VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, August 20, 2007
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, Stone and Haskell. Staff members present were: General Manager Arant, General Counsel Cowett, District Engineer Grabbe, Director of Operations Hoyle, Director of Finance Jeffrey, Board Secretary Stetson, and IT Manager Rivard. Spectators present were Ms. Steiner, Ms. Stapleton, Mr. Slominsky, Mr. Schwartz and Mr. Ross.
1. Upon motion by Stone, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held August 6, 2007
• Audit demand check numbers 114633 through 114812
2. Presentation on the Region’s Water Supply Reliability:
San Diego County Water Authority Board Chair Fern Steiner and General Manager Maureen Stapleton addressed the Board providing an overview of the San Diego region’s water supply conditions and its reliability. A summary of water facilities, the projected year 2020 water supply portfolio, and Metropolitan’s water supplies were reviewed. The Authority’s capital improvement program of $3.4 billion includes 76 projects to meet the region’s needs through 2030. San Diego’s water supply has been diversified since the last major drought of 1991 when 95% of the region’s supply was from Metropolitan Water District. The projected water supply portfolio by 2020 includes 10% from seawater desalination, 6% of recycled water, 6% groundwater, 11% conservation, 7% local surface water, 9% canal lining transfer, 22% IID transfer water and 29% from Metropolitan.
Metropolitan Water District’s two core supplies are the Colorado River and the State Water Project. Metropolitan’s supply source from the Colorado River is about 700,000 ac. ft. per year and varied amounts from the State Water Project, which in 2007 had been 1.15 MAF. Withdrawal from Metropolitan’s storage supplies make up the shortfall from its core supplies. General Manager Stapleton reported that the Colorado River basin is in its eighth year of an historic drought with the reservoirs that have a capacity of 60 MAF at less than 50% capacity, and Metropolitan’s Colorado River aqueduct is half full. Also, the historic dry year in California has challenged supplies from the State Water Project as it has only 5.8 MAF of storage and there are significant environmental, regulatory and judicial challenges pending that will affect deliveries from the State Water Project. One judicial challenge is the suit filed to halt pumping on the State Water Project as it was jeopardizing the delta smelt which are protected under the Environmental Species Act. The pumps were shut down by a court order but operations were resumed pending the court hearing on August 21st and its ruling on the matter. Interim operating proposals from the court hearing could cut the Bay-Delta supplies by 22% to 50%. Water supplies from the State Water Project in 2008 and beyond are linked to pumping limitations which are anticipated with the issuance of a new permit to operate the pumps, as well as the hydrological conditions.
Metropolitan noticed its member agencies of the potential reduction to agricultural customers effective January 2008. The affected member agencies have developed Interim Agricultural Water Program (IAWP) Water Supply Reduction Implementation Plans which will be submitted by the Authority to Metropolitan in September. At this time, a 30% reduction in supplies for agricultural customers is anticipated which will be accomplished through monthly allocations and penalty charges for excess usage. More stringent water use restrictions may be imposed if 2008 is a dry year or judicial or regulatory restrictions on pumping further limit supplies.
The San Diego County Water Authority has activated its Drought Management Plan implementing Stage 1, voluntary actions. An educational program has been launched by the Authority and Metropolitan to increase awareness among Californians of the water crisis confronting our state. Chair Steiner stated that the San Diego County Water Authority will continue to diversify the region’s water supply, aggressively pursuing water supply reliability by working with member agencies to further develop local supplies, enhance conservation efforts, pursue storage opportunities and implement water transfer and canal lining projects.
Discussion ensued regarding the settlement of the litigation filed to halt the lining of the All American Canal; the delta smelt and winter run salmon which are indigenous to the Delta and have or may affect pumping and therefore supplies from the State Water Project; conservation efforts which by 2020 are estimated to represent 11% of the water demands, and the pursuit of an additional desalination project that in combination with the Carlsbad-Poseidon Resources desal plant will equate to 10% of the Authority’s future supplies. Chairperson Steiner and General Manager Stapleton were thanked for their informative presentation.
3. Presentation on the Proposed Solar Electrical Project with Solar Power Partners and World Water and Solar Technologies:
General Manager Arant clarified that the Power Purchase Agreement with Solar Power Partners continues to be evaluated and is close to being finalized. The proposed agreement for a solar energy project at the District’s Lake Turner site and the Betsworth Pumping Station is with Solar Power Partners as the investor and owner of the facilities and World Water & Solar Technologies to be the contracted designer, supplier, installer and O&M provider. It is anticipated that upon the Board’s review of the agreement and input, execution of the agreement at the September 4th Board meeting will be considered.
Mr. Larry Slominsky of World Water and Solar Technologies (WW&ST) noted that after due diligence to secure an investment partner for the solar energy project, Solar Power Partners has committed to funding and ownership of the solar project with the District. Mr. Slominsky stated that a rebate of 39 cents per kWh has been reserved with the Center for Sustainable Energy for the District’s project. Upon execution of the contracts, the environmental study will be undertaken.
Mr. Roy Schwartz, Director of Sales with Solar Power Partners stated that his firm will add another layer of financing and safety for the solar energy project with the District. Solar Power Partners’ sole business is financing of photovoltaic solar projects through power purchase agreements. The power purchase agreement industry utilizes the federal tax credits and rebate which will subsidize the District’s solar energy power rate of $.085/kWh. Solar Power Partners has power purchase agreements for solar projects totaling $80 million with approximately $300 million in pending projects.
The proposed solar energy project with the District is 800 kW. The maximum sized solar energy project that will qualify for a rebate is 1 megawatt. Utilizing the area of the District’s Lake Turner property that can accommodate the solar panels (module tilt angle, single axis tracking) without further grading of the property results in a production rating of 700 kW. Additional capital costs would be incurred to clear land on the District’s Lake Turner property as well as environmental issues to be addressed if a larger solar energy project were to be pursued. Mr. Slominsky clarified that by August 28, 2007, a commitment on the size of the Project must be submitted to the Regional Energy Office. An option is to submit to the energy office the largest size project of 1 megawatt, and upon completion of the environmental studies, provide a firm commitment of the project’s size. Also, the energy office could be asked to extend the period of time for the rebate offer to be available for the District’s project and in the process of the engineering study, evaluate the feasibility and cost factors to install additional capacity. The rebate of 39¢ per kWh was secured for up to a 1 megawatt project with the District, but the rebates have decreased and are currently at 26¢ per kWh.
Solar Power Partners and World Water and Solar Technologies were directed to evaluate expansion of the solar energy project with the District to 1 megawatt net output and provide a cost analysis for consideration by the Board at an adjourned regular meeting of Monday, August 27th at 2:00 p.m.
4. Revised Design Guidelines and Specifications for the Private On-Site Low Pressure Wastewater Collection System Facility:
District Engineer Grabbe reported that the existing guidelines and standard specifications for the design and construction of private on-site low pressure wastewater collection system facilities have been revised. The revised manual “Design Guidelines and Specifications for Private On-Site Low Pressure Wastewater Collection System Facilities” incorporates modified and upgraded requirements and equipment including the Environment One grinder pump which will eliminate the need for a septic tank. The revised manual clearly outlines the responsibilities, requirements and equipment that will facilitate, coordinate and protect the longevity of the facilities. The revised on-site low pressure wastewater collection system will not affect existing low pressure collection system customers.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-07
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
FOR APPROVAL OF DESIGN GUIDELINES AND
SPECIFICATIONS FOR PRIVATE ON-SITE LOW PRESSURE
WASTEWATER COLLECTION SYSTEM FACILITIES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
5. Support of ACWA’s State-wide Public Education Program:
General Manager Arant reported that due to the current critical water supply conditions throughout the state, the Association of California Water Agencies (ACWA) will initiate a state-wide mass media campaign to educate Californians and raise an awareness about the issues impacting the state’s water supply resources and infrastructure. A recent public opinion poll showed that most Californians are not aware of the challenges facing the state’s water system, but once informed they are supportive of approving investments to correct the situation.
At the ACWA Board of Directors’ July 27th meeting, a multi-level, state-wide public water education effort was approved that will utilize paid advertising through television, radio and print media and special events to convey information on the problems and issues facing California’s water and discuss possible solutions. A concentrated mass media program that is estimated to cost $11 million is expected to reach Californians an average of 28 times over a 90 day period. Funding commitments totaling $7 million have been secured and ACWA member agencies have been asked to contribute. Educational efforts will benefit Californians in providing the information to make an informed decision regarding the proposed comprehensive ballot measure for water improvements that includes funds for water storage facilities and a water conveyance facility which may be before the voters in November 2008. The General Manager noted that some agencies are calculating their contribution at $1.00 per acre foot of Delta diversion which for the District would be $25,000. He recommended contributing a minimum of $10,000 to ACWA’s water public education program as there is a clear need to educate the public about current and future water problems. Funds are available in the 2007-08 budget in the outside representation and advocacy or unclassified contingency funds.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Board approved a contribution of $20,000 to the Association of California Water Agencies’ California Water Public Education Program.
GENERAL MANAGER’S AGENDA
6. Review of Miscellaneous Informational Items:
• San Luis Rey Municipal Water District Environmental Impact Report for its water, wastewater and recycled water services master plan has been finalized. An article in the North County Times newspaper regarding the proposed annexation of the San Luis Rey M.W.D. properties to the District references an April 22nd letter from former Director Pryor, County Department of Planning and Land Use, which opposes said annexation. The letter from Mr. Pryor is included in the San Luis Rey M.W.D.’s environmental impact report but was never brought to the District’s attention when the ad hoc committees met to discuss annexation procedures. The District’s position has been to amend the District’s sphere of influence to include the San Luis Rey M.W.D. properties and pursue annexation of the properties as it is proceeding through the land use development process. San Luis Rey M.W.D. has requested that their property be annexed into the District. However, to receive imported water service, there would need to be an annexation of the land to the San Diego County Water Authority and the Metropolitan Water District of Southern California as well as to the District. The San Diego County Water Authority’s position on annexing property is that there be certification from the land-use authority (i.e. county) that the property has been approved for development. As such, the District’s position to amend its sphere of influence to include the San Luis Rey M.W.D. properties and consider annexation of the property for service on a case by case basis is preferred.
• Metropolitan Water District is expected to begin fluoridation at its Skinner Treatment Plant in October. Metropolitan will adjust the natural fluoride level in the water (ranges from 0.1 to 0.4 parts per millions) to the optimal range for dental health which is 0.7 to 0.8 parts per million. A notification on the fluoride treatment will be sent to customers.
• Wholesale cost increases which are effective January 2008, will be reviewed at a September Board meeting. As a number of the wholesale costs to the District are fixed, the anticipated reduction in water sales due to supply cutbacks will be factored into the wholesale cost component. Also to be considered is deferring increasing rates for local cost increases until the 2008-09 Budget is prepared and at that time it will be known if additional water supply cut backs have been implemented. Notification under the provisions of Proposition 218 is not required to pass through the proposed rate increases from the wholesale water suppliers.
GENERAL COUNSEL’S AGENDA
7. Hearing on the Operation of the Delta Pumps:
The court hearing on the interim operation of the pumps on the Bay-Delta will be on August 21st. Agencies including the Department of Water Resources submitted operational plans. Cut backs of water supplies from the State Water Project of 30% to 60% have been estimated. A new permit is expected to be issued in 2008 for the operation of the Bay-Delta pumps which may include provisions that are similar to the interim operational plan.
BOARD OF DIRECTORS’ AGENDA
8. ACWA-JPIA Executive Committee Meeting:
A special meeting of the ACWA/JPIA Executive Committee was held subsequent to the adoption of the revised expense reimbursement policy that does not permit reimbursement of expenses at ACWA/JPIA functions for spouses/guests or for alcohol beverages. Executive Committee Chair Bannister, who had opposed the adopted changes to the expense reimbursement policy, had distributed a letter with misleading information concerning the policy changes. Executive Committee members present at the special meeting approved forwarding a letter to all the JPIA directors and General Managers which rescinds Chair Bannister’s letter. Additional issues such as the ACWA-JPIA conference reception and room rate reimbursement will be addressed at the September 21st Executive Committee meeting.
9. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 4:47 p.m. to Monday, August 27, 2007 at 2:00 p.m.