July 15, 2002

Regular Board Meeting

Monday, July 15, 2002

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, Aleshire, Stone and Haskell. Director Polito

was absent. Staff members present were: General Manager Arant, General Counsel Cowett,

District Engineer Jewell, Director of Operations Dacus, Acting Director of Finance Jeffrey, and

Board Secretary Stetson. Spectators present were: K. Klingelhofer, C. Shepherd and C. Crandall

of Berryman & Henigar; G. Garratt, S. Worley and D. Meyer representing Newland Communities;

W. Diven of Best, Best & Krieger; D. Bunts of Water 3 Engineering, and others.

1.

2 7/15/2002

meeting. The proposed sewer improvements include a Title 22 tertiary level wastewater

reclamation facility that will serve the entire Woods Valley Specific Plan area. The plant will

have the capacity to treat 70,000 gallons of wastewater per day and serve approximately 280

equivalent dwelling units.

In 2002 dollars, the budget to operate and maintain the sewer collection system and

reclamation facility at full build-out is $335,120 per year which is equivalent to $99.74 per

month per EDU (280 EDUs) in today’s dollars. The first year’s budget (FY 2002-03) is

estimated to be $168,000, or $600 per EDU, including a $51,300 contribution to the

replacement reserve and $54,700 toward an operating reserve for cash flow.

To ensure that expenses associated with operation and maintenance of the Woods Valley

Sewer System, as well as future replacement costs, are fully funded from those properties

within the sewer service area, assessment of a standby fee upon undeveloped property to be

collected on the tax bill and the assessment of a sewer service charge on developed property

has been proposed. Assessment of a standby fee and sewer service charge ensures that the

developer and the interim master builders pay their share of the cost of the sewer operation.

Further, collection through the tax roll assures receipt of delinquent assessments under the

County’s Teeter Plan. The two charges would be the same amount per EDU, but require

separate procedures to implement.

Acting Director of Finance Jeffrey reported that, pursuant to the assessment of a sewer

standby fee upon the undeveloped properties within the Woods Valley Sewer Service Area,

the Notice of Public Hearing and the Standby Fee Ballot were mailed to the record owner of

property subject to the standby fee. This information was mailed to the one owner of record,

Woods Valley LLC, c/o Newland Communities.

The Public Hearing to receive input on the proposed Woods Valley Sewer Service Area

Sewer Standby Fee was opened at 2:11 p.m. Mr. Dan Meyer representing Newland

Communities addressed the Board stating that Greg Garratt, Counsel, and the engineer for

the treatment plant, Don Bunts, were present to provide clarification or answer any questions

from the Board.

Responding to questions, Mr. Meyer stated that reclaimed water used within the Woods

Valley Ranch development will be contained on-site in compliance with the requirements of

the State and Regional Water Quality Control Board, and that completion of the golf course

is expected by late 2002 with it being opened in the spring of 2003.

No further comments or questions on the proposed Woods Valley Sewer Service Area Sewer

Standby Fee were received and the public hearing was closed at 2:13 p.m.

The standby fee ballot for the Woods Valley Sewer Service Area was tabulated with the

results supporting the levy of the Standby Fee. Staff recommended adoption of Ordinance

No. 2002-08 approving the Engineer’s Report establishing the Woods Valley Sewer Service

Area, declaring the results of the Sewer Standby Fee Ballot and amending the District’s

3 7/15/2002

Administrative Code with the addition of Section 171.11 to provide for the prescription and

collection of the sewer standby fees.

The Public Hearing to receive input on the proposed Woods Valley Sewer Service Area Sewer

Service Charge was opened at 2:17 p.m. A Notice of the Public Hearing to consider

establishing a sewer service charge for all parcels of developed property within the Woods

Valley Sewer Service Area was published in the Valley Roadrunner on June 19 and 26 as well

as mailed to the owner of the property within the sewer service area.

In response to Director Stone’s question concerning the requirement for a 4/5ths approval

vote from the Board, Warren Diven of Best, Best & Krieger clarified that, due to time

constraints in completing procedures to get the sewer standby fee and service charge on the

tax rolls by the County’s August 10

4 7/15/2002

to the sewer service charge. If the owners of a majority of the separate parcels of property

within the sewer service area in the future protest the proposed sewer service charge, said

charge may not be collected on the tax roll and must be collected on the water bills.

3. Resolution Opposing the Ballot Proposition “Water Quality, Supply and Safe Drinking Water

Act of 2002":

Resolution No. 2002-30 opposing the proposed initiative that has qualified for the

November 5, 2002, ballot, which is titled “Water Quality, Supply and Safe Drinking Water Act

of 2002", was presented for the Board’s consideration. The proposition, promoted as a “Water

Bond”, authorizes $2.6 billion primarily for park land and open space acquisition with

$825 million for CALFED and other water quality enhancement and protection projects.

However, the bond measure contains only $50 million for surface storage studies and a

specific prohibition for projects which construct surface storage for the purpose of expanding

or storing imported water supplies.

Mr. Ronald Gastelum, General Manager of the Metropolitan Water District of Southern

California, had contacted the District’s office urging that the District not oppose the proposition

and was scheduled to attend the meeting to address this issue, but was not able to attend due

to airplane problems. Mr. Gastelum called to request that his position regarding the proposed

5 7/15/2002

proposition be conveyed to the Board. They are:

• The proposition provides funds for additional study for surface storage though there is no

money for additional surface storage construction.

• There is funding for treatment enhancements that will benefit the Metropolitan service

area as an upgrade of Metropolitan’s ozone treatment process is underway.

• Money is appropriated for canal lining on the Colorado River (All American and Coachella

Canals)

• Funds are included to enhance security of Metropolitan’s facilities.

• There are funds for programs that other agencies could secure such as for desalination

projects.

• Delta improvements included in the proposition will add to the reliability of existing water

supplies (yield from the State Water Project).

Mr. Gastelum had expressed that an investment of money in surface water projects is

premature until it is known that the investment in the projects will result in a commensurate

benefit. He further noted that a lot of the ground rules for the operation of the Delta and

CALFED have not yet been established. Mr. Gastelum added that additional surface storage

may not be needed in the near term as the proposition includes funds for new conveyance in

the Delta, increasing its carrying capacity to 8,500 cfs or between 150,000 to 200,000 acre

feet of new supply.

The District’s position that the State needs to recognize the importance of constructing

additional surface water storage was conveyed to Mr. Gastelum and that the proposition to

be considered by the voters in November does not contain this needed provision.

Mr. Gastelum had requested that the Board consider taking no position on the ballot measure

or defer action until September when he could address the Board. However, the ACWA Board

will be meeting on July 26

6 7/15/2002

4. Consideration of Draft Legislative Policy Guidelines:

Draft legislative policy guidelines were presented for the Board’s review that, if adopted, would

provide guidance to staff in responding to legislative and regulatory proposals that could

impact the District. The draft guidelines were developed based upon policy guidelines

adopted by the Association of California Water Agencies and the San Diego County Water

Authority and input from District staff. The draft legislative policy guidelines would better

facilitate staff responding in a more timely manner to changes in legislative and regulatory

proposals per the policy direction provided in the guidelines.

Current District legislative procedures provide that the Board adopt a position on possible

legislative issues and proposed legislation such as support, oppose, support with

amendments, oppose unless amended or watch. Communication in response to the Board’s

action is then prepared for signature by the Board President or Board member with copies

provided at the next Board meeting. If legislation is subsequently amended such that it may

result in a possible change in position, the District’s legislative procedures provide that the

item be considered by the Board at the next meeting. If action is needed prior to the time that

the Board can take action, staff confers with the Board President or Vice President on the

change in legislative position and that change is reported to the full Board with ratification of

the action requested at the next Board meeting.

The draft legislative policy guidelines reflect legislative policy positions on the following areas:

imported water supply, water transfers, local water resources, water facilities/facility

improvement, water use efficiency, biological and habitat preservation, fiscal policy, right of

way acquisition, power supply, local autonomy, land use and water management planning,

7 7/15/2002

water resources planning, water security, safe drinking water act/water quality, clean water

act, agricultural return flows and surface water quality, fully protected species and operational

efficiency. Legislation that does not meet the principles set forth in the guidelines would not

be acted upon by staff, but rather presented to the Board for guidance. Staff proposed that,

if the Board concurs with the legislative policy guidelines, a finalized set of guidelines would

be presented at the next meeting for Board approval. The adopted guidelines would be

reviewed at least every two years.

Director Aleshire stated that the proposed legislative policy guidelines cover a wide range of

topics enabling staff to respond to almost all legislative proposals and issues that may arise

without concurrence of the Board. Director Aleshire voiced that he prefers the existing

legislative procedures due to the possibility that legislation may contain provisions that should

be opposed, such as water bonds with limited funds earmarked for substantive water

improvements and the majority reserved for environmental concessions and/or property

acquisition. He added that the current policy has the flexibility if a legislative issue should

be addressed prior to the next Board meeting whereby concurrence is obtained from the

Board President with ratification of the full Board requested at the next meeting.

General Manager Arant clarified that adopted legislative policy guidelines would improve the

overall effectiveness of the District’s legislative program allowing for more timely responses

to amended legislation and facilitate ACWA’s Legislative Outreach Program. Legislative

policy guidelines for the District could be adopted and procedural guidelines retained requiring

approval of a position from the full Board or, if time does not permit, concurrence of the Board

President or Vice President.

5. Strategic Plan Specific Goals and Budget Objectives, End of Fiscal Year 2001-2002:

The year-end status report on the 2000-2001 and 2001-2002 Strategic Plan Specific Goals

and Fiscal Year 2001-2002 Budget Objectives was presented. Of the 56 active specific goals,

as of June 30, 2002, 33 were complete and 11 underway or nearly complete, with 9 under the

control of an outside agency or party and 3 being long-term or ongoing projects. As such,

93.6% of the projects under the District’s control were completed.

6. Customer Comment Card Program, Fiscal Year 2001-2002:

Results of the Fiscal Year 2001-2002 District Customer Comment Card Program were

reviewed. Throughout the fiscal year, 180 cards were mailed to customers having service

contact with the District in which 44 were returned with 217 responses received to the five

service rating categories. The service rating categories are:

8 7/15/2002

9 7/15/2002

8. District Status Report, June 2002:

The District’s Status Report for the Fiscal Year ending June 30, 2002, was reviewed. Water

purchases for the year from the San Diego County Water Authority totaled 49,555.73 acre

feet.

9. Communication with Certified Agricultural Customers Re: Impact from the Drought:

At the July 1

10.