HomeMy WebLinkAboutMinutes 07/27/1998 UTILITY ADVISORY COMMITTEE 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
SPECIAL MEETING: 3:00 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.
Members Absent: Councilmember McKeown.
UAC Members Present: Joe Michalczik and Bill Myers.
Staff Present: Manager lbarra, 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.
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 of EES 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 stranded costs, possible annexations, and
electric utility options.
Mr. Saleba then presented a background on the electric utility industry.
Mr. Saleba reviewed 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 running wires to providing current.
Mr. Saleba described the external challenges facing the City's electric utility, which
included industry restructuring, 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
Utility Advisory Committee
July 27, 1998
Electrical Strategic Plan transition.
(Cont'd)
Mr. Saleha concluded his presentation by stating his recommendations fall into five
basic areas: business organization opt/om, what to do with some of the City's systems,
dealing 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 nonfinancial, or intangible. In Iooking
at the lrmancial 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 Iharra felt the report was very thorough, and staff will contemplate the
recommendations and bring the issue back to the Council for a £mal decision when the
proper time comes.
Mayor Braun thanked Messrs. Saleba and Earl for their time and effort on this project.
Carol A. Hagar, Deput~t~ity]Zlerk 3e~ ~OA>~ ~g~ ///
Orville Campbell, Vice Chair
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