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Home My WebLink About2009-09-02 Min - Board REGULAR MEETING September 2, 2009 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 perpe- tually 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 6:02 PM in the TDPUD Board room by President Hemig. ROLL CALL: Directors Joe Aguera, Jeff Bender, Ron Hemig, John Hillstrom and Pat Sutton were present. EMPLOYEES PRESENT: Steve Hollabaugh, Stephen Poncelet, Nancy Waters, Mary Chapman, Michael Holley and Barbara Cahill CONSULTANTS PRESENT: Steve Gross OTHERS PRESENT: Juanita Schneider and one other member of the public CHANGES TO THE AGENDA General Manager Holley asked to pull Agenda Item No. 17, Closed Session Pursuant to Government Code Section 54956.9, Subdivision (a), Existing Litigation: Claims of Pacific Rim Construction, Inc.; Lakeside Specialized Transportation; Advanced Asphalt; and Teichert PUBLIC INPUT DIRECTOR UPDATE There were no Director updates. Director Sutton asked to remove "Consideration of a Customer Leak Repair Rebate" from the Consent Calendar. President Hemig stated that both items should then be placed into Action Items. CONSENT CALENDAR— items removed ACTION ITEMS APPOINT THE GENERAL MANAGER AS DISTRICT NEGOTIATOR FOR THE IBEW 1245 UNION CONTRACT This item involves the appointment of a nogotiator(s) to represent the District in the Memorandum of Understanding with IBEW 1245. , . Director Aguera moved, and Director Hillstrom seconded, that the Board appoint the General Manager, Michael Holley, as the District's negotiator with IBEW 1245 for the upcoming MOU negotiations. ROLL CALL: All Directors aye, by voice vote. SO MOVED 1 Minutes: Sept 2, 2009 " CONSIDERATION OF A CUSTOMER LEAK REPAIR REBATE This involves setting a Customer Leak Repair Rebate amount. Director Sutton disqualified herself as she is one of the customers with a leak and should not participate in the Board decision. Director Hillstrom moved, and Director Bender seconded, that the Board approve a $100 rebate level for the Customer Leak Repair Rebate Program. ROLL CALL: Director Sutton, recused; All other Directors aye, by voice vote. SO MOVED. APPROVAL OF AN INCREASE IN THE CHANGE ORDER ALLOWANCE FOR DISTRICT PIPELINE REPLACEMENT — 2009 — CONTRACT B This item involves approval of an increase in the change order allowance for District Pipeline Replacement - 2009 - Contract B. Director Hillstrom moved, and Director Bender seconded, that the Board approve the in- crease of the change order allowance for the District Pipeline Replacement— 2009 — Contract B from $104,000 to $213,000. ROLL CALL: All Directors aye, by voice vote. SO MOVED. CONSIDERATION OF CHANGE ORDER TO THE CONTRACT WITH HOLDREDGE & KULL TO PERFORM GEOTECHNICAL TESTING SERVICES This item involves a change order for 2009 District construction projects geotechnical testing services. Director Aguera moved, and Director Bender seconded, that the Board authorize a change order to the contract with Holdredge & Kull for geotechnical testing services in an amount not to exceed $48,500; and authorize the transfer of monies from the 2006 COP funds to the Water Department General Fund and from the Water Capital Reserve Fund to the Water Department General Fund to cover the cost of the change order ROLL CALL: Director Sutton, no; All other Directors aye, by voice vote. SO MOVED. CONSIDERATION OF ADOPTING A RESOLUTION TO DISPENSE WITH FURTHER COMPETITIVE BIDDING IN RELATION TO THE WATER WISE DEMONSTRATION GARDEN AND AWARD OF A CONTRACT This item involves adopting a resolution to dispense with further competitive bidding and awarding a contract for the Demonstra- tion Garden. Director Hillstrom moved, and Director Aguera seconded, that the Board adopt a Resolution No. 2009 —xx directing that further competitive bidding be dispensed with in the installation of the TDPUD Water Wise Demonstration Garden. ROLL CALL: All Directors aye, by voice vote. SO MOVED Director Bender moved, and Director Hillstrom seconded, that the Board award a contract to Estate Landscape & Irrigation, Inc. for the installation of the TDPUD Water Wise Demonstra- tion Garden in a base amount of $43,030 plus a 10% change order authorization for a total amount not to exceed $47,333. ROLL CALL: Director Sutton, abstain; All other Directors aye, by voice vote. SO MOVED 2 Minutes: Sept 2, 2009 CONSIDERATION OF AN AMENDMENT TO THE NCPA WESTERN GEO AGREEMENT This item involves a possible amendment to the Western Geo Agreements: Purchase Power Agreement and NCPA Third Phase Agreement. Director Bender moved, and Director Aguera seconded, that the Board withdraw from the Western Geo Project and notify NCPA of this decision; and authorize the Board President to execute the TPA withdrawal from the Western Geo Project. ROLL CALL: Director Sutton, no; All other Directors aye, by voice vote. SO MOVED BUDGET 2010 & 2011 BUDGET: PURCHASE POWER Plan This item involves the purchase power preparation of the 2010 and 2011 budget. Steve Hollabaugh gave a presentation: • Background o Mission Statement of Truckee Donner PUD: The Mission of Truckee Donner Public Utility District is to provide adequate, reliable and high quality water and electrical power services, and to manage District resources in an open, responsible, environmentally sound manner at the lowest practical cost. In pursuing this Mission, the District will actively seek renewable energy sources as set forth in its Renewable Portfolio Standard o TDPUD Renewable Portfolio Standard (Excerpt) RPS Target: .00.- ■ At such time that projected resources do not exceed projected demand, TDPUD will strive to include qualifying resources to meet projected demand. ■ Truckee Donner Public Utility District resource mix will have a minimum of 21% of renewable resources by 2010. Renewable resources are defined as non- fossil fueled electric generating resources, including hydroelectric. • Conservation is Considered First Resource 0 2009 actual load is showing about a 3.7% decrease in load compared to 2009 budget o Forecast assumes load increases by only 1% annually over the next three years ■ Conservation is expected to account for 1-3% of total load ■ Offsets growth that would otherwise require additional resources ■ Greater conservation will reduce market purchases • History and Future forecasted Load 0 2008 Actual Load = 1607189 MWh 0 2009 Forecasted Load = 163,000 MWh 0 2010 Forecasted Load = 160,000 MWh 0 2011 Forecasted Load = 162,000 MWh • Future Portfolio (2010 and beyond) is intended to balance: o - Conservation - Contract Duration J o - Renewable Resources - Cost o - Resource Diversity - Price Volatility • Future will include Additional Renewable Resources o Existing renewable resources are: ■ Stampede hydro ■ Western CVP hydro ■ Market renewable purchases (Short term) 3 Minutes: Sept 2, 2009 o 2010 may include additional renewable resources: — UAMPS Idaho wind project (6.0 MW capacity) — Northern Nevada geothermal o 2011 may also include additional Renewable Resources — New renewable resource (wind, geo, biomass) o These additions and existing renewable resources should allow the District to reach our RPS goals • Proposed resource portfolio —2010 o SCE 48% o Payson 12% o Market 11% o Renewables 29% ■ Stampede 4% ■ Western (large hydro) 5% ■ Wind contract 5% ■ REC's- Wind 15% ■ Solar 0.2% • Proposed resource portfolio —2011 o SCE 49% o Payson 12% o Market 0% o Renewables 39% '""' ■ Stampede 4% ■ Western (large hydro) 5% ■ Wind contracts 9% ■ REC's- Wind 15% ■ New renewable resource 6% • Resource Portfolio — Risk vs. Benefit 0 2009, plan results in an all-in energy supply cost in the range of $63.2/MWh, this excludes transmission and scheduling costs 0 2010, plan results in an all-in energy supply cost in the range of $61.5/MWh, this excludes transmission and scheduling costs 0 2011, plan results in an all-in energy supply cost in the range of $64.6/MWh, this excludes transmission and scheduling costs o UAMPS All-In Pool currently has resources to meet most of its members load dur- ing this timeframe • Purchase Power Plan Expenditure Detail 2009 2010 2011 Total energy supply $10,307,465 $9,835,491 $101458,686 $/MWh $63.15 $61.47 $64.56 Transmission-SPPC $1,043,766 $1,043,766 $1,043,766 NCPA Scheduling $61,200 $75,348 $77,993 WAPA cost/(credit) 130 396 39 616 $76,416 Total Bulk Costs $11,282,034 $10,994,220 $11,656,861 Total Annual MWh 163,220 160,000 162,000 Delivered Cost $/MWh $69.10 $68.70 $72.00 4 Minutes: Sept 2, 2009 Fiscal Impact o Resource Plan balances conservation, renewable resources, fuel diversity, long- term contracts and medium term purchases. o Achieves an expected 2010 all-in cost in the range of$69/MWh o Achieves an expected 2011 all-in cost in the range of$72/MWh o Minimizes price volatility due to fuel and weather risk • Late October: prior to final budget, update gas prices and market prices There was no public input. Board discussion: • Great effort to increase the renewable portfolio • Is it possible to look at the eastern slope of the Sierras for renewables • Can the PUD put money into the Rye Patch Geothermal project to make it happen • How much money did the PUD put into Rye Patch already • What is the transmission charge based on • Is there a way our system does not peak at the same time other systems do • Is there a way to reduce transmission costs • What is the customer count for 2009 versus 2008 • Weather, economy, conservation all affect growth in power needs • What is the risk if the economy turns and the projections are too little • Is the RPS used first WORKSHOPS DISCUSSION OF THE PROCESS TO ADOPT THE PROPOSED WATER RATES This item involves setting dates to adhere to Prop 218: customer letters, public hearing and adoption of new rates. Neil Kaufman gave a presentation: • Background / History o Proposition 218 was adopted in 1996 and became effective in 1997. It is also known as the "Right to Vote on Taxes Act" o In February 2009, District Legal Counsel gave a presentation to the Board regarding Proposition 218 and how it impacts the District • New Information o Adoption of new water rates is subject to Proposition 218 ■ Mail notice to all ratepayers & property owners of the proposed change in rates ■ Hold a public hearing at least 45 days after the mailing of the notices ■ Change in rates is considered rejected if written protests are received from a majority of the affected property owners o Proposed schedule ■ Workshop on proposed water rates and draft ordinance — Sept. 2 ■ Consideration/approval of new water rates —Sept. 16 00, ■ Printing and mailing of notices— Sept. 17 to Sept. 25 ■ Notice published in Sierra Sun —week of Oct. 19 ■ Public Hearing on and Board adoption vote — Nov. 18 ■ Implementation of New Rates— Jan. 2010 5 Minutes: Sept 2, 2009 Public input: • Is there any rate allowance for more people in families Board discussion: • How can the board approve a new water rate General Counsel responded that the new water rate will not be in effect until the Prop 218 process is completed. One way to follow the process is to approve the rate schedule, mail a notice to rate payers and property owners, accept any protests and adopt the rate schedule ordinance. DISCUSSION OF NON-CONFORMING WATER ACCOUNTS This item involves the upcoming transition from flat rate billing to volume based billing. Neil Kaufman gave a presentation: • Background / History o AB 2572 requires that the District begin reading all water meters installed since 1992 and commence billing on a volumetric basis o Water customers: 11,814 residential accounts and 680 commercial accounts o Non-conforming water accounts are not in compliance with current practices regarding metering as described in Title 6 of the District code ■ Multiple accounts in a single structure ■ Single-family residential in multiple structures ■ Unbilled services ■ Unmetered outdoor usage ■ Other unique situations o This issue was discussed in a Board Workshop in May 2009 • New Information o Multiple Accounts in a Single Structure - Single structure such as a duplex or mixed-use facility that is fed by a single service line, but each unit receives a separate flat rate bill for water service ■ In some cases, the units are under common ownership; in others they are owned by separate parties ■ Individual units cannot be easily separated ■ Individual customer cannot be disconnected for non-payment o Single-Family Residential in Multiple Structures - Separate single-family residential structures fed by a single service, but each residential structure receives a separate flat rate bill for water service ■ Mobile home parks ■ Ownership and maintenance responsibility of the exterior piping may be unclear o Unbilled Services - properties where a separate connection was installed for irrigation purposes, but a bill for service is not being issued o Unmetered Outdoor Usage — usage occurs before the water meter o Other Unique Situations • Recommended Approach o Require full compliance with Title 6: expensive and who is financially responsible? o Master Metering 6 Minutes: Sept 2, 2009 " Acceptable party must exist to take responsibility for billings ■ Could require modification of lease agreements ■ Revenue impact to the District o Create New Class of Service (Non-Conforming Bulk Rate) ■ Customer's usage would be unknown and billed at a flat rate ■ Base upon 90th percentile of water usage for given customer class & meter size o Consider requiring compliance with current practices upon resale or significant remodel o Proposed Non-Conforming Bulk Rate: "The customer shall be charged a monthly bill for service based upon the base charge, commodity charge and pump zone charge corresponding to that customers location and class (residential or commercial). For determining the commodity charge and pump zone charge the customer shall be charged a volume equal the 90th percentile of usage for all customers with the same customer class and meter size. This determination of the 90th percentile shall occur annually in January and shall be based upon the metered usage data for the prior calendar year." • Fiscal Impact o Using the master metering approach, it is expected that the total count of single- family residential accounts will be reduced by about 200 o Partially offset by creation of new master metered accounts There was no public input. Board discussion: • Multiple structures are common in some areas of Truckee • The 90th percentile seems to be a reasonable approach • How is the master meter rate set • Are master meters considered commercial • So the three choices are: a Non Conforming Bulk Rate, bring into compliance or a Master Meter • Evaluate one at a time and see what happens • Could we say meter situation must be brought into compliance • Support proposal • Like the idea of a Non Conforming Bulk Rate • Use 90th percentile to conform- this is different than a master meter or regular meter • Long ago, someone who built the units made a decision to put in water as one service- it is unfair to bill at a 90th percentile • If there is a master meter with a number of units and the landlord sets the rent, there is not much of an issue 7 Minutes: Sept 2, 2009 REVIEW OF THE DRAFT ORDINANCE SETTING WATER RATES FOR 2010 AND 2011 This item involves review of a draft Ordinance to set Water Rates. Neil Kaufman gave a presentation: • Background / History o AB 2572 requires that the District begin reading all water meters installed since 1992 and commence billing on a volumetric basis o Existing rate structure is a flat rate for residential customers and declining block rate for commercial customers o HDR has conducted a number of workshops with the Board to discuss rate concepts and rate structures ■ District conducted public outreach regarding proposed water rates • New Information o Draft ordinance has been prepared for review by the Board o Board approval of an ordinance is needed on September 16 to meet notification requirements of Proposition 218 and have new rates begin at start of fiscal year o Beginning in 2010 District is moving to a two-year budget. Draft ordinance covers rates for both 2010 and 2011 o Draft ordinance addresses the following issues: ■ Implement new volume-based residential and commercial rate structures recommended by HDR • Implement new pump zone configuration ■ Projected revenue increases of 1.75 percent for fiscal years 2010 and 2011 ■ Establish a transition period for existing customers as allowed under AB 2572 ■ Continue small residential water(SRW) rate ■ Establish a non-conforming bulk rate o Rate impact to individual customer will vary with usage and pump zone • Fiscal Impact: draft ordinance is based upon projected revenue increase of 1.75 percent each year for fiscal years 2010 and 2011 There was no public input. Board discussion: • Is it a 1.75% increase overall • Is the grace period going to hard for the billing department as some will be in transition and some are billed • Good to have a transition period for people to see their usage • Will there be a new ordinance for years 2012 and 2013 with a new two-year budget • How ill Phase 3 water meter customers be addressed with the rates CLOSED SESSION CONFERENCE WITH LABOR NEGOTIATORS: SECTION 54957.6 OF THE GOVERNMENT CODE. DISTRICT REPRESENTATIVE: MICHAEL D. HOLLEY. EMPLOYEE REPRESENTATIVE: IBEW LOCAL 1245 8 Minutes: Sept 2, 2009 'low" Removed from agenda CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9, SUBDIVI- SION (A), EXISTING LITIGATION: CLAIMS OF PACIFIC RIM CONSTRUCTION, INC.; LAKESIDE SPECIALIZED TRANSPORTATION; ADVANCED ASPHALT; AND TEICHERT RETURN TO OPEN SESSION Report from closed session There was no reportable action. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 9:00 PM. TRUCKEE DONNER PUBLIC UTILITY DISTRICT n Hemig, President Prepared by Barbara Cah' 1, Deputy District Clerk bhc 9 Minutes: Sept 2, 2009