May 17, 2010
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, May 17, 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, Director of Finance Jeffrey, Director of Operations Hoyle, District Engineer Grabbe, Board Secretary Stetson, Manager of IT Pilve, and Manager of Accounting Pugh. Spectators present were: Wendy Heredia, Principal of the Valley Center Elementary School, Shannon Hargrave, Principal of the Valley Center Lilac School, the Valley Center Fourth Grade poster contest winners and family members, and Dave Ross, Valley Roadrunner Newspaper.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Haskell and unanimously carried, the following consent calendar items were approved:
▪ Minutes of the Board meeting held April 19, 2010
▪ Audit demand check numbers 125494 through 125753 and wire disbursements for April 2010
▪ Treasurer’s Report and Financial Statements for the period ended March 31, 2010
▪ Extension of the previously granted Concept Approval for the High Mountain and Piro High Vista South Wastewater Line Extension Projects
PRESENTATIONS
2. Fourth Grade Water Awareness Poster Contest – Presentation of Awards:
A poster contest for the fourth graders of the Valley Center Elementary School and Valley Center Lilac School was held as part of the District’s Water Education/Water Conservation Program. The students were asked to convey the importance of water with the theme of “Water is Life”. Approximately 240 posters were received from the 4th grade students of both the Valley Center Elementary and Lilac Elementary Schools that illustrated the importance of water, how it affects their lives, ways to conserve or recycle water, and the need to use water wisely. From the entries received in the poster contest, 3 were selected for top awards and 7 received Honorable Mention recognition, as follows:
1st Place: Annette Rivera
Lilac Elementary School
2nd Place: Cayden Tellez
Valley Center Elementary School
3rd Place: Michelle Macklin
Lilac Elementary School
Honorable Mentions: Drew Finstuen
Aleksander Archipov
Hannah Dickerson
Jonathan Diaz
Sydney Lopez
Ty Jon DeBruyn
Karina Munoz
Award certificates, ribbons and conservation material along with t-shirts imprinted with their posters were presented to the 1st, 2nd and 3rd Place and the Honorable Mention winners in the poster contest. Other participants in the poster contest were given a Certificate of Recognition from the District and various water conservation booklets and material. The District’s top 3 posters will be included in the North County Water Agencies’ 2011 calendar. The students, teachers, parents and Principals Heredia and Hargrave were thanked for their support of the District’s water education/conservation programs.
3. Adoption of the District’s Sewer System Management Plan:
The District’s Sewer System Management Plan prepared in accordance with the State Water Resources Control Board General Waste Discharge Order No. 2006-0003 was prepared and presented to the Board for adoption. The Plan documents standards and procedures for the operation and maintenance of the District’s wastewater collection facilities.
District Engineer Grabbe stated that the Sewer System Management Plan (SSMP) is available for viewing on the District’s website. In compliance with the State’s requirements for the District’s SSMP, the eleven Elements were addressed, which are: Goals, Organization, Legal Authority, Operations and Maintenance Program, Design and Performance Provisions, Overflow Emergency Response Plan, Fats/Oils and Grease Control Program, System Evaluation and Capacity Assurance Plan, Monitoring, Measurement and Plan Modifications, SSMP Program Audits and Communication Program. The SSMP will be periodically evaluated and recommendations for modification made as appropriate. Each year, staff will review the effectiveness of the SSMP and report its findings to the Board. Also, following a sanitary sewer overflow event, an internal review of the response will be conducted and an evaluation for needed modifications to the SSMP to improve efficiency would be completed.
Director Aleshire noted that the ACWA/JPIA, the District’s insurance provider, had completed a review of its claims which showed that most were the result of infrastructure failures. A Best Practices study concluded that practices at wastewater operations, such as lift station inspections, sewer back-up and response, would reduce damage claims.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-20
RESOLUTION OF THE BOARD OF DIRECTORS
OF VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING THE SEWER SYSTEM MANAGEMENT PLAN
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
4. Review of Survey of Agency Water Rates:
Manager of Accounting Pugh stated that staff compiled data on area water agencies’ water rates, and meter/wastewater service charges. He reported that the District has the 5th lowest domestic water rate, and the 3rd lowest agricultural water rate out of the 21 agencies surveyed. The meter service charge was 16 out of 21. The wastewater service charge was 11th out of 13. A comparison of agencies that receive 100% of their water supply from imported sources revealed that the District’s domestic rate is 2nd lowest, the District has the lowest agricultural rate, and the 12th lowest meter service charge.
5. Proposed Fiscal Year 2010-2011 Budget:
The District’s proposed 2010-11 Operations, Maintenance and Capital Budget was presented for the Board’s review. At the April 19th Board meeting, an overview of the preliminary revenue and expense projections and proposed capital projects had been provided. The proposed FY 2010-11 budget was reviewed, as summarized below:
• Based on current water and wastewater rates and charges and our estimates of water sales and connections, there will be a $2.8 million deficit. The deficits are: $1,118,610 (Water Operations), $1,171,886 (Water Capital), $190,883 (Moosa Capital) and $294,881 (Woods Valley Capital). The deficit will be met using reserves without increasing local water and wastewater rates.
• Budgeted water sales are estimated at 30,000 ac. ft. for Fiscal Year 2010-11. Water sales for FY 2009-10 are estimated at 30,170 ac. ft.
• Pass through of the wholesale water rate increases results in rate increases of: 13.2% for domestic customers, 14.0% for Interim Agricultural Water Program (IAWP) customers and 8.1% for Special Agricultural Water Rate customers. The District’s local cost component of the water rate remains unchanged at $102.41 per acre foot.
• Interest income is budgeted at $187,500 (1.25%).
• Property taxes are budgeted at $1,852,000, a reduction of 10% from the current fiscal year.
• The sale of 16 new meters is projected. There is no increase in the budget for the meter service charges, meter installation charges or meter capacity fees.
• Energy costs are down 19% from the previous fiscal year due to lower demand, operational efficiencies, utilizing off-peak periods and the District’s solar project. Energy cost savings are being reinvested in efficiency upgrades to the water pumping facilities and potential alternative energy sources.
• Authorized staffing level for FY 2010-11 is 74-1/2 employees, a reduction of one-half an employee.
• Capital projects (water) total $1,694,000 for the below listed projects: (The Capital deficit is $1,171,886.)
Pipelines & PRVs - $377,000
Pump Stations - $217,000
Reservoirs - $618,000
Data Management Systems - $300,000
Facilities - $90,000
Field Equipment - $92,000
In order to review and monitor the District’s Reserve Accounts, a listing of Reserves, the standards/goals of the reserves, sources of funding and a 5-year history of the funds will be compiled and provided the Board.
• No change is proposed for the Moosa wastewater service charge which is currently $44.50/EDU/month. The low pressure wastewater collection system maintenance fee is budgeted at $36.75/EDU/month, which is no change from the previous year’s budget. Capital projects for the Lower Moosa Canyon Water Reclamation Facility total $478,030, in which the major project is an upgrade of the Centrifuge at a cost of $350,000. Capital financing deficit is $190,883.
• The Woods Valley Water Reclamation Treatment Plant monthly service charge is proposed to be unchanged from the charge of $98.60/EDU which is collected by an assessment on the tax bill. Operating expenses at the Woods Valley Treatment Plant are estimated to be $37,920 more than last year. Capital projects for the treatment plant total $383,600 and there is a capital financing deficit of $294,881. The deficit will be funded from the Woods Valley Treatment Plant’s replacement reserve.
Discussion ensued regarding deferring capital projects such as pipeline replacements due to reduced water sales and revenue and the potential affects upon the District’s operations. It was recognized that in order to maintain the District’s level of service reliability, an increase in the District’s share of the water rates, which has not been increased since 2007, along with the pass-through of the water rate increases from the District’s wholesale suppliers, will be considered later in the year that would be effective in January 2011.
The District’s annual budget for Fiscal Year 2010-11 will be presented at the June 21st regular Board meeting for adoption by resolution.
6. Carlsbad-Poseidon Seawater Desal. Project, Review of Water Purchase Agreement:
The Water Purchase Agreements with Poseidon Resources for the delivery of the desal. water to the participating nine desal. partners are continuing to be evaluated and revised to address issues. It is hoped that the agreement will be ready for the Board’s consideration and adoption at the planned adjourned regular meeting of June 14th.
Issues of the Water Purchase Agreement that remain to be resolved include the minimum take or pay flow quantity and program funding; the Metropolitan Water District’s Seawater Desal. Program funding, and the San Diego County Water Authority’s Local Water Supply Development Program funding.
General Manager Arant reported that the San Diego County Water Authority has relinquished its position on the minimum take or pay flow conditions, but the “forced delivery” provision remains in which if there is an “operational flow imbalance”, the desal. water would flow into the SDCWA’s system with no compensation.
The final agreement for Carlsbad-Poseidon Resources Desal. Project Seawater Desal. Program Funding agreement with Metropolitan Water District has been executed. The funding under this Program may be revoked, however, if the San Diego County Water Authority takes action that is part of a successful effort to modify Metropolitan’s rate structure (rate integrity clause). Poseidon Resources and the San Diego Desal. Partners are seeking an amendment to the San Diego County Water Authority’s Local Water Supply Development agreements to provide that if the Authority takes action that results in a loss of Metropolitan’s Desal. funding, that the Authority will replace that lost funding.
A joint application by the San Diego Desal. Partners has been submitted to the San Diego County Water Authority for funding under its Local Water Supply Development Program, which provides up to $200.00 per acre foot in support of local water resource development. The opinion of the Authority staff is that as the desal. project agreements are structured, eligibility under its Local Water Supply Development Program is approximately one-half of the calculated amount. A proposal whereby the San Diego County Water Authority would provide funding for the desal. project via a revolving fund style program to provide the needed cash flow on the front end with repayment on the back end of the project is being discussed.
The Cities of San Marcos and Vista are proposing a franchise fee be imposed for the desal. pipeline that will be installed within their boundaries. The City of San Marcos’ proposed franchise fee as proposed is an upfront payment of $6 million and a 5% surcharge on the water moving through the pipeline. The formation of a Joint Powers Agreement (JPA) or placing the pipeline in public ownership are being reviewed to avoid the assessment of franchise fees which would make the desal. project financially infeasible.
The San Diego Desal. Partners will be meeting on Friday, May 21st to review the Water Transfer Agreements and proposed revisions. General Counsel de Sousa stated that the desal. partners are committed in their resolve to finalize the agreements for the delivery of the desal. water. As such, execution of the water Transfer Agreement with the desal. partners is expected to be completed in the near future and the District’s agreement presented for adoption at the June 14th meeting.
BOARD OF DIRECTOR’S AGENDA
7. ACWA 2010 Spring Conference:
Directors Aleshire and Stone reported that they had attended the ACWA 2010 Spring Conference in Monterey. Director Aleshire reported that he was not successful in his election to the office of Vice President of ACWA/Joint Powers Insurance Authority nor was Joan Finnegan of Municipal Water District of Orange County for President of the ACWA/JPIA. Jerry Gladbach of Castaic Lake Water Authority and Tom Cuquet of South Sutter Water District were elected to the offices of ACWA/JPIA President and Vice President, respectively. Director Aleshire also reported he attended a session on the merits of the water bond in which a compelling message was that Californians are living off the investments in water facilities of their forefathers, and it is time for the present generation to do their part to provide for the needed water facilities for their children and grandchildren. Director Stone concluded from attending the conference that the water industry is aware of the challenges of the state’s water infrastructure, but there never seem to be resolutions. Director Stone stated that he feels there is a shortage of leadership and political will throughout the state to solve the water issues. However, ACWA members are in agreement regarding pursuing co-equal goals of water reliability and environmental conservation.
CLOSED SESSION
8. A Closed Session was called by President Broomell at 3:45 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: 2
RECONVENE
9. The Regular Board meeting was reconvened at 4:16 p.m. There was no reportable action.
ADJOURNMENT
10. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 4:17 p.m. to Monday, June 14, 2010, at 2:00 p.m.
ATTEST: ATTEST:
___________________________ ___________________________
President Secretary