It's 9 o'clock.
We have a quorum, so we'll go ahead and open the meeting.
We do have a closed meeting scheduled.
However, in essence, we do have some folks
that have presentations in open meeting
or in the regular meeting.
So if it's OK with everybody, if we
can move the closed meeting to the end of the--
after the open meeting so we can get folks back in their
office
and do all that stuff.
So with that, we have--
in our regular meeting, we have our consent agenda first.
We have three items on consent agenda.
Would ask if there's any members of the board
who would like to pull any of those items
for individual consideration.
I would like to pull all three of them.
OK.
All right.
That makes it simple.
All right, then.
We will start for individual consideration.
We'll start with item A, which is
to consider recommending approval of the 2018 Water
and Wastewater Impact Fee Update, professional services
proposal from Kimley-Horne and Associates.
And I believe PS is there.
Are there any specific questions that I can answer?
Oh, I would just like for you to just give just
a brief overview, just for the thinking of the public
as the audience, just so the public can know.
OK.
It seems fairly self-explanatory to me.
We started the impact fees for water wastewater back in
1998.
And by state law, we have to do an update study every five
years.
So we had a study in 2003, 2008, 2013.
And this is for the 2018 now.
Because it takes a certain amount of time.
So we started the process a little bit early
because we had to go through a public hearing process,
capital improvement advisory committee, and then the
council.
So there's a certain amount of time it takes.
So sometime we anticipate in June or so
we will have the impact fees again updated and in place
and would have been approved at that time.
Why do we have impact fees?
It is really growth paying for growth.
What we do is we look at what is the additional capacity
that we need to accommodate growth in the future.
So there is a cost to that.
The cost is in building larger pipes, larger pump stations,
larger waste treatment plants, wastewater and water
treatment
plants.
So there's a cost involved in it.
So state law describes a method.
And we'll use that method to assess
what is the cost for a single family equivalent, if you
will.
And then that is what we charge.
The new development.
It is not assessed to existing homes, only to new
development
that comes out.
So that is the essence.
That's what impact fees are.
So we got our RFQ done through the Purchasing Department.
And we had five consulting companies
that sent their RFQs.
We evaluated them.
Kimley-Horn was ranked number one.
And we have a very good proposal.
And the fees that we got look pretty reasonable.
So we are happy to bring it to you for approval.
Thank you.
Is this a consulting group that the city
has worked with in the past?
Yes, they have.
Actually, they did the road impact fees.
I was involved in that.
That went into effect last year.
And they did a very good job on the road impact fees,
above and beyond.
Excellent.
So this is a special skill set.
It seems to me this is a special skill set
that we would need to contract out for,
rather than having this to--
Yes, it requires planning effort on their part,
growth scenarios for what is the growth in the city,
engineering, evaluation, and then the cost evaluation.
Yes.
OK, yes.
Thank you.
So this seems like a good return on investment to me,
in the sense that if we get somebody to really do this
right, we spend--
I think it was--
It's a little over $91,000.
Yeah, around $90,000.
But we end up getting back a lot in terms of impact fees.
And also, the $91,000 we spend actually
goes back into the charge we will assess.
Whatever cost we have, we put back at the cost.
Yes.
OK, well, thank you very much.
That sounds great.
Yes, is this the third party methodology that's
prescribed by state law?
Is that correct?
Yes, sir.
OK.
So it's really a requirement in addition to being a good
idea,
to have a third party look at it.
Yes, sir.
Yes.
That way you get an independent view of what
we need to charge for.
Right.
OK.
All right, any other questions?
PS, no?
Is there a motion then to approve item A?
Make a motion.
I motion.
Motion.
Second.
And a second.
You have to flip a coin, whichever.
I'll let Kim make that decision.
We have a motion and a second on item A.
Or is there any further discussion?
If not, all in favor say aye.
Aye.
Any opposed?
Motion carries.
Item B, which is to consider recommending
approval of a professional services agreement
with Enterprise Risk Consulting of Santa Fe, New Mexico
to assist the city in developing a power supply head
strategy
and implement a risk management process in an amount
not to exceed 200,000.
Brian?
Morning.
Brian Langley, Deputy City Manager.
Did you also want me just to provide some overall comments?
Or do you have any specific questions?
For me, anyway, it was just in terms of explaining to the
public
their return on investment.
I know that there's a lot of cynicism about consultants.
And I think it's a good idea to just explain to the public
why
it makes financial sense to spend this money, why
it's a good investment for us.
Well, with the board's indulgence,
I'll talk about items B and C together,
which is really a companion is the Deloitte study.
So I'll go through that overview for you.
So first of all, for Deloitte, which is item C on your
agenda,
there are two particular tasks that we're
asking them to look at.
And these are the ones that we talked about with you
at your last meeting that they presented.
The first would be to look at the 2017 benchmark analysis
to see what is the right benchmark to manage and measure
the energy management organization moving forward,
to look at different methodologies,
identify the advantages and disadvantages of those,
and make a recommendation to us of how we measure
performance going forward.
And then the second task that they have
is what they call the EMO capability maturity model
that they'll look at.
And basically, just look at the overall governance
that we have of the EMO.
What are our policies?
What are our procedures for that?
Understand all those activities.
Try to understand whatever risk we're
taking on with that operation.
If there are any process gaps that we have,
any issues that need to be resolved,
they'll identify those for us and recommend any
improvements
that are needed.
And so the companion to that is enterprise risk,
is once we have that recommendation from Deloitte
and the issues that have been identified,
they'll review those for us and give us
a practical application of how do they
think we can actually close those gaps.
What are the recommendations that they
would have for us to implement the recommendations from Del
oitte
and help us revise the governance structure as needed.
So as you may recall, we have a front office,
a middle office, and a back office for the EMO.
We have some policies that are in place.
What would that need to look like if there are any process
gaps, if any are identified by Deloitte.
And then the second component of their work
is to look at our power supply issues
that we've been talking about.
So looking at how do we take on more renewables going
forward?
What's the right mixture of those going forward?
How do we develop a hedging strategy for that?
How do we use the deck for that?
And how do we build a financial pro forma going forward
that takes into account all those different elements?
And we'll bring that back through the board and the city
council.
And they're looking to come back in October.
Their work is due to us for their first phase of the work,
what we've already contracted with them on October 16.
And we hope to be back to you on October 23
to have that discussion.
So in terms of cost, Deloitte is, for an amount not to
exceed,
$145,000, combined with what we've already spent with them,
that would be about $231,000.
Task one is the benchmark analysis that we mentioned.
It's about $35,000.
The EMO maturity assessment is $110,000.
We expect both of these tasks to be completed
by the first week of December and have a report available
for you
to come back and talk through.
And that will help us, again, better understand
the operations, the risk, how to measure success for EMO,
and develop appropriate strategies
to manage that operation if any improvements are
needed to be made.
So for enterprise risk consulting,
it's for an amount not to exceed $200,000.
That would be a total of $299,000
with our existing scope of work that we've already
performed with them.
We do think that there's a range of costs here that we have
.
It's about $135,000 to $182,000 plus some travel-related
expenses.
The reason for that range is we really
don't know what we're going to find out of the Deloitte
study,
what kind of improvements might need to be made,
what's the depth of those improvements perhaps.
So that will be known once we have the Deloitte report.
But we expect the EMO portion of the findings and
recommendations
to come forward in the spring of 2018.
And the rest of the work will be done throughout the year
and delivered no later than the end of September.
And the reason for that is we have the debt coming online
next year.
And so how to manage that properly
will be determined through that process.
We have some renewable RFPs that are on the street
that we'll be working through.
And so that will take a little bit more time.
But we'll certainly get updates for them
and bring that back to you as we get up.
So those are my overall comments for those two items.
I'd be happy to answer any specific questions that you
might have.
Questions?
Has Enterprise been asked to factor in a timeline
for the phasing out of the gas plant?
No, that's going to be a part of our power portfolio.
And so they've been asked to look
at how to best utilize that and how to best maximize that
use.
OK, so that comes from us.
Is that what you're saying?
We give that to them and then they figure out?
Sure, it's an asset that we have,
as well as some of the other contracts, power supply
contracts that we have in place that are known elements
of our power supply.
And so then the question for Enterprise
is how best to utilize those and add in more power supply
options over time.
OK, and they asked to consider how storage and distributed
generation--
we're working to that picture.
I think they addressed the storage question
at the last council meeting and just
didn't feel like it was a viable alternative at this point.
Although in the next few years it could be viable,
but at this point they didn't feel
like that was a viable option.
OK, thanks.
Yeah, I was really impressed with them.
I think they're terrific.
That was the one thing that I'm skeptical about.
It seems to me that storage has gotten really good,
both utility scale and--
Well, I can certainly--
if that's something the board's interested in,
I can certainly ask them to come back and explore that
further
at their next opportunity when they're
going to come back and present to you in October.
We can certainly have them add some information
to address that for you.
If I could, I think the initial scope here
is really to put something in writing that illustrates
kind of where we're going, what our strategies are
for renewables, something we can go back and visit each
year,
continue to refine.
The comment that was made about storage the other day
at the city councils is just not quite there yet.
But in three, five, 10 years, it very well may be here.
So we're viewing this issue from the scope from Enterprise
Risk
as something that's kind of a living document.
And each year or two, we can see how we're doing,
how the market's changed.
But it's vetted very publicly with all of your input
and the city council's input.
And as the market changes, we can also
change and adapt the plan.
So what's important is getting this first scope
underway to take a look at how the renewable market changed
,
how does that change, how we operate the deck,
and for all of you to be involved in that policy
discussion.
And then you'll make that recommendation to council.
Things two or three years from now
are going to be different than they are today.
But at least we've got a document that illustrates
our thinking at the time, something we can measure,
something we can continually improve upon and adapt
as the market adapts.
And then in terms of the DOIT study,
obviously moving forward and agreeing
to how we're going to measure success,
the governance structure of the EMO
is important because of the risk that's going through there
.
It is something that the city council was
very interested in as well.
So these are really documents that everything's
in writing, our thought processes,
and they will change over time.
In terms of decommissioning the gas plant,
I don't think that's a realistic conversation to have yet,
because we just don't know where the market's going to go.
A lot of the utilities and the renewables, the gas
contracts
we're looking at, you can only contract out
in a responsible fashion probably three to five years
to really control your costs and make sure that we're
always
in a good position.
But that's not to say that in five years,
things are looking very different now,
and we've got a totally different strategy in place.
But we wanted to make sure that we
had something that was vetted from everyone first
and that we could all look at one set of facts moving
forward.
And that's the benefit of this.
Oh, yes.
Yeah.
And I'm convinced of the benefit of it.
I just know that there are members of the public that
would appreciate an explanation.
It seems to me that the coal plant has not
been factored in also by Enterprise,
or maybe we just haven't been informed of it.
That is, it seems that the coal plant is still producing.
And have they been asked to look into how
that factors into our package?
Sure, we'll certainly bring that back to you as part of
that,
as part of the resource plan, to see all the assets
that we have, what's the best way to utilize those assets
at the lowest cost.
And so that will be a component of that discussion.
Excellent.
Thank you.
I think I read, or maybe it was from the last preliminary
report
they gave, was they were going to factor in some summer
peak
time, peak demand, seasonal operation of coal.
I mean, that may or may not where it ends up,
but at least they're looking at it that way.
So I just want to make sure I've got the timing on
everything
correct.
So Deloitte will deliver their report in December.
Both reports, right?
Yes, sir, for task one and two.
And then Enterprise will begin in October.
I'm assuming they're pretty confident in their final report
we receive on the 16th.
It's not going to differ too much from what they told us
two weeks ago.
I think those are certainly the preliminary findings
at this point, but I would expect those
to be on the 23rd, a little bit more detailed findings
and detailed presentation of how they got there
and what their final recommendations are.
But that won't be for these items.
That will be in the spring for these items
that are here on this contract.
And then one last question.
So the report from Enterprise is expected
to be delivered in the spring on the MO and then September
for the other item.
So do we have-- because they talked about now's the time,
if you're going to do renewable contracts,
now's the time to do it.
I don't know if that makes sure that--
I guess I just want to ask a question I don't want to
assume,
but I'm assuming that window will still be open,
in their opinion, by that time.
Yes, sir, we actually have an RFP on the street right now
for renewables.
We're asking the marketplace to give us some options for
that.
They're going to help us evaluate what those options are.
And as they're developing that resource plan,
we can come back with contracts for potentially more
renewables that will match up with that.
So that's what we think is one of the really good benefits
here,
is that they're helping us on the front end
and actually implement some of that through the process.
So hopefully we'll have that in the next couple of months.
We'll have something for you to consider.
OK.
And Brian, I know that Daffner does a lot of their own lean
process review.
Can you just briefly-- I'm in favor of Deloitte,
but could you just briefly tell us why you're using Delo
itte
rather than doing that?
We do have a lean program, a lean government program.
We look at processes.
My opinion, this is very different than anything else
that we do around the city.
And there's some process mapping I think would be helpful.
But the technical nature of what's going on,
you really have to have someone who has some experience
and some technical knowledge to help us understand
what are the best ways to do this.
And it's a very small operation, but it
has a lot of different components to it.
So that's why we feel like an outside expert would really
help us in terms of the dollars that
are going through that operation, that we're managing it
the best we can.
OK.
Any other questions?
Brian?
OK.
So we'll take item B first, which is consider
recommending approval of a professional services
agreement with Enterprise Risk Consulting.
Is there a motion on that item?
Motion to approve.
Second.
We have a motion and a second.
Any further discussion?
No.
If not, all in favor say aye.
Aye.
Any opposed?
Same sign.
OK.
Item C is to consider recommending approval
of a professional services agreement with Deloitte Touche
to perform fiscal 2017 benchmark as well as a risk
assessment
for the EMO not to exceed the amount of $145,000.
Is there a motion on that item?
Move approval.
Second.
And a second.
We have a motion and a second.
Discussion on that?
No.
Then all in favor say aye.
Aye.
Any opposed?
Same sign.
OK.
Thank you.
Moving on for individual items for individual consideration
.
Item A is to consider approval of the Public Utilities
Board
meeting minutes of September 11, 2017.
These have been distributed prior to.
Are there any corrections, comments, amendments
we need to look at?
No.
Everything seems OK.
All right.
Then those will stand approved as submitted then.
Item B is the ACM update.
Board members, I sent through Kim under a separate memo--
excuse me, a separate email--
a memo that outlined items 3, 4, and 5 of the new business
matrix.
And so hopefully that will fulfill those requirements
unless you have any questions.
And then items 6, 7, and 8 will be
able to come back to you either through a memo
or a subsequent presentation in an upcoming board meeting
if you so choose.
So any questions?
Be happy to answer as best I can.
Questions?
I just want to say I was very impressed
by the numbers of the solar rebate that we're doing here.
I mean, it's a good problem to have when you have
more than you can do.
But at the same time, to look at the number of 41
residential
in 2017 so far, and we had to turn people away
because we knew we were getting close to running out of
money,
that's excellent.
One thing I didn't mention is what we'll do next time
I'll work with Kim to include this memo along with the
backup
materials in your agenda, not to fill the agenda,
but just so that it's in the minutes
so that if folks whenever in the public ever want to go
back
and look at it, they can.
They have that information available to them online.
How will the new Tesla solar roofing fit into this whole
rebate process?
Thank you.
I was hoping my roof was wrecked so I could do it.
Maybe it wasn't.
Well, yeah.
Not a good reason to get a wrecked roof,
but I guess it's all right.
OK.
That's all the individual items we had on the regular
meeting.
Any concluding items under section 551.042,
this is time to request new metrics items or future agenda
items.
I'll just say I'd make the comment.
I hope that at some point once--
I know we just had a crew that got back from Florida,
I guess last week.
And so I hope at some point we'll
be able to recognize those folks when they come in.
Because what they do, leave their families
and go where they're needed.
And I know the people in Florida are very appreciative.
They-- I know the last--
I can't remember which one it was,
but there was one hurricane that they're actually bringing
them--
the citizens were bringing them baked goods, cookies,
and homemade sandwiches and stuff like that
while they were out there.
So that's-- just go to show you what
that means to people that really are in need.
So hopefully we can get them in and be recognized at some
point
once they get rested up.
Could I request some website data, some website metrics?
I'm interested in knowing how many people view
the stream of our meeting or live.
I'm interested in how many people
view it after the live broadcast.
I know it's posted up there to be viewed later as well.
I'm also interested in how many people download the agenda,
review the agenda and the backup items, maybe even
a metric for prior to the meeting and after the meeting.
It should be-- that should be pretty easy.
Yeah.
Good.
Good point.
That would be really interesting to see.
Thank you.
Yeah.
Thanks.
I had two brief things.
One is it would be nice, since we keep asking about--
and now I have my own timeline made up
of when we're expecting the consultants to come to us
and then to counsel with their results.
It would be nice to have a tentative timeline,
either posted on the PUB part of the website
or just added on in the agenda as part of the matrix
or something like that.
I'm not quite sure how that could fit in,
but it would be nice to have something
that the public could refer to.
It helps.
That's fine.
Yeah.
To kind of get in your mind, OK, December, we
know we're going to see this.
And spring, we'll see this.
Yeah.
And people could be made aware that this is tentative,
that everything is tentative.
If something comes up, it's subject to change, but that
helps.
And the second thing, I would like
to request for future consideration
that we consider having all proposed expenditures
of $50,000 or more as items for individual consideration.
That was the reason why I asked to pull these three
from the consent agenda, because all three had
a price tag over that amount.
Not just for us, but most importantly, for the public.
I think it rubs the public the wrong way
when they see expenditures of such a large amount
on the consent agenda.
And I think it does a lot of good for them
to see that we're doing our due diligence
and that we're concerned about return on investment.
I think that'll make a big difference.
OK.
Thank you.
All right, very good.
So at this time, we will go into the--
we'll adjourn the open meeting, first of all.
I guess we need a motion for that.
We'll have a motion and a second.
All in favor say aye.
Aye.
And we will go into a closed meeting,
PUB 17-201, deliberations regarding
certain public power utilities, competitive matters,
under--