VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Tuesday, May 30, 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, Accounting Manager Pugh, Pumps and Motors Supervisor Stetson, and IT Specialist Rivard. No spectators were present.
ACTION AGENDA
1. Review of the Proposed Fiscal Years 2006-07 and 2007-08 Operating and Capital Budget:
Manager of Accounting Pugh reviewed that an overview of the proposed two year budget for Fiscal Years 2006-07 and 2007-08 had been presented at the May 15th Board meeting. He reported that at today’s budget workshop, the presentations will be focused on:
▪ Rates
▪ Personnel
▪ Capital
▪ Debt Financing
Rates
A table showing a comparison of current water rates to projected rates for 2007 and 2008 was reviewed. Staff noted that the projected rates are estimates based on information available at this time from the District’s wholesale suppliers. The Board will consider adoption of increases in the water rates at a later meeting to be effective January 1st. The projected rate increases per acre foot are:
Domestic/Commercial - $68.10 (9%) in 2007 and $39.34 (4.8%) in 2008
Certified Agricultural - $65.99 (11.9%) in 2007 and $33.66 (5.4%) in 2008
These rate increases include the Metropolitan Water District’s delivery rate increasing $27 per year and increases in the San Diego County Water Authority’s charges of 1.3% and 4.1% for domestic/commercial and no change in 2007 for Certified Agricultural with a 1.8% increase in 2008. The District’s local rate is proposed to increase 3.5% each year to offset inflation.
Meter Service Charges are proposed to increase 3.5% each year in which the monthly meter service charge for a ¾” meter would change from $19.50 to $20.25 in 2007 and to $21.00 in 2008.
Personnel
A total of ten new positions are being requested: 6 in FY 2006-07 and 4 in FY 2007-08. A comparison of growth in meters and personnel since 1991-92 shows that installed meters have increased by 43% while number of employee positions has increased 33% in that same time period. The new proposed authorized position classifications were reviewed as summarized below:
Field Department
▪ Two Construction & Maintenance Technicians in 2006-07 to assist with the automated meter reading project, leak detection, valve maintenance repairs and encroachment issues.
▪ A Wastewater System Technician in 2007-08 to work on the MBR treatment plant requirements, the expanded collection systems, reclamation distribution systems and new state regulations and requirements.
Engineering Department
▪ Construction Inspector in 2006-07 to provide additional support for USA mark-outs, encroachment inspections and construction inspection.
▪ Engineering Technician II in 2006-07 for the GIS, Maps and Records Division to provide AutoCAD drafting services and eliminate the need for outside services.
▪ Administrative Assistant I in 2006-07 for the Public Services Division to perform receptionist duties and provide administrative support.
▪ Engineering Technician II in 2007-08 for the Planning, Design & Construction division to assist in plan checking, encroachment processing and easement acquisitions
▪ Engineering Technician I in 2007-08 for the Public Services section to assist with the anticipated increase in GIS/maps and records responsibilities and allow for a separate lead position in the public services section.
Finance Department
▪ Accounting Clerk in 2006-07 to assist in accounts payable and payroll, and imaging and indexing for expansion of the document management system.
▪ Administrative Assistant II in 2007-08 to handle the added receptionist and cashier functions with the relocation to the front of the building and serve as a back-up for customer service.
Personnel costs will increase $1,169,400 and $965,450 in FY 2006-07 and 2007-08, respectively. The budget includes a cost of living adjustment of 3% in 06-07 and 4% in 07-08 per the Memorandum of Understanding with employees.
Capital Improvement Projects – Proposed projects for Fiscal Years 2006-07 and 2007-08 were summarized as itemized below with the costs per each fiscal year as noted. New appropriation totals for the proposed capital improvement projects are $5,532,175 for FY 2006-07 and $5,056,700 for FY 2007-08.
Planning |
Costs FY 06-07 FY 07-08 |
Integrated Water, Wastewater and Reclamation Resources Plan |
$300,000 $0 |
Pipelines and PRVs |
|
Rodriguez Road Pipeline Replacement |
$250,000 $0 |
Participation, Upsizing and Unspecified Replacement Projects |
$503,975 $404,000 |
Merry Ferry and Miller Road PRV Upgrade |
$$85,000 $0 |
Nelson Way Pipeline Replacement |
$0 $138,000 |
Couser Way Pipeline Replacement |
$123,000 $0 |
Lilac Road Pipeline Replacement |
$0 $69,000 |
Gordon Hill Road Pipeline |
$0 $1,375,000 |
Lilac Reservoir Feeder Replacement |
$15,000 $78,000 |
Jesmond Dene PRV |
$90,000 $0 |
Pipelines and PRVs – Minor Projects |
$30,000 $41,000 |
Pump Stations |
|
Via Cantamar Pump Station |
$25,000 $0 |
Couser Pump Station |
$52,000 $0 |
Electric Pump Starter Replacements |
$66,000 $68,000 |
Gas Engine Heat Exchangers |
$32,000 $34,000 |
Pump Stations – Minor Projects |
$258,000 $156,000 |
|
Costs FY 06-07 FY 07-08 |
Reservoirs |
|
Country Club Reservoir Upgrade |
$0 $50,000 |
Reservoir Coating, Interior & Exterior |
$160,000 $320,000 |
McNally Reservoir – Exterior Stairway Installation and Recoating |
$195,000 $0 |
Meadows Reservoir, Landscaping |
$0 $50,000 |
Reidy Canyon Area Reservoir |
$0 $25,000 |
Data Management Systems |
|
SCADA System Improvements |
$1,581,500 $1,495,000 |
Content Management Software |
$50,000 $0 |
AMR Program, Phases I and III |
$293,000 $300,300 |
Service Order Software |
$240,000 $0 |
Accounting System Upgrade |
$120,000 $0 |
Office Hardware Upgrades |
$60,000 $0 |
Information Technology System Upgrades |
$51,000 $49,000 |
Facilities |
|
Engineering/Finance Space Remodel |
$13,400 $0 |
Engineering Annex No. 3 |
$35,000 $0 |
Operations Control Room Building Remodel |
$117,000 $0 |
Security Upgrades, Phases III & IV |
$150,000 $100,000 |
Administration Facility Improvements |
$115,000 $0 |
40 x 60 Steel Storage Building |
$77,000 $0 |
Wastewater System Improvements |
|
Moosa Aeration System Upgrade |
$0 $150,000 |
Moosa Digester Improvements |
$176,000 $774,000 |
Moosa Main Line Ductile Iron Pipe Replacement |
$75,000 $0 |
Meadows Trunk Line Replacement |
$65,000 $300,000 |
Wastewater System Improvements-Minor Projects |
$12,200 $16,300 |
Equipment |
|
Field Equipment: |
|
Replacement Trucks |
$229,000 $213,000 |
Caterpillar Backhoe |
$89,000 $0 |
New Trucks |
$25,000 $43,000 |
Tablet Chlorinator & Chlorine Residual Analyzer |
$23,000 $25,000 |
New Employee Equipment |
$16,000 $0 |
Diesel Particulate Filter |
$10,000 $0 |
Back-Up Alarm Sensors |
3,200 $3,400 |
Automatic Transmission Fluid Exchanger |
$4,100 $0 |
Engineering Equipment: |
|
Large Format Copier/Scanner |
$20,000 $0 |
New Employee Equipment |
$16,000 $11,000 |
Pipeline Locators (2) |
$4,000 $4,000 |
Finance Equipment: |
|
New Employee Equipment |
$5,000 $5,000 |
Debt Financing
Director of Finance Jeffrey reported that based on financial projections and the District’s capital improvement plan, a debt issuance in 2006-07 is anticipated with an estimated value of $8.3 million and an annual debt service of $718,200. In preparation of the District’s financial model in 2005, the preferred scenario approved by the Board had been “Bond Financing with Corporate Facility Built in 2015”. The Long-Range Financing Plan had been adopted by the Board in June of 2005. Upon adoption of the Financing Plan, it had been anticipated that bond financing would be pursued in 2007-08. However, factors including lower than anticipated water sales in Fiscal Year 2004-05 result in an anticipated debt issuance in FY 2006-07. Issuance of debt for the CIP is considered more prudent than pay-as-you-go financing to maintain stability in water rates. Also, if the District does not go to the debt market and maintains its proposed capital improvement program, reserves would be underfunded. Staff noted that the District’s Financial Plan will be updated to reflect the project costs contained in the FY 2006-07 and 2007-08 budget. The budget will be refined and presented for consideration of adoption at the June 19, 2006 Board meeting.
ADJOURNMENT
2. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 5:04 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary