April 4, 2011
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, April 4, 2011
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, District Engineer Grabbe, Director of Finance Jeffrey, Director of Operations Hoyle, Board Secretary Johnson, and Manager of IT Pilve. Spectators present were Mr. Warren Diven, Best, Best & Krieger and Mr. David Ross, Roadrunner Newspaper.
CONSENT CALENDAR
1. Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held March 21, 2011
• Audit demand check numbers 128464 through 128578 for March 11 through March 24, 2011
• Resolution No. 2011-13 adopting the 2011 Revisions to Local Guidelines for Implementing the California Environmental Quality Act (CEQA)
ACTION AGENDA
2. Woods Valley Ranch Water Reclamation Facility Phase II Expansion Project Proposed Dedicated Sources of Funds for Repayment of SRF Loan
District Engineer Grabbe presented an update on the Woods Valley Ranch Water Reclamation Facility Phase II Expansion Project and reported on the State Revolving Fund (SRF) loan funding obligations being required and the proposed debt coverage plan. The project funding requirements are as follows:
• Total Project Cost: $13.85M
• Loan Amount $13.125M
• Annual Debt Service $0.9M
• 20 Year Note at 3.0%
For SRF loan approval, the State Water Resources Control Board will require the District to provide a dedicated source of revenue sufficient for 120% coverage of the anticipated annual debt. The proposed assessment district would provide 100% debt coverage through the annual assessments. The additional 20%, required to cover any delinquencies, would be provided by net revenues of the District; initially through standby charges and later through monthly service charges as properties connect. This full faith and credit commitment is a new requirement that has recently surfaced.
Mr. Grabbe explained that typical assessment district projects, funded by bond sales, do not require a full faith and credit pledge of the District. This project, however, will be funded by the State through an SRF loan to the District. Thus, the full loan amount will be on the District’s balance sheet and could affect future bond indebtedness.
Special Counsel Warren Diven, of Best, Best & Krieger, conveyed that the resolution of support for the SRF loan being requested limits the District’s net operating revenue obligation to 20% of the annual SRF loan debt service amount that can be drawn upon to make scheduled loan payments. Once a preliminary funding commitment is received from the State, commitments from participants will be secured and assessment district formation can begin. The District will evaluate the lien to value ratio of all properties in the proposed assessment district and will require a minimum 4:1 ratio of equity value to assessment amount.
Assuming all the project hurdles are achieved, a preliminary funding commitment could be received in approximately four months with final loan approval by the end of the year.
Upon motion by Stone, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2011-17
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
IN SUPPORT OF A CLEAN WATER STATE REVOLVING FUND LOAN
FOR THE WOODS VALLEY RANCH WATER RECLAMATION
FACILITY PHASE II EXPANSION PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Resolution Approving Increase in Legal Services Fees from Best, Best & Krieger:
Per Board direction, an increase in the legal services fees from Best, Best & Krieger based on the Consumer Price Index change for the San Diego area is considered annually with any change approved effective July 1st. The CPI for the San Diego area for the year ending December 31, 2010, increased 1.3%.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2011-14
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING AN AMENDMENT TO THE AGREEMENT WITH
BEST, BEST & KRIEGER, LLP, TO APPROVE
AN INCREASE IN THE FEES FOR LEGAL SERVICES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
4. San Diego County Water Authority’s Board of Directors’ Meeting:
General Manager Arant reported on the following items from the March 24, 2011 SDCWA Board of Directors’ meeting:
• The 2011 and 2012 goals for each committee were adopted.
• A professional services contract was approved with RBF Consulting for technical studies of the proposed Camp Pendleton Seawater Desalination Project.
• A resolution supporting the Salton Sea restoration was approved.
5. Approval of Work Force Reduction Implementation Plan:
General Manager Arant requested adoption of the final Work Force Reduction Implementation Plan.
Upon motion by Stone, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2011-15
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING A WORK FORCE REDUCTION IMPLEMENTATION PLAN
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
6. Approval of First Amendment to the Current Memorandum of Understanding with the VCMWD Employees’ Association:
General Manager Arant reported that the Amendment to the Memorandum of Understanding, which was agreed to during a meet and confer process, will put in place changes that are estimated to save the District approximately $200,000 each year for the next two years, through the end of the current MOU contract. The following items are affected:
• Clothing allowance
• Deferred Compensation match
• Salary Survey
• Employee contribution to CalPERS
• Floating Holiday
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2011-16
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE FIRST AMENDMENT TO THE CURRENT
MEMORANDUM OF UNDERSTANDING
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
7. Approval to Modify Employer Paid Member Contributions to CalPERS:
General Manager Arant explained that the District currently pays 1.513% of the employees’ 8% member contribution to CalPERS. Adoption of this resolution is the official action required for the employees to pay the full 8% under the current plan, per the First Amendment to the MOU.
Upon motion by Polito, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2011-18
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE FIRST AMENDMENT TO THE CURRENT
MEMORANDUM OF UNDERSTANDING
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8. Miscellaneous Informational Items:
General Manager Arant reported on the following informational items:
• State budget crisis – watching for signs of the 1% property tax being shifted.
• Hearing being considered for consolidation of Special Districts to save tax money.
• Metropolitan will be lifting the water use restrictions soon.
• Beginning Friday, April 8th, Wally Grabbe was appointed Acting General Manager until Mr. Arant’s return to work.
GENERAL COUNSEL AGENDA:
General Counsel de Sousa reported that the final judgment in the Delta Smelt trial had been given. The court has ordered the Fish and Wildlife Service to complete its biological opinion and reasonable and prudent alternative document by October 1, 2011. The Department of Reclamation must complete the review of the reasonable and prudent alternatives by December 15, 2011. Currently, the Water Project is operating under the negotiated pumping restrictions.
Last week, Governor Brown released actual bill language of a seven part pension reform measure. The seven parts include:
• Elimination of the ability to purchase additional service credit for members of all State and local retirement systems;
• All California public agencies would be prohibited from suspending employer and/or employee contributions necessary to fund the normal cost of pension benefits;
• All California public agencies would be prohibited from making employee contributions that fund the normal cost of pension benefits in whole or part;
• Preclude retroactive pension increases;
• Prohibit pension spiking - a 3 year final compensation; for new employees a final average for the highest consecutive 36 month period;
• Prohibit pension spiking – defined compensation as only regular, non-recurring pay;
• Prevents pension benefits to those who commit a felony related to their employment.
We will likely be hearing more about this in the coming months.
BOARD OF DIRECTOR’S AGENDA AND REPORTS ON MEETINGS ATTENDED
Director Aleshire reported that the ACWA bylaws were revised last December. The changes included giving unilateral authority to an Executive Committee of the ACWA Board to conduct the performance review of the Executive Director and set his salary without taking their recommendation to the Board for approval. They also gave themselves authority to act, in the absence of the Board, on their behalf without seeking ratification by the Board of Directors. Dr. Aleshire prepared proposed revisions to the new bylaws, presented them to the Region 10 members at their last meeting, and asked for their approval to forward them to the ACWA Board of Directors for consideration. Tim Quinn, Executive Director of ACWA, was in attendance at the meeting and gave his support of the recommendation to go forward with the proposed changes.
General Manager Arant conveyed that at the last ACWA Board meeting, the chair made a commitment to enact many of the bylaw changes proposed by Dr. Aleshire.
CLOSED SESSIONS
9. Closed sessions were called by President Broomell at 3:03 p.m. pursuant to:
• Government Code §54957, Public Employee Discipline/Dismissal/Release
ADJOURNMENT
10. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 3:26 p.m.
ATTEST: ATTEST:
_______________________________ _______________________________________
President Secretary