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HomeMy WebLinkAboutAgenda Packet 07/12/2011I. Call To Order II. Roll Call III. Approval Of Minutes For June 14, 2011 IV. Late Items To Be Added To The Agenda V. Discussion Items: A. Equipment Purchase: Hydro- Excavating Vacuum Truck B. Moderate -Risk Waste Facility Funding Update C. Landfill Bluff Stabilization Evaluation D. Combined Sewer Overflow Professional Services Agreement Amendment No. 11 E. Dry Creek Special Services Agreement No. 2 F. Bonneville Power Administration Residential Exchange Program Litigation G. Deficit Commission Proposal to Raise Rates on Electricity H. Electric Utility Tier 2 Power Supply Strategy and Key Performance Objectives I. Overhead and Underground Utility Policies and Guidelines VI. Information Only Items: A. Nippon Utility Pole Transfer B. Industrial Transmission Electric Rate Ordinance C. Advanced Metering Infrastructure System Agreement Update (verbal report only) D. Puget Sound Clean Cities Coalition Electric Vehicle Infrastructure Grant Update (verbal report only) E. Demand Response Presentation (verbal report only) VII. Executive Session Potential Litigation: RCW 42.30.110(1)(i) VIII. Next Meeting Dates: IX. Adjournment N. \uac \final \071211 Utility Advisory Committee Jack Pittis Conference Room Port Angeles, WA 98362 July 12, 2011 3:00 PM AGENDA August 9, 2011 August 30, 2011 Utility Advisory Committee Members Absent: None Staff Present: IV. Late Items: City Council Special Meeting/Utility Advisory Committee Jack Pittis Conference Room Port Angeles, WA 98362 June 14, 2011 3:00 p.m. I. Call To Order Chairman Dan DiGuilio called the meeting to order at 3:02 p.m. II. Roll Call UAC Assigned Councilmembers Present: Dan Di Guilio, Cherie Kidd, Brooke Nelson Other Councilmembers Present: Max Mania Other Councilmembers Absent: Don Perry, Brad Collins, Patrick Downie Utility Advisory Committee Members Present: Dean Reed, Paul Elliott Others Present: Bob Lynette Glenn Cutler, Bill Bloor, Larry Dunbar, Randy Brackett, Phil Lusk, Dennis McBride, Sondya Wray, Jason Paynter, Helen Freilich, and Ken Dubuc (3:42). III. Approval Of Minutes Chairman Dan DiGuilio asked if there were any corrections to the minutes of May 10, 2011 Committee Member Brooke Nelson moved to approve the minutes. Dean Reed seconded the motion, which carried unanimously. None. V. Discussion Items: A. Nippon Paper Industry USA Co., Ltd, Power Sales Agreement Update Staff requested that the Nippon Paper Industry USA Co., Ltd, Power Sales Agreement Update be removed from the agenda. 1 B. Puget Sound Clean Cities Coalition Electric Vehicle Infrastructure Grant Acceptance Phil Lusk, Power Resources Manager, discussed the City's grant submission for funding request with the Puget Sound Clean Cities Coalition Electric Vehicles Infrastructure. Dennis McBride, Fleet Manager, reviewed the details and specifications of the alternative fuel technology acquisitions. There was a lengthy discussion. Dean Reed moved to recommend City Council authorize City Manager to 1) sign the agreement with the Puget Sound Clean Cities Coalition for the City's electric vehicle infrastructure project, 2) sign an interlocal agreement with the City of Seattle for procurement of electric vehicle infrastructure, and 3) make minor modifications to the agreement, if necessary. Brooke Nelson seconded the motion, which carried unanimously. C. Advance Metering Infrastructure System Agreement Change Order No. 1 Larry Dunbar, Deputy Director of Power Systems, reviewed Mueller Systems recommendation to the City for consideration of the use of fire rated meters for commercial customers with fire suppression systems. Ken Dubuc, Fire Marshal, discussed the value and purpose of the fire rated meters for the suppression systems. A lengthy discussion followed. Dean Reed moved to recommend City Council authorize the City Manager to approve Change Order No. 1 to the contract with Mueller Systems, LLC for the Advance Metering Infrastructure System, Project WTO1 -2008, in the amount of $78,550.00 for a total contract amount of $4,468,314.00, including applicable tax. Paul Elliot seconded the motion, which carried unanimously. D. Residential Solid Waste Collection Route Revision Randall Brackett, Deputy Director of Operations, reviewed the current residential collection routes and proposed a new collection route. A proposed advertisement plan was reviewed. There was a brief discussion. For information only, no action requested. E. Bonneville Power Administration Residential Exchange Program Settlement Agreement Ratification Larry Dunbar, Deputy Director of Power Systems, discussed the Residential Exchange Program settlement agreement with the Bonneville Power. More than 75% of consumer owned utilities have accepted the settlement agreement. A lengthy discussion followed. The Utility Advisory Committee provided guidance to staff to forwarded a favorable recommendation to City Council to authorize the City Manager to send a letter to congress supporting ratification of the Bonneville Power Administration Residential Exchange Program Settlement Agreement. 2 F. Bonneville Power Administration Commercial and Industrial Demand Response Grant Amendment No. 1 Phil Lusk, Power Resources Manager, explained an addition to the scope of work for Amendment No. 1 needed on the Commercial and Industrial Demand Response Pilot Project. There was an extensive discussion. Cherie Kidd moved to recommend City Council authorize City Manager to sign Amendment No. 1 to the agreement with the Bonneville Power Administration for the City's Commercial and Industrial Demand Response Pilot Project, and make minor modifications to the agreement, if necessary. Paul Elliot abstained. Dean Reed seconded the motion, which carried unanimously. G. Professional Services Agreement Amendment No. 3 for Commercial and Industrial Demand Response Project Evaluation Phil Lusk, Power Resources Manager, proposed Amendment No. 3 for support services to be provided by EES Consulting for the Commercial Industrial Demand Response Project Evaluation. EES Consulting is currently assisting with the City's Residential Demand Response Pilot Project. A lengthy discussion followed. Paul Elliot moved to recommend City Council to authorize City Manager to sign Amendment No. 3 to the Professional Services Agreement with EES Consulting for an amount not to exceed $20,000, and make minor modifications to the Agreement, if necessary. Cherie Kidd seconded the motion, which carried unanimously. H. Bonneville Environmental Foundation Solar4R Schools Project Update Phil Lusk, Power Resources Manager, gave information on the Bonneville Environmental Foundation, the Feiro Marine Life Center, and the City's implementation for an energy Solar 4R Schools demonstration and educational project. Information only, no action taken. Information Only Items: A. Northwest Public Power Association Tier 2 Power Supply Workshop Update (Verbal report only) Information only. No action taken. B. Advance Metering Infrastructure System Update (Verbal report only) Information only. No action taken. C. Eagles Easement (Verbal report only) Information only. No action taken. 3 VIII. IX. Next Meeting Dates: July 12, 2011 Adjournment: 4:26 p.m. Dan DiGuilio, Mayor Janessa Hurd, City Clerk Dan DiGuilio, Chair Utility Advisory Sondya Wray, Administrative Specialist Committee 4 EXECUTIVE SESSION Date: 7 -1, Expected length of session: 3 04, h Is action expected following the session: iV thus ar Only announced topics may be discussed No final action can be taken in Executive Session Discussions are confidential Reason for Executive Session: To consider matters affecting national security. To consider the selection of a site or the acquisition of real estate by lease or purchase when public knowledge regarding such consideration would cause a likelihood of increased price. X To consider the minimum price at which real estate will be offered for sale or lease when public knowledge regarding such consideration would cause a likelihood of decreased price. However, final action selling or leasing public property shall be taken in a meeting open to the public. To review negotiations on the performance of public bid contracts when public knowledge regarding such consideration would cause a likelihood of increased costs. To consider, in the case of an export trading company, financial and commercial information supplied by private persons to the export trading company. To receive and evaluate complaints or charges brought against a public officer or employee. However, upon the request of such officer or employee, a public hearing or a meeting open to the public shall be conducted upon such complaint or charge. To evaluate the qualifications of an applicant for public employment or to review the performance of a public employee. However, subject to RCW 42.30.140(4), discussion by a governing body of salaries, wages, and other conditions of employment to be generally applied within the agency shall occur in a meeting open to the public, and when a governing body elects to take final action hiring, setting the salary of an individual employee or class of employees, or discharging or disciplining an employee, that action shall be taken in a meeting open to the public. To evaluate the qualifications of a candidate for appointment to elective office. However, any interview of such candidate and final action appointing a candidate to elective office shall be in a meeting open to the public. To discuss with legal counsel representing the agency matters relating to agency enforcement ctions, or to discuss with legal counsel representing the agency litigation or potential litigation to which the agency, the governing body, or a member acting in an official capacity is, or is likely to become, a party, when public knowledge regarding the discussion is likely to result in an adverse legal or financial consequence to the agency. Closed session under RCW 42.30.140: To discuss proceedings concerned with the formal issuance of an order granting, suspending, revoking, or denying any license, permit, or certificate to engage in any business, occupation, or profession, or to receive a license for a sports activity or to operate any mechanical device or motor vehicle where a license or registration is necessary; or Meeting of a quasi judicial body relating to a quasi judicial matter between named parties as distinguished from a matter having general effect on the public or on a class or group. Collective bargaining session with employee organization, including contract negotiations, grievance meetings, and discussions relating to the interpretation or application of a labor agreement or a portion of a meeting which the governing body is planning or adopting the strategy or position to be taken by the governing body during the course of any collective bargaining, professional negotiations, or grievance or mediation proceeding, or reviewing the proposals made in the negotiations or proceedings while in progress. Time session began: Was session extended by announcement: If so, when: Time session ended: 3 Mayor Matters governed by chapter 34.05 RCW, the Administrative Procedure Act. G \LEGAL \Forms \EXECUTIVE SESSION 061509 wpd In attendance: Lag G >ti k City Clerk PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Glenn A. Cutler, P.E., Director of Public Works Utilities Subject: Equipment Purchase: Hydro- Excavating Vacuum (HEV) Truck Summary: The purchase of a hydro- excavating vacuum truck is essential for the ability of stormwater operations to perform under the NPDES Phase II regulations applied to the City of Port Angeles. It will also be an effective tool in "nondestructive" excavation for required water main maintenance and repairs. The budgeted amount is not sufficient to pay for the configured truck Recommendation: Forward a favorable recommendation to City Council to: 1) Amend the 2011 budget to procure a hydro- excavating vacuum truck by adding $70,000 from the equipment reserve fund; and, 2) authorize the City Manager to purchase a HEV truck utilizing the Washington State Contract from Owen Equipment, Inc, for an amount not to exceed $370,000, including applicable taxes and licensing. Background /Analysis: It was proposed and approved for the 2011 budget to procure a HEV truck to be utilized by the Streets /Stormwater and Water Divisions an effort to share highly specialized pieces of equipment. This is a highly specialized truck built to clean and/or excavate by use of high pressure water jet, collect mud and sediments with a large diameter vacuum hose as well as suction volumes of water. It is essential equipment as the City expands stormwater facility cleaning and maintenance activities as required through the Clean Water Act program known as National Pollution Discharge Elimination System (NPDES) Phase II permit. It will also be routinely used for "nondestructive" excavation such as when a water line leaks or breaks in close proximity to other utilities and requires a delicate means of excavating without causing greater damage or safety risks. The attached 2011 Supplemental Budget Request further describes its function as well as the need to replace the vactor truck, Vehicle 1575. A thorough search was conducted for purchasing this equipment at a favorable price. Washington State Contracts is a source of highly competitive equipment supplies and provides a properly configured truck for $338,058.00 (taxes and licensing are additional), including equipment as shown in the table below. The base price of a new HEV truck is $290,635 (taxes and licensing are additional) has limited capability such as only vacuuming catch basins. The added features include jetting and rodding equipment that aid hydro- excavating processes, a pump to allow larger N• \UAC\Final\Hydro- Excavating Vacuum Truck Purchase.docx Hydro Excavating Vacuum Truck Purchase July 12, 2011 Page 2 volumes of water to be transferred as when needed during flooding events or diverting flows in storm drains in order to perform maintenance or repairs in manholes or pipelines. Purchase of this truck in 2011 also helps extend the life of the Wastewater Division HEV truck. It is 10 years old and has six more years with present use across all divisions. By assigning this truck exclusively to the wastewater collections crew to focus on a backlog of sewer jetting is estimated to extend its usefulness another two to four years. The 2011 budget reflects an allocation of $300,000 for the purchase of a HEV truck and an additional $70,000 is required. Purchase of this Hydro- Excavating Vacuum Truck will require amending the 2011 budget from $300,000 to $370,000. The $70,000 includes the additional cost for taxes, licensing and additional equipment. The Finance Director has advised that the equipment reserve fund has sufficient funds to provide the additional funding requirement. Costs for the truck are to be equally shared by PW &U Water and StreetslStormwater Divisions. It is recommended that the Utility Advisory Committee forward a favorable recommendation to the City Council to allocate additional funds of $70,000 from the equipment reserve funds and authorize the City Manager to purchase a Hydro- Excavating Vacuum Truck utilizing the Washington State Contract from Owen Equipment, Inc. for an amount not to exceed $370,000, including applicable taxes and licensing. Attachments: HEV Truck Cost Summary HYDRO EXCAVATING VACUUM (HEV) TRUCK COST SUMMARY Description Cost Base Catch Basin Cleaner Truck $290,600 Hydro Excavator System Allows machine to be used for hydro- excavation operations essential to Water Division External Mount Trash Pump A self contained trash pump expands truck capability to pump large volumes during flood events or anytime a large $10,600 volume of water is needed to be intercepted or transferred 24 ft boom with 5 sections of vacuum hosing for wider range of operational settings. Automatic Hose Wind Level Wind Guide Keeps the jetting hose aligned Also allows for less man power to operate the machine reduces potential $4,900 risk of injuries. TOTAL N: \UAC\Final\Hydro- Excavating Vacuum Truck Purchase.docx 8,400 $9,400 Cordless remote pendant control for boom operations increases safety and reduces manpower Cold Weather Purge System —This system provides pressurized air to purge the water from the water lines, pumps, and valves and eliminate the $2,000 possibility of freezing Miscellaneous: tool box, vactor lube manifolds, fan flush out system, vacuum relief system and 600ft of 1 -in. sewer hose SALES TAX (8.7 29,400 $4,200 $7,400 $366,900 Vii;' C.7r?qf s Hydro Excavating Vacuum Truck Eric Wheatley Ernie Klimek 2011 Supplemental Budget Request Form To be used for new personnel. new /expanded programs, equipment, technology and capital (excluding CFP projects) The replacement of vehicle 1575, the Streets Division's 24 year old eductor truck with a hydro excavating vacuum truck. is proposed Both the Stormwater Utility and Water Utility will share equally for this piece of equipment This truck is needed for the cleaning of catch basins, storm lines, and other Stormwater facilities to meet the Western Washington Phase II Municipal Stormwater Permit In addition, both the Stormwater Utility and Water Utility will use it for hydro excavation to service and repair their utility lines Hydro excavating has proven to be the most efficient method to economically excavate for repairs of the City's piped underground infrastructure Vacuum excavation occurs when high- pressure water or pressurized air breaks up and cuts the soil, while a high -flow vacuum system lifts the soil up and out of the excavation area Buried gas. wastewater, storm, and water mains can be quickly and efficiently uncovered with greatly reduced risk of strike Fiber optic lines, cables. underground power and other utilities can be efficiently located without the damage that can happen with traditional mechanical digging Operators can dig with precision, establishing a Tess invasive method for slot trenching, potholing, and pipe location This manner of excavation causes less surface damage, reduces disruption of traffic and other surface activities and is easier and less expensive to repair The following picture shows a hydro excavating vacuum truck Equipment Replacement Fund PWU, Stormwater Water Utilities CB nozzle adds five feet of length to reach down into catch basins or sewer holes with ease. Vehicle 1575 is 24 years old and no longer serviceable The truck was built in 1986 and was obsolete 7 years ago Parts are not available and when a repair is required the parts must be rebuilt or fabricated Further, the technology in the eductor truck no longer meets environmental requirements for the non return of extracted fluids back into the stormwater systems Additionally, the production rate is extremely low due to its small holding capacity, approximately 1/5 of that of a vactor truck for catch basin work Currently the functionality of the existing educator truck is limited to catch basin cleaning only and will not allow maintenance to be performed on storm lines or any other stormwater facility or the water utility infrastructure Due to the increased workload from the requirements of the Western Washington Phase II Municipal Stormwater Permit, additional productivity is needed In addition, Water Division would be able to remove, replace and repair leaking or damaged service lines in 1/3 the time it takes compared to using a backhoe with less lead time and chance of damage to other utilities such as fiber optics, power, etc Picture of vehicle 1575 ∎4 L Status quo until the eductor truck fails completely in the near future or the City is put on notice by Ecology to cease using it Low productivity, inability to keep up with stormwater requirements use of a non compliant piece of equipment on the stormwater system I to it -2d4 or E i �°Y E o o n ri E) (19J Y C k fl n 6 c o v C C6 -'s'Y La mOn2Y'7X°I�XxY X07 300,000 300,000 300,000 YE Street contain SAVE COMPLETED FORM IN "G:EXCHANGE /FINANCE /BUDGET "Name of Request" Same as WW Vactor Hydro Excavating Vacuum Truck S, New revenue NO additional revenue Stormwater Utility and the Water Utility replacement funds funds to cover the purchase of this equipment PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Tom McCabe, Solid Waste Superintendent Subject: Moderate -Risk Waste Facility Funding Update Summary: The governor signed the 2012 -2013 Washington State budget and left Coordinated Prevention Grant program funding intact. Present funding will cover 75% of the remaining 2011 labor and disposal costs for the Moderate -Risk Waste Facility. Staff will apply for another grant in August during the next grant cycle. Staff will also monitor funding actions so as to respond quickly should any future reduction of State funding occur. Staff is also examining startup funding opportunities and options to establish a small quantity generator program to help small businesses properly dispose of hazardous wastes. Recommendation: For information only, no action requested. Background /Analysis: The Governor signed the new State budget June 15, 2011 and the good news for the Solid Waste Division is that the Coordinated Prevention Grant (CPG) funding for the Moderate -Risk Waste Facility (MRWF) operations is preserved for now. Oddly enough, the CPG funding cycle does not align with the state budget cycle and, as a result, the last six months of the next cycle is not assured funding. The next grant cycle is for January 1, 2012 to December 31, 2013, but funding is assured through June 30, 2013. The Department of Ecology (DOE) has yet to determine if they will amend the existing agreements to cover expenses from July 1, 2013 to December 31, 2013 or change the agreements to align with the budget cycle. Staff invited DOE representatives to briefly explain the program and answer any questions from the UAC. Staff is reasonably confident the City will receive funding for at least the next two years. The anticipated funding amount should be similar to what the City has received in the past. However, staff has reviewed the terms and conditions of our contract with Waste Connections in case State funding impacts our ability to operate the facility. With the State providing 75% of the operational costs of the MRWF, any loss of State funding could have a dramatic impact on the sustained operation of the program. Termination of the MRWF service element requires 180 written notice to the contractor and then negotiations must begin within 90 days of receiving notice. If funding is reduced but not eliminated, then negotiations for modifying the MRWF operations can be initiated without advance notice. Our goal is to promptly N: \UAC\Final\MRW Facility Funding Update doc MRW Facility Funding Update July 12, 2011 Page 2 respond to any possible loss of grant funding so that we maintain as many options possible for continuing this service. Options include but are not limited to increasing tipping fees to cover the loss of grant funding, requesting fees of residents that use the MRWF, and reducing the hours of MRWF operation. The CPG grant funding also covers education and outreach for waste reduction, recycling, composting, and proper disposal of hazardous waste. CPG funds cannot be used to operate a small quantity generator (small businesses) program, so costs of any future program has to be borne completely by the users. In the upcoming grant cycle, staff is proposing to request funds for additional education and outreach to small businesses that generate hazardous waste. Staff is evaluating different options for businesses to properly dispose of their hazardous waste. One option is to accept the materials at the MRWF for a fee. Another option is to establish a hazardous materials disposal web page to act as a clearinghouse where businesses might coordinate with hazardous waste collection companies for pick -up within Clallam County. July 12, 2011 Tami M Ramsey, Regional CPG Grants Manager 36o -407 -6612 tami.ramsey @ecy.wa.gov Peter Lyon, W2R Program, Regional Manager 36o -407 -6381 peter.lyon@ecy.wa.gov W A S N I W A 1 O N MAT DEF ART MEHT OF ECOLOGY 1 CPG Funds State fiscal biennium July 1 (odd year) through June 30 (odd year) Existing grant cycle 2 yrs Crosses the state fiscal biennium 18 month grant cycle (new in 2012 -13) January 1 (even year) through June 30 (last day of state biennium) Clallam County allocation Port Angeles can request from the County $1.6794 x population Current State biennium started July 1, 2011 and ends June 30, 2013. •CPG grant cycle starts January 1 (even years) for a two year period. •Starts in one state fiscal biennium, ends in the next. •Current grant cycle was designed in 2 phases 1st phase funds were covered with 2009 -2011 biennium budget; 2nd phase funds expected from new 2011 -2013 biennium budget. •Governor signed the 2011 -2013 fiscal budget which includes "'$28M to fund the CPG program through 6/30/13. Funds are from the Local Toxics Control Account (cash account). •Note: Governor swept this account in early 2009 to help balance the state's fiscal shortfall replacing the grant program fund source with another fund source. •New 18 month cycle 2 z 2012 -13 Distribution by County IMP SWE County IMP SWE 17634 .1 AMS 'ASOTIN 1BENTON 'CHELAN 1CLALLAM 'CLARK 'COLUMBIA 'OWLITZ 1DOUGLAS 'FERRY 'FRANKLIN 'GARFIELD 'GRANT 'GRAYS HARBOR 'ISLAND !JEFFERSON 'KING I1 MITSAP IKITTITAS 1KLICKITAT 'LEWIS 30 8136 444 8390,3731 8223 102 8217 7281 5831,558 0108,970 8267,943 $164,658 $113,183 8226,797 $103 863 8247,286 $220 247 5236 202 $149 207 53 347,004 $517,002 $168,017 $134,428 8226.965' $104 1 $104 1641 078 1251 $78,125 9104 164 $104,164 $104,164 $104,184 678,125 552,084 578,1251 $104 184 6104,164 5104 164 5104 1641 $104,164 5104 164 $104 164 8104 164 $104 164 5104 164 LINCOLN 'MASON 'OKANOGAN 'PACIFIC END OREILLE PIERCE SAN JUAN SKAGIT SKAMANIA SNOHOMISH SPOKANE STEVENS THURSTON /JAHKIAKUM NALLA WALLA RNHATCOM 'WHITMAN 'YAKIMA TOTALS $195 8951 0168,6891 $137,1151 $122 00g $1,468 0611 8127,7111 $300 3561 0118 3061 51 294 240 $889 834 $174,399 $523 887 $106,970 $200 094 $428,328 5173,2231 5501 551 64 $104 164 5104 164 5104,184 $52 084 $104,164 5104 164 $104,164 $104 164 5104,164 $104 164 052 084 $104,164 $104 164 5104,1641 $104 164 5104 164 5104 164 815,208.0001 3,802.001 'Allocation table by county in state share (75% of total costs) Clallam County $290,304 (includes required 25% match). 'Port Angeles can request a portion of this amount based on it's population. OFM population for Port Angeles based on 2011 census is 19,038. Distribution per capita is based on $1.6794 $32,547 (state share) City of Port Angeles can request $43,396 with 25% match). •Clallam County has historically provided the city with a portion greater than it's population current cycle is $156,380 (includes match). 'It has been Ecology's expectation that the city implement countywide solid waste programs with the "additional" funds. •Currently the City implements 5 projects including MRW Collection Disposal. 3 Moderate Risk Waste Collection Et Disposal Port Angeles current CPG budget (includes 25% match) Typical costs for Port Angeles program Labor facility operations Staff time satellite collections Disposal HHW only (includes supplies) Program development (includes SQG) Advertising outreach (includes SQG) Conditionally exempt small quantity generators (CESQG or SQG) •MRW collection disposal costs vary with each program. •Clallam County program includes a contract between the City of PA and Waste Connections to operate the fixed facility. •Grant agreement includes expectation for the City to assist the County with satellite collection events, educate outreach about HHW program, including promoting a new SQG program. •A CESQG program is required for each county. •At a minimum this means outreach about how and /or where an CESQG business can properly dispose of MRW. It is my experience as CPG grant manager, that City solid waste staff is knowledgeable, dependable and responsive. Staff also coordinate successfully with county staff to implement CPG projects. 4 PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Kathryn Neal, P.E., Civil Engineering Manager Subject: Landfill Bluff Stabilization Evaluation Summary: Staff recently visited the marine bluffs east of the landfill revetment wall and observed problematic erosion. Staff will provide a presentation on this issue at today's meeting. Recommendation: For information only, no action requested. Background /Analysis: On June 17, 2011 a staff team involved in the landfill post closure work visited the marine bluffs east of the landfill revetment wall and observed problematic erosion. The services of a qualified consultant will be sought to evaluate the impact of the changes over time, and to recommend and design any necessary remedial action. Staff will give a short presentation illustrating the site observations, and the location of erosion on the marine bluffs. The areas of concern are between the revetment wall and monitoring well #3 at the landfill. N \UAC\Final \Landfill Bluff Stabilization Evaluation doc P ORT A NGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Kathryn Neal, P.E., Civil Engineering Manager Subject: Combined Sewer Overflow Professional Services Agreement Amendment No. 11 Summary: On April 26, 2011, the Depaihuent of Ecology made a determination that an additional permit is required that must be fulfilled prior to the City soliciting for bids on the CSO Phase I project. The proposed amendment to the professional services agreement includes developing the permit application, preparing a stormwater pollution prevention plan, an engineering report that will be submitted to the Department of Ecology, and project management services through March 2011. Recommendation: Forward favorable recommendation to City Council to approve and authorize the City Manager to sign Amendment No. 11 to the Consultant Agreement with Brown and Caldwell, in an amount not to exceed $224,500, which increases the maximum compensation under the agreement from $3,968,915 to $4,193,415, and to make minor modifications to the agreement, if necessary. Background /Analysis: On April 26, 2011 the Depailnient of Ecology (Ecology) notified both the City and Rayonier that we would jointly need to submit an Individual Construction Stormwater National Pollution Discharge Elimination System (NPDES) Permit for the Combined Sewer Overflow (CSO) Phase 1 project. This was due to Ecology's concern with the contaminated nature of the Rayonier site and the probability of an appeal if the more rigorous permitting process was not required from the City and Rayonier. Prior to that, the City had every expectation that this work would fall under the State's existing Construction Stormwater General Permit. After further consultation with the Department of Ecology and a site visit to the Rayonier site, it was determined that Rayonier's requirements for stormwater and erosion control would fall under their existing stormwater permit for the entire Rayonier mill site, and Rayonier's obligations for soil and groundwater handling will fall under the Materials Management Plan (MMP), a document that Rayonier is presently developing with Ecology. The MMP is linked to an amendment to Rayonier's Agreed Order, resulting in new clean -up actions (Interim Actions) for Rayonier to implement. As a result, a joint application is no longer required, and the City can submit for the Individual Stormwater Permit solely for its construction activities. Nevertheless, this permit application and its SWPPP will have to be coordinated so that it and Rayonier's MMP, their permit requirements, and their ongoing MTCA work are coordinated and coherent. N: \UAC\Final \CSO Professional Services Agreement Amendment No 11 docx Combined Sewer Overflow Professional Services Agreement Amendment No. 11 July 12, 2011 Page 2 Normally, for coverage under the Construction Stormwater General Permit process, the contractor that is awarded the construction contract develops the Stormwater Pollution Prevention Plan (SWPPP) which forms the basis of the stormwater practices that will be used for the project. For the individual permit, these requirements are identified and designed in advance specifically for the site, approved by Ecology, and then made part of the bidding requirements and final contract. For this project, the Individual Permit will also address the discharge of groundwater from trench excavation and will be closely linked to Rayonier's soil handling activities under the MMP and Agreed Order. Consequently, the City will use Brown and Caldwell to develop the permit application, SWPPP, and an engineering report for submission to Ecology. In response to Ecology's comments, and to support completion of the design, additional work elements have been identified. Construction documents cannot be finalized until the stormwater plan is approved. A description of the additional work needed from Brown and Caldwell to complete the new permitting requirements and to reach design phase, through contract advertisement, is provided below. Description Amount Task 11.1 Project Management The timeline is extended from June 2011 $76,500 through March 2012. Includes management and coordination of the overall design effort and subconsultant effort including coordination with the City and other governmental agencies, and Quality Control and Quality Assurance on the project. Task 11.5 Permitting and Environmental Prepare permit submittals and 49,500 engineering analysis for Individual Construction Stormwater NPDES Permit. Coordinate closely with City, Rayonier, Ecology, and environmental engineering consultant. This item is partially reimbursable by Rayonier, under terms of the Sale Agreement. Task 11.7 Bid Document Completion Incorporate final MMP decisions from 78,500 Ecology, property and easement lines, Olympic Discovery Trail management, mitigation plans, hydraulic profiles, wastewater treatment plant instrumentation and control upgrades, and other edits identified by Brown Caldwell QA/QC, City comments, and Ecology. Respond to Ecology final review and obtain approval. Task 16 First St. Stormwater Separation, Valley Creek Culvert Permitting 20,000 Culvert maintenance is required to remove sediment in the lower portion of Valley Creek culvert. The City requires assistance in preparing a Biological Evaluation and JARPA for submittal to the Corps of Engineers on a tight timeline. These efforts are being partially funded by existing contracts; this amendment provides funding for the remainder of the environmental consultant's added tasks. This work is partially reimbursable from the National Park Service. TOTAL $224,500 The following schedule is anticipated to award the construction documents: July 2011 Aug 2011 December 2011 March 2012 March 2012 April 2012 Issue notice to proceed to Brown Caldwell for Amendment 11 work Submit permit application, SWPPP, and engineering report to Ecology Award construction management contract Permit issued by Ecology Bids solicited Award construction contract Funding is available from CSO reserves accumulated through rates and the Washington State Public Works Trust Fund Loans. It is requested that the Utility Advisory Committee forward a favorable recommendation to City Council to authorize the City Manager to sign Amendment No. 11 to the Consultant Agreement with Brown and Caldwell, in an amount not to exceed $224,500, which increases the maximum compensation under the agreement from $3,968,915 to $4,193,415, and to make minor modifications to the agreement, if necessary. N: \UAC\Final \CSO Professional Services Agreement Amendment No. 11 docx J W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Glenn A. Cutler, P.E., Director of Public Works Utilities Subject: Dry Creek Water Association Special Service Agreement No. 2 Summary: In May of 2005, the City entered into an Interagency Water Facilities Agreement with the Dry Creek Water Association (DCWA). The Agreement discussed one utility providing service in another's service area until it was economically feasible to construct the appropriate infrastructure. Special Service Agreement #2 has been negotiated to address water customers in the City, but served by the DCWA, north of Lauridsen Boulevard Edgewood Drive and east of Lower Elwha Road. Recommendation: Forward a favorable recommendation to City Council to approve and authorize the City Manager to sign Special Service Agreement No. 2 with the Dry Creek Water Association and make minor modifications to the agreement, if necessary. Background /Analysis: In 2005, the City annexed a portion of the Western Urban Growth Area into the City to support economic growth. In May of 2005, the City entered into an Interagency Water Facilities Agreement (IWFA) with the Dry Creek Water Association (DCWA). The IWFA addresses service area boundaries, sales of facilities, and new development. It also outlines the terms to enter into Special Service Agreements (SSA) that address water service to existing DCWA customers that are inside the City. The attached SSA No. 2 was recently negotiated, and is now ready for consideration. The SSA No. 2 covers water service to City customers north of Lauridsen Boulevard Edgewood Drive and east of Lower Elwha Road. There are 19 customers impacted by the agreement. The DCWA water customers will continue to be served by DCWA facilities, but become customers of the City. The customers will be billed at regular City water rates. The City will pay DCWA a wholesale water rate that is their regular water rate plus 20 The cost to execute the agreement is approximately $7,409.16. The final cost is the 20 surcharge on the bills from May 2005 to present. It may be adjusted when the City commences billing for services on or about September 1, 2011. The City's Customer Services Division of the Finance Department and the DCWA will contact the residents prior to the switch over. Funds are identified in the Water Utility for this agreement. After action is taken by the City Council the DCWA will consider the agreement. N: \UAC\Final\DCWA Special Services Agreement UAC Memo docx pORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Glenn A. Cutler, P.E., Director of Public Works Utilities Subject: Dry Creek Water Association Special Service Agreement No. 2 Summary: In May of 2005, the City entered into an Interagency Water Facilities Agreement with the Dry Creek Water Association (DCWA). The Agreement discussed one utility providing service in another's service area until it was economically feasible to construct the appropriate infrastructure. Special Service Agreement #2 has been negotiated to address water customers in the City, but served by the DCWA, north of Lauridsen Boulevard Edgewood Drive and east of Lower Elwha Road. Recommendation: Forward a favorable recommendation to City Council to approve and authorize the City Manager to sign Special Service Agreement No. 2 with the Dry Creek Water Association and make minor modifications to the agreement, if necessary. Background /Analysis: In 2005, the City annexed a portion of the Western Urban Growth Area into the City to support economic growth. In May of 2005, the City entered into an Interagency Water Facilities Agreement (IWFA) with the Dry Creek Water Association (DCWA). The IWFA addresses service area boundaries, sales of facilities, and new development. It also outlines the terms to enter into Special Service Agreements (SSA) that address water service to existing DCWA customers that are inside the City. The attached SSA No. 2 was recently negotiated, and is now ready for consideration. The SSA No. 2 covers water service to City customers north of Lauridsen Boulevard Edgewood Drive and east of Lower Elwha Road. There are 19 customers impacted by the agreement. The DCWA water customers will continue to be served by DCWA facilities, but become customers of the City. The customers will be billed at regular City water rates. The City will pay DCWA a wholesale water rate that is their regular water rate plus 20 The cost to execute the agreement is approximately $7,409.16. The final cost is the 20 surcharge on the bills from May 2005 to present. It may be adjusted when the City commences billing for services on or about September 1, 2011. The City's Customer Services Division of the Finance Department and the DCWA will contact the residents prior to the switch over. Funds are identified in the Water Utility for this agreement. After action is taken by the City Council the DCWA will consider the agreement. N: \UAC\Fina1\DCWA Special Services Agreement UAC Memo.docx SPECIAL SERVICE AGREEMENT #2 BETWEEN CITY OF PORT ANGELES AND DRY CREEK WATER ASSOCIATION, INC. This special service agreement is made and entered into this (Day) (Month) 2011, by and between Dry Creek Water Association, Inc. (hereinafter called the Association) and City of Port Angeles (hereinafter called the City). WHEREAS, on May 3, 2005, the Association and City signed an Interagency Water Facilities Agreement, which may hereafter be called the IWFA; and WHEREAS, the Association and City desire to enter into this Agreement to address provision of potable water to current customers of the Association located within the City limits; and WHEREAS, the Association and City desire to enter into this Agreement to address the sale to the City of certain Association facilities located within the City limits; and, WHEREAS, the Association and City entered into a similar agreement on December 1, 2009, titled Special Services Agreement #1; and, NOW, THEREFORE IT IS AGREED between the parties hereto as follows: 1. Incorporation: (Note: paragjranh lb added by City) a. The IWFA is incorporated herein by this reference. b. The terms, conditions, and provisions of the IWFA shall always control over the terms, conditions, and provisions of this document. Every future amendment of the IWFA shall become incorporated herein by this reference on the same date the amendment to the IWFA is effective. Every amendment so incorporated herein shall be an amendment to the corresponding term, condition, or provision of this agreement. No writing or other acknowledgement, other than the written amendment of the IWFA, is necessary effect the amendment to this agreement. 2. Special Service To Be Provided By The Association: a. Pursuant to the IWFA, the City requested a special service agreement with the Association for properties inside the city limits, north of Lauridsen Blvd Edgewood Drive, and east of Lower Elwha Road, which may hereafter be referred to as "the special service area." b. This special service agreement specifies the conditions and charges for service pursuant to Exhibit "C" of the IWFA. 1 c. The parties agree that the special service area qualifies for a special service agreement under the conditions stated in the IWFA. d. The water customers within the special service area shown in Exhibit "D -1" of the IWFA are and shall be customers of the City's water utility. The Association agrees to provide and be responsible for potable water service to and as required by the City's water customers within the special service area shown in Exhibit "AC." As consideration for the special service to be provided by the Association pursuant to this agreement, the City shall pay the Association compensation as provided in Section 6 below. 3. Sale of Facilities: Not Applicable (No customers are to be physically disconnected from DCWA). 4. Term: a. This agreement shall become effective on this 5th day of July 2011. It shall remain in effect until terminated as provided below. 5. Duration and Termination of Agreement: a. This agreement shall continue in force and effect until terminated in accordance with the following procedures: The Association may terminate this agreement at any time upon receiving the consent of the City. After July 5, 2016, the City may terminate this agreement at any time by giving the Association at least sixty (60) days notice prior to termination; additionally, after July 5 2016, the Association may terminate this agreement upon one hundred eighty (180) days written notice to the City when, in the reasonable opinion of the Association, the preconditions set forth in Section 11 of the IWFA are no longer applicable to this agreement. In the event, at the expiration of the notice period, the City shall proceed to implement service in the manner and subject to the time frame as depicted in Section 6 of the IWFA. 6. Payment for Water to Special Service Area: a. From and after the effective date of this agreement, the City shall pay to the Association, a monthly amount to be calculated in accordance with the Exhibit "C which is attached hereto and incorporated herein by reference. The parties agree that the Association is entitled to payment from the City of the 20% surcharge as depicted in Exhibit "C" for the period included in billings beginning with May 2005 through June 2011, together with interest on the surcharge due at the rate of 7.45% per annum from the date of each original billing to the date paid. The Association shall recalculate past due 20% surcharges, plus applicable interest thereon, and submit an invoice to the City therefore within ten (10) days of the effective date of 7 a. this agreement. The balance due shall be paid on or before August 30, 2011. The time period May 2005 through June 2011 is included in this agreement for reimbursement from the City to the Association as Exhibit "C -1 7. Chances to Agreement: a. Changes in the terms and conditions of this special service agreement may be made at any time upon the mutual consent of both parties. Either party desiring a change shall given the other party written notice. The notice shall contain the desired changes and with a full explanation of the reasons for the changes. If, the parties hereto cannot mutually agree to the proposed changes, the agreement shall remain unchanged. 8. Hold Harmless: Not Applicable 9. Arbitration: The parties agree that any dispute with regard to the interpretation or enforcement of this agreement shall be resolved by binding arbitration conducted pursuant to the arbitration statutes of the State of Washington in effect at the time of the dispute. The arbitration award may be filed with the Clallam County Superior Court and enforced in that venue In the event of litigation regarding the enforcement or interpretation of this agreement, the party who substantially prevails in such litigation shall be entitled, in addition to any other relief, to an award of reasonable attorney fees incurred in such proceedings. 10. Authority: a. Each party warrants that the undersigned representative has full and complete legal authority to sign for it and to commit it to the performance of the agreement set forth herein. 11. Priority. a. This agreement is intended to implement provisions of the IWFA, and the parties have not intended to create any conflict between the terms of this agreement and the IWFA. However, in the event of any conflict between the terms of this agreement, the IWFA shall control. WITNESS WHEREOF, the parties hereto have caused the SPECIAL SERVICE AGREEMENT to be duly signed and executed in two counterparts as of the day and year first above written. ATTEST: ATTEST: James Critchfield, President of the Board Kent Myers, City Manager Dry Creek Water Association, Inc. City of Port Angeles 4 ATTEST: Janessa Hurd City Clerk City of Port Angeles APPROVED AS TO FORM: William Bloor, Attorney City of Port Angeles Randy Alderson Randy Alderson AA &W Self Storage LLC Port of Port Angeles Port of Port Angeles Port of Port Angeles Port of Port Angeles Port of Port Angeles Jerry Payne Mary Payne Dan Morrison Partners Sabrina Hamm Myers Living Trust Lake Beavers Cheryl Richmond Port of Port Angeles Port of Port Angeles Port of Port Angeles EXHIBIT "A" PROPERTY OWNERS 1935 Edgewood Drive 1935 Edgewood Drive 1929 W. Duval Place Edgewood Drive (Office) 1520 S. Critchfield Road Critchfield Road Model Airplane Club 1512 S. Critchfield Road 1512 S. Critchfield Road 1509 S. Critchfield Road Critchfield Road 2917 W. Edgewood Drive 382 Lower Elwha Road 1607 Lower Elwha Road 3230 Saddle Club Road 3210 Saddle Club Road Lower Elwha Road Gardner Property Lower Elwha Road Bopp Property Lower Elwha Road Taylor Property 5 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Commercial Service (3/4 Commercial Service (3/4 Commercial Service (3/4 Commercial Service (3/4 Commercial Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Residential Service (3/4 Port of Port Angeles Lower Elwha Road Residential Service (3/4 Rush Property 6 EXHIBIT "C" SPECIAL SERVICE TERMS Customers served under this special service agreement are the customers of the City of Port Angeles, receiving water service by agreement from Dry Creek Water Association. 1. Definitions: "Special service water rate Dry Creek Water Association will charge the established Association customer rate (residential or commercial, as the case may be) plus twenty percent (20 2. Facility Costs Associated with Special Service Agreements: All costs of new or improved facilities in order to provide water pursuant to this special service agreement shall be borne by the City. These costs shall include but not be limited to the cost of providing meters and disconnect between the facilities of the two parties when applicable. Payment of costs by the City shall be made within forty -five (45) days of invoice by the Association upon completion of the project. The Association as owner of the existing facilities shall be responsible for maintenance of the existing facilities. 3. Special Service Charges: The Association shall provide monthly statements to the City of the total metered consumption of all customers included in this special service agreement. Special service conditions and charges for this service will be as follows: 3 /4 Residential Service: $25.00 Monthly Base Rate 0 -499 cubic feet $.005 per cubic feet 500 -999 cubic feet $.010 per cubic feet 1000 -1499 cubic feet $.015 per cubic feet 1500 -1999 cubic feet $.020 per cubic feet 2000+ cubic feet $.025 per cubic feet Plus 20% Total Billing 3 /4 Commercial Service: $28.00 Monthly Base Rate up to 1,000 cubic feet 0 -499 cubic feet $.005 per cubic feet 500 -999 cubic feet $.010 per cubic feet 7 $38.00 Monthly Base Rate from 1001 to 1999 cubic feet 1000 -1499 cubic feet $.015 per cubic feet 1500 -1999 cubic feet $.020 per cubic feet $48.00 Monthly Base Rate from 2000 cubic feet and over 2000 -over cubic feet $.025 per cubic feet Plus 20% Total Billing If a rate change happens by the membership of the Association before the termination of this agreement, Dry Creek Water Association will submit a change agreement request to this special service agreement. R Payment for Water to Special Service Area: EXHIBIT "C -1" SPECIAL SERVICE TERMS From and after the effective date of this agreement, the City shall pay to the Association, a monthly amount to be calculated in accordance with Exhibit "C which is attached hereto and incorporated herein by reference. The calculations below include monthly billings from May 2005 through June 2011. Customer #1 (Randy Alderson 1935 Edgewood Drive) 2005 -2011 billings $2,720.44 x 20% surcharge $544.09 Customer #2 (Randy Alderson 1935 Edgewood Drive) 2005 -2011 billings $1,646.80 x 20% surcharge $329.36 Customer #3 (AA &W Self Storage, LLC —1929 W. Duval 2005 -2011 billings $3,229.22 x 20% surcharge $645.84 Customer #4 (Port of Port Angeles Edgewood Drive (Office) 2005 -2011 billings $1,736.79 x 20% surcharge $347.36 Customer #5 (Port of Port Angeles 1520 S. Critchfield Road) 2005 -2011 billings $1,751.49 x 20% surcharge $350.30 Customer #6 (Port of Port Angeles Critchfield Road Model Airplane Club) 2005 -2011 billings $1,766.22 x 20% surcharge $353.24 Customer #7 (Port of Port Angeles —1512 S. Critchfield Road) 2005 -2011 billings $1,622.05 x 20% surcharge $324.41 Customer #8 (Port of Port Angeles 1512 S. Critchfield Road) 2005 -2011 billings $1,764.78 x 20% surcharge $352.96 Customer #9 (Jerry Payne 1509 S. Critchfield Road) 2005 -2011 billings $2,348.22 x 20% surcharge $469.64 Customer #10 (Mary Payne Critchfield Road) 2005 -2011 billings $1,633.43 x 20% surcharge $325.69 Customer #11 (Dan Morrison Partners 2917 W. Edgewood Drive) 2005 -2011 billings $2,090.77 x 20% surcharge $418.15 9 Customer #12 (Sabrina Hamm 382 Lower Elwha Road) 2005 -2011 billings $2,206.87 x 20% surcharge $441.37 Customer #13 (Myers Living Trust 1607 Lower Elwha Road) 2005 -2011 billings $2,329.88 x 20% surcharge $465.98 Customer #14 (Lake Beavers 3230 Saddle Club Road) 2005 -2011 billings $1,694.40 x 20% surcharge $338.88 Customer #15 (Cheryl Richmond 3210 Saddle Club Road) 2005 -2011 billings $2,028.69 x 20% surcharge $405.74 Customer #16 (Port of Port Angeles Lower Elwha Road Gardner Property) 2005 -2011 billings $1,620.25 x 20% surcharge $324.05 Customer #17 (Port of Port Angeles Lower Elwha Road Bopp Property) 2005 -2011 billings $1,620.25 x 20% surcharge $324.05 Customer #18 (Port of Port Angeles Lower Elwha Road Taylor Property) 2005 -2011 billings $1,620.00 x 20% surcharge $324.00 Customer #19 (Port of Port Angeles Lower Elwha Road Rush Property) 2005 -2011 billings $1,620.25 x 20% surcharge $324.05 Total Due: $7,409.16 10 PORT NGELE;S W A S H I N G T O N U.S.A. Utility Advisory Committee Memo July 12, 2011 Date: To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Bonneville Power Administration Residential Exchange Program Litigation Summary: The Western Public Agencies Group requested the City to consider if it will be defending its claims related to the Bonneville Power Administration Residential Exchange Program. Recommendation: Forward a favorable recommendation to City Council to proceed with defending its pending claims related to the Bonneville Power Administration Residential Exchange Program through its membership with the Western Public Agencies Group. Background /Analysis: Earlier this year the Bonneville Power Administration (BPA) Residential Exchange Program (REP) settlement agreement was rejected by City Council, but was accepted by more than 75% of customer owned utilities. On June 21, 2011, City Council approved joining an effort to influence the U.S. Congress not to ratify the agreement. At the last Western Public Agencies Group (WPAG) meeting, there was a discussion about the best legal strategy to follow regarding the REP settlement agreement and our pending litigation. At this time WPAG is not considering a legal challenge to the REP settlement agreement. After much discussion, there was a tentative determination that the best approach would be to take a defensive posture, not file a petition to challenge the lawfulness of the Exchange Settlement as APAC and Alcoa will likely do so, and instead defend vigorously our pending claims in the 9th Circuit. WPAG has requested each member utility determine if it wants to be involved in defending our pending claims against any motion to dismiss that may be filed in the 9th Circuit against them, and if successful in fending off such a motion continuing the pursuit of these claims by moving for oral argument. WPAG is seeking a response from the City, and after they know what all WPAG members intend to do, they will ask for the appropriate waiver from the utilities in WPAG that signed the settlement. The anticipated additional WPAG costs in 2011 for the motion is $10,000, and in 2012 $15,000 for the oral argument. WPAG costs for these types of expenses are usually split per capita, so the City's anticipated membership share is $1,000 in 2011 and $1,500 in 2012. N \UAC\Final\BPA Residential Exchange Program Litigation docx PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Deficit Commission Proposal to Raise Rates on Electricity Summary: Staff is seeking guidance on whether the City should join an effort to influence congress not to support the Deficit Commission proposal to raise rates on electricity. Recommendation: Provide guidance to staff. Background /Analysis: As part of the City's membership with the Public Power Council (PPC), it was alerted that the Deficit Commission has resurrected a proposal to raise rates on electricity charged by power marketing agencies such as the Bonneville Power Administration. A summary of the Deficit Commission's proposal and a form letter to congress prepared by the PPC is attached for more information. Staff is seeking guidance on whether the City should join an effort to influence congress not to support the Deficit Commission's proposal to raise rates on electricity charged by the Bonneville Power Administration. N \UAC \Final\Deficit Commission Proposal to Raise Rates on Electricity docx Spring 2011 Public Power Council 825 NE Multnomah, Suite 1225 Portland, OR 97232 503.595.9770 Fax 503.239.5959 Deficit Commission Proposal to Raise Rates on Electricity The old proposal to have the Power Marketing Administrations (PMAs) sell power at market rates has resurfaced in the Report from the Chairmen of the Deficit Commission released in December. We oppose this and any proposal that arbitrarily taxes power rates in some regions for the purpose of funding the federal government. Ratepayers in the Northwest pay all of the costs of operations and maintenance of the federal hydropower system. In addition to the annual revenue requirement for BPA power of over $2.2 billion, ratepayers fund an annual payment on principal and interest of debt to Treasury of over $860 million. In exchange, the Bonneville Power Administration (BPA) sells power at cost. Power sales at cost have been a legal requirement since BPA's inception and are the foundation of the contracts that BPA customers signed through 2028. Applied to the Northwest, the market rates proposal would be an abrogation of the long -term contracts that preference customers signed. These contracts clearly state that this power is to be sold at cost. Any move to unilaterally change the terms of the deal would be met with immediate legal challenge which could ultimately cost the Treasury for any court- ordered judgment. Regardless, if BPA were ordered to implement such a proposal, the increase in BPA rates would cause residential consumers significant harm. Energy is a key expenditure for people on fixed incomes. Even with the Northwest's continued aggressive energy conservation efforts, increased BPA rates are passed on to consumers who can ill afford the hit. In addition, increased BPA rates would hurt the economy. Moderate electricity rates historically have been an engine for our economy, counteracting higher transportation costs and other factors. Raising rates will stifle economic activity that is already struggling to recover from recession. Increased BPA rates also threaten other key activities. With the contracts breached and BPA rates tracking the market, the funding for fish and wildlife efforts and other programs would become less stable as BPA's current customers move to other, less volatile power supply options. We appreciate past Congressional Delegation efforts to ward off this enormous potential hit to citizens and our economy. Federal deficit reduction should be achieved through national sources. Raising electricity rates in certain regions would be an unfair tax on a critical commodity imposing severe economic harm. {letterhead} {date} {address Reps see: https: /writereo. house .aov /writerep /welcome.shtml Senators see: httn: /www.senate.aov /general /contact information /senators cfm.cfm Dear {Representative /Senator Residents of {your community understand the need to reduce the federal budget deficit. But those efforts need to be accomplished wisely to promote economic growth. For that reason, I am writing to urge you to oppose any effort to address the deficit that would mandate changes to the rate setting policies of the Bonneville Power Administration (BPA). As you may know, the power supply contract we signed with BPA for service through 2028 requires continuation of the cost -based rates that have always governed sale of BPA power. BPA already raises rates at times in order to meet increased costs and finance infrastructure and environmental investments. Those increases, such as the BPA power rate increase proposed for this October, strain businesses and residents in my community. But deficit reduction proposals to arbitrarily raise the cost of BPA power by switching to market -based rates will simply impose a selective tax on our residents and businesses and compound the economic challenges we face. My utility signed long -term contracts with BPA in order to provide needed certainty. Legislation that attempts to abrogate those contracts would remove the certainty needed for business planning and would likely trigger legal challenges that make any estimated increase in revenue to the Treasury uncertain. I appreciate the difficult decisions you face, but I am asking that you make clear that changing BPA rate setting policies is not an acceptable choice. Sincerely, pORT NGELES r W A S H I N G T O N U. S. A Utility Advisory Committee Memo July 12, 2011 Date: To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Electric Utility Tier 2 Power Supply Strategy and Key Performance Objectives Summary: On June 7 -8, 2011, City Council and Utility Advisory Committee members attended the Northwest Public Power Association Tier 2 Power Supply Workshop. Staff wants to confirm that the Tier 2 power supply and key performance objectives are consistent with the direction provided during the workshop. Recommendation: Confirm that the Tier 2 Power Supply Strategy and Key Performance Objectives for the Electric Utility are consistent with the direction provided during the workshop. Background /Analysis: On June 7 -8, 2011, City Council and Utility Advisory Committee members attended the Northwest Public Power Association Tier 2 Power Supply Workshop. The purpose of the workshop was to consider the City's Tier 2 power supply (for October 2014 September 2019) and key performance objectives for the Electric Utility (through June 2014). On June 14, 201, the Utility Advisory Committee received a draft copy of the Tier 2 Power Supply Strategy and Key Performance Objectives for the Electric Utility Staff requests that the Utility Advisory Committee confirm the Tier 2 Power Supply Strategy and the Key Performance Objectives are consistent with the direction received at the workshop. These documents will serve as an Electric Utility roadmap during the next two years. Attachment: Electric Utility Tier 2 Power Supply Strategy Electric Utility Key Performance Objectives N \UAC \Frnal\Electnc Utility Tier 2 Power Supply Strategy KPOs docx Electric Utility Tier 2 Power Supply Strategy Policymaker Consensus June 8, 2011 1. Continue reliance on BPA power supply for future Tier 2 needs (not landfill gas, cogeneration, market purchases, etc.). 2. Maintain selection of BPA short -term rate alternative and notify BPA by September 30, 2011 (for October 2014 September 2019 deliveries). 3. Consider adoption of an ordinance for incremental loads in 2011 (use a name other than "new large single loads" to avoid confusion with BPA terminology). 4. Annually review energy sales growth compared to BPA and City funded conservation program activities, performance targets, and funding sources to ensure avoidance of Tier 2 power supply needs. Complete BPA required Conservation Plan in 2012. 5. Complete demand response installations in 2011, evaluate the cost and benefits of demand response in 2012, and if appropriate consider expanding demand response efforts in 2013. 6. Revisit Electric Utility strategic planning in June of 2014 and the City's Tier 2 power supply in June of 2016 (for October 2019 September 2024 Power Supply) Electric Utility Key Performance Objectives Policymaker Consensus June 8, 2011 1. Conservation a. Maintain high staff performance to acquire energy conservation through City electric customers. b. Prepare for a 2/3 increase in BPA energy conservation funding beginning October of 2011 due to the Northwest Power and Conservation Council's 6 Power Plan, which is anticipated to continue for at least the next five years. c. Continue to identify and implement energy conservation projects at municipal facilities, and participate in the resource conservation manager program through 2011. d. Continue to seek additional BPA funding to implement energy conservation activities within the City. 2. Advanced Metering Infrastructure (AMI) System a. Consider additional demand response efforts in 2013. b. Integrate the AMI System into the Conservation Voltage Optimization and SCADA Systems in 2012. c. Consider annual meter inspection to review meter condition, check for tampering, and ensure clearances are maintained, beginning 2012. d. Utilize the outage management system beginning 2012. e. Consider redundant fiber optic connections to AMI System collectors in 2012 to ensure high network reliability. f. Correlate consumption with meteorological data to predict next day peak hour in 2012, which will be used for demand response scheduling. g. Consider future distribution automation and smart grid efforts as they become available (timing unknown). h. Begin optimization review of electrical transformer right sizing, commercial water meter right sizing, and consider water system main leak detection via the AMI System in 2013. 3. Telecommunications a. Explore need for a Telecommunications Utility ordinance in 2011 for the future City owned wireless mobile data system. b. Prepare a Request for Qualifications (RFQ) for consultant services in 2013 for the Cable Television Franchise formal renewal proceeding, which includes a community survey and a future needs and interests report. c. Explore ways to leverage telecommunications capability. 4. Electric Utility Rates Finances a. Anticipate wholesale power cost increases in the Fall of 2011 (that shift from variable cost to high fixed and low variable cost) that necessitate a retail rate increase. Return to City Council to evaluate options for retail rate increases that reduce retail rate revenue risk such as applying the increase only to the customer charge versus consumption charges, and ways to mitigate utility discount customer impacts prior to September 2011. b. Consider retail rates in the Fall of 2011 that include rebuilding unrestricted cash balance. c. Consider continuation of the communications plan incorporating AMI System benefits in 2012 (e.g., time of use rates, customer portal, high usage alerts, water leak alerts, etc.). Timely communicate final 2011 BPA wholesale power rate increase to the public. d. Consider conducting a separate customer survey on green retail rate alternative in 2013. e. Evaluate the effect on weekday (Monday through Friday) retail rates if Saturdays are made into either a low or medium rate in 2013. 5. Future Annexations a. Engage the Clallam County Public Utility District in a discussion to consider electrical customer transfer by wheeling arrangement versus acquisition of assets in 2012. 6. Infrastructure Plan a. Maintain renewals and replacements at or above depreciation 2011 forward. b. Complete cost /benefit evaluation of pole replacement to determine future use of City crews or contractors in 2012. 7. Landfill Flare Facility a. Conduct evaluation to assess gas quality and quantity in 2011. b. Proceed with a request for proposal (RFP) seeking development of a beneficial use in 2012. 8. Electrification of the Transportation Sector a. Seek grant opportunities for electric vehicle infrastructure and charging station(s) in 2011 forward. 9. Public Power a. Maintain a positive relationship with BPA, and memberships in trade associations (i.e., Public Power Council, Western Public Agencies Group, and Northwest Public Power Association) that preserve public power benefits. pORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2010 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Overhead and Underground Utility Policies and Guidelines Summary: City Council adopted policies relating to the installation of new overhead and underground utility facilities. Staff is informing the Utility Advisory Committee of the implementation guidelines in support of the policies. Recommendation: Support staff's interpretations of the Comprehensive Plan and Telecommunications Ordinance concerning guidelines for overhead and underground construction of new telecommunications facilities. Background /Analysis: City Council adopted a Comprehensive Plan in 1994 and a Telecommunications Ordinance in 2001 that set forth policies relating to overhead and underground construction by public and private sector utilities. This year there has been redundant fiber optic construction and next year construction of the wireless mobile data system is anticipated. Excerpts from the Comprehensive Plan relating to overhead/underground utilities are provided below: The City should place a high priority on installing new utility lines underground to increase safety and reliability and to improve neighborhood appearances. Where possible, new utilities should be located in alleys. Excerpts from the Telecommunications Ordinance relating to overhead/underground utilities are also provided below: The purpose and intent included encouraging economic development while preserving aesthetic and other community values and preventing proliferation of aboveground facilities. Encourage open competition and the provision of advanced and high quality telecommunications services on the widest possible basis to the businesses, institutions, and residents of the City, while eliminating unnecessary local regulation of telecommunications service providers and services. N \IJAC \Final \Overhead Facilities Policies Guidelines docx Overhead and Underground Utility Policies and Guidelines July 12, 2011 Page 2 All facilities shall be constructed, installed, and located in accordance with the following terms and conditions, unless otherwise specified in a license, master permit, or facilities lease: 1. Wherever a grantee has existing underground duct or conduit with capacity available, grantee shall install its telecommunications facilities within such underground duct or conduit. 2. A grantee with permission to install overhead facilities shall install its telecommunications facilities on pole attachments to existing utility poles only and then only if surplus space is available. 3. Whenever any existing electric utilities or telecommunications facilities are located underground within a right -of -way of the City, a grantee with permission to occupy the same right -of -way must also locate its telecommunications facilities underground. 4. Whenever any new or existing electric utilities and/or telecommunications facilities are located or relocated underground within a right -of -way of the City, a grantee that currently occupies the same right -of -way shall, at its own expense, relocate its facilities underground. Absent extraordinary circumstances or undue hardship as determined by the Director, such relocation shall be made concurrently to minimize the disruption of the rights -of -way. No extension granted by the Director under this Subsection shall exceed a period of twelve (12) months. The Director may waive the requirements for location of facilities under this Subsection, if the grantee demonstrates to the Director's satisfaction that such location requirements are commercially unreasonable or if provisions of the grantee's tariff filed with the Washington Utilities and Transportation Commission otherwise control. Staff has interpreted the above guidance into a concise list of conditions for performing work associated with telecommunications. This interpretation will be folded into the Wireless Mobile Data System Request for Proposal and Right of Way Construction Permits associated with new telecommunications facilities: A. The installation of new utility poles is not permitted to establish service. B. New services may be installed on existing overhead facilities in alleys, whether or not there are existing telecommunications facilities. C. New services may be placed on existing utility poles outside of alleys, if there are existing telecommunications facilities on the utility pole. D. If capacity is available in existing underground ducts or conduits, new services shall be installed within such underground ducts or conduits. E. New services shall not be installed on existing metal street lighting standards or traffic signal standards. F. Wireless access points may be attached to street lighting standards and utility poles. If a metal street lighting standard is used for a wireless access point that's directly connected to the fiber optic network, the cable shall be installed within the streetlighting standard then placed underground until reaching an existing utility pole. G. New services shall comply with all National Electric Safety Code (NESC) clearance requirements. H. The Director may waive any of the above guidelines, other than clearance requirements, on a case -by -case basis if the cost to comply is excessive in comparison to the estimated cost of overhead installation. ORT NGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2011 To: Utility Advisory Committee From: Terry Dahlquist, P.E., Electrical Engineering Manager Subject: Nippon Utility Pole Transfer Summary: Nippon wishes to complete disposition of their decommissioned electric transmission lines that formerly connected them to the Elwha Dam. They have offered a portion of one line to the City. Recommendation: For information only, no action requested. Background /Analysis: Several years ago, Nippon Paper Industries USA Co., Ltd (Nippon) disconnected the Port Angeles mill from the power lines coming from the Elwha and Glines Canyon dams. Some of these lines have been transferred to Clallam County Public Utility District No. 1, and the remainder have simply been unused. Nippon has offered a segment of line along the north side of Edgewood Drive near the entrance to Fairchild Airport at little or no cost to the City. There are two utility poles on this line that currently have City -owned 12kV distribution infrastructure built below Nippon's transmission circuit. Provided Nippon is willing, the City desires to acquire ownership of these two poles. The balance of Nippon's facilities are in the Western Urban Growth Area where the City does not serve any customers. Annexation of this area may be many years in the future, and the infrastructure required for future development is unknown. Due to their condition and location, owning and maintaining these electric lines does not appear to offer any benefit for the City. Staff intends to pursue a transfer of ownership from Nippon to the City for two poles that the City currently utilizes for distribution. N \UAC\Final \Nippon Pole Transfer.doc J ORT N GELEIS W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: July 12, 2010 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Commercial Industrial Demand Response Pilot Project Summary: As components of the Commercial Industrial Demand Response Pilot Project sponsored by the Bonneville Power Administration, Global Energy Partners has offered the City Participation Agreements to include specific demand response equipment at City Hall and the City's Water Treatment Plant. Recommendation: Forward a favorable recommendation to City Council to authorize the City Manager to sign the Participation Agreements with Global Energy Partners for the Water Treatment Plant and City Hall projects in an amount not to exceed $30,000, and to make minor modifications to the Agreements, if necessary. Background/Analysis: In February 2011, the Bonneville Power Administration (BPA) and the City of Port Angeles (City) entered into an agreement to conduct a Commercial and Industrial Demand Response Pilot Project (C &I DR) in the City's electric service territory. Global Energy Partners (Global) is under contract with BPA to manage the services for the C &I DR. Goals of the C &I DR include reducing peak electric demand, reducing the city's wholesale power supply costs, and testing the ability to dispatch C &I electric loads through automated demand response technologies. Global and the City have identified and recruited eight (8) commercial industrial locations for use in the C &I DR including two City facilities. Global has offered the City Pilot Participation Agreements for including the City's Water Treatment Plant and City Hall into the C &I DR. The estimated cost for automated demand response equipment for both city facilities is $30,000. Under terms of the C &I DR Agreement, BPA provides a 50% cost share for the project costs. Total estimated City cost for the automated design response equipment at the two facilities is $15,000, which will be paid out of the Conservation Fund. Staff will issue a request for quote (RFQ) to determine actual project costs. Staff requests that the Utility Advisory Committee forward a favorable recommendation to City Council to authorize the City Manager to sign the Participation Agreements with Global Energy Partners for the Water Treatment Plant and City Hall projects in an amount not to exceed $30,000, and to make minor modifications to the Agreements, if necessary. N \UAC \Onginal\Pilot Particpation Agreements docx pORT N \UAC\Final\NPI Rate Ordinance docx NGE1LE W A S H I N G T O N U. S. A, Utility Advisory Committee Memo Date: July 12, 2010 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Industrial Transmission Electric Rate Ordinance Summary: The Bonneville Power Administration's Tiered Rate Methodology will go into effect October 1, 2011. The City will need to have rates in place for all its electric customers that are appropriate for that new methodology. For the City's single industrial transmission customer, the City offered a power sales agreement consistent with the new methodology. Unfortunately, Staff was unable to successfully negotiate an agreement with that industrial customer. Staff will prepare an amendment to the industrial transmission rate ordinance for Utility Advisory Committee consideration at their August 9, 2011 meeting. Recommendation: For information only, no action requested. Background /Analysis: Consistent with City Council direction provided at the June 2009 Northwest Public Power Association Tier 2 Power Supply Workshop, staff proceeded to negotiate a power sales agreement with Nippon Paper Industries USA Co., Ltd (Nippon). On October 20, 2009, City Council authorized the Mayor to sign a power sales agreement with Nippon. At that time staff believed there were only a few issues yet to be negotiated. Staff, with the support of Terry Mundorf through the City's membership in the Western Public Agencies Group, has worked diligently to address the issues but were unable to achieve a mutually acceptable agreement. With the new Bonneville Power Administration Tiered Rate Methodology going into effect October 1, 2011, and the lack of a mutually acceptable power sales agreement with Nippon, staff now plans to prepare an amendment to the industrial transmission rate ordinance. Staff will return to the Utility Advisory Committee on August 9, 2011 with a proposed amendment to the industrial transmission rate ordinance. At that time the Utility Advisory Committee will be asked for their recommendation to City Council to conduct public hearings on the proposed ordinance amendment on September 6, 2011 and September 20, 2011. The proposed ordinance amendment would go into effect October 1, 2011.