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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1991-01-081 1\8\91 City Council, Adjourned Regular Meeting City Council Chambers Redding, California January 8, 1991 5:15 p.m. The Adjourned Regular Meeting was called to order by Mayor Buffum with the following Council Members present: Arness, Dahl, Fulton, Moss, and Buffum. The purpose of the meeting was to hold a Joint Meeting of the City Council and the Electric Utility Commission. Electric Utility Commissioners present were Gandy, Potter, Prielipp, and Toney. Commissioner Gelonek was absent. Also present were City Manager Christofferson, Assistant City Manager McMurry, City Attorney Hays, Electric Utility Director Lindley, Electric Utility Resources Manager Coleman, Director of Finance Downing, Secretary to the City Council Moscatello, and Mike Martin of the Record Searchlight. URGENCY ITEM (L-100) City Attorney Hays requested that City Council consider, as an urgency item, holding a closed session. Mr. Hays explained that the closed session is regarding pending litigation in the acquisition of property owned by the Sandrocks for the Stillwater Sewage Treatment Plant. MOTION: Made by Council Member Arness, seconded by Council Member Dahl, to consider pending litigation regarding the Sandrocks and the acquisition of property for the Stillwater Sewage Treatment Plant as an urgency item. The Vote: Unanimous Ayes Mayor Buffum stated that this matter will be considered as item five on the Agenda. LETTER FROM WARD GANDY (B-130-070) Electric Utility Commissioner Gandy submitted a letter to Council dated January 8, 1991, which is incorporated by reference herein. Mr. Gandy states that his letter to Council of November 30, 1990, was made as a private citizen, not as an Electric Utility Commissioner. He continues that he has subsequently sent a letter, dated December 7, 1990, requesting to be on the agenda at the first meeting of February and an item be placed on the agenda titled, "Redding's Finances, Past, Present and Future." He asks that the public be allowed to speak after staff has made a presentation, that a date be set today, and he be guaranteed that the item will not be pulled before the meeting. Electric Utility Commissioner Iwanick entered the meeting at 5:17 p.m. Mayor Buffum thanked Mr. Gandy for submitting the letter and stated that the timing is fair. In order to guarantee Mr. Gandy that the item will not be pulled, she suggested that each Council Member either assure or deny the request now. Noting that Council has already requested a plan from staff pertaining to financing capital improvements, Council Member Arness said the only problem he has is assuring that staff has enough time to put together a report. Electric Utility Commissioner Barzin entered the meeting at 5:19 p.m. City Manager Christofferson said he needs to know what it is that Council wants staff to present. He pointed out that the topic is fairly broad. 2 1\8\91 Council Member Arness conveyed that he has trouble following the cash flow. He said he is looking for a summation, illustrated by graphs, 3 1\8\91 words, and numbers, where the money has gone over the last three to five years and what the ten-year projection is. Council Member Fulton noted that it will take staff six months of hard work to put graphs and a report together. Mr. Christofferson said he is not sure that what Council Member Arness is talking about is what Mr. Gandy is talking about. He recalled that Mr. Gandy laid out a series of things at the EUC meeting that he wanted, and Council Member Arness is talking about major projects and tracking budget expenditures. Mayor Buffum stated that when budget process starts, a thorough tracking of every item can begin. But at this point, we are talking about major expenditures and priorities. Mr. Gandy conveyed that his report is going to be quite detailed, and the topic, "Redding's Finances, Past, Present, and Future," is very appropriate. Mayor Buffum said that Council wants to assure Mr. Gandy that he can be heard at a public meeting; and she questioned if the scope of detail is not all compiled, would the second meeting in February be okay. Council Member Dahl asked if Mr. Gandy has questions to raise or conclusions to state. If the concerns are known, and Council finds itself moving in the wrong direction, corrections can be made; and if there are inaccurate perceptions, those can be put to rest with some facts. Mr. Gandy said his conclusions will be stated in his letter, and they are sure to raise other questions. Mr. Christofferson said more information on long-range financial planning will be presented at Council's workshop on January 19. He noted, however, that he questions what to bring in when Mr. Gandy talks about "Finances, Past, Present and Future." Mayor Buffum said if the completed report was presented as a staff report, Mr. Gandy could follow with his comments, conclusions, and suggestions. Council Member Moss emphasized that staff should know what to address. The topic is so broad that he would prefer not to direct staff to reinvent the wheel three months before the budget process. He preferred that staff listen to Mr. Gandy and the public and then respond. Mr. Christofferson said Council Member Moss's suggestion is good; or if the questions and areas to explore can be determined in advance, a report can be prepared. He noted that Mr. Gandy met with Assistant City Manager McMurry and Assistant Director of Finance Sundin, and he understood it was productive and a variety of materials were provided to Mr. Gandy. Staff will be glad to provide whatever information may be requested in the meantime. Per Mr. Gandy's request, Mayor Buffum polled Council to determine if any Council Member would pull the item from the agenda. It was determined that each Council Member, individually and separately, agreed not to pull the item. MOTION: Made by Council Member Arness, seconded by Council Member Moss, to consider Mr. Gandy's request to discuss Finances, Past, Present and Future at the regular City Council meeting of February 19, 1991. The Vote: Unanimous Ayes ELECTRIC UTILITY COMMISSION COMMUNICATION POLICY (A-050-060 & B-080-160) Mayor Buffum recalled that at the last joint City Council/Electric Utility Commission workshop, Council and the Electric Utility Commission (EUC) each agreed to write to the Federal Energy Regulatory Commission (FERC). The letter from the EUC got off ahead of the Council's letter. 4 1\8\91 For better continuity and presentation to other agencies, Mayor Buffum stated that letters from the Commission should be transmitted with Council's letter. Council Member Moss expressed concern about Council being privy to communications between resource agencies and the Electric Department. He said he would like to be kept abreast of what is going on and what kind of contact is going on with other agencies. Electric Utility Director Lindley said he would like clarification--does he want copies of all correspondence regarding all projects. Council Member Moss said whatever a prudent man would consider to be of substance. Mr. Lindley said that leaves him in a position of trying to determine what Council may or may not want to see. There is a tremendous volume of correspondence, and staff has tried to keep the Council abreast. Council Member Moss said he would like to see items of substance, and not just written communications, brought to Council for policy direction, even if premature. For example, Council should have known about the Redding Power Proposal. There is a possibility that a statement of policy could have been assumed, or given, and Council had no role in formulating that. Regarding Redding Power, Mr. Lindley indicated that what would have been provided to Council would have been hearsay and innuendo. Staff can transmit all correspondence, but it is often not germane. He stated that matters of substance are brought to Council's attention. Council Member Arness said that he is not uncomfortable with the level of communication that is happening; however, he is the Council liaison and a little closer to what is happening. Commissioner Potter noted that staff receives hundreds of IPP projects on an annual basis; and until a commitment is made and the process is begun, there is very little that anyone can do. In response to Commissioner Barzin, Mr. Lindley stated that Redding Power did not fill out the questionnaire and return it. Commissioner Barzin opined that that is why staff did not take the proposal seriously. Mr. Lindley said part of the concern is that the Department has been accused, or circumstances have been misrepresented in correspondence, of setting policy. He explained that it is his prerogative to convey to an outside interest whether or not he would recommend a project to Council. Mr. Lindley said staff does its utmost not to establish City policy. Council Member Moss said the "prudent man" test is very difficult. However, he would like to know about Clear Creek, Spring Creek, Red Bluff, or important letters from FERC or Fish and Game. Noting that Council Member Moss has narrowed the scope, Mr. Lindley conveyed that staff can do that. He noted that letters from fisheries agencies and FERC are generally dealt with by the City Council because they require action. Mr. Lindley explained that IPP's fill out a four-page form; and if the project has potential, an EUC subcommittee reviews the project along with staff. Electric Utility Resources Manager Coleman added that if an IPP has been rejected at the staff level, the IPP can take the project up the review ladder. In response to Mayor Buffum, Mr. Lindley explained that Assistant City Manager McMurry has been involved with some projects, and Mr. McMurry will continue to meet with staff and the EUC. Commissioner Prielipp explained that the IPP subcommittee reports to the Commission at a regular meeting, and a representative from the City Manager's office, as well as a Council liaison, is there. 5 1\8\91 6 1\8\91 RESOURCE PLAN (E-120-070-825) Electric Utility Resources Manager Coleman reviewed the history of the Clear Creek release issue. Mr. Coleman conveyed that Ed Barnes, who is on retainer with the Department of Water Resources (DWR), indicated that the United States Bureau of Reclamation (Bureau) was reluctant to release more water from Whiskeytown unless the City was willing to give some of the additional power generated by such releases back to the Bureau. In December 1990, the City invited the Bureau to a meeting also attended by the Western Area Power Administration (Western), DWR, State Department of Fish and Game (DFG), Council Members and Commissioners. A staff member was assigned to develop a plan to provide increased releases that would be acceptable to CVP customers, be consistent with U.S. Government contractual commitments, does not adversely affect Redding's net revenue, and monitors the plan. Western has asked the Bureau to send them a letter asking them to officially participate in the process. Mr. Coleman conveyed that there are three release scenarios proposed: minimum release, salmon only, and salmon and steelhead. Mr. Coleman said there are four critical variables: the cost for the CVP to replace that power; the price for Whiskeytown Power; the amount of power, if any, that is given back to the CVP, and how much flow is released. Mr. Coleman said the cost for the CVP to replace the power will be significantly higher than the value of the power generated to Redding. Western currently buys energy (not capacity) from about twelve different sources in the Northwest; and if this energy generation is lost, high cost energy will have to be purchased from the Northwest. Mr. Coleman submitted a graph of the break-even price for Whiskeytown power. He said it is possible for the City to either make money or be at a net economic loss. Mr. Coleman conveyed that CVP customers will be impacted the most, and they will play a significant role in the final decision. Commissioner Gandy conveyed that at the meeting in December, there was a consensus of cooperation. There are, however, hurdles--Western has to determine whether they will accept the compromise, and apparently all of the customers of Western have to approve it. Commissioner Gandy opined that it is in the hands of the agencies to proceed, and the City is not perceived as the one doing anything at this point. Mr. Lindley said the CVP technical committee is generally made up of publicly owned electric utilities. There will be a considerable amount of pressure from them against Western releasing water down Clear Creek if it costs them additional money. The costs associated with releases at Shasta Dam for the salmon population have not been passed on, and this is the direction that the customer group will take. A position on the fisheries will not be taken one way or the other. In order to pass those costs on, some type of a legislative package must go before Congress. Council Member Moss said this should be looked at from a different perspective. There is $2 million available through DWR and DFG for the Clear Creek project, one of the most important projects of the 1086 program, the Upper Sacramento Riparian and Fisheries Improvement Plan. It entails increased releases and expenditures for riparian work, stream bed work, and placing a fish ladder at Saeltzer Dam. Council Member Moss explained that Federal projects are being forced to devote more to environmental and fisheries issues. The 1086 program is endorsed by fisheries management, resource management, and those we are dealing with on the Spring Creek Storage Project. All of the people we need to support us on the Spring Creek Project are pushing very hard for us to support them on the Clear Creek Project. Commissioner Barzin stated that the Commission is studying this issue right now, and there is not enough data available to make an opinion yet. 7 1\8\91 Council Member Moss that there are fish that qualify for the endangered species list for the Sacramento River; and if there is not some turnaround in the fisheries, then court orders will start telling us what is to be done. Council Member Arness noted that it takes a lot of money to build a new fishery replenishment area, and he questioned if the money would be better spent in the Sacramento River. He said the Clear Creek project sounds like an experiment. Council Member Moss noted that anytime a new project is put together, there is a certain amount of experimentation. You plan well, put it into effect, and monitor the results. Council Member Arness pointed out that other States have had good luck with hatcheries. Council Member Moss said the City should cooperate and agree to negotiate with Western and the Bureau on the power. We should not do any more than we have to, we should negotiate in a tough manner, eliminate our losses, and allow the project to move forward. General discussion on what the project may cost the City of Redding was held. Council Member Arness said he wants to reserve the right to step off if the price gets too big. He is concerned about the project's effect on the ratepayer. An open dialogue should be maintained and Council kept posted. Council Member Dahl said that if Council looks at the broader picture and takes a posture of cooperation toward these projects, as opposed to confrontation, we may get a lot farther. Commissioner Toney noted that the Commission is probably concentrating on this from the ratepayer's point of view, as well as looking at the broader picture. Staff has been helpful, although not enthusiastic. This may be a policy matter--does Council want to pursue it vigorously or be cautious. In response to Mayor Buffum, Mr. Lindley said staff is waiting for a response from Western to see if they are ready to proceed with discussions, and DFG is to provide staff with a scoping document and timeline. Noting that Council Members Arness and Moss are on the subcommittee, Mayor Buffum suggested that they set the pace and bring it back to Council. Mayor Buffum called for any further comments. REDDING POWER PROPOSAL (E-120-300) Council Member Arness suggested that the Redding Power proposal be tabled until the end of March. Commissioner Prielipp clarified that the IPP Committee has been given time to extend its exploration of the Redding Power proposal and staff will continue to gather information. CLOSED SESSION (L-100) Mayor Buffum stated that Council will adjourn to closed session pursuant to California Government Code Section 54956.9(a) to discuss the status of pending litigation in the case of City of Redding v. William E. Sandrock and Rachel S. Sandrock as Trustees of the Sandrock Trust, and Does 1 through 10 inclusive; Shasta County Superior Court Case No. 96242. 8 1\8\91 At the hour of 7:05 p.m., Mayor Buffum adjourned the meeting to closed session. At the hour of 7:19 p.m., Mayor Buffum reconvened the meeting to regular session. Following a discussion in closed session regarding the litigation between the City and Dr. Sandrock over the acquisition of land to be utilized for the Stillwater Sewage Treatment Plan, the following motion was made. MOTION: Made by Council Member Arness, seconded by Council Member Dahl, to settle the acquisition of property owned by William E. Sandrock and Rachel S. Sandrock for the Stillwater Sewage Treatment Plant in the amount of $650,000.00. The Vote: Unanimous Ayes ADJOURNMENT There being no further business, at the hour of 7:20 p.m., Mayor Buffum adjourned the meeting. APPROVED: ____________________________________________ Mayor ATTEST: ________________________________ City Clerk