VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Tuesday, January 22, 2008
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, Stone and Haskell. Staff members present were: General Manager Arant, General Counsel de Sousa, District Engineer Grabbe, Director of Finance Jeffrey, Director of Operations Hoyle, Manager of Accounting Pugh, Project Manager Williams, Board Secretary Stetson, and IT Manager Rivard. No audience was present.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held January 7, 2008
• Audit demand check numbers 116534 through 116711
• Treasurer’s Report and Financial Statements for the period ended November 30, 2007
ACTION AGENDA
2. Modification of the Interim Agricultural Water Program’s Supply Reduction Implementation Plan for Mixed Agricultural/Domestic Users for Consideration:
At the January 7th Board meeting, modification of the Interim Agricultural Water Program’s (IAWP) Supply Reduction Implementation Plan for mixed agricultural/domestic customers was reviewed and considered. Action was continued to today’s Board meeting to allow for further deliberation of the matter.
The modification of the Plan under consideration is to apply the 30% cutback on the mixed agricultural/domestic customers’ base year usage each month to only the consumption that exceeded the first 26 HCF of domestic usage. Under the IAWP,
customers’ allocations are based on water consumption in Fiscal Year 2006-07. Currently, allocations for mixed agricultural/domestic customers are calculated by reducing the base year usage by 30%, but not below the 26 HCF per month deemed domestic use. The Plan also provides for unused allocations to be carried forward to offset over-usage in subsequent months in 2008. Therefore, there is the potential that the 26 HCF of domestic usage is carried over and would convert 60 ac. ft. to agricultural water credits. Also, total agricultural allocations would increase 230 ac. ft. if the 30% cut back is applied only to usage above the first 26 HCF monthly usage for a total increase in agricultural allocations of 290 ac. ft. If the change in the method of calculating mixed agricultural/domestic customers’ allocations as proposed is implemented, the impact upon the 1,250 accounts would be as follows:
● 1,220 accounts would receive an average increase of 82 HCF (0.19 ac. ft.) in their annual allocation. Of these accounts:
▪ 18 would receive an addition of less than 13 HCF (0.03 ac. ft.)
▪ 39 would receive the maximum increase of 96 HCF (0.22 ac. ft.)
● 30 customers would receive no increase in their allocation as they have the minimum allocation of 312 HCF (0.72 ac. ft.).
The District’s total agricultural water allocation for 2008 from the Metropolitan Water District is 27,826 ac. ft. Budgeted water loss is at 6%, however, Metropolitan’s IAWP water loss calculation can vary from the District’s calculated water loss by 1% to 2% or more as they do not consider changes in water in storage or water delivered but not yet billed. Changing the Supply Reduction Implementation Plan for the mixed agricultural/domestic customers to exclude the first 26 HCF of domestic usage each month and apply the 30% reduction on the remaining consumption of the customers’ base year usage, would result in an increase in the IAWP water allocation from 25,958 ac. ft. to 26,188 ac. ft. And, as such, the water loss available decreases to 1,638 ac. ft. or a water loss of 5.9%. The proposed change in the Supply Reduction Implementation Plan removes the cushion for water loss from unforeseen events and greatly reduces the possibility of allocating additional water for hardship cases.
Staff reviewed that if the District does not meet its 30% reduction level on agricultural sales in 2008, a penalty could be incurred and future agricultural allocations reduced. To meet this reduction in agricultural sales under a revised reduction plan as proposed for the mixed agricultural/domestic customers would require compliance with the cut-backs and low water losses. The proposed change would deplete water that might have been available for hardship cases.
Directors Aleshire and Stone expressed that the reduction plan for the mixed agricultural/domestic customers should not have included the first 26 HCF per month of domestic use. Staff recommended that if the District’s supply reduction implementation plan is amended that the 60 acre feet previously allocated to bring each mixed agricultural/domestic user up to a 26 units per month minimum allocation be retained.
Upon motion by Polito, seconded by Haskell, no change was approved to the District’s IAWP Supply Reduction Implementation Plan adopted on November 19, 2007, which was approved by the following vote:
AYES: Directors Broomell, Polito and Haskell
NOES: Directors Aleshire and Stone
ABSENT: None
3. Retention of Audit Firm and Agreement for Auditing Services:
Director of Finance Jeffrey reported that the firm of Leaf & Cole, LLP had been selected by the Board to conduct the District’s audits for five years starting in 2002-03 following soliciting requests for proposals from auditing firms and auditor selection committee interviews. The five-year audit period with Leaf & Cole was completed upon the conclusion of the FY 2006-07 audit. Board consideration of extending the audit agreement with Leaf & Cole for one or two years or to initiate the request for proposal (RFP) process to solicit audit proposals was requested.
Because of the lengthy RFP process for audit proposals and the increased workloads resulting from the Interim Agricultural Water Program’s reduction implementation, the budget challenges and potential for domestic cutbacks, staff recommended extending the auditing contract with Leaf & Cole for one or two years. A proposal was submitted by Leaf & Cole for auditing services for Fiscal Year 2007-08 at $19,825 (an increase of $625 from the previous year) or no increase for a two year period, or $19,200 per year.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the auditing contract with Leaf & Cole, LLP for one year, Fiscal Year 2007-08, was approved, with adoption of the following resolution, entitled:
RESOLUTION NO. 2008-01
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ENTERING INTO AN AGREEMENT WITH LEAF &
COLE, LLP TO AUDIT THE FINANCIAL STATEMENTS OF
THE DISTRICT FOR THE YEAR ENDED JUNE 30, 2008
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
4. Ratification of Change Order No. 5 for the Valley Center Road Pipeline Replacement Project:
Project Manager Williams reviewed that Archer Western Construction, Inc. is under contract with San Diego County to construct the Valley Center Road improvements, including the relocation of District water facilities. At present, the contractor is constructing storm drain and road improvements at Keys Creek Bridge. To complete this work, the District’s existing 12-inch distribution pipeline in the work area must be removed. Removal of the pipeline will curtail all water flows between the Valley Center Pump Station and West Bear Ridge and Ridge Ranch service zones and to a commercial corridor section along Valley Center Road. Therefore, staff determined that two high lines needed to be installed prior to removing the 12-inch pipeline.
A construction change order for the installation and removal of two inter-ties to maintain flows and pressures within Valley Center Road and a source flow to the West Bear Ridge and Ridge Ranch service zones was requested. Archer Western Construction submitted a proposal of $26,842.95 for the installation and removal of the inter-ties, which was approved per the District’s regulations governing “Immediate Non-Emergency Action Authority” in order to not delay the construction work and maintain the water flows and pressures in the work area. Board ratification of this emergency approval was requested as well as approval of pending change orders totaling $10,550.19 for several minor field directives for a total amount of $37,393.14 for Change Order No. 5. Also, Board approval of Change Order Nos. 3 and 4 totaling $32,303.28 approved by staff ($8,055.30 for pipeline encasement and $24,247.98 to add a 12” stub) was requested as the cumulative change order amounts including Change Order No. 5 exceeds $35,000.
The reimbursement agreement with the County for Archer Western Construction’s work on the water facilities in conjunction with the County’s Valley Center Road Improvement Project was for $4,029,815. Change Order Nos. 1 through 5 result in a revised District obligation of $4,149,765.90.
Upon motion by Aleshire, seconded by Stone and unanimously carried, Change Order No. 3 in the amount of $8,055.30 and Change Order No. 4 in the amount of $24,247.98 were approved and the following resolution approving Change Order No. 5, entitled:
RESOLUTION NO. 2008-02
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT APPROVING
CHANGE ORDER NO. 5 TO THE CONTRACT WITH THE
COUNTY
OF SAN DIEGO
FOR THE CONSTRUCTION OF THE
VALLEY CENTER ROAD
PIPELINE RELOCATION PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
5. Resolution Approving the Relocation of the San Diego County Water Authority’s VC-1A/B Connection and Authorization to Enter into An Agreement:
Board approval to relocate the San Diego County Water Authority’s VC-1A/B connection and authorize the General Manager to enter into an agreement with the Authority for the design and construction of the new VC-9/10 flow control facility was requested.
The San Diego County Water Authority’s VC-1A/B flow control facility is located in the Lilac Ranch area within the 100-year flood plain of Keys Creek and has been damaged due to flooding. Also, the access road to the facility is subject to flooding. The Authority’s site was damaged during the winter rains of 06/07, and FEMA funds were secured for the relocation of the facility in the amount of $137,944.
