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HomeMy WebLinkAbout2008-04-02 Min - Board REGULAR MEETING April 2, 2008 In accordance with District Code Section 2.08.010, the TDPUD minutes are action only minutes. All Board meetings are recorded on audio tapes which are preserved perpetually and made available for listening to any interested party upon their request. The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order at 6:00 PM in the TDPUD Board room by President Taylor. ROLL CALL: Directors Joe Aguera, Ron Hemig, Patricia Sutton, Tim Taylor and Bill Thomason were present. EMPLOYEES PRESENT: Kathy Neus, Mary Chapman, Sanna Schlosser, Bob Mescher, Ed Taylor, Neil Kaufman, Becky Mazzer, Craig Beede, Michael Holley and Barbara Cahill CONSULTANTS PRESENT: Steve Gross OTHERS PRESENT: Juanita Schneider, Dan Warren, Carol Pauli, Rusty Pauli, Steve Weiss, John Hugo, Steve Randall, Denny Dickenson, Andrew Esler, Phyllis Kidler, Todd Kelly, David Goodman and Amy Norman. CHANGES TO THE AGENDA General Manager Michael Holley asked to remove agenda item number 15, Conference with real property negotiator pursuant to Section 54956.8 of the Government code. Property: 10695 Brockway Road, APN 19-450-54. PUBLIC INPUT Juanita Schneider said the board meeting was more audible on the television from the last board meeting. DIRECTOR UPDATE Director Sutton renewed her request to have the bottled water workshop return to the future agenda topics list. Director Hemig asked if Mary Chapman or Michael Holley could explain what auction rate bonds are and that the PUD has fixed rate bonds. President Taylor reminded the Board to read revised District Code Title 4, Personnel before it comes back to the Board for another workshop on April 16, 2008. SPECIAL BUSINESS WORKSHOP PRESENTATION BY TRUCKEE DONNER PARK AND RECREATION DISTRICT Involves a discussion of a permanent ice rink 10695 Brockway Road. Counsel Gross recused himself at Porter Simon represents the Truckee Donner Park and Recreation District, but not in this matter. 1 Minutes: April 2, 2008 Kathy Neus gave a brief presentation: • March 3:TDPUD received a letter from the Truckee Donner Park & Recreation District (TDP&RD) requesting that the existing land use contract be amended to allow for a permanent ice rink. • March 20: TDPUD responded to the TDP&RD with a request for an informal presentation at the April 2 board meeting. • March 25: TDP&RD said they would attend the April 2 meeting to provide further information on their request to use the rodeo parking area for a public/private ice rink. Steve Randall, General Manager of Truckee Donner Park & Recreation District: • Here to answer any Board or public questions. • The developer (Mr. Hugo) needs to know if he can move forward with this project. • Is the PUD interested in amending the lease? • The District could sign a Memorandum of Understanding with the developer, subject to various conditions. • The lease expires in 2095 and states use is for recreational purposes. • The ice rink is private/public and would be different from what is allowed in the lease. • The TDP&RD is not looking for financial gain, but want another amenity for the community who has asked for an ice rink for many years. • The TDP&RD would provide a layer of liability protection for the PUD. • Do not want to sign over the lease to developer without lots of questions. There should be a Memorandum of Understanding with the developer for a commitment to do various tasks and a MOU with the PUD. • If the ice rink was not successful, there is always a need for indoor space. This could be part of the lease agreement to use the building or restore the grounds to their original state. • The rink would require its own parking. • The rodeo parking area is only used 15-20 days a year for rodeo, concerts, renaissance, car show. The rodeo arena could be used for event parking. The parking for the rodeo could not be accommodated on site. Maybe participants could park elsewhere and bus attendees in. Areas need to be studied • The small TDP&RD ice rink get used by about 200 people per weekend. • There is a need for ice hockey. John Hugo, Ice Rink Developer • The proposal will have the same terms of the existing grounds lease, but I am open to other arrangements with the PUD as to ownership. The principal objective is to operate the ice rink business. • There are no financial implications for the PUD. • The developer would raise capital and include a contingency that would fund any operating losses. There is a bit of a ramp up period in generating interest. Half of revenue is associated with public skating. This project should do at least as well as the ice rink in South Lake Tahoe. • Any type of structure can be removed. A spring structure of aluminum I beam and fabric membrane (like the KidZone) can be taken down and moved. A rigid steel structure could be dismantled and parts sold. The type of building depends on the Town of Truckee require- ments. • Approval is up to the Town of Truckee in the end. • If the issue is parking, we will find a solution and make sure parking is not lost for other uses. .w. The ice rink will have 100 parking spaces and maybe there could be temporary parking rented in surrounding neighborhoods. • There would be both public and private funding. South Lake Tahoe used $3.8 Million in bonds to build the ice rink and it is run by the City. 2 Minutes: April 2, 2008 • We have looked at land in Martis Valley that has been dedicated to Placer County. Placer County Water Agency has a portion to use for a service yard and well, and may support this project. • Sales in South Lake Tahoe are about $800,000/year. Truckee ice rink could draw from Reno and north Lake Tahoe. This is the only mountain community that does not have an indoor ice rink. • Look at highest and best use for public land. There is a lot of demand for figure skating, hockey, events, tournaments- could be an estimated $3 million a year in additional visitor revenue. • Documentation for an ice rink has been started to form a non-profit entity. There are a couple options now until a separate 501 C3 non profit status is accepted. We could take over Incline Ice Foundation non profit status or merge. Also, the Truckee Community Foundation could be used initially as a fiscal agent. The entire planning process would take about one year. • We are asking for conceptual approval to go forward. We do not want to run the risk where the Board says they have changed their minds. Board discussion: • Want to understand the concept where TDP&RD would end up with an interest/ownership in the ice rink with the PUD as the landlord and TDP&RD being the tenant. Would the ice rink sublease? • Would the PUD be dealing directly with Mr. Hugo? • The TDP&RD indemnifies the PUD currently on any of the activities- if the TDP&RD were not part of the ice rink, the PUD would not have that protection. How would the liability be handled? • In the Performa, the objective is to break even in 3 years- the analogy in South Lake Tahoe was a break even after several years. What if the most likely case for TDP&RD ice rink is a less than break even or what if it never hits target and cannot make money? What is the implication for the PUD? • What if there is no breakeven- worst case scenario- what happens to improvements- remove? • TDP&RD is asking for some commitment regarding the lease subject to contingencies. Is this any different than shaking hands today and PUD saying yes we like the concept and come back with details? • Is this business operation for profit- a "for profit' would affect the lease. • The ice rink project would take 4 to 5 years and there are no implications to the PUD- would the PUD have to remove it if it did not work? • What about the use of this area for Rodeo grounds parking? It is also used for other events such as the car show and concerts- where would people park then? • What about the wetlands area? • Compliment Mr. Hugo and Mr. Weiss to bring a great deal of ice rink background to this project. • The concern about parking is critical. • Would there be a reduction in the skating rate for locals? Would there be Rec & Park programs? • The Performa talks about not privately funded- does not sound like the project would fly as needs public funds. • The Performa talks about an igloo ice rink that would take up 3 acres and include 90 parking spaces. • Seems like the project is too intensive for this park land- would be better if private land were used. Say Marais Valley- have you investigated this area? • Have you done a survey of the community to see if they are interested in an ice rink? • Need a formal survey. 3 Minutes: April 2, 2008 • What are the use stats on the small TDP&RD seasonal ice rink? Is it used by Truckee people or a lot of second homeowners? • Is it possible to do this project somewhere else? • Would the ice rink need local people to operate it? Or would you bring people in from the outside? • Doesn't Reno have an ice rink facility? • Look at the property and how would the ice rink shoehorn on it using 3 acres- how would it fit- the building is 35,000 square feet and parking would take up an acre. • There are a lot of hoops to go through. • Important to separate the District and Town- Town of Truckee will have to decide if they approve the density and aesthetics. • The PUD are stewards of land- we need to make sure it is complimentary to the district- is it a good thing- good for community- does it have a policy conflict? • The small ice rink has a dual use: in the winter, it is an ice rink and in summer- basketball and BBQ area. This serves the community well. • What about using the property across the Truckee River on the west side of Brockway Road? • Traffic impacts- concentration of use- park entrance, senior center, multi family use. • It is not the District's task to solve issues- the task is to say if we believe the partners can go forward. There are a lot of hoops to go through. This is an opportunity for the community to have an ice rink. • Want to know about other pieces of property the developer could use- say Martis Valley. • Must be a way to do this ice rink and not use this piece of property- if have an alternative site you can explore before thinking of using this piece. • Community needs an ice rink- maybe not right for this property-too many issues. • Would not want to kill the project, but there may be other choices. • If the developer pursued the PUD to change the lease to allow development, the PUD would need an attorney without a conflict, want a development agreement with the Rec & Park and developer, and determine how much water the ice rink would need. • Should look into other locations- unless this is the last resort. Public input: • 1 live behind the pond near the golf course and use Estates Drive. I am against the project. Weekends are a circus and Wednesday night concerts are a zoo. The parking lot now is not large enough for the events. Need to consider the parking issue and impact on Estate Dr. The rodeo used the LTD property for parking and that is wetlands. I ask the Board not give this a thought. I want to help Mr. Hugo find a better location. • Parking is a huge issue for the rodeo especially- every space is used for this 4-day event. There is also a barrel-racing event for 2 days and several horse shows and clinics throughout the summer. The rodeo area floor needs to be acceptable. An ice rink does not fit into the character of this area. Maybe it should be placed in the Railyard. • Not against the ice rink- just the location- parking concern- many events already and the traffic is horrible- locate the ice rink elsewhere. • 1 am a horseman and against the ice rink going in. An Olympic size bubble out on the property would not be an acceptable type of setting. I have been involved in the rodeo for 9 years. This event uses every inch of parking- to lose this parking would be incredible- plus many other events use the parking. It is good to use this area for what it is already used for. The rodeo brings in dollars to the community. Think of people who have been here a long time. • 1 have lived in the Tahoe area 25 years and play hockey. This area needs an ice rink- can see there is a parking issue, but hope this can be resolved. Would like to see this happen here or elsewhere. 4 Minutes: April 2, 2008 • 1 am a resident of the neighborhood and do have concerns about the parking and aesthetics. But an ice rink could have huge benefits. Have you considered Riverview Sports Park? Truckee does have wonderful park facilities. ACTION ITEMS CONSIDERATION OF AN EXTENSION OF THE DISTRICT'S PROPERTY AND LIABILITY INSURANCE COVERAGE AND CHANGE OF THE ANNUAL RENEWAL DATE. This item involves the extension of the District's current Property and Liability Insurance Coverage from May 1, 2008 to June 1, 2008 and changing the renewal date to June 1 of each year. Director Aguera moved and Director Thomason seconded, a motion to extend the current insurance policies one additional month to June 1, 2008; authorize the annual renewal date to be changed to June 1 of each year; and authorize payment of the one month extension in an amount not to exceed $33,000 ($30,000 plus 10%). ROLL CALL: All Directors, aye. SO MOVED. CONSIDERATION OF AUTHORIZING THE FISCAL AGENT TO INVEST THE SRF RESERVE FUND IN THE STATE OF CALIFORNIA'S LOCAL AGENCY INVESTMENT FUND. This item concerns the accumulation of reserve fund deposits for the State Revolving Fund loan. Director Hemig moved and Director Sutton seconded, a motion to adopt the resolution to authorize the Fiscal Agent to open an account with the State of California's Local Agency Investment Fund entitled the Truckee Donner Public Utility District State Revolving Fund Reserve Fund and to invest reserve fund deposits in this account; and authorize the Fiscal Agent, the Board President and the Treasurer to execute all required documents. ROLL CALL: All Directors, aye. SO MOVED. CONSIDERATION OF THE AWARD OF A TASK ORDER TO PERFORM GEOTECHNICAL TESTING SERVICES This item involves geotechnical testing work for the planned 2008 construction season. Director Hemig moved and Director Thomason seconded, a motion to approve a Task Order for Geotechnical Testing Services by Converse Consultants in an amount not to exceed $47,996.00; and authorize the transfer of $42,606 from the Water Department 2006 COP funds to the Water Depart- ment General Fund and $5,390 from the Water Facility Fees to the Water Department General Fund to cover the cost of the contract. ROLL CALL: All Directors, aye. SO MOVED. CONSIDERATION OF THE AWARD OF A TRANSFORMER BID. This item involves the purchase of electric transformers to meet new construction obligations and routine replacement. Director Aguera moved and Director Hemig seconded, a motion to Find HD Supply/Cooper Power Systems non-compliant with District Standards for Schedules C and D; Find Howard Industries Non- Responsive to District Contract; Award Schedule A (Pole Mounted Single Phase Transformers with Biodegradable Dielectric Fluid) to HD Supply/Cooper Power Systems with the contract prices as listed on the 2008 Transformer Bid Award Recommendation Table to be effective until 6/30/08; and Award Schedule B (Pad Mounted Single Phase Transformers), C and D (Three Phase Pad Mounted Trans- formers with Biodegradable Dielectric Fluid) to General Pacific with contract [prices as listed on the 2008 Transformer Bid Award Recommendation Table, to be effective until 6/30/08. ROLL CALL: All Directors, aye. SO MOVED. 5 Minutes: April 2, 2008 CONSIDERATION OF NOMINATING A CALL FOR NOMINATIONS TO FILL A VACANCY ON THE NEVADA COUNTY LOCAL AGENCY FORMATION COMMISSION (LAFCO) This involves nominations for the next four-year term of a regular(voting) District Member No action taken. WORKSHOPS DISCUSSION OF THE BOARD FINANCIAL GOALS This item involves a dialog about planning, revenue, debt and reserve goals Mary Chapman gave a presentation: • Financial goals are in integral part of Title 3, Finance &Accounting. • Most goals have been achieved- some with larger reserve dollar goals have not been achieved. o Debt: Water debt is more than one half the projected annual facilities fees revenue. o Debt: Water 2006 COP has more than a 25 year maturity. o Both electric and water cash reserve goals fall short. • The goals will take several more years to achieve. • Some modifications are being recommended. • Electric rate stabilization fund goal may not be sufficient to cover possible energy market volatility- staff is recommending an increase in the goal from $1 million to $3 million. • Electric Capital Reserve goal has not been funded. , . • Water capital reserve goal is close to the $4 million goal. • Each debt instrument should have a reserve fund equal to one year's reserve fund or the lender-required reserve amount. • Increase the 5-year financial plan to a 10-year financial plan, implementing the Electric and Water Master Plans. • Review the Board financial goals annually instead of every three years. • Recommend the Board adopt a policy to state its preference for a pay-as-you-go asset purchase versus financing. Board discussion: • Is the Capital Improvement Plan data in 5 to 10 years valid enough to make rate decisions? • Where is Michael Holley on this? • Agree with financial goals- review annually— not every 3 years. Rate stabilization needs to go from $1 million to $3 million- but how do we get to the goal when we have already raised rates- get from other funds? • Why are we starting an Electric Capital Reserve fund? • OK to use pay as you go for vehicle purchases; big stuff- use long term financing- even out the impacts on customers. • 25 year maturity for debt is good- but let the water COP at 30 years go. What about a policy for pay as you go versus financing? Had a discussion about pay as you go for water projects. • Isn't the electric rate stabilization fund changed already from $1 million to $3 million? • All affect rates and community in costs- not just balance books. • Board should be making more decisions than long term goals. • Board agreed to allocate 2%of the electric rate increase to the rate stabilization fund • Debt service- change to only ones that require a debt reserve. • Like pay as you go- set goals 6 Minutes: April 2, 2008 • Cannot recall ever discussing pay-as-you-go prior to 2008 and believe staff should have financed the 2008 vehicle purchases • Ok with a going from a 5 year to 10 year Capital Improvement Plan- review goals every year and move to a 2 year budget • Land Sales Trust fund- what about the outstanding internal loans which are about$1 million? • Like the 10 year capital improvement plan idea- years 6 to 10 can get fuzzy but can shoot for a project. • Review goals every year- not just every three years. • Electric Capital Reserve- bring back at budget time. • Pay as you go versus finance- look at project, purchase, asset, equipment- long term financing is for big projects. • Use depreciation as a basis for determining a vehicle reserve fund if use pay-as-you-go. Director Hemig asked about Auction Rate Securities (ARS). Mary Chapman explained that TDPUD bonds are fixed rate serial bonds and we are not affected by the volatility of today's market. All of TDPUD's bonds have been issued and the bond interest rates are fixed. She said the auction rate bonds became popular for long-term maturities tied to short-term interest rates of 7, 28, or 35 days. Director Hemig said agencies that relied on this mechanism are now in trouble. DISCUSSION OF IMPLEMENTING A TIERED ELECTRIC RATE STRUCTURE This item relates to tiered rates Mary Chapman gave a presentation: �-. • History o Staff was directed to look into a tiered residential rate that would benefit low income customers and encourage conservation. o Since 1995, PUD has had a two tier rates: permanent and non permanent. • New information o Rate structure should be revenue neutral, provide for low income rate or credit, encourage conservation and consider the 3% rate increase approved for 2009 o Reviewed several utility rate structures o Low income benefit ranges from a 20 to 25 percent discount o Tier difference ranges from 15 to 20 percent Things to consider with a low income rate o Length of program: winter only, one budget year, permanent? o How to qualify: process application in house, rely on if qualify under other programs, arrange with HEAP to process applications? o How frequently should customer have to apply- yearly? o Structure of credit: 10%, 15%, 20%? o Should low income rate receive percent off of both usage tiers? o Should low income receive baseline rate for all Kw used Board discussion: • To be revenue neutral- does the offset have to come from the upper tier structure? • Doesn't the County have a home energy assistance program? • The low income applications could take up a lot of staff time. • Could there be a problem with fraud with low income applicants? Is the two tier rate based on the more Kw used-the next rate is higher? • Would this be a change for non-permanent residents? • Is there a legal aspect for the second tier non-permanent resident? • Is the PUD in violation or out of compliance by not having a special low income rate program? 7 Minutes: April 2, 2008 • How does block pricing work and how does it compare to tiered rates? • Want to see a tiered rate model. • How many would qualify for the low income rate? • The difference in allocation would have to be covered by all customers. • There is already a commitment for a 3% electric rate increase for 2009- cannot do anything. • See a model and what happens for regular rate payers. • What options are there to phase in. • There needs to be a justification- stand by legally. • Keep the program as simple as possible or it could be an accounting nightmare. • For a low income rate, do one budget year at a time, phase in or do permanently. • How do other utilities qualify people for low income rates, for example ATT, Southwest Gas or SMUD? • Look at a model- get a perspective as a whole. • Board needs more data. Counsel Gross responded to the legal aspect of a second tier rate. The District currently has a two-tier rate structure. The current two-tier study showed the cost for non-permanent residents was a reason- able distinction and successful in court based on our rate study. This new rate structure would need a study to justify two tiers and would be lawful and defensible. It cannot just be arbitrary, but must be a standard that is held to. CLOSED SESSION CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO SECTION 54956.8 OF THE GOVERNMENT CODE. PROPERTY: 14630 GLENSHIRE DRIVE. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO SECTION 54956.8 OF THE GOVERNMENT CODE. PROPERTY: 10695 BROCKWAY ROAD, APN 19-450-54. - removed RETURN TO OPEN SESSION No reportable action. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 9:20 PM. TRUCKEE DONNER PUBLIC UTILITY DISTRICT 1� r Tim F. Taylor; resident Prepared by Barbara Cool, Deputy District Clerk bhc 8 Minutes: April 2, 2008