HomeMy WebLinkAboutMinutes - March 26, 2018 - UBCITY OF AZUSA
MINUTES OF THE REGULAR MEETING
OF THE AZUSA UTILITY BOARD/CITY COUNCIL
MONDAY, MARCH 26, 2018 – 6:30 P.M.
Chairman: Uriel E. Macias
Vice Chairman: Robert Gonzales
Board Member: Joseph R. Rocha
Board Member: Edward J. Alvarez
Board Member: Angel A. Carrillo
Secretary: Jeffrey Lawrence Cornejo, Jr.
The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, in the Azusa Light
and Water (ALW) Conference Room, located at 729 North Azusa Avenue, Azusa, California.
Chair Macias called the meeting to order at 6:30 P.M.
Pledge to the flag was led by Public Works Director Bobadilla.
ROLL CALL: Roll call was taken by Secretary Cornejo.
PRESENT: BOARD MEMBERS: MACIAS, GONZALES, ROCHA, CARRILLO (arrived at 6:36 p.m.), ALVAREZ
ABSENT: BOARD MEMBERS: NONE
ALSO PRESENT
Elected Officials: Secretary Cornejo
City Attorney: Jeff Ferre
Staff Members: Interim Utilities Director Lehr, Public Works Director Bobadilla, Assistant Director of Water
Operations Macias, Utilities Communications and Environment Programs Specialist Sagun, Senior Management Analyst
Lacasella, Utilities Administrative and Financial Services Manager Tran, Police Captain Dennis, Storekeeper Alvarez,
Chief Deputy City Clerk Garcia
PUBLIC PARTICIPATION
Jorge Rosales noted a large difference between Staff’s estimate and accepted least cost bid in Item D-2 as well as
vaguness in reporting information for Item D-7. The contract amount in Item D-2 is almost twice the amount budgeted
for the project. Apparently an increase had been previously approved for Item D-7. Perhaps confidentiality precluded the
release of information for Item D-7.
UTILITIES DIRECTOR COMMENTS
Interim Utilities Director Lehr responded to Mr. Rosales' comments with the explanation that labor costs had risen since
the interconnection project in Item D-2 was budgeted, and staff did not review and increase the budgeted amount each
year the project was carried forward. Funds will be reallocated from other projects to the interconnection project.
City Attorney Ferre reported Item D-7 pertained to pending litigation, Running v. City of Azusa, about which the Utility
Board and City Council had been briefed. The City was seeking funds from other sources to cover Azusa attorney fees
associated with the lawsuit. Confidentiality requirements prevented further disclosure of information.
PAGE 2 – 03/26/2018
UTILITY BOARD MEMBER COMMENTS
ELECTION OF OFFICERS
Interim Utilities Director Lehr noted Municipal Code requirements for election of officers.
Moved by Board Member Carrillo, seconded by Board Member Rocha, to elect Board Member Gonzales as Chairman by
the following vote of the Board:
AYES: BOARD MEMBERS: MACIAS, GONZALES, ROCHA, CARRILLO, ALVAREZ
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
ABSTAIN: BOARD MEMBERS: NONE
Moved by Board Member Carrillo, seconded by Vice Chair Gonzales, to elect Board Member Alvarez as Vice Chairman
by the following vote of the Board:
AYES: BOARD MEMBERS: MACIAS, GONZALES, ROCHA, CARRILLO, ALVAREZ
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
ABSTAIN: BOARD MEMBERS: NONE
Moved by Board Member Carrillo, seconded by Board Member Rocha, to affirm City Clerk Cornejo as Secretary by the
following vote of the Board:
AYES: BOARD MEMBERS: MACIAS, GONZALES, ROCHA, CARRILLO, ALVAREZ
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
ABSTAIN: BOARD MEMBERS: NONE
CONSENT CALENDAR
Moved by Vice Chair Alvarez, seconded by Board Member Carrillo, to approve the Consent Calendar by the following
vote of the Board:
AYES: BOARD MEMBERS: GONZALES, ALVAREZ (Items D 2-7), MACIAS, ROCHA, CARRILLO
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
ABSTAIN: BOARD MEMBERS: ALVAREZ (Item D 1 only)
1. The minutes of the regular meeting of February 26, 2018 were approved as written.
2. The award of a contract to Stephen Doreck Equipment Rentals, Inc., of Pico Rivera, California, for Water Project
W-280A, SGVMWD interconnect and site improvements, was approved; and the Mayor was authorized to
execute the contract in a form acceptable to the City Attorney.
3. On-Call Engineering Task Order Number 2, construction inspection services for the SGVMWD interconnect and
site improvements, Project W-280A, was awarded to CivilSource, Inc., in a not-to-exceed price of $68,761 and in
accordance with Azusa Municipal Code Section 2-518–Contracts (c), Master Professional Services Contracts.
4. On-Call Engineering Task Order Number 3, professional SCADA integration services for the SGVMWD
interconnect, Project W-280A, was awarded to Stantec Consulting Services, Inc., for a lump-sum not-to-exceed
price of $48,812 and in accordance with Azusa Municipal Code Section 2-518–Contracts (c), Master Professional
Services Contracts.
PAGE 3 – 03/26/2018
5. Staff was authorized to develop four (4) Professional Services Agreements (PSAs) with Vass Solutions, Sheffield
Scientific, Maintenance and Test Engineering, and T.S. McDonnald Associates for as-needed Owner's Engineer
consulting service on the Advanced Metering Infrastructure (AMI) project; the Mayor was authorized to execute
four (4) PSAs with each of the selected firms; and the Director of Utilities was authorized to administer PSAs,
including making any ancillary arrangements if such are required.
6. Amendment Number 2 to the Professional Services Agreement (PSA) with APX, Inc., extending the term of the
PSA through June 30, 2010, at no change in monthly cost was approved; and the Director of Utilities was
authorized to administer an amended PSA, including making any ancillary arrangements if such are required.
7. An increase to the existing Blanket Purchase Order for Best Krieger LLP of $400,000 for a total of $535,000 was
approved; and a budget amendment to the Water Fund's Legal Expenses (32-40-721-798-6301) in the amount of
$200,000 was approved.
SCHEDULED ITEMS
ELECTRIC COST OF SERVICE AND RATE DESIGN STUDY REVIEW
Interim Utilities Director Lehr proposed to share study findings and recommendations and to receive public comments in
the current meeting and to return in April with a detailed plan to adjust rates effective July 1. Azusla Light and Water
(ALW) commissioned a rate study in 2017 due to major changes in ALW's power supply portfolio, mandates for
increased renewable energy purchases, dynamic power markets, and a desire to review fixed and variable rate
components. Through a competitive process, ALW selected Burns & McDonnell, who provided a five-year financial
forecast, reviewed allocations among customer classes, made recommendations, calculated rate adjustments, and prepared
a financial forecast and rate analysis model. Burns & McDonnell recommended revenue-neutral rate adjustments of
increased fixed-rate components and reduced variable-rate components; consideration of a Power Cost Adjustment (PCA)
to more closely reflect power supply costs; extension of the Time of Use (TOU) summer period through October;
consideration of devising and offering a modified TOU rate as an option; consideration of additional rate options after
Advanced Metering Infrastructure (AMI) has been operational for at least one year; regular monitoring of financial
positions; and conducting a rate analysis again in three to five years or after AMI has been implemented for at least one
year.
ADVANCED METERING INFRASTRUCTURE (AMI) PROJECT UPDATE AND APPROVAL OF PHASE ONE
CHANGE TO INCLUDE ADDITIONAL ELECTRIC METERS
Interim Utilities Director Lehr reported the Board approved the AMI project in 2017. Sensus is the lead contractor and
project manager; Harris is the subcontractor for software data management; and UPA is the subcontractor for hardware.
The project was planned in three phases extending over three years. Phase I, the pilot phase, is underway and includes
installation of 77 water and 57 power meters and full functionality testing of software. Staff is developing a procedure for
rigorous acceptance testing and may hire an independent consultant to provide additional perspectives. The project is
proceeding according to schedule. Staff seeks authorization to accelerate the purchase of 400 additional electric meters
(originally scheduled in Phase II) for testing of one full electric zone. Staff proposes installing the meters around Azusa
Pacific University (APU) student housing. Given the high number of service connections and disconnections at APU
housing, AMI could accelerate service timeframes.
In response to questions, Interim Utilities Director Lehr advised that each unit of APU student housing, including
modules, has its own meter and receives an individual bill.
Moved by Board Member Carrillo, seconded by Board Member Macias, to approve the purchase of 400 additional electric
meters for the AMI Phase I program in the amount of $58,800 plus sales tax by the following vote of the Board:
AYES: BOARD MEMBERS: GONZALES, ALVAREZ, ROCHA, CARRILLO, MACIAS
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
ABSTAIN: BOARD MEMBERS: NONE
PAGE 4 – 03/26/2018
STAFF REPORTS/COMMUNICATIONS
PROCUREMENT OF ENERGY HEDGE FOR Q3 2018
Interim Utilities Director Lehr reported staff followed its usual approach to purchase energy hedge for the summer months
as summer energy prices are quite volatile. Currently, ALW is not over-resourced. Staff purchased 15 MWH/hr of
energy for all on-peak hours for the period July through September 2018. Staff issued solicitations to five companies and
received three responses. Shell submitted the most competitive price; however, staff negotiated the offer down to $45.85
per MWH. The total purchase amount is $836,304.
In reply to Board Member questions, Interim Utilities Director Lehr explained that staff analyzed market projections and
resources to determine a good time to purchase energy hedge. Purchasing energy hedge early in the year reduced the risk
of summer market volatility. Over the past few years, ALW's purchases had saved money.
RESULTS OF THE CALIFORNIA AIR RESOURCES BOARD'S FEBRUARY 21, 2018 AUCTION OF
GREENHOUSE GAS ALLOWANCES
Interim Utilities Director Lehr reported AB 32 and resulting regulations prohibit staff from discussing its intent to
participate in greenhouse gas auctions or its bidding strategy for auctions. In the first quarter 2018 auction, ALW sold
90,000 2018 allowances at a price of $14.61 each for total proceeds of $1.3 million. Sale proceeds may fund special
projects or may be refunded as a direct credit to ratepayers.
VERBAL COMMUNICATIONS
WATER SUPPLY UPDATE
Interim Utilities Director Lehr expected the State Water Control Board to adopt permanent statewide water restrictions in
the next few weeks. With the recent rain, the water situation is a bit better but still dire. Rainfall is currently 48% of the
seasonal normal. The snow pack is still low at 56%; although, it has increased since the last report. The Main San
Gabriel Basin level has decreased to 182 feet, which is 10 feet above the all-time low level. A substantial multiyear
recharge is needed for it to return to normal levels. The County has approximately 20,000 acre feet stored in San Gabriel
reservoirs, but only 9,700 acre feet are available for release. The Committee of Nine, of which ALW is a member, has the
right to the first 135 cubic feet per second of water flowing in the river below the Morris reservoir. The state water
allocation based on the Sierra snowpack is set at 20% for 2018. The San Gabriel Valley Municipal Water District
(SGVMWD) will receive 5,760 acre feet of water in 2018. Beginning in September or October, ALW will be able to
channel some water from the Devil's Canyon pipeline dirtectly to the filtration plant as a result of the interconnection
project. The Watermaster's 2017 modification of the Resource Development Assessment (RDA) for groundwater
recharge will be very costly for ALW. The cost of water per acre foot pumped from the basin is set at $70 in 2018, $105
in 2019, $140 in 2020, and $175 in 2021-2025. This calculates to millions of dollars for ALW annually. The
Watermaster expects the assessment will extend indefinitely. The Watermaster has determined that the assessment covers
both pumped and diverted water. Water conservation measures per Rule 21 are in effect in Azusa. Given that the April 1
date for summer watering has been published, Staff proposed posting to the website a recommendation to postpone
summer watering to the end of April. Watering three times per week in April will not be subject to enforcement. Staff is
not proposing a policy change.
CLOSED SESSION
None.
PAGE 5 – 03/26/2018
ADJOURNMENT
The meeting was adjourned by consensus of the Utility Board.
TIME OF ADJOURNMENT: 7:18 P.M.
__________________________________________
CITY CLERK/SECRETARY