HomeMy WebLinkAbout2001 - MINUTES - 3/14/2001 - STUDY SESSIONStudy Session Minutes
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STUDY SESSION
CITY OF PALM SPRINGS
March 14, 2001
CONVENE IN OPEN SESSION
A. Call Back to Order-Large Conference Room
B. Flag Salute
C. City Attorney Report on Matters Discussed in Closed Session-See Page 2 of
Agenda this date.
D. Public Comments
Ralph Hitchcock, electricity consultant, stated that there has been much written
regarding the power situation in California; that some thing that the crisis is not
real or a fact; that it is a problem; that the blackouts of the summer and winter of
2000 were facts; that the coming summer of 2001 will be worse; that there are
severe power problems in the State; that Assemblyman Kelly is concerned on
having power to sustain his ranch; that advisories have been issued that this
summer there may be 12-20 hours of interruptive power; that the rolling
blackouts should only last 1-1 ½ hours in duration; that power plants are deficient
in the State; that the issue will be who goes out and for how long; that for the
past 10 years no additional power plants have been built in the State; that
deregulation caused the power company to sell off its generating plants; that the
plants were not thought to be needed; that some of the plants shut down were
among the worse polluting; that now that the demand is greater, those polluting
plants are being brought back on line; that the proposed peaker plant in Palm
Springs is sorely needed; that the economy is suffering due to electricity needs
and projections; and requested support of the proposal.
Fred Noble, requested support be given to the peaking plant proposal; that the
State is preempting procedures to get the plants up and operational; that while it
is true the energy can not be directed to Palm Springs, the grid will get more
electricity provided and may prevent as many blackouts that are being projected.
Bob Hren, Intergen, stated that the company is based in Boston; that the
company is a developer of power plants; that the company stands ready to assist
California in its solution to electricity needs; that the equipment built by the
company is environmentally responsible and has low emissions; that the
company will work closely with the Community and the State to meet its
guidelines; that the company responded to the State’s need through the bid
process; that the Wildflower Energy Project is in Palm Springs and there will also
be a project in San Diego; that the City will derive tax revenue from the project;
that it is project to produce $1,000,000 ad valorum; and that the company will
endeavor to work closely with the Community to meet any concerns.
Miles Barrett, stated that the City should support the project; that there is a
problem with electricity in the State; that there are three peaking plants being
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proposed; that two will be in the Palm Springs area and one in San Diego; and
that the urgency for the project is factual.
Ron Miller, 1750 Sharon Road, stated that the City Attorney did misstate
information to the media; that the information is admissible as evidence during
trial; that the City promised Kathy Wile to assist financially in purchasing of
property; that the escrow was stopped on the deal; that the credibility of Palm
Springs is falling; that his own family is in need of a place to live and to locate the
business; that the family can not move until a place is found where they can live
and operate their business.
E. COUNCIL COMMENTS/QUESTIONS/REPORTS
Councilmembers commented on various civic functions attended.
Councilmember Reller-Spurgin questioned if the City had completed the financial
transactions with Mr. Miller; and added that the City Manager should schedule
Kay Hazen to give a presentation regarding energy.
Councilmember Hodges requested the median on Vista Chino and Sunrise be
weeded and that the City needs to look into how the median can be maintained.
F. CITY MANAGER COMMENTS
City Manager stated that there were five finalists for the James O. Jesse Desert
Highland Community Center manager’s position; that telephone interviews will be
conducted and a decision forthcoming; and that item 3 is withdrawn.
G. STUDY SESSION
1. PALM SPRINGS DISPOSAL
City Manager stated that the item being reviewed is on a time line; that the
Company is desiring to purchase CNG trucks; that the contract between the
parties has a term ending 2002; that the City Manager’s office has not received
any complaints related to service; that the company is a local business; that there
are some economic indicators that will result in possible rate reduction; that one
proposal is a two tiered schedule; that one tier will allow once a week trash
pickup from the curb; that an audit of the companies books is being proposed to
evaluate the profit of margin; that other Cities do have varying rates; that the
rates are indicative of the service; and that Rancho Mirage’s rate also reflect a
waiver of the franchise fee.
Director of Economic Development reviewed the handout attached and stated
that the City of Palm Springs also receives free service to its facilities; that the
service equals approximately $340,000 per year; that there are other fees
included in the billing for the consumer; that the recycling fee is one; that the
recycling program is allotted approximately $96,000 per year; that the funds
cover salaries, ABOP expanded services, educational programs and workshops
and the like; that of the $96,000 approximately $30,000 is spent on programs,
and the rest is salaries; that the fund is expended each year; that the consumer
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pays .55 cents for the program; that hazardous waste is another issue addressed
with the funding; that the 8.50 fund is banked to be used for a possible MERF
plant; that there are no additional funds needed in that fund at this time; that
there is $2 million in the fund at this time; that the goal is to provide a lesser rate
to the consumer; that in answer to questions by Council a greater breakdown of
the possible reductions and the ramifications can be provided.
Mayor stated that there could be some big hits in the reductions; that we need to
see if a rate can be fixed, or if there could be percentage reductions; that the
Council needs to know if something is reduced, what the impact will be not only
financially but also with service.
Councilmember Oden stated that there are two issues, one is needed to give
direction concerning PSPD and the other is further discussion and research on
reduction impacts; and questioned how may companies were reviewed for like
profit margins.
Director of Economic Development stated that the figures for profit margins were
complied by Dunn & Bradstreet.
Councilmember Oden questioned if staff verified the numbers presented by
PSDS.
Director of Economic Development stated that staff did work somewhat with
PSDS for the financial figures; that an audit of the books would be the real
measuring tool; that there are many ways to figure profits, with or without owners
compensation that does make a difference in the bottom profit; that PSDS does
indicate they are within the median profit margin; but that an independent audit is
needed.
City Manager stated that the City would be instrumental in control of the audit.
Councilmember Oden stated that it is time to start the process to determine and
to assure the consumer that a fair rate is being charged, and that a fair rate of
return is being given to PSDS; that the process of determination should not take
18 months to complete; that these type of negotiations seem to drag on forever;
that we need to move forward and do the audit.
City Manager stated that the audit would take 2 – 3 months; that the next step
would be for Council to determine if it is satisfied with the two tiered system
proposed; that if the audit indicates that the City could do better with another
hauler, the Council can consider its options at that time.
Councilmember Hodges stated that the Desert Sun always ridicules Palm
Springs rates for trash hauling; that it is time to review the rates and that it may
be that a survey could be done to see if the citizens want all the services that we
are at this time providing within the trash billings.
City Manager stated that the presentation was not meant to suggest or
recommend that the Council discontinue the franchise fee; that we do need the
fee to provide a standard level of service; that the figure was included to indicate
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the types of service the City does provide and the cost of those services; that if
the franchise fee is removed, it will be a direct hit to the General Fund, and
ultimately something else will suffer.
Mayor directed that the information requested regarding the possible reductions
listed on page 5 of the handout be detailed and returned for Council discussion in
two weeks.
2. ENERGY COST BUDGET ADJUSTMENTS
City Manager gave an overview on the increasing prices of energy costs; and
added that currently we are $900,000 in a deficit for the costs; that a plan has
been prepared for Council consideration to remedy the deficit; and that if Council
desires, the matter could be schedule for consideration at its next meeting.
Councilmember Hodges questioned how much fund balance would be if the
funds were transferred.
Director of Finance & Treasurer stated that there are fund balances in a number
of accounts that could be transferred; that the General Fund Reserves would
take a hit of approximately $181,000; and that the rising costs were not
foreseeable; and added that the long term purchase order the City Manager
entered into will at least give the City stability in prices for the next 18 months.
Mayor commented that natural gas also runs peaker plans
ADJOURNMENT