VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Tuesday, January 16, 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, Director of Finance Jeffrey, District Engineer Grabbe, Director of Operations Hoyle, Board Secretary Stetson, Project Manager Williams, and IT Specialist Rivard. Spectators present were: Messrs. Slominski and Eastman.
APPROVAL OF AGENDA
Upon motion by Stone, seconded by Aleshire and unanimously carried, the request for Board ratification of Change Order No. 2 in the amount of $55,277 pursuant to the Valley Center Road Pipeline Replacement Project was added to the agenda per Government Code §54954.2(b)(2).
1. Public Hearing to Consider Increases in the Meter Connection and Pressure Reducing Valve Charges:
Director of Operations Hoyle presented proposed increases in the District’s Meter Connection Charges and Pressure Reducing Valve Charges noting that the costs are commensurate with the increased cost of meter installation materials which includes brass and copper components. The current and proposed charges were reviewed as are shown on the following table:
Meter Connection Charges
(Installed by District)
(Service Lateral Installed
Pressure Reducing Valve Charges
The proposed increases had been published in the Valley Roadrunner Newspaper and posted and no public comments were received. The public hearing to consider the proposed increases in the District’s meter connection charges and pressure reducing valve charges was opened at 2:06 p.m. There were no comments from the audience and the hearing was closed at 2:07 p.m.
Director of Operations Hoyle requested the Board’s adoption of Ordinance No. 2007-01 to implement the increases in the meter connection charges and pressure reducing valve charges to be effective March 19, 2007.
Upon motion by Stone, seconded by Haskell and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2007-01
ORDINANCE OF THE VALLEY CENTER MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO PROVIDE FOR CHANGES IN METER
CONNECTION FEES AND PRESSURE REDUCING VALVES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
ELECTION OF OFFICERS
2. Upon motion by Polito, seconded by Haskell and unanimously carried, Gary A. Broomell was reelected President of the Board of Directors.
Upon motion by Stone, seconded by Aleshire and unanimously carried, Robert A. Polito was reelected Vice President of the Board of Directors.
3. Upon motion by Aleshire, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held December 18, 2006
• Audit demand check numbers 111522 through 111865 and wire disbursements for the period October 1 through December 31, 2006
• Treasurer’s Report and Financial Statement for the period ended November 30, 2006
• Quarterly report of expense reimbursements per Government Code §53065.5
• Mid-Year progress Status Report on the capital funded projects for Fiscal Years 2006-07 and 2007-08
• Population estimate for the District as of January 1, 2007
4. Consideration of Solar Power Proposal from WorldWater and Power:
General Manager Arant reviewed that in 2006 the District had evaluated a solar power generation project at Lake Turner to supply power to the District’s Betsworth Pump Station. The project had not been pursued due to economical uncertainties, but the potential of a solar power project continued to be monitored.
There are new programs providing incentives for investment in solar power projects; specifically, the San Diego Regional Energy Office has been allocated $203.5 million to be used as incentives in the San Diego region.
WorldWater and Power has submitted a proposal to the District to construct, operate and maintain a 600 kilowatt to 1 megawatt solar power facility at Lake Turner to supply power to the Betsworth Pump Station with a 20-year power purchase contract. Two purchase options were offered: a fixed rate of 10.5¢/kWh or a variable rate starting at 8.5¢/kWh with an annual increase of 3%. Director of Finance Jeffrey
stated that, at present, the District’s variable electrical costs at the Betsworth Pump Station are approximately 9.5¢/kWh. A financial analysis of the purchase options considering a 1 megawatt facility indicates that with a net present value discount rate of 5% and a 3% annual increase in power costs, the payback is 8 years at 10.5¢/kWh, with savings starting in the initial year with the cost at 8.5¢/kWh. The net present value of the savings at a discounted rate of 5% is $418,041 with the fixed price of 10.5¢/kWh and is $341,182 with the variable cost option which initiates at 8.5¢/kWh. The gross savings between the two options is about $360,000 under the fixed price option in which there is a net present value of approximately $70,000 over 20 years.
Staff noted that the power purchase approach proposed by WorldWater and Power eliminates the economic uncertainties and the District’s large upfront costs to construct the facilities. The new subsidy and incentive programs enable WorldWater and Power to offer a power purchase option providing power cost savings. The District would realize a partial back-up power source, increased pumping reliability at the Betsworth Pumping Station and environmental benefits of providing clean, renewable energy.
Mr. Larry Slominski of WorldWater and Power addressed the Board and clarified that the solar power generated will be provided at the SDG&E service connection point at the District’s Betsworth Pumping Station. The solar module utilized will track (dual axis) the sun’s location with a proprietary Aquamax VFD drive backup power system, integrated into the PV system design. The power produced is capable of operating pump motors up to 80% of the capacity of the PV system in the event of a power failure. The solar equipment will require approximately 9 acres of the District’s Lake Turner property.
WorldWater and Power’s solar power proposal also provides for the payment ($45,000 deposit) of the California PUC’s Solar Initiative program’s application fee in which WorldWater and Power would receive a rebate of $.39/kWh for 5 years. The rebates became available January 2, 2007. Mr. Slominski indicated that there is a high probability that the proposed solar program with the District will receive approval for the rebate funds if submitted in a timely manner. General Counsel Cowett stated that the District usually functions with such a proposal utilizing a competitive bid process. However, it was recognized that the financial incentive of the solar initiative rebate could be lost with the delay of obtaining bids for the project, increase the cost to the solar provider under a power purchase agreement, which would likely erode the savings to the District. WorldWater and Power was selected by ACWA as one of two solar partners following a due diligence review and has the only system that can provide solar power when the electric grid is down. Mr. Slominski noted that WorldWater and Power was the lowest bidder for the solar project at the Fresno Airport which will be a 1 megawatt facility at a fixed rate of 12.4¢/kWh. Staff noted that the solar power proposal was forwarded to Dr. Lon House, Energy Consultant, for his analysis.
Upon motion by Aleshire, seconded by Stone with Director Polito abstaining, staff was directed to further analyze the solar power proposal from WorldWater and Power and present recommendations to the Board for consideration of approval at a future Board meeting.
5. Request for Budget Adjustment for the Installation of Electric Soft Starters:
A budget adjustment to the 2006-2008 budget was requested to accelerate the installation of solid state soft motor starters for projects included in Phases 1 and 2 of the District’s SCADA project. Replacement of existing motor starters with the soft starters is in process throughout the District, but installation of the soft starters at this time on 21 motors in the Phase 1 and 2 SCADA construction project will save $2,500 per motor as the installation of the SCADA equipment, electronic overload devices, will not be needed with the soft starters. Installing the soft starters on the motors at this time will save $52,500 considering eliminating installation of the electronic overload devices. Adoption of Resolution No. 2007-01 was requested to amend the budget, Electric Pump Starter Replacement Account, to transfer $68,000 budgeted for FY 2007-08 to Fiscal Year 2006-07, appropriate an additional $262,500 to the budget to fund the starter replacements for 21 additional pumps as part of the SCADA project, and to make a declaration of official intent to reimburse expenditures for replacement and upgrade of the motor starters from proceeds of a future bond indebtedness.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following ordinance, entitled:
RESOLUTION NO. 2007-01
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT AMENDING
THE 2006-08 BUDGET BY TRANSFERRING $262,500 FROM
THE GENERAL FUND TO ACCT. NO. 01-5625.78 (ELECTRIC
PUMP STARTER REPLACEMENTS), MOVING THE $68,000
BUDGETED FOR FY 2007-08 FORWARD TO FY 2006-07,
AND MAKING A DECLARATION OF OFFICIAL INTENT TO
REIMBURSE EXPENDITURES FROM PROCEEDS OF INDEBTEDNESS
6. Ratification of Change Order No. 2 for the Valley Center Road Pipeline Replacement Project:
Project Manager Williams reported that Archer Western Construction, Inc., contractor for the County’s Valley Center Road improvement project which includes relocation of the District’s water distribution facilities, encountered hydrocarbon contaminated soil in the vicinity of the Regent Gas Station. To determine the extent of the hydrocarbon plume and to determine the level of contaminants within the proposed waterline trench, three locations along the waterline alignment were potholed and soil samples analyzed by a geotechnical subconsultant. Screening of the breathing space of the trench was also performed.
An analysis of the soil and air indicates that contamination producing hydrocarbon vapors may be located in the waterline trench or that gas from contaminated soil has migrated to the waterline trench alignment location. As such, it was found that the trench should be excavated by HAZWOPER trained personnel trained in the use of respirators.
A change order was approved with President Broomell’s concurrence in the amount of $55,277 to complete the work to be performed by Earth Tech associated with handling of the contaminated material. A reduction in Archer Western Construction’s contract will be sought for the trench excavation work that is included in Earth Tech’s proposal. The County will pursue the source of the contamination and additional reimbursement will be sought. Adoption of Resolution No. 2007-02 to ratify and approve Change Order No. 2 to the reimbursement agreement with the County of San Diego in the amount of $55,277 was requested.
Upon motion by Polito, seconded by Aleshire and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2007-02
VALLEY CENTER MUNICIPAL WATER DISTRICT
APPROVING CHANGE ORDER NO. 2 TO THE
CONTRACT WITH THE COUNTY OF SAN DIEGO
FOR THE CONSTRUCTION OF THE VALLEY CENTER
ROAD PIPELINE RELOCATION PROJECT
BOARD OF DIRECTORS’ AGENDA
7. National Salinity Summit:
Director Aleshire reported that he attended the National Salinity Summit in San Diego which was held from January 10-12. The workshop included a tour of the Carlsbad Seawater Desalination Demonstration Plant and the Hydranautics Membrane Plant in Oceanside. It was reported that Israel uses approximately one-fourth of the water consumed in the United States and has become nearly independent of the Sea of Galilee with the use of desalination plants. All of Israel’s agriculture receives recycled water. The flow of the Colorado River brings with it 9 million tons of salt each year. A Salinity Control Act has been successful in controlling approximately 1 million tons of the salt with plans to control another 800,000 tons. The remaining salt from the Colorado River is distributed in the soil, the Salton Sea and Sea of Cortez.
8. A Closed Session was called by President Broomell at 3:27 p.m. pursuant to:
• Government Code §54956.9(c), Conference with Legal Counsel – Anticipated Litigation
Number of potential cases: 1
9. The regular Board meeting was reconvened at 3:37 p.m. No action was reported.
10. Upon motion by Polito, seconded by Haskell and unanimously carried, the meeting was adjourned at 3:38 p.m. to Monday, January 29, 2007 at 2:00 p.m.