VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, June 16, 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.
ROLL CALL
Board members present were: Directors Broomell, Aleshire, Haskell and Stone. Director Polito was absent. Staff members present were: General Manager Arant, General Counsel Cowett, District Engineer Jewell, Director of Operations Dacus, Director of Finance Jeffrey, Accountant Pugh, Information Technology Specialist Rivard, Meter Services Supervisor Jones, Wastewater Systems Supervisor vonBorstel, Water Systems Supervisor Bull, Sr. Pump Facilities Technician Regan, Construction & Maintenance Supervisor Hoyle, Project Engineer Grabbe, GIS/Mapping Technician Garcia, and Board Secretary Stetson. Spectator present was Ms. Means of Means & Associates, LLC.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held June 2, 2003
• Concept approval of the Horwath Water Main Extension Project consisting
of approximately 1,420 feet of 8 inch water main, two 6 inch fire hydrants,
one water service and other required appurtenances
• Pursuant to Assessment District 93-1, reduction in the lien for parcel
186-612-33 (Mr. Kiesel) to the collection study amount of $68.53/EDU and
removal of the AD 93-1 lien when paid
• Audit demand check numbers 94325 through 94503
• Treasurer’s Report for the period ended April 30, 2003
ACTION AGENDA
2. Report on the Biennial Actuarial Valuation of the District’s Retirees’ Health Benefits Plan:
An actuarial valuation of the District’s Retirees’ Health Benefits Plan is performed every two years. Pamela Means of Means & Associates, LLC completed the valuation of the Plan as of July 1, 2002, and summarized the report as follows:
Expenses of retirement medical plans of senior type plan providers and the Medicare Part B coverage have increased substantially since the last biennial report for the period as of July 1, 2000. With increased liabilities and participating retirees, under the worst case scenario, there could be a deficit of $386,000. The present value of plan liabilities of $4,534,500 to $6,715,500 is offset by expected future contributions of $3,336,700 to $4,663,400 plus assets of $1,666,100. The projected rate of return on investments utilized is 6.25%.
To meet projected actuarial needs considering updated census information, mortality, interest, and medical care trend assumptions, the Plan will require annual contributions of approximately 11.5% of payroll until the end of the working lifetime of each of the employees currently covered by the Plan. Funding for the Plan is currently at 1.6% of payroll. Staff reviewed that funding for the Plan had been directed to CalPERS contributions with the expectation of redirecting payments to the retirees’ health benefit plan as CalPERS rates decreased. However, CalPERS rates are not expected to decrease for approximately five to six years. It was recommended that the underfunded status of the retirees’ health benefits plan continue to be closely monitored. It has been proposed to form a committee to address the benefits and funding of the Plan.
3. Resolution Adopting Fixed Charge Special Assessments for Fiscal Year 2003-2004:
Resolution No. 2003-21 setting the District’s fixed charge special assessments for Fiscal Year 2003-2004 for the Paradise Mountain annexation, delinquent and unpaid water bills, Assessment District No. 96-1, and the sewer standby charge for the Woods Valley Sewer Service Area was presented. The proposed assessments were reviewed as summarized below:
Paradise Mountain Annexation Annual Assessment. Pursuant to annexation of 14.5 acres on Paradise Mountain to the District in 1993, a fixed charge special assessment is levied. Of the five affected parcels, four have paid their assessments in full. The assessment to be levied on the one remaining parcel for 2003-2004 is $4,827.80.
Delinquent and Unpaid Water Charges. Per the provisions of the Water Code, delinquent and unpaid water and other charges may be collected through the property taxes of the property using the water or service. The delinquency must be unpaid for
at least 60 days and have had a lien recorded against the property. Two parcels (186-410-68 and 132-320-38) with a total delinquency of $3,129.32 will be assessed their respective delinquency charges through the tax roll for 2003-2004.
