VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board MeetingMonday, July 18, 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, Board Secretary Johnson, IT Specialist Pham, Administrative Assistant Wilson, Project Manager Carrillo, Meter Services Supervisor LoPresti, Manager of Accounting Pugh and GIS Supervisor Garcia. There were no spectators present.
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held June 20, 2011• Audit demand check numbers 129300 through 129556 for the period June 10 through July 7, 2011• Treasurer’s Report and Financial Statements for period ended May 31, 2011• Quarterly report of employees’ expense reimbursements for the quarter ended June 30, 2011• Board of Director’s request for reimbursement of expenses and report of expenses
2. Request to Purchase Replacement Blowers and Authorize a Transfer of Funds for Lower Moosa Canyon Water Reclamation Facility:
Project Manager Carrillo requested board approval of Resolution 2011-27 authorizing the purchase of two replacement blowers from Environmental Water Solutions for the Lower Moosa Canyon WRF and approval of a $60,000 fund transfer to cover additional costs for piping and installation.
Mr. Carrillo explained that the three existing centrifugal blowers at the Moosa plant have been in operation for over 36 years and no longer operate efficiently. Replacing two of these with more efficient blower units that can be dedicated to each aeration basin will improve wastewater treatment quality and save a significant amount of energy. The two old blowers will be used as back up for the third unit which will be replaced at a later date. Staff prepared specifications and requested quotes from six manufacturers. Three quotes were received as follows:
Gierlich-Mitchell, Inc. $85,050 (non-responsive) Environmental Water Solutions, Inc. $110,436 Bolttech Mannings $138,082
Staff contacted Gierlich-Mitchell regarding their quote and determined that they were unable to meet the required specifications. The Gierlich-Mitchell quote was, therefore, deemed non-responsive.
A budget increase of $60,000 is requested, bringing the total budget to $160,000 to purchase the blowers, installation, SCADA integration, and to include a new air supply line to improve blower performance. The new air supply line will be installed by District personnel. Funds for the transfer are available from the Lower Moosa WRF Centrifuge project.
Staff recommends issuing a purchase order to Environmental Water Solutions for their quote of $110,436 and transferring $60,000 from the Centrifuge project.
Upon motion from Aleshire, seconded by Haskell and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-27
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTAPPROVE THE PURCHASE OF REPLACEMENT BLOWER UNITSAND AUTHORIZE A TRANSFER OF $60,000 FOR THELOWER MOOSA CANYON WATER RECLAMATION FACILITY
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell NOES: None ABSENT: None
3. Review of the District’s Current Meter Installation and Backflow Prevention Device Charges:
Director of Operations Hoyle reminded the Board that meter installation and backflow prevention charges were last increased in 2007. When the AMR project began, a fixed price was negotiated for meter costs. New regulations in 2011 require all new brass nipples, valves and related parts to be lead free if used within a potable water system. The increased price of parts, along with increased costs for the new AMR technical components required to read meters remotely, and District labor charges, has necessitated this review of current rates.
In past reviews, the District has analyzed the actual installation cost of each size meter. Since 2010, the District has had very few full meter installations for comparison. To determine average meter installation costs, an evaluation of a standard meter installation with 8 hours of labor in an asphalt road was used. Outside contractors were surveyed for their installation rates and found to be significantly higher and also include a rock clause which, when activated, charges all trenching on a time and material basis. The following table shows current, actual, and proposed meter installation rates:
Mr. Hoyle also proposed increases for backflow prevention device charges to offset increases in labor, equipment and material costs. However, a slight decrease for some of the larger meters using the Wilkins, rather than Watts, is indicated as follows:
Director Aleshire questioned why the proposed increases were higher than the actual costs. Mr. Hoyle explained that this was to cover fluctuations in backflow costs that occur on a monthly basis. Director of Finance Jeffrey added that the actual rate is “as of today” but the proposed rate would cover inflation for the next year.
Director Aleshire noted that a 40% increase in the cost of a ¾” meter is proposed. He inquired as to how much of that increase is equipment and how much is labor. Mr. Hoyle reported that 60% of the increase was due to increased labor costs and is based on an average job; a three man crew on an asphalt road.
It was questioned why these costs are not reviewed annually and the rates adjusted by the construction cost index rather than making significant changes every five years. General Manager Arant noted that this had been previously discussed but was not applied because the fixed cost for the AMR meters was obtained. He agreed that it would be appropriate to adjust the rates annually.
Staff was directed by the Board to move forward with public notification of the proposed increases for meter installation and backflow prevention device costs. Staff was instructed to keep backflow device charges at the “actual” cost and to be more diligent with annual adjustments.
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 June 23, 2011 SDCWA Board of Directors’ meeting:
• The Board adopted the budget for fiscal years 2012 and 2013. An overall budget reduction of 16% was obtained.• An overall wholesale cost increase of 7% was adopted. This increase will vary with each retail agency.• Refinancing of $100M in existing bonds was approved. It is expected that a savings of $12M will be realized over the life of the bonds.• The Water Authority’s Urban Water Management Plan was adopted. It included a survey of the Meadowood property as a possible future annexation.• The SDCWA Board approved a policy for member agencies to purchase Water Authority-owned local water supplies from the Carlsbad Desalination Project.
5. Miscellaneous Information Items:
General Manager Arant reported on the following miscellaneous items:
• Water quality out of Skinner has improved dramatically over the last six months. TDS is currently at 381 which is a blend of 49% State Water Project and 51% Colorado River water. TDS levels were approaching 600 TDS when the mix was heavy (75-80%) on Colorado River water. • The City of San Diego has an open invitation for anyone who would like to see their advanced water purification system at the North City West Plant. This is a pilot plant where they are developing the treatment process that will lead to the indirect potable use system.
• California Forward Process is a very well funded foundation that is studying why California Government isn’t working. As part of this study they recommended that all the tax money in San Diego County should go to the Board of Supervisors to be distributed. The special districts and cities objected vehemently to this suggestion. In their final report, Cal Forward has deleted this recommendation.
• The Assembly on Accountability and Review is a group focused on special districts. They want to know why there are so many and are they accountable and transparent. Their report was passed on to the Legislative Analyst’s office for review and is now under investigation. Gary Arant is part of a task force at ACWA, via teleconference, responding to this investigation.
• With the 2010 census data now available, reapportionment of the five division boundaries within the District is under review. The GIS Department is analyzing the data for possible boundary adjustments to balance each division’s population as closely as possible. This information will be reviewed and discussed at a future public hearing.
6. Functional Consolidation Project Status Report:
General Manager Arant reported that the general managers of the four participating Districts met again to review responses from their respective Boards and to discuss the next possible steps in the project. The reservations by VCMWD’s Board in forming a Joint Powers Authority (JPA) were conveyed to the other agencies. The advantages and disadvantages were further discussed and it appears that Rainbow, Fallbrook and Yuima wish to move forward with conceptual development of the JPA. Mr. Arant explained that not being a part of the JPA would not preclude VCMWD from utilizing the services. It would, however, preclude the District from being involved in its administrative decisions. He reiterated that the purpose of the JPA is to save money, not create a new bureaucracy, and asked the Board to continue discussions on becoming a participating member. Director Aleshire suggested that a comprehensive analysis be prepared by an outside entity showing the cost benefits, impact on employees, etc. of forming a JPA rather than contracting directly with the other agencies.
Mr. Arant explained that the main advantage of the JPA was that it could buy its own equipment and hire its own employees with different labor rates and benefits than that offered to regular employees. Risk transfer to the JPA is another potential advantage.
The area being evaluated first for implementation is IT Support. Rainbow and Yuima currently contract outside for support which could be provided by Valley Center and/or Fallbrook. With today’s technology, all four databases could be virtualized on one server. The four agencies use the same water billing software and programmers and have very similar programs for billing and accounting. With integrated databases, customer service contact could also be integrated using a call center. Over the next few months a work group of the finance officers and IT specialists will convene to explore the feasibility of implementing these concepts.
VCMWD has requested Rainbow to develop a proposal for use of their Vactor truck for the sewer line maintenance program. Other consolidation areas being evaluated:
• Safety and Regulatory Compliance• HR Services• Community and Media Relations• Common Engineering Specifications• Meter Reading, Meter Service, Backflow Prevention• Mobile Vehicle/Equipment Maintenance
The Board reported that they are not yet convinced that formation of a JPA is advantageous, or necessary, for contracting of services between the agencies. Staff was directed to continue with the concept discussions.
DISTRICT GENERAL COUNSEL’S AGENDA
7. SB 1087 (Florenz) Water and Wastewater Capacity for Lower Income Housing:
General Counsel de Sousa requested approval of Resolution No. 2011-29 updating the water and wastewater services priority policy for lower income housing developments within the District. In 2006 the State legislature adopted SB 1087 which modified several Government Code provisions in the Water Code. These provisions require water and sewer providers to adopt a policy providing priority requirements for low income developments. This policy must be re-adopted every five years.
Ms. de Sousa reported that the policy has been updated to include the definitions contained in the Water Code for ease of reference. The policy was also reviewed to ensure compliance with the District’s Water Supply Shortage Response Program.
Counsel explained that the District is not required to reserve capacity for lower income housing developments, but if two new development projects come in at the same time and you have limited capacity, priority must be given to the low income development. Currently, the only project in the District with the lower income housing component is Orchard Run.
Upon motion from Stone, seconded by Haskell and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-29
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTADOPTING A SERVICES PRIORITY POLICY FORLOWER INCOME DEVELOPMENTSIN ACCORDANCE WITH SB 1087
BOARD OF DIRECTOR’S AGENDA
8. Health Benefits Authority (HBA):
Director Aleshire reported that he was successful in obtaining approval of reimbursement provisions for travel expenses incurred on HBA business. Reimbursement of per diem was not approved because per diem rates vary greatly per organization.
The HBA Executive Director will be leaving at the end of July. The HBA Board is tasked with finding a new chief.
Director Aleshire attended a meeting at Castaic Lake Water District to meet with a consultant that was hired to complete a strategic plan for the HBA.
The HBA new office location was approved. ACWA is still providing accounting, human resources, and IT services.
9. Closed sessions were called by President Broomell at 3:58 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
10. The regular Board meeting reconvened at 4:13 p.m. There was no reportable action.
11. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 4:14 p.m.