VALLEY CENTER WATER DISTRICT
Regular Board Meeting
Tuesday, January 19, 2010
Time: 2:00 P.M.
Place: Board Room
29300 Valley Center RoadValley 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 and Haskell. Director Stone was absent. 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. No spectators were present.
1. Upon motion by Aleshire, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held December 7, 2009
• Notice of Completion filed for the West No. 2 Reservoir exterior and interior repainting project
• Audit demand check numbers 124350 through 124693 and wire disbursements for December 2009
• Treasurer’s Report and Financial Statements for the period ended November 30, 2009
• Assessed values for the Valley Center Municipal Water District’s service area for FY 2009-10 compared to FY 2008-09
▪ Quarterly report of employees’ expense reimbursements for the quarter ended September 30, 2009
▪ Board of Director’s request for reimbursement of expenses and report of expenses
• Population estimate for the District as of January 1, 2010
2. Request for Support of the San Diego County Water Authority’s Local Resources Project Funding for the Carlsbad-Poseidon Resources Seawater Desalination Project:
General Manager Arant requested the Board’s adoption of Resolution No. 2010-02 that requests the San Diego County Water Authority’s support of Local Resources Project funding for the Carlsbad-Poseidon Resources Seawater Desalination Project. Local Resources Project funding from the San Diego County Water Authority would provide up to $200/ac. ft. subsidy for the development of this local water resource. The Authority’s Local Resources Project Program is based upon the comparative cost to the member agency for the supply. Since the desal. water to be delivered by Poseidon Resources to the contracted member agencies will not cost more than the avoided cost of the water from the San Diego County Water Authority, the Authority’s interpretation is that the Carlsbad-Poseidon desal. project is not eligible for its LRP funding. Resolution No. 2010-02 points out that the desal. project provides the benefits to the region’s water supply as envisioned by the Local Resources Project; such as, greater regional water supply, reduced demand for imported water supplies, meeting regional Water Supply Master Plan and Urban Water Management Plan goals, and deferred regional public water infrastructure cost for a long-term regional supply.
The District’s agreement with Poseidon Resources for desalted water deliveries is for an amount up to 7,500 per ac. ft. per year. The possibility of reducing the contractual amount of desalted water deliveries from 7,500 ac. ft. to 5,000 ac. ft. per year was discussed. This proposal was recommended as an efficient optimum level of production at the plant (50 mgd) will produce winter flows that exceed the collective demands. The desal. partners will be evaluating storage and distribution opportunities to avoid excess flows being delivered to the San Diego County Water Authority and possibly incur the charges associated with operation of the Twin Oaks Treatment Plan for the excess flows. Another solution discussed is for one or several of the agencies with agreements to receive the desal. water from the Carlsbad Plant to reduce their contractual amounts and add another agency to receive the desal. water that has significant storage capacity as well as winter time demands such as the City of San Diego.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Board approved Resolution No. 2010-02 and allowed for a possible reduction in the contractual agreement with Poseidon Resources for desalted water deliveries from 7,500 ac. ft. to 5,000 ac. ft. per year, by the following resolution, entitled:
RESOLUTION NO. 2010-02
A RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
REQUESTING SAN DIEGO COUNTY WATER
AUTHORITY APPROVE THE LOCAL WATER
DEVELOPMENT PROGRAM FUNDING FOR THE
CARLSBAD SEAWATER DESALINATION PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Haskell
ABSENT: Director Stone
3. Award of Contract for the West No. 1 Reservoir Exterior and Interior Repainting Project:
Bids for the West No. 1 Reservoir Repainting Project, exterior and interior, were opened on December 9th with the lowest bid of $115,000 submitted by J. Colon Coatings. Award of the painting contract to J. Colon Coatings was recommended as it was noted that J. Colon Coatings has completed reservoir recoating projects in the past to the District’s satisfaction.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-01
RESOLUTION OF THE BOARD OF DIRECTORS
OF VALLEY CENTER WATER DISTRICT AWARDING
CONTRACT FOR THE REPAINTING OF THE
EXTERIOR AND INTERIOR OF WEST #1 RESERVOIR
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Haskell
ABSENT: Director Stone
4. Board Direction Regarding the Auditing Firm Selection Process:
Board direction on the selection of the accounting firm to conduct the Fiscal Year 2009-10 annual audit was requested. The firm of Leaf & Cole, with Michael Zizzi as principal auditor, has performed the District’s audit since FY 2002-03. The Board had directed that proposals from auditing firms be obtained for the audit of the District’s records for FY 2009-10.
Options presented for the Board’s consideration were to retain Leaf & Cole as the auditing firm but with a change in the partner in charge of the audit, or solicit audit proposals from qualified firms, including Leaf & Cole.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Audit Selection Committee of Directors Aleshire and Haskell was appointed, and staff was directed to initiate the process to solicit bids from a minimum of 5 qualified auditing firms to conduct the District’s audit beginning Fiscal Year 2009-10.
GENERAL MANAGER’S AGENDA
5. Review of Miscellaneous Informational Items:
• General Manager Arant reported that the San Diego County Water Authority is considering extension of its Special Agricultural Water Rate (SAWR). The SAWR is provided as agricultural customers do not pay the commodity portion for the Emergency Storage Project or supplemental supply costs such as the canal lining and Quantification Settlement Agreement water as ag. does not receive the benefit from these programs. At this time, participants in the SAWR program are required to reduce water usage by 13% which is the reduction imposed by Metropolitan Water District. (M&I customers’ supply reduction level is at 8% which represents the 13% cut-back reduced by the supplemental supplies available to the region). The San Diego County Water Authority’s analysis of the SAWR program indicates that the investment in the supply portion of the discount does not support the benefit and that it is less expensive to purchase water on the spot market. However, it is felt that the storage component for the SAWR program should be retained which would include the carry-over storage project (San Vicente Reservoir expansion) which has an indebtedness that will increase.
• The Carlsbad Seawater Desalination Project Seawater Desalination Program agreement with Metropolitan Water District of Southern California and the 9 desal. partners, including the District, was approved for execution by the San Diego County Water Authority Board of Directors.
• General Counsel Cowett provided information on the Quantification Settlement Agreement and the recent court action to invalidate the QSA facilitating the transfer of water from the Imperial Valley to the San Diego region as well as restoration of the Salton Sea. General Counsel Cowett explained that the QSA was considered risky as it obtained a water supply for the 75 year period pursuant to contracts with other agencies many of which compelled other agencies to forego water usage. And, there were further complications with environmental issues and the Salton Sea. Lawsuits were filed challenging the many contracts of the QSA and a recent ruling from one of the lawsuits from a Superior Court Judge in Sacramento was on a validation action. The judge ruled to invalidate the QSA based on the State of California’s contract for an unlimited and unconstrained monetary appropriation for the restoration of the Salton Sea, which is a violation of the State’s Constitution. An appeal of this judgment will be pursued with the State Court of Appeals.
• A letter was received from Jeff Kightlinger, General Manager of the Metropolitan Water District of Southern California, regarding the request to allow Interim Agricultural Water Program customers to carry-over credits accumulated representing under-usage to the next year. Extraordinary conservation efforts by the growers would be rewarded by being able to roll conservation credits forward from one year to the next which would be beneficial if extraordinary weather conditions are experienced and to offset over-use penalties in a given month. The response from Metropolitan is that an agency can allow IAWP customers to carry-over under-usage credits, but an agency’s total water deliveries per year to its IAWP participants cannot exceed the allocation amount. Once the water supply conditions from the winter rains are known, an amendment to the District’s implementation procedures for the IAWP to allow earned conservation credits to be carried-over to a subsequent year of the Program will be presented for Board consideration.
• A consultant will be retained to review the District’s various projects and assist in researching funding sources. This information will then be used to consider utilizing a lobbyist to pursue available assistance for identified projects.
• In preparation of the Fiscal Year 2010-11 budget, staff has been evaluating ways to reduce the District’s operational expenses. A proposal for improving operational efficiency and reducing costs is to utilize an automated phone system. In this manner, the Administrative Assistant, who is the Receptionist, could be assigned to assist other departments. An automated phone system would improve customer contact as customers would more directly reach the party they are calling and improve efficiency as the need for a dedicated receptionist position would be eliminated. It was proposed that if a customer calls the District’s main number rather than a direct line number, the voice message would be user friendly providing a list of services and the extension number to dial. However, after a transition period, the majority of customer contacts will be from a direct dial number as the appropriate phone number will be printed on forms, business cards and communicated (i.e. direct number to reach Finance personnel printed on the water bills and final notices). At the present time, Administrative and Engineering personnel utilize their direct dial numbers which has resulted in 90%-95% of incoming calls handled by the receptionist being inquiries on water bills in which the call is then put on hold and transferred to the Finance Department. Customers’ use of the automated phone system to reach the appropriate department and printing of the direct dial number on communications (including water bills) to the customer will result in operational improvements and more efficient use of personnel. Per Board direction, a script of the voice message for the proposed automated phone system will be prepared for the Board’s review.
GENERAL COUNSEL’S AGENDA
6. Delta Smelt NEPA Challenge:
General Counsel Cowett reviewed that U.S. District Court Judge Wanger had granted the motion for summary judgment against the U.S. Fish and Wildlife Services and the U.S. Bureau of Reclamation ruling that an environmental review under the National Environmental Policy Act (NEPA) must be completed prior to implementing the Biological Opinion that reduces water deliveries to protect the Delta Smelt. However, a Biological Opinion will be needed so that water operations of the Central Valley Project and the State Water Project are not in violation of the Endangered Species Act.
7. A Closed Session was called by President Broomell at 3:35 p.m. pursuant to:
● Government Code §54956.9(b) – Conference with Legal Counsel, Anticipated Litigation
Number of potential cases: 1
● Government Code §54957.5(a) – Conference with Labor Negotiators
Agency Representative: Gary T. Arant, General Manager
Employee Organization: Valley Center M.W.D. Employees’ Association
8. The Regular Board meeting was reconvened at 4:12 p.m. There was no reportable action.
9. The meeting was unanimously adjourned at 4:13 p.m.