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HomeMy WebLinkAbout1972-12-19 Min - Board December 19, 19 72 The regular meeting of the Board of Directors of the Truckee-Donner Public Utility District was called to order by Nelson Stone at 7:30 P.M. in the conference room. ROLL CALL: Roy Waters, present; Rex Anderson, present; Duane Anderson, present; Henry Loehr, absent; Nelson S tone, present; GUEST PRESENT: Jeanne Sollen, Mr. Firpo, Mr. Moore EMPLOYEES PRESENT Ken Kraj ewski, Pete Silva, Bruce Grow, John Craig SIERRA PACIFIC REPRESENTATIVES: Dick Campbell, John Saibini, Merle Atcheson, Joe Gremban, Ralph Cromer, Vince Laveaga, Frank Giovonnani Stone: Please note that all members to the Board are present, with the exeption of Henry Loehr. He is excused for illness. This is the official opening of the regular meeting of the Truckee-Donner Public Utility District, December 19 , 19 72. Next, the minutes of December 5, 1972 for approval. APPROVAL OF MINUTES FOR DECEMBER S, 1972 R. Anderson: I have a question on page 362, of statements made at the bottom of the page. I asked, You are not going to make this retroactive? The answer, No we are going to make it retroactive. It is contradictive, I don't understand. We were talking about the Line Extension Rule George, if you'll remember. Cattan: It cannot be made retroactive. R. Anderson: So it should read: No we are not going to make it retroactive? Cattan: Yes, that is right. It is effective from the date stated on the Resolution. Stone: Are there any more questions? None. Minutes for December 5, 1972 stand ap- proved. Let's consider the bills. BILLS FOR APPROVAL BY THE BOARD Waters: I move that the b i 1 is be paid. D. Anderson: I second it. Stone: It has been moved by Director Waters , and seconded by Director Duane Anderson. All in favor? Everyone said Aye. Motion is carried. ITEM #4 - SIERRA PACIFIC POWER COMPANY - MANAGEMENT PROPOSAL Stone: The Chair will entertain a motion that the Agenda be adopted with any changes in order that you that you wish to make, because some of the people scheduled for the Agenda have not shown up. D. Anderson: I make a motion that we skip Item #4 for the time being. Waters : I second that. Stone: Moved and seconded that we skip Item #4 for the time being, dealing:;wi.th �-- Sierra Pacific Power Company - Management Proposal. We will go on with Item #S on the Agenda. -RESOLUT ION NO. 7223 W-3 RATE REVISION �Cattan: This was approved at the last Board meeting. But it wasn't written up. Waters : I move that this Resolution No. 7223 be adopted. R. Anderson: I second i t. Page 372 Resolution No.- 7223 GS-3 Rate Revision. . . Stone: It has been moved by Director Roy Waters, and seconded by Director Rex Ander- son, that Resolution No. 7223 be adopted. This Resolution deals with the revision of the GS-3 rate which at this present time applies solely to the Fibreboard Mill. This Resolution was discussed at the last meeting. What is it, about a 10% raise for them down. there? Cattan: Yes, from the original 20 0 Stone: Please call the roll. ROLL CALL: Roy Waters, yes ; Rex Anderson, yes ; Duane Anderson, yes ; Nelson Stone, yes; Stone: What have you on Item #6, George? AGENDA PREPARATION Cattan: I sent a copy to you of Paul's letter. It states that the Agenda is us- ually prepared by the Manager or the Board. And Board member that wishes to add something can do so. Stone: Is everyone clear on that? D. Anderson: It was pretty clear at the last meeting. MANAGER'S REPORT Stone: Let's take the Manager's Report. Cattan: The Beaver's case is going to be delayed. This suits me, as I have a question- naire from Mr. McDonough, Mr. Beavers attorney, with 36 items to prepare. I am also preparing my viewpoint which is based not on hearsay, but from records from the minutes. We are still concerned with Beavers, besides Ponderosa Palisade Unit #4, and Ponderosa Palisades West. He still -,as 90 acres that is undeveloped. This would affect the District with quite a large sum of money. I will prepare everything for the end of March. R. Anderson: So it is delayed until March? Cattan: I will have everything ready by February. March will be the first hearing. Stone: The date of the hearing would be up tb°the courts wouldn't it? Cattan: The attornies are working. Then the courts will decide the date. The Manager has been instructed to write to the Developer that the Board will issue a right of way to the County. SIERRA PACIFIC POWER COMPANY - MANAGEMENT PROPOSAL . ,Stone: We have with us tonight gentlemen from the Sierra Pacific Power Company. Would you care to introduce them to us John? Saibini: Yes. Dick Campbell is our Legal Counsel and vice president, Joe Gremban is our Secretary-Treasurer and vice president, Vince Laveaga is our Director of Employee Relations , Frank Giovonnani is our Manager of the Lake Tahoe Dis- trict, Ralph Cromer is in Commercial Services, he is also a vice president. And Merle Atcheson is our Senior Vice President, and also our spokesman. Stone: Before you begin Mr. Atcheson, I would like to make clear that this is not a pub 1 i c hearing. This is one phase of a management proposal that we have been investigating. The Sierra Pacific will present what they have to offer. Go ahead Mr. Atcheson. Page 373 Sierra Pacific Power Company - Management Proposal . . . . . . . . . . . . . . . . . . . . Continued Atcheson: Thank you. We have prepared written material here and I will distribute these to the Board .members. We don't expect you to read this whole book tongight. We will leave them with you and anticipate that we will be in- vited back for questions. We have two other instances in which we have leased properties. The Truckee-Carson Irrigation District and the Mineral County Power System. Our relations with them seem to be quite satisfactory. Mr. Gremban can toll you how he figured the money. Mr. Chairman can we rough out how Mr. Gremban arrived at the dollars for an offer for leasing your electric properties? Stone: Well Mr. Atcheson, at this time any way that we go about it will be alright. After this meeting the Board members are diligently going to study this. We aren't going to come up with any decisions tonight. Atcheson: Would it be in order then to rough out the general principals first that we have, then in this proposal where we start after this cover letter, where we suggested a term for example of 30 years, subject to review every 10 years. We propose a rental of $95,600 per year plus 2% of the annual increase in �- gross revenues in the excess of $700,000. So Mr. Gremban, what are the re- venues at present. Joe, are they in the order of about $700,000? Gremban: It is $629,000 at the present time. But based on the new rates that are in effect annualized would be about $700 ,000. Atcheson: And so we propose to deduct the District in on any increased revenues that are obtained, and I know you will want to examine the $9 5,600. There we would propose to put the improvements in like new poles and wires. And connect your customers in your service territory under our extension policy. Our extension rule, I think is a little more liberal than yours. Mr. Cattan collects all of the money from the customers which is fine. But we don't. OPMEENk We have a system with the California Public'Utility Commission that we live with and it works. But anyway we would then propose to own the new facilities that were installed by Sierra Pacific, new poles, new wires, whatever it might be. Then at the end of 10 years as I understand, they can recapture it by buying it back. I think that is a fair proposal. If the District wants their property back and Sierra Pacific's property in addition, it could be bought back at our costs. We have an annual depreciation. Stone: Do you have a figure as to what that might be? Atcheson: I think Joe knows the figure of the depreciation rate. Gremban: Yes, the annual depreciation rate is about 2.8%. So any new pole we would set in 10 years immediately would be depreciated. The original poles would be about_ 28%. Of course it tapers off each year depending upon how long it had been. In 10 years time it would be approximately 14% depreciated. Atcheson: We have made this sort of a scheme work at Hawthorne, and at __the Truckee- Carson Irrigation District. We would propose to lease this office building for $3600 a year, or $300 a month and let the District have offices, and pay the utilities , lights, heat and maintenance on a yearly basis. And you could have it back if you give us a notice within a year, or we could give you notice and say we will build another office or whatever. We would propose to buy your vehicles and inventory, poles and wires that are not installed at whatever the book cost is. Gremb an: At your b ook cos t not ours. Atcheson: That is correct. We propose and Mr. Laveaga can go into it further if you like. We will give your employees the same protection that our employees have in pensions, benefits, have I forgotten something Vince? Laveaga: Just Seniority. Atkheson: We don't foresee any problem do we? We have to negotiate with our Union. Page 374 Sierra Pacific Power Company - Management Proposal. . . . . . . . . . . . . . . . . . .Continued Laveaga: No. Atcheson: We haven't looked into that kind of a problem before. This would include all of your personnel, management, clerical and otherwise. We wouldn't force anyone to move out of Truckee. We would propose to operate this office or an office in Truckee. The rates, Mr. Cromer is our rate expert. We would propose with permission of the California Public Utility Commission to provide the lower of the rates that the District has for Sierra Pacific's --- rates. Am I on the right track Ralph? Cromer: Yes. Atcheson: Our rates I understand are fairly similar to yours. I have heard that you have comtemplated rate increases. I think that Utility Districts all over are thinking about rate increases. As you are well aware of Sierra Pacific has application for rate increases for its wholesale, resale customers. Stone: At the time the rates won't make too much of a difference. Maybe a mill or so. We raised rates, in fact it might it exceed yours. Atcheson: If the California Public Utility Commission will approve, we may leave your customers om the same rate if it is lower than ours, or put them on our rates. Because they are all quite similar. Stone: For how long? Atcheson: For a year. We have to go to the Public Utility Commission in California for general rate increases before we could do any modifications specifically in Truckee that wouldn't reflect all over California. You have Loyalton, Portol a, Lake Tahoe, and Mono County, and Alpine County. We would have to modify the rates all simultaneously. We couldn't pick out Truckee and give. you the rate increases. If somebody might be wondering if that might happen. We can leave our little book and you can read it over, and present questions to us. We can come at your convenience. Campbell: There were some questions asked at the last meeting that we endeavor to try and provide the right answers to. Starting on page 4 of the memorandum sheet. The District and RFA Officials in Washington, the present REA Loan to the District would not have to be paid off. It would not make any dif- ference to them if we made the payment directly to them, credit the lease or you took the lease payments and made payments to them. I don't think it would make that much difference, However, they did say they would have to approve any lease that you entered into, subject to your loan agreement. As long as the loan remained outstanding. We did a cursory examination, the District's authority, some Questions that were asked and I know you have pro- posed some of these questions to your counsel, we are in the opinion that you have the legal authority to enter into a lease. We also feel that a division of California Law is applicable to all ordinances. If 10 0 of your qualified voters want to sign a petition, and present it to you, then you are obligated to call a special election which would submit the question to them whether or not the ordinanceshould remain in force or be defeated- It is our opinion that something like this would certainly needircons'2Ederation. You might even want to call an election yourself. The question of 'not what happens to a California District which would substantially lease a part of the facilities, it is our opinion would not interrupt the rights to contain to existing communties, that you could continue to carry out your obligations under the remaining part of your functions mainly the supply of water, as I understand i t. Our Counsel of the California District say that there might be a question of or District such as yours where if you were to lease all of your facilities fdr a-period of time. The question might be raised under that circumstance as to whether or not you have any purpose in continuing to exist. Now the question of property taxes under California Law we feel that exemption was granted to you, would not by us , say compare to market value of our pos- sessory interest in the lease which primly would be the whole case -value Page 3 75 Sierra Pacific Power Company - Management Proposal. . . . . . . . . . . . . . . . . . . . .Continued Campbell: of facilities which would be a long term lease. Subject to Real Estate, added to our taxes. According to our calculations Utility Properties approximate a $30,000 tax payment per year, to Nevada. County, California. Collect from the taxing District that you have in this area, I suspect is the school, etc. But the total amount would be $30 ,000. Stone: Do you feel sure that the judgment of the tax -from these facilities is right? Campbell: You have an exemption under California Law as I understand it, which only applies to the Municip�le owned, etc. But if a profit making or non exempt entity were to lease those facilities then the possessory interest of those facilities would be subject to a state tax. It is our opinion on a 30 year lease, the possessory interest there would almost approximate the total value of the facilities. We would really just be booking your entire assets on our tax records. And the California tax rates would apply, that the , rate in this County would equal approximately a $30 ,000 tax payment from our Company to your tax collecting entity. I don't know how that would break down to Nevada County and the School District, whatever other tax comities you have. That would be our best estimate to what those taxes would amount to. On our close calculations on the feasibility study we assumed that we would be experiencing a $30,000 expense all at one time. Those were the questions at the last meeting that you asked us to look into. D. Anderson: Could this lease be transferred to another political subdivision? Other than the city if this area were to be incorporated? Campbell: If in the event you ever dissolve yourself, all of your assets are then trans- ferable to a city or county organization or as the case may be in which your properties are located. Let us assume this area was incorporated, Truckee-Donner P.U.D. dissolved then I think all of your assets would be transfer-red to the corporated city. That is just a guess , I don't really know. Stone: Mr. Chamberlin, did you have any comment on that? Chamberlin: -Well,,.you could:have a`-situation-like -the_Sacramento Munici.ple-Utility Dis- trio .where-in -essence incorporated wi thin-the. ,city of Sacramento--depends how;-- ,yp }set` up`the proceedings. If you decide to dissolve any assets it would be transferred to the city. If you corporated and don't say anything about dissolution of the District, the District would still remain an entity. The assets wouldn't necessarily be transferred to the city. Stone: It would not be unusuAl then to have a Public Utility District within a city that is separate from the city government? Chamberlin: That is right. D. Anderson: Or this lease could be transfer-red to the city? Chamberlin: Yes. Stone: I have another question. This District at the present time probably spends maybe $500.00 a month to run street lights through the community, between here and Donner Lake. Did you consider that anyplace in here? Or would that have to be .worked out? -- -Campbell: Under California Law as I understand it the Utility may not offer any free services. We have to have a tariff, under PUC regulations, we have to levy a charge for street lights and so on. I think Joe can clarify that. Gremban: We have taken .that into-, consideration when we showed the income statement, the first financial statement in here. We have listed on that financial statement the results of 1972 of 1971, as recorded by your auditors and the actual for the 10 months ended October of 19 72. We proformed for the 12 months ended September of 19 72. As if your new rates had been i e_-ffect for the entire 12 months. And as if the new purchase power costs had been in of fect at that time. In 19 71 at the end of the period there was a cash deficit of $51,000. Page 376 Sierra Pacific Power Company - Management Proposal . . . . . . . . . . . . . . . . . . . . . . . . . .Continued Gremban: And proforming for the new rates and the new cost there would still be a cash deficit of $85,800 for the 12 month period ended in September. We took the total amount of Utility plant that you have $1,6 20,000,. deducted the depreciation of contributions and come up with a net investment of roughly $1,200,000. We calculated a return to you of 8 0 on that, which comes up with a return on your investment of $95,600.00. The office space rental of $3600 would be a cash flow to you of $99,200.00. Now from that you would have to pay the power costs as we can't donate anything to the cities.- You would pay the power cost of $700.00 on the warehouse that you operate, the street lighting of $8900, and the water pumping of $10,400. And you have a debt service to repay of $4 7,500 annually, so your cash expenditures would be $6 7,500 and would leave you cash available of $31,700, which would compare to the cash deficit that you had in prior years. So you can do whatever you wish with the $31,700 and apply it to whatever other operations that you have. Now in addition to that on the next' page I have written the estimate of items that we would purchase direct from you at the time the lease would take affect. Materials and supplies as of Octo- ber 31, have been booked at $85,000 and we would buy the stock of meters , trans formers, whatever office furniture you wish to dispose of, tools, and transporati-on equipment. The transportation equipment was based on the original cost less depreciation. For 1972 we did not' depreciate at all. We are using the total purchase price. There would be cash:-payment in addition to that of $143,000 as of the time of the lease taking affect. Paulus : Let me ask you one question: On this material and supplies , $8S,000 these are just invetory items. These certain items at time of purchase you would take those and . . . Gremban: Yes, you would have to sign a cost date. Paulus : In other words they don't appear here. Gremb an: No. Atcheson: I'm sure you would like to have time to look this file over at your con- venience. We are not trying to rush you in any way. If there are any questions we will certainly give it a try. We would be pleased to come back another day. Waters .* I'm sure there are many questions that I will want to ask at a later time. Campbell: I might add that the two leases we submitted to you, as Mr. Atcheson said are the two leases that have-riegot aced with- the other two District type entities. The original lease was the Truckee Carson Irrigation District. Mineral County is somewhat similar. There have been some revisions. Some of the agreements in the original lease were in detail enough to take care of all contingencies. You will note there are some modifications. I want to point out that during the course of the lease, all the property that is owned by the District will be set up in our books. Gremban: I want to point out that during the course of the lease, all the property that is owned by the District will be set up in our books as a memo account. So that we can maintain adequate control of it and determine what you act- ually hav,at - any given time. Now as it is necessary to retire any of the property, it would be retired from that memo account. So we will always have a­c6ntinuing record of that total. Stone: This was one question that I was thinking of, where a District like this has a functioning Board, we are fearful that sometime in the future, 30 years is a long time. The incumbent of the Board would have been replaced many times. My question was, do you have an adequate facility to keep in- ventory and all of this, and I guess that your answer is yes. Gremban: Yes, we do. And we would not only keep track of your facilities as a se- parate item, separate control, but we would also keep track of our own additions to the system. So that at any given time we can give you a grand total of both. Now during the course of the lease as projects come into being, we have proposed that any project in access of $10,000 would be cleared with you, with the Board before the project would commence. And in addition we provide and audit procedure so that the Board can have our books .budited with respect to these facilities. And Truckee-Carson Irri- gation District, for example, we have just concluded an audit with them. You do have control on this at all times. In this proforma statement I have Page 377 Sierra Pacific Power Company - Management Proposal. . . . . . . . . . . . . . . . . . . . . . . . .Continued Gremban: just shown you, you want.to make on point clear, the only things we have proformed were the revenues for the entire year on your current rates and the cost of power that-we supplied to you. Those were the only two things. We did not adjust anything, payrolls, materials, or anything such as that. Those are as you would have experienced them. We aren't assuming or pro- jecting anything on that. -- Campbell: We would maintain at all times during the life of the lease, adequate in- surance, properties owned by you. There is public liability and property damage insurance. In the property entity itself, there will be no legal exposure to the District, so far as uninsured claims and all. Stone: Are there any questions from the Board? Gremban: You might add that the additions of auditing, insuring and so forth are pertained in those two leases so you can review that and see exactly what we are talking about. Stone: At the present time, the Board is retiring the Manager, what would be his status if the lease were executed before his.'_retirement? Saibini: We have proposed that all personnel would be protected. He would be under this protection until his retirement date. Cattan: There is one question I want to ask, is there a way to getting the County to pay for the street lights? Campbell: Normally the street_lights, are paid for by_-the,govermental entity. In Reno we have the situation where the city pays for the street lights. But I'm not sure the County does. The County has the authority to do it, but I'm not sure they have a street light program. Cattan: Well the County repairs roads, and move the snow, so therefore I could see that it might not be our obligation to pay for the street lights. Campbell: I think maybe up at the lake where they don't have cities, the County might pay. Cromer: As far as Mr. Gremban's presentation. It has been assumed that you would pay for them. Perhaps the County would assume it. That would of course be that much of your net. Campbell: I don't know how that $30,000 is divided up. I imagine the School takes a substantial part of that. Cattan: Perhaps we couls ask Mr. Paul Chamberlin to see what he can do. I would like to collect some money out of the County. Cromer: George, I think that the main point is sufficient tax revenue to the County to offset the street lights payment. As Mr. Campbell has said we have to charge. And Mr. Gremban's presentation is extreme, if you would, is that it would be levied against the Board. I would volunteer if I may, two copies of our rates, rules and reguldtions. You could review, or in the event that someone else might want to review them. They are open to the public. We will leave them with you. Stone: Okay gentlemen, on January the 2nd, we will review some of the debating on the Board. You are welcome to attend if you wish. On January the 16 th, we would like to invite the representatives of your company back to discuss the specific dues ti ons that we will arrive at on our jeer 2nd meeting. Is that satisfactory? Atcheson: Yes, that is fine. And thanks for listening to us. Page 378 Discussion with Mr. Chamberlain pertaining to Sierra Pacific Power Company Waters: Mr. Chamberlain is here, and he brought up some questions regarding this lease deal with the Sierra Pacific Power Company, which I think that he .should discuss. Stone: That's right Roy. I was going to get to that sooner or later. But now is a good time. Mr. Chamberlain, you were expressing some opinions on legal aspects? Chamberlain: Not necessarily opinions, more so questions that ran through my, mind as I read th=rough the initial draft of the TCID lease that Manager Cattan sent down to me. For the record I should also mention that on occasion, the office does work for Sierra Pacific Power Company. We are not doing any work on this , and I talked with Mr. Campbell afterwards and the power com- pany has no objections to us advising the Board in reference to any matters involved in the lease. I want to tell the Board that if they object to me discussing the matter with them, they should feel free to have another at- torney to review the matter with them. And I reserve the right to have saebody else review it and step out of it so that I don't get shot at from both sides. The questions that I had and they are unresolved at the time in my own mind. Items for example, strictly dealing with the rate s tructure. Under the lease the rates would be set by the Public Utilities Commission. Yet, by statue the Board has imposed on it the obligations to set the rates of the District for the services that it provides. I don't have the ans- wer to the question, but perhaps it is a matter to be resolved, -if it goes to the Board of the people and they say okay, we are agreeable that you abdicate your authority, to have the rates set by a Commission rather than an elected Board. Then that is one way the question may be answered. The other seems to me they are talking in the agreement about ;:reserving to the Board the right of approving certain capital expenditures in ac- cess of $10,000. It seems to me that perhaps another item that might be reserved to Board authority might be review and approve rates that the power company might seek to set. So you still have some of your local �. control because the Board is the official voted representatives by the people and they have an obligation to the people. Another question that came to my mind probably involves me getting an opinion out of County Counsel, in that part of the proposal that they submitted here this evening. That is selling to the power company certain physical assets at a price of approximately $14 3,0 0 0 even though the Pub t i c Utility's code under which the District operates doesn't specifically say that whenever you sell property you must sell it at- a public auction. Nevertheless, it has been the policy of this Board as well as many Boards when you dispose of property that is held in public trust, it goes to the highest bidder for the top price. As a matter of precaution to avoid possible criticism of the Board and so forth, I think this is an item that is going to have to be resolved. Another question that came to mind is a constitutional one that prohibits using public property for the benefit of a private individual. Here you have a situation of a lease of public property leaving aside the sale question, but a lease of public properties through a private corporation which is a profit making entity. Yet they are going to be using public property for that purpose. I think that is a question that has to be answered. To me that, probably more quickly than any of the others. D. Anderson: That is not a consideration in Nevada then, Under Nevada Law? Chamberlain: The thing that is brought to mind is that the Truckee-Carson Irrigation District is really in Nevada. A public corporation like the Utility ._.. District s' -_x a California Corporation. They have a different set of ground rules. Under Nevada Law the Utility District corporated state statue in California. That is a question that has to be resolved. You may end up with an Attorney General's opinion that says no, you can- not least public property to a private corporation for profit making pur- poses. R. Anderson: How soon can you get the answers? Page 379 Discussion with Mr. Chamberlain pertaining to Sierra Pacific Power Company. .Cont. Chamberlain: All I can do at the moment is check with County Counsel, and tell them this, and send over a copy of the proposal. I would ask him if he would give us some though and if necessary set up an appointment, and go down to talk to somebody in the Attorney General's Office in Sacramento. To see if we can get a letter opinion out of them rather than going through the full blown thing. Stone: By all means Mr. Chamberlain, if the Board contends , and I'm incorrect, you gentlemen may correct me to retain you in this matter and guide us 000%' in it. We hope that within the next month you can come up with the ans- wers you have proposed. I would have one other question that I'm not sure of., would you determine if this matter should come to the point where we should be placed before public ballot, determine whether this is a simple majority, whether 2/3 majority, required in the balloting, and any any other particulars of the balloting procedure. Waters: As a member of this Board, I will not lease the facilities of this District without the approval of the people, the full approval of the people. Chamberlain: Mr recconmendation would be that you make an effort to get a 10 o petition and go the rout of referendum. Then you know that you are following the wishes of the majority, You can do no more really. D. Anderson: Could you also in the investigation determine if we were wishing to sell the District, the power portion of the District, how that mould be done? Chamberlain: The policy is that you go to public auction. Although the Messenger Code system is different then the Government_ Code section applied by the County. Many times if you are going to sell any part of the county, you go on the auction block. Once you make the sale of course, the ownership is gone. If you have got the money in hand. Here is a different situation we are talking about, a lease of part of it and a sale of the rest. First, I want to get it clear on this constitution if at all possible. If they say ..�., no you can't, or yes you can, I want to know the ground rules. If you had some extra office space, and you were going to lease out that part to somebody say for a year, you would have a differenet situation altogether. Here you are talking about a major portion of the District's assets for a term as long as 30 years. I would like to get as many questions answered as soon as possible, and hopefully have answers on the 16 th of January. UNFINISHED BUSINESS Stone: George have you finished with your Manager's Report? Cattan: Yes. I have no more to say on that. Stone: We have quite a few items of unfinished business, so we will go into that. Might we ask you if you are going to Washington? Cattan: Yes, I will be going to Washington. I talked with McDonough and he wants me to be there. D. Anderson: What about Prosser Lakeview Estates.? Waters: I think that was set up for February, wasn't it? D. Anderson: Is that still a good date? Cattan: The last two weeks I've been working on Beaver's papers. D. Anderson: Didn't you just say that Be ave r's was postponed? Cattan: Yes. I will have to work on rates now before I go to Washington. D. Anderson: I almost think that in a way we are obligated to make some sort of de- cision on February 6 th. Page 380 UnfinishedBusiness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .Continued Cattan: This Beaver's case involves a lot. I have dropped everything so that I could work on this case. Now it is postponed. I just got the final word from them yesterday afternoon. Stone: Tom, have you made contact with Ray Harsten? Paulus: Yes. I spoke with him, he came into the office a few days ago. I told him what had transpired. And apparently he had already got wind of it. So it was no shock to him. I mentioned that reselling electricity was illegal according to our Resolution No. 6701. He agreed. He is merely acting as a collection agency. I got a letter from Paul the other day regarding this. Paul stated that he saw nothing illegal since he isn't raising the price. According to Mr. Harsten he is not. We charge a $7.50 fee during working hours, and more on weekends. He said that he was doing this primarily as a convenience for his renters. He is actually doing us a favor. It costs us more than 20 when we send out a man. Chamberlain: He is not really reselling. So nothing can be done if this is all that he is doing. Paulus: I think that if an apartment owner comes in and they want to know what their bill was for that particular apartment, then I think that we are obligated to give it to them. Cattan: If he was submitting them an electric bill, but he is not, he just tells them how much to pay. Waters : How do we know that he is overcharging or that he isn't? Paulus: We don't. As I said, until someone comes in and bring their receipts of what they paid, we can go back and look on the meter and find out then, what it actually was. Until that happens there isn't much that can be done. Chamberlain: Are your meters sealed? He isn't tapering with them is he? Paulus: No. Cattan: Well, actually the occupant is saving money, because if he came for a connection, he has to pay $7.50 during the day, and $20 after 5 0'clock. D. Anderson: So Paul is it your opinion that we cannot interfere with that? Chamberlain: I think the odds beyond that point of the meter, as long as he isn't causing a hazard to the operation, breaking the seals, and messing around with District property, I don't think you have any control. R. Anderson: You said that the person would have to make,-a formal complaint. What is the procedure for that complaint? Chamberlain: I would think they would have to come in, saying they think their electric bill is too high. You say this is what we billed the owner. If he is reselling, then a stop will have to come to this, either by terminating service, or by putting each tenant on separate meters. D. Anderson: Did you notify the lady that was here the last time? '"'`' Paulus : I just got Paul's letter today. I wrote to Hars ten, And I will also in- form her. R. Anderson: She did say that she has receipts for everything. Stone: If we cannot do anything else, I think that man should have a letter or legal order to cease from involving the name of the M.D. Waters: What legal right does he have to charge them for hook-up when there is no hook-up? Page 381 UnfinishedBusiness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Continued Chamberlain: It is just a matter of legal contract between the two of them. D. Anderson: The only thing he shouldn't be doing is b 1 aming the P.U.D. for the hook-up. R. Anderson: Do you feel Tom that you can write this letter to Mr. Hars ten? Or would you rather have Paul do it? Paulus: I have already written one, Paul has a copy of it. R. Anderson: I mean a follow-up letter that states he is not to use the P.U.D. for the hook-up charge. Do you want to write it, or let Paul write it? Paulus : I think I can write it cheaper than Paul, so I will write it. Stone: I wish to remind the Committee on Reorganization, these are the two right here. They were to have reported the is t of December to this Board, would have been the meeting of the 6th. During the next month or two while we--a-re into this reorganization, do you think that you can come up with something? R. Anderson: With the reccommendation of the Manager we deferred doing anything until we had made some decision on our proposal from the Sierra Pacific. Stone: You could throw some more thinking into it. If we went into the lease of the power, this might have an affect, in what you are thinking about in joining the Water system with the rest of i t. I guess what I am saying Rex, is that during this period I think it is going to take 4 to a half a dozen meetings to decide what we want to do. This is one of things that we should discuss. Maybe you can come up with something that will enlighten us. Have you done anything at all? R. Anderson: No we haven't. D. Anderoon: I don't think it makes any difference whether we lease the power or end up retaining. I think it is still worth investigating the com- bining the sewer and water, into one branch. And power in another branch. Whether the power be waste and controlled by the Board or it be a separate division controlled directly by the Board. I think we should pursue the matter of reorganization with the Sanitary District and the P.U.D. Stone: Well, I think we should. R. Anderson-:. I think we are beginning to see revenue because of the Resolutions that we have adopted. We are starting to reap the benefits from those. Cattan: Don't you think it is better -to wait _.until you see whether you agree to Sierra Pacific's proposal or reject it? D. Anderson: I still see it, regardless if this District remains as it is. I think there is benefits to be gained like buying the water with the Sanitary utilities. Cattan: I don't see i t. D. Anderson: Well there is a difference of opinions right there. There is quite a bit more than the one management. There is warehousing, equipment, quite a bit more. Waters: Duplication of personnel. D. Anderson: Absolutely. Cattan: We don't have any duplication of personnel. D. Anderson: We believe that there is. Page 382 UnfinishedBusiness. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .Continued Cattan: We don't have people that are just sitting idle. I can't see where you can s ay that. Maybe on the Board. Waters : Managers, Superintendents, etc.? Stone: There is another thing to consider, in my time I have been able to cut some s tumb 1 ingb to cks in the way of corporation Now T think that a corporation is inevitable. -I'm not talking- about tomorrow but maybe within 5 years. So I reverse my stand on it. D. Anderson: Is there going to be anymore contact with the Sanitary District as far as starting some procedure for reorganizing the District? Stone: Before long, I think we will have to make a contract with them, and at least get their views. Do you think that you can do that Rex? R. Anderson: Yes, I will contact them. Stone: Okay, the next item we have is the Piru Report. Wasn't Martin Mc- Donough suppose to attend this meeting? Cattan: I got a letter from Mr. McDonough. He says : He is planning to at- tend the meeting of the Department of resources in Sacramento next Thursday morning. Maybe you will be able to attend since your per- sonal ties have changed. If not he will try to present something to the- District. - As I have stated that with the pump storage operation, Piru Creek Power Plant could be operated with a generic mode of up to 6 hours per day. And up to full capability up to five weekdays. I am not an electrical engineer and am not going to reconcile these statements, but this power seems that it can be only used for economy capacity energy. If Piru Power would be available in 1980, will Ttuckee have a system then that can use this kind of power? �. Stone: Well, -,.you have work yet to do on it. Cattan: Yes. I have a lot of work to do on it yet. What they are actually going to do is present us _with a copy of a contract. A contract that they have already. Then after studying if, I will present the Board. Stone: I have one more item. I understand the Herzog property has been sold. Is this correct Mr. Chamberlain? Did we not read in there that this property could not be disposed of without the approval of this Board? Chamberlain: No. I don't think that it limits the disposal of the land. D. Anderson: I think it is in the limit of the use of the property. Chamberlain: It would be limited to recreational use. But it doesn't restrict the sale. D. Anders on: It looks like they have had some difficulty in opening, since they have just been z one d out of use by Nevada County. Chamberlain: I got a letter from a--Miss Mahaffey, in the Nevada County Planning Department. I sent to her the copy of restrictions in the Herzog Deed, and she said yes , that they were well aware of what was contained in the Deed. But the County zoning prevails over the provisions of the Deed. However she said that in view of the urgency and so forth they were tryigg to get the Kents on their Agenda for the January llth meeting. Rather than the much longer timetable they indicated before. Waters; How could they legally rezone it? Chamberlain: Rezoning can prevail over the Deed restriction. Waters : Wouldn't they have a record of who, after the rezoning of it? Page 383 Unfinished. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Continued Ch amb explain: I- don't know if it is a rezoning as such. They were a nonconf ormed use in the first place. As I unde rs t and when they fail to continue that use for 6 months, then they lost their nonconforming use. Probably what happened was that this thing was covered for recreational purposes, commercial purposes in a residential zone. When the re- sidential zone went on, it was one of these grandfather clauses, saying that it will not validate any existing use. Normally those kind of covenants even if there is a failure:to comply with the thing for a period of years, time keeps running, t think. Waters: The failure was the Districts fault to, because they didn't watch the operation. No one knew about the lease. Paulus: I spoke with the new owners and they are quite appalled at the re- zoning. They had wanted to open the 15th of December. And wanted to keep it strictly as a recreation area. Stone: Alright, this Chair, to its knowledge has asked questions and comments from old business. Next we shall go into the Resolution you passed a year ago. The Chair will now call.for=;nominations for president of the Board. NOMINATIONS OF PRESIDENT D. Anderson: I nominate Roy Waters for president, for the next term. R. Anderson: I second the nomination. Stone: The Chair is calling for any further nominations. If there be no further nominations, the Chair declares that nominations for President are closed. To refresh your memories, Roy Waters at the last meeting moved that this subject be postponed until a later date, when Director Loehr could be in attendance. The Chair, rules, whereas the ordinance does not come effective until a day after tomorrow. It appears that we may have to go ahead with it, since this zs ,the next meeting after the subject was postponed, and Mr. Loehr is not in attendance. What is your thoughts Director Waters? Waters : Since we do not know when Mr. Loehr is going to be available, we may as well go on without him. It may be sometime before he can be in attendance. Stone: Roy Waters has been nominated for president. What is your Vote Rex? What is your vote Duane? My vote is yes. All in favor? Everyone said yes. None opposed. I would like to thank you, and might I say that I will be glad to be back on the floor where I can express my opinions, and engage in some of the activities which this Chair has prevented me from doing. Upon the election of the new president, he must immediately take office. Waters : Wait! Don't we have to elect a vice-president? Stone: No, Robert's Rules Book states that the new elected president is to take over immediately upon election, and open the nomination for the vice-'pres i dent. Waters: Thanks for your confidence in me. This year of 1973, will be a year of decision for this Board in this District. You watch and see. I will open the meeting now by taking nominations for vice president. Page 384 Nomination of President. . . . . . .. . . . . . . . . . . . . . . . . ..Continued D. Anderson: I nominate Rex Anderson. Stone: I second the nomination of Rex Anderson. Waters: Mr. Rex Anderson has been nominated and seconded for vice-president of this Board. Any dues tions? Of not, I will poll you indivi dually. All of the votes are yes. In conjunction with tonight's business, and the future, I will now entertain a motion for adjournment. Stone: I so move. D. Anderson: I second i t. The regular meeting of December 19, 1972 was adjourned by the Board's newly elected President, Roy Waters, at 9 :50 P.M. NELSON STONE.., PRESIDENT OF THE B BARBARA SPENCER, RECORDI G SECRETARY Page 385