VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, July 7, 2003
Time: 2:00 P.M.
Place: Board Room
29300 Valley Center Road
Valley Center, CA 92082
The Valley Center Municipal Water District Board of Directors’ meeting was called to order by President Broomell at 2:00 P.M.
ROLL CALL
Board members present were: Directors Broomell, Polito, Aleshire, Haskell and Stone. Staff members present were: General Manager Arant, General Counsel Cowett, District Engineer Jewell, Director of Operations Dacus, Director of Finance Jeffrey, Meter Services Supervisor Jones, Project Manager Williams, Project Engineer Grabbe, and Board Secretary Stetson. Spectator present was Mr. David Ross, Valley Roadrunner newspaper.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held June 16, 2003
• Concept approval of the Husted Place Water Main Extension Project consisting of approximately 1,750 feet of 8 inch water main, three 6 inch fire hydrants, five one-inch water services and other required appurtenances
• Audit demand check numbers 94504 through 94741 and wire disbursements for the period April 1 through June 30, 2003
• Treasurer’s Report for the period ended May 31, 2003
PUBLIC HEARING
2. Public Hearing to Consider Proposed Meter Capacity Charges:
President Broomell opened the public hearing at 2:07 p.m. to discuss the proposed increases in the District’s meter capacity charges. General Manager Arant explained that meter capacity charges, a component of the cost for a new water meter installation, are collected and allocated toward construction of capital projects that provide supply capacity for new developments. In compliance with AB 1600, a compliance report was prepared identifying the nexus between the cost of the additional facilities identified in the Master Plan to supply water to vacant/non-water using property and funding of these improvements through the meter capacity charges. The District’s meter capacity charges were proposed to be increased by the change in the Engineering News Report, Los Angeles Construction Cost Index, between July 2002 and May 2003, or 1.63%, to be effective September 8, 2003, as follows:
Meter Size Current Charge Proposed Increase Proposed Charge
¾” $ 1,800 $ 30 $ 1,830
1” 3,060 50 3,110
1-1/2” 5,940 100 6,040
2” 9,540 160 9,700
3” 18,000 300 18,300
Director Aleshire expressed his concern regarding increases in the cost for a new meter installation which further add to the cost of housing in the region. He expressed that a review of operational efficiencies could contain costs for the District’s services. It was noted that the District’s meter capacity charges are among the lowest in the county and fund the prorated share of capital facilities such as reservoirs, pumping stations and pipelines needed to provide service to new meter services rather than collecting the revenue through the water rates.
The proposed increases in the District’s meter capacity charges had been published and posted. No written communication was received and there were no comments from the audience. The public hearing was closed at 2:10 p.m.
Upon motion by Stone and seconded by Polito, the following ordinance, entitled:
ORDINANCE NO. 2003-08
ORDINANCE OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING ADMINISTRATIVE CODE SECTION 160.4(c)
INCREASING METER CAPACITY CHARGES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Stone and Haskell
NOES: Director Aleshire
ABSENT: None
3. Public Hearing to Consider Changes in the District’s Meter Connection Charges:
Meter connection charges are collected to reimburse the District for labor, equipment and material costs associated with purchasing and installing the meter and meter connection. The public hearing to discuss the proposed changes to the District’s meter connection charges was opened at 2:12 p.m.
A review of actual costs to complete a meter installation including the meter, material and equipment and labor expenses for each size and type of installation, as well as consideration of material and labor costs anticipated during the fiscal year resulted in the following proposed changes to the District’s Meter Connection Charges:
Meter Size/Installation Current Cost Proposed Increase Proposed Cost
¾” Full Installation $1,562 $238 $1,800
¾” Drop In $290 $20 $ 310
1" Full Install $1,688 $197 $1,885
1" Drop In $373 -$ 33 $340
1½” Full Install $2,245 $155 $2,400
class=Section2>
1½” Drop In $898 $37 $935
2" Full Installation $2,389 $171 $2,560
2" Drop In $981 $29 $1,010
3" Full Installation $3,301 $89 $3,390
3" Drop In $1,232 $298 $1,530
1” Residential Fire
Sprinkler Meter Tee N/A N/A $100
(New Charge)
Director Aleshire reiterated that an efficiency study of the District’s operations may result in savings through automation and procedural changes that could contain increases in costs of service. President Broomell stated that operational efficiencies are evident as the District’s water rates are among the lowest in the county and questioned the benefit of conducting an efficiency study.
General Manager Arant reported that the proposed changes to the District’s meter connection charges had been posted and published in the Valley Roadrunner newspaper. Said charges would become effective September 8, 2003. No written communication on the proposed changes was received and there were no comments from the audience. The public hearing was closed at 2:18 p.m.
Upon motion by Polito and seconded by Stone, the following ordinance, entitled:
ORDINANCE NO. 2003-09
ORDINANCE OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING ADMINISTRATIVE CODE SECTION 160.4(a)
TO PROVIDE FOR CHANGES IN METER CONNECTION CHARGES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Stone and Haskell
NOES: Director Aleshire
ABSENT: None
ACTION AGENDA
4. Request for Award of Contract for the Hillcrest Avenue Pipeline Extension Project:
Project Manager Williams stated that bids for the Hillcrest Avenue Pipeline Extension project were opened on June 24th. This project will replace an existing pipeline in Hillcrest Avenue (Jesmond Dene area) that is inadequate for current demands and will complete a loop to further enhance water reliability in the area. The pipeline project consists of 750 feet of 8-inch PVC pipe, 6 meter service relocations, miscellaneous appurtenances, and two connections to the existing pipe.
An initial budget had been $86,000 for this project with an increase in Fiscal Year 2003-04 allocating an additional $75,000 in anticipation of increased construction costs due to the high potential of rock, limited right of way and contractor work area, the project’s small size, test water discharge, permits and testing requirements and the maintaining of water service to customers during construction.
Four bids had been received with the lowest submitted by Montijo Backhoe Service at $88,415 and the highest from Zondiros Corp. at $177,118. The Engineer’s estimate (R.W. Beck) had been $60,000. The low engineer’s estimate may be attributable to not calculating the cost impacts from working in a limited work area with residential development and that it is a small project with no economies of scale. An engineer’s estimate gives contractors preliminary information on a project and can affect a contractor’s bid. An estimate also provides a basis for the District’s evaluation of bids. It was noted, however, that a small project with the various issues identified can be difficult to estimate. A comparison of the variances between the low bids received on projects to the engineers’ estimates indicated that since the beginning of Fiscal Year 2001-02, the difference has ranged from -16% to +13%. The average variance in Fiscal Year 2001-02 based on the total amounts was 3.92%. The Board’s dissatisfaction with R.W. Beck’s estimate of the Hillcrest Avenue Pipeline Extension project will be conveyed. Staff recommended award of contract to Montijo Backhoe Service as the proposed pipeline extension will improve water reliability, quality and fire flows to the area.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-24
RESOLUTION OF THE BOARD OF DIRECTORS
OF VALLEY CENTER MUNICIPAL WATER
DISTRICT AWARDING CONTRACT FOR THE
HILLCREST AVENUE PIPELINE EXTENSION
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
5. Administrative Code Amendment to Clarify Contractor Bonding Requirements for Public Works Contracts:
Approval of Ordinance No. 2003-10 was recommended to establish a section in the District’s Administrative Code Article 140, “Regulations Governing Purchases, Contracts and Sales”, to address bonding requirements for construction and service contracts per the public contract code. As proposed, bonds for public works contracts shall be required of contractors, as follows:
Contract Amount |
$0 to $25,000 |
$25,000 to $35,000 |
$35,000+ |
Bid Bond (10%) |
Not Required |
Not Required |
Required |
Payment Bond (100%) |
Not Required |
Required |
Required |
Performance Bond (100%) |
Not Required |
Required |
Required |
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2003-10
ORDINANCE OF THE BOARD OF DIRECTORS
OF VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING ADMINISTRATIVE CODE ARTICLE 140
TO ESTABLISH BONDING REQUIREMENTS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
6. Request for Approval to Reject Bids Received for the Modular Building’s Multi-Media and Intrusion Detection System Installation:
Project Engineer Grabbe reported that bids had been opened on June 26th for the new modular building’s multi-media and intrusion detection system installation and requested rejection of all bids in order to re-bid with revisions to the scope of the project related to component modifications, clarifications and scope deletions. Upon modification of the plans and specifications, the project could be re-bid.
Upon motion by Aleshire, seconded by Polito and unanimously carried, bids for the modular building’s multi-media and intrusion detection system installation received on June 26, 2003, were rejected and staff was directed to re-bid the project once the plans and specifications are modified.
7. Adoption of Memorandum of Understanding with Employees for Fiscal Year 2003-04 Through 2007-08 and Approval of Related Administrative Code Modifications:
Resolution No. 2003-25 was presented for the Board’s consideration which approves the Memorandum of Understanding with the Valley Center Municipal Water District’s Employees’ Association for Fiscal Year 2003-04 through Fiscal Year 2007-08. Ordinance No. 2003-11 to incorporate the changes approved in the adopted Memorandum of Understanding in the District’s Administrative Code was also presented. In addition, changes in job classifications to establish steps (I, II, III and senior) for two existing single class positions, the Human Resources Assistant and the Electrical Facilities Technician, were recommended. The changes in job classifications do not add any new authorized staff positions.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-25
RESOLUTION OF THE BOARD OF DIRECTORS OF
THE VALLEY CENTER MUNICIPAL WATER DISTRICT
APPROVING THE MEMORANDUM OF UNDERSTANDING
WITH THE VALLEY CENTER MUNICIPAL WATER DISTRICT
EMPLOYEES’ ASSOCIATION FOR FISCAL YEAR 2003-2004
THROUGH FISCAL YEAR 2007-2008
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2003-11
ORDINANCE OF THE BOARD OF DIRECTORS OF
THE VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING THE ADMINISTRATIVE CODE TO INCOR-
PORATE CHANGES APPROVED IN THE ADOPTED
MEMORANDUM OF UNDERSTANDING WITH THE
VALLEY CNTER MUNICIPAL WATER DISTRICT
EMPLOYEES’ ASSOCIATION AND TO PROVIDE
CHANGES IN THE ORGANIZATIONAL CHART
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8. Approval of Investment Management Agreement with California Bank & Trust:
Director of Finance Jeffrey explained that, at present, the District’s investments are primarily held with Prudential Securities and the State of California’s Local Agency Investment Fund (LAIF). Declining interest rates have caused investments acquired by the District to be called by the issuer usually within 6 months.
Authorization to enter into an investment management agreement with California Bank & Trust would diversify the District’s investment funds. Through the agreement with California Bank & Trust, authorization would be given for the bank to invest and sell assets in the District’s account per the District’s established investment policy guidelines. Approximately one-third of the District’s investment funds would be invested with the California Bank & Trust’s Wealth Management Group, with one-third remaining with LAIF and one-third with the staff directed investments at Prudential Securities. The investment management services fees with California Bank & Trust are .25% per year.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-26
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AUTHORIZING AN INVESTMENT MANAGEMENT
AGREEMENT WITH CALIFORNIA BANK & TRUST
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
9. Approval of Audit Contract for Fiscal Year 2002-03:
Proposals from auditing firms to perform the financial audit of the District’s records for Fiscal Year 2002-03 were solicited as directed by the Board. Proposals received were evaluated and the Audit Selection Review Subcommittee consisting of Directors Aleshire and Stone, Director of Finance Jeffrey and Accountant Pugh interviewed three firms considered most qualified to meet the District’s needs. The three auditing firms are: Gilchrist, Steen, Stanfield and Newquist; Leaf & Cole; and, Moreland & Associates.
Director of Finance Jeffrey noted that the work of the incumbent auditing firm, Gilchrist, Steen, Stanfield and Newquist, has been of high quality and of minimal disruption to the District. The District has annually received the Certificate of Achievement in Financial Reporting from the Government Finance Officers of America since Fiscal Year 1991-1992 during which Gilchrist, Steen, Stanfield and Newquist served as the District’s auditors. There is the contention in the industry that periodically changing the auditing firm can lead to a review that identifies new issues or problems to be addressed.
If the Board desires to change auditing firms, the Audit Subcommittee unanimously recommended the firm of Leaf & Cole to complete an audit of the District’s records. It was felt by the committee members that this firm demonstrated the greatest ability to be responsive to the District’s auditing needs and provided the commitment that one of its partners would be involved in at least 50% of the work. Approximately 40% of Leaf & Cole’s auditors perform governmental auditing. It is considered prudent to evaluate auditors approximately every 3 years. Director Stone noted that additional tasks may be assigned an auditor such as analyzation of the District’s internal control procedures which could recommend efficiency improvements. Staff noted that Leaf & Cole would review the District’s internal procedures and controls.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-27
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ENTERING INTO AN AGREEMENT WITH LEAF &
COLE, LLP TO AUDIT THE FINANCIAL RECORDS
OF THE DISTRICT FOR THE YEAR ENDED JUNE 30, 2003
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
10. Decree Issued by the Bureau of Reclamation Pertaining to Imperial Irrigation District’s Colorado River Water Use:
General Manager Arant reported that the Bureau of Reclamation has issued its decision following evaluation of water use by the Imperial Irrigation District, called the 417 process, that the IID is wasting water in its irrigation practices. The decree issued by the Bureau of Reclamation is expected to be challenged by IID and will delay the proposed San Diego County Water Authority-Imperial Irrigation District water transfer and the Quantification Settlement Agreement. The 417 process of annual determinations is supposed to ensure that all lower Colorado River federal water contractors’ water use does not exceed the amount reasonably required for beneficial use so as to meet overall demands on Colorado River water to the extent possible. The decree would reduce Imperial Irrigation District’s 2003 Colorado River water order from 3.1 million acre feet to 2.8 million acre feet.
BOARD OF DIRECTORS’ AGENDA
11. San Diego County Water Authority’s Board of Directors’ Meeting:
At the June 26, 2003, San Diego County Water Authority Board meeting, staff was directed to continue preliminary design and the environmental permitting process for a regional water treatment plant at the Twin Oaks Valley Diversion Structure site. Treatment facilities serving the region may not be able to meet peak demands if consecutive days of hot weather is experienced. A peak-day management plan was adopted by the Authority to manage short-term treatment capacity needs and reduce treated water demand peaks. This potential shortage of treated water is the result of rapid growth in southwest Riverside County and San Diego County, and that expansion of the Skinner Treatment Plant and the Miramar Treatment Plant, that will provide the needed additional treatment capacity, are not yet completed.
The Authority’s proposed water treatment plant would have a treatment capacity of 50 or 100 MGD. Treated water from the Authority’s proposed plant will be substantially higher in cost than that supplied from Metropolitan’s Skinner Filtration Plant. Once the expansion projects at Skinner and Miramar are completed (expected by 2006-2007), the amount of treated water supplies available to the region should be in excess of needs. It was noted that the proposed Authority water treatment plant would not be completed until 2006 or 2007. It was unanimously agreed that the District will oppose the Authority’s proposed water treatment plant.
CLOSED SESSION
12. A Closed Session was called by President Broomell at 4:10 p.m. pursuant to:
$ Government Code '54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of Case: Sweetwater Authority, et al. v. Dynegy, Inc., et al.
San Diego Superior Court Case GIC 760743
$ Government Code '54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of Case: Rincon del Diablo Municipal Water District, et al. v. San Diego County Water Authority, et al.
San Diego County Superior Court Case No. GIC798230
$ Government Code '54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of Case: Cougar Pass Coalition v. John Braman, et al.
San Diego County Superior Court Case No. GIN028464
$ Government Code '54957.6(a), Conference with Labor Negotiators
Agency Representatives: Gary T. Arant, General Manager
William J. Jeffrey, Director of Finance
Employee Organization: Valley Center M.W.D. Employees= Association
$ Government Code '54957.6(a), Employee Performance Evaluation
Title of Position: General Manager
13. The Regular Board meeting was reconvened at 4:50 p.m. No action was reported.
ADJOURNMENT
14. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at 4:51 p.m.
ATTEST: ATTEST:
____________________________ ___________________________
President Secretary