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2015-05-14 Business and Industry Commission Agenda PacketCalifornia Public Records Act ("PRA"): In compliance with the PRA, the documents pertaining to agenda items, including attachments, which are presented to the Commission in open session are available for public inspection. They may be inspected during regular business hours in the Office of the City Clerk at Vernon City Hall, 4305 Santa Fe Avenue; Vernon, California 90058, no appointment necessary, and on the City’s website at www.cityofvernon.org. Americans with Disabilities Act (“ADA”): In compliance with the ADA, if you need special assistance to participate in the meeting, please contact the Office of the City Clerk at (323) 583-8811. Notification of at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service. Agenda Regular Vernon Business and Industry Commission Meeting Thursday, May 14, 2015, 9:00 a.m. Council Chamber 4305 Santa Fe Avenue Vernon, California W. Michael McCormick, Chairperson Eric Gustafson, Vice Chairperson Brett Dedeaux, Commission Member Ken Jackson, Commission Member Doug Pittman, Commission Member Stan Stosel, Commission Member Robert Wendoll, Commission Member CALL TO ORDER & FLAG SALUTE CHANGES TO THE AGENDA PUBLIC COMMENT - At this time the public is encouraged to address the Commission on any matter that is within the subject matter jurisdiction of the Commission. The public will also be given a chance to comment on matters which are on the posted agenda during deliberation on those specific matters. MINUTES – To be received and filed. 1. Minutes of the Special Business & Industry Commission Meeting held February 12, 2015. 2. Minutes of the Special Business & Industry Commission Meeting held April 18, 2015. / / / / / / Regular Vernon Business and Industry Agenda May 14, 2015 Page 2 of 2 NEW BUSINESS 3. Recommendation for a three year electric rate adjustment to City Council at its regularly scheduled meeting on May 19th. Recommendations A. Find that approval and adoption of the proposed recommendation is exempt under the California Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment; and B. Approve and support the recommendation of the Director of Vernon Gas & Electric for a three- year electric rate adjustment plan, whereby rates would increase by 3.5% effective July 1, 2015, an additional 3% effective July 1, 2016, and an additional 2.5% effective July 1, 2017. The Director intends to present this recommendation to the City Council on May 19, 2015. ORAL REPORTS 4. Brief reports on activities, other brief announcements, and directives to staff. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Vernon City Hall, located at 4305 Santa Fe Avenue, Vernon, California, and on the City’s website, not less than 72 hours prior to the meeting set forth on this agenda. Dated this 11th day of May 2015. By: ________________________________ Maria E. Ayala, Secretary MINUTES OF THE SPECIAL VERNON BUSINESS AND INDUSTRY COMMISSION MEETING OF THE CITY OF VERNON HELD THURSDAY, FEBRUARY 12, 2015, AT 9:00 A.M. IN THE CITY HALL COUNCIL CHAMBER, LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA MEMBERS PRESENT: W. Michael McCormick, Eric Gustafson, Ken Jackson, Douglass Pittman, Stan Stosel, and Robert Wendoll (partial) MEMBERS ABSENT: Brett Dedeaux The meeting was called to order at 9:00 a.m. Secretary Maria E. Ayala led the flag salute. There were no changes to the agenda. PUBLIC COMMENT It was announced that this was the time allotted for public comment. There was no public comment. INTRODUCTORY ITEMS 1. Self-introductions by all Vernon Business and Industry Commission members. Present Commission members made self-introductions. 2. Election of Chairperson and Vice Chairperson to serve until the next annual election. It was moved by Commissioner Stosel and seconded by Commissioner Pitman to nominate McCormick as the Chairperson. With no other nominations, motion carried, 5-0; Commissioner Wendoll had not yet entered the meeting. It was moved by Chairperson McCormick and seconded by Commissioner Stosel to nominate Gustafson as Vice Chairperson. With no other nominations, motion carried, 5-0; Commissioner Wendoll had not yet entered the meeting. Self-introductions of City staff were conducted. 3. Review of the Conflict of Interest Code and Rosenberg’s Rules of Order by the City Attorney. City Attorney/Commission Counsel Hema Patel conducted the oral presentation. Special Vernon Business and Industry Commission Meeting Minutes February 12, 2015 Page 2 of 3 At 9:16 a.m., Commissioner Wendoll entered the meeting. 4. Staff Explanation of Meeting Stipends pursuant to Vernon Municipal Code Section 2.182. City Finance Director/Committee Treasurer William Fox conducted the oral report. 5. Resolution No. VBIC-1 - A Resolution of the Vernon Business and Industry Commission of the City of Vernon setting the date, time and place for regular meetings. Recommendation: (1) Find that adoption of the proposed resolution does not constitute a “project” pursuant to section 15378(b)(2) of the Guidelines to the California Environmental Quality Act (“CEQA”), because it constitutes an administrative activity; and even if the adoption of the proposed resolution did constitute a project, it would be exempt from CEQA in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment; and (2) Select a day and time in which members are available to hold regular meetings on the second week of the following months: February, May, August, and November; and (3) Subsequently, adopt a resolution to set the Vernon Business and Industry Commission regular meeting schedule incorporating the Commission’s selection of the specific day and time. Deputy City Clerk Ana Barcia reported on the proposed schedule. It was moved by Commissioner Wendoll and seconded by Vice Chairperson Gustafson to establish the second Thursday at 9:00 a.m. of the following months: February, May, August, and November, as the regular meeting schedule; and subsequently approve Resolution No. VBIC-1, incorporating said schedule. Motion carried, 6-0. PRESENTATIONS 6. Staff overview of Vernon’s historical and current business/industrial landscape and objectives. Economic Development Manager Alex Kung conducted the presentation. 7. Staff review of Commission duties and responsibilities in accordance with Vernon Municipal Code Section 2.179. Economic Development Manager Alex Kung conducted the presentation. Special Vernon Business and Industry Commission Meeting Minutes February 12, 2015 Page 3 of 3 ORAL REPORTS 8. Brief reports on activities, other brief announcements, and directives to staff. Director of Public Works, Water and Development Services Kevin Wilson provided an update on proposed amendments to the zoning ordinance. In response to Vice Chairperson Gustafson and Member Jackson, Wilson further clarified the zoning ordinance. Wilson reported on the two public workshops for the proposed zoning ordinance amendments. It is anticipated that the proposed amendments will be placed on the March 17, 2015 agenda for Council consideration. In response to Commissioner Stosel’s request for clarification on the Commission’s intent and purpose, Economic Development Manager Alex Kung further explained. In further response to Commissioner Stosel, Counsel Hema Patel explained potential conflicts for certain items, and reasoning for which certain items will not be part of the Commission’s purview. Vice Chairperson Gustafson stated that goals, providing guidance for the Commission, as well as a focus would be beneficial. With no further business, Chairperson McCormick adjourned the meeting at 9:57 a.m. _______________________________ W. Michael McCormick, Chairperson ATTEST: _________________________ Maria E. Ayala, Secretary MINUTES OF THE SPECIAL VERNON BUSINESS AND INDUSTRY COMMISSION MEETING OF THE CITY OF VERNON HELD TUESDAY, APRIL 28, 2015, AT 3:00 P.M. IN THE CITY HALL COUNCIL CHAMBER, LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA MEMBERS PRESENT: W. Michael McCormick, Brett Dedeaux, Ken Jackson, Douglas Pittman, Stan Stosel, and Robert Wendoll MEMBERS ABSENT: Eric Gustafson The meeting was called to order at 3:08 p.m. by Commissioner Pittman who also led the flag salute. There were no changes to the agenda. PUBLIC COMMENT Marisa Olguin (Vernon Chamber of Commerce). Ms. Olguin commented on the businesses’ concerns over potential rate increases, and requesting the City look into potential ways of absorbing these rates. Recommended that the Commission recommend to the City Council to have another “Kosmont Cost Analysis” conducted, as the last one was done in 2007. She provided copies for the Commissioners. INFORMATIONAL ITEMS 1. City of Vernon’s Electric Rates Economic Development Manager Alex Kung briefly introduced the topic. Mr. Kung introduced Carlos Fandino, Director of Gas and Electric Department, and Bill Fox, Director of Finance who provided a PowerPoint presentation regarding the proposed rate adjustment. Chairperson McCormick and Commissioner Dedeaux arrived at the meeting at 3:17 p.m. during the PowerPoint presentation. The Commission had several questions that included, but were not limited to: general economic conditions; requests for data comparing Vernon utilities to other comparable agencies; stability for the next few years; dissemination of financial information; etc. Mr. Fandino and Mr. Fox responded to the questions. At this time Chairperson McCormick asked for public comment. Steve Freed (Mt. Vernon LLC). Mr. Freed commented and expressed concerns regarding the following: increased expense of generating power; questions regarding the issuance of debt and the bond ratings. Mr. Fox and Mr. Fandino addressed questions. Vernon Business and Industry Commission Meeting Minutes April 28, 2015 Page 2 of 2 Bob Gutterman (Crown Poly, Inc.). Mr. Gutterman agreed that a comparison study should be conducted and Vernon should benchmark itself against other local utilities; requests that the history of rate increases be looked at; commented that (as having served on the Ad Hoc Advisory Committee on Electric Rates (“ERC”)), the City was asked to look at cutting back on transfers to the general fund; etc. Marisa Olguin (Vernon Chamber of Commerce). Ms. Olguin provided history about the prior work of the ERC; questions on the justification of need for future rate increases; and a question on the gas hedge fund; etc. Mr. Fandino responded accordingly. ORAL REPORTS 2. Brief reports on activities, other brief announcements, and directives to staff . Economic Development Manager Alex Kung announced that the next regularly scheduled meeting of the Commission will be held on May 14. Commissioner Freed commented on the following: being at the “mercy of the market” on utilities; retaining the Tehachapi property; and thanked everybody for their public comments. Commissioner Wendoll asked if Mr. Fox or Mr. Fandino would like to address or respond to any of the public comments. Mr. Fox and Mr. Fandino both responded that additional information will be provided at the next meeting addressing various questions. With no further business, Chairperson McCormick adjourned the meeting at 4:39 p.m. ________________________ W. Michael McCormick Chairperson ATTEST: _________________________ Maria E. Ayala City Clerk REGE;VED MAY I 1 2015 CIIY CLERK'S OFFICE STAFF REPORT CITY ADMINISTRATION DATE: TO: FROM: RE: May 14,2015 Honorable Chairperson and Members of the Vernon Business and Industry Commission Mark C. Whitworth, city Administrator t\It't^t/re Originator: Alex Kung, Economic Development Manager Recommendation for a three year electric rate adjustment to City Council at its regularly scheduled meeting on May 19th Recommendations A. Find that approval and adoption of the proposed recommendation is exempt under the California Environmental Quality Act ("CEQA") in accordance with Section 15061(bX3), the general rule that CEQA only applies to projects that may have a significant effect on the environment. B. Approve and support the recommendation of the Director of Vernon Gas & Electric for a three-year electric rate adjustment plan, whereby rates would increase by 3.5% effective July 1, 2015, an additional3Yo effective July 1, 2016, and an additional 2.5%o effective July 1, 2017. The Director intends to present this recommendation to the City Council on May 19,2015. Background On April 28,2015, the Vernon Business and Industry Commission (Commission) held a special meeting to discuss future rate adjustments. The Director of Vernon Gas & Electric (VG&E) and the City Finance Director conducted a PowerPoint presentation on Vernon's electric rates, the rate making process, and proposed adjustments for future fiscal years. The presentation also discussed the City's current efforts to provide immediate rate relief by refinancing VG&E's electric system revenue bonds. During the meeting, the Commission requested additional historical information and rate comparison data to further assist in the deliberation and consideration of the proposed rate adjustments. In response to the Commission's request, the Director of VG&E and the Finance Director will presenl additional information at the May l4th meeting. At that meeting the Commission's recommendation(s) and/or feedback regarding Page 1 of2 VG&E's proposed electric rate adjustments will be received by City staff and presented to the City Council at its meeting on May 19,2015. Fiscal Impact None Attachment(s) None Page2 of2