VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, March 19, 2007
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 and Stone. Director Haskell was absent. Staff members present were: General Manager Arant, General Counsel Cowett, Director of Finance Jeffrey, District Engineer Grabbe, Director of Operations Hoyle, and Board Secretary Stetson. Spectators present were: Messrs. Steinke, Hoagland, Muir and Ross.
CONSENT CALENDAR
1. Upon motion by Aleshire, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held March 5, 2007
• Audit demand check numbers 112549 through 112743
• Board of Directors’ request for per diem compensation and reimbursement of expenses
ACTION AGENDA
2. Adoption of Resolution to Initiate Formal Negotiations for the Provision of Water and Wastewater Services for Lands Within and Adjacent to the San Luis Rey Municipal Water District:
General Manager Arant reviewed that the San Luis Rey Municipal Water District adopted at their February 21st Board meeting Resolution No. 2007-6 that requests the Board of Directors of the Valley Center Municipal Water District to initiate formal discussions between the two districts to:
• Support inclusion of the San Luis Rey Municipal Water District and certain adjacent areas within the Sphere of Influence of the Valley Center Municipal Water District, and
• Support annexation of portions of the San Luis Rey Municipal Water District and certain adjacent areas into the Valley Center Municipal Water District as the land use authority approves development which may need supplemental water supplies and retail water and wastewater utility services; and
• Establish a process and/or processes that address an orderly, systematic and equitable integration of such portions of the San Luis Rey Municipal Water District and adjacent areas into the Valley Center Municipal Water District.
Resolution No. 2007-16 was presented for the Board’s consideration of adoption which concurs with the request of the San Luis Rey Municipal Water District and approves entering into formal discussions and negotiations with the San Luis Rey M.W.D. concerning the process, terms and conditions under which the District would consider providing retail water, wastewater and water reclamation services to land currently within and adjacent to the San Luis Rey Municipal Water District.
General Manager Arant reported that the Municipal Service Review (MSR) for the Bonsall and Pala Hydrologic Subareas has been completed and the CEQA process for the San Luis Rey M.W.D.’s Master Plan for water, wastewater and recycled water services is expected to be completed by July 2007 at which time an update on the Municipal Service Review process by LAFCO should resume. The District’s position has been that the San Luis Rey M.W.D.’s EIR should be certified and there be a determination by LAFCO on the MSR prior to action to amend the District’s Sphere of Influence.
It is proposed that the District’s Sphere of Influence be enlarged to include the property within and adjacent to the San Luis Rey M.W.D. San Luis Rey M.W.D. would be designated with a “zero” sphere in which the agency would exist but would not provide any water, wastewater or reclamation services. When those properties within the District’s expanded Sphere of Influence are being developed and seek supplemental water supplies, efforts for the concurrent annexation of the land to the Metropolitan Water District, San Diego County Water Authority, the District and detachment from the San Luis Rey M.W.D. will be pursued.
The District had adopted a “Policy Perspectives on the Potential Consolidation of Lands Currently In and Adjacent to the San Luis Rey Municipal Water District”. The San Luis Rey M.W.D. has recommended changes to the language concerning Local Water Resources, as follows:
It is anticipated that as a condition of annexation, both MWD and SDCWA will require that any local water resources would continue to be put to beneficial use after supplemental imported water is brought to the area. In the event that a current water right holder is unable to beneficially use a local water resource, VCMWD will take appropriate steps to preserve and continue the use of the local water resource for beneficial use.
As a condition of annexation, the Metropolitan Water District and the San Diego County Water Authority will likely require that the local water rights that have been utilized by the annexing properties continue to be put to a beneficial use. There will be the maximum use of the groundwater and reclaimed water supplies.
Mr. Jack Hoagland, consultant for the San Luis Rey Municipal Water District, stated that the San Luis Rey property owners desire to continue to hold onto their local water rights as long as they can beneficially utilize those rights. Mr. Hoagland further stated that an accelerated schedule to pursue the annexation process (amend the District’s Sphere of Influence) is preferred rather than waiting for a determination by LAFCO on the MSR. He stated that it would be timely to integrate a request for the amended Sphere of Influence in conjunction with the MSR update. Mr. Hoagland requested an indication of an agreement between the District and San Luis Rey M.W.D. pertaining to pursuing an amendment to the District’s Sphere of Influence to include the San Luis Rey properties. General Manager Arant responded that any action in this regard should be approved by LAFCO to avoid a conflict with the environmental document for the San Luis Rey M.W.D.’s Master Plan.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-16
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
RESPONDING TO A FORMAL REQUEST FROM THE
SAN LUIS REY MUNICIPAL WATER DISTRICT BOARD
OF DIRECTORS TO INITIATE FORMAL NEGOTIATIONS
REGARDING THE PROVISION OF RETAIL WATER AND
WASTEWATER SERVICES ON LANDS WITHIN AND
ADJACENT TO THE SAN LUIS REY MUNICIPAL WATER DISTRICT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: None
ABSENT: Director Haskell
3. Solar Power Purchase Proposal, Status Report and Resolution Making Requisite Findings Prior to Entering Into a Sole Source Power Purchase Contract:
Director Polito recused himself from discussion on the solar power purchase proposal as he has an economic interest in property directly across from the proposed project site. And, in compliance with the Government Code he left the room.
General Manager Arant explained that negotiations with WorldWater & Power (WWP) for a proposed Power Purchase Agreement for WWP to construct, operate and maintain a solar power facility at the District’s Lake Turner property to supply power to the Betsworth Pump Station have been ongoing. Proposed revisions to the agreement reinforce WWP’s obligations and protect the District from any financial or performance shortfalls. Discussions pertaining to the ownership of the environmental credits created by the generation and use of renewable solar energy are continuing.
Dr. Lon House, Energy Consultant, reviewed the proposed agreement and opined that he “does not see risk to Valley Center in this deal”, and recommended that the District enter into the power purchase agreement with WWP selecting purchase Option 1, the variable rate starting at $.085/kWh with a 3% annual escalation rate. Dr. House also noted upon review of the proposed agreement that the power purchase agreement is superior to the project evaluated in 2006 as WWP takes all of the risk in constructing and operating the facility with the District benefiting from lower power costs and a back-up solar power source independent of the grid to operate pumps at the Betsworth Pumping Station on an emergency basis.
State statute does not require a competitive bid process for the District to enter into a Power Purchase Agreement in which the District is not constructing capital facilities. WorldWater and Power is the sole provider that has the switching technology which allows the solar system to operate and supply power when the electrical grid is down, considered by the District as a critical benefit for a solar system. Requesting bids for the solar power project with the requirement that the system provide power during a power outage would likely result in one bidder meeting the bid requirements; i.e. WorldWater and Power. The law requires that certain findings be declared as contained in the proposed Resolution No. 2007-12. They are:
1. That the cost of the energy services will be less than the cost of the electrical energy that would have been consumed absent the energy services to be provided; and
2. If the energy services agreement has a financing component, that the funds for the repayment of the financing and the cost of design services under the agreement are projected to be repaid from the energy cost-savings realized from the project.
General Manager Arant noted that adoption of Resolution No. 2007-12 does not approve a power purchase agreement with WorldWater and Power, but makes the findings required for energy service contracts.
Director Aleshire suggested that the cost of solar power paid by other water utilities, such as those under contract with Powerlight, should be obtained for further evaluation, as well as obtain electricity costs paid by other entitles with power purchase agreements with WorldWater and Power for comparison purposes. General Manager Arant noted that the data will be obtained but many of the water agencies with contracts with Powerlight were for construction of the solar energy systems rather than a power purchase agreement as proposed for the District.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-12
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER
DISTRICT MAKING FINDINGS REQUIRED FOR
ENERGY SERVICE CONTRACTS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire and Stone
NOES: None
ABSTAIN: Director Polito
ABSENT: Director Haskell
4. Award of Contract for the SCADA System Improvements, Phases I and II:
District Engineer Grabbe reviewed that the District’s 2006-2008 budget included funds for the construction of Phases I and II of the Supervisory Control and Data Acquisition (SCADA) project. The District’s SCADA project will replace the existing tone telemetry system with a wireless computer network, move automated control from central to the field panels utilizing Programmable Logic Control (PLC) equipment, and develop a computer system interface with the field control system. The overall project consists of the conversion of 63 sites in addition to the Central Facility.
The first two phase of the SCADA project consist of high priority sites as identified in the District’s vulnerability assessment and other sites needed for radio communication links. These sites include: Cobb, Cool Valley, Country Club, Meadows, Paradise Mountain, Red Mountain and San Gabriel Reservoirs, and the Miller, Rainbow, Paradise, Valley Center, Betsworth and Oat Hill Pump Stations and the V.C. 8 aqueduct connection. Security and electrical upgrades are also included in the construction project for the Phase I and II sites which consist of video surveillance equipment, motion detector activated alarms and replacement of the existing motor starters with new solid state reduced voltage soft starters, as well as control panel and instrumentation upgrades.
Bids for the Phase I and II SCADA project were opened on March 6th in which the lowest bid received was from Rock Electric at $1,147,500. The second lowest bidder, Precision Electric at $1,250,000, submitted a protest to Rock Electric’s bid challenging that they had not listed subcontractors for the mechanical work. District Engineer Grabbe explained that bidders are required to list all subcontractors they intend to use if the subcontract amount exceeds ˝ of 1% of the bid amount. Rock Electric has responded to the protest demonstrating that they will complete the preparation work including excavation and backfill and, therefore, are able to keep the subcontract work below the reporting level.
Staff recommended award of contract for the SCADA Phases I and II project to Rock Electric noting that they have performed work for the District on other projects and they performed in a satisfactory manner. Also, a favorable reference was received regarding their work on a SCADA project previously completed.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-18
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AWARDING CONTRACT FOR THE SCADA SYSTEM
IMPROVEMENTS PHASES I & II AND MAKING
A DECLARATION OF OFFICIAL INTENT TO REIMBURSE
EXPENDITURES FROM PROCEEDS OF INDEBTNESS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: None
ABSENT: Director Haskell
5. Award of Contract for the Operations Control Room Remodel:
District Engineer Grabbe reported that bids were received on February 27th for the Operations Control Room Remodel Project with the lowest bid submitted by Blair Rasmussen Construction at $159,549. As approved in the budget, remodeling of the Operations Control Room provides for improvements needed for the new SCADA system, office space improvements and upgrades to the existing locker room and restroom facilities.
The SCADA System improvements consist of replacement of the existing control console, and circular chart wall with SCADA system computer workstations and large screen displays. The office space improvements include a conference area, operator workstations and expansion of the restroom and locker room to be in compliance with the American Disability Act. Once the SCADA project has been completed and the tone telemetry signals integrated into the new system, the existing telemetry cabinet will be removed and additional office space created. During the remodeling project (approximately 4 months), the Operations staff will be relocated to a temporary on-site modular unit provided by the contractor.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-13
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AWARDING CONTRACT FOR THE OPERATIONS
CONTROL ROOM REMODEL PROJECT AND MAKING
A DECLARATION OF OFFICIAL INTENT TO REIMBURSE
EXPENDITURES FROM PROCEEDS OF INDEBTNESS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: None
ABSENT: Director Haskell
6. Award of Contract for the Reid Hill Reservoir Repainting Project:
Director of Operations Hoyle reported that bids were opened on March 7th for the repainting of the interior and exterior of the Reid Hill Reservoir. The lowest bid submitted was from J. Colon Coatings, Inc. at $120,000. Award of contract to J. Colon Coatings, Inc. for this project was recommended.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-14
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AWARDING CONTRACT FOR REPAINTING THE
EXTERIOR AND INTERIOR OF REID HILL RESERVOIR
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: None
ABSENT: Director Haskell
7. Award of Contract for the Paradise Mountain No. 2 Repainting Project:
Director of Operations Hoyle reported that bids for the Paradise Mountain No. 2 Reservoir’s interior and exterior repainting project were received on March 7th in which the lowest bid was submitted by RPI Coatings, Inc. at $232,100. The low bid exceeded the projected budget appropriation of $200,000 due to the epoxy coating which must be removed. Approval of Resolution No. 2007-15 was recommended to award the contract to RPI Coatings, Inc. and approve a budget transfer of $32,100 from the Reid Hill Reservoir Recoating account to the Paradise Mountain No. 2 Repainting account.
Upon motion by Polito, seconded by Aleshire and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-15
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT AMENDING
THE 2006-07 BUDGET BY APPROPRIATING AN ADDI-
TIONAL $32,100 INTO ACCOUNT #01-5691.78 AND
AWARDING CONTRACT FOR REPAINTING THE EXTERIOR
AND INTERIOR OF PARADISE MOUNTAIN #2 RESERVOIR
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: None
ABSENT: Director Haskell
8. Report on Facility Damages from the January Freeze and Authorization to Apply for Disaster Assistance Funds:
Director of Finance Jeffrey informed the Board that as a result of the freezing temperatures in January 2007, the District incurred $40,277 in costs to repair facilities that were damaged which included main line leaks, appurtenances and facility leaks. The State declared the freeze area a state disaster, and Board authorization to ratify the application submitted for state disaster assistance to recover the costs incurred was requested.
A report on the facility damages was provided by Gaby Olson and Tony LoPresti, Administrative Assistant and Meter Services Supervisors, respectively, as summarized below:
• From January 13 to January 26, 2007, District staff responded to approximately 375 freeze related calls from customers
• The District also incurred damage to 9 facilities and appurtenances
• Twenty-three employees worked during the first three days of the freeze which was over the Martin Luther King 3-day weekend
• District staff worked to answer and respond to customer calls on Sunday, January 14th and Monday, January 15th as the answering service, which is utilized by other water agencies, was overwhelmed by the volume of calls. This action was taken in order to respond appropriately to the problems customers were experiencing from the freeze damage (no water), and to maintain the District’s high level of customer service. Procedural improvements implemented by the answering service are: District personnel will be immediately called whenever there are an excessive number of calls received from our customers and their incoming phone line capacity was increased.
• As the pipes started to thaw out, numerous calls reporting leaking backflow devices were received. The freeze caused damage to the backflow devices’ gaskets and some devices cracked. A total of 138 backflow devices were replaced.
• Protective measures that have or will be implemented include:
~ A letter will be mailed to customers that have a backflow device in the fall containing freeze protection measures,
~ The automated phone system will be utilized to call customers reminding them to protect their backflow devices during the winter months.
~ All new customers receive Information on protecting water facilities from freeze damage and the information will be posted on the District’s web page.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Board ratified the District’s application for disaster assistance to recover costs incurred as a result of the January 2007 freeze.
GENERAL MANAGER’S AGENDA
9. Review of Miscellaneous Information:
• Cal-PERS Prior Funding Issue – Notice was received that the District’s prior funding issue with Cal-PERS could not be resolved administratively and will be processed through their administrative hearing process in which the matter will be heard by an Administrative Law Judge.
• Potential Annexation of the San Luis Rey M.W.D. Service Area – Advantages of annexing the San Luis Rey M.W.D. properties were discussed which include a financial advantage with an expanded customer base to fund general administrative costs. The proponents of the annexation will fund all associated costs. Meter sales that will result from the annexation will generate revenue from the capacity charges that fund capital improvements as well as revenue from the District’s water availability charge. Further, increasing the number of residential customers will reduce the volatility of water sales experienced with a large agricultural customer base. There will be separate accounting funds maintained for the annexed properties to account for costs and the associated water and sewer fee structures.
BOARD OF DIRECTORS’ AGENDA
10. ACWA Salary Survey:
Director Aleshire reported he had participated in modifying ACWA’s salary survey and submitted summaries of District classifications. As such, the District could utilize this survey to obtain comparable salary information on these classifications.
CLOSED SESSION
11. A Closed Session was called by President Broomell at 4:15 p.m. pursuant to:
• Government Code §54956.9(b)(1), Conference with Legal Counsel – Anticipated Litigation
Number of potential cases: 1
ADJOURNMENT
12. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 4:23 p.m.
ATTEST: ATTEST:
______________________________ _______________________________
President Secretary