August 17, 2009
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, August 17, 2009
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 Cowett, District Engineer Grabbe, Director of Operations Hoyle, Director of Finance Jeffrey, Sr. Administrative Assistant Johnson and IT Manager Pilve. Spectators present were David Ross, Don Bunts, Steve Flynn, Sid Bernsen, Robert Carlin, John Coseo, Tony Lopez, Steven Tweed, Allen and Barbara Olson, Sandra O’Rourke, Judy Downing, Joanne Tolman and Liz Zerbe.
CONSENT CALENDAR
Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
1. Minutes of the Board meeting held July 20, 2009
2. Audit demand check numbers 123028 through 123190
3. Treasurer’s Report and Investment Discussion for the period ended June 30, 2009
4. Report of Developer Constructed Facilities for Fiscal Year 2008-09
ACTION AGENDA
5. Concept Approval of the Woods Valley Ranch Water Reclamation Facility Expansion Project and Request for a Budget Adjustment:
District Engineer Grabbe explained the differences in the proposed project from the proposal previously discussed. This project would start out as a developer type project with an application for a State Revolving Fund (SRF) loan, prepared by the developer’s engineer. Assuming a favorable SRF response, it would transition into a District project if approved for construction.
Previously, the project was proposed at 240 EDUs; now Village Redevelopment is asking for a 350 EDU project. It is believed with SRF funding, at lower interest rates, there would have better participation in the project. Currently, the Butterfield Trails and Bell Enterprises projects consist of 147 EDUs. There were other property owners interested in the project which totaled approximately 160 EDUs, but because of cost, only 80 EDUs have actually been committed to the project.
An assessment district would need to be formed to 1) pay back the loan from annual assessments, and 2) meet the requirements of the District’s Spending Limit Ordinance. Assuming a favorable response to the SRF application and receiving the participation numbers needed for the project, the SRF loan could be finalized. The State may attach conditions to the loan which may involve how the District establishes its rate structures and other items. These conditions would have to be reviewed and the offer of the loan would be brought before the Board for approval.
Mr. Grabbe stated that the design of the project would most likely have to be completed prior to loan approval and that this cost would be covered by the proponents of the project. Once the loan was finalized, the District would bid and award the project and manage the construction. The proponent’s responsibilities would be to provide:
· SRF Application and funding for District review and submittal
· Design of the expansion facility
· Acquisition of a seasonal storage site (4.06 acres)
· Funding for District solicitation of additional participants
· Funding for Assessment District formation
· SRF Loan conditions (matching funds, etc.)
The District would provide the following items which would be funded by a transfer from the Woods Valley WRF Replacement Reserve Account:
· Waste Discharge Report
· Water Balance Evaluation of the Golf Course
· Acquisition of an additional seasonal storage site (2.81 acres) for future expansion.
It is assumed that the loan funds would include the construction costs for the expansion and the seasonal storage pond. The State will advise if the site acquisitions and design costs can be included in the loan. It is anticipated that there will be some matching fund requirements.
The District Engineer explained that the concept approval being requested includes conditions associated with the project. The main headings that are described in more detail in the document include: Participation, Project Scope, Effluent Disposal, Funding, Assessment District Formation, Design Requirements, Construction Management & Inspection, Cost Allocations & Reimbursements, Capacity Pool, Standby Fees, Reimbursements to Newland and Water Reclamation Facilities Agreement. These items have been discussed previously and are detailed in the document “Conditions of Concept Approval – Woods Valley Ranch WRF Expansion”. The collection system facilities are not included as part of the concept approval because all parcels to be served by the expansion project have not yet been determined.
The District Engineer also recommended that $50,000 be transferred from the Woods Valley WRF Replacement Reserve account in order to start the Waste Discharge Report, the Water Balance Evaluation, and begin acquisition of the additional property. All of this is, of course, subject to getting a favorable response to the SRF funding and the developer proceeding with the project.
President Broomell questioned the source of the State Revolving Fund money. Mr. Grabbe explained that this program is managed by the Department of Water Resources which provides funding for treatment plants. Funding for the program comes from repayment of prior loans and a recent infusion of Federal Stimulus Funds. This program has been around for a long time, and depending on the merits of the project, the State may approve funding. Director Stone inquired as to the prospects of receiving an SRF loan. The General Manager explained that there were many funding categories and factors involved, such as the demographics of the community, is there a health issue, etc. He declined to guess at the probability of the District receiving a loan but stated that the SRF is there to deal with water quality issues, not to subsidize new development. It was noted that one of the criticisms of the SRF process is that it takes a long time before receiving any money (1 to 2 years). However, during the initial process, it should be known if the State is looking favorably on our application. According to Don Bunts, who is preparing the application, there should be a good indication within 30 to 60 days.
The General Manager explained that this concept approval is designed to address whichever track this project takes: Full SRF funding, partial funding, or no funding. Some of the items listed in the conditions may or may not have to be utilized depending on the level of State funding.
Steve Flynn, of Bell Enterprises, addressed the Board regarding the conditions outlined for the project and noted that if full SRF funding is achieved, it becomes a public project at that point since all of the properties will be in an assessment district. The General Manager replied, that even with full SRF funding, there will be up front costs involved and the State will likely require a local share commitment. Instead of one private developer agreement, there will be multiple agreements committing each property owner to his level of required funding. Without SRF funding, concept approval will be for a private developer project.
Upon motion by Aleshire, seconded by Stone and unanimously carried, Concept Approval of the Woods Valley Ranch Water Reclamation Facility Phase 2 Expansion was granted with the conditions noted, along with the following resolution, entitled:
RESOLUTION NO. 2009-38
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING THE FY 2009-10 BUDGET BY TRANSFERRING $50,000
FROM THE WOODS VALLEY RANCH REPLACEMENT RESERVE ACCOUNT
TO THE SOUTH VILLAGE PROJECT ACCOUNT
was adopted by the following vote, to wit:
AYES: Director Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
6. Request to Assume Contract Responsibilities for the High Mountain Waterline Portion of the Steinbeck High Vista Project and to Establish a Special Service Connection Charge for Reimbursement to District:
District Engineer Grabbe explained the High Vista area map that indicated Mr. Steinbeck’s project and the 14 inch water line that he was required to install in High Vista as part of his project. In lieu of installing that portion in High Vista, the District requested he install an 8 inch water line in High Mountain Drive to loop the system between Mountain Meadow Road and High Vista Drive. The loop would benefit more properties by providing redundant service in the event of a line break, and better fire protection to the area. When the District granted concept approval of Steinbeck’s project, the District agreed to pay the difference between the cost of the line in High Vista and the cost of the looped line in High Mountain. Due to the large amount of rock in High Mountain Drive, the estimated cost of this project is $345,500. The District’s portion is estimated at $230,000, which has already been budgeted for this project. Mr. Steinbeck’s portion is estimated at $115,500, based on the construction estimate for the line he would have had to build in High Vista. Normally, participation funds for these types of projects are reimbursed to the developer after completion of the project. Since the District has the larger share, staff recommends that the District bid, award and manage the construction contract after receiving the developer’s share of the project.
The District Engineer reported that there are potentially 168 lots that benefit from these improvements. Excluding the 58 lots that already have water meters, there are 110 new lots that could be developed in that area that would benefit from the new line. A Special Service Connection Charge (SSCC) of approximately $1,370 could be established by dividing the District’s estimated cost ($230,000) by the number of benefiting lots. This SSCC would be charged when new meters are purchased and could potentially collect as much as $150,000 in reimbursement of our initial investment. Since Mr. Steinbeck is contributing to the new line, his lots would not be subject to this special charge. Once the project is complete and all the construction costs have been validated, property owners in the area will be notified of the potential cost and given a 30 day review period. After that time, staff will return to the Board for approval to establish the Special Service Connection Charge.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Board authorized staff to assume contract responsibilities to bid, award and construct the High Mountain waterline portion of the Steinbeck development project contingent upon receipt of the developer’s share of the project costs, and to establish a special service connection charge for reimbursement of District funds for this project from new meter sales to properties in the benefiting High Vista area.
7. Adoption of Resolution 2009-38 Formally Opposing the SDG&E Emergency Power Shutoff Plan:
General Manager Arant stated that the District needed to take formal action to oppose SDG&E’s Emergency Power Shut-Off Plan prior to the issue going before the Public Utilities Commission Board.
Upon motion by Stone, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION 2009-39
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER WATER DISTRICT
OPPOSING SDG&E’S EMERGENCY POWER SHUT-OFF PLAN
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8. Request from Assemblyman Jeffries to Support Proposed ACA 8 – Open Legislative Process:
General Manager Arant explained that Assemblyman Jeffries has requested support of Assembly Constitutional Amendment 8 to establish public noticing and posting requirements, as well as providing the Legislature a full copy of any legislative proposals at least 24 hours prior to a scheduled vote.
Upon Motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2009-35
A RESOLUTION OF THE BOARD OF DIRECTORS
OF VALLEY CENTER MUNICIPAL WATER DISTRICT
SUPPORTING ASSEMBLY CONSTITUTIONAL
AMENDMENT 8 (JEFFRIES)
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
9. Request to Approve Participation in the “Save Our Water Program”:
General Manager Arant explained that ACWA, in a joint venture with the Department of Water Resources, has requested participation in the “Save Our Water Program”. This is a $4 million program. The State has committed $2 million and ACWA has committed $2 million in contributions from their members. They suggested that VCMWD’s contribution be $7,000. Mr. Arant stated that conservation funds are available and recommends that a commitment to spend up to $5,000 on additional “in-kind” services also be approved. This would require that we include the “Save our Water” logos and information in some of the materials we already produce, including local newspaper ads and printing of materials for our customers. It was explained that this is our only way of reaching the public on the importance of the upcoming water bond.
Upon Motion by Aleshire, seconded by Stone and unanimously carried, the Board approved a direct contribution of $7,000 to the ACWA “Save Our Water Program” and a commitment of up to $5,000 of “in-kind” services, along with a provision for VCMWD to encourage the participation of other Water Authority members in this program.
GENERAL MANAGER’S AGENDA
10.
San Diego
County Water Authority’s Board Meeting Report:
Ø The SDCWA Board passed a resolution supporting the efforts of Metropolitan and the State Water Contractors in litigation affecting the operation of the State Water Project. Greg Wilkinson of BB&K is the lead counsel. The suit has been brought against the biological opinions, challenging the science that focuses all of the restrictions on pumping when there are many factors that affect the fish population.
Ø The Water Authority Board approved the agreement to go to Metropolitan to seek local projects funding for the Carlsbad Poseidon Desal Plant. At our next Board meeting there will be an item for VCMWD to approve the form of agreement with Metropolitan. Each one of the nine agencies and the Water Authority will sign this agreement for local projects funding.
11. Review of Miscellaneous Information Items:
During the first month of the full price M&I voluntary cutback program, we are at 29% when we only asked for 8%. The IAWP and SAWR programs are also far exceeding their requirements. We are saving 27% more than the 30% that was requested. The Water Authority said we were doing a great job on conservation to which Mr. Arant replied, “No, what you are seeing is an implosion of an industry”.
DISTRICT COUNSEL’S AGENDA
12.
Update on Litigation:
Ø District Counsel reported that Greg Wilkinson, who has been heading up the litigation for the State Water Contractors, will be in San Diego on Thursday evening to speak at the Special District’s Association Meeting dinner. There are currently eleven cases/complaints challenging the biological opinions for both the smelt and the salmon. There are motions being presented before the judge on September 20th attacking the biological opinion for a variety of reasons. They will be carrying arguments against the Endangered Species Act as far as they have ever been carried in a U.S. Court. There are arguments being made that have never been made before in the United States. The items that may prevail are 1) they should have prepared an Environmental Impact Statement, under NEPA, prior to issuing a biological opinion, and 2) were regulations followed with regard to scientific data reporting the findings in the biological opinion. Mr. Wilkinson believes that the judge has signaled that he is inclined to rule in favor of the plaintiffs (the water agencies) on September 20th. If this occurs, it doesn’t mean that there will be free pumping, there will still be constraints.
Ø Regarding the Poseidon project, we have been waiting on the judge’s opinion on the State Lands Commission case. The judge has ruled in our favor. This ruling may, or may not, be appealed but the appeal on the Coastal Commission case has been dropped and is now finished. The appeal to the State Board is continuing. Poseidon will start construction, regardless of the status of the litigation. Their only issue is they must commence work prior to the deadline on their Coastal Commission permit, which is sometime in October. The Coastal Commission staff is again saying that the paperwork showing that Poseidon has complied with the various conditions imposed by the Commission is incomplete.
BOARD OF DIRECTORS’ AGENDA AND REPORTS ON MEETINGS ATTENDED
13. ACWA-JPIA:
At the Strategic Planning Meeting the previous week, Director Aleshire reported that JPIA has changed their opinion from not growing, but becoming the best at the customer base they had, to trying to grow the JPIA customer base in order to pass on some savings to existing customers.
Director Aleshire commended the accomplishments of Fran Shough for completing her Basic Supervisor Specialty Program and Gaby Olson for completing the Basic and also the Operations Specialty Programs. These are part of the JPIA Professional Development Program.
The ACWA/JPIA Executive Committee approved the purchase of a new 16,000 sq. ft. building, vacated by AAA, in Roseville. It is in a better location, and will cost less than remodeling the current building.
14.
Audience Comments
:
Ms. Liz Zerbe, an audience member who came in late to the meeting, addressed the Board. She lives in the North Lake Wohlford area with her handicapped son and is concerned about water being available during the SDG&E power outages.
The General Manager addressed her concerns by stating that in most cases during a 12 to 24 hour power shut-off, we will be fine. He explained that some of the District’s pump stations run on natural gas, and the District also has portable generators. There are portions of the District, on the extreme ends of our system, where there could be a problem. Ms. Zerbe was advised that in her area there are two large reservoirs with lots of storage. The District’s concern is that during a hot, dry, Santa Ana condition, customers will have depleted our reservoirs, and then the fire starts. This is why we are battling with SDG&E over this issue.
Ms. Zerbe suggested that the District put information in the Roadrunner in September explaining what will happen and to not deplete the system, by watering their roofs, unless absolutely necessary. The Board assured her they would.
CLOSED SESSION
15. A Closed Session was called by president Broomell at 4:00 p.m. pursuant to:
· Government Code §54956.9(a), Conference with Legal Counsel, Existing Litigation
Name of case: Nora Armenta v. James Jones Company, et al.
· Government Code §54956.8 - Real Property Transaction, Conference with
Negotiator
Property: 30777 Pauma Heights Road, Valley Center, CA
Agency Negotiator: Gary T. Arant, General Manager
Negotiating Party: TMO CA/NV LLC
Under Negotiation: Terms of Lease
ADJOURNMENT
16. Upon motion by Polito, seconded by Haskell and unanimously carried, the meeting was adjourned at 4:10 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary