June 21, 2010
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, June 21, 2010
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, Director of Finance Jeffrey, Director of Operations Hoyle, District Engineer Grabbe, Board Secretary Stetson, Manager of IT Pilve, Manager of Accounting Pugh, Consumer Services Supervisor Tilley and Accounting Specialist Serrato. Spectators present were: Mrs. and Mrs. Art Branstine, and Messrs. Rilling, McCullough and Hilbig.
CONSENT CALENDAR
1. Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
▪ Audit demand check numbers 125949 through 126056
▪ Board of Directors’ requests for reimbursement of expenses and per diem compensation
▪ Resolution No. 2010-25 establishing the appropriation limit for proceeds from taxes per Government Code and Article XIIIB of the State Constitution
PUBLIC HEARINGS
2. Public Hearing to Consider Adoption of District-Wide Water Availability Charge for Fiscal Year 2010-11:
President Broomell opened the public hearing to receive input on the proposed District-wide water availability charge for Fiscal Year 2010-11 at 2:02 p.m. Director of Finance Jeffrey explained that the public hearing on the proposed $10.00 per acre availability charge for Fiscal Year 2010-11 is conducted to receive written and oral public testimony. Notices on the proposed water availability charge had been published and posted. New property owners since the assessment of the charge the prior fiscal year received notification by direct mail.
The proposed $10.00 per acre/$10.00 per parcel minimum water availability charge will generate approximately $591,000 and is planned to be used for revenue debt service ($103,886), with the remainder ($487,114) used for ongoing capital requirements. Said water availability charge has been collected annually since Fiscal Year 1995-96. Director of Finance Jeffrey noted that the proposed water availability charge is the equivalent of a $19.70 per acre foot increase in the selling price of water, or an average increase of $5.66 to the monthly fixed meter charge.
As of the date and time of the public hearing, no protests had been received for the District-wide Water Availability Charge for Fiscal Year 2010-11. There were no comments from the audience.
The public hearing on the proposed Fiscal Year 2010-11 District-wide water availability charge was closed at 2:03 p.m.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2010-11
ORDINANCE OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ESTABLISHING WATER AVAILABILITY CHARGES FOR
2010-2011 ON ALL PROPERTY WITHIN THE DISTRICT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Public Hearing on the Woods Valley Sewer Service Area’s Annual Sewer Service Charge:
The public hearing on the Woods Valley Sewer Service Charge for Fiscal Year 2010-11 was opened at 2:04 p.m. Director of Finance Jeffrey reviewed that in July 2002, the property owners within the Woods Valley Sewer Service Area approved the Woods Valley Sewer Standby Fee and Sewer Service Charge. The standby fee and service charge finance the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. It was explained that undeveloped property is assessed the standby fee and developed property assessed the service charge. There are currently 254 developed parcels within the Woods Valley sewer service area using a total of 263 EDUs.
The 2010-11 budget for the Woods Valley Ranch Water Reclamation Facility requires revenue of $331,296. As such, the proposed assessment for the Woods Valley Sewer Service Charge is $1,183.20 per EDU, or $98.60/month which is detailed in an annual report listing the parcels and respective sewer service charge. The combined Sewer Standby Fee and Sewer Service Charge for the Woods Valley Ranch Reclamation Facility for 2010-11 provide the necessary revenue to meet the requirements of the reclamation facility. The Sewer Standby Fee is presented as a separate item and does not require a public hearing and is assessed upon those properties within the Woods Valley Ranch Service Area that do not have a Certificate of Occupancy (undeveloped).
Collection of the sewer service charge through an assessment on the property tax bill was recommended. If a majority protest to the sewer service charge is received, the charge may not be collected on the tax roll, but rather would be billed each month on the water bill. No protests to the proposed Woods Valley Ranch Sewer Service Charge to be collected by the County of San Diego with the property taxes were received.
Mr. Wayne Hilbig addressed the Board stating he is representing the HOA Board members of the Woods Valley Ranch Development and questioned the Woods Valley Sewer Service Charge and Standby Fee. Director of Finance Jeffrey explained that the annual charge of $1,183.20 per EDU has been levied since 2002 and is the fee charged for the operation and maintenance of the Woods Valley Ranch Treatment Plant. It was reiterated that the charge is levied on the property owners’ tax bills, but if a majority protest to this charge is filed, the Sewer Service Charge would be billed (one-twelfth of the annual charge) on the monthly water bill. The Woods Valley Annual Sewer Standby Fee is the same as the Sewer Service Charge ($1,183.20), and is levied on the property tax roll for those properties within the Woods Valley Ranch Development that are undeveloped. In this manner, the undeveloped properties within the Woods Valley Ranch Development contribute toward the maintenance of the treatment plant through the levy of the Woods Valley Sewer Standby Fee. Director of Finance Jeffrey noted that the maximum fee that can be levied is $147.36/month/EDU. Operating expenses at the Woods Valley Ranch Treatment Plant are estimated to be $37,920 more than the previous year. The operating deficit of approximately $30,000 and capital financing deficit of approximately $295,000 will be funded from the Woods Valley Treatment Plant’s replacement reserve.
Mr. Art Branstine of Augusta Drive in the Woods Valley Ranch Development inquired as to what will happen over time with the current deficit of the operation and maintenance of the Woods Valley Ranch Treatment Plant. Director of Finance Jeffrey clarified that a portion of the fees collected by the users of the treatment plant is allocated toward a reserve account for the Woods Valley Ranch Treatment Plant which is funding the current deficit. An expansion of the treatment plant, which has been proposed to serve other properties, should result in a positive affect on the cost per unit at the treatment plant.
The public hearing on the Woods Valley Annual Sewer Service Charge was closed at 2:15 p.m.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-21
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
PLACING THE WOODS VALLEY SEWER SERVICE CHARGE
ASSESSMENT FOR 2010-2011 ON PROPERTY WITHIN
THE WOODS VALLEY SEWER AREA ON THE
SAN DIEGO COUNTY SECURED PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
ACTION AGENDA
4. Resolution to Set the Woods Valley Annual Sewer Standby Fee for Fiscal Year 2010-11:
Adoption of Resolution No. 2010-22 to set the Woods Valley Sewer Service Area Sewer Standby Fee for Fiscal Year 2010-11 was requested. Director of Finance Jeffrey noted that in July 2002, following a public hearing, the property owners within the Woods Valley Sewer Service Area approved the Woods Valley Sewer Standby Fee and Sewer Service Charge which finance the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. Undeveloped property within the Woods Valley Ranch Sewer Service Area is assessed the Standby Fee which insures that the developer and interim builders pay their share of the cost of the sewer operation, including future replacement. There are currently 17 undeveloped parcels with a total of 17 EDUs.
The budget for the Woods Valley Ranch Reclamation Facility for Fiscal Year 2010-11 requires revenue of $331,296 in which a Standby Fee of $1,183.20/EDU or $98.60/month will be assessed. The revenue requirement for the Woods Valley Ranch Reclamation Facility is collected through a combination of the Standby Fee and a sewer service charge on developed parcels. The Woods Valley Annual Sewer Standby Fee will be assessed on the property tax bills.
Upon motion by Stone, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-22
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
PLACING THE WOODS VALLEY SEWER STANDBY FEE
ASSESSMENT FOR 2010-2011 ON PROPERTY WITHIN
THE WOODS VALLEY SEWER AREA ON THE
SAN DIEGO COUNTY SECURED PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
5. Adoption of Fixed Charge Special Assessments for Assessment District 96-1 and Authorization to Lien Parcels for Unpaid Water and Other Services:
Resolution No. 2010-23 was presented for adoption to establish the District’s fixed charge special assessments for Assessment District 96-1 (Treasures at Castle Creek – improvements to the Lower Moosa Canyon Wastewater Treatment Facility) to meet the principal and interest obligations of the debt, and authorizing the District to add delinquent and unpaid charges for water and other services on the property taxes for 2010-11 of the property using the water or service.
An assessment on the 200 parcels in Assessment District 96-1 of $757.70 per parcel for 2010-11 is needed to meet the principal and interest obligations of the bonded indebtedness. The Water Code authorizes the District to add delinquent and unpaid charges for water and other services to the property taxes of the property using the water or service. The delinquency must be unpaid for at least 60 days and have had a lien recorded against the property. Eighteen parcels with a total delinquency of $159,928.66 are eligible to be placed on the tax roll for FY 2010-11.
Mr. Bob McCullough of Platanus Drive in the Treasures Development inquired as to the Assessment District 96-1 charge. Director of Finance Jeffrey explained that in 1997 bonds were sold to fund improvements to the Lower Moosa Canyon Wastewater Treatment Facility for the benefit of the Treasures Development. Assessments to meet the principal and interest obligations of the bonded indebtedness are paid through an assessment of the properties within the boundaries of the assessment district, the Treasures at Castle Creek. Some units within the Treasures elected to pay off their indebtedness. At present, there are 200 parcels remaining with an outstanding debt for the A.D. 96-1 bonds and each parcel will be assessed $757.70 for Fiscal Year 2010-11 on the property tax roll.
Upon motion by Polito, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-23
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
PLACING FIXED CHARGE SPECIAL ASSESSMENTS FOR 2010-2011
ON PROPERTY WITHIN ASSESSMENT DISTRICT NO. 96-1 AND ON
PROPERTY FOR UNPAID CHARGES FOR WATER AND OTHER SERVICES
PURSUANT TO STREETS AND HIGHWAYS CODE SECTIONS 8680
AND 8682 AND WATER CODE SECTIONS 72094, 72100, 72102
ON THE SAN DIEGO COUNTY SECURED PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
6. Amendments to the District’s Water Supply Shortage Response Program:
General Manager Arant reviewed that the District’s Water Supply Shortage Response Program had been adopted in September 2008 to address the impending water shortage and the San Diego County Water Authority’s implementation of its Drought Response Plan. Subsequent to its adoption, the District’s Water Supply Shortage Response Program has been amended to clarify and standardize the water use measures and provisions.
Customer compliance with the current Level 2 Water Supply Shortage Alert Condition of an 8% voluntary conservation level has far exceeded this level. Modifications to further facilitate compliance with the Water Supply Shortage Response Program and enforcement of the Program were proposed as follows:
• Eliminate the three days per week limitation in Level 2 to allow customers to maintain irrigation schedules convenient to their needs as they have demonstrated a commitment to conserve water as requested.
• Expand the allowable water schedule in Level 3, the Water Supply Shortage Critical Condition, to three days per week rather than a limitation of two days per week. It is felt that the desired water consumption reduction of between 20% and 40% in a Level 3 condition can be met with this expanded flexibility for customers’ irrigation schedules.
• Allow for construction water to be from a non-potable source or from the potable water system in a Level 2 condition. The requirement that construction water be from a non-potable source would be retained for Levels 3 and 4.
• Miscellaneous amendments to better clarify regulations of the District’s Water Supply Shortage Response Program were proposed including a definition of additional water resources pertaining to annexation proposals.
Upon motion by Polito, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2010-03
AN ORDINANCE OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
APPROVING REVISIONS TO THE WATER SUPPLY
SHORTAGE RESPONSE PROGRAM, ARTICLE 230
OF THE DISTRICT’S ADMINISTRATIVE CODE
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
7. Support of Direct Negotiations Between the San Diego County Water Authority and Poseidon Resources for the Carlsbad-Poseidon Seawater Desalination Project:
General Manager Arant stated that the options that were being evaluated for funding of the Carlsbad-Poseidon Seawater Desalination Project through the San Diego County Water Authority’s Local Water Supply Development Program for the nine desal. partners are not viable. Also, Metropolitan’s funding through its Seawater Desal. Program may be in jeopardy under the Rate Integrity Clause as the Authority has filed a lawsuit challenging Metropolitan’s rate structure.
The nine desalination partners have concluded that in order to move the seawater desalination project forward, they support direct water purchase negotiations between the San Diego County Water Authority and Poseidon Resources. And, upon a successful conclusion of a water purchase agreement between the Authority and Poseidon, the contractual agreements between the desal. partners and Poseidon Resources would be relinquished. The San Diego County Water Authority is requesting the nine agencies with agreements with Poseidon withdraw the request for funding over the level determined by the Authority under the Local Water Supply Development Program, and relinquish the request for the Authority to consider replacing lost revenue from Metropolitan’s Seawater Desalination Program if funding under the Program is terminated due to actions by the Authority. Adoption of Resolution No. 2010-30 was recommended to affect these changes.
It has now been opined that upon agreeing to relinquish the request for additional funding from the San Diego County Water Authority and guaranteed funding under Metropolitan’s Desal. Program, the conflict of interest is removed. Therefore, the agency representatives of the desal. partners would be able to vote on the matter before the San Diego County Water Authority Board to enter into negotiations with Poseidon Resources for a Water Purchase Agreement.
Upon motion by Stone, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-30
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
SUPPORTING DIRECT WATER PURCHASE NEGOTIATIONS
BETWEEN THE SAN DIEGO COUNTY WATER AUTHORITY
AND POSEIDON RESOURCES (CHANNELSIDE) LLC
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8. Resolution Ratifying the Amended Joint Powers Authority Agreement of the ACWA Health Benefits Authority:
The Association of California Water Agencies (ACWA) Health Benefits Authority (HBA) recently converted its medical and dental PPO programs to a self-funded platform. The HBA Bylaws and Joint Powers Agreement (JPA) were amended to reflect the proposed changes and a modification of the representative governance. Resolution No. 2010-28 was presented for the Board’s consideration to approve the amended and restated JPA Agreement of the ACWA Health Benefits Authority.
As restructured, the ACWA HBA Board will be comprised of 11 members; 10 members elected based upon geographic and size of agency representation and the Chair of the Insurance and Personnel Committee. Nominations to the HBA Board of Directors and the three advisory committees (Health Benefits Program, Ancillary Benefits Program and Finance & Audit) have been requested. Nominations for the HBA Board must be made by resolution and receive concurrence from 3 other ACWA HBA members. Nominations to serve on an Advisory Committee can be made by Minute order. Director Aleshire concurred with placing his name in nomination for Board of Director of the ACWA HBA and staff recommended the nomination of Sr. Human Resources Analyst Fran Shough to serve on the Health Benefits Program Committee.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-28
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT CON-
SENTING TO APPROVE THE AMENDED AND RESTATED
JPA AGREEMENT OF THE ASSOCIATION OF CALIFORNIA
WATER AGENCIES HEALTH BENEFITS AUTHORITY
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Stone, seconded by Haskell and unanimously carried, the nomination of Fran Shough, Sr. Human Resources Analyst, to serve on the ACWA HBA Health Benefits Program Committee was approved and the following resolution, entitled:
RESOLUTION NO. 2010-29
NOMINATION OF DIRECTOR MERLE J. ALESHIRE
TO THE BOARD OF DIRECTORS OF THE
ASSOCIATION OF CALIFORNIA WATER AGENCIES
HEALTH BENEFITS AUTHORITY
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
9. Adoption of the Fiscal Year 2010-2011 Operations, Maintenance and Capital Budget:
The District’s proposed budget for Fiscal Year 2010-11 had been reviewed at the May 17th Board meeting. Manager of Accounting Pugh noted that no substantive changes have been made to the budget since its presentation and review on May 17th. He reviewed that based on current water and wastewater rates and charges and estimates of water sales (30,000 ac. ft.) and connections, the proposed FY 2010-11 budget has a deficit of nearly $2.8 million which will be met using reserves with no increases to the local water and wastewater rates. Rate increases from the District’s wholesale water suppliers, the Metropolitan Water District and San Diego County Water Authority, will be passed through when incurred in January 2011. The operating budget deficit is outlined below:
Water Operations $1,118,610
Water capital 1,171,885
Moosa Capital 190,883
Woods Valley Capital 294,881
Total Deficit $2,776,260
Capital projects total $2,554,630 which includes the following major projects:
Integrated Water Resources $ 195,000
Management Plan
Pump & Motor Replacements 195,000
Lilac Reservoir Cover 485,000
Data Management Systems – SCADA 300,000
Facilities 90,000
Equipment 92,000
Moosa Treatment Plant capital projects 478,030
(Includes centrifuge upgrade-$350,000)
Woods Valley Reclamation Plant 382,600
(Expansion Phase 2 Project-$320,000)
The adoption of Resolution No. 2010-26 to adopt the Fiscal Year 2010-2011 Operating and Capital Budget, and Ordinance Nos. 2010-06 and 2010-05 approving the changes in authorized staffing levels per the budget and to incorporate the changes per the approved Memorandum of Understanding with employees, respectively, was recommended.
Director Aleshire expressed concern regarding the District’s reserve levels noting that the Water Rate Stabilization Reserve’s balance as of June 30, 2010, will be depleted, and the Pumping Rate Stabilization Reserve has been reduced by $1 million over the last 5 years. Director Aleshire stated that total reserves, including restricted reserves, have declined $6 million over the last 5 years. Director Aleshire stated that the reserve levels will need to be addressed in the near future. General Manager Arant stated that an analysis of the reserve levels per Board direction has been undertaken and will be presented for the Board’s evaluation along with data from the Financial Plan Rate Model to consider for a plan to restore the reserve levels.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-26
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE FINAL OPERATING AND CAPITAL
BUDGET FOR THE FISCAL YEAR 2010-11 AND
ESTABLISHING CONTROLS ON CHANGES IN
APPROPRIATIONS FOR THE VARIOUS FUNDS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2010-06
ORDINANCE OF THE VALLEY CENTER MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO PROVIDE FOR CHANGES IN AUTHORIZED
STAFFING LEVELS FOR THE FISCAL YEAR 2010-11 BUDGET
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2010-05
ORDINANCE OF THE VALLEY CENTER MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO INCORPORATE CHANGES PER THE APPROVED
MEMORANDUM OF UNDERSTANDING WITH EMPLOYEES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
10. Resolution Adopting a Privacy Statement for the District’s Website:
Director of Finance Jeffrey reviewed that customers will soon have access to an online account system on the District’s website. In conjunction with this new system, it is appropriate to provide customers with information on the District’s privacy policy. Adoption of Resolution No. 2010-27 adopting the Privacy Statement for the District’s website was recommended.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-27
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING A PRIVACY STATEMENT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
11. Board Approval of Position of Oppose, SB 972:
Senate Bill 972 (Wolk) has been introduced pertaining to indemnity provisions between local agencies and design professionals. This legislation, as written, would make it more difficult for public agencies to include indemnity provisions for liability arising from construction. ACWA has asked its members to write letters opposing SB 972. Board approval of the letter written by staff opposing Senate Bill 972 was requested. The Board concurred with the position of oppose pertaining to Senate Bill 972 and directed staff to forward a letter of opposition on this proposed legislation.
CLOSED SESSION
12. A Closed Session was called by President Broomell at 3:22 p.m. pursuant to:
● Government Code §54957(b)(1) – Public Employee Performance Evaluation: General Manager, and
● Government Code §54957.6 – Conference with Labor Negotiator,
Unrepresented Employee: General Manager
RECONVENE
13. The Regular Board meeting was reconvened at 3:40 p.m. There was no reportable action.
ADJOURNMENT
14. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 3:40 p.m.
ATTEST: ATTEST:
___________________________ ___________________________
President Secretary