405 $663,871 21 Putrhased Water°i 3,212,415 421,993 1 ransmission and Distribution 2,505,270 611,349 24 - ustorner Accounting and Sales ts' 4,062,145 1,015,536 25 Administrative and Engineering 983,105 132,381 1 , ranchise Fees 390,665 105,528 i' I Subtotal Expenses S 2 950.Cf7 _1 Capital Expenditures I Debt Sen-ire: IP-1st Semite Payments is 54,520,170 $ 1,130,043 25 apital Improvement Budget'' 2.140,000 46,382 24 spited Projects Funded Ity Bond (23,508) (23,508) 1(0°• Total Expenses(Less Bond Funding) S 20,993,667 $ 4,103,574 20" Adjustments rangers Out'1 $0 50 0°• Total Lxpenditures and Transfers Out $ 20,993,667 5 4,103,574 20 i Net Change in Cash(Negative) $ (2,457,302) 1,154,036 5° Debt Coverage Ratio" 1.01 .13 ri` 51 AZUSA. -t - F ,s'Ec Comments/Questions , ..,, tor- i__.7 iii.j ,5 = ., .;, ; ., ! „. 52 AZUSA 26 CRC River Walk and Compost Workshop Report Azusa Utility Board November 22, 2010 AZ ( Background • On January 25, 2010, the Utility Board approved a request to fund 2 CRC programs • CRC — California Resource Connections 54 ALL' 27 River Walk & Litter Clean-up • April 17, 2010 • Clean-up of portion of San Gabriel River • Total event cost was $31 ,912 • AL&W share was $7,400 • Attendance 85 people. Ages 3 to 65. • 500 pounds trash collected -w /,;!1 55 7 Backyard Composting Workshop • April 10, 2010 • North Recreation Center • 77 attendees (including 15 volunteers) • Total event cost was $17,925 • AL&W share was $7,425 • Water conservation and composting education provided • 55 composting bins distributed e4 i /% ' 56 2g Comments/Questions r •r i . rl p�lC( .•11 JJ 57 29 Permie3 !1LUSA _CHT a 'k id EE INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: NOVEMBER 22, 2010 SUBJECT: CALIFORNIA RESOURCE CONNECTIONS RIVER WALK AND COMPOST WORKSHOP PROGRAM REPORTS On January 25, 2010, the Utility Board approved a request by California Resource Connections (CRC) to help fund two environmental programs in Azusa: (1) a River Walk and Litter Clean-up event in amount of $7,400; and (2) Smart Gardening and Compost Workshop in amount of $7,425. The Compost Workshop was conducted on April 10, 2010, and the River Walk event was held on April 17, 2010. CRC is required to provide the City with a follow up report pursuant to the City's funding support for the two events, and a report was submitted by CRC in October on the two programs and is attached for your review and any comments you might have. Staff is generally pleased with CRC's initiative to propose and conduct such programs in Azusa and encourages Board Members to read the attached reports for details about the respective programs. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities Attachment 2010 CRC Program Rpt.pdf 083 CALIFORNIA RESOURCE CONNECTIONS, INC . 1201 N. Azusa Avenue • Azusa, CA 91702 • 626.969.2491 • www.watershedconnections.ory RESEARCH • EDUCATION • ACTION • LAND To: Azusa Utility Board / Azusa City Council From: Suzanne Avila, Program Director California Resource Connections, Inc. Date: October 27, 2010 Re: Final Report for Backyard Composting Workshop (4/10/10) and San Gabriel River Litter Clean-up Event (4/10/10) California Resource Connections, Inc. (CRC), the Azusa-based non-profit organization with a mission to "connect people to land", is happy to submit the attached narratives and financial reports representing the final accounting for the 2 community environmental education events funded this year (2010) by Azusa Light and Water/City of Azusa. Specifically, these events were a Backyard Composting/Smart Gardening Workshop held April 10, 2010 at the North Recreation Center at Memorial Park; and a San Gabriel River Litter Clean-up event held April 17 2010 along the river bike trail as part of the City of Azusa's April 2010 "Clean, Green, and More Beautiful" campaign. Through your support CRC was able produced two environmentally-conscious programs to educate residents on a variety of sustainable living practices and on the inherent qualities of the natural resources of the San Gabriel River watershed. This was the third year that CRC produced these events and interest throughout the community continues to grow as both events are well attended by Azusa residents of all ages. Both events were also produced by partnering and collaborating with a multitude of organizations and agencies. CRC is fortunate to have developed a number of partnerships over the years with organizations tasked with similar interests in conservation work. Our partners are happy to help when called upon, thus enforcing the relationship and helping CRC succeed. CRC is appreciative of the opportunity to work with and represent the City of Azusa in this endeavor. It is a pleasure creating and developing environmental programs in the Canyon City. 084 2010 Environmental Programs—Final Reporting EVENT#1 BACKYARD COMPOSTING/SMART GARDENING WORKSHOP Saturday,April 10,2010, 10:30 am—12:30 pm North Recreation Center Memorial Park 320 N.Orange Place Azusa,CA 91702 Final Statistics: Number in attendance: 77(62 participants+15 volunteers) Copies of the Workshop sign in sheets are provided at the end of this document. Composting bins distributed=55 Total Bins given away free to Azusa residents: 48 (4 worm bins+44 soil saver bins) Bins sold for nominal fee to non-Azusa residents: 7 (1 worm bins+6 soil saver bins) Composting bins remaining in CRC possession: 2 (2 soil saver bins purchased in 2009,stored inside Taylor House at Azusa River Park) Description of program: The purpose of the Azusa Smart Gardening Workshop was to educated residents on native plant gardening, promote water conservation practices, and encourage various methods of backyard composting including vermiculture (worm composting), all in an effort to promote sustainable living practices. CRC's main partners in producing the Azusa Smart Gardening Workshop were Azusa Recreation and Family Services, who allowed use of North Recreation Center facilities to host the event; and the California Conservation Corps (CCC) who provided a labor crew for equipment pickup and delivery,event set up and tear down,and who also served as event hosts helping things run smoothly and in a timely manner the day of the event. Morning check-in began with participants signing in at a registration tent where names and addresses were collected in order to keep track of residents to whom composting bins were distributed. All resident's addresses were checked against address collected in previous two past Smart Gardening Workshops (2008 and 2009) to insure that duplicate bins are not given to the same household. Brief welcoming remarks were said by CRC directors,followed by the introduction of the Master Composter representing Los Angeles County Department of Public Works Smart 2 085 Gardening Division, who conducted the lectures and composting demonstrations. Nurses from the Azusa Neighborhood Wellness Center then led a brief discussion on the health benefits of gardening. Four resident volunteers distributed recycling bags and "Green and Clean" calendars donated by Azusa Light & Water and while members of the California Conservation Corps helped distribute composting bins and loaded them in the automobiles of those in attendance. In addition, informational booths focusing on water conservation were hosted by Rain Bird Corporation and by Master Gardener Xilonin Cruz-Gonzales. Description of how event was advertised and marketed: A press release inviting Azusa residents to attend the Smart Gardening Workshop was created and advertised through the following: Assemblyman Dr. Ed Hernandez— via e-mail list of constituents; Azusa Herald - articles appeared on 03/25/09 and 4/22/10; Azusa Unified School District- Student Achievement/Educational Services; Azusa Woman's Club Newsletter— The Chain, March/April 2010 edition; Citrus Community College — Service Learning; City of Azusa City Council Meetings - during public participation on 04/05/10 and 04/19/10 City Hall Marquee — on rotation from 04/01/10 to 04/19/10 Library— flyers on front counter from 03/27/10 to 04/19/10 Light & Water April Clean and Green Campaign — announcement in Campaign pamphlet sent to all utility customers and on Light & Water marquee rotation from 04/01/10 to 04/19/10 On-line City Calendar — entire month of April 2010 Revolving Charter Cable Bulletin — entire month of April 2010 San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy Website - Month of April 2010 San Gabriel Valley Tribune — submitted via features@sgvn.com Costs associated with program activities: See Financial Report outlined in chart on next page. 3 086 EVENT #1 - Smart Gardening Workshop 2010 Financial Report: MATERIALS OUTLINED AZUSA LIGHT PARTNER IN BUDGET REQUEST & WATER CONTRIBUTION TOTAL NOTES FUNDING 55 Composting Bins = $3712.03 $3, 175.00 Azusa Light & Water — 55 composting bins 5 Worm + 50 Soil Savers including 5 worm cards + shipping. Purchased from TRIFORMIS Corporation, Hawthorne, CA. $750.00 $750.00 Azusa Light & Water — Donation of recyclable grocery bags and "Green & Clean" calendars for participants. $500.00 $500.00 Azusa Pacific University School of Nursing and Neighborhood Wellness Center — 2 APU Nurses to discuss health benefits of gardening. Azusa Recreation donation of $2050.00 $2050.00 Azusa Recreation and Family Services — Use of Facility Use (storage, restroom, North Recreation Center facilities at Memorial parking lot),and Event Equipment Park, Azusa; Donation of use of 50 chairs 5 tables. (tables, chairs) CCC donation of Corps $1 ,000.00 $1 ,000.00 California Conservation Corps — 5 Corps Members/Event Leaders Members, 4 hours each to host event (help (20 hours @ $25.00 hour), distribute composting bins to participants); and Use of equipment event clean up. (truck, van, clean up equipment) Program Planner(s) stipend for $3,712.97 $3,375.00 49.5 hours $75.00/hour � $7,087.97 California Resource Connections, Inc. — °� Program planning leadership VOLUNTEER paid for by Azusa Light & Water HOURS = 45.0 hours @ $75.00/hour = $3,375.00 (SA total hours = 94.5). Bottled Water $50.00 $50.00 California Resource Connections, Inc. — Purchased 2 cases of bottled water. $750.00 $750.00 County of Los Angeles Dept of Public Works Environmental Programs Division — 2 person team to lead workshop. $275.00 $275.00 Master Gardener Xilonin Cruz Gonzales — Hosted an educational booth on drought tolerant plants. $1 ,750.00 $1 ,750.00 Rain Bird Corporation — Hosted an educational booth on water conservation; Donation of seed packets and water-saving hose nozzles. Event 1 Total $7,425.00 $10,500.00 $17,925.00 C) 4 00 EVENT#2 THINK RIVER!SAN GABRIEL RIVER LITTER CLEAN UP Saturday,April 17,2010,9:00 am—11:30 am Azusa River Wilderness Park 100 N.Old San Gabriel Canyon Road Azusa,CA 91702 Final Statistics: Number of participants: 85 people Ranging in age from 3 to 65. Amount of trash collected: 500 lbs. Trash consisted of plastics,paper,broken glass,tires,plywood scraps,one shopping cart,and numerous cigarette butts. Average amount of steps taken,per person,to walk the 3.6 mile river bike trail: 6,118 Azusa Neighborhood Wellness Center recommends walking 10,000 steps per day to maintain health and weight. Description of program: The purpose of Think River! Azusa—San Gabriel River litter clean up and watershed education walk was to conduct a community litter clean up along the San Gabriel River while educating participants on the importance of maintaining a healthy San Gabriel River watershed. This event was conducted as part of the City of Azusa's April 2010 "Clean, Green and More Beautiful"campaign. CRC's main partners in producing Think River! Azusa were the Watershed Conservation Authority/Rivers and Mountains Conservancy(WCA/RMC), owners/operators of the Azusa River Wilderness Park,who allowed use of park facilities. USDA Forest Service/Angeles National Forest provided Ranger Services to deliver opening safety message and watershed interpretation messages; and the California Conservation Corps (CCC) provided a labor crew for equipment pickup and delivery,event set up and tear down,and to serve as event hosts helping things run smoothly and in a timely manner. The morning's activities began at the Azusa River Park/EI Encanto parking lot with participants signing in at a registration tent. Morning snacks, water, sunscreen, and insect repellant was available for all participants. The flag salute was led by student representative from Azusa High School Varsity Football Team. On hand to for welcoming remarks were City of Azusa Mayor Joseph Rocha and USDA Forest Service Ranger L'Tanga Watson. Participants were then invited to visit several educational stations as part of the Watershed Education component. These stations were hosted by experts from the following organizations:Azusa Beautiful-who gave out information on city wide clean- 5 088 up activities; Azusa Neighborhood Wellness Center - who handed out sunscreen, insect repellant, and pedometers to educate participants on the health benefits of an outdoor walk; EcoTribe - who provided interactive, hands-on information on the San Gabriel River Watershed in terms of water supply and water quality (i.e. how trash affects water quality); and Rain Bird Corporation — who disseminated information on the water conservation benefits of designing and maintaining drought tolerant landscapes. Each participant was given a trash bag and plastic glove and then the entire group was escorted across Highway 39 by the California Conservation Corps to the northern terminus of the Azusa River Bike Trail. On hand to help launch the walk were Woodsy Owl, representing the U.S. Forest Service and their ecology message; and h2o Owl, representing the San Gabriel Valley Municipal Water District and their water conservation message. Participants then walked south, picking up litter along the way while counting the number of steps taken to complete the walk via their pedometers. The Azusa Historical Society hosted an educational station that served as the official turn-around point of the watershed education walk. This station was located at Lario Park, on Foothill Boulevard just east of the San Gabriel River. Members of the Azusa Historical Society had photos and artifacts on display that focused on the history of the San Gabriel River Watershed. In addition, the Historical Society members handed out water and collected trash bags if they were too heavy for participants to carry back. New trash bags were also handed out if needed. Conclusion of the event was back at El Encanto/Azusa River Park where all trash bags collected, counted, weighed, and disposed of properly. Participants were asked to record the number of steps counted on their pedometers next to their name on the sign in sheet and were then given a recycling bag for participating. Description of how event was advertised and marketed: A bilingual flyer was created specifically to target and recruit Azusa Unified School District (AUSD) students. A total of 8,580 flyers were collated and distributed to students at Azusa's 12 elementary schools, 3 junior high schools, and 3 high schools, via the AUSD Educational Services Department. In addition, a press release inviting Azusa residents to attend the Think River! was created and advertised through the following: Assemblyman Dr. Ed Hernandez— via e-mail list of constituents Azusa Herald - articles appeared on 04/08/10 Community Calendar and on 04/15/10 as part of lead story Azusa Unified School District- Student Achievement/Educational Services Azusa Woman's Club Newsletter— The Chain, March/April 2010 edition Citrus Community College — Service Learning City of Azusa City Council Meetings - during public participation on 04/05/10 and 04/19/10 6 089 City Hall Marquee — on rotation from 04/01/10 to 04/19/10 Library—flyers on front counter from 04/01/10 to 04/19/10 Light & Water April Clean and Green Campaign — announcement in Campaign pamphlet sent to all utility customers and on Light & Water marquee rotation from 04/01/10 to 04/19/10 On-line City Calendar — months of March and April 2010 Revolving Charter Cable Bulletin — Months of March and April 2010 San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy Website - Months of March and April 2010 San Gabriel Valley Tribune — article appeared on 04/13/10, Local News Costs associated with program activities: See Financial Report outlined in chart on next page. 7 090 EVENT #2 - Think River! Azusa 2010 Financial Report: MATERIALS OUTLINED AZUSA LIGHT & PARTNER IN BUDGET REQUEST WATER CONTRIBUTION TOTAL NOTES FUNDING Outreach/Marketing $450.00 $450.00 Assemblymenber Ed Hernandez, O.D. — Partner recruiting; Sponsor recognition Trash Disposal Service $500.00 $500.00 Athens Services — 10 cardboard box trash containers, 20 trash box liners, plus delivery; one additional trash pick- up of Azusa River Park bins prior to event. Outreach/Marketing $250.00 $250.00 Azusa Beautiful — Posted info on Twitter and Fan page; Recruited from Azusa Beautiful website. Event Equipment $650.00 $650.00 Azusa City Library — Donation of use of 5 EZ-Up tents. Educational Materials $550.00 $550.00 Azusa Historical Society - Hosted an educational station that focused on the history of the San Gabriel River Watershed and served as the official turn-around point of the watershed education walk. Educational Materials $750.00 $750.00 Azusa Light & Water — Donation of recyclable grocery bags and "Green & Clean" calendars for participants. Education station $250.00 $250.00 Azusa Pacific University School of Nursing and Neighborhood Wellness Center — Hosted an education station and handed out sunscreen, insect repellant, and pedometers to educate participants on the health benefits of an outdoor walk Safety Equipment $850.00 $850.00 Azusa Police Department — Use of reader board to warn Hwy 39 traffic of pedestrians on bike trail, Event Equipment $850.00 $850.00 Azusa Recreation and Family Services - Donation of use of 8 tables, 1 podium, 1 PA system. Outreach/Marketing $500.00 $500.00 Azusa Unified School District — Student Achievement/Educational Services Department distributes two-sided, bilingual flyer to 8,580 students in AUSA elementary, junior high, and high schools. Trash Bags $250.00 $250.00 CalTrans — 300 trash bags for participant use. CO 8 1--ek MATERIALS OUTLINED AZUSA LIGHT & PARTNER IN BUDGET REQUEST WATER CONTRIBUTION TOTAL NOTES FUNDING CCC donation of Corps $1,000.00 $1,000.00 California Conservation Corps—4 Corps Members/Event Leaders Members, 10 hours each to pick up equipment (40 hours @$25.00 hour) from Azusa Recreation (tents, chairs, tables, Use of equipment podium, PA system); host event(help participants); (truck, van, clean up equipment) dress up as, and escort, the US Forest Service's "Woodsy Owl" and SGVMWD 's "h2o Owl", and conduct event clean up. Program Planner(s)stipend for $7,400.00 $5,887.50 $13,287.50 California Resource Connections, Inc.— 98.66hours @ $75.00/hour Program planning leadership VOLUNTEER HOURS = 78.5 hours @ $75.00/hour=$5,887.50 (SA total hours = 177.16). Oureach/Marketing $200.00 $200.00 Citrus College Service Learning—Student recruitment offering community service hours for college credit. Education Station $750.00 $750.00 EcoTribe- Hosted an educational station that provided interactive, hands-on information on the San Gabriel River Watershed in terms of water supply and water quality. Take home potted plant _available for all. Outreach/Marketing $350.00 $350.00 L.A. County Dept of Public Works Watershed Management Division—Event coordination with regional events and with water purveyors; Provided educational materials on safety issues along the river. Facilities Use $1,250.00 $1,250.00 L.A. County Dept of Parks and Recreation Lario San Gabriel River Trial— Use of trailhead facilities to serve as turn-around point for river trail _ clean-up. Education Station $275.00 $275.00 Master Gardener Xilonin Cruz Gonzales— Hosted an educational booth on drought tolerant plants. Ambulance/Medic Service $850.00 $850.00 Priority-One Medical Transport—One (2 paramedics @ 4 hours each) ambulance and 2 paramedics stationed at Azusa River Park during event. C) Ca 9 tV MATERIALS OUTLINED CITY OF AZUSA PARTNER IN BUDGET REQUEST FUNDING CONTRIBUTION TOTAL NOTES Education Station $1,750.00 $1,750.00 Rain Bird Corporation—Hosted an educational station that disseminated information on the water conservation benefits of designing and maintaining drought tolerant landscapes. Safety Supplies $200.00 $200.00 San Gabriel River Water Committee—Donated the purchase of safety supplies for participants (gloves, sunscreen, hand wipes, and napkins to serve snacks). Education Station $500.00 $500.00 San Gabriel Valley Municipal Water District- Donated use of water mascot (h2o Owl). Safety Supplies, $850.00 $850.00 U.S. Forest Service—Donation of Woodsy Owl Education Station and associated ecology curriculum; Ranger services to deliver safety speech as opening remarks. Student Outreach $2,800.00 $2,800.00 Vulcan Materials Company, Western Division— Donated the printing of 8,600 copies of two sided bilingual flyer advertising event for distribution to AUSD students. Safety Supplies $200.00 $200.00 Vulcan Materials Company, Western Division— Donated 15 cases of bottled water.. WCA/RMC donation of facilities $550.00 $550.00 Watershed Conservation Authority/Rivers and (storage, restroom, parking lot), Mountains Conservancy— Use of facilities at El Encanto/Azusa River Park. Event 2 Total $7,400.00 $24,512.50 $31,912.50 C.3 (D CW 10 Total funding amounts for two events: TOTAL FUNDING FOR CITY OF AZUSA PARTNER TWO 2010 EVENTS FUNDING CONTRIBUTIONS TOTAL 1 Community Gardening and Composting Workshop Event 1 Total $7,425.00 $10,500.00 $17,925.00 2 Think River! Clean Up Event 2 Total $7,400.00 $24,512.50 $31,912.50 TOTAL AMOUNT SPENT $14,825.00 $35,012.50 $49,837.50 11 094