VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, Dec ember 1, 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.
Board members present were: Directors Broomell, Polito, Aleshire and Stone. Director Haskell was absent. Staff members present were: General Manager Arant, General Counsel de Sousa, District Engineer Jewell, Director of Finance Jeffrey, Water Systems Supervisor Bull, Project Engineer Grabbe and Board Secretary Stetson. Spectator present was Mr. David Ross, Valley Roadrunner Newspaper.
1. Upon motion by Stone, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held November 17, 2003
• Concept approval of the Valley Center California Department of Forestry Fire Station water main extension project consisting of approximately 420 feet of 8-inch water main, one 6-inch fire hydrant, two 2-inch water services and other appurtenances
• Concept approval of the Hormuth water main extension project consisting of approximately 1,600 feet of 8-inch water main, three 6-inch fire hydrants, 14 2-inch water services and other appurtenances
• Concept approval of the Thrash water main extension project consisting of approximately 650 feet of 8-inch water main, one 6-inch fire hydrant, three 1-inch water services and other appurtenances
• Quitclaim that portion of the District’s easement recorded April 11, 2003 (Sky Ridge project), where there are no District facilities
• Audit demand check numbers 96572 through 96603
• Treasurer’s Report for the period ended October 31, 2003
2. Administrative Code Changes Increasing Water Rates and Charges:
Amendments to the District’s Administrative Code to increase the water rates, which would provide for a pass-through of the San Diego County Water Authority’s and Metropolitan Water District’s increases in the wholesale price of water and for increases in the operations and maintenance costs of the District, were presented for Board consideration.
Director of Finance Jeffrey reviewed the proposed new rate structure which would be effective with the billings of January 1, 2004. Assuming water purchases of 45,200 acre feet, the rates for M&I and agricultural customers would be as follows with the pass-through of the increases from the District’s wholesale suppliers and a 4.1% increase in the District’s local cost:
Proposed M&I Proposed Agric.
Rate (Per Ac. Ft.) Rate (Per Ac. Ft.)
MWD Total $461.59 $332.47
SDCWA Total 115.21 83.34
VCMWD Local Cost 74.56 74.56
These rates reflect an increase of $29.06 and $21.27 per acre foot for M&I and agricultural customers, respectively. It was noted that the portion of the District’s water rates for local costs has not increased since Fiscal Year 1995-96, but has been lowered twice since that time to its current level of $71.62/ac. ft. as a result of absorbing wholesale rate increases.
Pass through of an increase in the Infrastructure Access Charge, which is a fixed charge assessed monthly by the San Diego County Water Authority based on the number and size of the District’s active meters, was requested. Said monthly charge is shown separately on the customer’s water bill and identified as a pass through from the San Diego County Water Authority. The monthly Infrastructure Access Charge will increase from $1.00 to $1.15 on a ¾” meter effective as of the January 2004 billings.
In response to Director Stone’s inquiry as to justification for the proposed increase in the District’s rates for local costs from $71.62 to $74.56 per acre foot, staff responded that approximately $35 million in capital improvement projects have been identified and a debt financing program may be implemented to fund the improvements. A stream of revenue will need to be identified for a debt financing program such as securing additional funds for local costs. Further, the District’s purchasing power has been eroded by maintaining the charge at $71.62/ac. ft. for approximately 8 years at a time when costs increased and water sales have leveled off. The proposed increase in the rates for the District’s local share will preserve the ability to continue with the capital improvement program as well as fund cost increases such as the state’s regulatory fees and emergency preparedness enhancements. Increasing the District’s local cost would likely circumvent the need for a larger increase for financing of the identified capital improvements.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
ORDINANCE NO. 2003-15
ORDINANCE OF THE
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 and Stone
ABSENT: Director Haskell
3. Payoff of Promissory Note Used for Expansion of the
Water Reclamation Facility:
Authorization for the District to payoff the promissory note, which funded the expansion project at the Moosa Canyon Water Reclamation Plant, was requested. The negotiable promissory note matures on December 28, 2003, with a principal amount of $1.5 million due and payable. Staff recommended that sewer capacity charges collected ($600,700) be used to repay a portion of the note with the balance of approximately $899,300 funded from a loan from the General Fund. As such, underwriting and legal fees will be avoided that would be incurred if the note was renegotiated.
Staff explained there are several large developments In the Moosa Reclamation Plant’s service area that, upon payment of the sewer capacity fees, should repay the loan from the General Fund. Interest on the General Fund loan will be calculated by multiplying the monthly average cash balance for the year by the monthly average yield on the General Fund’s investments for the year.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-41
RESOLUTION OF THE
DISTRICT TO PROVIDE FOR PAYOFF OF THE NEGOTIABLE
PROMISSORY NOTE USED TO FINANCE EXPANSION OF THE
WATER RECLAMATION FACILITY
4. Review of STEP Sewer Maintenance Charges:
Staff had been directed to continue to monitor the revenue and expenses associated with maintaining the STEP sewer system serving the Rimrock Development and present a summary by approximately December 2003. Currently, the monthly STEP maintenance charge is $30.00/EDU. An outline of the revenue and expenses since Fiscal Year 2000-01 was presented as shown below:
Budgeted Actual Actual Net
Fiscal Year Expenses Expenses Revenue Gain / (Loss)
2000-01 $34,750 $26,782 $ 7,048 $(19,734)
2001-02 14,270 8,635 9,498 863
2002-03 18,750 9,830 12,083 2,253
2003-04* 22,780 1,098 3,284 2,186
General Manager Arant noted that since 2001-02 revenue collected from the STEP system maintenance charge has exceeded expenses. This trend can largely be attributed to an improved control unit for the STEP system and adoption of increases in the maintenance fee to offset inflation. It was further explained that budgeted expenses include funding for replacement pumps though no pump replacements have been needed in the past two years. Staff recommended that the STEP system maintenance fee be maintained at this time with expenses and revenue monitored, and adjustments in the charge considered during the budget process.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Board approved staff’s recommendation that no increase in the STEP system maintenance charge be adopted and the charge will be re-evaluated during the budget deliberations for Fiscal Year 2004-05.
5. Award of Contract for the Engineering
x II Remodel Project:
Bids were received for the remodeling project of the Engineering Annex II (formerly the boardroom modular) on November 20th. Two bids were submitted with the lowest from Blair Rasmussen Construction at $43,418.00. Project Engineer Grabbe explained that the remodeling of the modular will result in there being a conference room, 4 offices and 2 workstations for engineering/Information Technology personnel. Adoption of Resolution No. 2003-38 awarding the contract for the Engineering Annex II Remodel project to Blair Rasmussen Construction was recommended.
Upon motion by Polito, seconded by Aleshire and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-38
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AWARDING CONTRACT FOR THE ENGINEERING
ANNEX II REMODEL PROJECT
6. Ordinance Amending
ucational Incentive Reimbursement Program and Training and
ucation Compensation and Expense Reimbursement:
Ordinance No. 2003-16 to amend Article 7 of the District’s Administrative Code pertaining to employees’ educational incentive reimbursement program and training and education categories was presented for Board approval.
During a review of the District’s training and education programs, it was discovered that additional clarification regarding the policy on reimbursement of expenses and compensation for training or educational pursuits was needed for consistency in its application. As proposed, Section 7.3, Educational Incentive Reimbursement Program, would be amended to establish a limit of three attempts for testing and certification cost reimbursement for a given license or certificate. In addition, Section 7.4 would be added (Training and Education Categories; Compensation Provisions) to set forth the training and education categories and the guidelines for compensation and expense reimbursement for each of the categories.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2003-16
ORDINANCE OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT AMENDING
THE ADMINISTRATIVE CODE TO INCORPORATE CHANGES
IN ARTICLE 7, RECOGNITION PROGRAMS, SETTING
FORTH A LIMITATION ON PAYMENT OF TESTING AND
CERTIFICATION COST REIMBURSEMENT AND GUIDELINES
PERTAINING TO TRAINING AND EDUCATION CATEGORIES
ABSENT: Director Haskell
7. Proposed 9/80 Workweek Trial:
General Manager Arant reviewed that a provision of the MOU with employees was to continue discussion and negotiations with employees regarding a 9/80 workweek. The 9/80 analysis had been approved with two conditions that are: 1) the new workweek would not result in additional costs to the District, and 2) it would not result in diminished service levels for the customers and community.
A committee comprised of the Valley Center Employees’ Association President, 3 Employee Represenatives, and District senior management staff began evaluating the potential implementation of a 9/80 workweek in July 2003. Agencies of similar size with a 9/80 workweek (Vista ID, Fallbrook PUD and Olivenhain MWD) were contacted in which they reported that customer service personnel were retained on the traditional 10/80 workweek. The agencies reported that their hybrid 9/80 workweek programs improved employee morale and there were initial improvements in sick leave usage and productivity, though offset by minor inconveniences of employees not being present when needed.
A hybrid workweek trial was proposed with a trial period from February 2004 through September 30, 2004. This trial proposal was approved by a vote of the Employees’ Bargaining Unit. Specifics of the proposal were reviewed which are outlined below:
• Due to concerns regarding adequate staff to provide responsive customer service, certain employees would be required to stay on the traditional 10/80 schedule. Employees that are in a work division or crew grouping would be required to participate in the 9/80 workweek to maintain effectiveness and others provided optional participation. There are approximately 27 employees that would be required to retain the traditional 10/80 schedule.
• Exempt personnel would not participate in the 9/80 workweek, but would provide overall management coverage for both schedules.
• The work schedules would be: 7:00 a.m. - 4:30 p.m. for the 9/80 employees (hours of 7:30 a.m. - 4:00 p.m. for the “on” Fridays), and 7:30 a.m. – 4:00 p.m. for the 10/80 employees.
• Due to staffing concerns on Fridays, requests for vacation and compensatory time off will be granted with due consideration of adequate staff coverage.
• For the 9/80 employees, pay periods would begin at mid-shift on Friday and end at mid-shift on the following Friday. When a holiday falls on a 9 hour workday, the employee will be charged for the additional hour (vacation or compensatory time), and 8 hours of vacation pay will be provided when a holiday falls on an employee’s normal day off.
If the trial hybrid workweek schedule is approved by the Board, its implementation will be evaluated for organizational performance that will be used in analyzing the program for extension beyond the trial period. Factors to be evaluated include:
Adequacy of staffing levels available during regular business hours,
Changes in productivity,
Issues incurred in scheduling vacation and compensatory time off,
Availability of emergency response personnel on weekends and holidays,
Changes in use of sick leave and family leave,
Patterns of sick leave and family leave use on the “on” Fridays and Mondays following the “off” Fridays,
Changes in patterns of overtime expenses, and
Management and payroll administration for the various work schedules.
Director Aleshire voiced that he opposes the 9/80 workweek proposal as it results in no benefit to the District or the community and with its complexity creates an added work load for management as well as payroll administration and in the organization of work schedules. Director Stone stated he could support a trial period for the 9/80 workweek noting the effort expended developing the proposal and that its feasibility would be analyzed after the trial period.
Upon motion by Aleshire, seconded by Polito, with Director Stone abstaining, implementation of the proposed Trial Hybrid 9/80 Workweek Program was denied.
GENERAL MANAGER’S AGENDA
8. Status Report on Vulnerability Assessment Emergency Response Plan Review:
Gaby Olson, Program Coordinator for development of the Vulnerability Assessment and update of the District’s Emergency Response Plan, provided a status report. She reported that the District must submit its vulnerability assessment by June 30, 2004 and an update of its Emergency Response Plan six months thereafter. The Vulnerability Assessment will consist of a review of the vulnerability of the District’s system to a terrorist attack or other intentional acts intended to substantially disrupt the ability of the system.
Bids were received from four consultants to conduct the Vulnerability Assessment and Emergency Response Plan Update. They were:
LXT Group $29,929
R.W. Beck $29,575
Telemus Solutions $24,250
Tracer Environmental $20,110
Sciences & Technologies
Following interviews with representatives of the four consulting firms, a contract was awarded to Telemus Solutions for their bid of $24,250. Telemus Solutions was selected due to their extensive experience in conducting vulnerability assessments and their strong security background with a substantial number of the employees with years of security and intelligence experience. Mrs. Olson stated that the District’s Vulnerability Assessment will be completed by March 1, 2004 and the Emergency Response Plan by August of 2004.
BOARD OF DIRECTORS’ AGENDA
Director Aleshire reported that during the ACWA Joint Powers Insurance Authority meeting that morning, action was taken to require all participating member agencies to pay for ACCU-Med, an agency that conducts pre-employment physical examination screenings. Utilization of this program is optional.
JPIA’s return on investments is averaging approximately 1.7% compared to the District’s 2.29% average investment earning rate. JPIA had taken action to withdraw a substantial amount of its funds from the Local Agency Investment Fund (LAIF), but will be reinvesting in this Fund.
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: Sweetwater Authority, et al. v. Dynegy, Inc., et al.
San Diego Superior Court Case GIC 760743
11. The Regular Board meeting was reconvened at 3:59 p.m. There was no reportable action from the Closed Session.
12. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at