VALLEY CENTER WATER DISTRICT
Regular Board Meeting
Monday, February 2, 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.
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 Manager of IT Pilve. Spectator present was Mr. Johnson.
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 20, 2009
• Audit demand check numbers 121221 through 121349
2. Request for Concept Approval of the Proposed Butterfield Trails Subdivision Water and Wastewater Facilities:
District Engineer Grabbe explained that the proponent of the proposed Butterfield Trails Subdivision project, Mr. Hilbig of the Alti Corporation, has requested that the Board’s consideration of granting concept approval of this proposed subdivision’s water and wastewater facilities be deferred as he is unable to attend the meeting. The Board unanimously agreed to defer the agenda item for concept approval of the Butterfield Trails Subdivision water and wastewater facilities to a subsequent Board meeting.
3. Workshop to Review the Proposed Woods Valley Ranch Water Reclamation Facility Expansion Project:
Due to the complexities involving the proposed expansion of the Woods Valley Ranch Water Reclamation Facility, Director Polito suggested that a workshop be held to review and discuss the proposals that have been presented. Under consideration is the size of the expansion project and its impact upon the ultimate capacity of the treatment site as well as the formation of an assessment district. Following discussions of potential dates for the workshop, Monday, February 23rd at 2:00 p.m. was elected as the date and time to conduct the workshop. The developers of Alti Corporation and Bell Enterprises will be informed of this workshop, and staff will endeavor to arrange for representatives of Fieldman, Rolapp & Associates, financial advisors, and Dudek & Associates, the engineering firm that completed the master plan for the Woods Valley Water Reclamation Facility, to be present.
4. Agreement to Conduct the District’s Audit for Fiscal Year 2008-09:
Leaf & Cole, LLP submitted a proposal to perform the audit of the District’s financial statements for the year ending June 30, 2009. The proposal fee of $19,700 reflects a 2.6% increase from the Fiscal Year 2007-08 audit fee. Leaf & Cole has completed the audit of the District’s financial statements since FY 2002-03 and staff requested approval to extend the audit contract to Leaf & Cole for 2008-09. An extension of the contract was requested rather than initiating Requests for Proposals for a change in auditing firms due to the increased workload associated with the cutbacks to the Interim Agricultural Water Program participants and the mandatory reductions to municipal and commercial customers that is considered eminent.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the contract with Leaf & Cole, LLP to complete the audit of the District’s records for Fiscal Year 2008-09 was approved with adoption of the following resolution, and staff was directed to solicit Requests for Proposals from audit firms to perform the audit of the district’s records for Fiscal Year 2009-10:
RESOLUTION NO. 2009-01
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER WATER DISTRICT ENTERING INTO AN
AGREEMENT WITH LEAF & COLE, LLP TO AUDIT
THE FINANCIAL STATEMENTS OF THE DISTRICT FOR
THE YEAR ENDED JUNE 30, 2009
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
5. Participation in 2009 Federal Stimulus Funding:
Engineering staff had compiled data on capital improvement project needs throughout the District’s service area that were submitted to SANDAG and Metropolitan Water District for possible funding consideration under the proposed Federal stimulus program. However, it has now been determined that the economic stimulus funding currently being considered by Congress for water and wastewater public works projects will be distributed through the Drinking Water State Revolving Fund and the Clean Water State Revolving Fund. Of the stimulus funding approved, it is estimated that 5% will be earmarked for public works improvements. Applications can be submitted to the State Water Resources Control Board. The parameters to apply for federal stimulus funds will likely change as the legislation moves through the process, but at present, eligible projects must be “ready to proceed” and be in compliance with all applicable environmental requirements.
Staff was directed to evaluate the identified capital improvement projects for potential application for federal stimulus funding and prioritize wastewater and reclamation projects.
6. Review of Strategic Plan Performance Standards:
The District’s Customer Comment Card program for the period July 2007 through December 2008 was reviewed. A report of the District’s Strategic Plan Performance Standards will be reported on a calendar year in the future to facilitate the data’s use in the annual budget and the CAFR.
The performance standard for customer satisfaction is greater than 95%. Customer comment card ratings during the period July 2007 through December 2008 were either “Exceeds Expectations” or “Meets Expectations”. Receiving 100% of the comments with high ratings is considered significant as it was during a period of the water supply cutbacks to agricultural customers.
The status of other Strategic Plan Performance Standards were summarized as follows:
▪ Unknown Water Loss (calendar year 2008) – 6.1%. (Goal: 5% or less). The increase in water loss is likely due to the AMR faulty devices.
▪ Discretionary Reserves – 9.5 months of operations and maintenance budget. (Goal: 6 months of unrestricted or uncommitted reserves not anticipated to be used in the current fiscal year).
▪ Local Commodity Rate for Local Operating and Maintenance Costs - 11.3% of total commodity rate for full price. (Goal: No more than 13% of total commodity rate for full price).
