HomeMy WebLinkAboutMinutes - August 26, 2002 UB Fr'
AZUSA`
CITY OF AZUSA
MINUTES OF THE REGULAR
MEETING OF THE AZUSA
UTILITY BOARD/CITY COUNCIL
MONDAY, AUGUST 26, 2002 - 6:30 P.M.
The Utility Board Members of the City of Azusa met in regular session, at the above date and time
in the Azusa Light and Water Department Conference Room, located at 729 N. Azusa Avenue,
Azusa, California.
Chairperson Chagnon called the meeting to order. Call to Order
ROLL CALL Roll Call
PRESENT: COUNCILMEMBERS: HARDISON, STANFORD, ROCHA, CHAGNON,
MADRID
ABSENT: COUNCILMEMBERS: NONE
ALSO PRESENT: Also Present
City Attorney Ferre, Director of Utilities Hsu, Assistant to the Director of Utilities Kalscheuer,
Electrical Engineer Langit, Utilities Marketing Services Coordinator Torres, Assistant Director of
Water Operations Anderson, Assistant Director of Customer Care and Solutions Vanca, Deputy
City Clerk Toscano, City Clerk Mendoza.
Pub Part
Public Participation None
None
An item of subsequent need arose regarding an Option Agreement with Los Alamos County, New Item of
Mexico, and it was moved by Councilmember Stanford, seconded by Councilmember Chagnon Subsequent
and unanimously carried to agendize it as item 111-B. need
It was consensus of Councilmembers to removed item III-A from the agenda regarding Transfer of Trnfr Wtr
Water Rights. Rt rmd
The CONSENT CALENDAR consisting of Item II-A through II-F, were approved by motion of Consent
Councilmember Stanford, seconded by Councilmember Hardison, and unanimously carried with Calendar
the exception of items B, C, E &F, which were considered under the Special Call portion of the
Agenda.
A. The minutes of the regular meeting of July 22, 2002, were approved as written. Min appvd
B. SPECIAL CALL ITEM. Spec Call
C. SPECIAL CALL ITEM. Spec Call
D. Letter of support regarding AB 2308, (Chavez), to Senator Gloria Romero, to remove inert Ltr support
waste form disposal reporting system that is used to determine compliance with AB 939,was AB2308
approved.
E. SPECIAL CALL ITEM. Spec Call
F. SPECIAL CALL ITEM- NO ACTION WAS TAKEN ON THIS ITEM. Spec Call
Special Call Items Special Call
Director of Utilities Hsu and Electrical Engineer Langit addressed item II-B, citing the benefits of Dir of Util
employing an Engineering, Procurement &Construction (EPC) approach in constructing electric &Elect Engr
substations as follows: 1) It reduces the project timeline and administration burden to process Comments
multiple agreements on separate engineering, procurement&construction contracts. 2) Quality Re: EPC for
control and cost saving will accrue if one seamless vendor or firm will be doing the entire Azusa
substation project as opposed to different parties dealing with uncoordinated portions of the Substation
project. "One-stop-shop" arrangement also eliminates potential design problems &delays that
normally arise in this type of specialized construction. 3) EPC approach follows similar
competitive arrangements in material procurement and construction services and the possibility of
savings will encourage EPC vender to work efficiently without sacrificing design standards and
quality construction. 4) The major electrical equipment such as high voltage circuit breakers,
power transformers, control panels &relay equipments are not readily available but have to be
ordered, manufactured then delivered. EPC approach advances the procurement process upon
completion of detailed design and coordinates equipment installation during construction stage
thereby eliminating delays and potential design conflicts with different vendors, suppliers and
contractors. Director Hsu and Electrical Engineer Langit answered questions regarding other cities
that have used this process, cost, and how the firm becomes the general contractor.
Moved by Councilmember Stanford, seconded by Councilmember Rocha and unanimously carried Auth to
to authorize staff to prepare a Request For Proposal/Qualifications (RFP/Q) and solicit a complete Solicit
Engineering, Procurement and Construction (EPC) proposal for constructing the new Azusa RFP/Q
Substation at 1 160 West Gladstone Street. EPC
Chairperson Chagnon questioned item in the fiscal impact listed as "other parties" regarding the Chagnon
Award of Contract for Project W-182, Northern Transmission Main. Question
Utilities Director Hsu responded stating the "other parties" reimbursement noted in the fiscal Util Dir
impact is an agreement that was entered into with a large commercial customer in Irwindale. Response
Moved by Councilmember Stanford, seconded by Councilmember Rocha and unanimously carried No. Trans
to approve the award of the contract to Engineered Plumbing for the construction of Project W- Wtr Main
183, Northern Transmission Water Main.
Assistant City Manager Person addressed item regarding Budget Amendment to cover river related Asst City Mgr
`expenses, clarifying that the budget amendment consists of carryover money from Suzanne Avila' Comments
old contract from last fiscal year and money that has been allotted for river projects in addition to
Suzanne Avila' new contract amount.
08/26/02 PAGE TWO
Moved by Councilmember Stanford,seconded by Councilmember Rocha and unanimously carried Budget
to authorize a Budget Amendment in the amount of $200,000.00 to cover 2002/2003 River Amend
related expenses. Approved
Discussion was held regarding declaring certain property surplus and offer to sale pursuant to Discussion
California Government Code. The property is a parcel acquired through the acquisition of Azusa Re: surplus
Valley Water Company. There is an above ground water storage reservoir with appurtenant Item. No
structure on the property. Utilities Director stated that Monrovia Nursery approached the City Action
wanting to acquire the property, but it has to be declared surplus. It was consensus of
Councilmembers not to declare it surplus at this time.
Scheduled Items Sched Items
Item regarding Transfer of Water Rights was removed from the Agenda. Item Rmvd
This following item was an item of subsequent need. Utilities Director Hsu stated that one of the Item of
main concerns staff has regarding existing power resource is the over-reliance on City's San Juan Sub-sequent
Unit 3 entitlement. Staff's strategy was to either assign or exchange part of the entitlement with Need
another party, and replace the assigned amount with either a power resource (ownership) or a Option
long-term contract. Los Alamos County in New Mexico showed interest in acquiring part of the Agreement
entitlement and the negotiation process began. Mr. Hsu advised that LAC just received its Los Alamos
board's approval to enter into an Option Agreement which would give LAC exclusive right during County,
the Option Period, 60 days from September 16, 2002, they would have a right to exercise option New
and enter into a Purchase Agreement or they could decide to walk away from it. LAC is willing to Mexico
pay $5,000 as a deposit; if they withdraw from the agreement, the City will receive the money
and if they purchase the power they will use the $5,000 as credit. Within the 60 days the City of
Azusa will not be able to negotiate with anyone else. He described the process for purchase and
replacement of power. Lengthy discussion was held between Councilmembers and staff
regarding the pros and cons of the issue. Councilmembers statements were to release the
option so it's not binding, further that the City won't market and sale to anyone else within 60
days, but, any purchase and sale would be at the City's discretion. An update on this item is to
be placed on the next agenda.
Moved by Councilmember Stanford, seconded by Mayor Madrid and unanimously carried to Option Agmt
approve the Option Agreement conditioned upon certain changes whereby the City would agree Approved.
not to market to any third party during the Option Period. However, the determination of
whether to enter into any agreement would be in the discretion of the parties.
Staff Reports/Communications Staff Rpts
Assistant Director of Customer Care and Solutions Vanca presented the Flex Your Power Energy Flex Your
Conservation Award the City received from Sacramento on August 20t. This was in response to Power Award
the 2001 summer energy crisis and the Governor's request for energy reduction. The City To Azusa
created a multi-pronged approach to reducing energy usage in Azusa.
Utility Director Hsu, addressed item regarding Electric Utility Operating Cost and Revenue Util Dir
Projection for FY 03-08. He stated that operating costs have gone up and we can't rely on Re: Elect.
wholesale revenue; operating cost should be covered by retail revenue. He stated that there is a Utility
need for a 5%increase in electric rate and recommended that it be effective October 1, 2002;will Operating
keep the $.01 per kilowatt hour surcharge implemented last January, 2001 to stay on until June Cost Rev
2003. Further, in future still need to increase to cover cost of the substation. He stated that with Project
a 5%increase Azusa is still 40%below Edison for residential customers and the average customer
increase will be about a $2.50. He responded to questions posed and noted that a Public
Hearing on the increase will be placed on the Council Agenda on September 16, 2002.
08/26/02 PAGE THREE
Mayor Madrid requested that she be furnished with a list of City assets and to see how to Mayor
improve the amenities. She also asked where the City is on renewable energy, such as Solar. Comments
Utilities Director responded and spoke about renewable energy.
Councilmember Rocha advised that there are some power lines that need to be checked at the Rocha
home on the corner of Rosalinda and Celeste, owned by Mrs. Franks, as the house has a Chinese Comments
— Elm in front and you can't see the power lines and there is a need to have the tree trimmed away
as they lights flutter when its windy.
Utilities Director Hsu and Assistant Director of Water Operations Anderson responded to Workplan
questions posed by Chairperson Chagnon regarding the Workplan, I.e., Electric Construction of Presentation
the office remodel, the Co-Gen project and repairs to Sierra Madre Reservoir.
Utilities Marketing Services Coordinator Torres addressed Utilities Board presenting an update on Pwr Res
the California Electricity Market. The Overview consisted of Federal Actions, State Actions, Mo Rpt
Financial Stability of the Market, Spirit of Cooperation and Joint Planning, What the future holds Update
for the City and What Azusa should do. He advised that FERC is continuing its quest of California
promoting competitive electricity market, they intend to standardize the market structure Electricity
throughout the nation, they appear to be getting "tougher" in monitoring the market and are Market
enmeshed in many litigious proceedings regarding the fallout of California energy crisis. He
advised that with regard to State actions there are contentious PG&E bankruptcy proceedings,
they continue investigations of the causes of the energy crisis, the fervor of building electric
infrastructure has considerable cooled down, there is no direction in how to plan for the future
and the over reliance in one fuel source is natural gas. He stated that the financial stability of the
Electric Market is dominated by financially weak market participants, and there are no
expectations of near term financial health of the market. In the spirit of cooperation and joint
planning California pursues a California-centric approach with no substantial regional cooperation
with western states or the region. He stated that the future holds higher volatility and
unpredictability in supply and demand balance, higher cost of doing business for traditional
utilities and ultimately, higher costs to the consumers.
Utilities Director Hsu provided the Quarterly Billing Report for April 2002 and the Monthly Qtly Billing
Departmental Summary were provided as an information items and Assistant to the Director of Rpt &Mthly
Utilities Kalscheuer answered questions posed by Councilmembers regarding the department Dept. Energy
energy savings and City auditorium new lighting. Savings
Utilities Director provided an update on San Juan Generation Project,Moody's Credit Rating,and Util Dir
on Assistant Director's Recruitment and answered questions posed. Comments
It was consensus of Councilmembers to recess to Closed to discuss the following: Closed
CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATION (Gov Code Sec. 54956.9(c)) Session
One Potential Case. Recess: 8:12 p.m. Reconvened: 8:35 p.m. There was no reportable No Rpts
action taken in Closed Session.
Councilmembers conducted a Book Review- Boards That Make A Difference, by John Carver. Book Review
It was consensus of Councilmembers to adjourn. Adjourn
TIME OF AD OURNME : 8:50 P.M.
L_SEC TARY
NEXT RESOLUTION NO. 02-C87.
08/26/02 PAGE FOUR