In order to coordinate the project of relocating the VC-1A/B connection with the development plans of the Lilac Ranch Subdivision, the District has proposed that it provide project management for the project. The San Diego County Water Authority has prepared and submitted for execution an agreement for the design and construction of the relocated VC-1A/B flow control facility. All costs associated with the design and construction of the new flow control facility including removal of the existing facility will be funded by the Authority. The District will fund all costs associated with the installation of a new chlorine injection system, temporary and permanent piping to connect to the existing distribution system and the abandonment of the existing piping and chlorine injection system.
Costs to relocate the VC-1A/B facilities is estimated at $4,380,000 of which $3,100,000 would be funded by the San Diego County Water Authority and $1,280,000 by the District. A proposed schedule for the project was reviewed as set forth below:
• Fiscal Year 2007-08 – Selection of design consultant and CEQA documentation ($20,000)
• Fiscal Year 2008-09 – Design ($140,000)
• Fiscal Year 2009-10 – Construction ($1,120,000)
Project Manager Williams clarified that the current project budget has sufficient funds for anticipated expenses in Fiscal Year 2007-08. Funding for the design phase will be included in the proposed Fiscal Year 2008-09 budget.
Upon motion by Polito, seconded by Stone and unanimously carried, the Board approved the relocation of the San Diego County Water Authority’s VC-1A/B connection and authorized the General Manager to enter into an agreement for the design and construction of the San Diego County Water Authority’s VC-9/10 connection, subject to General Counsel’s review, with adoption of the following resolution, entitled:
RESOLUTION NO. 2008-03
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT ENTER-
ING INTO AN AGREEMENT WITH THE SAN DIEGO
COUNTY WATER AUTHORITY FOR THE DESIGN,
CONSTRUCTION, OPERATION AND MAINTENANCE
OF THE VC-9/10 FLOW CONTROL FACILITY TO REPLACE
THE VC-1A/B FLOW CONTROL FACILITY
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
6. Review of Miscellaneous Informational Items:
● Solar Electrical Project at Lake Turner – The Draft environmental document has been received for the solar project. The mitigated negative declaration document will be available for public review in February, followed by a hearing and consideration of adoption of the document in March.
Dr. Lon House has nominated the District for a San Diego Excellence in Energy Award for the solar project.
● Nominations are being accepted for positions on the Association of California Water Agencies Joint Powers Insurance Authority. Two Executive Committee positions and Chair of the ACWA/JPIA will be filled. At this time, member agencies may place a name in nomination for the available positions. This matter will be considered at a subsequent Board meeting.
● Metropolitan Water District will be reviewing its Interim Agricultural Water Program in conjunction with water rates and resource development within its Integrated Resources Plan. There is pressure at this time to sustain the 30% reduction for IAWP participants and revoke the discount. This is due largely to the higher price of transfer water that is being secured. It will be argued that the IAWP does not include a provision to eliminate the ag. discount while agricultural customers are subject to higher water cut backs than other users.
Metropolitan’s draft allocation plan calls for reduction in IAWP deliveries of 30% up to the call for 10% reduction in firm water deliveries. Upon 15% reduction in the firm water deliveries, IAWP deliveries will be reduced to 40%. Water transfer purchases will be investigated. The Metropolitan Water District and San Diego County Water Authority are exploring transfer options. Due to the demand, the transfer water secured is expensive and then must be transported through the Delta and State Water Project transportation costs paid. General Manager Arant stated he will inquire as to possible water transfer sources while at the ACWA Board of Directors meeting.
CLOSED SESSION:
7. A Closed Session was called by President Broomell at 3:35 p.m. per:
• Government Code §54956.9(a), Conference with Legal Counsel – Existing Litigation
Claimant’s Name: Surfrider Foundation and Planning and
Conservation League
• Government Code §54957.5(a), Conference with Labor Negotiators
Agency Representative: Gary Arant, General Manager
Employee Organization: Valley Center M.W.D. Employees’ Association
RECONVENE
The Regular Board meeting was reconvened at 4:12 p.m. There was no reportable action.
ADJOURNMENT
8. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 4:13 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary