VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting Monday, June 6, 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.
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, Meter Services Supervisor LoPresti, Board Secretary Johnson, Manager of IT Pilve, Manager of Accounting Pugh, and Accounting Specialist Serrato. 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 May 16, 2011• Audit demand check numbers 128957 through 129183 for May 6 through May 26, 2011• Treasurer’s Report and Financial Statements for period ended April 30, 2011• Board of Director’s request for reimbursement of expenses and report of expenses• Resolution No. 2011-24 establishing the appropriation limit for proceeds from taxes for FY 2011-12 per Government Code and Article XIIIB of the State Constitution• Purchase Order No. 18537 to Hidden Valley Pump in the amount of $71,977.34 for two new pump and motor replacements for West Pump Station
2. Public Hearing to Consider Adoption of District-Wide Water Availability Charge for Fiscal Year 2011-12:
President Broomell opened the public hearing to receive input on the proposed District-wide water availability charge for Fiscal Year 2011-12 at 2:04 p.m. Director of Finance Jeffrey explained that the public hearing on the proposed $10.00 per acre availability charge for Fiscal Year 2011-12 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 a dedicated source of revenue of approximately $591,000. These funds will be used for revenue debt service ($111,693) and to fund capital requirements ($479,307). Director of Finance Jeffrey noted that the proposed water availability charge is equivalent to a $23.40 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, one letter had been received protesting the manner in which the availability charge is collected, not the amount. There were no comments from the audience.
The public hearing on the proposed Fiscal Year 2011-12 District-wide water availability charge was closed at 2:08 p.m.
Upon motion from Polito, seconded by Haskell and unanimously carried, the following Ordinance, entitled:
ORDINANCE NO. 2011-04
ORDINANCE OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTESTABLISHING WATER AVAILABILITY CHARGES FOR2011-2012 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 to Consider Adoption of the Annual Woods Valley Sewer Service Charge for Fiscal Year 2011-12:
A public hearing to set the Woods Valley Sewer Service Charge for Fiscal Year 2011-12 was opened at 2:09 p.m. Director of Finance Jeffrey reviewed that in July 2002 the property owners within the Woods Valley Sewer Service Area voted approval of the Woods Valley Sewer Service Charge and Sewer Standby Fee. The service charge and standby fee are collected on the tax rolls to finance the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. Developed property is assessed the sewer service charge and undeveloped property assessed the standby fee. There are currently 254 developed parcels within the Woods Valley sewer service area using a total of 263 EDUs. There are 17 undeveloped parcels. The Woods Valley Ranch Water Reclamation Facility operating budget for FY 2011-12 requires revenue of $331,296. The proposed assessment for the Woods Valley Annual Sewer Service Charge is $1,183.20 per EDU or $98.60 per month, generating $311,181.60 of the operating budget. Collection of the sewer service charge through an assessment on the property tax bill is recommended to continue. No protests or comments were received on this issue.
The public hearing to set the Woods Valley Sewer Service Charge for FY 2011-12 was closed at 2:11 p.m.
Upon motion from Stone, seconded by Polito and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-20
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTPLACING THE WOODS VALLEY SEWER SERVICE CHARGE ASSESSMENTFOR 2011-2012 ON PROPERTY WITHIN THE WOODS VALLEY SEWER SERVICE AREA ON THE SAN DIEGO COUNTY SECURED PROPERTY TAX ROLL
4. Resolution to Set the Woods Valley Annual Sewer Standby Fee for Fiscal Year 2011-12:
Director of Finance Jeffrey reviewed that the sewer standby fee is collected on undeveloped parcels in the Woods Valley sewer service area for the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. The sewer standby fee is assessed on undeveloped parcels to insure the developer and interim builders pay their share of the cost of the sewer operation, including future replacement. There are currently 17 undeveloped parcels at Woods Valley.
The Woods Valley Ranch Water Reclamation Facility operating budget for FY 2011-12 requires revenue of $331,296. The revenue requirement is collected through a combination of the Standby Fee and a Sewer Service Charge on developed parcels. The proposed assessment for the Woods Valley Annual Sewer Standby Fee is $1,183.20 per EDU or $98.60 per month, generating $20,114.40 of the operating budget. Collection of the Woods Valley Annual Sewer Standby Fee will be assessed on the property tax bills.
RESOLUTION NO. 2011-21
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTPLACING THE WOODS VALLEY SEWER STANDBY FEE ASSESSMENTFOR 2011-2012 ON PROPERTY WITHIN THE WOODS VALLEY SEWER SERVICE AREA ON THE SAN DIEGO COUNTY SECURED PROPERTY TAX ROLL
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. 2011-22 was presented for adoption to establish the District’s fixed charge special assessments for Assessment District 96-1 (the Treasurers at Castle Creek) to meet principal and interest obligations on the debt, and authorizing the District to add delinquent and unpaid charges for water and other services to the property taxes for 2011-12 of the property using the water or service.
Director of Finance Jeffrey reported that 20-year limited obligation improvement bonds were sold in February 1997 in lieu of paying wastewater capacity fees for the parcels in Assessment District 96-1. To meet the principal and interest obligations of the debt, an assessment of $746.84 per parcel for the 200 parcels with unpaid debt in the assessment area is required for FY 2011-12.
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. To go on the tax roll, the delinquency must be unpaid for at least 60 days and have had a lien recorded against the property with the County Recorder. Currently, there are nine parcels with delinquencies totaling $9,327.54 that are eligible to go on the tax roll for FY 2011-12.
Upon motion from Polito, seconded by Stone and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-22
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTPLACING FIXED CHARGE SPECIAL ASSESSMENTS FOR 2011-2011ON PROPERTY WITHIN ASSESSMENT DISTRICT 96-1 AND ON PROPERTYFOR UNPAID CHARGES FOR WATER AND OTHER SERVICES PURSUANTTO STREETS AND HIGHWAYS CODE SECTIONS 8680 AND 8682 ANDWATER CODE SECTIONS 72094, 72100, 72102 ON THESAN DIEGO COUNTY PROPERTY TAX ROLL
6. Adoption of the Fiscal Year 2011-2012 Operations, Maintenance and Capital Budget:
The District’s proposed budget for Fiscal Year 2011-12 was detailed and reviewed at the May 16th Board meeting. Manager of Accounting Pugh noted that no changes had been made since that time. He reviewed that the total combined budget shows revenues of $42,708,539 which is 0.7% less than the current 2010-11 budget. The expenditures are estimated at $42,175,899, a 7.9% decrease over the current year budget, leaving a surplus of $532,640. The surplus will provide $130,063 in capital reserves to the water fund, and replacement reserves of $315,113 for the Lower Moosa Canyon, and $87,464 for the Woods Valley Water Reclamation Facilities.
Water sales for FY 2011-12 are budgeted at 25,260 acre feet. Wholesale costs from the San Diego County Water Authority (SDCWA) and Metropolitan Water District (MWD) are expected to increase on January 1, 2012 and will be passed through to our customers. The District’s local cost component of the water rate is budgeted at $155.73 per acre foot and represents a 13.8% increase over the current rate. This increase will generate $475,000 annually and is necessary to restore the District’s capital reserves. The following estimated rates were used to prepare the budget. Actual rates adopted for January 1, 2012 may be different:
Imported Water Costs
Total Domestic IAWP SAWR
Proposed Increase $179.95/AF $180.43/AF $153.86/AF
13.8% 17.4% 13.9%
41.03¢/hcf 41.42¢/hcf 35.32¢/hcf
The budget also includes the following:
• A 12.1% increase in the meter service charge in 2012, however, no new meter sales are budgeted for 2011-12.
• Secured property taxes of $1,785,000, down 10% from the current year due to reduced assessed property valuations.
• An estimated interest earnings rate of 1.0%.
• 69¼ full-time positions, down 5¼ from 2010-11.
• District Engineer identified as Deputy General Manager to more readily fill the role of acting in the General Manager’s absence. No change in compensation.
• Capital projects for FY 2011-12 are budgeted at $971,500 and include: SCADA Improvements - $500,000, Pump and Motor Replacements - $170,000, Water Loss Reduction Program - $105,000, Emergency Power Generation and Equipment - $75,000, and Reservoir Mixing System - $75,000.
• The Moosa budget includes two capital projects: Centrifuge Upgrade - $50,000 and Aeration System Upgrades - $35,000.
• A $2.25 increase in the Moosa wastewater service charge and an increase of $1.85 in the low pressure collection system maintenance fee for 2012.
• No increase in the Woods Valley wastewater service charge is budgeted and no new capital projects are included in the Woods Valley budget.
Staff recommended adopting Resolution 2011-23 approving the Final Operating and Capital Budget for Fiscal Year 2011-12, and approving Ordinances 2011-05 and 2011-06 incorporating changes to the Administrative Code per the approved Memorandum of Understanding with employees and for changes in authorized staffing levels.
RESOLUTION NO. 2011-23
RESOLUTION OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTADOPTING THE FINAL OPERATING AND CAPITAL BUDGET FORTHE FISCAL YEAR 2011-2012 AND ESTABLISHING CONTROLS ONCHANGES IN APPROPRIATIONS FOR THE VARIOUS FUNDS
Upon motion from Stone, seconded by Haskell and unanimously carried, the following Ordinance, entitled:
ORDINANCE NO. 2011-05
ORDINANCE OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTAMENDING THE ADMINISTRATIVE CODE TOINCORPORATE CHANGES PER THE APPROVEDMEMORANDUM OF UNDERSTANDING WITH EMPLOYEES
ORDINANCE NO. 2011-06
ORDINANCE OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTAMENDING THE ADMINISTRATIVE CODE TOPROVIDE FOR CHANGES IN AUTHORIZED STAFFINGLEVELS FOR THE FISCAL YEAR 2011-12 BUDGET
7. Ordinance to Adopt Amendments to the District’s Administrative Code:
General Manager Arant explained that amendments to the Administrative Code are needed to implement the mid-contract negotiations and Amended Memorandum of Understanding with Employees that was adopted in April 2011. The changes effective July 1, 2011 include:
• Sec. 2.2: Elimination of the Floating Holiday and related paragraph.
• Sec. 3.2: Elimination of paragraph relating to District matching of Deferred Compensation.
• Sec. 8.1: Elimination of sentence that reads: “Under the CalPERS plan, the District currently contributes both the employer and employee share of the costs.”
• Sec. 8.12: Elimination of clothing allowance for employees not issued uniforms.
Upon motion from Stone, seconded by Haskell and unanimously carried, the following Ordinance, entitled:
ORDINANCE NO. 2011-07
ORDINANCE OF THE BOARD OF DIRECTORS OFTHE VALLEY CENTER MUNICIPAL WATER DISTRICTAMENDING THE ADMINISTRATIVE CODE TO INCORPORATECHANGES PER THE ADOPTED FIRST AMENDMENT TO THEMEMORANDUM OF UNDERSTANDING WITH EMPLOYEESAND APPROVE MISCELLANEOUS REVISIONS
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell NOES: None ABSENT: None
GENERAL MANAGER’S AGENDA:
8. San Diego County Water Authority’s Board of Directors’ Meeting:
General Manager Arant reported that at the May 26, 2011 SDCWA Board of Directors’ meeting a public hearing date was set for the Water Authority’s proposed 2012 rate and charge increases. The Water Authority’s proposed 7.8% increase actually varies for each water agency based on a formula that includes fixed costs, volume, customer service, storage charges, transportation, etc. Approximately 60% of their proposed increase is a pass through from Metropolitan. The public hearing is scheduled for June 23, 2011.
9. Water Rate Survey Results:
A water rate survey of the twenty-one San Diego County retail water agencies based on data compiled as of May 31, 2011, was reviewed. The results were summarized as shown below:
District’s Ranking Domestic Rate: All agencies 5th Lowest Agencies with same cost basis* 1st Lowest Average Domestic – 26 HCF/mo All agencies 9th Lowest Agencies with same cost basis* 4th Lowest Large Domestic – 100 HCF/mo All agencies 5th Lowest Agencies with same cost basis* 1st Lowest IAWP Agricultural Rate: All agencies 6th Lowest Agencies with same cost basis* 1st Lowest 1 AF Agricultural Usage: All agencies 6th Lowest Agencies with same cost basis 1st Lowest Monthly Meter Charge: All agencies 13th Lowest Agencies with same cost basis* 4th Lowest Wastewater Service Charge: Among 13 Wastewater Agencies 9th Lowest
*The eight retail water agencies with same “Cost Basis” are those buying 100% treated imported water and paying all SDCWA transportation and fixed charges.
10. Miscellaneous Information Items:
General Manager Arant reported on the following miscellaneous items:
• Mr. Arant was asked to speak on a panel regarding the proposed Public Goods Charge (Senate Bill 34). After the meeting, the Legislative Analyst contacted Gary to find out what it is like to run a water district and to discuss ideas.
• Cal Forward, a think tank, held a workshop in San Diego to discuss taking district property tax revenue and giving it to the Board of Supervisors to be reallocated for the highest and best use of public funds. Approximately 14 water districts were represented at the meeting expressing vehement opposition to this idea.
• The Urban Rural Roundtable report indicated that one of their top priorities is to get price supports for agriculture in the Southern California region. They have committed to take a lead role in approaching Metropolitan.
• A work group, comprised of the Avocado Commission and Farm Bureaus from San Diego, Riverside and Los Angeles Counties, is putting together strategies to approach Metropolitan about restoring and extending the IAWP. Since the Metropolitan Water Board approved restoration and reimplementation of the groundwater replenishment discount of $118/AF, the work group is hopeful.
GENERAL COUNSEL AGENDA
11. General Counsel de Sousa reported on the following items:
• Governor Brown proposes to eliminate 43 state boards, commissions and agencies from the state budget.
• June 3rd was the deadline for passing legislation out of its house of origin. The Public Goods Charge did not pass out of its house of origin so it with be a two year bill. Other noteworthy bills include:
o AB 246 relates to water quality enforcement matters. It would permit a Regional Water Quality Control Board to delegate to its executive officer the authority to apply for judicial enforcement of an action without first having to go through a public hearing process. CASA opposes this bill.
o AB 741, which passed its house of origin, is being pushed forward by Irvine Ranch Water District to permit public wastewater agencies to offer private voluntary liens to property owners who finance lateral replacement conversions from septic to sewer, even without a judicial order in place.
o AB 1354 proposed to reduce retention on public works projects to no more than 5%. Currently, public agencies must withhold no less than 5% retention, although it is common in the industry to withhold 10% from all payments to contractors. This bill was vetoed several times by the previous Governor and was finally withdrawn by the author. There is now another bill surfacing which only refers to payment bonds, not progress payments, which reduces the retention to 5%. Counsel will be tracking its progress. Ms. de Sousa noted that public agencies already have the discretion to reduce retention to 5% if the project is progressing well.
BOARD OF DIRECTOR’S AGENDA
12. Health Benefits Authority (HBA):
Director Aleshire reported that he made another trip to Sacramento to look at office accommodations for the HBA. He has found that rates for office space are dramatically lower in the suburbs. Quotes on four properties are being obtained. A decision should be forthcoming by the end of June.
An agenda item was submitted to the JPIA Board of Directors by Dr. Aleshire to allow HBA to pay all expenses for its directors. The original assumption was that they would be attending four meetings per year. This has proved to be underestimated and will be addressed at the next meeting.
13. Closed sessions were called by President Broomell at 3:08 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
14. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 3:39 p.m.
____________________________ _______________________________ President Secretary