November 5, 2001

VALLEY CENTER MUNICIPAL WATER DISTRICT

Regular Board Meeting

Monday, November 5, 2001

Time: 2:00 P.M.

Place: Board Room

29300 Valley Center Rd.

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.

Board members present were: Directors Broomell, Polito, Aleshire, Stone and Haskell. Staff

members present were: General Manager Arant, General Counsel Cowett, District Engineer

Jewell, Director of Finance Jarrell, Director of Operations Dacus, Manager of Accounting Jeffrey,

Project Engineer Grabbe, Assistant Safety Officer Gertzen and Board Secretary Stetson.

Spectators present were: Messrs. Hilbig, Mooney, Bunts, Garratt, Ross and Ms. Millay.

CONSENT CALENDAR

Upon motion by Aleshire, seconded by Stone and unanimously carried, the following

consent calendar items were approved:

• Minutes of the Board meeting held October 22, 2001

• Resolution No. 2001-47 establishing the District’s restricted assets as of June 30,

2001

• Notice of Completion filed for the Betsworth Pump Station natural gas engine

replacement numbers 3 and 4

• Annual report of properties approved for deferral of water availability charges per

Administrative Code Section 165.2(d)(3)

• Audit demand check numbers 86776 through 86824 and wire disbursements 01-206

through 01-245

• Board of Directors’ requests for reimbursement of expenses and per diem

compensation

• Quarterly disclosure of expense reimbursements per Government Code

Section 53065.5

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Board of Directors’ Meeting

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ACTION AGENDA

2. Woods Valley Ranch Development – Water Reclamation Facilities Agreement and Reclaimed

Water Agreement:

Two agreements were presented to the Board for review and consideration of approval

pursuant to development of the Woods Valley Ranch. They are:

Water Reclamation

Facilities Agreement

and Reclaimed Water Agreement between Valley Center Municipal

Water District and Newland California, Inc.

Project Engineer Grabbe explained that the Water Reclamation Facilities Agreement

establishes the terms and conditions for design, construction, dedication, operation and

maintenance of the wastewater treatment and effluent disposal facilities to serve the

proposed Woods Valley Ranch development. Said agreement addresses the sewer

collection, treatment plant and effluent disposal facility improvements. The developer will

design and construct the treatment facilities per the District’s standards and specifications,

which will be dedicated to the District for ownership, operation and maintenance.

The Reclaimed Water Agreement provides for sale of reclaimed water to the Woods Valley

Ranch Golf Course. Per the terms of this agreement, the developer shall:

Accept reclaimed water produced by the Woods Valley Ranch development,

Pay an amount equal to 85% of the domestic water rate for the reclaimed water,

Operate and maintain the reclaimed water distribution facilities, and

Abide by District rules and regulations

The agreement further stipulates that the District has the right to operate the effluent disposal

facilities, if needed. Operation of the reclaimed water system would become the

responsibility of the successor owner in the event of bankruptcy as the Reclaimed Water

Agreement sets forth that the “...terms, covenants, and conditions contained herein shall

apply to, inure to the benefit of, and bind the heirs, successors, executors, administrators and

assigns of the parties hereto”.

Expansion of the Woods Valley Ranch Treatment Plant to accommodate treatment capacity

for surrounding properties will continue to be evaluated. The District will endeavor to identify

those properties desiring sewer service and the commensurate level of treatment capacity.

The wet weather (seasonal) storage requirements set forth by the Regional Water Quality

Control Board for the surrounding property owners to receive sewer service will need to be

explored by the developers. Typically, seasonal storage capacity equal to 84 days of flows

is required.

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Board of Directors’ Meeting

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Mr. Wayne Hilbig of Alti Corporation, owner of property adjacent to the Woods Valley Ranch

subdivision, stated he is supportive of the proposed sewer treatment facilities for the Woods

Valley Ranch development and is hopeful that his and other surrounding properties can

participate in an expansion of the treatment plant to serve said properties. General Manager

Arant clarified that the County’s Major Use Permit for the Woods Valley Ranch subdivision’s

sewer facilities stipulates that consideration will be given to providing additional sewer

treatment capacity for surrounding properties which is a provision supported by the District.

The District has completed a conceptual analysis to define the boundaries of the sewer

service area to be served by the Woods Valley Ranch treatment plant. A mailing to property

owners in this proposed sewer service area to ascertain levels of interest in receiving sewer

service was deferred awaiting a more defined estimation of costs.

Upon motion by Aleshire, seconded by Stone and unanimously carried, the following

resolution, entitled:

RESOLUTION NO. 2001-48

RESOLUTION OF THE BOARD OF DIRECTORS OF

VALLEY CENTER MUNICIPAL WATER DISTRICT

ENTERING INTO A WATER RECLAMATION FACILITIES

AGREEMENT AND A RECLAIMED WATER AGREEMENT

FOR THE WOODS VALLEY RANCH DEVELOPMENT

was adopted by the following vote, to wit:

AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell

NOES: None

ABSENT: None

3. Lilac Pump Station Reconstruction – Requests for Budget Adjustment and Award of Contract:

Bids for reconstruction of the Lilac Pump Station were opened on October 30, 2001 in which

the lowest was submitted by SCW Contracting at $975,000.

Adoption of Resolution No. 2001-49 to appropriate additional funding for this project and

award of contract to SCW Contracting was recommended. The Lilac Pump Station

Reconstruction project had been budgeted at $962,200. Project Engineer Grabbe explained

that an amendment to the 2001-02 budget to provide for additional funding ($140,000) is due

to the following:

• Labor associated with time expended to complete the specifications and bid

documents and for inspection services - $19,000

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Board of Directors’ Meeting

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• Funds to meet the bid amount plus 5% contingency for the construction project -

$13,000 + $55,000

• Expenditures for the Pilot SCADA Project that will transmit information from Lilac

Pump Station to the District’s Operations Center. This entails installation of radio

and programmable logic controller (PLC) equipment at the Lilac Pump Station,

McNally Reservoir and Oak Glen Reservoir and District Operations Center and

includes expanding the SCADA project to include video surveillance. It was

explained that the PLC programing work will set the standard for these types of

facilities and can be used as templates for other similar facilities as they are

added to the SCADA system in the future - $53,000

Upon motion by Polito, seconded by Stone and unanimously carried, the following

resolution, entitled:

RESOLUTION NO. 2001-49

RESOLUTION OF THE BOARD OF DIRECTORS OF

VALLEY CENTER MUNICIPAL WATER DISTRICT

AMENDING THE 2001-02 BUDGET BY APPROPRIATING

AN ADDITIONAL $140,000 INTO ACCOUNT #01-5655.78

AND AWARDING CONTRACT FOR THE CONSTRUCTION

OF THE LILAC PUMP STATION

was adopted by the following vote, to wit:

AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell

NOES: None

ABSENT: None

4. Ordinance Amending the Administrative Code to Increase the Water Service Rates as a

Result of an Increase from the San Diego County Water Authority:

Effective as of January 1, 2002, the San Diego County Water Authority’s surcharge on

domestic water deliveries will increase from $90.00 to $95.00 per acre foot. The certified

agricultural customers are exempted from this increase and past water rate increases from

the San Diego County Water Authority that have been earmarked for its Emergency Storage

Project. As such, certified agricultural customers are currently assessed a surcharge from

the San Diego County Water Authority of $80.00 per acre foot. However, participating

certified agricultural customers will receive a reduced benefit from the Emergency Storage

Project in the event of an emergency.

Valley Center Municipal Water District

Board of Directors’ Meeting

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A pass through of this increase from the San Diego County Water Authority to the District’s

residential customers was recommended by staff which, including a water loss allowance,

totals $5.40 per acre foot or $.0124/hundred cu. ft. Director of Finance Jarrell reviewed the

District’s water rates with the proposed increase from the San Diego County Water Authority,

which are set forth below:

Customer Classification Rate/100 cu. ft.

Municipal & Industrial $1.4286

Certified agricultural $1.0769

Certified ag/domestic:

First 2,600 cu. ft. $1.4286

Consumption over 2600 cu. ft. $1.0769

Construction water:

Potable $1.4286

Nonpotable $1.0715

Upon motion by Aleshire, seconded by Stone and unanimously carried, the following

ordinance, entitled:

ORDINANCE NO. 2001-14

ORDINANCE OF THE VALLEY CENTER MUNICIPAL

WATER DISTRICT AMENDING THE ADMINISTRATIVE

CODE TO PROVIDE FOR CHANGES IN WATER RATES

was adopted by the following vote, to wit:

AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell

NOES: None

ABSENT: None

5. Amendment No. 2 to the Retirees’ Health Benefits Plan:

Amendment of the District’s Retirees’ Health Benefits Plan to expand the Advisory Committee

members from 5 to 7 which would add the Manager of Human Resources and another elected

employee representative was recommended. As such, the Retirees’ Health Benefits Plan

Advisory Committee would consist of a member of the Board of Directors (currently Director

Stone), General Manager, Director of Finance, Manager of Human Resources and 3 elected

representatives from the employees. Resolution No. 2001-46 would also provide for the

definition of “hours worked” to include overtime hours worked in the last five years and

accrued and unused leave time at the date of separation from the District, as well as defining

“attained age” as “...the actual age of the employee on the date in question to be expressed

in whole years and a decimal fraction rounded to two decimal places.”

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To ensure that any action by the Advisory Committee shall require approval from a majority

of the members of the Committee, the wording under Section 2.01, Administrator, will be

amended to read “Any action by the Committee shall require the approval of a majority or

more of all the members of the Committee, either present at a duly constituted meeting, or in

writing without a meeting.”

Upon motion by Stone, seconded by Aleshire and unanimously carried, the following

resolution, entitled:

RESOLUTION NO. 2001-46

RESOLUTION OF THE BOARD OF DIRECTORS OF

VALLEY CENTER MUNICIPAL WATER DISTRICT APPROVING

AND ADOPTING THE SECOND AMENDMENT TO THE DISTRICT’S

RETIREES’ HEALTH BENEFITS PLAN TO PROVIDE FOR AN

ADVISORY COMMITTEE TO ACT AS ADMINISTRATOR OF

PLAN AND TO CLARIFY AND AMEND CERTAIN PROVISIONS

OF THE PLAN AND AUTHORIZING AND DIRECTING

THE PRESIDENT AND SECRETARY OF SAID WATER

DISTRICT TO EXECUTE THE SAID SECOND AMENDMENT

FOR AND ON BEHALF OF SAID DISTRICT

was adopted by the following vote, to wit:

AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell

NOES: None

ABSENT: None

6. Request for Funding from the Pacific Legal Foundation:

A request was received from the Pacific Legal Foundation for funding in the range of $1,000

to $10,000. The Pacific Legal Foundation (PLF), a non-profit organization, focuses on legal

and advocacy activities aimed at protecting private property rights from government

encroachment or taking.

The PLF, through the Western Law Program, has been involved in a number of actions

associated with the federal taking of water rights. It argued that the listing of Coho salmon

in the Alsea River in Oregon as “threatened” under the Endangered Species Act (ESA) was

based on “junk science” because millions of hatchery-raised fish were not counted. The court

agreed and it was ruled that the Oregon coastal coho salmon no longer be declared

“threatened” under the ESA, resulting in federal protection for wild coho in dozens of coastal

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Board of Directors’ Meeting

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rivers across Oregon being revoked. The PLF will be using this same legal theory to attack

other listings threatening water users which could result in the de-listing of other fish species

in watersheds in Washington, Oregon and the Northern California coast.

It was noted that the Pacific Legal Foundation’s efforts to protect private property rights and

its work, through the Western Law Program, addressing the taking of water rights is very

important to the water industry in western states. However, there is the possibility that the

PLF will take a legal or political position that conflicts with the District’s or that of the

Association of California Water Agencies.

The Board unanimously agreed to decline the

Pacific Legal Foundation’s request for financial support, but would consider financial

support on a specific water resources related issue in the future and directed staff to

communicate this position.

7. Emergency Response Security Measures:

Security measures that have been implemented since the terrorists’ attacks of September 11

were reviewed as listed below:

Staff meetings were held on September 11 to inform all personnel to be vigilant at all our

facilities. Maintained media updates in the Operations Center by setting up the television

to CNN news. Information was passed out to all employees regarding terrorism. District

went to a Stage 1 alert.

The District’s office gates will be kept closed at all times and additional fencing will be

installed at the administrative building site.

All visitors and deliveries are being checked in at the front desk before entering the

compound.

The camera security system at the Cool Valley Reservoir is operating and transmitted into

the Operations Center.

Security measures were discussed at the Metropolitan Water Quality Managers meeting

of September 20

th and the San Diego County Water Authority Operating Heads meeting

of October 2

nd which were attended by field personnel.

Classes for site security at the Fall American Water Works Association Conference were

attended by Chuck Dacus and Dale Gertzen on October 11, 2001.

District staff received in-house training for handling mail in response to the Anthrax scare.

An informational booklet from the Office of Emergency Services on handling mail

procedures was distributed. Gloves and masks will be available for personnel opening

mail to use at their discretion. A video from the Postal Service on Protecting Your Mail

Room has been ordered and the possibility of isolating the District’s mail room from other

District offices is being considered.

Valley Center Municipal Water District

Board of Directors’ Meeting

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The District has responded to requests for information from the FBI.

The District has been in contact with the California Highway Patrol complying with all their

requests and has been working in coordination with the Sheriff’s department.

The video Emergency Planning: The Big Picture for Water Utilities and the CHP Biological

Threat Safety video has been reviewed with field supervisors.

Emergency Response to Terrorism Awareness Training conducted on October 19 th was

attended by Bob Jones and Dale Gertzen along with the California Department of Forestry

and the Valley Center Fire Department.

The Code Enforcement\Safety Department has a list of internet sites and contacts that

are checked daily for updates from the FBI, America Water Works Association,

Emergency Digital Information Service, Center for Disease Control, Federal Emergency

Management Agency, Office of Emergency Services, Federal Bureau of Investigation,

Department of Health Services, Association of Metropolitan Water Agencies, Department

of Health and Human Services, Department of Justice and the Information Sharing and

Analysis Center.

The Emergency Response Plan is continuously updated and reviewed by District staff.

An Emergency Response Planning class conducted by ACWA/JPIA on October 17th was

attended by Dale Gertzen, Gaby Olson, Greg Hoyle, Bill Jeffrey and Bob Jones.

Dale Gertzen, Code Enforcement/Assistant Safety Officer, stated that since the events of

September 11

th and subsequent occurrences, the District has not received any calls or

observed activities that would be considered suspicious.

District staff has been asked to be on high alert for any out of the ordinary activities at our

facilities and other locations within the District’s service area. It was reported that since

September 11

th , there have been trespassers at 4 reservoirs in which there was minor

damage at 3 of the sites. This is an increase in the number of trespassing incidents, but may

be attributable to closer scrutiny by staff. Director of Operations Dacus reported that ladders

at the reservoir sites are enclosed and are not accessible.

Assistant Safety Officer Gertzen stated that the FBI’s National Infrastructure Protection

Center does not consider contamination of water supplies with deadly biological agents a

probable or effective threat given dilution and treatment barriers. It is felt that a greater threat

involves disruption of treatment processes such as disruption of power service or delivery of

disinfectants, and the addition of contaminants after treatment. Utilities have been

encouraged to remain vigilant and communicate activities that may be suspicious. No

deficiencies in security of the District’s facilities were found following a thorough review. The

San Diego County Water Authority has implemented a risk assessment of its facilities and has

Valley Center Municipal Water District

Board of Directors’ Meeting

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increased security measures at critical locations. General Manager Arant reported that the

Federal Environmental Protection Agency Director Christine Whitman has assembled a task

force for development of long-term security provisions and regulations for water suppliers.

GENERAL MANAGER’S AGENDA

8. Refund Received from San Diego Gas & Electric:

A refund from San Diego Gas & Electric in the amount of $388,000 was received which

represents the reduction from the market price of electricity to the 6.5¢ per kilowatt hour cap

during the period February 7 to May 30, 2001. This action is the result of Assembly

BillX1 43. Since June 1, 2001, the 6.5¢ cap on electrical sales to the District has been in

effect. The Board will be asked at a future meeting to consider allocating the $388,000

toward refunding the overdraft charged to the general operating fund when energy expenses

exceeded the revenue from pumping charges on water sales. The District’s pump zone

charges will continue to be evaluated for recovery of pumping costs incurred and

replenishment of the reserve fund.

Refunds expected from Metropolitan Water District of Southern California and the San Diego

County Water Authority will be proposed to be allocated to reserves for the District’s capital

improvement program.

BOARD OF DIRECTORS’ AGENDA

9. Election of ACWA’s President and Vice President:

On November 28

th , at the ACWA Fall Conference in San Diego, an election of ACWA’s

President and Vice President for the 2002-2003 term will be conducted. ACWA has

requested that its agency members designate one individual to cast the vote on behalf of the

agency.

Director Aleshire was designated to cast the District’s vote at the ACWA Fall

Conference for ACWA’s President and Vice President for the 2002-03 term.

CLOSED SESSION

10. A Closed Session was called by President Broomell at 3:55 p.m. pursuant to:

• Government Code §54956.9(a), Conference with Legal Counsel - Existing Litigation.

Name of case: Chatham Brothers Barrel Yard clean-up

• Government Code §54956.9(a), Conference with Legal Counsel - Existing Litigation.

Name of case: State of California, ex rel. Nora Armenta v. James Jones Company, et al.

The Regular Board meeting was reconvened at 4:20 p.m. No action was reported.

Valley Center Municipal Water District

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ADJOURNMENT

11.

Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting

was adjourned at 4:21 p.m.

ATTEST: ATTEST:

______________________________ _______________________________

Secretary President