March 16, 2009
VALLEY CENTER WATER DISTRICT
Regular Board Meeting
Monday, March 16, 2009
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, Stone and Haskell. Director Aleshire was absent. Staff members present were: General Manager Arant, General Counsel Cowett, District Engineer Grabbe, Director of Operations Hoyle, Director of Finance Jeffrey, Board Secretary Stetson, and Manager of IT Pilve. Spectators present were: Messrs. Washburn, Johnson, Hilbig and Warth.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meetings held February 23, 2009 and March 2, 2009
• Resolution No. 2009-16 concurring in the nomination to the ACWA/JPIA Executive Committee of Lou Reinkens, Tahoe City Public Utility District
• Audit demand check numbers 121625 through 121778 and wire disbursements for February 2009
ACTION AGENDA
2. Support of Application for the County Department of Public Works to Receive CALTRANS Community-Based Transportation Planning Grant for the Valley Center Planning Area:
Mr. Andy Washburn, who serves on the Valley Center Planning Group’s Transportation Subcommittee, requested that the Board submit a letter supporting the County Department of Public Works’ application to CAL-TRANS for a $150,000 grant from the Community-Based Transportation Planning Program. He explained that the money will be earmarked for workshops to develop guidelines for roadway amenities and enhancements, such as curb treatments, landscaping, sign posts and pathways, but not for travel lanes. Letters of support of the application for the grant funds are
being requested of community members and governmental entities in the Valley Center Planning Group area.
Upon motion by Polito, seconded by Haskell and unanimously carried, the Board directed staff to prepare a letter supporting the County Department of Public Works’ application for a grant from the Community-Based Transportation Planning Program.
3. Review of Revenue and Expense Projections and Revenue Options for Fiscal Year 2009-2010:
The District’s budget process for FY 2009-10 has begun with an initial assessment of projected operating and non-operating revenues and core operational expenses. Scenarios presented are summarized below:
Scenario A (Base Case):
• Water Sales estimated at 29,800 ac. ft.
• Property taxes – 100%
• Standby Availability Charge ($487,000) used for O&M expenses (not capital)
• No new capital improvement programs (CIP) funded
• No contribution to fund OPEB
• Return on investments estimated at 1.5%
Summary Results of Scenario A:
Total water revenues $37,629,110
Total water expenditures $37,521,142
Net gain $ 107,968
Scenario B:
• Standby Availability Charges ($487,000) to Capital Improvement Program
Summary Results of Scenario B:
Total water revenues $37,629,110
Less Standby Availability Charge 487,000
Net water revenues $37,142,110
Total water expenditures 37,521,142
Net loss $ 379,032
Scenario C:
• Standby Availability Charge ($487,000) to Capital Improvement Program and Fund OPEB ($633,000)
Summary Results of Scenario C:
Total water revenues $37,629,110
Less Standby Availability Charge 487,000
Net water revenues $37,142,110
Total water expenditures 37,521,142
OPEB contribution 633,000
Net loss $ 1,012,032
Financial resource options available to the District to fund annual costs were reviewed, as outlined below:
Discretionary Reserves – Reserves not considered obligated in the current fiscal year:
Operating reserve $4,578,000
Pumping rate stabilization reserve $1,729,000
Total discretionary reserves $6,307,000
Less 6 months O&M reserves 5,040,000
per Strategic Plan
Projected surplus $1,267,000
Water Sales Revenue – Water sales for Fiscal Year 2009-10 are estimated at 29,800 ac. ft. Currently, the District retains $102.41 per ac. ft. for local costs. As such, the District’s water sales revenue is affected by $102,410 for every 1,000 ac. ft. of sales above or below the estimated water sales figure. An increase in the District’s local share of the water rates would impact rates as follows:
Increase/HCF Increase/AF Revenue/Year
10% increase $0.0235 $112.65 $305,200
20% increase $0.0470 $122.89 $610,300
30% increase $0.0705 $133.13 $915,460
Meter Service Charges – Increases in the monthly meter service charges would generate revenue as follows:
% Increase to ¾” Revised ¾” Revenue
Increase Meter Service Chrg. Meter Service Chrg. Generated
10% $2.05 $22.55 $331,400
20% $4.10 $24.60 $661,800
30% $6.15 $26.65 $994,200
Staff’s recommendations for consideration by the Board are that the District’s Standby-Availability Charge be used for capital improvement projects, the OPEB obligation be funded in 2009-10, District’s local commodity rate and monthly meter service charges be increased to offset the O&M shortfall, and any excess discretionary reserves be used for CIP or its reserves.
The Board expressed that due to the impending substantial wholesale water rate increases, they supported that, for the Fiscal Year 2009-2010 budget, there be no increase in the District’s local share of the water commodity charge, the standby-water availability charge be allocated for capital, and that the OPEB obligation be funded.
GENERAL MANAGER’S AGENDA
4. Review of Miscellaneous Informational Items:
• Modifications of the San Diego County Water Authority’s water policies for wheeling of water to facilitate desalinated water deliveries are being pursued.
• A hearing before the San Diego Regional Water Quality Control Board will be held on April 8th at which it is hoped that the Regional Board will approve the Flow, Entrainment and Impingement Minimization Plan for the Carlsbad Desalination Plant’s waste discharge requirements.
GENERAL COUNSEL’S AGENDA
5. Review of Miscellaneous Items:
• Westlands Water District has filed litigation trying to enjoin the judge’s opinion regarding the reduced pumping from the Delta to protect the Delta Smelt.
• Castaic Lake Water District has prevailed in its effort to receive damages for compensation for a requirement that they utilize some of their water for mitigation on an endangered species issue. Compensation was paid because of a taking of property.
• The Fair Political Practices Commission (FPPC) adopted new rules concerning gifts to public agencies which places restrictions on travel gifts and disclosure requirements. This ruling affects directors and staff members who take trips offered by other public agencies such as Metropolitan Water District. The value usually exceeds the gift limit amount under the FPPC rules. The new ruling for reporting requirements for any travel, lodging and meals received as a part of a tour of public facilities of other government agencies is that it needs to be disclosed on the Form 700, Statement of Economic Interests, but it is not subject to the gifts limitation.
CLOSED SESSION
6. A Closed Session was called by President Broomell at 3:06 p.m. pursuant to:
• Government Code §54956.9(b)&(c) – Conference with Legal Counsel,
Anticipated Litigation
Number of potential cases: 2
RECONVENE
7. The Regular Board meeting was reconvened at 4:10 p.m. No action was reported.
ADJOURNMENT
8. Upon motion by Stone, seconded by Polito and unanimously carried, the meeting was adjourned at 4:12 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President
Secretary