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HomeMy WebLinkAboutMinutes - November 26, 2001 - UB , sa 40- AZUSA CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, NOVEMBER 26, 2001 - 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: STANFORD, HARDISON, CHAGNON, ROCHA, MADRID ABSENT: COUNCILMEMBERS: NONE ALSO PRESENT: Also Present City Attorney Ferre, City Manager Cole, Director of Utilities Joe Hsu, Assistant to the Director of Utilities Kalscheuer, Assistant Director of Resource Management Tang, Electric Line Supervisor Kjar, City Clerk Mendoza, Deputy City Clerk Toscano. Public Participation Pub Part Messrs. Ed Waldheim of California Trail Users Coalition, Mike Bishop President of CORVA, E. Waldheim, California Off Road Vehicle Association, Inc., and Barry Wetherbee, President of the San Gabriel M. Bishop, Canyon Property Owners Association, addressed Board members stating their opposition to a and B. proposed letter from the City of Azusa to USDA Forest Service regarding the Forest Plan Update, Wetherbee expressing concern regarding the permitted use of offroad vehicles in, and around the San comments Gabriel River. They stated that the area used by off-roaders is managed and a place where re: in favor of people can legally go and recreate; and if there is no place legally, people will go anywhere. They off-road rec also stated that there are no problems with air or water quality due to off-roaders and vehicles in distributed a Certificate of Analysis conducted by Weck Laboratories, Inc., that allegedly Canyon confirmed their statements. They stated that they are committed to making sure the quality of water and air is good and are taking actions to clean-up gasoline or oil if needed. Lengthy discussion was held between Councilmembers and Mr. Bishop, regarding the number Lengthy of off-roaders in the Canyon, monitoring the area by volunteers, the speeding traffic by off- discussion roaders on San Gabriel Avenue, the maintenance of the area by off-roaders, raising funds for Sheriff's to supervise area, for County Parks and Recreation and for Forest Services. Mr. Bishop stated that there were water quality samples with pictures and documentation, and M. Bishop tests by biologist regarding. He stated that they have incorporated policies,crossing signs, and comments have gone above and beyond what forestry requires, that they stake off dangerous areas with caution tape, and that there has been no gas or oil in the water from their usage, that all tests show there has been none for twenty years. They are pro-active and the state legislators are aware of it; further that it is all managed by CORVA. He submitted test results into the record. Moved by Councilmember Rocha, seconded by Councilmember Stanford and unanimously Item brt fwrd carried that item II-H, be brought forward for handling at this time. for handling Further discussion was held regarding data on tests results, policy issues, Committee of Nine Further and its vote against off-road users in the area, concern regarding even one incident of discussion contamination, water quality testes performed by the City and the group. It was consensus to table the item in order for staff to study additional information submitted, Item tabled and to make an exception to place a Utility Board item on a regular Council meeting, scheduling to 12/17/01 the item for the City Council meeting of December 17, 2001, for discussion and handling. Cncl Mtg The CONSENT CALENDAR consisting of Item II-A through II-I, were approved by motion of Consent Cal. Councilmember Stanford, seconded by Councilmember Rocha, and unanimously carried, with Appvd, D&G the exception of item II-D, and II-G, which were considered under the Special Call portion of the Spec Call Agenda. A. The minutes of the regular meeting of October 22, 2001, were approved as written. Min Appvd B. Purchase of a Hydraulic Digger Derrick Truck from Pacific Utility Equipment Company in the Pur of Truck amount of $184,990, was approved. Pacific Util. C. Specifications for 34 Electric Reactive Meters were approved and the City Clerk was Specs Elect authorized to advertise for bids. Meters D. SPECIAL CALL ITEM. Spec Call E. Approval was given to participate in the Los Angeles County's Smart Gardening Workshops LA Co. Smart and staff was authorized to purchase backyard compost bins in an amount not to exceed Gardening $5,000, and provide the bins free to Azusa residents that attend the workshops. Workshops F. Approval was given to staff to conduct recycling contest for schools and to provide cash Recycling prizes totaling $700. Contest G. SPECIAL CALL ITEM. Spec Call H. HANDLED EARLIER IN THE MEETING. Handled early .I. Specifications for Water Main Replacement Project W-170, were approved and the City Specs Wtr Clerk was authorized to advertise for bids. Main Replace 11/26/01 PAGE TWO Special Call Items Spec Call Chairperson Chagnon asked if there were any cost savings from Project No. LD2001-4 regarding Chagnon the Underground Electric System. She requested that in the future, under Fiscal Impact, staff comments note if the project came in over or under budget; if over there is need to identify where funds will come from and if under there is a need to identify where funds will be re-allocated. Moved by Councilmember Hardison, seconded by Councilmember Rocha and unanimously Notice of carried to accept Project No. LD2001-4, Underground Electric System, as complete, and direct Completion City Clerk's Office to execute Notice of Completion and have same recorded in the Office of the Underground Los Angeles County Registrar-Recorder. Electric Sys. Chairperson Chagnon asked if money to be received from Mountain Cove will underwrite the Chagnon money that is needed for the Skate Park. City Manager Cole responded stating that there is a comments need to approve a Community Facilities District in the Mountain Cove area before any money can be counted on. He stated that fundraisers should continue to be held for the Skate Park. Discussion was held regarding proposed funds for the Skate Park. Moved by Councilmember Hardison,seconded by Councilmember Rocha and carried to approve $5,000 appropriation of $5,000 from Azusa Light &Water retained earnings towards construction of towards Azusa Canyon City Skate Park. Chairperson Chagnon dissenting. Skate Park Action Items Action Items Utilities Director Hsu addressed Council requesting a budget amendment to include a new Utilities Dir funding source provided by SB5X, which is $141,960.00, to be used to augment Azusa Light& re: Budget ' Water's Public Benefits programs. Councilmember Rocha asked if this would include high Amendment efficiency pool equipment and Utilities Director Hsu responded that it would. inc SB5X Councilmember Stanford offered a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, ADOPTING A Res. 01-C126 BUDGET AMENDMENT TO SPEND SB5X FUNDS ON ELIGIBLE PROGRAMS FOR THE BENEFIT OF Amend AZUSA LIGHT AND WATER CUSTOMERS. Budget to include SB5X Moved by Councilmember Stanford,seconded by Councilmember Rocha to waive further reading funds and adopt. Resolution passed and adopted by the following vote of the Council: AYES: COUNCILMEMBERS: HARDISON, STANFORD, CHAGNON, ROCHA, MADRID NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE Staff Report/Communications Staff Rpt Assistant Director of Resource Management Tang highlighted the Monthly Power Resources B. Tang Update for October, stating that the Energy Consumption has leveled off compared to last year Power Res. and it peaked in October. He stated that Wholesale Power Prices on Spot basis have Division continued with the dollar trend; in October on peak prices averaged $28 per megawatt hour and Monthly Rpt. ._..off peak prices at $19. In November on peak prices averaged $30 and off peak $20. 1 1/26/01 PAGE THREE He stated that Wholesale Electricity Forward Prices averaged $40 per megawatt hour,no change B. Tang from last report. With regard to Power Resource Cost Accounting, in October, with no major continued outages, net cost stabilized with about $1.5 million dollars on a monthly basis. He presented Current Events, as follows: Enron, the world's largest energy trading company is Current in sever financial distress due to heavy losses in non-core businesses. As of early October events Enron's stock was about $35 and on October 17`h they reported a quarterly loss of Six Hundred Enron and Ninety Million dollars. They reduced their shareholder equity by one point one billion dollars. Financial They had a lot of off-balance sheet transactions. (They take off of their books certain debts and Distress finance large projects off balance sheet with debts, which obligates current company to pay off the debt under certain events, Enron had thirty-two of these). He detailed the events that have taken place since then. The following is taken from handout passed out at the meeting: • Enron,the world largest energy trading company, is in severe financial distress due to heavy losses in non-core businesses. • Dynegy, the 5th largest energy trading company in the U.S., has offered to buy Enron. It is widely believed that without such buyout, Enron would have to file for bankruptcy. • There is a large uncertainty whether Dynegy-Enron Merger will garner the necessary regulatory approvals in time to save Enron. • Azusa currently has dealings with Enron through CY 2003. As of today, on a net-basis, Azusa owes money to Enron for all outstanding transactions. Staff is monitoring very closely the Enron situation, so that we are not adversely affected by Enron's fallout. (An Additional Update as of(11/26/01). • Enron's stock dropped another 50%just in the last week, putting its merger with Dynegy in jeopardy. • In order to protect city's financial interest, staff has converted all physical transactions with Enron to financial transactions, i.e., where city is buying from Enron before, staff sold back the same power to Enron. • The strategy is a necessary protection, since if Enron is bankrupt, all physical deliveries from Enron will most likely cease,exposing the city to replacement energy cost that may be highly unpredictable. • The net settlement with Enron at this point is city owes Enron about $2.6 million dollars in the next 24 months. If Enron goes bankrupt,the city may have to pay the entire amount up- front. Discussion was held between Councilmembers and staff regarding any possible exposure Discussion contractually. Mr. Tang detailed the strategies for pre and post bankruptcy for Enron and the uncertainties he is trying to avoid. Lengthy discussion was held. Assistant Director of Resource Management Tang presented the San Juan #3 Diversification B. Tang Conceptual Strategy detailing the following: There are factors that warrant the city to look into San Juan #3 means to diversify holding in the unit for the long term. Diversity • Normal aging of unit (almost 20-year old unit)will adversely impact the unit reliability in the Strategy coming years. • New coal sourcing contract will introduce additional risks to the San Juan unit. • Minority ownership by Azusa does not render effective management of plant performance by Azusa. Staff is beginning to investigate the possibility of diversifying city's San Juan ownership through exchanges or sales with third parties. Such strategy, if successfully implemented, may involve write-downs of asset values. 11/26/01 PAGE FOUR Utilities Director Hsu presented the Monthly Billing Report, noting there was nothing unusual Monthly about it and submitted it as an informational item. Billing Rpt Utilities Director Hsu also presented an information item regarding the modification of after- Modify After hours service reconnect practices. He stated that the Light and Water department will no longer Hours Svs do shut offs for non-payment on Thursdays, which will reduce customer after-hour calls, weekend reconnecting by standby personnel, customers can get reconnected before the weekend, and saves impact on Field Service Representatives. Utilities Director Hsu presented an information item regarding the Utilities Department Statement Utilities Dept. of Purpose, Work Plan FY 00-01, and Goal and Objectives FY 2001-2002. He answered Work Plan questions posed by Mayor Madrid and Councilmember Rocha regarding meetings, conferences and training within departments. Councilmembers asked that training, etc. be distributed equitably within the departments and that a reporting system be instituted. Moved by Councilmember Stanford,seconded by Councilmember Hardison that the Utility Board 12/24/01 meeting of December 24th be cancelled and that items of major significance be scheduled for Mtg Cancel Council meeting of December 17, 2001. City Manager Cole announced the Holiday Schedule hours that will be held throughout City Holiday departments. Councilmembers asked that the holiday schedule be publicized, that everyone Hours place appropriate messages on voice mail and that the switchboard remain open to direct customers to proper places. Utility Director Hsu announced and invited Council to SCPPA, Annual Legislative Briefing lunch Invitations to in Pasadena on December 20th; the California Municipal Utilities Association Legislative Briefing Council and Visiting and Reception for Local Legislators on January 14, 2002, in Sacramento, and APPA winter meeting on January 27 through January 30, 2002. Utilities Director Hsu presented an update on the Water Rights issue and stated that it will be Update on placed on the Utility Board meeting of January 28, 2002. Water Rights Issue It was consensus of Councilmembers to recess to Closed Session to discuss the following: CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov. Code Sec. 54956.8) Closed Property: Potential Lease of Water rights Session Negotiator: Joseph F. Hsu, Director of Utilities Negotiating Parties: David Allen Under Negotiation: Lease Payments and Terms of Payment. Recess/ Recess: 8:15 p.m. - Reconvene: 8:20 p.m. Reconvene There was no reportable action taken in Closed Session and it was consensus of Councilmembers Adjourn to adjourn. TIME OF AD •URNMENT: 8:15 P.M. SECRETARY NEXT RESOLUTION NO. 01-C 127. 11/26/01 PAGE FIVE