June 14, 2010
VALLEY CENTER MUNICIPAL WATER DISTRICT
Adjourned Regular Board Meeting
Monday, June 14, 2010
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 Stetson and Manager of IT Pilve. Spectator present was Mr. Dave Ross, Roadrunner Newspaper.
CONSENT CALENDAR
1. Upon motion by Polito, seconded by Stone and unanimously carried, the following consent calendar items were approved:
▪ Minutes of the Board meeting held May 17, 2010
▪ Audit demand check numbers 125754 through 125948 and wire disbursements for May 2010
▪ Treasurer’s Report and Financial Statements for the period ended April 30, 2010
▪ Board of Director’s request for per diem compensation and reimbursement of expenses
ACTION AGENDA
2. Ratification of Change Order No. 3 for the Meadows Highline Project:
A contract had been awarded to HTA Engineering & Construction, Inc. in March 2010 for the Meadows Highline Project consisting of replacing 180 linear feet of above ground 8-inch wastewater pipe with a concrete encased HDPE wastewater line. District Engineer Grabbe explained that upon completion of the concrete encasement of the highline, it was apparent that the placement of rocks on both sides of the encasement was needed for protection of the pipe and to eliminate a safety hazard and its potential tagging. The cost of $20,003 for this project (Change Order No. 3) caused the total cumulative change amount to exceed $35,000; therefore, requiring Board approval. Two change orders had previously been approved by staff totaling $17,036 for the replacement of additional pipe. District Engineer Grabbe explained that in order to not cause a delay in the project and additional costs, a verbal approval was obtained from the Board President to proceed with the Change Order No. 3 per the District’s Administrative Code. Board ratification of this action was requested. Staff further noted that Change Order No. 4 is being processed in the amount of $5,000 for an additional 25 tons of rock. To deter any unlawful activity on the encasement, slates were installed. It is anticipated that the project will be complete by June 18th.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-24
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT
RATIFYING STAFF’S APPROVAL OF CHANGE ORDER
NO. 3 TO THE CONTRACT WITH HTA ENGINEERING &
CONSTRUCTION FOR THE CONSTRUCTION OF THE
MEADOWS HIGHLINE PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Status Report of the Water Purchase Agreement for the Carlsbad-Poseidon Seawater Desalination Project:
The Water Purchase Agreement with Poseidon Resources for up to 7,500 ac. ft. of desalted water from the Carlsbad-Poseidon Seawater Desalination Project is not ready for execution as had been anticipated. General Manager Arant explained that the San Diego County Water Authority held a workshop on June 10th in which the Authority staff presented 3 options in response to the funding issues for the Poseidon Resources Carlsbad Desalination Project, as follows:
Option 1 – The San Diego County Water Authority would front the differential between the funding from its Local Water Supply Development Program and Metropolitan’s Desalination funding. This would require that the desal. partners take out a loan to provide the funding of between $150 million and $200 million.
Option 2 - The same as Option 1 but if the Authority recoups a value from the project, the loan from the desal. partners would be reduced by that amount.
Option 3 - The San Diego County Water Authority and Poseidon Resources resume negotiations for a potential joint desalination project.
Option 3 is being explored by San Diego County Water Authority staff whereby the Authority could negotiate a contract with Poseidon Resources for the purchase of the desal. water rather than Poseidon Resources contracting with the nine desal. partners. A report on this option will be provided by the Authority staff on June 24th.
The San Diego County Water Authority’s General Counsel Hentschke’s opinion that the nine desal. partners must recuse themselves from a vote on the desalination project funding provided through the Authority’s Local Water Supply Development Program was discussed. General Counsel de Sousa stated that Mr. Hentschke’s opinion is based on the interpretation of the Authority’s Act which states that “a representative of a member agency cannot vote on a contract between the San Diego County Water Authority and its agency.” The nine desal. partners and their attorneys are not in agreement with this opinion as the approval of Local Water Supply Development Program funding for the desal. project is not a direct contract with the member agency. It was noted that member agencies benefit from many policy issues that are implemented at the Authority, and those member agencies are not required to recuse themselves from a vote on the matter.
General Manager Arant stated that he has asked for a ruling from the Authority’s General Counsel pertaining to the nine desal. partners voting on whether the San Diego County Water Authority and Poseidon Resources can enter into direct negotiations for a joint desalination project. Mr. Hentschke initially indicated that the Desal. Partner’s Authority representatives cannot vote on this issue as it was requested by the Desal. Partners but would be eligible to vote on subsequent related issues. A formal opinion on this question will be forthcoming.
The importance of the Carlsbad Desalination Project for the region’s water supply providing 56,000 ac. ft. of local supply has been acknowledged by all water agencies including the San Diego County Water Authority. Southern California’s water supply has become much more tenuous since the time period when the Authority had been working with Poseidon on the proposed desal. plant. Director Aleshire stated that he had attended the Metropolitan Water District and San Diego County Water Authority briefing at the Cuyamaca College and the Authority’s position of support of the Carlsbad Desal. project had been conveyed by representative Steiner of the Authority. San Diego County Water Authority General Manager Stapleton concurred with this position noting the need for additional water supplies due to the pumping restrictions on the Delta and that permitting for the desal. project has been secured, the design complete and it is broadly supported by the public.
The Board voiced support for the proposal (Option 3) that the San Diego County Water Authority pursue negotiations with Poseidon Resources for a joint desalination project. General Manager Arant stated that he will inform the Board of any outcome from the June 24th meeting at the San Diego County Water Authority to discuss this matter.
GENERAL MANAGER’S AGENDA
4. San Diego County Water Authority Board of Directors’ Meeting:
General Manager Arant reported that the San Diego County Water Authority Board of Directors approved filing a lawsuit against Metropolitan Water District at its May 27th Board meeting to challenge Metropolitan’s water rates for 2011 and 2012. The San Diego County Water Authority’s position is that Metropolitan Water District overcharges the Authority’s ratepayers as “MWD charges too much for using its facilities to transport water and spends those revenues to subsidize the water supply costs of other MWD member agencies.” General Manager Arant explained that Metropolitan allocates State Water Project and other water supply costs among its different rate categories. Costs for the water purchased from the State Water Project are allocated (approximately 80%) to the transportation or system access rates rather than to supply costs. This has adversely affected the Authority’s ratepayers, the single largest user of Metropolitan’s transportation services, as the Authority uses Metropolitan’s facilities to transport Colorado River water it purchases per the agreements with the Imperial Irrigation District and from the lining projects of the All American and Coachella Canals. Under Metropolitan’s water rate structure of charging for the State Water Project purchases on the transportation rates, the Authority feels it will be overcharged by $30 million in 2011 and $34 million in 2012, and by as much as $230 million annually by 2021 as the supply from the Imperial Irrigation District is ramped up. General Counsel de Sousa responded to Director Stone’s inquiry as to the Authority’s chances of prevailing with this lawsuit stating that there appears to be a non-equitable way of allocating the costs as an agency’s rates should reflect the reasonable cost of providing the services.
DISTRICT GENERAL COUNSEL’S AGENDA
5. Water Pumping Restrictions Lifted:
General Counsel de Sousa reported that Judge Wanger ruled on the preliminary injunctions filed by the State Contractors and other agencies challenging the Bay-Delta pumping restrictions for the protection of the Delta Smelt and Salmon. They prevailed in getting the pumping restrictions lifted for the Salmon and the preliminary injunction for the Delta Smelt. A resolution of the pumping restrictions is being worked on. With the increased pumping of water, the Smelt and Salmon have been monitored and a minimal amount has been caught in the pumps. The trials on the pumping plans will be later this year.
CLOSED SESSION
6. A Closed Session was called by President Broomell at 3:00 p.m. pursuant to:
● Government Code §54956.9(a), Conference with Legal Counsel, Existing
Litigation
Name of case: Valley Center Municipal Water District V. Sensus Metering
Systems, North America, Inc.
San Diego County Superior Court
Case No. 37-2010-00051403-CU-BC-NC
● Government Code §54956.9(b), Conference with Legal Counsel, Anticipated
Litigation
Number of potential cases: 1
● Government Code §54957(b)(1) – Public Employee Performance Evaluation: General Manager, and
● Government Code §54957.6 – Conference with Labor Negotiator,
Unrepresented Employee: General Manager
RECONVENE
7. The Regular Board meeting was reconvened at 4:46 p.m. No action was reported.
ADJOURNMENT
8. The meeting was unanimously adjourned at 4:46 p.m.
ATTEST: ATTEST:
___________________________ ___________________________
President Secretary