October 17, 2011
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, October 17, 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 and Stone. 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, Accounting Manager Pugh, Safety and Regulatory Compliance Assistant Olson, Meter Services Supervisor LoPresti, and Pumps and Motors Supervisor Rutherford. Spectators present were Mr. William Lewis – Lewis & Lewis Dev., Mr. Wayne Hilbig – Village Redevelopment LLC, Mr. Don Bunts - Water Synergy, Inc., and Mr. Dave Ross – Valley Roadrunner.
CONSENT CALENDAR
1. Upon motion by Aleshire, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held September 19, 2011
• Audit demand check numbers 130076 through 130240 for the period September 9 to September 29, 2011 and wire disbursements for September 2011.
• Treasurer’s Report for period ended August 31, 2011
• Annual report on deferrals from water availability charges as of June 30, 2011
• Quarterly report of employees’ expense reimbursements for the quarter ended September 30, 2011
• Board of Director’s request for reimbursement of expenses and report of expenses
ACTION AGENDA:
2. Review of September 8 and 9, 2011 SDG&E Power Outage Incident:
Director of Operations Hoyle provided an overview of the September 8th and 9th power outage incident and described the staffing requirements and performance by District personnel. He reported that the first three hours of any event are critical for setting priorities and mobilizing personnel and equipment. Initial reports by SDG&E indicated that the outage could possibly last until Sunday so developing a plan for a possible long term event became important. This included establishing a rotation process for key personnel and providing meals and overnight accommodations for those on duty. After the gen-sets had been installed and activated, refueling them became the next challenge.
During this event, the Valley Center Fire Protection District contacted the District to find out the status in the event of a fire. The Fire Protection EOC office requested someone from the District at their office and Tony Lo Presti was deployed. Since Tony could not be spared all evening, a CERT member was sent to VCMWD’s operations center with a two way radio connected to Cal Fire Valley Center, Deer Springs and Ramona to notify us immediately if a fire broke out.
At approximately 1:15 a.m. power started being restored to some of the District’s facilities. Once the power returned, generators needed to be powered down, the transfer switches needed to be switched back, the facilities with stationary gen-sets had to be checked to confirm everything was working properly, and some stations needed rebooting.
As a result of this event, a number of modifications and enhancements to our emergency response resources have been recommended to improve the District’s performance during a future event.
Safety and Regulatory Compliance Assistant Olson reported on the activities in the Emergency Operations Center during the outage. Recommendations for improving the EOC included the following:
• Purchasing additional emergency phones for the SCADA control desk and customer call center;
• Additional display wall monitors;
• Customer call center area separated from the SCADA console area;
• Additional internet access locations;
• New television location area; and
• Improve functionality of the SCADA desk area
Pump and Motor Supervisor Rutherford reported that all of the District’s generators started up without a problem during the power outage. The two largest portable generators (400 kw) were set up at Couser and Rainbow Pump Stations; the two smaller units (70 kw) were sent to Tyler and Ridge Ranch Pump Stations. Two 600 kw generators were rented from Hawthorne Equipment and were deployed later in the evening to Oat Hill and Paradise Pump Stations. Small portable generators were deployed for natural gas engines at Betsworth Forebay, Valley Center and San Gabriel Pump Stations. He stated that the District has purchased, and is in the process of installing, stationary generators for the natural gas engines and for five SCADA communication hub sites that had been budgeted for the 2011-12 fiscal year. Mr. Rutherford reported that a few sites without backup generators had problems including Miller, Oat Hill and Couser Pump Stations. In preparation for future events, the following enhancements to the District’s emergency response resources were recommended:
• Stationary Gen-Sets for Miller, Oat Hill and Couser Pump Stations
• Transfer Switch for Lilac Pump Station
• Redundant back-up power connection for stationary generators at wastewater facilities
• Additional small portable generator/plug-ins for communication sites
• Installation of back-up power connection to EOC generator
• Additional fuel transfer trailer
Manager of IT Pilve reported that during the event the corporate facility was running on generators and, except for a small flicker, the power interruption was unnoticeable. Two way communications through a radio at Palomar Mountain was maintained. The District’s phone system remained fully operational, however, the after hour answering service was not responding. The phone system was switched back to working hours mode to receive customer calls which were forwarded to a call center set up in the operations center. Two public notices were posted on the District’s website.
The wireless network communication was lost when the UPS batteries were depleted. The older UPS units lasted less than 30 minutes; some newer units lasted up to 120 minutes. Upgraded UPS units have now been installed at all hub/priority sites to provide monitoring capabilities and increased run times. Mr. Pilve made the following long term recommendations for system enhancement:
• Establish minimum UPS runtime specifications for sites
• Upgrade UPS units at all sites not meeting specs
• Maximize UPS runtime with device selection
• Test UPS and generators regularly
• Install more radio links for redundancy
• Continually evaluate new technology
• Enhance network monitoring capabilities
Another item that became apparent during the SCADA communication failures was that data had to be manually collected from each site and reported via phone or two-way radio. The data then had to be recorded with time stamps in order to evaluate reservoir levels. Development of a manual data collection software system would make this process easier. Other enhancements recommended include simplifying the District’s website editing process so that authorized personnel can post notices quickly and evaluating other social media networks like Twitter and Facebook for public communication.
General Manager Arant wrapped up the power outage assessment by reporting the District will not solely rely on the San Diego County Water Authority, the County Office of Emergency Services, or the local media to communicate the District’s status to our customers. In the future, VCMWD will disseminate information about the local water supply and water quality conditions directly to radio and television outlets to ensure correct reporting.
Director Aleshire conveyed that District staff did an outstanding job in responding to this event. He stated that the recommendations given represent substantial financial commitments and hoped staff wasn’t trying to become totally free of inconveniences. Mr. Arant replied that most of the recommendations were low cost items and will allow the District, under emergency conditions, to provide a minimal amount of service for an extended period of time. He reminded the Board that failures at wastewater facilities could incur substantial fines and the recommended improvements are not for the District’s convenience but to provide a safe, reliable service for our customers.
3. Woods Valley Ranch WRF Phase 2 Expansion Project Update:
District Engineer Grabbe reported that the State Water Resources Control Board produced a draft of the Facility Plan Approval Report for the State Revolving Fund loan application submitted for the Woods Valley Ranch Water Reclamation Facility Phase 2 Expansion project, for the District’s review. Staff traveled to Sacramento to review their comments with the State and provided them with updated cost estimates. The updated funding limits are as follows:
• Total Project Cost - $14.6M
• Loan Amount - $13.5M
• 20 Year Note at 2.6%
• Annual Debt Service - $874,000
SWRCB staff provided a favorable response to approval of the loan and, after one more round of internal reviews, will be scheduled for the State’s Board Meeting in January for approval of the Preliminary Funding Commitment. In the meantime, information meetings will be held to solicit participation commitments from property owners in the service area and consultants will be selected for the design phase. Once preliminary funding is approved, certain conditions must be met prior to Finance Agreement approval including assessment district formation, acquisition of property and easements, and preparation of a 30% design level construction cost estimate. After the Finance Agreement is signed, project design will be completed and construction contracts will go out to bid. Construction should take approximately 18 months and is estimated to occur between April 2013 and September 2014.
Project proponents Bill Lewis and Wayne Hilbig addressed the Board to thank Wally Grabbe and Don Bunts for their hard work and perseverance on the project. Obtaining commitments from property owners and forming the assessment district are now critical tasks to the project’s success. It was noted that this will likely be the last community opportunity for sewer service in the South Village for a long time.
4. Review of Proposed Wholesale Water Rate Increases, Meter Service and Moosa Wastewater Service Charges:
Director of Finance Jeffrey provided the Board with a first look at proposed water rates, water meter service charge, and wastewater service charge increases and asked for their input and direction.
Wholesale Rate Increases: Wholesale costs from the San Diego County Water Authority (CWA) and Metropolitan Water District (MWD) will increase by 10.9% for domestic water sales in January 2012. The cost for special agricultural water rate (SAWR) sales will increase 9.3%, and the interim agricultural water program (IAWP) rate will increase 13.3%. The IAWP increase is higher than SAWR due to the 50% reduction in the MWD discount as part of the phase-out of IAWP at the end of 2012.
Mr. Jeffrey reported that included in the CWA and MWD water charges to be paid in 2012 are fixed charges for capacity, customer service, and emergency storage totaling $3.3M, regardless of how much water is sold. The District calculates the per-acre-foot equivalent of these charges by dividing the total by the projected water sales, less a reserve for declining sales. Given last year’s water demand and expectations of further reductions in agriculture, the possibility that actual sales could be significantly lower than budgeted must be considered. Therefore, the $3.3M in fixed charges was allocated over 80% of projected sales.
Local Commodity Rate Increase: Ordinance No. 2009-08, adopted in July 2009 after a public hearing in accordance with Proposition 218, provided for a pass through of all wholesale water increases through September 1, 2014, and for increases in the local water component and meter service charges of no more than the percentage increase in the wholesale rate. The recommended increase in the local component of the water rate would raise the total water rate just 1%.
Water Meter Service Charge: In the past, the District relied on high water sales from agriculture to provide most of its revenue. With declining agriculture and uncertain water sales for the foreseeable future, meter service charges provide a more stable source of revenue to cover fixed operating costs. The District’s Strategic Plan provides that fixed revenues should cover 50% of fixed costs. Staff presented several options for setting the monthly meter service charge for Board consideration:
a) Increase equal to the actual wholesale increase of 10.9%
b) The increase used in the adopted budget, 12.1%
c) The increase needed to cover 50% of fixed expenses, 14.2%
d) The maximum allowable increase by Ord. No. 2009-08, 23.834%
General Manager Arant pointed out that increasing service charges will provide the District some needed income stability. The District’s goal is to have its water operations revenue pay for the water operations, leaving the tax revenue available to provide funding for capital improvement projects or to leverage debt for CIP. Some District facilities are approaching 60 years old and must be replaced. With lower water sales, transitioning to more fixed cost revenue will allow the system to remain viable.
The Board of Directors indicated their preference to pursue option c.
SDCWA Infrastructure Access Charge: Annually, the SDCWA assesses the District a fixed charge based on the number and size of active meters within the District. This charge is passed through and collected from active customers. SDCWA will be increasing this charge by 4.4% for calendar year 2012 bringing the total IAP charge for a ¾” meter to $2.60.
Wastewater Monthly Service Charge: Ordinance No. 2009-08 provides for an increase in wastewater service charges of up to 10% annually. Staff is recommending the Moosa wastewater service charge be increased by $2.25 per month (4.8%) to $48.75, and the low pressure wastewater collection system maintenance fee by $1.85 per month to $40.25. These increases were included in the 2011-12 budget. No change to the Woods Valley Ranch wastewater service charge was recommended at this time.
Staff will return to the Board in November with an Ordinance to adopt the proposed increases discussed for possible implementation in February 2012.
GENERAL MANAGER’S AGENDA:
5. San Diego County Water Authority’s Board of Directors’ Meeting:
General Manager Arant reported on the following items from the September 22, 2011 SDCWA Board of Directors’ meeting:
• The Water Authority’s capital improvement program is winding down due to low water demands.
• The San Vicente Dam raise is underway. The project is expected to be complete in 2013.
6. Miscellaneous Information Items:
General Manager Arant reported on the following miscellaneous items:
• SDG&E has filed a new rate case. They contend that solar projects are costing them money because the solar energy being net-metered back to them is being transported using their system. SDG&E wants to impose a service charge to offset the lost revenue from solar power generation.
• A report for the Valley Center Fire Protection District was completed by Wally Grabbe to help facilitate their ISO rating process. The report included an engineering analysis on water pressures, flows, storage capacity and sustainability to meet fire flows.
• The San Diego Farm Bureau will be honoring Gary Arant with the “Friend of Agriculture Award” at their annual dinner.
DISTRICT GENERAL COUNSEL’S AGENDA
7. Comments to Federal Communication Commission’s Notice of Inquiry:
General Counsel de Sousa reported that comments were submitted by Best, Best & Krieger to the Federal Communications Commission (FCC) in response to their Notice of Inquiry (NOI) regarding “Acceleration of Broadband Deployment”. Other BB&K clients shared in the cost of preparing the response. Ms. de Sousa explained that the NOI is supported by telecommunications companies who are seeking unfettered access to all public agency property.
BOARD OF DIRECTORS’ AGENDA AND REPORTS ON MEETINGS ATTENDED
8. Local Agency Formation Commission Special District Election:
General Manager Arant reported that the LAFCO Special District Mailed Ballot election for an Alternate LAFCO Regular Member and nine Special District Advisory Committee Members is being held. There are eight nominees for the nine Special District Advisory Committee positions, and three nominees for the position of Alternate Regular Member. The nominating committee recommended the re-election of Jo MacKenzie for Alternate Regular Member and all eight nominees for the nine Advisory Committee positions. The ninth position will be filled by an appointment or special election.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the District’s LAFCO Special District Election ballot shall be cast per the nominating committee’s recommendation.
9. Director Aleshire reported that he had served on the nominating committee for the next President and Vice President of ACWA. The nominating committee recommended Randy Record for President and John Coleman, from East Bay MUD, for Vice President.
ADJOURNMENT
10. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 4:04 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary