VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board MeetingMonday, August 15, 2011Time: 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 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 de Sousa, District Engineer Grabbe, Director of Finance Jeffrey, Director of Operations Hoyle, IT Manager Pilve, Board Secretary Johnson, Project Manager Williams, GIS Supervisor Garcia and GIS Analyst Martinez. Spectators present were Mr. Dave Ross – Roadrunner Newspaper, Mr. Ross Woodfield – Water Innovations Power & Technology, and Mr. Rick Halperin – Advisory One.
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held July 18, 2011• Audit demand check numbers 129557 through 129808 for the period July 8 through August 4, 2011 and wire disbursements for July 2011.• Treasurer’s Report and Financial Statements for period ended June 30, 2011• Board of Director’s request for reimbursement of expenses and report of expenses• Report of Professional and Consulting Agreements/Contracts for FY 2010-11
2. Public Hearing to Consider Changes to the Meter Connection Charges and Backflow Prevention Devices:
President Broomell opened the public hearing to discuss and receive comments on the proposed changes to Administrative Code Sections 160.4(a) Connection Charges, and 160.12(d) Backflow Prevention Devices Fee Schedule at 2:02 pm.
Director of Operations Hoyle reminded the Board that meter installation and backflow prevention charges had not been increased since 2007 mainly due to the fixed price agreement with Sensus which expired in 2010. The proposed fees reflect increases in the new AMR technical components required to read meters remotely, the new 2011 regulation which requires all new brass nipples, valves and related parts to be lead free if used within a potable water system, and increased labor costs.
Mr. Hoyle pointed out that some of the fees for the larger backflow devices have actually decreased because the components are not brass and they have been utilizing the Wilkins devices. In previous years the District evaluated the actual installation cost of each size meter. Since 2010, the District has had very few full meter installations for comparison so they determined the average meter installation cost for each size meter. The average is based on the equipment required for a standard meter installation with a four man crew, for an 8 hour day, in an asphalt road.
Current and proposed meter installation charges:
Installed by District
Current Charge ----- $2,768 $2,852 $3,459 $3,751 $4,833
Proposed $3,870 $3,944 $4,797 $5,449 $6,364
Installed by Others
Current Charge $429 $429 $511 $1,064 $1,274 $1,772
Proposed $472 $505 $564 $1,278 $1,421 $1,772
Current and proposed backflow prevention device fees:
Current $140 $150 $250 $310 $1,300
Proposed $145 $170 $270 $300 $1,150
DC on Risers
Current $191 $214 $378 $486 $1,700
Proposed $240 $295 $450 $700 $1,750
RP on Risers
Current $275 $355 $540 $655 $1,900
Proposed $320 $370 $510 $780 $1,720
RP w/Dom. Tee
Current $400 $480 $665 $785 $2,100
Proposed $425 $480 $650 $920 $1,950
Mr. Hoyle explained that the existing and proposed increases to the meter installation fees are not subject to the provisions of Proposition 26 based on the following findings:
1) The proposed fees are imposed for a specific service or product provided directly to the Payor;
2) All persons who receive this service or product are also charged for such service or product; and
3) The proposed fees do not exceed the reasonable costs of the specific service or product provided.
Director Aleshire noted that some of the increases are substantial and questioned whether an annual review of costs would have lessened the impact. Mr. Hoyle noted that the fixed price agreement with Sensus ran from 2007 to 2010 and did not include the new AMR components or the 2011 Lead and Brass Rule. If the District’s component costs had been going up during that time a thorough evaluation would have been completed.
Notification of the proposed changes to the meter connection charge and the backflow prevention device fees had been published in the local newspaper for two consecutive weeks. No letters or comments were received.
Staff recommended approval of Ordinance No. 2011-08 to amend the Administrative Code to provide for changes in the meter connection and backflow prevention device fees effective October 15, 2011.
The public hearing was closed at 2:08 p.m.
Upon motion from Stone, seconded by Aleshire and unanimously carried, the following Ordinance, entitled:
ORDINANCE NO. 2011-08
ORDINANCE OF THE VALLEY CENTER MUNICIPAL WATER DISTRICTAMENDING THE ADMINISTRATIVE CODE TO PROVIDEFOR CHANGES IN METER CONNECTION ANDBACKFLOW PREVENTION DEVICE FEES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell NOES: None ABSENT: None
3. Public Hearing to Review Election Division Reapportionment Proposals:
President Broomell opened the public hearing to review and receive input on two Election Division Reapportionment proposals at 2:10 p.m.
General Manager Arant reported that state and federal law requires an examination of population apportionment among election divisions after each census and that imbalances be corrected by reapportionment. Each division should contain an equal population within +/-5% of each other. District GIS staff obtained the census tract data and developed a proposal to reapportion the election division boundaries based on population balance. This proposal was previewed at the July 18, 2011 regular meeting. Upon further review, it was found that this proposal contains very irregular boundaries which are difficult to describe. Staff then developed Proposal 2 which achieved the same balance in population (+/-1% of average) utilizing major thoroughfares. The following table shows the current, Proposal 1 and Proposal 2 election division populations:
Division I 4,722 5,280 5,276
Division 2 6,211 5,295 5,261
Division 3 6,245 5,277 5,279
Division 4 4,870 5,253 5,262
Division 5 4,336 5,279 5,306
Population Total 26,384 26,384 26,384
The average population between the five election divisions is 5,277. In Proposal 1 the greatest deviation above the average is Division 2 at 18 people, or 0.34% above average. The greatest deviation below the average is Division 4 at 24 people, or 0.45% below average. In Proposal 2, the spread between the largest (Division 5) and the smallest (Division 2) is 45 people, indicating Division 5 has 0.86% more people than Division 2. The population variations between Proposals 1 and 2 are very similar and are well within the legal parameters.
The Board commended GIS staff on their preparation of Proposal 2. The public hearing was closed at 2:15 p.m.
Proposal 2 will be discussed at a second public hearing to be held September 19th for further review and possible adoption.
4. Development of a Floating Reservoir Cover Incorporating a Solar Voltaic Energy Production System – Request to Enter Memorandum of Understanding:
Project Manager Williams explained that authorization to enter into a Memorandum of Understanding (MOU) with Water Innovations Power and Technology (WIPT) for the possible development and deployment of a photovoltaic solar power generating system on a floating reservoir cover is being requested. WIPT, Pty Ltd. is a legal corporation in Australia with a California corporation under the name Water Innovations Power and Technology, Inc. The non-binding MOU has been reviewed and approved by District legal counsel and describes the roles and responsibilities of each party.
WIPT is developing a floating reservoir cover that provides a stable platform upon which a photovoltaic (PV) power generating system may be affixed. The power generated by the PV system would be used to offset power used by facilities at, or near, the reservoir site. This new technology presents some fairly complex engineering issues such as wind, weight balance/counter balance, security, etc., and would be the first of its kind on a potable water reservoir. WIPT will be responsible for all permits and approvals.
Lilac Reservoir, which is in need of a replacement cover, has been chosen as the initial site to be evaluated for project development. If successful, this technology may be utilized on other District reservoirs. It is anticipated that the annual power produced will be 266,000 kWh, or 44% of the power usage at Lilac Pump Station. The District’s cost savings would be $400,000 to $500,000 over the life of a 20 year power purchase agreement (PPA), or the approximate cost of a new hypolon floating cover.
Mr. Williams described the conceptual design of the project and reported that WIPT has been in contact with several other agencies in California to install floating covers over non-potable reservoirs. Currently, WIPT is working with Padre Dam to install a floating cover at Santee Lakes. The potable reservoir cover is a showcase project still under design. Its greatest challenge will be to obtain approval from the California Department of Health Services.
Mr. Ross Woodfield of WIPT explained his company’s history in developing floating reservoir covers. WIPT is working to create an opportunity to provide enough power on this site so that they can generate an income stream, through a PPA, over a 25 year period so that the cover is provided at no net cost to the District.
The MOU does not commit the District to purchase this technology but confirms the District’s interest, should WIPT be able to develop and receive the necessary approvals to utilize this technology, in entering into a power purchase agreement. Mr. Woodfield stated that he expected to have a proposal to the District by October on the terms of the PPA.
General Manager Arant stated that one of the biggest PPA issues, if this project is built, is that the District must have a secure floating cover. A bond or security will be required to fix or remove the cover if it is not working. He pointed out that we are still a long way from the end result, but we are making a good first step.
Upon motion from Aleshire, seconded by Haskell and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-31
RESOLUTION OF THE BOARD OF DIRECTORS OFVALLEY CENTER MUNICIPAL WATER DISTRICTAUTHORIZING ENTERING INTO A MEMORANDUM OF UNDERSTANDINGWITH WATER INNOVATIONS POWER AND TECHNOLOGY, PTY. LTD.
5. South Village Wastewater Expansion Project Status Report:
District Engineer Grabbe reviewed that a Resolution of Support for the Clean Water State Revolving Fund Loan for the Woods Valley Ranch Water Reclamation Facility Phase II Expansion Project was adopted and forwarded to the State in April 2011. The funding requirements for the project are unchanged as follows:
Total Project Cost - $13.85M Loan Amount - $13.135M Annual Debt Service - $0.9M 20 Year Note at 2.7 to 3.3%
To proceed with the project, the District would be required to purchase a portion of the seasonal storage site ($250K) and prepare a Waste Discharge Permit Modification ($30K). The proponents would be required to purchase the larger portion of the seasonal storage site ($350K) and they, along with other project participants, would need to deposit funds ($1.53M) for assessment district formation, easement acquisitions and project design, before receiving the loan.
The loan requirements include a full faith and credit commitment by the District, a restricted reserve of $0.9M, and an annual dedicated source of revenue equal to 1.2 times the annual debt service (a total annual amount of $1.08M). Mr. Grabbe expects Facility Plan Approval from the State by October 2011. Once received, it will be submitted to the State Water Resources Control Board for a Preliminary Funding Commitment which could take another three months. During that time the District would hold property owner meetings, obtain participation commitments and select project consultants. Following is a revised project schedule:
Facility Plan Approval – 2 mos. (Sept – Oct. 2011) Preliminary Funding Commitment – 3 mos. (Nov. ‘11- Jan. 2012) Financing Agreement Approval – 6 mos. (Feb. – July 2012) Complete Design & Award Construction Contract – 8 mos. (Aug. ‘12 – Mar. ‘13)
Construction – 15 months (April ‘13 – June 2014) Start-up, Testing, Final Acceptance – 3 months (July – September 2014)
Mr. Arant pointed out that the SRF loan process is notorious for taking one to two years to complete and with the State financial issues and furloughs, the process seems to have slowed down. The major project hurdles, especially during a down economy, will be obtaining financial commitments from property owners and formation of the assessment district. Mr. Grabbe was tasked with finding out how much time the District has to meet the requirements once the preliminary funding commitment is received. The project status will be updated again in the future.
GENERAL MANAGER’S AGENDA:
6. San Diego County Water Authority’s Board of Directors’ Meeting:
General Manager Arant reported on the following items from the July 28, 2011 SDCWA Board of Directors’ meeting:
• Quantitative Settlement Agreement (QSA) - litigation against the environmental mitigation portion of the QSA where the parties are limited to $133M in mitigation costs for the Salton Sea and the State would pick up the balance of the mitigation costs. The lawsuit said the State could not commit future legislatures to participate in what could be several billions of dollars. The trial court decided it was unconstitutional and it will now move to the appellate court.
• Litigation with Metropolitan over their rate structure is in the preliminary stages. The Water Authority has brought in new counsel and it will be litigated in San Francisco.
7. Miscellaneous Information Items:
General Manager Arant reported on the following miscellaneous items:
• July 2011 water sales are slightly higher than 2010. It is hoped that sales have stabilized for now.
• The first functional consolidation work group meeting was held at the District on August 11th. There will be an Engineering Specification Work Group and an IT Group which will break down into two subgroups; one IT/SCADA and the other Finance/Accounting. The groups will work through the end of the year then report in January on the items to be implemented in Fiscal Year 2012-13. Ando demonstrated the software system he is developing that integrates all of the District’s databases into one access portal to the Work Group and took them on a tour of the District’s SCADA Operations and IT Center.
DISTRICT GENERAL COUNSEL’S AGENDA
8. FCC Notice of Inquiry - Potential Impact on District Communication Site Lease/ License Agreements:
General Counsel de Sousa reported that the Federal Communications Commission (FCC) has issued a Notice of Inquiry (NOI) that could affect our ability to determine the conditions and terms upon which we would permit telecommunications companies to use District property. The NOI is to gather information from public agencies that lease or license their property to telecommunication companies and derive compensation from it. The telecommunication companies do not like the fees being set and do not want restrictions on co-location of other telecommunication facilities on the facilities that they have agreements with public agencies on.
BB&K will be providing information to the FCC, on behalf of the District and other agencies that they are representing, to explain that the telecommunications companies should not be able to restrict the District’s right as a property owner, tell you when you can and cannot permit access to your property, and can’t allow co-location of other tele-communication company’s facilities by right, without additional compensation.
Ms. de Sousa noted that this inquiry is a preliminary step in a long rule making process. She requested authority from the Board to file a blanket response to the FCC stating that they should not be contemplating adopting rules that might impede the ability to use our property or allow wireless servers to place additional facilities on the District’s property at less than fair market value.
Director Aleshire asked if there was a provision to state that we believe that government, in general, is over-regulating everyone and everything. Ms. de Sousa will make the request to have that statement on Valley Center’s response letter.
President Broomell authorized General Counsel to respond to the FCC inquiry.
• A Legal Alert was sent out regarding the City of Palmdale vs. Palmdale Water District. The Court of Appeals issued an opinion on rate structures between different classes of customers. It recognized that budget based water rates, where different classes of customers had different water budgets, did not violate Proposition 218 and are a valid basis for a rate structure. This case could be important if we are faced again with water restrictions.
• Ms. de Sousa will be participating in the California Special Districts Association (CSDA) working group on LAFCO law.
BOARD OF DIRECTOR’S AGENDA
9. Miscellaneous Information Items:
• Director Aleshire reported that the Ancillary Health Benefits Committee met and made recommendations on dental, vision, employee assistance, life and disability programs which will be submitted to the HBA Board August 18th.
• Director Aleshire noted that the Delta Stewardship Council has been preparing their final report which is due by the end of the year. After reviewing the fifth draft of the Delta Plan, he indicated that comments in the report imply ten more years of studies and the proposal of additional fees. Two more drafts are expected to come out, one with the EIR and the final in December.
10. ACWA Region 10 Candidates for Election:
Input on casting the District’s ballot for candidates for ACWA’s Region 10 officers and members of the board for CY 2012 and 2013 was requested. General Manager Arant noted that Region 10 covers both Orange and San Diego County. Current bylaws provide that the Region Chair alternates between the two counties, with this being San Diego’s turn as Chair.
The Nominating Committee, which Mr. Arant served on, prepared a recommended slate of candidates which consisted of:
Chair – Darrell Gentry, Vallecitos WD Vice Chair – Peer Swan, Irvine Ranch WD Board Members: Cathy Green, Orange County WD Saundra Jacobs, Santa Margarita WD Larry McKenny, Moulton Niguel WD Richard Vasquez, Vista ID DeAna Verbeke, Helix WD
Upon motion from Aleshire, seconded by Stone and unanimously carried, the Board President was directed to cast the ballot following the Nominating Committee’s recommendations.
11. Closed sessions were called by President Broomell at 4:13 pm pursuant to:
• Government Code §54956.8 – Real Property Transaction, Conference with Negotiator
Property: 9539 Sage Hill Way, Escondido, CA Agency Negotiator: Gary T. Arant, General Manager Negotiating Party: Crown Castle International Corporation Under Negotiation: Price and Terms of Lease
12. The regular Board meeting reconvened at 4:17 p.m. There was no reportable action.
13. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 4:18 p.m.