HomeMy WebLinkAbout2000-03-20 City Council (16)City of Palo Alto
C ty Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:MARCH 20, 2000 CMR:171:00
TITLE:CLARIFICATION OF UTILITIES DIRECTOR AUTHORITY
UNDER MUNICIPAL CODE TO SELL AND PURCHASE
COMMODITIES AND ORGANIZATION
RECOMMENDATION
Staff recommends that the Council adopt an Ordinance of the Council of the City of Palo
Alto amending section 2.08.200 of Chapter 2.08 of title 2 of the Palo Alto Municipal Code.
relating to the Department of Utilities and the duties of the Director of Utilities.
BACKGROUND
As the City’s electric and gas utilities are exposed to competitive forces, the City is closely
examining any risks it may hold in its utilities enterprise operation.
A review of relevant sections of Palo Alto’s Municipal Code (PAMC) revealed certain
ambiguities related to the provision of energy to meet the needs of Utilities customers as well
as areas that needed to be updated to conform to current practice. Amending these code
sections, although perhaps not legally necessary, is recommended to remove any legal
ambiguities that might be present. All the proposed changes can be characterized as "clean-
up" provisions.
DISCUSSION
Staff identified three general areas that were unclear or outdated in the PAMC Section
2.08.200, Department of Utilities, related to authorities of the Utilities Director. These three
are: 1) ambiguous authority to sell commodity; 2) unimplementable test of Utilities Director’s
responsibility for purchasing commodity; and 3) description of the Utilities Department
organizational arrangement.
CMR:171:00 Page 1 of 3
Authori .ty to sell commodities: The Municipal Code, as currently written, expressly allows
the City Manager to buy power for up to three years at one time. However, it does not
expressly authorize the sale of power under identical circumstances. As there are times
when, in conducting normal Utilities business, supplies are in surplus and must be sold, staff
believes that the intent of the Municipal Code is that the City Manager has the authority to
meet the commodity needs of the Utilities customers for terms of up to three years. This
means the City Manager’s authority to buy includes, as an incident thereto, the authority to
sell. The proposed ordinance resolves any outstanding ambiguities that may exist.
Utilities Director’s responsibility for purchasing commodity: The Municipal Code currently
has a test for the Utilities Director to purchase supplies at the "lowest possible" price.
However, this is an impossible test to meet as there may be a price in the market place that
is better than the one negotiated and it is impossible to audit such a transaction. The historical
rationale for the requirement to acquire resource supply at the "lowest possible price" is
unknown and is incongruent with current practice. The modification to "best available price"
reflects the purchasing principies under which staff has operated.
Reorganization of the Utilities Department: The proposed change to Section 2.08.200 (b) simply
reflects the current organization of the Utilities Department.
Clean-up Provisions: A number of other minor changes are recommended to update the
Municipal Code to better reflect current practices. Most of these changes are nonsubstantive
but make the language cleaner or more accurate when describing Utilities Department
functions.
RESOURCE IMPACT
Adoption of the proposed ordinance amending PAMC may reduce the risks inherent in
conducting business, thus mitigating potential negative fiscal impacts.
POLICY IMPLICATIONS
No new policies are implied by the adoption of the proposed ordinance.
characterized as "clean-up" -provisions.
They can all be
ENVIRONMENTAL REVIEW
Approval of the proposed policy and procedures does not constitute a project under the
California Environmental Quality Act and, therefore, is exempt from the environmental
assessment requirement
CMR: 171:00 Page 2 of 3
ATTACHMENTS/EXHIBITS
1.Resolution
2.Ordinance of the Council of the City of Palo Alto amending section 2.08.200 of
Chapter 2.08 of title 2 of the Palo Alto Municipal Code relating to the Department
of Utilities and the duties of the Director of Utilities
PREPARED BY: Jane Ratchye, Senior Resource Planner
REVIEWED BY: Girish Balachandran, Supply Resources Group Manager
of Utilities
CITY MANAGER APPROVAL:
CMR:171:00 Page 3 of 3
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING SECTION 2.08.200 OF CHAPTER 2.08 OF
TITLE 2 OF THE PALO ALTO MUNICIPAL CODERELATING
TO THE DEPARTMENT OF UTILITIES AND THEDUTIES OF
THE DIRECTOR OE UTILITIES
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION 1 Section 2.08.200 of the Palo Alto Municipal
Code is hereby modified to read, as follows:
"2.08.200 Department of Utilities.
(a) The department of utilities shall be
organized and administered under the direction of
a director of utilities who shall be accountable
to the city manager. The duties of the director
of utilities shall be as follows:
(I) To plan, direct and coordinate the
operations of the city’s utilities department;
(2) To coordinate the forecasting of ~
9rl~em~the city’s long-range utility needs and
develop plans to ensure that the city’s utilities
rate and revenue levels will be able to meet
customer ....~--’ ..........operatinq and~i~ ±~ ~ ~ ~ ~l-n~s ervl ce,
financial requirements;
(3) To provide-administrative support for
the utilities advisory commission on matters
relating to the department;
(4) To generate appropriate reports as may
b_____e required by county, state and federal agencies
or by law;
(5) To operate a responsive customer service
center, to manage customer service utilities
billing, inquiries and complaints and to provide $
fast and courteous response to each customer’_____s
request~ for utility service;
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(6) To establish rates to offset operating
costs of all city utility operations desiqnated as
utilities enterprise funds and to provide a fair
and reasonable rate of return on the city’s
capital .improvement investment in those utilities
designated as utilities enterprise funds;
.(7) To maintain ~ profitable market share i~_n
the existinq competitive enerqy marketin~
environment by retaining existing electric and qas
utilities customers and seeking new, efficient
uses for gas, water and electricity;
(8) To provide technical or other
efficiency services to enable residential,
commercial and industrial utilities customers to
reduce their operating costs, improve the quality
of the environment and maintain a high level of
customer satisfaction;
(9) To forecast and plan the acquisition and
disposition of sufficient least-cost resource
supplies to meet existing and future supply
requirements in an environmentally acceptable
manner;
(I0) To negotiate for the purchase and sale
of water, gas and electricity and contract with
water, gas and electric power producers, suppliers
and marketers for resource supply at the~
possible best available price or cost;
(ii) To recommend capital construction and
improvements of all utility systems,and to
administer such programs when approved;
(12) To inspect all construction work done by
or for the utilities and require compliance with
all contracts made in connection therewith;
(13) To prepare or cause to be prepared all
utility maps of the utilities, and to keep and to
maintain such records as are necessary for the
fulfillment of this function;
(14) To provide operations, maintenance, and
construction necessary to ensure th___~e safe,
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efficient and reliable delivery of electric ~,
water, gas and wastewater collection services to
all customers;
(15) To provide operations, maintenance, and
construction necessary to ensure the proper
operation of the city’s traffic signal, street
lighting and communication systems;
(16) To perform or cause to be performed all
duties required by this code or other law of the
~ical enginee~director of utilities and
the department of light and power~utilities; and
(17) To perform such other duties as may be
required.
(b) For organizational purposes, the
department of utilities shall consist of the
following divisions or functions: administration;
administrative services; resource management;
engineeringT and operations; telecommunications;
and public relations "
SECTION 2. The City Council hereby finds that this
ordinance is exempt from the provisions of the California
Environmental Quality Act pursuant to Section 15061(b) (3) of the
California Environmental Quality Act Guidelines, because it can be
seen with certainty that there is no possibility of significant
environmental effects occurring as a result of the adoption of this
ordinance.
SECTION 3.
commencement of
adoption.
//
This ordinance shall become effective upon the
the thirty-first day after the date of its
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INTRODUCED:
PASSED:
AYES:,
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
City Manager
Director of Utilities
APPROVED:
Mayor
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