VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, June 6, 2005
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 Cowett, Director of Finance Jeffrey, Director of Operations Hoyle, District Engineer Grabbe, Board Secretary Stetson, Manager of Accounting Pugh, IT Specialist Learue, Accounting Specialist Masley, Water Systems Supervisor Bull, Pumps & Motors Supervisor Stetson, Wastewater Systems Supervisors vonBorstel and Hill, Construction/Maintenance Supervisor Lovelady, Meter Services Supervisor Jones, Sr. Meter Technician LoPresti, and Project Manager Carrillo. Spectators present were: Mr. and Mrs. George Casparian, Peter MacLaggan of Poseidon Resources and Dave Ross, Valley Roadrunner Newspaper.
AUDIENCE COMMENTS/QUESTIONS
1. Mrs. Deirdre Casparian, who resides on Hell Creek Road, inquired as to the District’s policy pertaining to wasteful water dripping from customers’ private pipes. General Manager Arant responded that the District has a policy that prohibits water waste. When the District becomes aware that water is being wasted, the customer is notified by the District and asked to take corrective action in a timely manner. A recourse for the District should the situation not be corrected is restriction of the meter’s flow or termination of service.
Mrs. Casparian stated that when she had previously reported excessive water usage by an adjacent property owner, the response received had been that water waste is not investigated “until there is a shortage”. (NOTE: Further investigation by staff regarding this matter revealed that customer service personnel had been dispatched to Mr. Charles’ property, the site adjacent to Mrs. Casparian’s property, following an anonymous report of water being wasted, but no run-off or unusual water usage was detected. It should be further noted that the customer who called in to report the water waste could not be contacted on the District’s actions as the caller had elected to remain anonymous. Mr. Charles’ account had high usage in comparison to historical usage for the account in January 2005 and the following two months. Mr. Charles was in contact with the District during this time period and repairs to his water system completed upon cessation of the rains in April as indicated by his usage returning to average consumption levels.)
CONSENT CALENDAR
2. Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held May 16, 2005
• Audit demand check numbers 103961 through 104253
• Board of Director’s request for reimbursement of expenses and per diem compensation
• Treasurer’s Report and Financial Statement for the period ended April 30, 2005
• Concept approval of the Camino de Oro (TM #5212) Water Line Relocation project consisting of approximately 85 feet of 8-inch water main and required appurtenances
• Concept approval of the Blue Ribbon Farms, Inc. (PM #18815) Water Main Extension project consisting of approximately 312 feet of 8-inch water main and required appurtenances
• Resolution No. 2005-18 establishing the appropriation limit for proceeds from taxes for Fiscal Year 2005-06
ACTION AGENDA
3. Public Hearing to Consider Adoption of District-Wide Water Availability Charge for Fiscal Year 2005-06:
Director of Finance Jeffrey explained that a public hearing will be conducted to receive written and oral public testimony concerning the proposed District-wide water availability charge for Fiscal Year 2005-06. Notices of the public hearing on the proposed water availability charge had been published, posted and 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 approximately $591,000 and is planned to be used for revenue debt service ($103,960), with the remainder ($487,040) used for ongoing capital requirements. Said water availability charge has been collected annually since Fiscal Year 1995-1996. Director of Finance Jeffrey noted that the proposed water availability charge is the equivalent of a $13.28 per acre foot increase in the selling price of water or $4.00 per month on the ¾” meter service charge.
The public hearing to receive input on the proposed Fiscal Year 2005-06 District-wide water availability charge was opened at 2:05 p.m. Four letters protesting the levy of the proposed $10.00/acre, $10.00/parcel minimum water availability charge were received which are attached hereto as Exhibit “A”. The four letters received represent a total of five parcels with a proposed water availability charge of $177.00.
Mrs. Casparian addressed the Board requesting that consideration be given to implementing a reduced water availability charge for property owners affected by the proposed lower density land use designations of the County’s General Plan 2020. Mrs. Casparian stated that under GP 2020 her 40 acre parcel can no longer be subdivided or an additional home built on the large parcel. She asked for consideration of a policy to allow for a waiver of the water availability charge on the acreage of property not utilized or not further developable. Mrs. Casparian noted that she is not willing to expend funds to pursue a boundary adjustment of her property as it is a lengthy and expensive process that may not be successful if not finalized prior to the adoption of GP 2020. General Counsel Cowett confirmed that the water code requires assessment of the availability charge on a per acre basis. Staff noted that finalization of the GP 2020 process is anticipated in 2 years and litigation from property owners is expected.
The District’s deferment policy from the water availability charge was reviewed. A deferment from the District’s water availability charge is available if the property is a separate legal parcel and is permanently dedicated to open space or it is not now using and there is no intention to use water purchased from the District. A reinstatement of water service for properties that were deferred from payment of the water availability charge requires payment of all deferred availability charges with interest and a 10% surcharge. Deferments from payment of the San Diego County Water Authority’s and Metropolitan Water District’s water availability charges can also be obtained.
The public hearing on the proposed Fiscal Year 2005-06 District-wide water availability charge was closed at 2:18 p.m.
Upon motion by Polito and seconded by Stone, the following ordinance, entitled:
ORDINANCE NO. 2005-06
ORDINANCE OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ESTABLISHING WATER AVAILABILITY CHARGES FOR
2005-2006 ON ALL PROPERTY WITHIN THE DISTRICT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire and Stone
NOES: Director Haskell
ABSENT: None
4. Public Hearing on the Woods Valley Sewer Service Area’s Annual Sewer Service Charge:
Director of Finance Jeffrey reviewed that in July of 2002, the property owners within the Woods Valley Sewer Service Area approved the Woods Valley Sewer Standby Fee and Sewer Service Charge. The standby fee and service charge finance the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. It was explained that undeveloped property is assessed the standby fee and developed property assessed the service charge of which there are currently 118 developed properties within the Woods Valley sewer service area.
The 2005-06 budget for the Woods Valley Ranch Water Reclamation Facility requires revenue of $331,296. As such, the proposed assessment for the Woods Valley Sewer Service charge is $1,183.20 per EDU or $98.60 per month which is detailed in an annual report listing the parcels and respective sewer service charge.
The public hearing on the Woods Valley Sewer Service Charge was opened at 2:22 p.m. Collection of the sewer service charge through an assessment on the property tax bill was recommended. If a majority protest to the sewer service charge is received, the charge may not be collected on the tax roll, but rather would be billed each month on the water bill. No protests to the proposed Woods Valley Sewer Service charge to be collected by the County of San Diego with the property taxes were received. The public hearing was closed at 2:23 p.m.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO.2005-14
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
PLACING THE
WOODS
VALLEY
SEWER SERVICE
CHARGE ASSESSMENT FOR 2005-2006 ON PROPERTY
WITHIN THE
WOODS
VALLEY
SEWER AREA ON THE
SAN DIEGO
COUNTY
SECURED PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
5. Resolution to Set the
Woods
Valley
Annual Sewer Standby Fee for Fiscal Year 2005-06:
Adoption of Resolution No. 2005-15 to set the Woods Valley Sewer Service Area Sewer Standby Fee for Fiscal Year 2005-06 was requested. Director of Finance Jeffrey noted that in July of 2002, following a public hearing, the property owners within the Woods Valley Sewer Service Area approved the Woods Valley Sewer Standby Fee and Sewer Service Charge which finance the operation, maintenance and replacement of the Woods Valley Ranch Water Reclamation Facility. Undeveloped property within the Woods Valley Sewer Service Area is assessed the Standby Fee which ensures that the developer and interim builders pay their share of the cost of the sewer operation, including future replacement. There are currently 153 undeveloped parcels with a total of 162 EDUs.
The budget for the Woods Valley Ranch Reclamation Facility for Fiscal Year 2005-06 requires revenue of $331,296 in which a Standby Fee of $1,183.20/EDU or $98.60/month will be assessed. The Woods Valley Annual Sewer Standby Fee will be assessed on the property tax bills.
Upon motion by Aleshire, seconded by Polito and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2005-15
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
PLACING THE
WOODS
VALLEY
SEWER STANDBY
FEE ASSESSMENT FOR 2005-2006 ON PROPERTY
WITHIN THE
WOODS
VALLEY
SEWER AREA ON THE
SAN DIEGO
COUNTY
SECURIED
PROPERTY TAX ROLL
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
6. Presentation on the Proposed City of Carlsbad-Poseidon Resources Seawater Desalination Project:
A proposed agreement for the development of a regional seawater desalination facility has been reached between the San Diego County Water Authority and the City of Carlsbad. Negotiations between the San Diego County Water Authority and Poseidon Resources Corporation, the leaseholder of the desalination facilities site at the Encina Power Station, are continuing. Mr. Peter MacLaggan, Vice President of Poseidon Resources, provided an update on the desal. project stating that a Draft Environmental Impact Report was released by the City of Carlsbad on May 16th. The project is a 56,000 ac. ft. per year seawater desalination project and will be capable of serving the greater portion of the North County San Diego region. This represents approximately 8% of new supply to the region. The Draft EIR concluded that the project can move forward with no significant impacts to the environment after mitigation. The Draft EIR will be out for review until June 29th.
The agreement with Carlsbad for the development of a desal. project at the Encina Power Station provides that Poseidon will assume the responsibility for financing, permitting, constructing and operation of the plant and to deliver a specified supply to Carlsbad for distribution throughout their service area, which is approximately 40% of the output of the plant. Negotiations are ongoing with the San Diego County Water Authority for the remainder of the plant’s output as well as negotiating with some of the neighboring water agencies. Benefits to the region and the District are a firmer water supply as there will be an 8% increase in the San Diego County’s water supply.
On September 15th, a meeting sponsored by ACWA Regions 8, 9 and 10 will be held in Dana Point with the program being “Desal – Fact or Fantasy”. The one-day program will address national and regional desalination development, technological advances, environmental and regulatory challenges and a roundtable discussion. Director Aleshire stated that a briefing on the Department of Water Resources Draft State Water Plan Update will be held on June 21st at the San Diego County Water Authority. The data in the Draft Plan indicates the need to develop new surface and groundwater storage to enhance water reliability.
Mr. MacLaggan clarified that the agreement with the City of Carlsbad to supply desal. water will be at a price not to exceed the San Diego County Water Authority’s rates. The ability to deliver desal. water at this cost will be possible with the subsidy from the Metropolitan Water District. A subsidy from Metropolitan for the desal. water produced at the Encina Power Station should be secured once the EIR for the project is certified and the San Diego County Water Authority sponsors the application for the subsidy funds.
7. Approval of Agreement for Inspection Services for the
Woods
Valley
Water Reclamation Project and Couser Pump Station:
Project Manager Carrillo reported that the accelerated schedule of the Woods Valley Water Reclamation Facility ($5.3 million developer project) and the Couser Canyon Pump Station ($700,000 capital improvement project) will require a full-time inspector with mechanical specialty inspection experience. Both projects are scheduled to begin in late August with an approximate nine month time frame.
A proposal for professional inspection services for the Woods Valley Water Reclamation Facility and Couser Pump Station projects was advertised and four proposals received. A selection committee reviewed the proposals and has recommended award of contract to Dudek & Associates at an estimated total inspection cost of $225,000 ($168,400-Woods Valley Water Reclamation Plant and $56,600-Couser Pump Station).
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2005-20
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT APPROV-
ING ENTERING INTO AN AGREEMENT WITH DUDEK &
ASSOCIATES FOR PROVIDING INSPECTION SERVICES
FOR THE
WOODS
VALLEY
WATER RECLAMATION
PLANT AND THE COUSER PUMP STATION
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8.
San Diego
County
Water Authority’s Survey of Member Agencies’ Water Rates:
Annually, the San Diego County Water Authority prepares a survey of its member agencies’ water rates. An analysis by staff of the survey indicates that the District’s commodity, meter service and meter capacity charges compare very favorably with the other member agencies of the Authority. The District has the 2nd lowest M&I and lowest agricultural commodity rates of the Authority’s member agencies that are 100% dependent on imported water and receive all of their water through the Authority’s pipelines. Compared to all the member agencies, including those with local water supplies, the District’s commodity rates are the 4th lowest for M&I and the 2nd lowest for agricultural water. Director of Finance Jeffrey noted that the data in the survey reflects member agencies’ rates as of December 2004.
9. Audit Contract for Fiscal Year 2004-05:
Leaf & Cole, LLP submitted a proposal to perform the audit of the District’s financial statements for the year ending June 30, 2005 at a fee of $17,850, a $600 increase (3.5%) over the prior year’s base fee. A written Management Letter in accordance
with generally accepted auditing standards will be provided. Adoption of Resolution No. 2005-19 to authorize Leaf & Cole, LLP to perform the financial audit of the District’s financial statements for Fiscal Year 2004-05 was recommended.