Assessment District No. 96-1. Assessment is to meet the principal and interest obligations in Fiscal Year 2003-04 for the limited obligation improvement bonds sold by the District pursuant to the improvements to the Moosa Sewer Treatment Facility for properties within Assessment District No. 96-1 (Treasures at Castle Creek). The assessment for Fiscal Year 2003-04 is $761.00 per parcel of which there are 203.
Woods Valley Sewer Service Area. A Sewer Standby Fee will be assessed parcels within the Woods Valley Sewer Service area to fund operation and maintenance expenses of the Woods Valley Sewer System. There are 271 parcels within this sewer service area to be assessed a sewer standby fee of $600.00 per EDU (280 total EDUs) in Fiscal Year 2003-2004.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-21
RESOLUTION OF THE BOARD OF DIRECTORS OF VALLEY
CENTER MUNICIPAL WATER DISTRICT PLACING FIXED CHARGE
SPECIAL ASSESSMENTS FOR 2003-04 ON PROPERTY WITHIN
PARADISE
MOUNTAIN ANNEXATION, UNPAID CHARGES FOR
WATER AND OTHER SERVICES, ASSESSMENT DISTRICT
NO. 96-1, AND
WOODS
VALLEY
SEWER SERVICE AREA – SEWER
STANDBY FEE PURSUANT TO WATER CODE SECTIONS 72094,
72100, 72102, STREETS AND HIGHWAYS CODE SECTION 8682,
AND HEALTH AND SAFETY CODE SECTION 5470 AND FOLLOWING,
ON THE
SAN DIEGO
COUNTY
SECURED PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
4. LAFCO Independent Special Districts of San Diego County 2003 Special Districts Election:
The Local Agency Formation Commission (LAFCO) is conducting its 2003 election for one alternate special district member position on LAFCO and ten positions on the Special Districts Advisory Committee. The Advisory Committee members make
recommendations to LAFCO on various issues that affect special districts’ jurisdictions and service provisions in the county. Two nominations for the alternate special district member and fourteen nominations for the Advisory Committee were received.
The nominating committee evaluated the nominations received considering special district experience, interests and knowledge of LAFCO issues. Committee recommendations were for the Alternate Special District Member: Andy Menashek and for the Special Districts Advisory Committee Members: Barbara Barber, Judy Hanson, Darrell Jobes, John Pastore, Tom Pocklington, James “Ski” Wolneiwicz, Daniel Goldberg, Dr. Hanno E.G. Ix, Augie Scalzittti and Trish Hannan. Of the ten Special Districts Advisory Committee member positions to be filled, 2 positions have terms expiring in 2004, and eight positions with terms expiring in 2005. Director Aleshire stated that, after review of the resumes, he recommended the District’s vote for Special Districts Advisory Committee members include an affirmative vote for Philip Keep of Whispering Palms Community Services District and Max Halfon of the Tri-City Healthcare District.
President Broomell was authorized to cast the written ballot for the LAFCO Independent Special Districts of San Diego County 2003 Special District Election.
5. Proposed Increases in the Monthly Sewer Service Charges for the Moosa Wastewater Facility and the Pressure Sewer Maintenance Fees:
Increases in the monthly sewer service charge for the Lower Moosa Wastewater Facility to reinstate funding of the capital replacement reserve for the purchase of replacement assets or facilities were proposed. The sewer service charge was proposed to be increased by $3.00/EDU per month effective July 1, 2003 and an additional $3.00/EDU per month increase effective as of January 1, 2004. As such, the monthly sewer service charge at the Lower Moosa Wastewater Facility would be $31.00/EDU as of July 1, 2003 and $34.00/EDU on January 1, 2004. Full funding of the replacement reserve is $429,861 which would require an additional $11.00 per EDU per month. The Lower Moosa Wastewater Facility’s reserve balances and replacement schedules will continue to be evaluated to determine future replacement funding requirements.
The pressure sewer maintenance fee collected for the septic tank effluent pump (STEP) maintenance was proposed to be increased by the CPI or to $30.00 per EDU per month. The STEP systems provide sewer service to properties within the Rimrock development. Director of Finance Jeffrey stated that the pressure sewer maintenance fee of $30.00/EDU/month funds approximately 55% of the operational and maintenance costs for the STEP system. Full cost recovery of maintenance expenses is anticipated as more properties are developed in the Rimrock development with the STEP systems.
Director Aleshire inquired as to the level of the pressure sewer maintenance fee required to fully recover costs incurred for maintenance of the property owners’ STEP systems. Director of Finance Jeffrey responded that the fee would need to be approximately $60.00/EDU per month. Director Aleshire stated that the property owners with the STEP systems should fully fund the maintenance costs for their systems through the pressure sewer maintenance fee. An aggressive accelerated fee schedule was suggested to achieve this funding goal. To recover half of the budgeted maintenance expenses, a monthly pressure sewer maintenance fee of $45.00 per EDU per month would be required. Budgeted expenses for maintenance of the STEP systems total $22,800. Director of Operations Dacus clarified that the budgeted request for FY 2003-04 is conservative to cover potential costs such as replacement of pumps, controls, etc., but funds will not be expended unless necessary for the maintenance of the STEP system’s facilities. A cost analysis of the STEP system’s maintenance indicated a variance of costs each year, and that costs may be high one year, but reduce substantially the next. As such, a life cycle cost analysis of the STEP system would more accurately reflect costs to maintain the system and could be used to establish a maintenance fee that within a cycle would recover costs.
Staff was directed to analyze costs associated with maintenance of the Septic Tank Effluent Pump Systems (Rimrock development) and a fee schedule to recover such costs to be presented to the Board for further discussion and consideration.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following Ordinance, entitled:
ORDINANCE NO. 2003-07
ORDINANCE OF THE
VALLEY
CENTER
MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO PROVIDE FOR CHANGES IN SEWER RATE
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
6. Proposed Budget for Fiscal Year 2003-2004:
The District’s operations, maintenance and capital budget for Fiscal Year 2003-2004 was reviewed by Director of Finance Jeffrey as outlined below:
Revenues:
▪ Water sales estimated at 42,500 ac. ft.
▪ No rate changes included in the budget. Proposed increases by Metropolitan and the SDCWA to be effective January 1, 2004, will be passed through to the District’s customers per policy and consideration will be given to adjusting the District’s share.
▪ Capital financing plan will be completed in FY 2003-04 and may include recommendations including debt issues, rate changes and restructuring.
▪ 399 new meters are budgeted for installation which includes 161 fire meters
▪ Interest income of $624,000 is anticipated at 2.6%
▪ Two new positions requested: Water Systems Technician (SCADA program) and Engineering Technician (capital projects)
▪ Negotiations for a new MOU with employees are proceeding.
▪ Increases in electric rates and natural gas prices are expected. No change in the pump zone charges is recommended
▪ Other operating items proposed in the budget include a vulnerability assessment ($46,550), temporary employee to assist with the vulnerability assessment ($14,000), budgeted expenses of $80,000 for the Economic Study Group and the replacement of five trucks.
▪ Capital project funding requests total $4,414,700 as shown on the attached Exhibit “A”.
▪ Moosa Sewer Fund’s operating reserve on June 30, 2003, projected at 5 months operating and maintenance. Monthly sewer service charge increases will resume funding of the replacement reserves.
▪ Skyline Ranch Sewer Fund is self-supporting. Rate will decrease from $33.55 to $33.04.
▪ An assessment of $600.00 per unit will secure $168,000 for the Woods Valley Ranch Sewer Fund for operating expenses, operating reserve fund and replacement reserves.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-19
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTR MUNICIPAL WATER DISTRICT ADOPTING
THE FINAL OPERATING AND CAPITAL BUDGET FOR
THE FISCAL YEAR 2003-2004 AND ESTABLISHING
CONTROLS ON CHANGES IN APPROPRIATIONS FOR
THE VARIOUS FUNDS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2003-05
ORDINANCE OF THE
VALLEY
CENTER
MUNICIPAL WATER DISTRICT AMENDING THE
ADMINISTRATIVE CODE TO PROVIDE FOR
CHANGES IN AUTHORIZED STAFFING LEVELS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
7. Approval of Contract for an Electronic Document Management System:
The District’s electronic document management system was installed in 1997 and contains nearly 300,000 stored documents. The system is nearing capacity and upgraded document management systems that can also integrate with the District’s geographical information system (GIS), as well as engineering drawings, have been analyzed. Director of Finance Jeffrey reported that the only software found that will meet the District’s document management needs is from Hummingbird, Ltd. Approval of a contract with Hummingbird, Ltd. as a sole source procurement was requested to provide and install an electronic document management system in the amount of $225,994.14.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-22
RESOLUTION OF THE BOARD OF DIRECTORS
OF
VALLEY
CENTER
MUNICIPAL WATER
DISTRICT AUTHORIZING AN AGREEMENT WITH
HUMMINGBIRD, LTD., FOR AN ELECTRONIC
DOCUMENT MANAGEMENT SYSTEM
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
8. Award of Contract for the Modular Boardroom Building’s Decking, Ramps, Stairways
and Fencing:
Bids for the decking, ramps, stairways and fencing for the new Modular Boardroom building were opened on April 3rd. Award of contract to Design Space Modular Buildings at the cost of $44,302 was recommended.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-23
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AWARDING CONTRACT FOR THE DECKING ON
THE NEW
MODULAR
BOARDROOM
BUILDING
was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire, Stone and Haskell
NOES: None
ABSENT: Director Polito
GENERAL MANAGER’S AGENDA
9. Review of Miscellaneous Informational Items:
General Manager Arant requested and the Board supported mailing a letter to the San Diego County Water Authority expressing dismay that the Authority would support the State’s actions of denying Metropolitan’s request to store water it had secured (100,000 ac. ft.) in a State Water Project reservoir. This action is considered to be a result of the Governor’s dissatisfaction concerning the stalled SDCWA/IID Water Transfer Proposal and Metropolitan’s reluctance to approve the current terms of this proposal. The federal government, however, thwarted the state’s action by offering space for Metropolitan’s water in the federal Lake Shasta reservoir citing “that to do otherwise would constitute an unconscionable waste of a precious resource.”
BOARD OF DIRECTORS’ AGENDA
10. Request for Proposals from Auditors:
Director of Finance Jeffrey reported that, per Board direction, proposals from auditors to complete the District’s audit for Fiscal Year 2002-03 have been solicited. Review of the proposals received by staff with interviews of the 3 most qualified firms was recommended. Participation by Board members on the interview panel was requested.
An Ad Hoc Committee was formed consisting of Directors Aleshire and Stone to participate in the interview of auditors.
CLOSED SESSION
11. A Closed Session was called by President Broomell at 3:50 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
$ Government Code '54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of Case: Rincon del Diablo Municipal Water District, et al. v. San Diego County Water Authority, et al.
San Diego County Superior Court Case No. GIC798230
$ Government Code '54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of Case: Cougar Pass Coalition v. John Braman, et al.
San Diego County Superior Court Case No. GIN028464
$ Government Code '54957.6(a), Conference with Labor Negotiators
Agency Representatives: Gary T. Arant, General Manager
William J. Jeffrey, Director of Finance
Employee Organization: Valley Center M.W.D. Employees= Association
$ Government Code '54957.6(a), Employee Performance Evaluation
Title of Position: General Manager
12. The Regular Board meeting was reconvened at 4:40 p.m. No action was reported.
ADJOURNMENT
13. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at 4:50 p.m.
ATTEST: ATTEST:
_____________________________ _______________________________
President Secretary