VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, March 21, 2005
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, Aleshire, Stone and Haskell. Director Polito was absent. Staff members present were: General Manager Arant, General Counsel Cowett, Director of Finance Jeffrey, Director of Operations Hoyle, District Engineer Jewell, Board Secretary Stetson, Project Manager Williams, Construction Inspector Dentino, and Meter Installers/Technicians Goswick and Feik. Spectator present was Mr. David Ross, Valley Roadrunner Newspaper.
APPROVAL OF AGENDA
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the agenda was amended to add Board consideration of the District’s position regarding proposed legislation, SB 393 (Ortiz) and the National Energy Policy.
2. Upon motion by Aleshire, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held March 7, 2005
• Audit demands
3. Ratification of Change in Scope of Work for Construction of the Meadows Reservoir No. 2:
Project Manager Williams reported that during construction of the Meadows Reservoir No. 2 fractured rock was discovered on the site, which is assumed to have been the result of blasting for construction of the Meadows Reservoir No. 1. A geotechnical survey was conducted and the consultant recommended that the fractured rock be removed to a depth of approximately 5 feet below the bottom of the ring footing with a cement sand-slurry placed within the excavation. In order that the contractor’s work could proceed without further interruption, President Broomell’s approval was obtained for the change in scope of work and, per the District’s Administrative Code, Board ratification of Change Order No. 1 to the Meadows Reservoir No. 2 in the amount of $61,815.60 was recommended.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, Change Order No. 1 to the Meadows Reservoir No. 2 in the amount of $61,815.60 for work associated with the removal of fractured rock around and below the reservoir ring footing was ratified.
4. Approval of Amendment No. 1 for the Design of the
Pipeline Relocation Project:
Kennedy/Jenks Consultants is under contract to prepare plans and specifications for the Rodriguez Road Pipeline Replacement project located within Rodriguez Road between the District’s Rainbow Pump Station and Triple J Road. Approximately 1,200 linear feet of this replacement project is within property proposed to be developed by the Sea Bright Development Company and a preliminary design report for approval by the District was being processed. It was tentatively agreed that Sea Bright would perform all design and construction work for the pipeline within their development with the District contributing the cost associated with upsizing the line for the District’s needs.
Sea Bright is now requesting that the District design and install the portion of the Rodriguez Road Pipeline (approximately 1,200 linear feet) located within their property. Design costs and a portion of the construction costs would be funded by Sea Bright. Kennedy/Jenks Consultants will perform the design work for the additional pipeline at a cost of $11,304.
In addition, redesign of the pipeline, easement preparation and survey work amounting to $14,028 was recommended as it was discovered that approximately 1,000 linear feet of existing pipeline is outside of the existing easement. The additional work proposed to shift the pipeline alignment to the north would provide access to the proposed pipeline and avoid conflicts with current use on the property.
Staff recommended approval of Amendment No. 1 to the contract with Kennedy/Jenks Consultants for the design of the Rodriguez Road Pipeline Relocation project in the amount of $25,332.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Board approved Amendment No. 1 in the amount of $25,332 to the contract with Kennedy/Jenks Consultants for the design of the Rodriguez Road Pipeline Relocation project.
5. Review of Recently Completed Capital Improvement Projects:
A report on three recently completed capital improvement projects was provided the Board. It was noted that Notices of Completion have been filed on these projects.
Champagne Lakes Pipeline Replacement – Project consists of approximately 3,300 linear feet of 14” pipeline and approximately 100 feet of 12” pipeline located within Highway 395 between Nelson Way and Ritson Road. Approximately 2,000 feet of 12-inch steel pipe was removed within the Champagne Lakes Resort property. Budgeted amount for this project was $670,000 with final costs amounting to $649,417.37.
PRV & Large Meter Upgrades:
▪ Adams PRV – Project consisted of construction of a pressure reducing station and replacing a PRV in a manhole that was difficult to access and operate. Also, the pressure relief valve was in a remote location from this site.
▪ Circle R PRV and 2 Meter Assemblies – Project consisted of a pressure reducing station with two 8-inch compound meters. Upgrades replaced one 8-inch compound meter and a pressure reducing station below ground in a vault which was subject to flooding and required compliance with confined space regulations to access. The two compound meters allow separate metering for Circle R and Castle Creek.
▪ Champagne Village Meter Assembly – Project consisted of an 8” compound meter replacing a meter assembly that was in an underground vault posing access difficulties.
The PRV & Large Meter Upgrade Projects had been budgeted at $430,000 with total costs amounting to $427,276.84
Lilac Road Pipeline Replacement - Project consisted of approximately 1,200 linear feet of 8-inch pipe in Lilac Road and a pressure reducing station at Mesa Verde Drive. The budgeted amount for this project had been $529,037.80 with the total cost at $395,776.77. Additional funds will be expended for the installation of 42 pressure reducing valves at the affected customers’ meters along Lilac Road.
6. Review of the District’s Investment Policy:
A review of the District’s investment policy is completed annually per the District’s Administrative Code. Also, Government Code Section 53607 requires the delegation of investment authority to be confirmed annually by the Board. Director of Finance Jeffrey stated that the District’s investment policy continues to be conservative in that the type of investments allowed is limited to those investments that carry the least risk while continuing to pay at least a market rate of return. The primary goals of the District’s investment policy are preservation of capital, maintaining enough liquidity to meet cash flow requirements and then consideration of investment income.
Government Code requires the legislative body of the local agency to annually confirm the authority delegated to the treasurer of the local agency to invest and reinvest District funds. The Board has delegated the authority to invest and reinvest District funds to the Treasurer of the District and, since 1984, the Director of Finance has been appointed Treasurer. Staff recommended that the Board renew the authority to invest and reinvest District funds to the Treasurer of the District.
Extensive amendments to Administrative Code Section 50.3, Statement of Investment Policy, were presented for adoption which substantially incorporates language from a sample policy written by the Government Finance Officers Association and by the Association of Public Treasurers of the U.S. and Canada. Proposed Administrative Code revisions would be incorporated as a new Section 50.1 to be named Investment Policy, deleting the existing Section 50.1, Finance Department, General. The proposed revisions do not change the goals or authorized investments of the District’s investment policy and were reviewed as summarized below:
• Mission Statement added outlining the overall goal of the Policy,
• Scope of the Policy rewritten following model language. For example, it specifically includes the current practice of pooling all District investments to maximize investment earnings and increase efficiencies,
• Objectives have been expanded to give clear statements of how we safeguard principal from both credit and interest rate risk, manage liquidity and obtain a market rate of return,
• Standards of Care addresses prudent investor rule, ethical practices and investment authority,
• Process to select financial institutions and brokers/dealers authorized to provide investment services included,
• Safekeeping provisions which include that investments be conducted on a delivery-versus-payment basis,
• Section on investments lists authorized investments which is unchanged except for limiting investments in certificates of deposit to 30% of the portfolio as required by state law. Further addressed are investment pools, collateral and prohibited investments,
• Investment parameters section addresses diversification of investments, maximum maturities, procedures and trading criteria,
• Reporting requirements expanded to include benchmarks and market values,
• An annual review by the Board of Directors of the District’s investment policy shall be continued,
• A glossary of terms has been added to assist in understanding the District’s investment policy as set forth in the Administrative Code.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2005-01
ORDINANCE OF THE
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, Aleshire, Stone and Haskell
ABSENT: Director Polito
7. Mailed Ballot Election for A Regular LAFCO Special District Member Position:
A mailed-ballot election is being held for a Regular San Diego Local Agency Formation Commission (LAFCO) Special District Member position. Nominated candidates for this position are: Margarette Morgan (Vista Fire Protection Dist.), John B. Linden (Helix Water District), Kathleen Sterling (Tri-City Healthcare Dist.), and Andrew Menshek (Padre Dam M.W.D.). The Nominating Committee has recommended Andrew Menshek. It was noted that John Linden withdrew his nomination.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Board approved casting the District’s vote in support of Andrew Menshek of Padre Dam M.W.D. for the Regular LAFCO Special District Member position.
8. Proposed Legislation:
Senate Bill 393 has been introduced by Senator Ortiz that, if adopted as written, would reform special districts’ auditing procedures, elected board member ethical conduct, whistle blower protections and board member compensation and benefits. Senate Bill 393 provides for special districts’ board members per diem compensation of $150.00 with an allowance for increases up to 5% per annum. ACWA has voted to take a position on SB 393 of oppose unless amended largely due to it affecting special districts differently than all other forms of local government and its unfair travel reimbursement. Senate Bill 393 will be heard before the Senate Local Government Committee on April 6th. Assembly Member Salinas has introduced AB 1234 that would implement reasonable reform measures for all local governments. ACWA’s position on AB 1234 is support with amendments.
General Manager Arant reported that National Energy Policy legislation before the House Energy and Commerce Committee contains a provision that likely will exempt fuels manufacturers from liability for clean-up of groundwater contamination of MTBE and ethanol with the exemption retroactive to September 2003. ACWA is urging its members to forward letters opposing this provision of the proposed National Energy Policy legislation as ongoing groundwater clean-ups and those not yet underway would be jeopardized with water districts left without the means of cleaning up or restoring their water supplies.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the Board approved the position of oppose unless amended on Senate Bill 393 (Ortiz) and a position of oppose on the exemption for MTBE and Ethanol in the National Energy Policy legislation and directed staff to communicate said positions.
9. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at