HomeMy WebLinkAboutMinutes 07/27/1998 3778
CITY COUNCIL SPECIAL MEETING
Port Angeles, Washington
July 27, 1998
CALL TO ORDER - Mayor Braun called the special meeting of the Port Angeles City Council to order at 3:00
SPECIAL MEETING: p.m. This meeting was held in joint session with the Utility Advisory Committee.
ROLL CALL: Members Present: Mayor Braun, Councilmembers Campbell, Doyle, Hulett,
Wiggins, and Williams.
Me m be rs A bs e n t: C ouncilmember McKeown.
UAC Members Present: Joe Michalczik and Bill Myers.
Staff Present: Manager Ibarra, Attorney Knutson, Deputy Clerk Hagar, K.
Godbey, J. Pittis, B. Titus, K. Ridout, G. McLain, S. McLain,
and C. Rinehart.
Electrical Strategic Plan At Mayor Braun's request, Deputy Director of Utilities Titus introduced Gary Saleba and
Charlie Earl of EES, who were present to make a presentation on the Electrical Strategic
Plan. Mr. Titus stated that the Council and UAC would have the opportunity to ask
questions regarding the Plan and, if changes are to be made, a report will come back to the
UAC on August 10, 1998, with a recommendation to the Council at its meeting of August
18, 1998.
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Mr. Titus noted there were members of the PUD also present for this meeting. Fred
Mitchell, Assistant General Manager for the PUD, introduced Gary Burke, Auditor and
Shelly Burgett, Treasurer/Comptroller. Mr. Titus reminded the Council that a Steering
Committee had been formed for this issue, and Cate Rinehart and Gall McLain of that
Committee were also present. Mr. Titus then deferred to Mr. Saleba of EES.
Gary Saleba, President ofEES Consulting~ Inc., explained the report on the strategic plan
was developed by interviewing key customers and employees and comparing financial and
cost statistics to evaluate the City's competitiveness. A benchmarking of wires was
performed as well as a review of utility policies and systems. Finally, EES performed an
analysis on issues such as Sanded costs, possible annexations, and electric utility options.
Mr. Saleba then presented a background on the electric utility industry.
Mr. Saleba rex4ewed the options which are available for an electric utility. These included
the most conservative option of selling the utility to the most aggressive option of offering
complete service from nmning wires to providing current.
Mr. Saleba described the external challenges facing the City's electric utility, which
included industry res~ucturing, comparison of neighboring utilities, pressure to merger or
consolidate with other utilities, keeping the customers informed, and the Growth
Management Act.
Charlie Earl described the internal challenges facing the electric utility, which included
organizational changes, information systems, and keeping morale high during the transition.
Mr. Saleba concluded his presentation by stating his recommendations fall into five basic
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CITY COUNCIL MEETING
July 27, 1998
Electrical Strategic Plan areas: business organization options, what to do with some of the City's systems, dealing
(Cont'd) with annexations, ways of proceeding in difficult areas, and several miscellaneous issues.
Discussion followed and Messrs. Saleba and Earl responded to questions posed by the
Council and Utility Advisory Committee and provided additional clarification on several
of the issues.
Mr. Saleba stated he would like to end hiS presentation by addressing two other areas of
concern; how deregulation would affect the industrial customer and if the City should
consider a merger with the PUD. Mr. Saleba stated that on large industrial loads, he would
advise that all services be taken care of through a wires fee. The power supply could be
purchased by the industrial customer or by the City on behalf of the industrial customer.
Financially, it would not make a difference to the industry.
Regarding a merger, Mr. Saleba stated there is a two pronged test; first, look at the
financial implications and second, look at the nonfmancial, or intangible. In looking at the
financial implications, a merger must pass three tests. First, neither the PUD nor the City
can be a loser, second, the City's General Fund must be held harmless; and third, the PUD
and City customers must be no worse off. After the financial implications have been
cleared, the nonfmancial issues must be resolved such as meter reading, vending, etc.
Manager Ibarra felt the report was very thorough, and staff will contemplate the
recommendations and bring the issue back to the Council for a fmal decision when the
proper time comes.
MayorBraun thanked Messrs. Saleba and Earl for their time and effort on this project.
ADJOURNMENT: The meeting was adjourned at 4:40 p.m.
~-ecky).'01~'~C~ Cler~ /"~--- -- Gary , MaWr -' -
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