June 4, 2012
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, June 4, 2012
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, Manager of IT Pilve, and Manager of Accounting Pugh. There were no spectators present.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held May 21, 2012
• Audit demand check numbers 131952 through 132129 for May 4 through May 24, 2012
• Board of Director’s request for reimbursement of expenses and report of expenses
• Resolution 2012-09 establishing the appropriation limit for proceeds from taxes for FY 2012-13 per Government Code and Article XIIIB of the State Constitution
ACTION AGENDA
2. Adoption of the Fiscal Year 2012-2013 Operations, Maintenance and Capital Budget:
Manager of Accounting Pugh reported that an overview of the proposed 2012-13 Operations, Maintenance and Capital Budget was presented to the Board at the April 16, 2012 meeting. At that time a wholesale rate increase of 13.7% was presented based on information available at that time. Updated information from the San Diego County Water Authority has been received and the new wholesale rate increase is calculated at 12.6%. The budget presented today represents that change.
The total combined budget is 4.6% higher than last year and shows a surplus of $179,979, which consists of $20,908 for the General Water Fund, $97,250 for Moosa, and $61,821 for Woods Valley.
Water
The water operating revenue budget of $39,838,500 is 3.2% higher than the 2011-12 operating budget, primarily due to the increase in the wholesale cost of water. This is the first year that shows property tax revenues are being fully utilized for capital projects.
Water sales for 2012-13 are budgeted at 24,000 acre feet compared to 25,545 acre feet for 2011-12. This is due to economic uncertainty, termination of the IAWP and forecasted warmer temperatures with average rainfall.
Pass through of the MWD/SDCWA wholesale rate increase is estimated at 12.6% for domestic customers and 5.8% for SAWR customers. The local component will increase by 12.6%, the same as the wholesale water rate, from $151.68 to $170.76/AF. This will generate approximately $458,000 annually to help restore the District’s capital funding and replacement of the 60-year old water system, and it will reduce reliance on property taxes to fund operations.
The following rates were used in preparing the budget; actual rates adopted for February 1, 2013 may be different.
Component |
Domestic |
SAWR |
Current |
Projected |
Current |
Projected |
MWD/SDCWA Wholesale |
$1,292.25 |
$1,454.90 |
$1,058.72 |
$1,119.67 |
VCMWD |
$151.68 |
$170.76 |
$151.68 |
$170.76 |
Total |
$1,443.93 |
$1,625.66 |
$1,210.40 |
$1,290.43 |
Proposed Increase |
|
$181.73/AF |
|
$80.03/AF |
|
|
12.6% |
|
6.6% |
|
|
41.72¢/hcf |
|
18.37¢/hcf |
• Interest earnings rate is estimated at 0.75% for 2012-13, yielding an estimated $101,500 in earned interest.
• Secured property taxes are budgeted at $1,979,000 for 2012-13, the same as for the current year. Water Availability Charges will again be $591,000.
• The budget includes a 12.6% increase in the meter service charge which would generate approximately $481,000 over twelve months. Six new water meters are anticipated to be installed in FY 2012-13.
• The operating budget proposes 67 full-time positions, down 2¼ from 2011-12.
• COLA is budgeted at 1.75% in adherence with the current MOU.
• Local expenses for operations are down $100,178 due to lower insurance, mainte-nance, supplies and labor costs, representing a 1% budget reduction.
• The cost of water sold is the largest expense representing 70.1% of the water operating budget, or 67.3% of the total budget. Fiscal year 2012-13 is budgeted at $537,000 higher than the current year due to wholesale rate increases which is offset by a reduction in demand.
• Capital projects budgeted for the coming year total $2,195,000. The major projects include Red Ironbark Pump Station, $655,000; Wilkes Road Pipeline Replacement, $500,000; SCADA improvements, $400,000, Solar Power Development, $365,000; and Emergency Power Generation and Equipment, $120,000.
Wastewater
Moosa: The wastewater service charge is budgeted at $51.20, an increase of $2.45. The low pressure wastewater collection system maintenance fee for the Rimrock area is budgeted at $42.25, an increase of $2.00. The total Moosa increase is 5.0%.
The Moosa budget includes five capital items totaling $336,000. These capital items include $150,000 for SCADA, $75,000 for Digester Aeration and Mixing System, $65,000 for a new skip loader, $27,500 for one-half of a new camera system (to be shared with Woods Valley), and $18,500 for blower room acoustical panels.
Woods Valley Ranch: The current wastewater service charge for connected properties and standby fee for those not yet connected to the system is $98.60 per month. No increase has been included in this budget.
Three new capital projects are included for Woods Valley Ranch in the budget totaling $57,000. The projects include $27,500 for one-half of a new camera system, $25,000 for SCADA and security, and $4,500 for variable frequency drives.
Personnel
Two new position classifications, which will be filled internally through promotion during FY 2012-13, have been added: Safety & Regulatory Compliance Supervisor and Director of Information Technology. No new positions are being budgeted for this year. In addition, salary in lieu of vehicle allowance will be moved from a footnote to inclusion within the compensation schedule to better meet reporting requirements.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2012-11
RESOLUTION OF THE BOARD OF DIRECTORS
OF VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE FINAL OPERATING AND CAPITAL BUDGET
FOR THE FISCAL YEAR 2012-2013 AND
ESTABLISHING CONTROLS ON CHANGES IN
APPROPRIATIONS FOR THE VARIOUS FUNDS
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Stone, seconded by Aleshire and unanimously carried, the following Resolution, entitled:
ORDINANCE NO. 2012-05
ORDINANCE OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING THE ADMINISTRATIVE CODE TO
INCORPORATE CHANGES PER THE APPROVED
MEMORANDUM OF UNDERSTANDING WITH EMPLOYEES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Upon motion by Stone, seconded by Polito and unanimously carried, the following Resolution, entitled:
ORDINANCE NO. 2012-06
ORDINANCE OF THE VALLEY CENTER MUNICIPAL
WATER DISTRICT AMENDING THE
ADMINISTRATIVE CODE TO PROVIDE FOR CHANGES
IN AUTHORIZED STAFFING LEVELS FOR THE
FISCAL YEAR 2012-2013 BUDGET
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Nomination to the Local Agency Formation Commission Special Districts Advisory Committee:
The Local Agency Formation Commission (LAFCO) is soliciting nominations for one regular district commission position and eight positions on their Special Districts Advisory Committee whose terms expire in 2012. General Manager Arant reminded the Board that he has been serving on the LAFCO Special District Advisory Committee since 1981 and is willing to continue in this service if the Board so desires.
Upon motion by Stone, seconded by Polito and unanimously carried, the nomination of Gary Arant will be made to LAFCO for the Special Districts Advisory Committee.
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 May 24, 2012 SDCWA Board of Directors meeting:
• The Water Authority is still making progress on the Carlsbad Desal Water Purchase Agreement. The water will enter the Water Authority’s system through a pipeline being built from the coast over to the Third Aqueduct. Water Authority staff are evaluating what has to be done to the third pipeline to have desal water pushed to the Twin Oaks Plant where it will be blended and distributed over the service area.
• The lawsuit with Metropolitan is still being pursued. Another lawsuit has been filed on the most recent action by the Met Board to adopt another set of rate structures. There may be an effort to consolidate these litigations in the future.
5. Miscellaneous Informational Items:
• The National Resources Defense Council is concerned that there are no price point connections between water usage and sewer charges. They are pushing for a state-wide mandate to have sewer bills tied to water consumption.
• Draft number six of the Delta Plan has been released for review.
• SDG&E, after being turned down on the network use charge, are coming back with GRC-2 to increase the monthly standby charges. A Coalition of Water Agencies will be addressing the PUC in June regarding this proposed rate change.
BOARD OF DIRECTOR’S AGENDA
6. Director Aleshire reported that ACWA HBA has hired a temporary CPA to assist in finalizing the financial records. The merge between ACWA Joint Powers Insurance Authority and the ACWA Health Benefits Authority is expected to be effective July 1, 2012.
It was suggested by Director Aleshire that the District’s water loss goals be re-evaluated to accommodate changes in water sales. General Manager Arant reminded the Board that there would be some inevitable water loss even if no water were sold. Changing the formula for determining water loss would make the goal impossible to reach with any decline in water sales. Reducing water loss within the District remains a high priority.
CLOSED SESSIONS
7. Closed Sessions were called by President Broomell at 3:11 p.m. pursuant to:
• Government Code §54956.8 – Conference with Real Property Negotiators
Property: 9537 Sage Hill Way, Escondido, CA
Agency Negotiator: Gary T. Arant, General Manager
Negotiating Party: SpectraSite LLC
Under Negotiation: Terms of Lease
• Government Code §54957 – Public Employee Performance Evaluation:
General Manager
• Government Code §54957.6 – Conference with Labor Negotiators,
Agency Designated Representatives: Board of Directors
Unrepresented Employee: General Manager
RECONVENE
8. The Regular Board meeting was reconvened at 4:00 p.m. It was reported by General Counsel that for the closed session on Conference with Real Property Negotiators, upon motion by Director Aleshire, which was seconded by Director Haskell, the Board unanimously approved Resolution No. 2012-12, approving a 4th Amendment to the License Agreement with SpectraSite Communications, LLC (at the Meadows Reservoir), which extends the term of the License Agreement for three additional five-year periods, and makes additional minor revisions. Resolution No. 2012-12 further authorizes the General Manager to execute the 4th Amendment.
ADJOURNMENT
9. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at 4:00 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary