VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, March 17, 2003
Place: Board Room
29300 Valley Center Rd.
The Valley Center Municipal Water District Board of Directors’ meeting was called to order by President Broomell at
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 Operations Dacus, Director of Finance Jeffrey, and Board Secretary Stetson. Spectator present was Mr.
Ross, Valley Roadrunner Newspaper.
1. Upon motion by Aleshire, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held
March 3, 2003
• Concept approval of the Sherwood Ridge Unit No. 3 (TM #5039-3) consisting of approximately 19,500 feet of 8”, 10” and 12” water mains, twelve 6” fire hydrants, seventy-two 1” water services and other required appurtenances
• Concept approval of the Armstrong Farms Line Extension consisting of approximately 540 feet of 8” water main (replacement of 4” main), one 6” fire hydrant and other required appurtenances
• Audit demand check numbers 93088 through 93254
• Treasurer’s Report for the period ended February 28, 2003
2. Status of the Valley Center and Cole Grade Roads Water Main Replacement Project:
District Engineer Jewell gave an update on the water main replacement project at the intersection of Valley Center and Cole Grade Roads. This replacement project had
been approved with an “urgent” status as the pipeline in Valley Center Road in the area of the aforementioned intersection has deteriorated and pipeline breaks have occurred in which there was property damage. Previously, the pipeline was to be replaced in conjunction with the County’s road improvement/realignment project. But, due to the potential of additional line breaks occurring prior to the county road work project, the timetable for the pipeline replacement project was accelerated.
R.W. Beck, design consultant for the Valley Center Road Pipeline project, prepared a design plan for the Valley Center/Cole Grade Roads pipeline replacement project which was then sent to the County for approval. The pipeline design plan had the pipeline at depths that would not interfere with the county’s existing and future storm drains. Subsequent to submittal of the plans to the county, it was discovered that testing of the ground water near the gas station at the intersection indicated the detection of gasoline at an approximate depth of 10 feet. District Engineer Jewell reported that the District’s proposed pipeline for the Valley Center/Cole Grade Roads intersection would be near this depth where the gasoline was detected. In order to avoid the increased costs and further delays in the proposed pipeline replacement project should gasoline be detected in the location where the pipeline will be installed, the pipeline was redesigned to avoid the depth at which gasoline was detected. In this manner, when the county’s road improvement project is underway in the future and the storm drains installed, a portion of the District’s pipeline replacement project at the Valley Center/Cole Grade Road intersection will need to be replaced and relocated under the storm drain. Additional costs may be incurred at that time if gasoline is present in the area to be excavated. District General Counsel indicated the property owner of the gas station would be the financially responsible party, but it would take time to resolve.
It was proposed to complete the Valley Center/Cole Grade Roads pipeline replacement project at night due to the high volume of traffic in the area. Advertisement of the pipeline project should be in 2 to 3 weeks with construction expected to commence by mid-June when school has recessed.
Budgeted funds for the Valley Center/Cole Grade Roads pipeline replacement project was $400,000. Construction costs are now estimated at $471,000. After review of the construction estimates, the appropriation of additional funds may be requested.
3. Review of the District’s Investment Policy and Administrative Code Article 50, Finance
Department – Duties:
Per the District’s investment policy procedures and the Government Code, the Board of Directors shall, annually, review the District’s investment policy, which is set forth in Section 50.3 of the District’s Administrative Code. Further, Government Code §53607 requires the delegation of investment authority by the Board to be confirmed annually. The Board has delegated the authority to invest and reinvest District funds to the Treasurer of the District, William Jeffrey.
Proposed revisions to Section 50.3 of the District’s Administrative Code, Statement of Investment Policy, were as follows:
• Redefine market-average rate of return to use one year U.S. Treasury bonds
instead of U.S. Treasury bills which are no longer issued by the United States.
• Remove “retirement” from exceptions to the scope of the investment policy,
as Retirement Plan 002 has been liquidated since the District joined CalPERS.
Elimination of Section 50.2, Activities-Accounting, within the Administrative Code was also proposed as the duties and functions of position classifications are maintained within the job descriptions for each position.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2003-03
ORDINANCE OF THE VALLEY CENTER MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO PROVIDE FOR CHANGES IN THE STATE-
MENT OF INVESTMENT POLICY AND TO RENEW
THE DELEGATION OF INVESTMENT AUTHORITY
TO THE TREASURER OF THE DISTRICT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
4. Board Per Diem – Annual Review:
Per policy of the District, the Board’s per diem is reviewed annually for consideration of a change. At present, the Board receives compensation at $100.00 per diem with a maximum of 10 meetings per month. This rate has been in effect since February of 1993. Per law, the Board may increase its per diem amount by 5% for each calendar year since the date of the last adjustment or to a maximum of $162.00 per diem. A public hearing must be noticed and held to consider a change in the Board per diem compensation. Said public hearing could be conducted during the regular Board meeting of April 7th.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the Board elected to retain its current compensation of $100.00 per diem.
5. Resolution Establishing Date of Public Hearing to Consider Assessment of Water
Availability Charge for Fiscal Year 2003-2004:
Resolution No. 2003-12 was presented for the Board’s consideration to set June 2, 2003, at 2:00 p.m. as the date and time of the public hearing for the proposed water availability charge for Fiscal Year 2003-2004. Continuation of the District-wide water availability charge levied since FY 1995-1996 of $10.00 per acre with a $10 per parcel minimum was proposed. Assessment of the $10.00 per acre water availability charge would generate revenue totaling $589,000, which could be allocated as follows:
Revenue Debt Service $ 92,444
Ongoing Capital Requirements 496,556
Director of Finance Jeffrey reported that, effective as of January 1, 2003, Metropolitan Water District will collect its total Readiness-to-Serve charge (funds a portion of Metropolitan’s capital programs) from a standby charge assessed on property within the District. Since the implementation of Metropolitan’s Readiness-to-Serve charge, a large portion of the District’s $10.00 per acre water availability assessment had been earmarked to fund this charge. In Fiscal Year 2003-2004, approximately $353,000 previously collected by the District for the Readiness-to-Serve charge can be allocated toward the District’s pipeline replacement program.
In response to Director Stone’s question pertaining to continuing assessing the $10.00 per acre water availability charge if it is not needed to fund Metropolitan’s Readiness-to-Serve charge, staff responded that Metropolitan’s water charges have not been reduced but rather restructured. Along with the reduction in the Readiness-to-Serve charge was the implementation of a Capacity Reservation Charge that will be assessed as a component of Metropolitan’s water charges. In the past, District reserves for capital improvements, such as pipeline replacement projects, was partially funded through the commodity rate. Under Metropolitan’s restructured rates (Tier I, Tier II and the Capacity Reservation Charge), a larger portion of the District’s capital improvement funds will be funded through the continuation of the $10.00 per acre water availability charge.
Director of Finance Jeffrey clarified that continuation of the $10.00 per acre water availability charge provides a fixed revenue source to the District which would be prudent to retain as the District’s water sales are affected by the vagaries of the weather and there is the potential that revenue from property taxes could be substantially reduced or eliminated due to the state’s budget crisis. General Manager Arant added that a large segment of both Metropolitan’s and the San Diego County Water Authority’s restructured rate structures are fixed charges. Further, the District-wide water availability charge is a mechanism to collect money from undeveloped property owners that will benefit from the “availability” of water and, therefore, from the capital projects which are funded by this charge. As directed by the Board, an analysis outlining the water charges from Metropolitan Water District and the San Diego County Water Authority will be provided.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2003-12
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT SETTING
FORTH A SCHEDULE OF WATER AVAILABILITY CHARGES
PROPOSED TO BE ESTABLISHED FOR ALL PROPERTY
WITHIN THE DISTRICT FOR 2003-2004 AND FIXING THE TIME
AND PLACE OF HEARING AND GIVING NOTICE OF HEARING
was adopted by the following vote, to wit:
GENERAL MANAGER’S AGENDA
6. Legislation Sponsored by the Economic Study Group:
General Manager Arant reported that the Economic Study Group (ESG) is sponsoring Assembly Bill 1385 (Haynes) which, if adopted, would amend the Government Code concerning LAFCO procedures and provide a mechanism to allocate system capacity to an agency or agencies detaching from the county water authority. The bill is set for a hearing on April 9th in the Assembly Local Government Committee. General Manager Arant stated that he will be in Sacramento on March 20th to interview lobbyists.
Assembly Member Haynes has accepted language that would change the governance structure at the San Diego County Water Authority which has been submitted to the Legislative Counsel. It is proposed to add the language into AB 1385 at the April 9th hearing. The proposed change in the Authority’s governance structure is that a measure would have to be approved by both a majority of the weighted vote based on an all-end financial contribution, and a member agency vote (majority required) with each agency casting one vote. This proposed voting method is similar to the voting structure at SANDAG.
7. Corporate Facility Master Planning Process:
Mr. Don Gillis and Mr. Ron Hilton were at the District’s offices last week gathering data to complete the needs assessment of the Corporate Facility Master Planning project.
A generic needs assessment will identify the facilities to meet the District’s needs through 2025. They are optimistic that the facilities can be constructed on the existing site with certain concessions such as a two-story structure. A presentation of the proposed facilities will be provided the Board along with a comparison of costs to build on the existing site and on an alternate site. To build on the existing site, demolition expenses will be considered in the comparison study as well as the value of the property if sold.
8. Anticipated Lawsuit Challenging Closure of Cougar Pass Road:
Residents opposed to the closure of Cougar Pass Road have hired an attorney to challenge this action. The property owner whose property is encumbered by the easement used for several years by motorists to travel between the Hidden Meadows and Valley Center recently took action to close the gates to impede traffic flow. A web site was created (www.savecougarpass.com) for interested parties to view information and for the purpose of obtaining declarations from users of the road. General Counsel Cowett stated that the intent of a lawsuit regarding Cougar Pass Road will be to demonstrate a prescriptive easement. If the District is named in the suit, it would be because the District has an easement over the property. The District has access through the gates in order to maintain its facilities within the easement.
9. A Closed Session was called by President Broomell at 3:06 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
Name of Case: Rincon del Diablo Municipal Water District, et al. vs. San Diego County Water Authority, et al.
San Diego County Superior Court Case No. GIC798230
• Government Code §54957.6(a), Conference with Labor Negotiations
Agency Representatives: Gary T. Arant, General Manager
William J. Jeffrey, Director of Finance
Linda Hale, Manager of Human Resources
The Regular Board meeting was reconvened at 3:20 p.m. No action was reported.
10. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 3:21 p.m.