▪ Pump Efficiency – 101% of design efficiency. (Goal: 95% of design efficiency).
▪ Project’s Actual Cost – No projects were finalized in the measurement period as the current projects are multi-year projects. (Goal: ±10% of the engineer’s estimate).
▪ Water Service Reliability – 99.938% service reliability. (Goal: Greater than 99%).
▪ Compliance with All State and Federal Regulations – 100% compliance. (Goal: Full compliance).
▪ Lost-time Accidents – No hours of lost time accidents. (Goal: Less than 1% of hours worked).
▪ Return on Investments – Weighted average return on all investments was 3.45% in 2008. (Goal: Greater than the 12-month rolling average return on U.S. Treasury bonds which had been 2.95% in 2008).
GENERAL MANAGER’S AGENDA
7. Review of Miscellaneous Informational Items:
General Manager Arant reported on the following miscellaneous items:
• At the January 22nd San Diego County Water Authority Board meeting, payments were authorized for the construction of the San Vicente Pipeline and Aqueduct Interconnect Project that will connect the San Vicente Reservoir to the 2nd aqueduct. This project is part of the Authority’s Emergency Storage Project which also includes the raising of the San Vicente Dam for increased storage. There are cost overruns on the San Vicente Pipeline and Interconnect project due to problems encountered with the soil as well as substantial cost increases for the Lake Hodges pump facility to transfer water to the Olivenhain Reservoir due to discrepancies with the size of the equipment and the pump building’s size.
• General Manager Arant had participated in a tour of the All American Canal lining project in the Imperial Valley. This lining project will conserve approximately 77,000 ac. ft. of water. Approximately 60 miles of the canal are being lined and it is about one-half completed.
• At the ACWA Board meeting on January 30th, the Assistant General Manager of the State Water Contractors reported that the snow pack survey completed showed that the snow measurement is 61% of normal and limited run-off is anticipated. There is a strong likelihood that the Department of Water Resources will reduce the contractor’s allocation from 15% to 5%. At 5% of the contract obligation, Metropolitan Water District will receive slightly over 100,000 ac. ft. Typically, Metropolitan Water District has received from 1.2 and 1.5 million ac. ft. of water from the State Water Project. The shortfall to our region will be reduced by Colorado River Aqueduct deliveries estimated at 1 million acre feet and use of Metropolitan’s water storage supplies, leaving a water shortage to the Southern California region estimated at 400,000 to 450,000 acre feet.
With these reported cutbacks in water supply, a 15% mandatory cutback in water deliveries for municipal, industrial and commercial customers is anticipated beginning in July 2009.
GENERAL COUNSEL’S AGENDA
8. San Diego Gas & Electric’s Application to the PUC to De-Energize Electrical System:
General Counsel Cowett reported that SDG&E has applied to the PUC for a change in its rules to enable it to de-energize its system under certain circumstances. As part of its application, water districts will be supplied generators along with the implementation of a tariff for this provision. Best, Best & Krieger has filed an objection to the application before the PUC on behalf of the water districts involved in the litigation to prevent SDG&E from implementing its fire preparedness program of turning off electrical power.
BOARD OF DIRECTORS’ AGENDA
9. ACWA-JPIA Executive Committee Meeting:
Director Aleshire reported that the ACWA-JPIA Executive Committee members had approved an increase in their per diem from $176 to $200 with an automatic 5% increase each year unless there is action to not approve the increase in a given year. Director Aleshire stated that he made a motion at the January 2009 meeting that there be no increase to the per diem rate, but the motion did not receive a second.
The formulas used to establish agencies’ water rate structures were discussed at the Finance Committee meeting. Conservation rate structures are being implemented that vary from an allocation based rate, tiered rate structure, water budgets for individual parcels, and hydrologic rates determined by the capacity of a meter and the average consumption for that meter size. An evaluation of the District’s rates was completed for consideration of a conservation rate structure. It is felt that due to the diversity of lot sizes throughout the District’s service area, the most equitable rate structure would be a percentage reduction based on historical consumption. A tiered rate structure based on a percentage reduction utilizing historical usage such as a three-year rolling average will have an allowance for 10 units per month water consumption. Per Director Aleshire’s recommendation, a customer could elect to re-allocate water usage between properties owned in the District’s service area with the execution of agreements.
Director Aleshire announced that Fran Shough, Sr. Human Resources Analyst, completed the JPIA Human Resources Specialty Program which is part of ACWA-JPIA’s Professional Development Program.
A check from the ACWA-Joint Powers Insurance Authority was presented by Director Aleshire in the amount of $38,532.24, which is a refund to the District per the policy to refund member agencies when the rate stabilization fund exceeds 60% of premium costs.
10. A Closed Session was called by President Broomell at 3:23 p.m. pursuant to:
• Government Code §54956.9(c) – Conference with Legal Counsel,
Number of potential cases: 1
11. The Regular Board meeting was reconvened at 3:49 p.m. No action was reported.
12. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at 3:50 p.m.