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HomeMy WebLinkAbout2010-04-07 Min - Board REGULAR MEETING , -- April 7, 2010 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 perpetual- ly 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 Vice President Hillstrom. ROLL CALL: Directors Joe Aguera, Jeff Bender, Ron Hemig, John Hillstrom and Tony Laliotis were present. Director Jeff Bender was absent. PLEDGE OF ALLEGIANCE Stephen Hollabaugh led the Board and public in the Pledge of Allegiance. EMPLOYEES PRESENT: Mary Chapman, Kathy Neus, Rosana Matlock, Steven Poncelet, Ste- phen Hollabaugh and Barbara Cahill CONSULTANTS PRESENT: Shawn Koorn OTHERS PRESENT: Juanita Schneider, Josh Susman, and Carolyn Dee CHANGES E TO THE AGENDA Stephen Hollabaugh asked to remove Agenda Item No. 713, Consideration of Agreements with CaIPECO and SPPC, Reliability Agreement PUBLIC INPUT Josh Susman wanted to comment on agenda item number 12 from the March 17 Board meeting regarding the General Manager Employment Agreement. "I find your actions vague and misrepresented as listed on the agenda, as well as manipulation of the agenda, as well as the Board's manipulation of the public process an outrageous affront to the ratepayers of this District. By your actions, you denied the rate payer the ability for input you so strongly suggest you desire. You dismissed responding to a local respected organization known as CATT whereby in their letter they requested an opportunity to have the Board consid- er and respond to their inquiries prior to their action. And by railroading through the approval of Mr. Holley's contract without any of the aforementioned consideration. You, in the opinion of many of the ratepayers of the District, demonstrate a complete lack of responsibility and public process and a further weakening of the public trust by your failing to provide fiscal responsibility to the voters that elected you. $11,000 raise plus retirement and bonus, over $20,000 plus retirement, and generous reimbursement in this calendar year alone. As more of your rate payers become aware of this, I am confident the outrage will grow. In approving this contract, you all, all except for you, Mr. Laliotis- wise move on your part, appeared to be reading from a paper with talking points, possibly one handed to you by Director Hemig when you came back from Closed Session as evidenced by watching the meeting. You all cited similar reasons in 1 Minutes: April 7, 2010 validating your actions toward Mr. Holley this jackpot salary with a boondoggle contract during this time of unprecedented economic decline. Stability you site in the 5 year contract was not discussed in your budget; your budget discussed only an increase to only $193,000. Nor has it been discussed to be sustainable. The District sited having Mr. Holley stay as the reason for this contract. By increasing severance from 3 months to 12, 1 believe it is Mr. Holley's incentive to leave the District. Consistency. Director Bender cited this contract is consistent with other labor groups. Some of these same groups recently agreed to a wage and benefit freeze to help us all get through these tough times. Mr. Holley's contract does not allow him to be treated materially different from these other groups. When the District makes up salary and benefits to this group, I expect Mr. Holley will be entitled by this contract to get another raise as well. Performance. Mr. Holley has stepped up to fill the Water Manager position- good for him. That showed fore- sight by the Board to hire a GM that has water certifications and has shown that we really don't need a redundant Water Manager. As Mr. Holley's contract states, he will work full time for the Truckee Donner PUD including some duties of the Water Manager during his work hours from 8 to 5 Monday through Friday. His contract gives him an annual bonus for doing these duties. Incredible. What really has happened is that the rate payer's elected trusted Board has given any one of us the equivalent of winning the lottery. This contract states that he is an "at will" employee of the Truckee Donner PUD. Then the Board can terminate his contract with or with- out cause, yet the Board hastily approved this contract by Ordinance. Ordinance defined as a regulatory act of law. Rather than by motion, Mr. Holley's employment is a contract at of law. With all the bonuses, reimbursement, vacation, sick days, administration days, contributions to retirement, the increase to 12 months' severance, and more, one has to ask and CATT tried to and I ask, did the District's attorney read this contract, or did only Mr. Holley's. Now when ... Mr. Holley does leave with his 12 month severance package, his replacement manager will have the same contract established by law. In a statement by Director Bender, only one member of the public was present during the hearing on the 17t". Is this the public process you all truly believe which is that which the people who elected you expected or deserve? If you think so, then shame on all of you. If you think this contract is fair to the rate payers you represent, then shame on you. For Mr. Holley negotiating this contract and accepting in the face of the rate pay- ers, shame on him. Mr. Holley in his bill stuffer last month wrote and I quote: "Today more than ever, companies need to do more with less, and the District will continue to look at ways to trim its budget." I am sure the Grand Jury of Nevada County will find interest in some of the recent actions of this Board, including the overall budget of the Truckee Donner PUD and its public process. In addition, I am confident that those who voted to approve this contract, you will hear from the voters during the next elections. So what can you do now? What can you do now? This ordinance does not take affect for 30 days. As a Board, I believe and others do too, that you have no other alternative than to counter and hold a special meeting before the 30 day dead- line and rescind this ordinance and rehear it with an open and transparent public process you denied the first time. Mr. Holley's contract could still be reapproved with or without modification by motion even in time for his July bonus if still applicable. We all thank CATT for bringing this to our attention in spite of its dismissal by the Board. I think this Board owes it to the community to consider the request because I believe this community will not let this rest. Thank you." Director Hemig responded that it sounds like Mr. Susman is setting his platform for running for the TDPUD board because in all the time he has known him, he has not ever heard him this trumped up over anything. Somebody has helped Josh prepare in a way that Director Hemig has never seen. 2 Minutes: April 7, 2010 Mr. Susman responded to Director Hemig: 1 take offense to that. I believe there were pages passed around this dais that were perhaps not penned by some of the people. I assure you that I penned this document myself based on the information of the Board and what I observed on the television and the process I observed after 12 years in a public office on the Town Council. I have never seen such a more blatant manipulation of the public process as you last meeting on the 17th when you adjourned to a 2 hour closed session, came back after only 40 minutes, changed the crawler to only 5 minutes, and approved this with no public process. It was stated by you, Mr. Hemig, that you only raise rates here at the PUD when you have to. Well increasing a contract to this magnitude in this economy suggests to me, Director Hemig, that this Board may be having to raise rates. Am I candidate for the PUD? I am not stating I am a candidate for the PUD, but I am saying this Board needs to be responsive to the rate payers of this communi- ty. And if this Board is not responsive, then we need candidates that will be responsive." Director Hemig responded: "There was nothing passed around between Board members in terms of talking points written by himself or anyone else. This is a major affront to our process; I recall that we had a number of conversations with the General Manager. And that culminated into a public session. In the public session, no one came to this meeting, including CATT who had written the letter. There was an opportunity to take input. There was none. We had the letter from CATT. The letter from CATT said two things: we don't understand all of this; we would like to understand it so we don't want you to go forward with the process. My opinion on that is that we should explain things to you; but understanding something at the eleventh hour of a long process, does not mean you stop the process. Nobody from CATT or any other agency came here. Regarding the situation itself, let me ask you, Josh, if Tony Lashbrook said he was not ,,.-. going to replace the public works position at the Town because that person happens to be leav- ing, says he will take that on, do you think that maybe the Town manager might deserve some nod of compensation for that kind of attitude and approach. In other words, I will take a $200,000 position and I will not fill it and I will work harder. And in return, perhaps I deserve some kind of pay for that effort." Josh stated Mr. Holley is still working the same number of hours in a week. So whether Mr. Holley is entitled to that bonus or not is not the issue, the issue is the.public process that he is challenging relative to what this community deserves. Juanita Schneider stated she was at the March 17 Board meeting and was concerned that there were no other people here for what the item was on the agenda. There was no one here to give any input. DIRECTOR UPDATE Director Hemig reported that he participated in a teleconference meeting for the Municipal Utili- ties Financing Association (MUFA) on March 24. There was a discussion on the contemplation of a gas project, gas suppliers, and UAMPS joint venture member's performance. There is no prospect of a pre-paid gas project at this point. Director Hemig has been observing commercials about Proposition 16 which relates to Municipalities and Electric Utilities borrowing money. He would like this item to come before the Board to understand it fully, but does not think it has a direct connection to us. Director Hemig also wanted to comment on the Google Fiber article. There is also more that the PUD has done as to the Broadband initiative; more than just the 3 Minutes: April 7, 2010 infrastructure. The PUD evolved into a business plan to provide a gold standard Broadband Triple Play service, which we could dust off. The PUD has a lot to bring to the table. Vice President Hillstrom said he read recently that natural gas futures have spiked. CONSENT CALENDAR Director Laliotis asked that item No. 8, "Award of a Contract to Perform Conservation Marketing" be removed from the Consent Calendar. CONSIDERATION OF AGREEMENTS WITH CALPECO AND SPPC A) FRINGE AREA AGREEMENT B) RELIABILITY AGREEMENT Item pulled from agenda This item involves additional agreements with CaIPECO and SPPC for the Fringe Area Agreement and Reliability Agreement. Director Laliotis moved, and Director Hemig seconded, that the Board approve the consent ca- lendar. ROLL CALL: Director Bender, absent; All other Directors aye, by voice vote. SO MOVED ACTION ITEMS CONSIDERATION OF THE AWARD OF A CONTRACT TO PERFORM CONSERVATION MARKETING SERVICES This item involves awarding a contract for marketing services. Director Laliotis moved, and Director Aguera seconded, that the Board award a contract for conservation program marketing services to Switchback Public Relations + Marketing for an amount not to exceed $66,667 for a term of 20-months. ROLL CALL: Director Bender, absent; All other Directors aye, by voice vote. SO MOVED CONSIDERATION OF VOTING FOR A LAFCO SPECIAL DISTRICT MEMBER This item involves casting a ballot for the election of a Special District Member of the Nevada County Local Agency Formation Commission. Director Laliotis moved, and Director Hemig seconded, that the Board authorize the Board Vice President to mark the attached ballot in favor of Jeff Bender as directed by the TDPUD Board of Directors for the election of a Special District Member of the Nevada County Local Agency Formation Committee ROLL CALL: Director Bender, absent; All other Directors aye, by voice vote. SO MOVED WORKSHOPS DISCUSSION OF A POWER SALES CONTRACT FOR THE UAMPS WIND PROJECT AT HORSE BUTTE This item involves an update on the status of the UAMPS wind project at Horse Butte in Idaho. ..,, Steven Hollabaugh gave a presentation: • Background / History 4 Minutes: April 7, 2010 o Truckee Donner PUD is a participant in the Horse Butte Wind Project located in Idaho o A workshop was given to the Board on November 4, 2009 • Project Status - Cost Estimate o Internal Model— Base Case Scenario ■ Traditional 100% Debt Muni Financing at year 0. ■ Currently about $80-81 Wh, Conservative assumptions ■ Does NOT incorporate offsetting REC's ($5-7 MWh, minimum) o Citi Model (Prepay structure) ■ Currently about $71/MWh, same conservative assumptions are inherited from the Internal Model ■ Does not assume the net affect of any REC's o Project Costs are based on V100 model ■ V100 model refers to 100 meter blades that work better in lower winds and are the newest more efficient technology • UAMPS has filed the Conditional Use permit application and anticipates approval by mid-May • Environmental schedule is moving forward and a full biological report will be completed in the summer of 2010 • UAMPS has submitted the transmission Interconnection System Impact Study Agreement with BPA and anticipated the results by early May 2010 • UAMPS is currently evaluating turbine vendors • UAMPS intends to recommend a Balance of Plant Contractor to the committee in April • Power Sales Contract expected within the next two months o The recitals set the table for the rest of the Power Sales Contract and describe UAMPS undertaking the project through the Development Agreement and Power Purchase Agreement o UAMPS sells the projects capacity and energy to participants including financing through bonds o Citibank has proposed a transaction structure that enable the project to capture federal tax credits and cash grants o Power Sales Contract has 36 sections that are outlined in the staff report • Fiscal Impact: The cost for power produced from this plant could range from $71/MWh to $81/MWh There was no public input. Board discussion: • Why after six years would UAMPS exercise a purchase option for the fair market value- what would the cost to the members be? • What do they expect for entitlement shares • Wind power plant rates could be close to $100 MWh • What is the estimated anticipated power the PUD could get from the project • So there is a 100 MWh potential and also a potential to expand • When will this project near completion- 2011 or 2012? How does the power get here? • Is the cost high on this type of renewable? • What other renewable resources are we looking at? 5 Minutes: April 7, 2010 • Does the $71/MWh cost mean delivered power? • Could the load factor be better than 30% DISCUSSION OF PRELIMINARY ELECTRIC RATE-STUDY DATA ANALYSIS This item involves a discussion of a preliminary electric rate-study data analysis. Consultant Shawn Koorn of HDR gave a presentation: • Overview of the Rate Restructuring Process o Restructure residential rates to meet Board's goals and objectives (what is important) o Lifeline rate o Revenue neutral rate design o Provide alternative rate structures for review o Develop final rate recommendation o Review of the commercial rate structures • Residential Customer Overview o Two residential classes of service ■ Permanent resident ■ Non-permanent resident o Different usage patterns and rate schedules o Approximately 4,700 permanent accounts o Approximately 7,000 non-permanent accounts o Maintain current customer classes o Further refinement of customer class/status may be necessary • Summary of Average Customer Usage o Varies by season ■ Lower in the summer ■ Higher in the winter o On average most customer use less than 1,000 kWh per month o Low use customers use on average less than 500 kWh per month • Electric Rate Structure Overview o Typical electric rate structures ■ Uniform rate ■ Seasonal ■ Increasing block rate (varying number of blocks) ■ Time of use ■ Decreasing block rate ■ Low Income o Defining block sizes ■ Lifeline use ■ Other block sizing o Development of Alternative Residential Electric Rate Structures o Key assumptions ■ Revenue neutral ■ Does not include any estimated conservation o Developed three alternatives Apply to both permanent and non-permanent customers 6 Minutes: April 7, 2010 o Alternative 1 ■ Two tier rate structure— lifeline rate and all above o Alternative 2 ■ Three tier rate structure — lifeline rate, average customer usage, all above o Alternative 3 ■ Two tier structure — lifeline rate varies by season, all above • Present Residential Electric Rate Structure o Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge—All use $0.132/kWh o Non-Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge —All use $0.151/kWh • Alternative 1- Two Tier Increasing Block Rate Structure o Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge —Tier 1: 0 to 500 $0.117/kWh; Tier 2 over 501 $0.151/kWh o Non-Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge —All use $0.151/kWh • Alternative 2 —Three Tier Increasing Block Rate Structure o Permanent Residential ■ Customer charge $6.76/ Month �^ ■ Energy Charge — Tier 1, 0 to 500 $0.113/kWh; Tier 2, 501 to 1,000 $0.148/kWh; Tier 3, over 1,001 $0.167/kWh o Non-Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge — Tier 1, 0 to 1,000 $0.148/kWh; Tier 2 501 over 1,000 $0.167/kW h • Alternative 3—Two Tier Increasing Block Seasonal Rate Structure o Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge Winter—Tier 1, 0 to 600 $0.117/kWh; Tier 2, over 601 $0.151/kWh ■ Energy Charge Summer — Tier 1, 0 to 400 $0.117/kWh; Tier 2, over 401 $0.151/kWh o Non-Permanent Residential ■ Customer charge $6.76/ Month ■ Energy Charge —All Use $0.151/kWh • Summary of the Residential Electric Rate Structure Alternatives o Developed three alternative residential rate structures for review o Rate structures are revenue neutral ■ Collect approximately the same level of revenue ■ Impacts by customer will vary 0 1,000 kWh is approximate breakeven point o Tier sizes can be adjusted to meet the Board's goals and objectives ■ Pricing will change as block sizes are adjusted o Input from Board will change the final alternatives 7 Minutes: April 7, 2010 • Next Steps o Develop final residential rate alternatives o Review of the commercial customer rate schedules ■ Appear to meet current industry practices o Present final rate alternatives to the Board ■ Including any proposed changes to the commercial rate structure There was no public input. Board discussion: • How would conservation change the rate structure? • Did you use only 2009 data? • 2010 budget Electric Revenue-was conservation revenue taken into consideration? • With a lifeline rate, 75% will benefit and the burden will remain on 25% • Concern that higher rate spread out too far to high use customers- will they bring their usage down • Introduce some form of conservation on high users • Seasonal alternative seems over the top- too complicated for accounting- not enough value- against- did not use seasonal rates for water • Low income versus low usage- what is the difference- is one approach different than the other • What are the impacts of conservation • Timing/timeline- do not change rates right now- wait until have a new power contract in a year; then work through thoughts- then can see costs and review rates • Oppose an electric rate increase- rate change could affect customers • Need to match a rate increase with the two-year budget cycle • Concern three tiers are too far apart and revenue could decrease from less usage • With a lower first tier, it will be weird to give a discount to 70% of the customers and an increase to 30% of the customers • Seems more reasonable to go to tiers when there is a rate increase • There are really only two alternatives- the only difference between alternative 1 and 3 is the seasonal rate • Agree with the timing, it is better to wait until we have a new purchase power agreement to see with the costs will be • A low income rate would require a means test • Not inclined to do a seasonal rate • Can't make a decision on a low income rate if billing changes are costly • Want more information about a low income rate • Is there a public system set up to determine what type of discount and how it is applied • Is there a common problem on who fits into the category-seems like a third party would decide who qualifies • Telephone and gas have low income rates • Need to look at TDPUD rates as they were evaluated 15 years ago- are we in the ballpark of industry norms �'''` • Like to see a low income rate- no way to know the number of customers that would qualify for a low income rate- so hard to model 8 Minutes: April 7, 2010 • When Board first brought up doing an electric rate study, low income was what wanted to do • A first tier of 500 kWh will not encourage people to use less- do not want a surprise discount-they will be getting a better deal • There seem to be consequences to offer everyone the Tier 1 rate and not just have a 0 to 500 kWh rate for low income • Using the Tier 1 rate will have a larger impact on upper rate people- a cost shifting • A lifeline rate of 0 to 500 kWh should apply to those who qualify rather than a bunch of people getting a surprise discount on their bill • What does a time of use rate mean • Come back with more details about a low income rate UPDATE ON THE "TRASHION SHOW" ASSEMBLIES AND THE GREEN CHALLENGE This item involves an update on two conservation programs: Green Schools and the Truckee Green Challenge Steven Poncelet gave a presentation: • Staff presented FY10 conservation programs to Board at February 3�d workshop o Green Schools/"Trashion Shows" & Truckee Green Challenge were two important new programs • Green Schools/"Trashion Show" at Donner Trails, Glenshire Elementary, Truckee Elementary, &Alder Creek Middle School o Collaborative effort: District, Tahoe Truckee Unified School District (TTUSD), Sierra Watershed Education Partnership (SWEP), and Truckee High School Envirolution Club o Integrated into Envirolution Club's "Trashion Show" general assemblies o Distributed nearly 1,800 conservation kits ■ >20,000 CFL's, >3,000 LED night lights and nearly 1,800 each of shower heads, sink aerators, shower timers, etc. ■ VERY cost-effective measure delivery ■ Brought District's conservation opportunities to many new homes o Response from kids, staff, parents, and the community overwhelmingly positive o Truckee High School Envirolution Club members distributed the conservation kits and educated the kids o Peer-to-peer education on our programs is invaluable o Significant media coverage & community `buzz' about the program & conservation kits o The Envirolution Club members should be commended for their innovation, courage, and leadership • Truckee Green Challenge entry period closed April 1st o Collaborative effort between the District and the Sierra Sun o Web-based energy competition with prizes for business, home, and school children (elementary, middle, and high schools) winners o Promoted by the Sierra Sun, District marketing (press release, KTKE adds, bill stuffier, newsletter, etc.), and in the "Trashion Shows", and hosted on their web site o One goal of the Green Schools conservation kits was to jump-start the Truckee Green Challenge with the kids o Contest was highly visible 9 Minutes: April 7, 2010 o 11 people participated " o Voting period ends April 15th o Winners announced locally & at April 24th Earth Day "Trashion Show" Squaw Valley o Future of this program will need to be evaluated • Consider directing staff to bring back to the Board a resolution commending members of the Truckee High School Envirolution Club for their leadership in educating our communi- ty on the benefits of conservation and striving for a sustainable future There was no public input. Board discussion: • Successful program- great kits that were handed out • Program touched a lot of people- are other programs hitting this many people • Impressed- a lot of bang for the buck • Good educational component to the children • Neat concept of top down and bottom up • Direct staff to bring resolution before the Board to commend the Envirolution Club • Are there other Green challenge models available to get better participation • The message is "simple is better" • Drive people to do more energy savings ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 8:06 PM. TRUC NN LIC UTILITY DISTRICT Jeff ende , ident Pre by CIA Barbara Cahitt,Deputy District Clerk 10 Minutes: April 7, 2010