3. Survey of General Counsel and Auditing Services Fees:
In compliance with the District’s Administrative Code, a survey of general counsel and auditor
fees was completed. Data was collected from 14 water agencies in San Diego and
Southwestern Riverside Counties to provide, for the Board’s review, a comparison of costs
for general counsel and auditing services.
Director Aleshire noted that the District has contracted with Gilchrist, Steen, Stanfield &
Newquist for several years to conduct an audit of the District’s financial records. He stated
that, in light of the recent Enron scandal, accounting firms are being closely scrutinized and
that it might be fiscally prudent to consider changing the District’s auditor. Director Aleshire
proposed that bids from auditing firms be solicited. General Manager Arant stated that the
current auditing firm has never done consulting work for the District unlike the auditors for
Enron, and that a change in auditors may increase the Finance Department’s workload at a
time of transition with the impending retirement of the Director of Finance. Director Aleshire
expressed that it may be an ideal time to change auditing firms with the transition within the
Finance Department. He voiced that, in view of the public’s concern regarding accounting
practices, it would be considered prudent to change auditing firms at this time. Director
Aleshire clarified that he has no indications of a problem with the current auditing firm or
staff’s accountings practices, but that a new auditing firm would result in a fresh review of the
District’s financial records and possible new recommendations within the Management Letter.
The Board will consider, at its April 1, 2002, Board meeting, an award of contract for auditing
services for Fiscal Year 2001-02 to Gilchrist, Steen, Stanfield & Newquist or the Board could
direct staff to solicit competitive audit proposals.
4. Woods Valley Ranch Project – Status Report and Consideration of Concept for Securing
Long-Term Obligations for Operations and Maintenance of the Wastewater Treatment and
Disposal System:
Mr. James Delhamer, President of Newland Communities, the owner of the proposed Woods
Valley Ranch Project, addressed the Board. Mr. Delhamer explained that Newland
Communities specializes in the acquisition and development of residential land, the
Valley Center Municipal Water District
Board of Directors’ Meeting
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development and entitlement of master-planned communities, and the sale of finished lots to
homebuilders and commercial developers.
Newland Communities purchased the Woods Valley Ranch property in January of 2002.
Grading of the property for its proposed development is expected to be completed in July
2002. Woods Valley Ranch project will consist of 270 lots ranging from 6,000 sq. ft. to over
one-half an acre with the majority ranging from 1,500 to 20,000 sq. ft. Offsite improvements
include widening and straightening Woods Valley Road and installing a stop light at the
intersection of Woods Valley and Valley Center Roads. Lots are expected to be packaged
for sale to builders by September of this year.
Mr. Delhamer reported that Newland Communities has a contract with Peerless Golf to
develop and operate the golf course planned for the Woods Valley Ranch Project. The golf
course will encompass 163 acres of the development which has a separate Major Use Permit
with the County.
In response to Director Polito’s inquiry regarding the schedule of the County’s planned
improvements to Valley Center Road, staff explained that no commitment from the County on
the construction schedule has been obtained, but that a capital schedule shows funds to be
expended on this project toward the end of 2002. Many factors are involved in the Valley
Center Road improvement project including its design and right-of-way issues. The District
has been diligent in keeping abreast of the design plans for Valley Center Road and any
impact upon design of the District’s pipeline in this vicinity. A letter was previously received
from the County that the District will be reimbursed for costs incurred to redesign its Valley
Center Pipeline that may be required as the result of the County redesigning its road
improvement project.
Project Engineer for the Woods Valley Ranch Project, Mr. Don Bunts, explained that, initially,
wastewater from the development will be trucked to the District’s Moosa Treatment Plant.
Operation of an interim treatment facility is planned when wastewater flows from the homes
reach approximately 5,000 gpd which will trigger construction of the permanent treatment
plant facilities. An estimated time line for construction of the Woods Valley Water
Reclamation Plant was reviewed as summarized below:
January 2002-January 2004 Wastewater trucked to Moosa (0-5,000 gpd - 20 EDUs)
May 2003 Installation of the Interim wastewater facility
January 2004-January 2005 Operate the interim facility and begin construction
of the permanent wastewater facility
(5,000-15,000 gpd – 60 EDUs)
January 2005 Operation of the permanent wastewater treatment
facilities (15,000-70,000 gpd – 280 EDUs)
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Board of Directors’ Meeting
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Mr. Bunts noted that depending on level of home sales and correlating wastewater flows, an
interim facility may not be installed but rather the construction timetable for the permanent
water reclamation plant would be accelerated.
General Manager Arant reviewed that the permit issued for the Woods Valley Ranch
treatment plant and disposal system names the District as operator. Once the wastewater
treatment plant is operating and there are connections to the sewer system, the District will
enter into a long-term contractual agreement for treatment and disposal of the wastewater.
A method for the District’s securement of obligations for the long-term operation and
maintenance expenses of the treatment plant facilities has been evaluated.
Director of Finance Jarrell presented a proposal for the financial security of operation and
maintenance expenses related to operation of the proposed Woods Valley Ranch Water
Reclamation Facilities in which an assessment district would be established affecting
properties within the development and, in compliance with Proposition 218, an annual sewer
service standby fee could be levied on the parcels. Utilizing this financing alternative, the
standby fee could be levied upon undeveloped properties in the development to secure
revenue to satisfy O&M expenses of the wastewater treatment and disposal system. Creation
of an assessment district also permits collection of all sewer fees through an annual property
assessment. Collection of fees assessed on the property tax rolls is 100% secured as the
District participates in the San Diego County Teeter Plan. If only the undeveloped properties
are to be assessed a sewer standby fee, the developed properties would be charged a
monthly sewer service charge collected on the water bill.
Collection of a sewer standby fee from all properties within the created assessment district
would also allow increases to the per parcel assessment against a preset cap over time with
the ability to increase that cap, if necessary. Staff recommended Board approval to proceed
with forming the proposed sewer assessment district for properties within the Woods Valley
Ranch Project and to collect the sewer standby fee from both developed and undeveloped
properties. Procedures for formation of an assessment district are governed by
Proposition 218 which require the preparation of a detailed Engineer’s report to confirm the
cost and benefit to the affected properties, a property owner vote indicating support or
opposition to the fee and a public hearing by the District Board on the proposed fee.
Proceeding with formation of the proposed assessment district at this time will permit
compliance with all regulations and the first year’s assessment on the tax roll for 2002-2003.
Upon motion by Aleshire, seconded by Broomell and unanimously carried, formation
of an assessment district for properties within the Woods Valley Ranch Project to
secure long-term operations and maintenance obligations for the Woods Valley Ranch
Wastewater Treatment and Disposal Facilities was approved with the sewer
assessment to be levied against both developed and undeveloped properties.
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Board of Directors’ Meeting
5 3/18/2002
5. Resolution Establishing Date of Public Hearing to Consider Assessment of Water Availability
Charge for Fiscal Year 2002-2003:
The District-wide water availability charge proposed to be established for Fiscal Year 2002-
2003 is $10.00 per acre, $10.00 per parcel minimum, which is a continuation of this charge
levied since FY 1995-96. Proceeds from a $10.00 per acre District-wide availability charge
would secure approximately $587,000, proposed to be allocated as follows:
Revenue debt service $ 94,086
Ongoing capital requirements 140,714
To meet a portion of Metropolitan’s 352,200
ready-to-serve (RTS) charge
Metropolitan Water District of Southern California’s (Metropolitan) calculation of its RTS
charge is expected to change as of January 2003, however, it is not known how it will be
implemented by the San Diego County Water Authority. As such, the RTS charge is
estimated at $1,847,003, the same amount assessed annually since 1998-99. Of this
amount, approximately $673,297 will be collected by Metropolitan through its standby charge
($11.51/acre) assessed property within the District and collected through the property tax
bills. Allocating $352,200 of the District’s water availability charge proceeds toward the RTS
charge leaves a remaining balance of $821,506 which is funded through a component of the
District’s water rate.
Adoption of Resolution No. 2002-11 would establish June 3, 2002, at 2:00 p.m. as the date
and time of the public hearing to receive comments on and consider assessment of the
proposed FY 2002-03 District-wide water availability charge. In accordance with the Water
Code, a Notice of the Public Hearing would then be published once a week for two
successive weeks and mailed to current property owners that have changed ownership since
the levy of the Fiscal Year 2001-2002 water availability charge.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following
resolution, entitled:
RESOLUTION NO. 2002-11
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
SETTING FORTH A SCHEDULE OF WATER AVAILABILITY
CHARGES PROPOSED TO BE ESTABLISHED
FOR ALL PROPERTY WITHIN THE DISTRICT FOR
2002-2003 AND FIXING THE TIME AND PLACE
OF HEARING AND GIVING NOTICE OF HEARING
Valley Center Municipal Water District
Board of Directors’ Meeting
6 3/18/2002
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
6. Review of Miscellaneous Informational Items:
Miscellaneous informational items were reviewed as follows:
~ Metropolitan’s New Water Rate Structure was adopted and will be fully implemented on
January 1, 2003. The adopted rate structure includes the continuation of the Interim
Agricultural Water Program. The Ready-to-Serve (RTS) charge will only be applied to
firm water deliveries to each member agency. The District’s RTS charge is expected to
be reduced by 80-85% or from approximately $1.8 million to $300,000 if the SDCWA
passes this reduction, as adopted by Metropolitan, to its member agencies.
~ Seasonal Shift Program may be resolved to provide that Metropolitan will deliver water
for storage with Metropolitan paying for evaporation and any marginal operations cost.
The member agency will be charged for the water when utilized from its storage facility.
In this manner, the local agency is paid for local water storage costs, and only charged
when water is used, though the water must be used upon Metropolitan’s call.
CLOSED SESSION
7. A Closed Session was called by President Broomell at 3:20 p.m. pursuant to:
• Government Code §54956.9(a), Conference with Legal Counsel - Existing Litigation.
Name of case: Sweetwater Authority, et al. v. Dynegy, Inc., et al.
Superior Court Case GIC 760743
The Regular Board meeting was reconvened at 3:27 p.m. No action was reported.
Valley Center Municipal Water District
Board of Directors’ Meeting
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ADJOURNMENT
8.