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HomeMy WebLinkAboutMIN 05.14.2019 CC-WNotice of Meeting of the Governing Body of the City of Georgetown, Texas Tuesday, May 14, 2019 The Georgetown City Council will meet on Tuesday, May 14, 2019 at 3:00 PM at the Council Chambers, at 510 West 9"' Street, Georgetown, TX 78626. The City of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require assistance in participating at a public meeting due to a disability, as defined under the ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please contact the City Secretary's Office, at least three (3) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 808 Martin Luther King Jr. Street for additional information; TTY users route through Relay Texas at 711. Mayor Ross called the meeting to order at 3:02 PM. The following councilmembers were in attendance: Mayor Dale Ross; Anna Eby, Councilmember District 1; Valerie Nicholson, Councilmember District 2; Steve Fought, Councilmember District 4; Kevin Pitts, Councilmember District 5; Rachael Jonrowe, Councilmember District 6; and Tommy Gonzalez, District 7 (arrived during Item A). On May 4, 2019 the City of Georgetown held an election and Mike Triggs was elected as the representative for District 3. Mr. Triggs was unavailable for swearing in prior to the May 14, 2019 Council meeting, so John Hesser remained as the District 3 representative. Mr. Hesser was absent from the meeting. Policy Development/Review Workshop — Call to order at 3:00 PM A. Presentation and discussion regarding Atmos Energy -- Randy Hartford, Manager Public Affairs, Atmos Energy Jack Daly introduced Randy Hartford, Manager of Public Affairs for Atmos Energy. Hartford spoke on Atmos' commitment to safety and how they will be investing over $8 billion over the next five years to continue to replace pipeline. He then reviewed the affordability of the average customer's bill, the types of pipe used, and detection of leaks. Hartford explained how leaks occur, how leak detectives work, and the different regulation authorities that have oversight of Atmos. He described how Atmos gives back to communities, how they work with different types of stakeholders to ensure safer systems, and how rates are set. Hartford explained who owns what in the pipeline and that Atmos is responsible for the line at the street and up to the meter. He added that from the meter to the home is the responsibility of the customer, which is similar to a water line. Hartford then explained that citizens should call 811 before digging in their yard to make sure they don't accidentally hit a pipe. He introduced the audience to Rose the Skunk and Gus the Gopher who are the Atmos safety ambassadors and teach citizens how to smell, listen and look for signs of a leak, and to call before they dig. Hartford explained that if someone smells natural gas they should leave the area immediately, leave doors open and they should not turn anything electrical on or off, use a cell phone, smoke, operate machinery or try to shut off a natural gas valve. He then reviewed the City of Georgetown Profile which included the pipe makeup and capital expenditures. Pitts complimented Hartford on their response to the gas leak on Williams Drive and asked what caused the leak and if it was due to aging pipe. Hartford responded that Atmos doesn't know yet, but it wasn't due to corrosion. He added that the parts of the pipe that failed were replaced and sent in for testing. Pitts asked testing if testing was being done to make sure that something like this wasn't happening in other parts of Georgetown, or if testing was part of the normal course of business. Hartford responded that testing is happening all the time. He added that Atmos did testing throughout the area and didn't find any additional leaks but did find some older pipes and went ahead and replaced them while they were there. Gonzalez asked if there are non -human detection methods being utilized by Atmos. Hartford responded that Atmos is using the most current tech and continues to work to find the best methods. Jonrowe asked when a mobile leak detection vehicle last went through the affected area prior to the leak being discovered. Hartford responded that he did not now. Jonrowe asked how the leak was detected. Hartford responded that someone called it in. Jonrowe asked how often the leak detection vehicles go through Georgetown. Hartford responded that he did no know the exact schedule. Jonrowe asked that Council be provided with that schedule. Nicholson thanked Hartford and City staff for their work on remedying the leak. She added that there was a lot of communication, but some of it wasn't always visible. Nicholson asked Hartford if he had anything that he wanted to share. Hartford responded that he applauded City for its efforts and reviewed lessons learned. He added that Atmos uses the latest technology for surveys and Atmos will be out in community spreading awareness. Mayor Ross noted that Atmos offered hotels stays, paid for food, and supplemented businesses during the evacuation. He added that he only received two emails, one positive and one negative. Ross stated that the City was willing to help as needed and that he spoke with other entities during the evacuation. Hartford noted that almost everyone was very understanding and very nice despite frustrations, but Atmos is a safety company first. Mayor Ross said that he did receive a comment from a citizen about how nice and helpful the Atmos people were. Hartford said that Atmos utilized employees from all over the country and they did everything to make it as accommodating as possible. Mayor Ross noted that Atmos rented office space in the Lone Star Circle of Care facility to have more of a presence in the area. Hartford stated that Atmos will maintain that office for a year and replacement projects are being moved up since staff is here and mobilized. Mayor Ross said that a business relaunch is scheduled for June 1, 2019. Hartford asked that people please come out and attend the relaunch. Mayor Ross noted that the Chamber of Commerce was very helpful with the relaunch. Hartford said that there was a good partnership with the Chamber of Commerce and applauded the work of Jack Daly. B. Presentation and discussion of improvements made to customer communication regarding utility system outages -- Glenn Dishong, Utility Operations Director Glenn Dishong introduced James Foutz, Conservation and Marketing Manager. Dishong stated that a major outage about a year ago lead to communication issues and this is a product of that. He added that staff was able to use existing systems and existing staff members. Foutz presented the CAN (Customer Alerts and Notification) Project. He reviewed the project background which included the need for staff to better communicate with customers. Foutz discussed the Requirements and Analysis Phase and the Development Phase. He added that in the Requirements Phase staff focused on Tier 2 events that are urgent and important but within normal business operation. Foutz stated that this was done by meeting four main requirements: relevant service interruption information to customers via text or email; provide outbound notification in under 30 minutes during service interruption; make information accessible and centralized; and standardize electric and water outage business processes. He reviewed the work that has been done up to this point that includes: process improvement, website updates, and direct notifications. Foutz demonstrated the Outage Map for water and electric which includes information available on map about current outages. He then recognized the project team which included: Keith Hutchinson, Jack Daly, Judith Mattocks, Randy McKenzie, Joe Sepulveda, Christian Richardson, Erin McDonald, Neha Rathi, David Hernandez, Cindy Pospisil, Chelsea Solomon, Kevin Vitek and Patrick Roepke. Foutz reviewed the next steps that include: automation; improve the contact information in our CIS; continuous improvement; and "go - live" for outage maps on May 17, 2019. C. Presentation and discussion regarding Electric Management Assessment report from Schneider Engineering -- David Morgan, City Manager David Morgan introduced Steve Moffit and the Schneider Engineering team. He added that the assessment was needed to make improvements to the electric fund, specifically purchased power. Steve Moffit introduced the Schneider Engineering team, which consisted of Jay H. Hurst, Ned Brown, Ramsey Cripe, and Jason Wiesepape. He reviewed the assessment goals: review the City's Electric Resource Management organization; develop the current wholesale power contracts and the performance outlook for the contracts; significant factors that contributed towards decisions that culminated in significant increases in cost to wholesale power; the impact of wholesale power cost increases to the City's budgets, retail electric rates and other City business areas; and offer a forward - looking evaluation of steps the City may consider to effectively manage and optimize the contracts and consider market factors that may influence the performance of the contracts. Moffit reviewed how the report was organized and that it consisted of. background information; current power contracts containing confidential information; financial impact to the City; organizational assessment; a forward - look at market and regulatory issues; conclusions and key findings; and recommendations. He noted that the background of the report consisted of reviews of. the City utility structure; City Council; Georgetown Utility System (GUS) Advisory Board; GUS Electric Resources Management Department; and the important dates and issues. Moffit noted the specific date of when the LCRA contract ended in 2016, and how the City left the contract early in 2012 due to a breach of contract by LCRA. He added that Schneider Engineering had really worked to review the current power contracts by: conducting a review of the individual contract development and performance; analysis of total contract portfolio performance; their findings of the review; and their recommendations. Moffit the reviewed the financial impact the contracts have had by reviewing the annual budget planning cycle. He added that the budget planning process is a year-round process and the electric fund was a big part of that planning. Moffit reviewed Table 7 which covers the GUS purchased power performance over FY 2016-2018. He then reviewed how the rates to customers have increased over the last few years to make up for budgeting forecasting issues. Moffit reviewed the four areas of significance of the electric resource management which included: the City's transition from the LCRA contract; responsibilities of the GUS General Manager of Utilities and how the current role has many responsibilities and the current structure of the GUS organization leaves many responsibilities on staff; the multiple single points of failure, and the organizational impacts. He reviewed the forward market issues and the favorable trends of diminishing reverse margins, long-term system growth, resolution of constraints, and expiration of federal tax incentives, versus the disadvantageous trends of continued transmission constraints, continued renewable energy penetration, and the depression of natural gas prices. Moffit reviewed the conclusions and key findings listed in the report noting: the decisions regarding the LCRA contract; financial impact to the City, organization assessment, and a forward -look at market -side issues and developments. He also noted that City staff did not have the "depth" and time to handle the complexity of the management of these issues. Moffit reviewed the recommendations listed in the report noting: the procurement of third party energy management services to put less pressure on staff to manage the contracts; implement additional enabling contracts with market participants to allow decisions to be made quickly; direct energy manager to consider appropriate insured products in relation to serving native GUS load and optimizing the value of the portfolio in the market; leverage internal and external resources to increase oversight and accountability for decision making regarding portfolio management. He reviewed the recommendations for the impact management consisting of: establishing mark -to -market and other valuation procedures, which will all oversight bodies a clear understanding of contracts performance on a short, medium, and long-term basis; establishing reporting guidelines for each level of wholesale contracts management oversight, from the GUS Electric Resource Management team to the City Council and customers; and setting appropriate target levels for rate stabilization fund and manage power cost adjustment to meet target levels by adjusting periodically. Moffit noted the one policy recommendation to develop and implement comprehensive risk management policy and that this policy, while not addressing past issues, will increase the probability of good power outcomes in the future. He noted the issues that need to be studied that were outside the scope of the Request for Proposal (RFP) as: to study the installation of separate governance structure for Georgetown Utility Systems; and study the potential implications to the existing power contracts related to a City in Opt -In scenario. Pitts thanked Moffit for the report and presentation. He asked about page 8 of the report and its reference to the City's excess energy and if the City in its current form has the expertise to manage the contracts. Moffit responded that there is some expertise, but not enough depth. He added that there is a lot that goes on in day to day management and a lot on the plates of those tasked with managing the contracts. Moffit stated that he did not feel that the City's external consultant had served the City well. Pitts noted the mention of improved reporting on page 25, section 2 and asked if there is enough staff to appropriately address this recommendation. Moffit responded that the report did not look at staffing, but there is probably a need for additional staff. He noted that the challenge in developing reports is the need for customization and suggested considering if the current staff is capable of knowing who needs to see what information in reports/reporting. Moffit added that and outside contractor would help provide some of these services and most likely be able to handle reporting. Gonzalez asked if the part of the issue with current staff was not lack of expertise, but not enough staff dedicated on a regular basis to this current issue, as no one was monitoring the market on a constant basis. Moffit responded yes, that is correct, but Council also needed to put the appropriate processes in place for people to have ownership of what they're doing. He added that is includes reviewing the Risk Management Policy and setting up the proper parameters in that policy to allow for quicker decision making. Gonzalez clarified the need to grant authority and delegation for quicker response to dynamic changes. Moffit responded, yes, that is correct. Nicholson noted the report's reference to multiple single points of failure and long-term solutions. She asked about short term needs and if Schneider provided solutions for the short-term, of if it was determined that staff was already addressing those appropriately to address items that might need triage. Morgan responded that there was already an RFP underway for a third -party manager. He added that staff would bring Council recommendations within the June timeframe. Morgan continued that there were already several things in place to address reporting and internal monitoring. He stated that adding a third -party will be very beneficial in addition to the Risk Management Policy, which is critical. Morgan continued that there are several things staff is preparing for Council this summer including a review for the opt -in and the potential for selling the utility. Fought stated that he appreciated the report and nothing in report that startles him. He added that Council is now acutely aware of issues and the report gives plenty of guidance to use to move forward. Fought said that he looks forward to next step and agrees that the LCRA decision is key, but so was long position strategy. Moffit responded that he had an appreciation for staff. He said that staff was very open and the Schneider group received all needed information. Mayor Ross asked about the rationale to not highlight long positions. Moffit responded that the long position will be addressed in executive session. Pitts asked about page 16 of report as it related to the need for outside staff, page 12 relating forecasting accuracy and what took so long to address these issues. Morgan responded that the challenge with purchase power was that FY2016 and FY 2017 were considered anomalies due to weather events. He added that another challenge is utility volatility in summer months combined with when the fiscal year closes. Morgan said this should have been identified earlier and wished that staff had identified the issues earlier. He continued that staff is now basing the budget on past experiences with a conservative outlook instead of forward market projections. Moffit stressed the importance of not basing the budget 100% on marketing reports. Pitts addressed the small amount of time spent on utilities by Council. He added that he would like a solution on how to spend more time addressing utilities. Pitts also stated that the General Manager of Utilities does more than just manage the contracts and at one point over the last few years was required to serve as Acting City Manager. Moffit responded that impactful reports will allow for actionable items that are meaningful for Council. Morgan added that discussing risk is critical. Gonzalez stated that receiving information from inside and outside experts is what Council relies on. He added that different interpretations of information are helpful, and Council should be dependent on others to provide the needed information to make sound and timely decisions. Gonzalez said that he doesn't want to micromanage GUS. Eby stated that what jumped out is the reporting and how context matters, which is an ongoing issue. She added that she didn't take from this that Council needs to become managers of electric utility, but instead need to be provided better information. Eby thanks Moffit for the report. Mayor Ross asked what the role of council when it comes to formulating policy. He added that Council is not electric experts and asked for clarification on what Council should look for related to policy. Moffit responded that the development and enhancement of the risk management policy, which will set parameters to direct staff on how to operate, will lead to Council being confident that what's in the policy can be utilized by staff to manage the contracts. He added that a strong policy will prevent the need for utility items to be on every Council agenda. Moffit said that large critical issues will come with more analysis to assist in decision making. Mayor Ross asked what the management structure looks like when you have independent third -parties weighing in to verify that Council is being provided accurate and good information. Moffit responded having multiple entities providing that information staff can utilize resources to come together and make a proper course of action. Mayor Ross asked about the possibility of a type of audit. Moffit responded that an energy management firm will be continually auditing positions and contracts. Mayor Ross asked if a third -party would have viewed FY2016 and FY2017 as anomaly years. Moffit responded that a third -party would have optimized contracts no matter what the environmental factors. He added that an energy management company would have continually tried to get some kind of return instead of waiting for a projected big payoff. Nicholson asked about the governance piece and how it would affect the GUS board. She inquired if Schneider's suggestions had been relayed to staff for implementation. Moffit responded that it had been discussed with staff at a high level, but a separate study is suggested. He added that they didn't develop any GUS Board changes into concrete recommendation. Moffit said that there are many different models that can be utilized to determine what it best for the City. Morgan added that a multi- step approach may be needed. He said that workshop in June staff will bring information on opt -in, the overall utility, and requirements for GUS board members and make-up of the board. Morgan said those would be the first steps, in additional to next steps that may include changing the governance structure. He added that it is a lot to consider. Mayor Ross recessed the meeting at 4:29 p.m. and Council went into Executive Session, Executive Session In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon's Texas Codes, Annotated, the items listed below will be discussed in closed session and are subject to action in the regular session. D. Sec. 551.071: Consultation with Attorney Advice from attorney about pending or contemplated litigation and other matters on which the attorney has a duty to advise the City Council, including agenda items - Litigation Update Sec. 551.072: Deliberations about Real Property - Sale of Property — 103 West 7th Street -- Travis Baird, Real Estate Services Manager Sec. 551.086: Certain Public Power Utilities: Competitive Matters - Purchased Power Update Sec. 551:074: Personnel Matters City Manager, City Attorney, City Secretary and Municipal Judge: Consideration of the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal ---- ------------- Approved by the Georgetown City Council on K&Ao CO Date Dale Ross, Mayor Attest: L ty Secretary