Director Aleshire noted the District’s audit reviews samples of financial transactions, but does not audit District employees’ compliance with policy. Director Aleshire stated that one member agency of ACWA has its auditor complete a compliance check whereby one area is audited with another area audited the next year. He recommended evaluating the merits of including a compliance with policy check in the audit services for the District. Director of Finance Jeffrey stated that some of the District’s transactions are verified by the auditors such as cash balances and sample verifications completed of accounts payable transactions. Concerns of the Board could be addressed with the auditors at the beginning of the audit process in which the audit plan could be presented and Board input received.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2005-19
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ENTERING INTO AN AGREEMENT WITH LEAF &
COLE, LLP TO AUDIT THE FINANCIAL STATEMENTS
OF THE DISTRICT FOR THE YEAR ENDED
JUNE 30, 2005
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
10. Ballot for Proposed Mosquito, Vector and Disease Control Assessment:
Mail ballots on a proposed assessment by the County of San Diego for vector control were received for 81 parcels with a proposed assessment totaling $578.67. Currently, the District only pays taxes on two parcels which are located outside of the District’s boundary. The proposed assessment on these two parcels is $17.10.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Board directed staff to vote “No” on the ballots received for the County of San Diego’s proposed mosquito, vector and disease control assessment.
11. Adoption of Operating and Capital Budget for Fiscal Year 2005-06:
The District’s operations, maintenance and capital budget for Fiscal Year 2005-06 had been reviewed during the Board meeting of April 18th. A modification since that review is a request to purchase a new track loader and trailer at a cost of $140,000 as the existing track loader cannot be repaired.
General Manager Arant noted that amendments to the budget may be necessary if the Valley Center Road Improvement Project (Phase 2) commences and if the District pursues a solar power program. In addition, the revised salary structure per the salary survey will be presented to the Board at the June 20th meeting. A review of the proposed Fiscal Year 2005-06 budget ensued, as summarized below:
• Projected water sales are budgeted at 44,500 acre feet
• Total authorized positions is 80, which includes the 2 new requested positions of Construction Inspector and Wastewater Technician
• The water loss figure used for budget purposes is 6% (estimated water purchases of 47,500 ac. ft. and the sale of 44,500 ac. ft.). Director of Finance Jeffrey stated that the 6% water loss rate is considered prudent for budget calculations. However, compliance with the District’s Strategic Plan measurement standard of “water loss at less than 5% per calendar year” is expected. The average water loss for the last 4 years was 4.6%. The meter test bench program has been reactivated in which meters are replaced and the pulled meters tested for register accuracy. An increased effort with this program will reduce water losses.
• Total budgeted expenditures are $41,888,223 with total revenue estimated at $39,855,013. Funds ($868,300) from the pumping rate stabilization reserve will be used to fund the operating budget and $2,048,317 from the capital improvement reserves to fund the capital budget. Capital projects total $4,577,400.
• Water rates are expected to increase from 5 to 7% in 2006 as wholesale rate changes proposed for January 1, 2006, from the Metropolitan Water District and San Diego County Water Authority are adopted and the District’s local cost component of the water rate is increased to recover the remaining ERAF shift and to offset inflation.
• As adopted on May 16, 2005, to be effective July 1, 2005, the Moosa Sewer Treatment monthly service charge will increase by $1.50 (to $38.50/EDU), and the STEP maintenance charge by $1.00 per month (to $32.00/EDU).
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2005-17
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE FINAL OPERATING AND CAPITAL
BUDGET FOR THE FISCAL YEAR 2005-06 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 Aleshire, seconded by Haskell and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2005-07
ORDINANCE OF THE
VALLEY
CENTER
MUNICIPAL
WATER DISTRICT AMENDING THE ADMINISTRATIVE
CODE TO PROVIDE FOR CHANGES IN AUTHORIZED
STAFFING LEVELS PER THE FISCAL YEAR 2005-06 BUDGET
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL COUNSEL’S AGENDA
12. Increase in Legal Fees:
The District’s General Counsel, C. Michael Cowett of Best, Best & Krieger, LLP, has requested an increase in legal services fees of 11.8% which, since the last fee increase in July of 2001, represents an average annual increase of 2.95%.
The requested hourly legal rates are:
Partner $195.00
Sr. Associate $175.00
Jr. Associate $145.00
Paralegal $110.00
In response to the request that the agreement with Best, Best & Krieger be amended each July 1st based upon the All Urban Consumers’ Index, staff was directed to annually prepare for the Board’s consideration an increase in legal fees based upon the Consumers’ Price Index change for the San Diego area. If approved, the revised legal fees would become effective July 1st.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the increase in legal fees from Best, Best and Krieger, LLP was approved, to be effective July 1, 2005.
CLOSED SESSION
13. A Closed Session was called by President Broomell at
3:40 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.
San Diego Superior Court Case GIC 760743
RECONVENE
14. The regular Board meeting was reconvened at 3:50 p.m. No action was reported.
ADJOURNMENT
15. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at
4:00 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary