VALLEY CENTER MUNICIPAL WATER DISTRICT
Adjourned Regular Board MeetingTuesday, November 16, 2010Time: 2:00 P.M.Place: Board Room29300 Valley Center RoadValley Center, CA 92082
The Valley Center Municipal Water District Board of Directors’ meeting was called to order by Vice President Polito at 2:00 P.M.
Board members present were: Directors Polito, Aleshire and Haskell. Directors Broomell and Stone were absent. Staff members present were: General Manager Arant, General Counsel de Sousa, District Engineer Grabbe, Director of Finance Jeffrey, Director of Operations Hoyle, Board Secretary Stetson, Manager of IT Pilve, Manager of Accounting Pugh and Sr. Administrative Assistant Johnson. There were no spectators present.
1. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held November 1, 2010 • Audit demand check numbers 127228 through 127364 and wire disbursements for October 2010 • Treasurer’s Report and Financial Statements for the period ended September 30, 2010
2. Ordinance Approving Increases in Water Charges and Rates and Wastewater Service and Pressure Wastewater Collection System Charges;
Director of Finance Jeffrey reviewed that at the November 1st Board meeting the wholesale water rate increases from the Metropolitan Water District and the San Diego County Water Authority (SDCWA) to be effective January 1, 2011, were discussed. Also reviewed were the SDCWA’s Infrastructure Access Charge increases, proposed increases to the Moosa Wastewater service charges and fees, and increases to the District’s monthly meter service charge and local commodity water rate component.
The District’s proposed water commodity rates per Hundred Cubic Feet (HCF) with the proposed increases to be effective January 1, 2011, are:
Domestic/Commercial $2.5680 $0.4219 $2.9899 16.4%
Special Agricultural 2.2623 0.2751 2.5374 12.2%
Interim Agricultural 2.0211 0.3568 2.3779 17.7%
The above water rates include an increase of 7.9¢/HCF to the District’s local water rate component which was provided for in the Proposition 218 hearing and ordinance adopted in July 2009. The ordinance provides for increases in the local component of the water rate and the meter service charges of no more than the cumulative percentage increase in the wholesale water rate. The District’s local water rate was not changed in 2009.
The District’s meter service charge has been unchanged since 2007. In compliance with Proposition 218, the meter service charge for a ¾” meter can be increased by $6.88 per month. Increasing the monthly meter service charge by $4.00 annually over the next three years was proposed. Effective January 1, 2011, the monthly meter service charges would be:
¾” $20.50 $ 4.00 $ 24.50
1” 28.00 5.50 33.50
1-1/2” 42.00 8.25 50.25
2” 56.00 11.00 67.00
3” 84.00 16.50 100.50
Director of Finance Jeffrey reported that the proposed water rate and meter service charge increases will generate approximately $1.37 million in a year that will cover roughly 60% of the water budget deficit in the current fiscal year. The deficit is projected to be eliminated by 2014 with implementation of the policy to maintain annual increases in O&M expenses of no more than 5% and adjust the District’s local water rate commensurate with the increases in wholesale rates.
Increases to the Infrastructure Access Charge (IAC) to pass-through this fixed charge assessed by the San Diego County Water Authority, which is based on the number and size of active meters in the District, would result in the following monthly IAC:
3/4” $0.47 $2.49
1” 0.73 3.98
1-1/2” 1.42 7.47
2” 2.42 12.95
3” 4.51 23.90
Ordinance No. 2009-08 adopted in compliance with the Proposition 218 rate change notification requirements provided for an annual increase in the wastewater service charges of up to 10%. An increase in the Lower Moosa Canyon Wastewater Treatment Facility’s monthly wastewater service charge of $2.00 (to $46.50/EDU, a 4.5% increase) was recommended. This increase would raise approximately $118,000 annually to be used to offset operational expenses and the replacement fund reserve. The STEP Surcharge would be increased $1.65/month/EDU to $38.40/month/EDU and the Lower Moosa Canyon Wastewater Facility’s Capacity Reservation fee will increase to $23.25/month/EDU.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following ordinance increasing the water rates, meter service charges, Infrastructure Access Charges and Moosa wastewater charges, was adopted:
ORDINANCE NO. 2010-08
ORDINANCE OF THE BOARD OF DIRECTORS OFVALLEY CENTER MUNICIPAL WATER DISTRICT ADOPTINGINCREASES IN WATER AND WASTEWATER RATES AND CHARGES
by the following vote, to wit:
AYES: Directors Polito, Aleshire and Haskell NOES: None ABSENT: Directors Broomell and Stone
3. Ordinance Amending the Temporary Water Service Charges and Construction Water Permit Charges:
Ordinance No. 2010-09 was presented for the Board’s adoption to increase the monthly service and rental charge for potable construction service to $100.50 (currently $84.00) and for nonpotable service to $60.00 (currently $50.00). The daily construction water permit fees would increase as shown below:
With a Capacity of: Potable Nonpotable
2,500 gal. or less $190.00 $115.00
3,000 gallons 225.00 135.00
3,500 gallons 260.00 160.00
4,000 gallons 300.00 175.00
5,000 gallons or more 375.00 225.00
These proposed increases are commensurate with the increases in the water rates adopted per Ordinance No. 2010-08.
Upon motion by Aleshire, seconded Haskell and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2010-09
ORDINANCE OF THE VALLEY CENTER MUNICIPAL WATERDISTRICT AMENDING THE ADMINISTRATIVE CODETO PROVIDE FOR CHANGES IN CONSTRUCTIONWATER PERMIT FEES
was adopted by the following vote, to wit:
AYES: Directors Polito, Aleshire and Haskell NOES: None ABSENT: Directors Broomell and Stone
4. Approval to Notify Property Owners in the High Vista Service Area of the Proposed Special Service Connection Charge:
District Engineer Grabbe reported that the High Mountain waterline consisting of 1,640 linear feet of 8-inch PVC waterline has been completed. This line extension project was installed in lieu of a proposed 14-inch waterline extension for water and fire service for the Steinbeck Subdivision. The District had recommended the 8-inch loop to be installed in High Mountain Drive in order to provide fire protection to higher
elevations and a redundant water supply to benefit a larger area. It was agreed that the $110,000 extension for the 14-inch water pipeline as proposed by the developer would be applied to the High Mountain waterline extension as recommended by the District, and the District would fund the remaining balance of the extension project.
Upon completion of the High Mountain waterline, a reimbursement report was prepared by staff indicating the benefit to the property owners in the designated High Vista service area and allocating project costs. Total cost of the District’s portion of the project was $220,000. The line extension provides equal benefit to the 168 units of both existing and potential development in the designated service area; thus, a proposed Special Service Connection Charge (SSCC) of $1,310 per EDU was proposed to reimburse the District for the expenditure of funds for the project. The proposed SSCC would only apply to new meter installations as existing services would not incur the charge.
A letter notifying the property owners in the designated High Vista Service Area of the proposed establishment of a SSCC for new meter installations in said service area to be considered at the Board meeting of December 20, 2010, was presented for the Board’s authorization. The Board unanimously authorized staff to notify the property owners in the High Vista Service Area of the public hearing on December 20, 2010, to consider establishing a Special Service Connection Charge within the designated High Vista service area.
5. Approval to Award Construction Contract for the Country Club Roof Upgrade Project:
Project Manager Carrillo reported that bids for the Country Club Roof Upgrade project to repair broken cross members and lateral supports on the steel roof trusses and repair two main areas of the roof that have sags were opened on October 28, 2010. The lowest bid was submitted by Falcon General Engineering & Construction, Inc. at $113,425.
Funds for the project will be from the Country Club Reservoir Upgrade Project which had included funding for full replacement of the reservoir’s cover as this project was deferred.
Completion of the Roof Upgrade Project is estimated to be February 18, 2010. Staff recommended award of the construction contract to Falcon General Engineering & Construction, Inc. for $113,425 and amendment of the Fiscal Year 2010-2011 budget to transfer $170,000 from the Country Club Reservoir Upgrade Project to the created Country Club Roof Upgrade Project account.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-38
RESOLUTION OF THE BOARD OF DIRECTORS OFVALLEY CENTER MUNICIPAL WATER DISTRICT AWARDINGTHE CONTRACT FOR THE COUNTRY CLUB ROOF UPGRADEPROJECT AND AMENDING THE FISCAL YEAR 2010-11BUDGET BY TRANSFERRING $170,000 FROM THECOUNTRY CLUB RESERVOIR UPGRADE PROJECT
6. Pardee Homes’ Request for Annexation of the Meadowood Project:
General Manager Arant informed the Board that Pardee Homes submitted a letter to the District to renew their request for annexation of the Meadowood Project into the District’s service area. Following further evaluation by staff, a report will be presented to the Board at a subsequent meeting pertaining to the annexation request.
Pardee Homes had requested in 2008 approval to initiate annexation proceedings of the Meadowood project into the District, however, at that time the region’s water supply conditions were in question and annexation policies in light of the restricted water supply conditions were being examined by both the San Diego County Water Authority and the District. The District’s Water Shortage Response Program has been adopted providing guidelines for the processing of annexation requests and under certain water conditions the requirement for developments to demonstrate the offset of water demands. Pardee Homes completed a Net Demand Water Analysis for the Meadowood Project and, with the development’s availability of groundwater and its reclaimed water to be generated, its net water demands are greatly reduced (approximately .3 ac. ft. per lot). General Manager Arant stated that there has been interest in development of the properties near the proposed Meadowood project and they have been informed that the processing of one annexation is preferred and that the area will be served by one wastewater treatment plant due to the operational and maintenance expenses associated with smaller treatment plants.
GENERAL MANAGER’S AGENDA
7. Review of Miscellaneous Informational Items:
General Manager Arant provided an update on miscellaneous projects/programs, as follows:
• The District’s Status Report for October 2010 was reviewed. Water sales projected for Fiscal Year 2010-2011 are 28,440 ac. ft. Vehicle maintenance data was reviewed in which it was explained that the fuel consumed and a vehicle’s miles per gallon are affected by the vehicle’s usage. Examples are when a vehicle is left idling for the use of the safety lights at a leak site and for backflow testing (depending on the road’s traffic).
• General Manager Arant reported that he was appointed by the Chair of the San Diego County Water Authority, Mike Hogan, to serve on the Authority’s Desal. Work Group to work with staff members on the negotiations with Poseidon Resources for the execution of a Water Purchase Agreement pursuant to the Carlsbad Desalination Plant.
• A meeting was arranged by Jacqueline Howells of Howells Government Relations with the Commissioner of the Bureau of Reclamation, Mike Conner. General Manager Arant attended the meeting with the Commissioner on November 11th to advocate for federal funding for the District. General Manager Arant explained that an overview of the District was presented to the Commissioner as well as an outline of various local resource development and infrastructure projects. The impacts of the federally imposed pumping restrictions of the State Water Project upon agriculture in Valley Center Municipal Water District’s service area was explained and that the resulting decrease in water supplies has resulted in escalating water costs for agricultural operations. It was pointed out that the farm gate value of agriculture in San Diego County exceeds California’s Central Valley farm gate value and is 6th or 7th in the nation. The importance of securing federal funds to pursue resource development and infrastructure projects to reduce the cost impact upon agriculture in Valley Center was emphasized. A summarization of the presentation was thought to be beneficial.
• General Manager Arant attended a Board meeting of the Deer Springs Fire Protection District on November 9th in which the maintenance and operation of fire hydrants was discussed. The Deer Springs Fire Protection District is concerned about the pressure and location of the fire hydrants in its service area. The District has submitted a proposal to the Deer Springs FPD to complete a fire hydrant location, test and maintenance program for the fire hydrant facilities in their service area which is being considered.
• District Engineer Grabbe informed the Board that a proposed addendum to the Environmental Impact Report for the South Village Water Reclamation Project will be mailed to property owners along Charlan Road. The addendum for the project’s seasonal storage site and to modify configuration of the treatment process will be considered at the December 20th Board meeting.
GENERAL COUNSEL’S AGENDA
8. Impacts of Proposition 26:
General Counsel de Sousa stated that at the November 16th Council of Water Utilities’ meeting a presentation by Kelly Salt of Best, Best & Krieger was given on the impacts of Proposition 26 on public agencies. Proposition 26, as approved by the voters in November, establishes what a tax is by defining what is not a tax as it provides seven exceptions to a tax. If the charge does not fall within one of the exceptions, it is a special tax subject to a 2/3rds vote or a general tax requiring a majority vote for approval. General Counsel de Sousa stated that most of the District’s fees will not be considered a tax within the guidelines of Proposition 26, but the burden of proving it is an exception is placed upon the District.
BOARD OF DIRECTORS’ AGENDA
9. Groundwater Monitoring Program:
Director Aleshire provided information released by the Department of Water Resources on the state’s recently adopted Groundwater Monitoring Program. The District is located in the South Coast Hydrologic Region which has 77 basins. The monitoring program for the basins is yet to be determined. It is likely that the County of San Diego will be the monitoring entity for the South Coast Region. There are no significant groundwater basins in the District’s service area but there would be monitoring of the groundwater of the property that is proposed for annexation in the San Luis Rey River Valley Basin.
10. A Closed Session was called by Vice President Polito at 3:25 p.m. pursuant to:
▪ Government Code Section 54957
Public Employee Appointment Title: General Counsel
▪ Government Code §54956.9(c), Conference with Legal Counsel, Anticipated Litigation
Number of potential cases: 1
11. The meeting was reconvened at 3:40 p.m., and the following action was reported:
12. Appointment of General Counsel:
Upon motion by Aleshire, seconded by Haskell and unanimously carried, Paula de Sousa of the law firm Best, Best & Krieger was appointed the District’s General Counsel, by the following vote:
AYES: Directors Polito, Aleshire and Haskell
ABSENT: Directors Broomell and Stone
13. The Board meeting was adjourned at 3:42 p.m.