VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, March 20, 2006
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, District Engineer Grabbe, Director of Operations Hoyle, Board Secretary Stetson, IT Specialist Learue, and Project Managers Kilwein and Williams. Spectators present were: Messrs. Richardson, Fosselman, Lewis, Harry, and MacLaggan.
APPROVAL OF AGENDA
Upon motion by Stone, seconded by Polito and unanimously carried, consideration of adoption of Resolution No. 2006-17 concurring in the nomination of Joseph Dion, Citrus Heights Water District, for the ACWA/JPIA Executive Committee was added to the agenda under the Consent Calendar.
CONSENT CALENDAR
1. Upon motion by Polito, seconded by Aleshire and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held February 21, 2006
• Resolution No. 2006-07 setting June 5, 2006, as the hearing date to consider assessing a District-wide water availability charge for Fiscal Year 2006-07
• Resolution No. 2006-08 adjusting the District’s authorized debt limits per Ordinance No. 171, effective January 1, 2006
• Resolution Nos. 2006-09, 2006-10, 2006-11, 2006-12 and 2006-17 concurring in the nominations of Lou Reinkens (Tahoe City Public Utility District), Max A. Richman (Rio Alto Water District), Charles Muse (Helix Water District), Melody A. Henriques (San Bernardino Valley Water Conservation District), and Joseph M. Dion (Citrus Heights Water District), respectively, for the Executive Committee member of the ACWA/JPIA.
• Audit demand check numbers 107722 through 108086
• Treasurer’s Report and Financial Statement for the period ended January 31, 2006
• Board of Director’s request for per diem compensation and reimbursement of expenses
• Concept approval of the Miller water line extension project consisting of approximately 2,280 feet of 12-inch water main and one 6-inch fire hydrant and other appurtenances
ACTION AGENDA
2. Orchard Run Project Status Report and Adoption of a Mitigated Negative Declaration for the Wastewater Treatment Plant Expansion at
Woods
Valley
Ranch:
Project Manager Kilwein provided an update on the Orchard Run project stating that the Water Reclamation Facilities Agreement and Reclaimed Water Agreement were executed on March 10, 2006. Next month, the Board will consider revisions to the District’s debt policy to include provisions for land-secured financing of water and wastewater facilities. Also, at a subsequent Board meeting, formation of an assessment district to fund construction of the Orchard Run project’s wastewater treatment facilities will be considered.
Concept approval of the Orchard Run project’s water and wastewater facilities was granted in September of 2005. An Environmental Impact Report (EIR) had been completed for the project in 2002, but a mitigated negative declaration (MND) is necessary for the expansion of the wastewater treatment plant at Woods Valley Ranch and for the pipelines. The EIR’s Initial Study identified potentially significant effects on the environment and proposals to mitigate to below a level of significance. Significant impacts were determined to occur in the vicinity of archaeological sites. To be implemented is a grading, monitoring and data recovery program during construction which will reduce all impacts to below a level of significance. The Initial Study and MND were prepared by Mooney Jones & Stokes and have been filed with the San Diego County Clerk of the Court.
Project Manager Kilwein reported that during the 30 day review period of the environmental documents, which ended February 16, 2006, four letters of comment were received. They were received from: The State Clearinghouse and Planning Unit, County of San Diego Department of Planning and Land Use, Native American Heritage Commission and Mr. Melvin E. Heye. Responses to the County of San Diego’s comments were reviewed which included clarification that the pipeline extension, additional treatment at the Woods Valley Ranch site and on-site facilities are a “new project” and, therefore, a mitigated negative declaration was prepared. Additional responses were that an amendment to the existing Major Use Permit is not required for the construction and operation of the expansion of a District-owned facility, that a noise analysis is not needed for the proposed sewer lift station as it will be underground with submersible pumps and that the reclaimed water to be used as irrigation on the designated open space will be per the Landscape Management Plan approved by the County.
The pipeline alignment east of Valley Center Road/Mirar de Valle intersection was modified to reduce impacting the Bell property. The alignment within Valley Center Road was the preferred alternative. This alignment would extend north approximately 800 feet within Valley Center Road then extend east approximately 500 feet within an existing easement to connect with the Woods Valley Ranch Treatment Plant. D.R. Horton (project proponent) has contacted Archer Western, contractor for the Valley Center Road improvement project, to negotiate details for construction of the pipelines within Valley Center Road.
Adoption of Resolution No. 2006-13 adopting the Mitigated Negative Declaration for the wastewater treatment plant expansion at Woods Valley Ranch and associated facilities was recommended. Within five working days after adoption of the MND, a Notice of Determination will be filed with the County and posted for a minimum of 30 days which initiates a thirty days statute of limitations on court challenges to the approval under environmental laws.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2006-13
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
ADOPTING A MITIGATED NEGATIVE DECLARATION FOR
THE WASTEWATER TREATMENT PLANT EXPANSION AT
WOODS VALLEY RANCH AND ASSOCIATED FACILITIES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Authorization to Participate in a Proposition 50 Grant Application for the
Carlsbad
Seawater Desalination Project:
A request has been received by the City of Carlsbad and Poseidon Resources to participate in an application for Proposition 50 funding of $3 million to be used toward design and construction costs for the proposed Carlsbad Seawater Desalination Project. The District and Rincon del Diablo M.W.D. have executed water purchase agreements to purchase desalinated water from the Carlsbad desalination plant. If approved by the Board, co-applicants on the grant application for Proposition 50 funds would be the City of Carlsbad, the District and Rincon del Diablo M.W.D. General Manager Arant noted that the District’s water purchase agreement with Poseidon provides that the parties are to cooperate with each other in applying for and obtaining grants and subsidies. The City of Carlsbad will be the lead agency on the grant application.
Mr. Peter MacLaggan, Poseidon Resources, addressed the Board explaining that Proposition 50 grant funds has a competitive application program in which proposals are due by Friday, March 24th. An application will be forwarded to the California Department of Water Resources with the City of Carlsbad executing the agreement responsible for ensuring that matching payments, reporting and accounting responsibilities are satisfied.
Mr. MacLaggan opined that the State Lands Commission resolution pertaining to once through cooling restrictions will likely be revised to allow an evaluation on a case by case basis rather than a blanket ban of once through cooling systems for power plants in coastal regions. A hearing on the resolution will be held in April.
Upon motion by Stone, seconded by Aleshire and unanimously carried, the District’s participation as a co-applicant for Proposition 50 funding for the Carlsbad Seawater Desalination Project was approved.
4. Approval of Amendment No. 3 to the Design Contract for the
Rodriguez Road
Pipeline Replacement Project:
Kennedy/Jenks Consultants is preparing plans and specifications for the Rodriguez Road pipeline replacement project which consists of approximately 6,000 LF of 18-inch and 20-inch diameter pipe located within Rodriguez Road between the District’s Rainbow Pump Station and Triple J Road. An amendment to the design contract with Kennedy/Jenks Consultants in the amount of $20,073 was requested to prepare grading plans adjacent to a portion of the pipeline and to survey the District’s easement as outlined below:
1. Perform a geotechnical analysis along 900 feet of the pipeline alignment
2. Stake approximately 500 feet of District’s existing easement west of the project
3. Re-stake 100 feet of proposed alignment
4. Prepare grading plans as necessary along 900 feet of the pipeline alignment
The modified scope of work is necessary in order to modify an existing slope adjacent to the proposed pipeline. The grading plans will be included as part of the project’s plans and specifications and used to solicit construction bids. A survey of the existing District waterline easement and field survey markers will be used to verify right of way and determine the number and significance of any encroachments therein.
Upon motion by Aleshire, seconded by Polito and unanimously carried, Amendment No. 3 in the amount of $20,073 to the existing contract with Kennedy/Jenks Consultants for the design of the Rodriguez Road pipeline relocation project was approved.
5. Status Report on the Proposed Solar Power Project:
General Manager Arant reviewed that at the February 6th Board meeting, an application for funding under the California Public Utilities Commission Self Generation Incentive Program was approved for the proposed solar electric power project by the due date of February 10th. It had been noted that an invoice for payment is not issued until approximately 30 days following filing of the application for funding. The Board had further directed that the project’s feasibility analysis completed by WorldWater and Power and the District’s financial analysis be forwarded to Dr. Lon House, Energy consultant, for further evaluation and recommendation prior to payment of the approximate $14,000 application fee.
The financial analysis indicated that under the most favorable conditions (availability of renewable energy credits and interest free financing), the payback of the project ranges from 16 to 17 years. Dr. House’s analysis of the data concluded that:
▪ Solar panel prices are not likely to decrease next year due to a shortage in the silicon supply.
▪ Public agency’s rebate amounts may increase in the future, but the effort has not been initiated and the outcome uncertain.
▪ The amount of interest free financing (clean renewable energy bonds) is limited with competition from other public entities and there are underwriting costs to consider.
▪ A power purchase option may be more financially attractive than District ownership of the solar power project if legal and technical hurdles can be overcome.
▪ The Renewable Energy Credit market is highly uncertain.
▪ Electricity prices in SDG&E’s service area will increase by at least the rate of inflation. It was noted that the electricity prices are linked to natural gas prices, which are expected to decrease in the future due to increased supply and reduced demand and the payoff of the state’s long-term contracts.
Dr. House recommended continuing to pursue the solar energy project option up to having to make a major financial commitment to the project at which time it is hoped that uncertainties related to the project will be resolved and a more informed decision can be made. However, forwarding the application fee would obligate the District to initiate pursuing the Clean Renewable Energy bonds, other sources of grants or loans and the preliminary design and environmental analysis and incur the associated expenses in anticipation of being granted the funds under the Self Generation Incentive Program. Preliminary design and environmental review and permitting could range in cost between $75,000 and $100,000. In addition, a source for funding of the cumulative negative cash flow of approximately $3.1 million during the first 10 years of the project would need to be determined.
In light of the economic uncertainties in pursuing the Betsworth Pumping Station Solar Project at this time, i.e. local share funded with the clean renewable energy bonds, renewable energy credit market, and the capital improvement demands on the District’s financial resources, moving forward with the proposed solar power project was not recommended by staff. The various factors impacting the economics of solar power could continue to be monitored and a project reconsidered when more economically favorable.
Upon motion by Aleshire, seconded by Stone and unanimously carried, consideration of the Betsworth Pumping Station Solar Power Project was concluded in which the application fee for funding under the California Public Utilities Commission Self Generation Incentive Program was not approved, but the economic feasibility of the project will continue to be monitored for its reconsideration.
6.
Certificate of Achievement for Excellence in Financial Reporting for Fiscal Year 2004-05:
Director of Finance Jeffrey and the Finance Department were congratulated for receiving the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association recognizing the District’s Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2005. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. It is the fourteenth consecutive year that the District has received this award.
7.
License Agreement with New Cingular Wireless for Use of the
Paradise
Mountain
Reservoir:
Director of Finance Jeffrey stated that in 2003 Cingular Wireless (now T-Mobile) entered into an agreement with the District and constructed two communication towers and an equipment building on the District’s
Paradise
Mountain
reservoir property. New Cingular wireless has requested a communications site license agreement for use of a portion of the District’s Paradise Mountain Reservoir property in which Cingular would install its antennas on T-Mobile’s existing towers and construct an equipment enclosure.
To effect these changes, an amendment to the existing agreement with T-Mobile was recommended to permit the co-location on the existing towers at no additional cost. In addition, approval of a license agreement with New Cingular Wireless was recommended for use of the Paradise Mountain Reservoir property with an initial annual rent of $17,000 to be adjusted yearly by the consumer price index.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolutions, entitled:
RESOLUTION NO. 2006-15
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT APPROVING
A SITE LICENSE AGREEMENT BETWEEN THE DISTRICT
AND NEW CINGULAR WIRELESS PCS, LLC AT
PARADISE
MOUNTAIN RESERVOIR AND AUTHORIZING THE GENERAL
MANAGER TO SIGN
RESOLUTION NO. 2006-16
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT APPROVING
THE FIRST AMENDMENT TO THE SITE LICENSE AGREEMENT
BETWEEN THE DISTRICT AND TMO CA/NV LLC fka PACIFIC
BELL
WIRELESS LLC AT
PARADISE
MOUNTAIN RESERVOIR
AND AUTHORIZING THE GENERAL MANAGER TO SIGN
were adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
8.
Survey of General Counsel and Auditing Services Fees:
In compliance with the District’s Administrative Code (Sec. 135.3), a survey of general counsel and auditor fees was completed. Data was collected from fourteen comparable water agencies in San Diego and Southwestern Riverside counties. The survey provides a comparison of costs for general counsel and auditing services fees for the Board’s review.
9.
Administrative Code Modification to Add an Ethics Training Policy:
A proposed addition to the District’s Administrative Code Article 30, Organization of Board of Directors, to set forth the District’s policy on ethics training, which is in compliance with Assembly Bill 1234 as adopted, was presented. The new Section 30.6, Ethics Training Policy, establishes that the District’s Board of Directors and designated key employees shall complete an ethics training session at least once every two years. The Board members and designated employees who are in service as of
January 1, 2006
, shall receive the required training prior to January of 2007. Employees designated to comply with the ethics training policy are: General Manager, District Engineer, Director of Finance, Director of Operations and the Board Secretary. The District’s ethics policy will be reviewed annually with the employees at a staff meeting.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following ordinance, entitled:
ORDINANCE NO. 2006-01
ORDINANCE OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING THE ADMINISTRATIVE CODE ARTICLE 30
TO INCORPORATE PROVISIONS FOR ETHICS TRAINING
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
GENERAL MANAGER’S AGENDA
10. Request for Information:
General Manager Arant reported that a request under the California Public Records Act was received from the San Diego Union-Tribune requesting information including how much the District spent on benefits for directors, number of District employees, and expenditures on employees’ salaries for the previous ten years. The information as requested will be compiled and forwarded.
BOARD OF DIRECTORS’ AGENDA
11. Board of Directors’ Per Diem:
A survey of comparable water agencies’ Board of Directors’ per diem was presented for review and Board direction. General Manager Arant clarified that the Board may increase its per diem amount by 5% for each calendar year since the date of the last adjustment which was February 1993. As such, the Board could increase its current $100.00 per diem to $188.58 per day of Board business. Action to raise the Board’s per diem requires a public hearing which could be scheduled to be held during the regular meeting of April 17, 2006. Any change in the Board’s per diem would be effective 60 days after adoption. The Board unanimously elected to retain its current compensation of $100.00 per diem.
12. Legislative Symposium:
Director Aleshire reported he had attended the recent ACWA Legislative Symposium in Sacramento on March 8 and 9th which had been informative. General Manager Arant had served on the panel with the topic of “Special District Reserves: Will the Administration and the Legislature Continue Their Hands-Off Approach?” Marianne O’Malley, Principal Fiscal Policy Analyst of the Legislative Analyst’s Office, had stated during the discussion that the Jarvis-Gann initiative (Proposition 13) granted constitutional authority to the state Legislature for the allocation of tax revenue. Local Governments’ tax revenue fro Fiscal Years 2004-05 and 2005-06 were shifted to the State due to budget deficits. However, Proposition 1A adopted by the voters provides certain safeguards associated with future transfers including that they would be loans and to borrow additional funds would require that the Governor declare a state fiscal hardship and a 2/3rds vote by the Legislature.
CLOSED SESSION
13. A Closed Session was called by President Broomell at 3:52 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
$ Government Code '54956.9(a), Conference with Legal Counsel – Existing Litigation
Name of Case: Claim by Ehsan Afaghi
$ Government Code '54956.9(b)(1), Conference with Legal Counsel – Anticipated Litigation
Number of Potential Cases: 1
RECONVENE
14. The Regular Board meeting was reconvened at 4:09 p.m. No official action was reported.
ADJOURNMENT
15. Upon motion by Stone, seconded by Polito and unanimously carried, the meeting was adjourned at
4:10 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary