VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Tuesday, September 4, 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, Stone and Haskell. Staff members present were: General Manager Arant, General Counsel de Sousa, Director of Finance Jeffrey, District Engineer Grabbe, Director of Operations Hoyle, Board Secretary Stetson, Manager of Accounting Pugh and IT Manager Rivard. Spectator present was Mr. Al Sherr.
CONSENT CALENDAR
1. Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meetings held August 20 and 27, 2007
• Audit demand check numbers 114813 through 114982
• Concept approval of the Curran Court waterline extension project consisting of approximately 1,029 feet of 8-inch water pipe and associated appurtenances
• Fiscal Year 2006-07 Report of Professional and Consulting Agreements
ACTION AGENDA
2. Review of Proposed Changes to Water and Wastewater Rates:
Proposed increases to the District’s water and wastewater charges were reviewed by Manager of Accounting Pugh. The proposed increases would be effective January 1, 2008, and are a pass-through of the increases in the wholesale price of water from the San Diego County Water Authority and Metropolitan Water District, as well as increases for operations and maintenance expenses.
A review of the proposed rate increases followed, which is summarized below:
• The wholesale rate increases effective January 1, 2008, will increase domestic rates by $74.84 per ac. ft. (10.2%) and agricultural rates by $38.03 per ac. ft. (7.3%). The agricultural rate increase is less as agriculture under the IAWP (Interim Agricultural Water Program) does not participate in the funding of programs such as the IID water transfer, All American and Coachella Canal lining, and the Emergency Storage Project.
• The reduction of water sales due to reduced water supplies has been factored into the rate calculations (reduced sales of 35% agric. and 15% domestic).
• An increase of 9% to the Infrastructure Access Charge (IAC), which is a pass-through of the fixed charge from the San Diego County Water Authority that is based on the number and size of active meters. The IAC on a ¾” meter would increase to $1.70 per month from the current charge of $1.56 per month.
• Local water rate increases to cover increased expenses for operational and maintenance needs and to partially cover unfunded retirement benefits results in an increase of $9.54 per acre foot. Adopting this increase in the rates for local costs results in a total increase of $84.38 per ac. ft. for domestic and $47.57 per ac. ft. for agriculture.
• Proposed increase in the monthly water meter service charges of 4% to offset operating costs. This change would increase the meter service charge for a ¾” meter from $20.50 to $21.50 per month and on a 3” meter from $84.00 to $87.00 per month.
• The construction water monthly service charge of $84.00 for potable construction service was proposed to be increased $3.00 to $87.00 per month. Also, the construction water permit fee based on a water truck’s capacity was proposed to be increased to a range of $145 (2,500 gallons or less capacity) to $285 (capacity of 5,000 gallons or more).
• Wastewater charges proposed to be increased include a $2.00 per EDU increase for the Lower Moosa Canyon Water Reclamation facility monthly service charge (to $42.50/EDU) and a $1.50 per EDU increase in the low pressure wastewater collection system maintenance fee (to $35.00/EDU). These cost increases are to meet operational expenses and to partially cover unfunded retirement benefits. No change was proposed for the Woods Valley Ranch monthly service charge which is collected by a special assessment on the property tax roll and has been assessed for Fiscal Year 2007-08. An increase in the reclaimed water fee, which is 85% of the current domestic rate, was proposed to be $1.7910/HCF.
The District’s practice has been to adjust rates for increases in the wholesale water rates and for local cost increases effective January of each year. Staff has been evaluating deferring action to revise the water and wastewater rates to offset local operations and maintenance expenses to July 1, 2008. Several factors affecting this action are:
~ The reduction in IAWP water sales and the potential for a reduction in domestic sales of 10% to 15%.
~ The possibility of the District’s share of property tax revenue being shifted to the State due to its budget deficit per the provisions of Proposition 1A.
~ Local rates have been increased by the general rate of inflation rather than budget needs.
~ The reduced deliveries and revenue will be more accurately identified in the spring of 2008 for implementation of a rate increase for local cost increases.
Manager of Accounting Pugh explained that the District’s ordinance previously adopted provides for a pass-through of cumulative wholesale water rate increases of 30% over three years without the property owner notification requirement of Proposition 218, which for the District involves 39,000 notices at a cost in excess of $28,000. A full Proposition 218 notification would be necessary to adopt increases in the water and wastewater rates for local increased costs.
Options presented to the Board pertaining to the proposed increases in the District’s water and wastewater charges were:
▪ Adopt all wholesale water rate increases and the local water and wastewater increases with an increase to partially fund the under funded retirement benefits as presented to be effective January 1, 2008. The increase in water rates would be $84.38/ac. ft. for domestic and $47.57/ac. ft. for agriculture.
▪ Adopt all wholesale water rate increases and the local water and wastewater increases but no increase to partially fund the unfunded retirement benefits. The impact on water rates would be an increase of $78.94/ac. ft. for domestic and $42.13/ac. ft. for agriculture.
▪ Adopt as a pass-through all wholesale water rate increases, withholding the increases in rates for local costs. This proposed increase in water rates results in an increase of $74.84/ac. ft. for domestic and $38.03/ac. ft. for agriculture. A deferment of the increase in rates to July 1, 2008 for local cost increases will reduce revenue by $175,000 to $200,000. This decrease in revenue is offset by spending control measures that have been implemented which include a freeze on hiring and deferment of capital projects.
Upon motion by Stone, seconded by Polito and unanimously carried, the Board elected the option to pass-through the wholesale water rate increases to be effective January 1, 2008, and defer increasing rates for local water and wastewater cost increases until the spring of 2008, to be effective July 1, 2008.
3. Local Agency Formation Commission 2007 Independent Special Districts Election:
A mailed ballot election is being held for the Local Agency Formation Commission (LAFCO) Special Districts Alternate Commissioner Member and nine positions on the Special Districts Advisory Committee. Two nominations for the Alternate Member and nine nominations (one had been withdrawn) for the Advisory Committee were received. The Alternate Commissioner Member’s term on LAFCO will expire in 2011 and the terms of eight Special Districts Advisory Committee members expire in 2011 with the individual with the lowest number of votes filling the ninth Advisory Committee position with a term expiring in 2008.
The nominating committee for the 2007 Special Districts election recommended John Ingalls of the Santa Fe Irrigation District for the LAFCO Alternate Commissioner Member and concluded that all nine candidates nominated for the Special Districts Advisory Committee are qualified to serve. The candidates for the Advisory Committee are:
Thomas Pocklington (Bonita-Sunnyside Fire Protection District)
Gary Croucher (Otay Water District)
John Pastore (Rancho Santa Fe Community Services District)\
Kimberly Thorner (Olivenhain Municipal Water District)
Larry Jackman (San Miguel Consolidated Fire Protection District)
Richard Olson (North County Fire Protection District)
Diana Towne (Rincon del Diablo Municipal Water District)
Judy Hanson (Leucadia Wastewater District)
Jim Poltl (Vallecitos Water District)
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Board approved casting the District’s vote for the LAFCO Special Districts Alternate Commissioner Member for John Ingalls of Santa Fe Irrigation District and the nine candidates for Special Districts Advisory Committee positions.
4. ACWA Region 10 Elections for Calendar Years 2008 and 2009:
The ballot for the Association of California Water Agencies (ACWA) Region 10 Officers and Board Members for 2008 and 2009 is due by September 30th. In accordance with the ACWA Region 10 rules and regulations, for 2008 and 2009, a Chair from San Diego County, Vice Chair from Orange County and 5 Board Members (3 from Orange County and 2 from San Diego County) will be elected to serve the members of Region 10.
Upon motion by Stone, seconded by Polito and unanimously carried, the Board concurred with the Region 10 nominating Committee’s recommended slate, which is as follows:
Chair Merle Aleshire, Valley Center Municipal Water District
Vice Chair Peer Swan, Irvine Ranch Water District
Board Members Jan Debay, Orange County Water District
Darrell Gentry, Vallecitos Water District
Susan Hinman, Muni. Water District of Orange County
Saundra Jacobs, Santa Margarita Water District
Joe MacKenzie, Vista Irrigation District
5. Nomination of ACWA Committee Appointments for the 2008 and 2009 Term:
The elected ACWA President for 2008-2009 will complete committee appointments for ACWA’s Standing and Regular committees from the member nominations received. The incoming Chair and Vice Chair of each ACWA region will provide committee appointment recommendations. Currently, General Manager Arant serves as Chair of the standing Communications Committee.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the Board nominated General Manager Arant for consideration of appointment to the Association of California Water Agencies’ Communications Committee, Committee Chair, for the 2008 and 2009 term.
GENERAL MANAGER’S AGENDA
6. Review of Miscellaneous Information Items:
• Cut in Water Supply Deliveries – Restrictions in the operations of the pumps supplying water from the Sacramento-San Joaquin Delta, as ruled by the U.S. District Court Judge to protect the threatened Delta Smelt in the Bay-Delta, will severely reduce water supplies to San Diego County. The pumping restrictions are set to begin December 25, 2007. Metropolitan Water District is analyzing the potential impact of the court action on its projected water supplies for 2008. Agricultural customers receiving a discount under the Interim Agricultural Water Program have been notified to expect a 30% cut in their supplies beginning January 1, 2008.
• San Luis Rey M.W.D. Proposed Annexation – A letter has been received from Jack Hoagland, consultant for the San Luis Rey M.W.D. property owners, requesting that the District complete an evaluation of the ability to supply imported water to the San Luis Rey M.W.D. service area. The response will clearly state that the District is 100% dependent on imported water and its availability will be determined by the decisions of Metropolitan Water District and the San Diego County Water Authority pertaining to annexation and provisions for water service. Water supply availability reports in compliance with the requirements of SB 610 could be initiated if funded by the proponents of the San Luis Rey M.W.D. service area. The Master Plan EIR for San Luis Rey M.W.D.’s water, wastewater and recycled water services indicates a need for 4,200 ac. ft. of water for build-out. This projected water need could be reduced with the use of groundwater for landscaping, reclaimed water for parks and common areas and implementation of conservation measures.
GENERAL COUNSEL’S AGENDA
7. Review of Pending Legislation:
AB 343 has been amended to allow that an agreement that was not available for review at the time of posting of the agenda can be considered at the meeting, if the agreement is made available to the public as well as the Board members at the meeting.
The State’s budget and impact on the consideration and analysis of green house gases are being analyzed for its impact on infrastructure projects.
ADJOURNMENT
8. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 3:15 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary