VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, November 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.
ROLL CALL
Board members present were: Directors Broomell, Polito, Aleshire, and Stone. Absent was Director Haskell. Staff members present were: General Manager Arant, General Counsel Cowett, District Engineer Grabbe, Director of Operations Hoyle, Director of Finance Jeffrey, Project Manager Kilwein, and Assistant Board Secretary Doerr. Spectators present were: Matt Tebbetts, Allen Olson, Barbara Olson, Steve Flynn, and Wayne Hilbig.
APPROVAL OF AGENDA
At its option, the Board may approve the agenda, delete an item, reorder items and add an item to the agenda per the provisions of Government Code '54954.2.
CONSENT CALENDAR
Upon motion by Stone, second by Polito and unanimously carried, the following consent calendar items were approved:
1. Minutes of the Board meeting held November 7, 2005
2. Audit demands
ACTION AGENDA
3. Status Report on the
Woods
Valley
Ranch Water Reclamation Facility and Proposal to Proceed with Expansion Project:
Project Manager Dianne Kilwein presented the Board with an update of the Woods Valley Ranch Water Reclamation Facility expansion project. The original County approval documents for the Woods Valley Ranch Water Reclamation Facility (WVRWRF) required that the plant be designed such that it could be expanded to serve other properties in the proximity of the plant. During the initial planning phase of the WVRWRF property owners in the vicinity of the plant were notified and requested to indicate their interest in obtaining sewer capacity. Based on the results of the survey and funding provided by Bell Enterprises and Alti Corp, with matching funds from the District, a Woods Valley Ranch Expansion project was initiated in FY 1997-98. Early work on the project included developing collection system, expansion costs, and addressing major use permit requirements with the County. However, due to delays in starting the initial construction of the treatment facility, the expansion project was put on hold until there was a facility that could be expanded. With the WVRWRF now under construction, it is time for the expansion project to be initiated to meet the development demands of the appropriately zoned property in the vicinity of the plant, referred to as the South Node Area.
In addition, a new developer, D.R. Horton, is in escrow to purchase the Orchard Run project and they desire to expand the WVRWRF, per concept approval on September 9, 2005, in lieu of building a separate facility as previously planned. Because of timing requirements for CEQA processing and amending the WVRWRF waste discharge permit, the Orchard Run expansion of the WVRWRF will proceed as a separate expansion project prior to the expansion project for the South Node Area. Thus, the development and expansion of the treatment facility is established as three separate, independent, but related, sequential projects; Woods Valley Ranch (WVR), Orchard Run and South Node Sewer. The WVR and Orchard Run projects are developer funded and the South Node Sewer is the District expansion project to serve appropriately zoned parcels in the vicinity of the WVRWRF.
Woods
Valley
Ranch
– This project consists of the initial construction of the 70,000 gpd, treatment facility serving 280 EDUs. Treated effluent is used for irrigation on the WVR Golf Course. The golf course ponds provide the required seasonal storage. The permanent plant construction began in October 2005. Various components of the facility are oversized and designed to accommodate future expansion. A reimbursement agreement remains to be developed with Newland Communities to establish the “buy-in” cost due from others connecting to the facility. Staff has requested a proposal from Boyle Engineering to review the cost allocations proposed for future connections.
Orchard Run – This project consists of 308 EDUs comprised of 300 lots within the development and an agreement to provide 8 EDUs of sewer capacity to the Community Services District. Expansion of the WVRWRF will require modification to the waste discharge permit and construction of wastewater force main and a reclaimed water return line. Seasonal storage and effluent disposal by landscape irrigation will be located within the development. The District will process the Waste Discharge Permit Modification and will act as lead agency for the CEQA process required to expand the plant. Staff is negotiating agreements with Michael Welch and Brian Mooney for these services. Water 3 Engineering services will be needed to oversee the design as it relates to ultimate build out of the plant. All consultant costs will be paid by the developer.
South Node Sewer – The proposed General Plan 2020 amendment identifies a significant area in the vicinity of the WVRWRF that would require sewer capacity. Property owners within the proposed service area were recently requested to provide a $1,000 per parcel deposit if they were interested in obtaining sewer service and participating in an expansion to the WVRWRF. The District received $34,000 in response to that request. The District has a contract with Bell Enterprises and Alti Corporation to provide funding for planning phases of an expansion project. With construction starting on the WVRWRF, Orchard Run planning an expansion to the facility, and recent requests for sewer capacity, it is time to begin the process of expanding the plant to serve the South Node Area.
Staff is proposing a five-step approach to the project. The key steps involved will be to accurately define project costs, identify the boundary of interested and supportive property owners, secure financial commitments to fund obtaining discretionary permits and completing design of the required facilities, formation of an assessment district, and construction of the facilities. Primary challenges in meeting the anticipated sewer capacity demand of the service area will be finding sufficient disposal areas for the treated effluent and sites suitable for both seasonal and operational storage of reclaimed water.
Step 1 – Project Master Plan:
· Determine required treatment capacity based on General Plan 2020.
· Determine available capacity considering plant site constraints, disposal area and seasonal storage availability.
· Develop a preliminary design of a sewer collection system, evaluating both gravity and low pressure sewer configurations and/or a combination of both.
· Develop a preliminary design of a reclaimed water distribution system including operational and seasonal storage requirements.
· Identify required easement and property acquisitions.
· Develop a preliminary estimate of anticipated costs and proposed project schedule, include potential for phasing.
· Present results to Board and request authorization to notify property owners.
Step 2 – Project Definition and Funding:
· Second interest letter to property owners requesting project commitment and additional funding for Step 3.
· Set service area (Assessment District) boundary.
· Determine required capacity and define project.
· If required for VCMWD funding security, form preliminary assessment district establishing assessment lien rights and confirming project support.
Step 3 - Discretionary Approvals and Design:
· CEQA
· Waste Discharge Permit Modification
· Design required facilities
Step 4 – Form Assessment District and Sell Bonds
Step 5 – Construction Phase
Several property owners in the South Node Area have expressed a strong desire to have sewer capacity in the WVRWRF. Scheduling goals for the South Node Sewer Project would be to start construction once the Orchard Run Expansion project is completed. Initial construction on the WVRWRF project began October 2005 and is anticipated to be completed in one year. Assuming that the Orchard Run WRF expansion is a nine-month project, a July 2007 start date is anticipated for the South Node Sewer expansion. The South Node Sewer project is also assumed to be nine months, with project completion anticipated for April 2008.
Consultants
The project will require a team of consultants with varying expertise. Because of the magnitude of the project, staff is recommending Mr. Matt Tebbetts of Kennedy/Jenks, one of the District’s as-needed engineering consulting firms, to help manage and oversee the over-all design process. Mr. Tebbetts has worked with the District in the past on the Moosa expansion project when he was with NBS/Lowry and is experienced with low pressure sewer design.
The District has existing contracts with Mooney and Associates (currently, Mooney, Jones & Stokes), Water 3 Engineering, and Michael Welch from the original WVR Expansion Project that was started in 1998 and staff desires to retain these consultants based on their previous involvement and knowledge of the project. Brian Mooney has prepared the CEQA documents for the WVR and Orchard Run projects. Water 3 designed the original WVRWRF and Michael Welch prepared the basin plan amendment, waste discharge report and permit processing for the WVR project. The scopes of work, schedules and fees from these consultants will need to be modified for the current project.
Bond counsel and financial advisor services will be required when the project goes to formation of the assessment district and selling of bonds. Best, Best & Krieger and Fieldman, Rolapp and Associates are recommended for bond counsel and financial advisor, respectively. Regarding assessment engineering services, staff recommends Mr. Skip Shank with Boyle Engineering who has worked with the District on previous projects including the Water System Master Plan and has considerable experience in assessment engineering. Due to the size and the complexity of the anticipated project, staff anticipates that construction management services will also be required.
It is important that the consultant team for these key positions be determined at the onset of the project and be maintained through all phases for continuity and over-all project efficiency. District selection requirements for professional consultants (Administrative Code Article 135) have been adhered to for the initial task assignments selection but in the case of CEQA, waste discharge permitting, assessment engineering and wastewater treatment plant design, the complete scopes of work and total fees required are difficult to determine at this time for all tasks that will be required for the project. Because it is likely that total fees for these consultants will exceed limits in the selection criteria and would, therefore, require a more extensive selection process, i.e. multiple proposals, etc., staff is requesting the Board approve the selection of these key consultants with scopes of work, fees and schedules negotiated for the various tasks needed for the projects as they are identified, and that all individual task assignments in excess of $50,000 be brought to the Board for specific approval per Administrative Code Article 135. There is sufficient funding for tasks through Step 1 (Master Plan Development) and Step 2 (Project Definition and Funding). The total project budget will be developed as part of the Master Plan process and brought to the Board for review and approval as part of Step 2.
President Broomell invited questions from the audience. Ms. Barbara Olson inquired when the second letter of interest for the South Node Sewer project would be going out and was told it would be February or March of 2006.
Upon motion by Aleshire, seconded by Polito, and unanimously carried, the following resolution entitled:
RESOLUTION NO. 2005-37
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
FOR ENTERING INTO TASK ORDER AGREEMENTS WITH
VARIOUS PROFESSIONAL CONSULTANTS FOR THE
WOODS
VALLEY
RANCH WATER RECLAMATION FACILITY
EXPANSION PROJECT
was adopted by the following vote:
AYES: Directors Broomell, Polito, Aleshire, and Stone
NOES: None
ABSENT: Director Haskell
4. Review of Proposed Water Rate Changes:
Director of Finance Jeffrey presented proposed increases in water rates to offset increases in wholesale prices of water from the San Diego County Water Authority (CWA); Metropolitan Water District (MET), and the District’s operations and maintenance costs, energy costs, and partial recovery of lost property tax revenues.
Wholesale Water Rates - Effective January 1, 2006, aggregate wholesale costs from CWA and MWD will increase $47.22/acre foot for domestic water and $19.42/acre foot for certified agricultural water. The District calculates water rates based on budgeted sales volume and in fiscal year ended June 30, 2005, VCMWD’s water sales were 19% under budget, resulting in uncovered fixed wholesale costs of $350,000. Because of this, the fixed charge components of the water rate above are based on water sales 5% below budget.
Retail Water Rates - It is proposed to increase the retail rate 3.3% ($2.57/acre foot over the current rate) to cover local cost inflation. In addition, it is proposed to increase the Educational Revenue Augmentation Fund (ERAF) tax shift, which the District did not recover last January, by $3.40 in order to cover District’s operating costs.
The total increase in water rates would be $53.19 per AF (7.5%) for domestic and $25.39 (4.8%) for agriculture. The 2004 annual survey of agency water rates prepared by the CWA showed that the District was fourth lowest for domestic and second lowest for agricultural water. The 2005 survey is not complete; however, staff has determined that the District would be in a similar position after adoption of these new water rates.
Water Meter Service Charge:
It is proposed to increase the monthly meter service charge by 3.3% (change in San Diego CPI) to offset local inflation of the District’s operating costs. This would increase the charge for a ¾” meter from $18.75 to $19.50 and a 1” meter from $26 to $27 per month. This would generate approximately $100,000 annually. No change is proposed in the service charge for fire protection meters.
SDCWA Infrastructure Access Charge:
Annually, the SDCWA assesses the District a fixed charge based on the number and size of the active meters within the District. The District passes these charges through and they are collected from active customers. CWA increases in meter charges being proposed to be passed through are:
¾” meter $1.48
1” meter $2.38
1½” meter $4.44
2” meter $7.72
3” meter $14.22
4” meter $24.32
6” meter $44.40
8” meter $76.96
Pumping Rate Charge:
Staff is proposing an increase of 12.5% in pumping rates. This is based on the knowledge that electric rates will increase on January 1 by 12.6%. Natural gas futures have doubled this year and will increase our average natural gas rates by approximately 25%. The effect of increased natural gas costs on electric rates is still unknown and is, therefore, not being included in this proposed rate increase.
Construction Water Service and Water Permit Fee:
It is proposed to increase the present construction water service monthly charge of $80 to $81, which would be the same as the present monthly service charge for a 3” domestic meter. Additionally, it is proposed to increase construction water permit fees for a small truck from $115 to $125 and for a truck with a capacity of 5,000 gallons or more from $230 to $250 per month.
A Notice of Public Hearing for these proposed water rate changes is being published in the local newspaper with the public hearing to be held at the Board’s December 5th meeting.
5.
Consideration of District’s Contribution to “
California
’s Water” Sponsored by ACWA and Hosted by Huell Howser:
ACWA is proposing to sponsor a 12 segment program entitled “California’s Water” to be produced and hosted by Huell Howser and aired on the Public Broadcast System statewide. This program is envisioned to increase the public’s awareness about water resource issues and build support for implementation of the various measures recommended in the ACWA’s “No Time to Waste: A Blueprint for California’s Water Supply.” To make this possible, ACWA will need to secure contributions of at least $360,000 to fund the production costs and is conducting a general solicitation from ACWA member agencies.
Upon motion by Polito, second by Stone and unanimously carried, a contribution of $5,000 to the ACWA’s “California’s Water” series was approved.
GENERAL MANAGER’S AGENDA
6.
Valley
Center
Planning Group Meeting:
General Manager Arant briefed the Board on his November 14 presentation to the V.C. Planning Group on the District’s proposed policy for wastewater services. The planning group is in disagreement with the County and desires to restrict sewer service to the “Village Town” boundary only. The General Manager explained that the District’s sewer service policy needs to comply with the County and what is ultimately approved when GP 2020 is adopted.
7.
Valley Center Road
Widening Project:
The County has agreed that VCMWD’s participation in the cost for replacing the water main in Valley Center Road will be 5% over the District’s engineer’s estimate, which amounts to $4.2 million, plus 10% for any change orders. The County has also agreed to reimburse the District actual costs, estimated at $243,000 for changes in design costs which were caused by the County plus the design and construction costs due to improvements required outside of the county’s right of way.
8.
Economic Study Group:
General Manager Arant reported that the Economic Study Group’s (ESG) efforts to modify the San Diego County Water Authority’s Governance structure have been resolved and legislation will be introduced in 2006 concerning a report on the governance changes.
DISTRICT GENERAL COUNSEL’S AGENDA
9. Agreement with Poseidon Resources Corp:
Michael Cowett reported that he plans to bring to the Board’s next meeting the agreement with Poseidon Resources Corporation to purchase a portion of the output from the proposed desalination facility at the Encina Power Station.
BOARD OF DIRECTORS’ AGENDA
10.
San Diego
County
Water Authority’s Board of Directors’ Meeting Report:
§ President Broomell stated there is a groundbreaking to be held on December 6 between 10-11:00 a.m. for the Twin Oaks Water Treatment Plant and that anyone is invited.
§ The economic impact to the Imperial Valley resulting from the water transfer agreement between the Imperial Irrigation District and the San Diego County Water Authority will be mediated. Participants will include members of the IID and SDCWA Boards.
11. ACWA Governance Study:
§ Director Aleshire reported that new region officers for ACWA will be taking office the first of the year with new committee groups formed. There are 10 regions in California with about 12 committees, so there is concern over the need to take a look at the ACWA governance that has been in place for over 10 years.
ADJOURNMENT
12. Upon motion by Broomell, seconded by Stone and unanimously carried, the meeting was adjourned at 3:45 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary